Thomas Sowell doesn't waste time with niceties in his book "Economic Facts and Fallacies." He cuts right to the chase: many destructive economic policies persist because they align with popular worldviews, not because they work.Fallacies, Sowell explains, aren't just nonsensical ideas. They're actually quite logical and plausible - except they're missing crucial pieces. This incompleteness becomes dangerous when these ideas transform into government policies, leading to those infamous "unintended consequences" we hear about after economic disasters.Why do fallacies persist despite...
The Zero-Sum Fallacy
Behind many economic policy blunders is a stubborn misconception: the idea that economic transactions are zero-sum games where one person's gain must be another's loss. Sowell demolishes this notion so thoroughly, you'll never believe in "Your loss is my gain" again.Think about why you buy coffee from your local shop. You value the coffee more than your $5, while the shop values your $5 more than the coffee. Both of you walk away better off. That's the magic of voluntary...
The Post Hoc Fallacy
Ever notice how we love connecting dots, especially when big events happen one after another? That's the post hoc fallacy in action – assuming that because B followed A, A must have caused B. It's an old mistake with a fancy Latin name: "Post Hoc, Ergo Propter Hoc" (after this, therefore because of this). But, just because it happened after doesn't mean it happened because.Everyone knows the DDT story. People said this insecticide caused cancer because cancer rates went up...
When What's Good for One Isn't Good for All
You've seen it at baseball games. One person stands up for a better view. Then another. Soon everyone's standing, and nobody sees any better than before. That's the fallacy of composition in action – assuming what benefits one person will benefit everyone if everyone does it.This mistake shows up constantly in government policies. Take those fancy "urban renewal" projects. Local officials proudly showcase before-and-after photos of transformed neighborhoods. The old "eyesore" buildings gone, replaced with gleaming new developments. Looks impressive,...
Sometimes "More" Has No Stopping Point
Economics teaches us one fundamental truth: resources are limited and have alternative uses. Sounds simple, but many people overlook this reality when advocating for noble-sounding causes and fall prey to the open-ended fallacy.Health, safety, and open space are universally desirable. The problem is they're completely open-ended. You can always make things healthier, or safer, or more spacious - there's just no natural stopping point. Meanwhile, our resources remain stubbornly finite.Consider health spending. We happily fund cancer research, but would we...
The Chess-Pieces Fallacy
Social engineers view society as their personal chessboard. They believe they can arrange people as easily as moving knights and rooks across squares. This view, which economist Adam Smith criticized centuries ago, remains alive today among those who craft sweeping policies.Here's the problem: unlike chess pieces, we humans have our own preferences, values, and plans. We don't passively accept being positioned according to someone else's grand design. When policymakers forget this basic truth, their clever schemes often collapse.Beyond individual resistance,...
Why "The Rich Get Richer, The Poor Get Poorer" Is Plain Wrong
Have you ever heard someone say "the economy is a fixed pie, so when the rich get more, the rest of us get less"? That's zero-sum thinking, right? Know what propagates this thinking? Misinterpretation of statistics.Let's cut through the confusion with a simple example. News reports often claim American workers' incomes haven't improved in decades. Sounds terrible! But many of those reports use household income — the sum of all earnings for everyone living in a home — which grew...
Fallacies from Gender Gaps to Rising Tuition
Do you remember what the post hoc fallacy was? The error of assuming that because event B followed event A, event A must have caused event B. Looking at why women earn less than men, many folks jump to a quick conclusion: discrimination must be the culprit. Here's the facts: women's representation in professional jobs was actually higher in the early 1900s than in the 1950s - long before anti-discrimination laws existed! Then it dropped mid-century before rising again.What lines...
Summary
Economic fallacies destroy prosperity while promising to create it. They survive on plausibility, political self-preservation, and our tendency to misread evidence. And now that you are aware of the fallacies existing around you, beware!
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About the Author
Thomas Sowell is an American economist, economic historian, and social and political commentator. He is a senior fellow at the Hoover Institution. With widely published commentary and books—and as a guest on TV and radio—he is a well-known voice in the American conservative movement as a prominent black conservative. He was a recipient of the National Humanities Medal from President George W. Bush in 2002.
More on: https://en.wikipedia.org/wiki/Thomas_Sowell
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