Rating: 
Summary: A Great Book (Even for Environmentalists)
Review: Thomas Sowell describes economics as thinking beyond Stage One-considering the later consequences of present policies. This is a great message, and one I wish our national leaders understood. I am a biochemist and a patent attorney, and I consider myself an environmentalist. Most environmentalists, unfortunately, need to think much more about Stage Two and beyond. This book is a good way to start this process and correct some of the naivete that surrounds environmental policy proposals. Mr. Sowell's analysis of recycling, for example, is a much-needed insertion of reality into this area.
I enjoyed the analyses of medical care and risk-taking. Mr. Sowell makes the excellent point that drug prices convey an underlying reality that is not nearly as easily changed as the prices are; drug price controls are therefore self-defeating. I felt Mr. Sowell did not go far enough on this, however. Life insurance works because it is reasonably easy to tell whether someone is dead or not, and because successfully killing someone for the insurance money is difficult and risky. Health insurance works poorly because there simply is no way to define "good" health care, much less tell whether or not someone else's child is receiving it. The demand for medical care is essentially infinite; nearly everyone would like themselves and their families to have better health than they presently do. As soon as a third party payer enters the picture, the necessary connection between demand for health care and the available resources of the patient or his family becomes a fog filled with conflicts of interest.
Mr. Sowell's analysis of zoning laws is basically good. I agree that we need much more consideration of the role of zoning laws in creating urban sprawl. I think Mr. Sowell puts too much emphasis on the role of "open space" in this, though. The main problem is not that we don't allow people to build in the remaining open space, but that thanks to too-restrictive zoning, housing density is far too low in the locations (such as near jobs, shopping, schools, parks, and subway stations) where people want to live. In my own neighborhood (Falls Church, Virginia), demand for housing is intense and home prices are soaring, but thanks to zoning and local politics, the few remaining lots are mostly having single-family houses built on them. Ridiculous!
Mr. Sowell's analysis is faulty in some areas. He too easily dismisses overpopulation as a serious problem. The difficulty is that if people are not required to pay the full costs of raising their own children, they will raise more children than they or their society can afford. If we are going to have such "pro-child" policies as universal free education, therefore, we must balance that with taking steps to control population.
Mr. Sowell admits that there is a limit to the earth's capacity to sustain human life, but says this is not a problem because we are still far from the limit. I am not convinced that we are as far from the limit as he thinks. The earth's resources (and its waste sinks) are being used at a rate which is simply not sustainable even over a time span of decades, never mind centuries. Mr. Sowell's analysis would be correct if there were no externalities. The fact is, though, that resource use is in effect very heavily subsidized. Users of crude oil, for example, do not now have to pay the costs of air pollution, roads, auto accidents, wars to protect the oil flow, climate change, and the like, but instead shove these costs off onto others. As long as this continues, crude oil will continue to be overused and the economy will be less efficient as a result. I would like to see Mr. Sowell's formidable abilities applied to the problem of solving the "Stage Two" problem of externalities, rather than simply sweeping it under the rug.
Rating:
Summary: A Great Book (Even for Environmentalists)
Review: Thomas Sowell describes economics as thinking beyond Stage One-considering the later consequences of present policies. This is a great message, and one I wish our national leaders understood. I am a biochemist and a patent attorney, and I consider myself an environmentalist. Most environmentalists, unfortunately, need to think much more about Stage Two and beyond. This book is a good way to start this process and correct some of the naivete that surrounds environmental policy proposals. Mr. Sowell's analysis of recycling, for example, is a much-needed insertion of reality into this area.
I enjoyed the analyses of medical care and risk-taking. Mr. Sowell makes the excellent point that drug prices convey an underlying reality that is not nearly as easily changed as the prices are; drug price controls are therefore self-defeating. I felt Mr. Sowell did not go far enough on this, however. Life insurance works because it is reasonably easy to tell whether someone is dead or not, and because successfully killing someone for the insurance money is difficult and risky. Health insurance works poorly because there simply is no way to define "good" health care, much less tell whether or not someone else's child is receiving it. The demand for medical care is essentially infinite; nearly everyone would like themselves and their families to have better health than they presently do. As soon as a third party payer enters the picture, the necessary connection between demand for health care and the available resources of the patient or his family becomes a fog filled with conflicts of interest.
Mr. Sowell's analysis of zoning laws is basically good. I agree that we need much more consideration of the role of zoning laws in creating urban sprawl. I think Mr. Sowell puts too much emphasis on the role of "open space" in this, though. The main problem is not that we don't allow people to build in the remaining open space, but that thanks to too-restrictive zoning, housing density is far too low in the locations (such as near jobs, shopping, schools, parks, and subway stations) where people want to live. In my own neighborhood (Falls Church, Virginia), demand for housing is intense and home prices are soaring, but thanks to zoning and local politics, the few remaining lots are mostly having single-family houses built on them. Ridiculous!
Mr. Sowell's analysis is faulty in some areas. He too easily dismisses overpopulation as a serious problem. The difficulty is that if people are not required to pay the full costs of raising their own children, they will raise more children than they or their society can afford. If we are going to have such "pro-child" policies as universal free education, therefore, we must balance that with taking steps to control population.
Mr. Sowell admits that there is a limit to the earth's capacity to sustain human life, but says this is not a problem because we are still far from the limit. I am not convinced that we are as far from the limit as he thinks. The earth's resources (and its waste sinks) are being used at a rate which is simply not sustainable even over a time span of decades, never mind centuries. Mr. Sowell's analysis would be correct if there were no externalities. The fact is, though, that resource use is in effect very heavily subsidized. Users of crude oil, for example, do not now have to pay the costs of air pollution, roads, auto accidents, wars to protect the oil flow, climate change, and the like, but instead shove these costs off onto others. As long as this continues, crude oil will continue to be overused and the economy will be less efficient as a result. I would like to see Mr. Sowell's formidable abilities applied to the problem of solving the "Stage Two" problem of externalities, rather than simply sweeping it under the rug.
Rating:
Summary: Sowell Urges us to Think Ahead
Review: Thomas Sowell's "Applied Economics" ought to be required reading in every high school and college economics, politics, and English courses. While Mr. Sowell is Ph.D economist and fellow at the Hoover Institute at Stanford, his ideas are useful even to the non-economist. As a society, we tend to be taken in too easily by people who make irrational arguments that sound good at first glance but produce miserable results since no one thought about the next step. Often times, too many words are politically popular but are actually quite harmful. Such words include: "living wage," "consumer protection," "rent control," etcetera. When these ideas are actually applied in practice, the results rarely meet the rhetoric over the long-run. Politicians only tend to care about what will get them re-elected, and as a result, few of them have an incentive to think about what will happen 10 years from now. As a result, many often escape the blame since the poor results will be far removed from their disasterous policies. This, of course, could easily be construed as a problem with democracy, but instead, my feeling is that it is a problem with our educational system. If our educational system actually educated citizens to think deeply about what would be the consequences of certain policies, perhaps the heated irrational logic emanating from certain politicians would cease. Perhaps such rhetoric would continue to work in irrational hotspots such as Berkeley, but rare for it to work elsewhere. One could only hope. This book is a must read for everyone -- regardless of who you are.Michael Gordon
Rating:
Summary: Sowell Urges us to Think Ahead
Review: Thomas Sowell's "Applied Economics" ought to be required reading in every high school and college economics, politics, and English courses. While Mr. Sowell is Ph.D economist and fellow at the Hoover Institute at Stanford, his ideas are useful even to the non-economist. As a society, we tend to be taken in too easily by people who make irrational arguments that sound good at first glance but produce miserable results since no one thought about the next step. Often times, too many words are politically popular but are actually quite harmful. Such words include: "living wage," "consumer protection," "rent control," etcetera. When these ideas are actually applied in practice, the results rarely meet the rhetoric over the long-run. Politicians only tend to care about what will get them re-elected, and as a result, few of them have an incentive to think about what will happen 10 years from now. As a result, many often escape the blame since the poor results will be far removed from their disasterous policies. This, of course, could easily be construed as a problem with democracy, but instead, my feeling is that it is a problem with our educational system. If our educational system actually educated citizens to think deeply about what would be the consequences of certain policies, perhaps the heated irrational logic emanating from certain politicians would cease. Perhaps such rhetoric would continue to work in irrational hotspots such as Berkeley, but rare for it to work elsewhere. One could only hope. This book is a must read for everyone -- regardless of who you are. Michael Gordon
Rating:
Summary: Economics: Well Explained and Applied
Review: Thomas Sowell's new book (2004 imprimatur) came to my attention as he was interviewed on radio...I pulled into the nearest (independent) bookstore in the metropolis of Austin, Texas, finding and buying the lone copy back in the dreary Economics section. I will certainly be reading more of Sowell's writings. Although a sequel to his book Basic Economics, this book stands well alone. In it, he tackles the current problems in this country involving the interaction of the political climate with basic economic principles. These include health care, housing, discrimination, risk, and the problems afflicting so-called third-world nations in economic development. He takes an interesting historical perspective. For example, his analysis of slavery through the ages, and during the period of the American Colonies and southern United States is particularly cogent, and still of contemporary interest. How could slavery have survived so long? Was there such a variety of slave "status" and freedoms to act as has recently been portrayed, even in such films as "Gods & Generals". During this film, a complicated relationship between General Thomas J. Jackson and his personal cook is portrayed. They have discussions during which it is clear that the slave's status as a well-known cook, and his desire to defend HIS home from invasion as much as Jackson's is remarkable. Within Sowell's analysis of the antebellum South, it is not difficult to understand. In fact, he describes a situation in which slaves were put in less "risky" labor positions than Irish immigrants, a situation derived from their economic value in a cotton baling and transport operation. I probably have not seen an economic "page turner" since reading George Gilder's "Wealth and Poverty" which was so important to understanding the Reagan era (it was, evidently, the "Bible" of many men responsible for early decisions during the Reagan administration and essential to understanding so-called supply-side economics). I recommend this book highly. Sowell's insights are well-explained in "plain English." A short read, thoroughly enjoyable, that will stimilate the reader to think more deeply about the current issues that should lead to a more informed discussion outside the academic elite about the problems plaguing our economy.
Rating: 
Summary: An abundance of common sense in this volume
Review: Throughout "Applied Economics" author Thomas Sowell continually tries to impress the reader of the importance of "thinking beyond stage one". As Sowell so artfully points out "stage one thinking" is part and parcel of a great many politicians these days. As an economics major myself (many years ago) I was anxious to see how Sowell would argue the conservative case on many of these issues. I must say he makes his points eloquently and with great clarity. Readers who tend to be liberal in their thinking should read this book if for no other reason than to understand conservative reasoning. But I do think it quite plausable that Sowells well thought out arguments might just change some minds about some of these basic economic issues.
I was particularly impressed with Sowell's presentation on health care and housing. Having done a fair amount of reading on how expensive it is for drug companies to develop a new drug I agree with Sowell when he argues against the re-importation of drugs from Canada. Now that may appear cruel on the surface but if drug manufacturers are not allowed to recoup their costs of developing these new drugs then there is really very little incentive for them to develop new drugs. In countries where drug prices are artificially held down by government intervention virtually no new drugs are discovered. Just think of the costs to our people if that were to occur here in the United States. Likewise, Thomas Sowell argues vehemently against policies like "rent control" and excessive "open space" laws in the housing arena. Such policies inevitably create shortages of well maintained rental units and new homes alike.
The result: higher prices for those seeking an apartment or new home. This is not rocket science the author is discussing here...just cold hard economic facts.
I tend to part company with conservatives on environmental issues. I am not at all sure that laissez-faire policies are the best way to go. Interestingly enough Sowell does not address the environment in this book. I would love to hear his arguments. All in all, this is a well written and easy to understand book. As another reviewer posited this should be required reading for anyone intending to vote. Recommended.
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