An Introduction To Thomas Sowell - Mathew Lloyd
Thomas Sowell is an accomplished American economist and social commentator who offers an alternative, in-depth viewpoint to the mainstream narrative on race-related matters. His relevance to today’s conversations on race is hugely important because his in-depth research and many years of experience challenge several popular assumptions and conventions around the subject of race.
He was born in North Carolina in 1930 but spent most of his childhood in Harlem, New York. He completed his economics degree at Harvard, his masters at Columbia and his PhD at Chicago. Following his education, he went on to work for several companies, think tanks and to teach at several prestigious universities across America. In 1980 he was made a senior fellow at the Hoover Institution at Stanford University where he continues to work to this day.
He was, until his early twenties, a Marxist but after working for a governmental department for a summer he soon concluded that the government was not a good tool to solve poverty. This realisation led Sowell to question his ideas and eventually to write about various social aspects including economics, education, poverty and race. Thomas Sowell’s commitment to rational thinking and the pursuit of truth, in a non-partisan way, is admirable. This is a man who knows an awful lot about world history and over his vast career he has written about what leads human groups to economic success across the globe and throughout history. He has a great trilogy of books on this subject Race and Culture, Migrations and Cultures and Conquests and Cultures, the perspective he offers in these books is not of abstract groups but of flesh and blood groups of humans and how the way in which they interact with the world impacted their prosperity.
Reading his works and making one's way through all this vast information from throughout history and across multiple cultures leads you to the fact that ultimately human capital, which can be summarised as knowledge and skills, are arguably what leads to prosperity. In Basic Economics Sowell points out that capital is not necessarily money, if you are an artist for example then capital is your skill, paint, brushes, pencils and paper. Our brains are our capital creator. Most importantly, when a group of people have skills and knowledge, these things can never be taken from them. A very clear example of this throughout history is the Jewish people. Despite persecution almost everywhere they lived, as a group, they had knowledge and skills which meant they could establish themselves and create flourishing businesses wherever they went because the skills required to trade-in various industries were passed on from generation to generation within the group. People able to produce goods or services can move to new continents, with no possessions or money, and over the span of just a few generations, they will proceed to join the most affluent members of any capitalist society because they are their capital.
Sowell also highlights the problems with pursuing political power as a solution to social or economic problems. In his view, this is harmful because often the policies proposed as a solution sound good on paper but will have unforeseen consequences. Such results can have disastrous impacts on the very people those policies were meant to help and can even lead to dependency on government. An example of a government policy which in Sowell’s view hinders economic progress for people is the minimum wage law. Business owners required by law to pay a certain minimum wage no longer have an incentive to take on high-risk staff, such as the inexperienced or young people, and as a result, leaves those with no experience of work unable to enter the job market at all to gain experience. Thus leaving them reliant upon the welfare system in order to survive and with little prospect of employability. Minimum wage laws do not have any impact on highly skilled or highly educated people, who are usually the people pushing for such laws, because their wage per hour is likely to be considerably more than a proposed minimum wage in the first place. This law also drives up prices of goods as companies seek to cover their losses from paying staff more.
Well-meaning policies can also be undertaken by independent organisations and still have the same negative influence. An example of this according to Sowell would be affirmative action, which in theory sounds like a good way to make opportunities fairer for people from different backgrounds. However, when quotas were introduced requiring a certain percentage of black students to be admitted to prestigious universities in America the consequence was that there were not enough black students applying who performed at the level required for regular admission (Sowell’s book Charter Schools and their Enemies is about underperformance in schools). So the universities lowered their entry standards for some black students to meet their own quotas, resulting in a mismatching of students and university. These mismatched students are among the brightest students in the country, but within elite institutions they may perform among the lowest percentile which leaves them struggling to keep up, demoralised and more often than not qualifying with a lower grade than they otherwise would have had they chosen a different university or dropping out of university entirely. Had they attended a lower-ranking university at the start they would have been among the top students in that institution and qualified with a better grade, thus setting them up for better career prospects (Sowell’s book Affirmative Action around the World goes into this in-depth).
These unforeseen consequences come from how knowledge works. In Knowledge and Decisions, Sowell writes about the spread of knowledge across many people and that within a society of millions of members there is an awful lot of knowledge and to try and bring all that knowledge together into a top-down approach from the government is inefficient because a small number of people, however intelligent, cannot know all things and in his view, the smartest process for making decisions is a free market. Rather than wealth redistribution he was interested in what leads to the creation of wealth in the first place and how wealthy people acquire that wealth while simultaneously lifting others out of poverty through job creation. A response to Sowell’s point here might be that as the system we live in currently is not the ideal free market he would prefer then some barriers could exist which are off-putting for young people to even try and enter a particular industry, such as farming for example. There is not much prospect of acquiring land for farming without considerable investment which just isn’t achievable for people who have limited resources. Though I suppose his response would be to acquire what resources you can and pursue the means to the end, the means being knowledge and skills that someone deems worth paying you a high price to acquire. Essentially turn yourself into an asset worth a high price.
His writings on economics were intended to help everyday people understand just how economies work and that through this knowledge people would be in a better position to understand the importance of voting wisely in politics based on the proposed economic policies presented by politicians. For anyone wanting to read some of Thomas Sowell’s work then below is a condensed list of some books and interviews worth looking at.
An easy to read and informative introduction to how economics work. There are no tables, charts or graphs to bog you down just simple insightful explanations.
Thomas Sowell’s autobiography.
This is a great book about how knowledge is spread out among people and that actual knowledge is often displaced by assumptions.
This book is about the prevailing visions being pushed by intellectual elites who believe they know best but which have in fact often caused greater harm.
Race and Culture, Migrations and Cultures, Conquests and Cultures
This trilogy offers a world view of various factors involved with how humans interact with one another and the influences that has had on culture. (This is the order it was published in but he recommends reading it in reverse as that was how it was originally written.)
Matthew Lloyd