Clicking on banner ads enables JWR to constantly improve
Jewish World Review Dec. 17, 2003 / 22 Kislev, 5764

Bill Steigerwald

Bill Steigerwald
JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
Ann Coulter
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
James Glassman
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
Michelle Malkin
Jackie Mason
Chris Matthews
Michael Medved
MUGGER
Kathleen Parker
Wes Pruden
Sam Schulman
Amity Shlaes
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports


10 minutes with Thomas Sowell


http://www.NewsAndOpinion.com | Thomas Sowell, one of America's greatest intellectual treasures, is generally referred to as a "black conservative," but he is a revered hero in both libertarian and conservative camps.

A free-market economist, philosopher, social critic, syndicated columnist and senior fellow at the Hoover Institution, Sowell has written more than 25 scholarly, logical, usually provocative and often groundbreaking books on economics, politics, race, immigration, education, culture, the justice system, the U.S. Constitution and Marxism.

Sowell's latest book, "Applied Economics: Thinking Beyond Stage One," (Click HERE to purchase. Sales help fund JWR.) applies the principles of economics (without the jargon) to such real-world problems as housing, medical care, discrimination and the economic development of nations. I talked to him by telephone on Thursday from San Francisco:

Q: What's the biggest difference between the way a politician thinks and the way an economist thinks?

A: Well, the politician thinks in terms of what would get him elected in the next election. The classic definition, or my favorite definition of economics, is "the study of the allocation of scarce resources which have alternative uses," which may sound pretty dry. But whether those resources are used efficiently or inefficiently determines whether people are rich, prosperous or poor.

Donate to JWR

The Soviet Union, for example, had some of the most abundant resources, and quite possibly the most abundant resources of any country in the world. And yet the standard of living in the Soviet Union was not only far below that of the United States, it was lower than that of countries which have virtually no natural resources, such as Japan or Switzerland.

The difference is that what resources the Japanese buy — and they have to buy most of them — they use far more efficiently than the Soviets did.

Q: Who are your favorite economists, or the economists you look up to?

A: Well, of course, Milton Friedman. And the book "Applied Economics" is dedicated to Arthur Smithies, who had this wonderful way of questioning in class, as I say in the subtitle, to get us to "think beyond stage one," because so many policies that sound good, when you only look at the immediate effect, look totally different when you begin to look at the repercussions of those polices.

Rent control is a classic example. When you put in rent control, the tenants have lower rents, the tenants are happy. Fine. In no time, you discover that, 1), nobody is building any more housing, and, 2), the landlords are not maintaining the existing housing as well as they did before, because now there is a housing shortage and they don't have to. And so the housing stock begins to decline, and no comparable amount of new housing is built to replace it. And so now you get a progressively worsening housing shortage.

At some point, the politicians become aware that nobody is building any housing. In some places they say, "All right, we will maintain rent control for low-cost housing, but if you want to build luxury housing, we won't put in rent control." Fine. But resources have been shifted from building ordinary housing to luxury housing.

This has happened in cities across the United States and in countries in Europe and elsewhere. The ultimate consequence is that the people who wanted to produce affordable housing are making it impossible to build affordable housing and shifting resources to building housing that the vast majority of people can't afford at all.

Q: Who are your favorite politicians?

A: Oh, gee. George Washington and Abraham Lincoln.

Q: What's the biggest difference between the way politicians and economists think and act when it comes to health care?

A: The politicians look at it in terms of saying and doing "What will get me elected." What that means is that if you give people the impression that they are getting something either free or at a bargain, they are more likely to vote for you.

Economists, unfortunately, are handicapped because they know there is no such thing as a free lunch. They also know the difference between lowering costs and merely lowering prices. You can lower prices with a law, but that doesn't lower the cost by one penny. It still costs just as much to produce the medicines, educate the doctors and build the hospitals.

So you end up with costs being shuffled around. But they don't go away just because they're shuffled around. The HMOs try to put more of the costs on Medicare and vice versa, so you get this game being played, which doesn't lower anybody's costs.

Q: You say in the book that it's important to have a sense of humor when you're trying to learn about economic policies. What do you mean by that?

A: Well, so many of the policies are so badly mistaken. They not only don't solve the problem, they usually make the problem far worse than to begin with. So you can get quite angry just studying economic policies, even more so than economic theory.

The first thing to remember is that you will have the last word when Election Day comes around, and the time to get angry is in voting booth.

Q: Someone wanted me to ask you if $500 billion budgets matter in the long run?

A: (laughs) There was a time when the entire gross national product of the United States was about $500 billion. It would have mattered a lot then. When the gross national product is in the trillions, it matters less. I'm sure that if I had one-tenth the debts that, say, Donald Trump has, I would be ruined. But that doesn't mean Donald Trump is ruined.

Q: Of all your books, is there any one you'd recommend to someone that would explain who you are?

A: If there is any one book of mine I would most like most people to read, it would be "Basic Economics," (Click HERE to purchase. Sales help fund JWR.) because it does just take you from square one right on through everything, from price controls to international trade, stocks and bonds, whatever.

Q: Do you think the level of economic literacy has been going up or down among the general public?

A: I have no idea. I suspect that it is so low it would be hard to measure. In fact, that was the whole reason for my writing these two books — to do what little I can, because there is no great incentive for an economist to write at this level. It certainly won't help his career, but when you're an old man, you can do all kinds of things you couldn't do when you were young.

Q: I would suggest that after working in the media for 30 years, one of your key target audiences would be my fellow journalists.

A: If I were rich, I would send every one of them a copy of "Basic Economics."

Enjoy this writer's work? Why not sign-up for the daily JWR update. It's free. Just click here.




JWR contributor Bill Steigerwald is an associate editor and columnist at the Pittsburgh Tribune-Review. Comment by clicking here.

12/15/03: Journalism 'watchdog' displays bad reporting
12/09/03: Book lovers are losing a good read
12/05/03: 'South Park' has unlikely audience tuning in
12/03/03: An odd lot of 35 'heroes'
11/24/03: 'We'll learn the truth someday' 10 minutes with JFK expert Cyril Wecht
11/18/03: Exposer of the idiocy of bureaucracy and the threat to individual freedom posed by government Ten minutes with author James Bovard
11/14/03: Two stories examine Wal-Mart's domination
11/07/03: The real Rumsfeld 10 minutes with author Midge Decter
11/05/03: Lights! Camera! Fudge!?
10/31/03: The straight dope on hate, drugs, Jon Stewart
10/24/03: See what federal $$$ does?
10/21/03: Esquire recalls its glory days
10/14/03: A 784-page biography hatchet job that only Clinton-haters will love — published by Random House? Ten minutes with Nigel Hamilton
10/10/03: Bush adviser girds for a tough fight ... 10 minutes with Mary Matalin
10/07/03: Forbes gives advice on making rich list
09/30/03: A 20th Century American tour
09/26/03: Reagan's life in letters
09/24/03: Bin Laden and Boy Bill
09/22/03: Dennis Miller makes funny business of politics
09/16/03: Famous 'bad girls' clear the air
09/12/03: Ben Stein gets serious: Davis is a 'thug in a gray flannel suit'
09/09/03: Smart(-Alecky) mag's very different 'swimsuit issue'; Murdoch might not be as bad as we thought
09/02/03: Ex-teacher lambastes our schools
08/25/03: Vanity Fair strives to be more than glamorous
07/22/03: Title IX's original intent Ten minutes with Eric Pearson
07/11/03: Vanity Fair dishes it out on JFK Jr., N.Y. Times
07/09/03: Why Ben Franklin should be the "Father of Our Country" ... 10 minutes with Walter Isaacson
07/07/03: Honoring nation's first celebrity superstar
06/27/03: Reader's Digest can't help but act its age
06/24/03: Dick Morris, consultant for hire, reveals the inside story
06/20/03: Move over, Hillary. Here comes a better work of fiction
06/10/03: Publications take us away from Middle East
06/03/03: Dear graduates: Work for freedom 10 minutes with Penn Jillette
05/30/03: National Geographic goes to the top of the world
05/23/03: Editors dabble in history, fiction
05/16/03: The Old Grim Lady gets covered
05/09/03: Political parties fighting over Iraq's wreckage
05/07/03: 10 minutes with a big-city Dem mayor who loathes budget deficits, the federal highway program, taxpayer-funded sports stadiums and the meddling (and aid money) of Washington
05/02/03: Are you sufficiently terrified?
04/29/03: Finally, a president defending American principles in the Middle East ... 10 minutes with Alexander Haig
04/25/03: Newsweeklies starting to lose interest in Iraq war
04/21/03: There's bias, and then there's bias
04/11/03: Planning future of Iraq, world
04/04/03: Newsweeklies come back with graphic look at war
03/28/03: Newsweeklies try to keep up with TV war coverage
03/26/03: Wen Ho Lee whistle-blower says beware of China
03/21/03: America's ready for war ... and peace
03/18/03: Baseball limping, not dead 10 minutes with author Andrew Zimbalist
03/14/03: Vanity Fair gets us ready for month's big event
03/11/03: A road map for Iraq's liberation devised by James Madison? 10 minutes with James S. Robbins
03/06/03: Iraq war will come and go before we know it
02/28/03: America takes time out for swimsuits
02/26/03: 'We shall be seen as liberators' .... 10 minutes with noted Brit commentator David Pryce-Jones
02/21/03: Terrorism one of many losing battles
02/14/03: Editors planning for the day after Gulf War II
02/12/03: The 'religiosity' of Ronald Reagan 10 minutes with author Paul Kengor
02/10/03: Should the shuttle crash be the end of NASA?
02/06/03: Dear Joan ...
01/31/03: Newsweek, Nation ponder pros, cons of Gulf War II
01/24/03: 'Original' ideas follow New Deal philosophy
01/22/03: When handicapping 2004, watch the economy: Ten minutes with Charlie Cook
01/17/03: New Republic fans hatred for SUVs
01/14/03: 10 minutes with Santorum on ... taxes, steel and Lott
01/10/03: Newsweeklies move on to latest menace
01/07/03: The best of the Q&As
12/30/02: Rosie's demise tops list of 2002 highlights
12/23/02: GOP must stick to its principles: 10 questions for ... Bill Kristol
12/20/02: Lott fiasco uncovers bigger problem
12/18/02: Free markets king in Sweden, at least for a day: Ten minutes with . Donald Boudreaux
12/13/02: Corruption of Indian casinos no surprise
12/06/02: Giving credit to young philanthropists
12/02/02: Ten minutes with . Chris Matthews
11/26/02: It's critical to memorialize communism's victims: 10 minutes with Lee Edwards
11/22/02: JFK's secret health woes are revealed
11/19/02: “It's best to contain Saddam”: Ten minutes with Col. David Hackworth
11/15/02: Brushing up on the affairs of a wild world
11/12/02: Make Dems filibuster 10 minutes with Robert L. Bartley
11/08/02: National Geographic: Urban overpopulation is good
11/05/02: The bloody consequences of a broken INS: Ten minutes with Michelle Malkin
11/01/02: Going to pot; thank heaven for media overkill
10/29/02: It's all about federalism: Ten minutes with Jonah Goldberg
10/25/02: Frank Sinatra, Kurt Cobain, Mad Magazine will never die
10/22/02: Here's why Orwell matters: Ten minutes with Christopher Hitchens
10/18/02: The sniper knocks Iraq off the covers
10/15/02: Iraq, oil and war: 10 minutes with ... economist/historian Daniel Yergin
10/11/02: England's gun-control experiment has backfired
10/04/02: Buchanan the media baron?
09/27/02: Analyzing Esquire, GQ is not for the squeamish
09/20/02: CEOs: The rise and fall of American heroes
09/13/02: Skeptics remind U.S. to calm down
09/10/02: 'A failure to recognize a failure': 15 minutes with ... Bill Gertz
09/06/02: Rating the 9-11 mags
08/30/02: Bad trains, bad planes, and bad automobiles
08/28/02: Baseball, broken, can be fixed: 15 minutes with George Will
08/16/02: 9-11 overload has already begun
08/13/02: Tell us what you really think, Ann Coulter
08/09/02: A funny take on a new kind of suburb
08/02/02: It's not the humidity, it's the (media) heat wave; the death of American cities
07/12/02: Colombia's drug lords are all business
07/09/02: If capitalism is 'soulless' then show me something better: 10 minutes with Alan Reynolds
06/25/02: Origins of a scandal: 10 minutes with Michael Rose
06/21/02: 9/11 report unearths good, bad and ugly
06/18/02: The FBI is rebounding 10 Minutes with Ronald Kessler
06/14/02: U.S. News opens closet of Secret Service
06/11/02: 10 minutes with William Lind: Can America survive in this 'fourth-generation' world?
06/07/02: America, warts and all
05/30/02: FBI saga gets more depressing
05/13/02: The magazine industry's annual exercise in self-puffery
04/30/02: 10 Minutes with ... The New York Sun's Seth Lipsky
04/26/02: Will the American Taliban go free?
04/23/02: 10 minutes with ... Dinesh D'Souza
04/19/02: Saddam starting to show his age
04/12/02: Newsweek puts suicide bombing in perspective
04/09/02: How polls distort the news, change the outcome of elections and encourage legislation that undermines the foundations of the republic
04/05/02: Looking into the state of American greatness
03/25/02: The American President and the Peruvian Shoeshine Boys
03/22/02: Troublemaking intellectual puts Churchill in spotlight
03/20/02: 10 minutes with ... Bill Bennett
03/18/02: Suddenly, it's cool again to be a man
03/12/02: 10 minutes with Ken Adelman
03/08/02: TIME asks the nation a scary question
03/05/02: 10 minutes with ... Rich Lowry
02/26/02: 10 minutes with ... Tony Snow
02/12/02: Has Soldier of Fortune gone soft?

© 2002, Bill Steigerwald