« Brazil school shooter spent 'four hours every day reading the Koran' | Main | White House Played Pure Politics With Budget Deal: Had Plans To Purposefully Inconvenience And Inflict As Much Pain On The American Public As Possible »

April 11, 2011

Thomas Sowell On Economic Facts And Fallacies

Thomas Sowell has just released Economic Facts and Fallacies: Second Edition . John Hawkins read the first edition, thought it was outstanding, and would highly recommend it. He's also taken the opportunity to interview Thomas Sowell about the Second Edition of the book and has posted a slightly edited transcript of their conversation.

Here's a brief excerpt to pique your interest:

[...] We also hear a lot about income inequality these days. There is a wide disparity between the rich in this country and everyone else and that's presented as evidence the system is not fair, that it's bad for the poor and the middle class, and that we need to tax the rich a lot more. True?

No. One of the sad things that happens is that people look at numbers and they translate the numbers into a concept that has no relationship to those numbers.

Being rich and being poor are thought of as classes of people who endure over time. In reality the great income inequality is between people of different ages. People in their 50's make a lot more money than people in their 20's. But that's not a class because anyone who lives a normal lifetime is going to be in his 20's at some point and in his 50's at a later point. I see all this stuff about wealth even more so than income and yes, most people under the age of 15 don't really have any wealth. And there are millions of them, but that is not a class issue. That's an age situation and most of the people who have no income and are under 15 are being supported by other people. So there are all kinds of numbers that are seized upon to be forced into some kind of a pattern, a pattern that bears no relationship to reality.

Now, poverty is commonly believed to be a root cause of crime and even terrorism. How much truth is there to that?

Close to zero. In fact, if you look at say the 1950's, people were a lot poorer in 1950 than they are today. The crime rate was a lot lower. The crime rate was lower even during The Great Depression than it was in some later times. So there is a correlation, but what little correlation there is has to be looked at in terms of the correlation is not causation. Many of the same characteristics that lead people to remain poor are also characteristics that promote crime by the same people. Even there, when you find a correlation you have to find out which way the direction of causation goes. Most people who talk this way just automatically assume that people commit crimes because they're poor.

Posted by Richard at April 11, 2011 6:58 AM

• Thomas Sowell On Economic Facts And Fallacies - Apr 11, 2011