 First edition | |
| Author | Thomas Sowell |
|---|---|
| Country | United States |
| Language | English |
| Publisher | Basic Books |
Publication date | 1980 |
| Media type | |
| Pages | 422 (hardcover) |
| ISBN | 978-0465037360 |
| OCLC | 35768274 |
| 302.3 21 | |
| LC Class | HM73 .S69 1996 |
| Preceded by | Race and Economics |
Knowledge and Decisions is a non-fiction book by American economist Thomas Sowell. [1] The book was initially published in 1980 by Basic Books and reissued in 1996. [2]
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 is drawn from F.A. Hayek's article "The Use of Knowledge in Society."
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 viewpoints, Sowell also indicts price controls (such as rent control, minimum wage, price fixing, and subsidies) 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 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, 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 and National Institutes of Health, 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 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.
The economic calculation problem is a criticism of using economic planning as a substitute for market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article "Economic Calculation in the Socialist Commonwealth" and later expanded upon by Friedrich Hayek.
Herbert Alexander Simon was an American economist, political scientist and cognitive psychologist, whose primary research interest was decision-making within organizations and is best known for the theories of "bounded rationality" and "satisficing". He received the Nobel Prize in Economics in 1978 and the Turing Award in 1975. His research was noted for its interdisciplinary nature and spanned across the fields of cognitive science, computer science, public administration, management, and political science. He was at Carnegie Mellon University for most of his career, from 1949 to 2001.
Rational choice theory refers to a set of guidelines that help understand economic and social behaviour. The theory postulates that an individual will perform a cost-benefit analysis to determine whether an option is right for them. It also suggests that an individual's self-driven rational actions will help better the overall economy. Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.
Public choice, or public choice theory, is "the use of economic tools to deal with traditional problems of political science". Its content includes the study of political behavior. In political science, it is the subset of positive political theory that studies self-interested agents and their interactions, which can be represented in a number of ways – using standard constrained utility maximization, game theory, or decision theory.
The term Homo economicus, or economic man, is the portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively-defined ends optimally. It is a word play on Homo sapiens, used in some economic theories and in pedagogy.
Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals and institutions and how those decisions vary from those implied by classical economic theory.
Thomas Sowell is an American economist, social theorist, and senior fellow at Stanford University's Hoover Institution.
Policy analysis is a technique used in public administration to enable civil servants, activists, and others to examine and evaluate the available options to implement the goals of laws and elected officials. The process is also used in the administration of large organizations with complex policies. It has been defined as the process of "determining which of various policies will achieve a given set of goals in light of the relations between the policies and the goals."
Government failure, in the context of public economics, is an economic inefficiency caused by a government intervention, if the inefficiency would not exist in a true free market. It can be viewed in contrast to a market failure, which is an economic inefficiency that results from the free market itself, and can potentially be corrected through government regulation. The idea of government failure is associated with the policy argument that, even if particular markets may not meet the standard conditions of perfect competition required to ensure social optimality, government intervention may make matters worse rather than better.
In economics, the profit motive is the motivation of firms that operate so as to maximize their profits. Mainstream microeconomic theory posits that the ultimate goal of a business is "to make money" - not in the sense of increasing the firm's stock of means of payment, but in the sense of "increasing net worth". Stated differently, the reason for a business's existence is to turn a profit. The profit motive is a key tenet of rational choice theory, or the theory that economic agents tend to pursue what is in their own best interests. In accordance with this doctrine, businesses seek to benefit themselves and/or their shareholders by maximizing profits.
Social movement theory is an interdisciplinary study within the social sciences that generally seeks to explain why social mobilization occurs, the forms under which it manifests, as well as potential social, cultural, and political consequences.
The rational planning model is a model of the planning process involving a number of rational actions or steps. Taylor (1998) outlines five steps, as follows:
Bent Flyvbjerg is a Danish economic geographer. He is Professor of Major Programme Management at Oxford University's Saïd Business School and the first Director of the University's BT Centre for Major Programme Management. He was previously Professor of Planning at Aalborg University, Denmark and Chair of Infrastructure Policy and Planning at Delft University of Technology, The Netherlands. He is a fellow of St Anne's College, Oxford.
The Myth of the Rational Voter: Why Democracies Choose Bad Policies is a 2007 book by the economist Bryan Caplan, in which the author challenges the idea that voters are reasonable people whom society can trust to make laws. Rather, Caplan contends that voters are irrational in the political sphere and have systematically biased ideas concerning economics.
Predictably Irrational: The Hidden Forces That Shape Our Decisions is a 2008 book by Dan Ariely, in which he challenges readers' assumptions about making decisions based on rational thought. Ariely explains, "My goal, by the end of this book, is to help you fundamentally rethink what makes you and the people around you tick. I hope to lead you there by presenting a wide range of scientific experiments, findings, and anecdotes that are in many cases quite amusing. Once you see how systematic certain mistakes are—how we repeat them again and again—I think you will begin to learn how to avoid some of them". The book has been republished in a "revised & expanded edition".
Ethics in the public sector is a broad topic that is usually considered a branch of political ethics. In the public sector, ethics addresses the fundamental premise of a public administrator's duty as a "steward" to the public. In other words, it is the moral justification and consideration for decisions and actions made during the completion of daily duties when working to provide the general services of government and nonprofit organizations. Ethics is defined as, among others, the entirety of rules of proper moral conduct corresponding to the ideology of a particular society or organization (Eduard). Public sector ethics is a broad topic because values and morals vary between cultures. Despite the differences in ethical values, there is a growing common ground of what is considered good conduct and correct conduct with ethics. Ethics are an accountability standard by which the public will scrutinize the work being conducted by the members of these organizations. The question of ethics emerges in the public sector on account of its subordinate character.
Intellectuals and Society is a non-fiction book by Thomas Sowell. The book was initially published on January 5, 2010 by Basic Books.
Preference falsification is the act of communicating a preference that differs from one's true preference. The public frequently conveys, especially to researchers or pollsters, preferences that differ from what they truly want, often because they believe the conveyed preference is more acceptable socially. The idea of preference falsification was put forth by the social scientist Timur Kuran in his 1995 book Private Truths, Public Lies as part of his theory of how people's stated preferences are responsive to social influences. It laid the foundation for his theory of why unanticipated revolutions can occur. The concept is related to ideas of social proof as well as choice blindness.
The opposition between substantivist and formalist economic models was first proposed by Karl Polanyi in his work The Great Transformation (1944).
Basic Economics is a non-fiction book by American economist Thomas Sowell published by Basic Books in 2000. The original subtitle was A Citizen's Guide to the Economy, but from the 3rd edition in 2007 on it was subtitled A Common Sense Guide to the Economy.
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