Tuesday, January 18, 2005

Decisions, "Society" and Thomas Sowell's Insights

Relatively few books provide insights so powerful and useful that they can change your way of looking at things. Thomas Sowell's book, "Knowledge and Decisions" ( Basic books, 1996) is such a book.
Consider the first sentence in Chapter 2 "despite the fashionable practice of personifying "society" as a decider and actor, decision making in the real world can be understood only in the context of the actual decision making units (DMUs- my abbreviation) that exist, and the specific, respective sets of constraints and incentives within which each operate".
He emphasized that the term society is a metaphor."There is no one called"society" that decides anything." He continues to say that sometimes this metaphor is used to shift the decision making from smaller and more numerous units to a single national wide unit. No DMU controls a whole society except to varying degrees in a totalitarian state.
Some may consider the government as the institutional personification of "society". Of this Sowell says "...the diversities,conflicts and disparate incentives and constraints which make "society" a meaningless abstraction as a decision making unit also make government a fragmentary aggregation of decision makers."
Discussion about various issues, e.g. "distribution" of health care, overlooks-through ignorance or intention- the fact that the most basic decision is who makes decisions and under what constraints and feedback.
Medical Journal articles abound with comments such as "society can or cannot afford this or that" . The things to remember there are: 1) society is not a decision making unit 2) issues that are addressed by the "society" obfuscation need to be thought of in terms of the incentives and constraints of the various DMUs potentially involved and 3) Government is not society (articles frequently propose or at least imply a governmental solution to the issue at hand).


Anonymous Anonymous said...

learning books for your home library collection. Great books on learning books and home repairs ...

1:58 PM  
Anonymous Anonymous said...

Thomas Sowell has been an American hero to me since, several years ago I read his book 'Economics'. I have many other of his books in my library, which I have read, and have given them to others as gifts.

2:41 PM  

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