I highly recommend watching the presented interviews with Dr. Thomas Sowell
Thomas Sowell (born in June, 1930) is an American economist, historian, social commentator and a rational thinker. He’s had an enormous influence in my thinking over the years.
Even his personal story is an inspiration:
Sowell grew up in Harlem, New York. He had some difficulties growing up and eventually dropped out of High School. He would later join the Marine Corps during the Korean War.
Once he got back to America, he enrolled and got accepted into Harvard University to study economics, and later graduated magna cum laude in 1958. In 1959 he got his master’s degree from Columbia University, and finally earned his doctorate in economics from the University of Chicago in 1968.
He’s taught in multiple universities and been a part of many think tanks over the years. He also worked at the Hoover Institution at Stanford University where he served as Rose and Milton Friedman Senior Fellow on Public Policy.
What’s curious about his relationship with Milton Friedman is that Sowell has professed to have been a Marxist all the way until he got his doctorate. Yes, he somehow survived as a socialist thinker through Friedman’s ideas throughout his years in the university.
That is until something changed in his way of thinking; he started to pay attention to facts and figures.
He has since become a critic of the socialist ideologies and big governments. He understands the arguments from both sides, and this is the reason for his rather unique perspective on economics, politics and life in general.
Today, we will go on a journey together with Thomas Sowell to see if his ideas hold any value. I will use existing interviews with Dr. Sowell to bring up some of his talking points, and I’ll also bring up some of my own insights.
The Myths of Economic Inequality
For this part we’ll use this interview from 2018:
In this interview Dr. Sowell talks about how central planning and socialist talking points sound good in theory, but have historically been shown not to work in practice.
After the terse initial interaction, Sowell mentions that governments are institutions with their own institutional interests in mind (around 6 minute mark).
He mentions minimum wage laws, an idea he himself supported at the time. But he was also aware of the argument that minimum wage laws would price low wage workers out of a job.
Later on, he went to work on a project around minimum wages in Puerto Rico. According to statistics, as they increased the minimum wages, the number of jobs went down. So, the problem was, of course, the number of jobs going down!
Two explanations were given for the phenomena:
- Minimum wage laws pricing low wage workers out of a job
- Hurricanes in the area had destroyed sugar crops as it swept over the area
For one of the explanations there was data. Increasing the minimum wage directly correlated with the loss of jobs.
For the hurricane idea Sowell tried to get answers (data and statistics on the sugar crops), but was ultimately halted on his tracks.
In the end it ended up being a comfortable idea that many could support without having admit their own policies caused problems for the workers. Sowell is still today waiting for the data he requested to prove his theory.
“In nature there is nothing resembling equal opportunity.”
Next he talks about socialism and his confusion with the support for Bernie Sanders. He mentions if Sanders’ supporters would just take a look at Venezuela, a socialist country in ruins, they just might change their minds.
And indeed, all you need to do is look at Venezuela to see something isn’t working. That being said, you should probably also look into other points in history where socialism/Marxism/communism was widely accepted as the norm.
On this point, as I’m sure someone will comment on it, China’s economy isn’t doing that great either. They will run into issues with their economy as well, but because they have massive amounts of production, they will also recover from their problem-caused disaster faster than other countries around the globe. This is why you can expect China to become the next superpower in the world.
China’s communist model, from what I can understand, is a hybrid between classical communism and free market capitalism. Top down control with relatively free reign for businesses. We’ll see what happens to it over longer period of time.
Later on in the interview family structure is mentioned (21 minute mark). This is what I want to focus on next.
“Most black children were being raised in two-parent families in 1960. But thirty years after the liberal welfare state… the great majority of black children [were] being raised by… single parents”
They talk about black children in particular (it is statistically a massive problem), but this is a universal issue.
Sowell goes on to mention two extremes: Iceland (welfare state), where 2/3 children are being raised by single parents, while in South Korea the same statistic is 1 out of 66 children are being raised by a single parent. What a drastic difference!
I didn’t want to just believe Dr. Sowell (although, he’s usually done his research), so I looked into it. Here’s what I found:
I found an aljazeera article talking about the stigma single parents face in South Korea. The welfare benefits for single mothers are rather low (monthly allowance of South Korean won 180,000 ($167)) in South Korea, and there is an added social pressure for women to stay married (or stick to their partner) due to their Confucian culture. These seem to be the most pressing reasons why single parent households are rare in South Korea.
The social structure and benefits simply do not support the idea of single parent households in South Korea.
How about Iceland? According to island.is, this is the current situation:
“If the parents of a child are not married or in a registered cohabiting partnership when the birth takes place, then the mother alone will have custody, unless the parents have agreed on a joint custody.”
Based on this, we can see why there would be more single mothers over fathers.
“Maternity/paternity pay may be paid to single parents living in Iceland who are supporting two or more children below the age of 18.”
You must have two or more children to be qualified for the benefits. From this we can tell the government is attempting to increase the number of children being born.
Benefits such as:
- Subsidies for day-care and nursery-school.
- Child support if one of the parents is deceased or receives a disability pension or a rehabilitation pension.
- Housing benefits and financial assistance.
- Single parents and students can apply for subsidies for day-care and nursery-school fees.
The amounts paid in benefits? (source. skatturinn.is)
- First child 390.700 – ISK / Year
- Each additional child – 400.800 ISK / Year
Special supplement (their words, not mine)
- For children under the age of 7 – 140.000 ISK / Year
100 000 ISK is roughly 790 dollars or 665 euros. Keep in mind that these are not the only benefits the parent can get.
You also get benefits if you decide to stay with your partner, but then the benefits are halved, and for others you can’t even apply for in two-parent household.
So, mathematically it would be best to get a couple of kids, and then divorce / separate yourself from your partner while the children are still under the age of 18, preferably under the age of 7 for “special supplements”. (Note that the parents can’t live in the same household)
The benefits are rather significant in Iceland. You’d almost have to be a fool not to take an advantage of them. The smart woman (yes, that’s right) will do this.
Iceland is not the only country with such benefits for the single parent, but this data (and common sense) does support Sowell’s point about welfare affecting the family structure.
From this you can gather that in their efforts to support single parents through welfare programs, the governments have created incentives to break the family unit apart. Today, because of the benefits, it is sometimes more lucrative for a parent to raise the child alone than to stay as one unit. Talk about unintended consequences (this could also be the INTENDED
consequences results, depending on how evil you think your government is).
This then leads to other societal problems. Children raised by single parents commit more crimes and their test scores overall are lower than in households where both parents are present. All of this will then lead to even more problems in the future. What a perverse situation.
Here is an interesting question: what do you think will be the unintended consequences of the rather generous welfare checks handed to Americans (for NOT working) during our current crisis?
You can read more on this topic at Fix Family Courts (or by reading Sowell’s books on this topic).
“When you pay people not to get married, people don’t get married”
Finally they go on to talk about how the leaders in the US have become attached to a vision and they would rather keep aiming for that vision than look at facts and figures.
Their “war on poverty” in particular has been on-going for more than half a century, but their efforts (in light of statistics) have been nothing but an enormous failure.
Something similar can be said about “war on drugs” and “war on terrorism”… and so on. Does the American government just go to war with every problem they face without ever actually planning on ending the war? Seems like it.
What is the myth of economic inequality then? There is no such thing as “perfect equality” in nature. No matter what you do, you will never reach this utopian vision. Someone, somewhere will always be at the top.
In their quest to squash economic inequality, governments and their welfare programs have created other, unintended problems along the way – which in turn has created more inequality than what they started with. The best you can achieve with this approach is poverty for the majority and wealth for the very few.
Thomas Sowell himself is an example of a man who started at the bottom and climbed his way to the top. Now he’s one of the all time greats.
You can do this too. You just need to realize that you yourself are the one who is responsible for the successes and failures in your life. Yes, connections, luck and timing play a role, but the better prepared seem to get luckier more often than the unprepared.
“Socialism is a great idea, but it doesn’t mean it’s a great reality.“
Here’s a recent video by Peter Schiff on “unintended consequences”:
Lets move on to another interview.
Wealth, Poverty and Politics
This time, an interview from 2015:
As Peter Robinson says in the beginning, poverty is the norm, wealth the exception. This is the topic of the conversation in this interview.
Dr. Sowell goes on to explain that differences in wealth are due to a vast number changing of factors, such as location (flat land vs. rocky mountains), groups and nations.
Basically, the world is starkly different if you travel from say India to Scandinavia. Everything changes, including economics and social structures.
Mr. Robinson then summarizes the book as it being an effort to correct the thinking some (perhaps most) Americans have that what they have now (Internet access, phones, TVs, cars, plenty of food, etc.) is somehow the norm around the world. It is not.
Even the poor people in America get to enjoy wealth that is unheard of in history, and a poor American could be considered rich or at least middle class in some other part of the world today.
What Americans now enjoy is a historical and even geographical anomaly and that it isn’t typical to be so wealthy as a nation.
Sowell goes on to talk about geography being a major factor in the wealth of a nation (he’s discussed this point many times in his books). He mentions how hurricanes and tornadoes are rare around the world, but in middle parts of America they’re a common occurrence.
He also mentions how the access to water (as in, rivers and the sea) play a major role in the prosperity of a city. This is one of Sowell’s favourite topics to talk about.
How many major cities you know have a port? I’ll point out a couple: New York, Tokyo, Singapore, Hong Kong, Stockholm, Helsinki, St. Petersburg, Oslo.
Then there are cities like London that are connected to major rivers (The River Thames) and just think of how important a role The Nile has played throughout history in Africa.
It matters where your country is located in the world. Having easier access to other civilizations means you can trade, share ideas and grow faster. Your connections and resources are multiples of that of a remote city / country.
Dr. Sowell goes on to point out that isolation almost invariably leads to poverty and backwardness.
This is rather easy to understand even on individual level. Living in a bigger city means you have access to more connections and more opportunities. Having access to something doesn’t automatically mean it is being utilized.
One should consider him/herself lucky if they’ve been born into a country and/or city that can be considered wealthy. Most of the rest of the world aren’t in that situation, so it can’t be taken for granted.
As for the people in the not so fortunate position, don’t blame your circumstances. Work hard and prove to yourself that you can do it.
“The world has never been a level playing field”
They move on to talk about culture, and especially how certain cultures are simply more prosperous than others.
The Germans, the Chinese and the Jews in particular are mentioned.
Sowell argues that some groups simply just happen have the know-how and the right kind of attitude towards work that allows them to create wealth. This seems to hold true even when they move to another location and “start fresh”.
I can attest to this myself. While I lived in Japan, I met people from various different (mostly Asian) countries.
Eventually I also ran into Chinese students who were a few years younger than myself. I was almost immediately blown away by their ability to get things done. All of them spoke fluent Chinese, Japanese and English. They had no difficulties communicating or taking even the higher level courses in various languages. They could also talk about almost any topic I brought up in conversation. The Chinese government may be a little questionable, but don’t underestimate the Chinese people.
The Japanese, on the other hand, like to keep to themselves, but I guess this is a rather well-known character trait when describing them. That being said, they work, and work, and work, until it (whatever it is) gets done, and it gets done well. Everybody knows Japanese quality; their diligence and attention to detail is prevalent in all aspects of their culture. And if you manage to get the Japanese to talk (this can prove to be difficult), they’ll be articulate and the topics they tend to talk about are usually the things they know something about. The Japanese, in general, don’t like to “rock the boat”, so to say.
As a Finn (European), I’ve also run into my fair share of Germans. I can’t speak much for their personality (it varies), but they are certainly efficient. More so than most other European nationalities.
But of course, these are just my personal observations, and generalisations at that. Exceptions do exist.
Then Sowell’s counter argument is also brought up: The Soviet Union.
Russia has some of the richest lands on the planet. They have oil, minerals and vast amounts of natural gas that they export to elsewhere in the world. And the landmass itself is massive and they have some of the best connections to the rest of the world through their ports, rivers and land.
Yet, under the heavy handed control of the Soviet Union, they were unable to feed their own people, or get much done in general. What gives? “The mismanagement by the government,” says Sowell.
Here’s a video by George Gammon on the current state of government mismanagement:
“If the government took over the Sahara desert there’d be a shortage of sand.”Milton Friedman
The rest of the interview is spent on talking about diversity and politics, and the difference between “opportunity” and “outcome”. It’s rather interesting, recommend you listen to it, but I’ll move on to the last interview I want to cover.
Intellectuals And Society
This time, an interview from 2009:
This interview revolves around Thomas Sowell’s famous book, Intellectuals and Society.
Mr. Robinson starts the interview with a quote: “It’s like these guys, republicans, take pride in being ignorant. They should go talk to some experts and actually make a difference.”
Sowell bursts into laughter.
“Well, talking to experts does make a difference.”
“Many of the great disasters of our time have been committed by experts.”
Then he gives a couple of examples of mistakes that led to disasters. Mistakes made by “experts” with very high IQ’s, as he puts it.
What the book is about, and what is discussed in the interview, is the idea that intellectuals are convinced of their own superiority over the less intelligent.
Because intellectuals have high IQs and they are good, perhaps great at something very specific, they think that they have all the answers to our questions. They also know how to solve all problems with their superior intellect.
They seem to think that since they’re good at X, they must be good at Y and Z, too!
Noam Chomsky is mentioned as one of these intellectuals. If you don’t know him, he’s a famous American linguist, whose work in linguistics has had a remarkable impact in the field. Chomsky is clearly a brilliant thinker when it comes to his specific area of expertise, but as Sowell puts it, his takes on politics are an absurdity.
I’ve listened to Chomsky give his opinion on politics. I have to agree with Sowell, Chomsky doesn’t have much to contribute in this area. Yet, people listen to him, because he is known to be smart.
You can imagine how frustrating it is to listen to someone and know he’s talking nonsense, but at the same time, also knowing that some people actually take whatever he’s saying seriously. We’ve all been there.
“When you step outside your field of speciality, sometimes that’s like stepping off a cliff.”
Next they discuss the idea that it is far easier to concentrate power than it is to concentrate knowledge.
Dr. Sowell argues that they (intellectuals) ‘probably’ don’t know even 1% of all of the consequential knowledge in society. Consequential knowledge, as he puts it, is knowledge that has consequences, serious consequences.
For this reason, whenever in history the power has been concentrated to a small group of people, it has always eventually ended horribly. This has happened even in the case where the people in power had superior intellect and all the possible data at their disposal.
Yet, when the power has been returned to the people, and people have had to do with their own specific knowledge in their area of expertise, it usually has ended up with a more rapid rate of growth and rapid decline in poverty.
At this point I will, of course, point to the example of Soviet Union. Their way of doing things actually worked in the beginning. Their 5 year plans were a success for decades, or so it was being advertised at any rate. Russia experienced rapid growth at first, but eventually their efforts turned into dust seemingly out of nowhere.
The Soviet Union’s reign lasted for decades, and I can’t possibly fit all the reasons for its downfall into one part of one article. What I can say is that their centrally planned economic policies and rampant attacks against the dissidents caused the system to implode from inside.
On this topic, I will point you towards the direction of Aleksandr Solzhenitsyn:
Most of the rest of the interview is spent on answering questions related to the topic at hand. It is worth the watch, but I won’t make more comments on it here. I believe most readers get Sowell’s point.
Dr. Thomas Sowell has seen the world from both socialist as well as capitalist point of view. He’s spent decades on his research and come to certain conclusions about life. Now, being in the later stages of his life, he’s gotten even more stern about his beliefs.
From what I gather, he doesn’t fully subscribe to either socialist or capitalist way of thinking. He takes something from both extremes and brings us his idea of how things should or could be done differently.
His work revolves around the idea of maximizing personal responsibility and freedom. He argues that the power that governments hold should be limited and that decision making shouldn’t be left to intellectuals (such as himself) alone. People should be free to make their own (good or bad) decisions.
I recommend Sowell’s books as well as his many interviews that you can find mostly for free on the Internet.