The one-handed economist

I’ve known of Thomas Sowell‘s writings for many years, often enjoying his pithy summaries of important economic ideas. I also knew that he was a “conservative” (Hoover Institute, U Chicago) economist and — as a Black man — kind of rare in the field.

But then I decided to take a look at his Basic Economics (2000/2015), and I am glad I did.

First, it’s because “some people” dismiss him as a neo-liberal [this term is poorly defined and often derogatory], and I wanted to see what they are talking about. This guy on YouTube, for example, takes 2.5 hours to raise petty points against Sowell. I didn’t watch the whole thing (whew!), but he does make ONE good point in the course of throwing the baby out with the bathwater: Sowell is definitely talking neoclassical [not neo-liberal!] free-market economics [NCFME], which means he ignores important areas such as environmental/ecological economics, behavioral economics, etc.

I agree that such omissions are a weakness. According to Perplexity, “Sowell urges humility and caution in both diagnosing and addressing climate change and its externalities, emphasizing the limits of knowledge and the risks of unintended consequences from well-intentioned policies.” Sowell, in his NCFME manner, worries more about government failure than market failure. I think this stand is on the wrong side of the debate, given our present understanding of (a) the harms of pollution (local and global) as well as (b) the need for government to intervene where markets do not exist. Indeed, I searched his book and found ZERO mentions of climate change or negative externalties (the term we use for the larger category of market failures), which is concerning in this day and age. Milton & Rose  Friedman’s Free to Choose [my review] also underplayed negative extremities, but their book is 35-years older, so I will be more understanding. So that’s a big #1 critique/observation.

Second, taking as given that Sowell is writing a NCFME book on basic economics, how does he do? I’d say rather well! His writing is crystal clear — often summarizing an important point in no more than a page or two, as if he was a skilled columnist (which he is :)). He also puts useful examples into the larger context to highlight the economics. Although I think he could do more to call out the limits to (his) economic thinking and analysis, I think his book is far more useful than, say Freakonomics, for thinking like an economist.

This book has seven sections (Prices and Markets, Industry and Commerce, Work and Pay, Time and Risk, The National Economy, The International Economy, and Special Economic Issues). I read most of Prices and all of Special Economic Issues, which was particularly insightful on the history of economic thought. I didn’t skip the other parts because they were wrong, but because I didn’t need to be reminded of those ideas by someone who writes far more fluently than me 🙂

I will copy/paste some of his amazing prose below, but I’ll end here with my recommendation: Yes, do read this book if you want to understand basic economics. There are no figures or math — just a really clear discussion of how markets and incentives help us make win-win decisions. After reading this and grasping its ideas, then I’d suggest getting into market failures and the government failures that come with them (this and this, respectively?).

1. And then what happens? One of the ways of understanding the consequences of economic decisions is to look at them in terms of the incentives they create, rather than simply the goals they pursue. This means that consequences matter more than intentions—and not just the immediate consequences, but also the longer run repercussions.
2. Opportunity costs: If the medical team does not allocate its time and medications efficiently, some wounded soldiers will die needlessly, while time is being spent attending to others not as urgently in need of care or still others whose wounds are so devastating that they will probably die in spite of anything that can be done for them. It is an economic problem, though not a dime changes hands. Most of us hate even to think of having to make such choices. Indeed, as we have already seen, some middle-class Americans are distressed at having to make much milder choices and trade-offs. But life does not ask us what we want. It presents us with options. Economics is one of the ways of trying to make the most of those options.
   AND: The real cost of building a bridge is whatever else could have been built with that same labor and material. This is also true at the level of a given individual, even when no money is involved. The cost of watching a television sitcom or soap opera is the value of the other things that could have been done with that same time.
   AND: The very word “needs” arbitrarily puts some desires on a higher plane than others, as categorically more important. But, however urgent it may be to have some food and some water, for example, in order to sustain life itself, nevertheless—beyond some point—both become not only unnecessary but even counterproductive and dangerous. Widespread obesity among Americans shows that food has already reached that point and anyone who has suffered the ravages of flood (even if it is only a flooded basement) knows that water can reach that point as well. In short, even the most urgently required things remain necessary only within a given range
3. The coordinating role of prices: Without the role of prices, imagine what a monumental bureaucracy it would take to see to it that the city of London alone is supplied with the tons of food, of every variety, which it consumes every day. Yet such an army of bureaucrats can be dispensed with—and the people that would be needed in such a bureaucracy can do productive work elsewhere in the economy—because the simple mechanism of prices does the same job faster, cheaper and better. Hayek surfaced this insight 80 years ago.
   AND: What this means, from the standpoint of the hungry people in that region, is that food is being rushed to them at maximum speed by “greedy” suppliers, probably much faster than if the same food were being transported to them by salaried government employees sent on a humanitarian mission.
4. The housing “crisis”: If the government today were to come up with a “plan” for “universal access” to beach-front homes and put “caps” on the prices that could be charged for such property, that would not change the underlying reality of the extremely high ratio of people to beach-front land. With a given population and a given amount of beach-front property, rationing without prices would have to take place by bureaucratic fiat, political favoritism or random chance—but the rationing would still have to take place. Even if the government were to decree that beach-front homes were a “basic right” of all members of society, that would still not change the underlying scarcity in the slightest.
   AND: When some people used more housing than usual, other people found less housing available. The same thing happens under other forms of price control: Some people use the price-controlled goods or services more generously than usual because of the artificially lower price and, as a result, other people find that less than usual remains available for them…. a Census report showed likewise that 46 percent of all households in Manhattan, where nearly half of all apartments are under some form of rent control, are occupied by only one person—compared to 27 percent nationwide
5. Profit and loss: Losses force the producers to stop producing what consumers don’t want. Without really knowing why consumers like one set of features rather than another, producers automatically produce more of what earns a profit and less of what is losing money.
   AND: In a price-coordinated economy, employees and creditors insist on being paid, regardless of whether the managers and owners have made mistakes. This means that capitalist businesses can make only so many mistakes for so long before they have to either stop or get stopped—whether by an inability to get the labor and supplies they need or by bankruptcy. In a feudal economy or a socialist economy, leaders can continue to make the same mistakes indefinitely. The consequences are paid by others in the form of a standard of living lower than it would be if there were greater efficiency in the use of scarce resources.
   AND: One upscale supermarket was rated “superior” in the speed of its checkout line by 90 percent of its customers but one of the low-price warehouse stores received a similar rating from only 12 percent of its customers.{947} Consumers pay in both money and time, and those who value their time more highly are often willing to pay more money in order to save that time and the exasperation of waiting in long lines or having to go from store to store to buy the all the items on their shopping lists. In short, people shopping at different supermarkets were paying different prices for different things, although superficially these might be called the “same” things, based solely on their physical characteristics.
   AND: In general, those who run non-profit organizations are in a position vis-à̀-vis those who use their goods and services very similar to that of a landlord during a shortage of housing: There is a surplus of applicants…. Adam Smith pointed out how academics running colleges and universities financed by endowments can run them in self-serving ways, being “very indulgent to one another,” so that each academic would “consent that his neighbour may neglect his duty, provided he himself is allowed to neglect his own.” Widespread complaints today that professors neglect teaching in favor of research, and sometimes neglect both in favor of leisure or other activities, suggest that the underlying principle has not changed much in more than two hundred years. Tenure guaranteeing lifetime appointments is common in non-profit colleges and universities, but is virtually unknown in businesses that must meet the competition of the marketplace, including profit-seeking educational institutions such as the University of Phoenix… Colleges and universities, for example, can become disseminators of particular ideological views that happen to be in vogue (“political correctness”) and restrictors of alternative views, even though the goals of education might be better served by exposing students to a wider range of contrasting and contending ideas.
   AND: Employment policies of non-profit organizations have more latitude than those of enterprises which operate in the hope of profit and under the threat of losses. Before World War II, hospitals were among the most racially discriminatory of American employers, even though their avowed purposes would have been better served by hiring the best-qualified doctors, even when those doctors happened to be black or Jewish. Non-profit foundations were also among the most racially discriminatory institutions at that time. The same was true of the non-profit academic world, where the first black professor did not receive tenure at a major university until 1948. Yet there were hundreds of black chemists working for profit-seeking chemical companies, years before blacks were hired to teach chemistry at non-profit colleges. Similarly, both black and Jewish doctors had flourishing private practices long before they could practice medicine in many non-profit hospitals.
   AND: We can see why market economies have so often outperformed other economies that depend on ideas originating solely within a narrow elite of birth or ideology. While market economies are often thought of as money economies, they are still more so knowledge economies, for money can always be found to back new insights, technologies and organizational methods that work, even when these innovations were created by people initially lacking in money, whether Henry Ford, Thomas Edison, David Packard, or others. Capital is always available under capitalism, but knowledge and insights are rare and precious under any economic system.
6. Value vs price vs cost: Many false predictions over the past century or more that we were “running out” of various natural resources in a few years were based on confusing the economically available current supply at current prices with the ultimate physical supply in the earth, which is often vastly greater.
   AND: The most fundamental reason why there is no such thing as an objective or “real” value is that there would be no rational basis for economic transactions if there were. When you pay a dollar for a newspaper, obviously the only reason you do so is that the newspaper is more valuable to you than the dollar is. At the same time, the only reason people are willing to sell the newspaper is that a dollar is more valuable to them than the newspaper is. If there were any such thing as a “real” or objective value of a newspaper—or anything else—neither the buyer nor the seller would benefit from making a transaction at a price equal to that objective value, since what would be acquired would be of no greater value than what was given up.
   AND: One of the reasons for the survival of economic myths is that many professional economists consider such beliefs to be too superficial, or even downright silly, to bother to refute them. But superficial and even silly beliefs have sometimes been so widespread as to become the basis for laws and policies with serious and even catastrophic consequences. Leaving myths unchallenged is risky, so scrutinizing silly notions can be a very serious matter… the oldest and most consequential of these myths is a notion summarized this way: Prices have been compared to tolls levied for private profit or to barriers which, again for private profit, keep the potential stream of commodities from the masses who need them… Crude as this notion might seem after examining the many economic activities coordinated by prices, it is an idea which has inspired political movements around the world, movements that have in some cases changed the history of whole nations.
   AND: Often related to the notion of reasonable or affordable prices is the idea of keeping “costs” down by various government policies. But prices are not costs. Prices are what pay for costs. Where the costs are not covered by the prices that are legally allowed to be charged, the supply of the goods or services simply tends to decline in quantity or quality, whether these goods are apartments, medicines, or other things. The cost of medical care is not reduced in the slightest when the government imposes lower rates of pay for doctors or hospitals. There are still just as many resources required as before to build and equip a hospital or to train a medical student to become a doctor. Countries which impose lower prices on medical treatment have ended up with longer waiting lists to see doctors and less modern equipment in their hospitals. Refusing to pay all the costs is not the same as lowering the costs. It usually leads to a reduction of either the quantity or the quality of the goods and services provided, or both.
   
7.  Win-win market transactions: Continuing transactions between buyer and seller make sense only if value is subjective, each getting what is worth more subjectively. Economic transactions are not a zero-sum process, where one person loses whatever the other person gains.
   AND: Too often, however, when a market is conceived of as a thing, it is regarded as an impersonal mechanism, when in fact it is as personal as the people in it. This misconception allows third parties to seek to take away the freedom of individuals to transact with one another on mutually agreeable terms, and to depict this restriction of their freedom as rescuing people from the “dictates” of the impersonal market, when in fact this would be subjecting them to the dictates of third parties.
   AND: In short, the mercantilists were preoccupied with the transfer of wealth, whether by export surpluses, imperialism, or slavery—all of which benefit some at the expense of others. Adam Smith was concerned with the creation of wealth, which is not a zero-sum process. Smith rejected government intervention in the economy to help merchants—the source of the name “mercantilism”—and instead advocated free markets along the lines of the French economists, the Physiocrats, who had coined the term laissez faire. Smith repeatedly excoriated special-interest legislation to help “merchants and manufacturers,” whom he characterized as people whose political activities were designed to deceive and oppress the public. In the context of the times, laissez faire was a doctrine that opposed government favors to business.
   AND: Those with a zero-sum vision who have seen property rights as mere special privileges for the affluent and the rich have helped erode or destroy such rights, or have made them practically inaccessible to the poor in Third World countries, thereby depriving the poor of one of the mechanisms by which people from backgrounds like theirs have risen to prosperity in other times and places. However useful economics may be for understanding many issues, it is not as emotionally satisfying as more personal and melodramatic depictions of these issues often found in the media and in politics. Dry empirical questions are seldom as exciting as political crusades or ringing moral pronouncements. But empirical questions are questions that must be asked, if we are truly interested in the well-being of others, rather than in excitement or a sense of moral superiority for ourselves
8. Water: One of the factors in California’s recurring water crises, for example, is that California farmers’ use of water is subsidized heavily. Farmers in California’s Imperial Valley pay $15 for the same amount of water that costs $400 in Los Angeles. The net result is that agriculture, which accounts for less than 2 percent of the state’s output, consumes 43 percent of its water. California farmers grow crops requiring great amounts of water, such as rice and cotton, in a very dry climate, where such crops would never be grown if farmers had to pay the real costs of the water they use. Inspiring as it may be to some observers that California’s arid lands have been enabled to produce vast amounts of fruits and vegetables with the aid of subsidized water, those same fruits and vegetables could be produced more cheaply elsewhere with water supplied free of charge from the clouds. The way to tell whether the California produce is worth what it costs to grow is to allow all those costs to be paid by California farmers who compete with farmers in other states that have higher rainfall levels. There is no need for government officials to decide arbitrarily—and categorically—whether it is a good thing or a bad thing for particular crops to be grown in California with water artificially supplied below cost from federal irrigation projects.
   AND: In Britain as well, the privatized water supply in England has meant lower water bills, higher quality drinking water, less leakage, and a sewage disposal system that complies with environmental regulations a higher percentage of the time than that in Scotland, where the government runs the water system. This evidence may be suggestive, rather than conclusive, but those who argue for political control of the water supply seldom see a need for any evidence at all. To many people, empirical consequences often matter less than deeply ingrained beliefs and attitudes. NB: Scottish Water has upped its game in its “benchmarking” competition with English firms, which have moved from providing value to extracting profits (yes, I blame OfWat), so Sowell’s thoughts here were indeed more suggestive than conclusive.
9. Taxes and subsidies: From the standpoint of the allocation of resources, government should either not tax resources, goods, and services or else tax them all equally, so as to minimize the distortions of choices made by consumers and producers. For similar reasons, particular resources, goods, and services should not be subsidized, even if particular people are subsidized out of humanitarian concern over their being the victims of natural disasters, birth defects, or other misfortunes beyond their control. Giving poor people money would accomplish the same humanitarian purpose without the same distortion in the allocation of resources created by subsidizing or taxing different products differently. However much economic efficiency would be promoted by letting resource prices be unchanged by taxes or subsidies, from a political standpoint politicians win votes by doing special favors for special interests or putting special taxes on whomever or whatever might be unpopular at the moment. The free market may work best when there is a level playing field, but politicians win more votes by tilting the playing field to favor particular groups.
   AND: A long-standing staple of political rhetoric has been the attempt to keep the prices of housing, medical care, or other goods and services “reasonable” or “affordable.” But to say that prices should be reasonable or affordable is to say that economic realities have to adjust to our budget, or to what we are willing to pay, because we are not going to adjust to the realities. Yet the amount of resources required to manufacture and transport the things we want are wholly independent of what we are willing or able to pay. It is completely unreasonable to expect reasonable prices.
   AND: Both in the private sector and in the government sector, there are always values that some people think worthy enough that other people should have to pay for them—but not worthy enough that they should have to pay for them themselves. Nowhere is the weighing of some values against other values obscured more often by rhetoric than when discussing government policies. Taxing away what other people have earned, in order to finance one’s own moral adventures via social programs, is often depicted as a humanitarian endeavor. But allowing others the same freedom and dignity as oneself, so that they can make their own choices with their own earnings, is considered to be pandering to “greed.” Greed for power is no less dangerous than greed for money, and has historically shed far more blood in the process.
10. Uncertainty: In addition to risk, there is another form of contingency known as “uncertainty.” Risk is calculable: If you play Russian roulette, there is one chance in six that you will lose. But if you anger a friend, it is uncertain what that friend will do, with the possibilities including the loss of friendship or even revenge. It is not calculable. The distinction between risk and uncertainty is important in economics, because market competition can take risk into account more readily, whether by buying insurance or setting aside a calculable sum of money to cover contingencies. But, if the market has uncertainty as to what the government’s ever-changing policies are likely to be during the life of an investment that may take years to pay off, then many investors may choose not to invest until the situation becomes clarified. When investors, consumers and others simply sit on their money because of uncertainty, this lack of demand can then adversely affect the whole economy. NB: Sowell, who is 94 (!), condemned Trump’s tariff idiocy.
11. Hamburgers today: The fact that economic consequences take time to unfold has enabled government officials in many countries to have successful political careers by creating current benefits at future costs. Government-financed pension plans are perhaps a classic example, since great numbers of voters are pleased to be covered by government-provided pension plans, while only a few economists and actuaries point out that there is not enough wealth being set aside to cover the promised benefits—but it will be decades before the economists and actuaries are proved right. My 2005 opinion on pensions [pdf].
12.  Economists and their thinking: Economics does not say that you should make the most money possible. Many professors of economics could themselves make more money in private industry.
    AND: What lofty talk about “non-economic values” often boils down to is that some people do not want their own particular values weighed against anything. If they are for saving Mono Lake or preserving some historic building, then they do not want that weighed against the cost—which is to say, ultimately, against all the other things that might be done instead with the same resources.
    AND: Politics has sometimes been called “the art of the possible,” but that phrase applies far more accurately to economics. Politics allows people to vote for the impossible, which may be one reason why politicians are often more popular than economists, who keep reminding people that there is no free lunch and that there are no “solutions” but only trade-offs. In the real world that people live in, and are likely to live in for centuries to come, trade-offs are inescapable. Even if we refuse to make a choice, circumstances will make choices for us, as we run out of resources for many important things that we could have had, if only we had taken the trouble to weigh alternatives.
    AND: When the classical economists referred to “political economy,” they meant the economics of the country as a whole—the polity—as distinguished from the economics of the household, or what might today be called “home economics.” The term “political economy” did not imply an amalgamation of economics and politics, as some [me!] have used that term in more recent times. I think we’d call these macro and micro, respectively.
    AND: Although Menger and Jevons were the founders of the marginal utility school in economics, and pioneers in the introduction of marginal concepts in general, it was Alfred Marshall’s monumental textbook Principles of Economics, published in 1890, which systematized many aspects of economics around these new concepts and gave them the basic form in which they have come down to present-day economics. Jevons had been especially at pains to reject the notion that value depends on labor, or on cost of production in general, but insisted that it was utility which was crucial. Alfred Marshall, however, said: We might as reasonably dispute whether it is the upper or the under blade of a pair of scissors that cuts a piece of paper, as whether value is governed by utility or cost of production. In other words, it was the combination of supply (dependent on the cost of production) and demand (dependent on marginal utility) which determined prices. In this and other ways, Marshall reconciled the theories of the classical economists with the later marginalist theories to produce what became known as neo-classical economics. His Principles of Economics became the authoritative text and remained so on into the first half of the twentieth century, going through eight editions in his lifetime. I commented on every chapter of Marshall’s Principles over a 72-week period.
    AND: While it is tempting to think of the history of economics as the history of a succession of great thinkers who advanced the quantity and quality of analysis in this field, seldom did these pioneers create perfected analyses. The gaps, murkiness, errors and shortcomings common to pioneers in many fields were also common in economics. Clarifying, repairing and more rigorously systematizing what the giants of the profession created required the dedicated work of many others, who did not have the genius of the giants, but who saw many individual things more clearly than did the great pioneers.
    AND: What scientists share is not simply agreement on various conclusions but, more fundamentally, agreement about the ways of testing and verifying conclusions, beginning with a careful and strict definition of the terms being used. The crucial importance of definitions in economics has been demonstrated, for example, by the fallacies that result when popular discussions of economic policies use a loose term like “wages” to refer to such different things as wage rates per unit of time, aggregate earnings of workers, and labor costs per unit of output.
    AND: In principle, economics is much like meteorology. There is no example in recorded history in which a government increased the money supply ten-fold in one year without prices going up. Nor does anyone expect that there ever will be. The effects of price controls in creating shortages, black markets, product quality decline, and a reduction in auxiliary services, have likewise been remarkably similar, whether in the Roman Empire under Diocletian, in Paris during the French Revolution or in the New York housing market under rent control today. Nor has there been any fundamental difference whether the price being controlled was that of housing, food, or medical care. Controversies among economists make news, but that does not mean that there are no established principles in this field, any more than controversies among scientists mean that there is no such thing as established principles of chemistry or physics. In both cases, these controversies seldom involve predicting what would happen under given circumstances but forecasting what will in fact happen in circumstances where there are too many combinations and permutations of factors for the outcome to be completely foreseen. In short, these controversies usually do not involve disagreement about fundamental principles of the field but about how all the trends and conditions will come together to determine which of those principles will apply or predominate in a particular set of circumstances.
    AND: In short, whether or not any given explanation is too simple is an empirical question that cannot be decided in advance by how plausible, complex, or nuanced an explanation seems on the face of it, but can only be determined after examining hard evidence on how well its predictions turn out. [Friedman, 1953]
    AND: Keynes: “the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.” In other words, it was not by direct influence over those who hold power at a particular point in time that economists influence the course of events, according to Keynes. It was by generating certain general beliefs and attitudes which provide the context within which opinion-makers think and politicians act. In that sense, the mercantilists are still an influence on beliefs and attitudes in the world today [Trump!], centuries after they were refuted decisively within the economics profession by Adam Smith.
    AND: The major problem of our time is that people have come to expect policies to produce results that they are incapable of producing. . . . we economists in recent years have done vast harm—to society at large and to our profession in particular—by claiming more than we can deliver. We have thereby encouraged politicians to make extravagant promises, inculcate unrealistic expectations in the public at large, and promote discontent with reasonably satisfactory results because they fall short of the economists’ promised land.
    AND: The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false.
    AND: While the economic analysis required to understand these issues may not be particularly difficult to grasp, one must first stop and think about the issues in an economic framework. When people do not stop and think through the issues, it does not matter whether those people are geniuses or morons, because the quality of the thinking that they would have done is a moot point.
    AND: However, no listing of economic fallacies can be complete, because the fertility of the human imagination is virtually unlimited. New fallacies are being conceived, or misconceived, while the old ones are still being refuted. The most that can be hoped for is to reveal some of the more common fallacies and promote both skepticism and an analytical approach that goes beyond the emotional appeals which sustain so many harmful and even dangerous economic fallacies in politics and in the media.

Sowell’s Bottom Line: Many economic fallacies depend upon (1) thinking of the economy as a set of zero-sum transactions, (2) ignoring the role of competition in the marketplace, or (3) not thinking beyond the initial consequences of particular policies.

I give this book FOUR STARS.

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Here are all my reviews.

I read this 1998 book by James C. Scott (1936-2024) while I was in graduate school (maybe 20 years ago). I loved it then and — after re-reading it recently — I love it now. This is one of my top 10 books of all time.

I’ve also enjoyed his Weapons of the Weak (1985) and Two Cheers for Anarchism (2012).

Now I typically paste excerpts of books that I review, as a means of showing you the author’s insights, but my highlights run to 50 pages (!), so I’m not going to do that.

What the book is about: It complements the insights of Hayek, van Mises, Douglass North and the Ostroms, i.e., that no one person can possess all information, which means that it’s impossible to summarize information in a useful (actionable) way. This “Knowledge Problem” is why markets work better than centralized planners, but also why democracy works better than authoritarianism. It explains why institutions (“the rules of the game”) differ across time and space. Those institutions reflect the interactions of local conditions and culture, outside forces, and a long history of learning by doing (read The Secret of Our Success). Scott contributes a series of examples, wonderfully annotated, of how the State’s top-down (“high modernist”) perspective is not just inefficient but anti-human. NB: He is not an uncritical fan of free markets as Hayek and Friedman are.

Scott: High-modernist faith was no respecter of traditional political boundaries; it could be found across the political spectrum from left to right but particularly among those who wanted to use state power to bring about huge, utopian changes in people’s work habits, living patterns, moral conduct, and worldview… In sum, the legibility of a society provides the capacity for largescale social engineering, high-modernist ideology provides the desire, the authoritarian state provides the determination to act on that desire, and an incapacitated civil society provides the leveled social terrain on which to build.

What is high modernism, then? It is best conceived as a strong (one might even say muscle-bound) version of the beliefs in scientific and technical progress that were associated with industrialization in Western Europe and in North America from roughly 1830 until World War I. At its center was a supreme self-confidence about continued linear progress, the development of scientific and technical knowledge, the expansion of production, the rational design of social order, the growing satisfaction of human needs, and, not least, an increasing control over nature (including human nature) commensurate with scientific understanding of natural laws. High modernism is thus a particularly sweeping vision of how the benefits of technical and scientific progress might be applied — usually through the state — in every field of human activity.

High modernism implies a truly radical break with history and tradition. Insofar as rational thought and scientific laws could provide a single answer to every empirical question, nothing ought to be taken for granted. All human habits and practices that were inherited and hence not based on scientific reasoning — from the structure of the family and patterns of residence to moral values and forms of production-would have to be reexamined and redesigned. The structures of the past were typically the products of myth, superstition, and religious prejudice. It followed that scientifically designed schemes for production and social life would be superior to received tradition. The sources of this view are deeply authoritarian. If a planned social order is better than the accidental, irrational deposit of historical practice, two conclusions follow. Only those who have the scientific knowledge to discern and create this superior social order are fit to rule in the new age. Further, those who through retrograde ignorance refuse to yield to the scientific plan need to be educated to its benefits or else swept aside.

The idea of a root-and-branch, rational engineering of entire social orders in creating realizable utopias is a largely twentieth-century phenomenon. And a range of historical soils have seemed particularly favorable for the flourishing of high-modernist ideology. Those soils include crises of state power, such as wars and economic depressions, and circumstances in which a state’s capacity for relatively unimpeded planning is greatly enhanced, such as the revolutionary conquest of power and colonial rule.

Some examples: Street names so the government can find you (military service) and tax your property. Last names so the government can tell people apart. “Scientific” forests that are easy to conceive but fail in the face of natural pressures (read Priests and Programmers). City after city that’s been ruined for people as it’s been rebuilt for cars. Standard units of measure that made it easier to tax crops.

Context: The goal, always, was to allow the center to rule the periphery. The tragedy, often, was harmful misrule. The poor got poorer and the rich (relatively) richer, but net prosperity and resiliency declined. We need to keep this wasteful dynamic in mind as the rich and powerful try to protect themselves from climate chaos. They are likely to “defend” in ways that harm us while failing to help themselves — just as in the end of “Don’t Look Up” and Musk’s idea of letting Earth burn while he and his many children colonize Mars.

Some interesting (not?) surprises: Lenin and Courbusier, respectively, tried to reshape political and urban life to their will. Rosa Luxembourg and Jane Jacobs opposed them. Gender is relevant here, in the sense of men sometimes taking a more abstract view and women taking a more grounded view.

This “Seeing” (rather, blindness) is everywhere: The vocabulary used to organize nature typically betrays the overriding interests of its human users. In fact, utilitarian discourse replaces the term “nature” with the term “natural resources,” focusing on those aspects of nature that can be appropriated for human use… Highly valued animals become “game” or “livestock,” while those animals that compete with or prey upon them become “predators” or “varmints.

What does it overlook? Metis — the local unique knowledge that is more experienced than explained (read Shop Craft as Soul Class) — which throws away our wisdom (see Secrets of Our Success, above).

Scott: The skills of metis may well involve rules of thumb, but such rules are largely acquired through practice (often in formal apprenticeship) and a developed feel or knack for strategy. Metis resists simplification into deductive principles which can successfully be transmitted through book learning, because the environments in which it is exercised are so complex and nonrepeatable that formal procedures of rational decision making are impossible to apply. In a sense, metis lies in that large space between the realm of genius, to which no formula can apply, and the realm of codified knowledge, which can be learned by rote

Knowing how and when to apply the rules of thumb in a concrete situation is the essence of metis. The subtleties of application are important precisely because metis is most valuable in settings that are mutable, indeterminant (some facts are unknown), and particular.  Although we shall return to the question of indeterminacy and change, here I want to explore further the localness and particularity of metis. In seamanship, the difference between the more general knowledge of navigation and the more particular knowledge of piloting is instructive.

A mechanical application of generic rules that ignores these particularities is an invitation to practical failure, social disillusionment, or most likely both. The generic formula does not and cannot supply the local knowledge that will allow a successful translation of the necessarily crude general understandings to successful, nuanced, local applications. The more general the rules, the more they require in the way of translation if they are to be locally successful. Nor is it simply a matter of the captain or navigator realizing at what point his rules of thumb are inferior to the intimate local knowledge of the pilot. Rather, it is a matter of recognizing that the rules of thumb themselves are largely a codification derived from the actual practices of sailing and piloting.

Like language, the metis or local knowledge necessary to the successful practice of farming or pastoralism is probably best learned by daily practice and experience. Like serving a long apprenticeship, growing up in a household where that craft is continually practiced often represents the most satisfactory preparation for its exercise. This kind of socialization to a trade may favor the conservation of skills rather than daring innovation. But any formula that excludes or suppresses the experience, knowledge, and adaptability of metis risks incoherence and failure; learning to speak coherent sentences involves far more than merely learning the rules of grammar.

[Some] economists are also guilty: Risk, providing it could be assigned a known probability, became a fact like any other, whereas uncertainty (where the underlying probabilities are not known) still lay outside techne’s reach [techne, the opposite of metis, is logical codification]. The intellectual “career” of risk and uncertainty is indicative of many fields of inquiry in which the realm of analysis was reformulated and narrowed to exclude elements that could not be quantified and measured but could only be judged. [I talk about this all the time.] Better put, techniques were devised to isolate and domesticate those aspects of key variables that might be expressed in numbers (a nation’s wealth by gross national product, public opinion by poll numbers, values by psychological inventories). Neoclassical economics, for example, has undergone a transformation along these lines. Consumer preferences are first taken as a given and then counted, in order to bracket taste as a major source of uncertainty. Invention and entrepreneurial activity are treated as exogenous and cast outside the perimeter of the discipline as too intractable to submit to measurement and prediction. The discipline has incorporated calculable risk while exiling those topics where genuine uncertainty prevails (ecological dangers, shifts in taste). As Stephen Marglin shows, “the emphasis on self-interest, calculation, and maximization in economics” are classical examples of “self-evident postulates” and reflect “more an ideological commitment to the superiority of episteme than a serious attempt to unravel the complexities and mysteries of human motivation and behavior.”

Borrowing the prestige of scientific language and methods from the biological sciences, many social scientists have envisioned and tried to effect an objective, precise, and strictly replicable set of techniques — a set of techniques that gives impartial and quantitative answers. Thus most forms of formal policy analysis and cost-benefit analysis manage, through heroic assumptions and an implausible metric for comparing incommensurate variables, to produce a quantitative answer to thorny questions. They achieve impartiality, precision, and replicability at the cost of accuracy. [These dynamics define the tension in “The Bet” between Simons and Ehrlich (more, more, more). Also see The Prophet and the Wizard.]

What to do in an over-centralized world? Stephen Marglin has put their problem succinctly: If “the only certainty about the future is that the future is uncertain, if the only sure thing is that we are in for surprises, then no amount of planning, no amount of prescription, can deal with the contingencies that the future will reveal.” Thus: 

1. Take small steps
2. Favor reversibility
3. Plan on surprises
4. Plan on human inventiveness

My one-handed conclusion: Everyone should read this book, to appreciate metis, worry about techne, and defend their local institutions against centralized “efficiency.” FIVE STARS.

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