Knowledge And Decisions

“The analysis begins with one of the most severe constraints facing all humans in all societies and throughout history - inadequate knowledge for making all the decisions that each individual and every organization nevertheless has to make.’’ (ix) The problem, the challenge - of the ‘constraint of inadequate knowledge’ - is the overwhelming foundation of this work. In manifold ways, with innumerable examples, added to clear explanation, Sowell presents a coherent, persuasive, engaging explanation. Great! How does he do this? “This approach rejects the common practice of ‘characterizing processes by their hoped for results rather than their actual mechanics.’ ‘Profit-making’ businesses, ‘public interest’ law firms, and ‘drug prevention’ programs are just some of the many things commonly defined by their hoped-for results. . . . So called ‘profit-making’ businesses, for example, often fail to make a profit.’’ (x) This (seemingly simple) mental adjustment, creates profound changes in understanding organizations. For example . . . “Socialism in this book is defined not in terms of such goals as equality, security, economic planning, or ‘social justice,’ but as a system in which property rights in agriculture, commerce, and industry may be assigned only by political authorities, rather than through transactions in the marketplace.’’ (x) Sowell examines what incentives drive individual and organizational decisions. “Lofty goals have long distracted attention from their actual consequences.’’ (x) This highlights the first half theme. The second half . . . “Even within democratic nations, the locus of decision making has drifted away from the individual, the family, and voluntary associations, and toward government. And within government, it has moved away from elected officials subject to voter feedback, and toward more insulated governmental institutions, such as bureaucracies and the appointed judiciary.’’ (xiii) Commenting on ‘Social Trends’ . . . “Not all information is new information. History is a vast storehouse of experience from generations and centuries past.’’ (xiv) How can this knowledge be lost, rejected? “Old taboos have been replaced by new ones. Well-known entertainer Anita Bryant vanished from the media and became a nonperson almost immediately after voicing criticisms of homosexuality.’’ (xiv) Sowell point is that freedom is not increasing. Knowledge is no longer available about forbidden subjects. “The unifying theme is that the specific mechanics of decision-making processes and institutions determine what kinds of knowledge can be brought to bear and with what effectiveness. In a world where people are preoccupied with arguing about what decision should be made, this book argues that the most fundamental question is not what decision to make but who is to make it.’’ (xxii) Who! - not - What! Part I - Social Institutions 1 The role of knowledge 2 Decision-Making Process 3 Economic Trade-Offs 4 Social Trade-Offs 5 Political Trade-Offs 6 An Overview Part II - Trends and Issues 7 Historical Trends 8 Trends in Economics 9 Trends in Law 10 Trends in Politics Sowell’s concern, even love, of freedom permeates this book. His definition - ‘freedom is choice - fewer options is less freedom’. He consistently explains that ‘intellectual freedom’ is only one type of freedom. Freedom to write, teach, speak, proclaim, is essential to this class. For the rest, where to live (zoning), what kind of car, how discipline children, etc., etc., can be more important. “It is the difference between the preferred and the imposed values that necessitates the use of force - the curtailment (or extinction) of freedom. In this context, an ideology of categorically transcendent values - whether religious salvation or ‘social justice’ - is an ideology of crushing power.’’ (378) Why ‘ideology of transcendent values’ so destructive? “The logic of transcendent values drives even the humane toward the use of force, as those not with the same values prove recalcitrant, evasive, or undermining - provoking indignant anger. . . . This systemic logic rather than intentional design drove Robespierre - ‘a man of great sweetness of character’ - to mass executions.’’ (378) French monarchs killed hundreds. Robespierre executed tens of thousands. Not the same. For example . . . “No one expected the humane social programs initiated by the new deal to lead to bureaucratic empires issuing their own laws - more laws than congress - unilaterally, outside the constitutional framework.’’ (379) This unexpected result of good intentions that become institutionalized is key theme. Note his illustration . . . “Initial insurgents began under a different set of incentives. . . . Once they achieve their goal, the new incentive structure tends to attract and select successors with different characteristics. This has been the history of Christianity, Marxism, civil rights movement, regulatory agencies.’’ (153) Organized, institutional systems are interesting . . . “People who chose to be Christian under the prosecution of the Roman Empire were not the same who chose to be Christians after Christianity had become the state religion.’’ (153) (See parable of wheat and weeds - Matthew 13) Another fascinating comparison . . . “Both Adam Smith and Karl Marx were systemic social analysts. In Smith’s classic, ‘The Wealth Of Nations’ laissez-faire Capitalism was advocated - as a system - because of (beneficial) systemic characteristics which were ‘no part’ of the ‘intention’ of the capitalists, whom smith excoriated as dishonest, oppressive and ruthless, and for whom he had not a single good thing to say in a nine hundred page book.’’ (153) What about Marx? “By the same token, Karl Marx’s ‘capital’ condemned capitalism for (detrimental) systemic characteristics which Marx refused to attribute to the individual moral failings of the capitalist, who remained objectively the creature of circumstances, ‘however much he may subjectively raise himself above them.’(153) What other similarity? “Both Smith and Marx dealt with the systemic logic of capitalism, and neither based his theory on individual intentions, or on a hyper-rational man, which both have been accused of.’’ (154) What a fascinating connection!

"Knowledge and Decisions" is considered to be among his most "landmark" works, which is apparent in the accolades on the back cover from the likes of Milton Friedman and F.A. Hayek (which everyone considering buying this book should read on the back cover photo before buying). I HIGHLY RECOMMEND this book to anyone that wants to understand all of the intricacies in which a modern society function, whether it be capitalist, socialist etc.. It will tell you everything you need to know.. Thomas Sowell explains the format of the book in detail in the preface. The first half of the book pertains to knowledge itself, and how knowledge is transmitted in various (formal or informal) decision making units in institutional environments whether they be economic, political, social. The second half of the book discusses the mechanics of specific trends and issues pertaining to economics, law and politics that are still completely relevant today, and how they affect our current and future freedom (if only this book was updated to include Big Tech). It is remarkable how Sowell is able to verbally break down such complex concepts. His verbal and logical capacities in itself are a substitute for graphs and equations. However, I have read all of his major works and for me, this was by far his most difficult, technical read - very academic in nature. This is probably why it is not one is his more popular and discussed "best seller" type of books. The preface from this updated 1996 edition is 16 pages which almost constitutes as a chapter within itself, and it sets you up to understand and prepare for the intellectual journey in which you are about to partake. I must say that if one does not have rudimentary understanding of economics I recommend reading his book "Basic Economics" before reading this book. Wheres "Basic Economics" is more about the fundamentals of economics theory, "Knowledge and Decisions" is more esoteric, mechanical and overall more broad in scope. I also found myself re-reading paragraphs two-to-three times quite often just to make sure I was digesting and internalizing everything properly due to the technical nature. Not an easy read, but anyone that completes this book will be very rewarded.

Great man with sound thinking on many subjects.

Sowell's perspective on liberal, enlightenment philosophies is the most clearly defined and explained work one could read. His book The Vision of the Anointed is my vote for best book of the 20th Century! He understands liberal "thinking" and demagog worship; he can expound upon their approaches and make the reader clearly see what is confusing to the intellectual mind: that is, What are they thinking? How did they get to that conlcusion? If you truly want to understand where our philosophies have become so distorted and entangled with the absurd, read this or any of Sowell's works. P.S. I am aware that book titles should be underlined, but the Amazon site will not allow me to pull up that tool bar when using their review site.

This is a great book. It is as applicable today as when written. Anyone concerned with the political state of the world and it's history should read it.

As always, Sowell is simultaneously simple and majestic in his reasoning, logic and characterizations. Anyone wishing to understand the "why" not just the "how" of institutional decision making should read this book.

A great text on how knowledge is formed, connected, and used, well-cited and with numerous examples for case studies or operationalization. I wish I’d read it years ago.

Was very nice

Je n'y ai pas trouvé les qualités des livres anglo-saxons. Trop de généralités. Je n'ai pas su tirer profit de ce livre.

What a great mind.

Sowell considers how knowledge includes both articulated discussions and information that is not, or perhaps cannot be articulated. This leads to differences between centralized and distributed decision makers and between intellectuals and “experts” versus the unwashed masses. (This also implies limits in current AI and computer systems which can only use articulated information). Although written in the 1970’s, the examples in law and politics are relevant today. You can find material to help understand crime and punishment, censorship, to what extent should we put all our trust in health care experts, and much more. Why should we resist activists of crises who seek to impose their solutions, ignoring tradeoffs? How would we all have more freedom if the US government worked as the founders intended? Many of Sowell’s later books addressed parts of these and other subjects. Even if you have read them, you will still find new things here.

Absolutely excellent, there is no thinker/writer so lucid as Sowell. No gaps in his thinking whatsoever. If you want to set your brain right, read this book! It will change you, but depress you at the same time (when you realise how stupid and misguided people are, including your friends and family).

This book successfully provided me with a framework for understanding the actions of decision makers and institutions. Not in the sense of teaching me what is right and wrong, but rather in the sense understanding what leads people to behave the way they do, regardless of if the outcomes are deemed morally good or bad.