Why I Recommend Basic Economics From Sowell

Here is part of Sowell's Townhall post this morning.

One of the most widespread and dramatic examples of amateurs outperforming professionals has been in economies that have had central planning directed by highly educated people, advised by experts and having at their disposal vast amounts of statistical data, not available and probably not understandable, by ordinary citizens.

One easy to understand reason is that central planners in the days of the Soviet Union had to set over 24 million prices. Nobody is capable of setting and changing 24 million prices in a way that will direct resources and output in an efficient manner.

For that, each of the 24 million prices would have to be weighed and set against each of the other 24 million prices. in order to provide incentives for resources to go where they were most in demand by producers and output to go where it was most in demand by consumers.

In a market economy, however, nobody has to take on such an impossible task. Each producer and each consumer need only be concerned with the relatively few prices relevant to their own decisions, with coordination of the economy being left to supply and demand.

In short, amateurs were able to outperform professionals in the economy because the amateurs did not take on tasks beyond the capability of any human being or any manageable group of human beings.

Of course the entire column is worth reading.

The Politics of Supply and Demand

Thomas Sowell has two columns this week that are outstanding. Here are a couple of good lines:

Least of all do voters want to hear about the most fundamental reality of
economics— that what everybody wants has always added up to more than there is.

That is called scarcity— and if there were no scarcity, there would be no
economics. What would be the point, if we could all have everything we want, in
whatever amount we want?
There were no economists in the Garden of Eden
because everything was available in unlimited abundance.

A politician with good rhetorical skills can create a new Garden of
Eden in people's minds, though only in their minds. However, that is sufficient,
if that vision or illusion can be kept alive until election day, and its failure
to materialize afterwards can be explained away by the obstruction of
villains.

and more...

Make a list of those politicians who do the most to prevent our drilling
for our own oil. Then make a list of those politicians who express the most
outrage about the high price of gasoline. Don't be surprised if you see the same
names on both lists.

Make a list of those politicians who most loudly lament the lack of
"affordable housing." Then make a list of those politicians who have most
consistently promoted restrictions on the building of housing, under the banner
of "open space" laws, "farmland protection" policies, preventing "urban sprawl,"
and other politically soothing phrases.

Again, do not be surprised at seeing the same folks on both
lists.

and finally...

So long as voters prefer heroes and villains to supply and demand, this game
will continue to be played. It is not because supply and demand is too "complex"
to understand, but because it is not emotionally satisfying.

Read the entire columns.

Too Complex? Part I
Too Complex? Part II