''Knowledge and Decisions'' is a non-fiction book by American economist

Thomas Sowell Thomas Sowell ( ; born June 30, 1930) is an American economist, economic historian, and social and political commentator. He is a senior fellow at the Hoover Institution. With widely published commentary and books—and as a guest on T ...

. The book was initially published in 1980 by

Basic Books Basic Books is a book publisher founded in 1950 and located in New York City, now an imprint of Hachette Book Group. It publishes books in the fields of psychology, philosophy, economics, science, politics, sociology, current affairs, and his ...

and reissued in 1996. Sowell analyzes social and economic knowledge and how it is transmitted through society, and how that transmission affects decision making. The book's central theme of dispersed knowledge is drawn from F.A. Hayek's article " The Use of Knowledge in Society." Hayek said that this book expanded admirably on his original concepts and made them clear to lay readers, with examples of economic activity drawn from the real world.Hayek
Reason, 1981, retrieved 2021-07-24 Sowell rejects the tendency to put economic and political decisions and their results in moral terms. Doing so, he argues, ignores the tradeoffs and limitations inherent in every economic system and society. Consistent with his established

laissez-faire ''Laissez-faire'' ( , from , ) is a type of economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies or regulations). As a system of thought, ''laissez-faire'' ...

viewpoints, Sowell also indicts

price controls Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of go ...

(such as

rent control Rent regulation is a system of laws for the rental market of dwellings, with controversial effects on affordability of housing and tenancies. Generally, a system of rent regulation involves: *Price controls, limits on the rent that a landlord ...

minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. List of countries by minimum wage, Most countries had introduced minimum wage legislation b ...

price fixing Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...

, and

subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...

) as interfering in the implicit communication between consumers and producers necessary to optimize the choices of each. The fact that some industries or

government agencies A government agency or state agency, sometimes an appointed commission, is a permanent or semi-permanent organization in the machinery of government (bureaucracy) that is responsible for the oversight and administration of specific functions, ...

seem particularly incompetent or corrupt over many turnovers of their staff, he argues, is not bad people performing the duties, but of rational people acting in their own interests responding to whatever incentives have been established in the system. The last section of the book deals with

intellectuals An intellectual is a person who engages in critical thinking, research, and Human self-reflection, reflection about the nature of reality, especially the nature of society and proposed solutions for its normative problems. Coming from the wor ...

, those whose profession is the distribution of ideas. Sowell questions the popular unwavering faith in the expert intellectual and "articulated rationality" for "solutions" to economic or political problems. He explains that through intellectuals, government agencies, such as the

United States Environmental Protection Agency The Environmental Protection Agency (EPA) is an independent agency of the United States government tasked with environmental protection matters. President Richard Nixon proposed the establishment of EPA on July 9, 1970; it began operation on De ...

and

National Institutes of Health The National Institutes of Health (NIH) is the primary agency of the United States government responsible for biomedical and public health research. It was founded in 1887 and is part of the United States Department of Health and Human Service ...

, have become more numerous and more powerful. Sowell explains that agencies make more laws than Congress does, but the agencies are insulated from any sort of consequences of their decisions because the officials are not elected. That has the effect of creating a larger divide between people who make decisions and those who experience the consequences. Sowell also talks about the recurrent

unintended consequences In the social sciences, unintended consequences (sometimes unanticipated consequences or unforeseen consequences, more colloquially called knock-on effects) are outcomes of a purposeful action that are not intended or foreseen. The term was po ...

of many intellectual decisions. Consequently, Sowell advocates decentralized decision making by allowing people to make economic choices for themselves rather than assuming that non-elected intellectuals at centralized planning agencies will make better decisions.

References

1980 non-fiction books Basic Books books Books by Thomas Sowell Economics books Works about the information economy {{Econ-book-stub

See also

References