Applied Economics by Thomas Sowell

(New York: Basic Books, 2008), 352

Chapter 1

  • Politics and economics are separate, but must be considered together
  • We need to think about economics in terms of both goals and incentives (which may be different)
  • We need to think beyond just "state 1" in making policies (thinking ahead)
  • The truth emerges over time, even though politicians often take politically positive short term action even if it is economically damaging over the long term (Nixon price controls)
  • We need to be pragmatic rather than idealistic in economic policy

* Chapter 2

  • Greater importance of human capital: it accrues to those who continually grow their skills
  • Removing low wage jobs has a bigger impact than just the lost wages, but also lost experience for later jobs
  • Long discussion of slavery and other forms of forced labor m

Chapter 3 - Medical Care

  • Who pays for what greatly influences demand for medical care
  • How pharmaceutical companies must recoup billions in development costs on low marginal cost drugs

Chapter 4 - Housing

  • Basically he argues against land use regulations, which lead to increased housing costs
  • "Politics offers attractive solutions, but economics offers only trade offs"
  • Insurance reduces overall contingency for risk because risk is aggregated
  • Shame around having a child out of wedlock disappeared after the costs associated with raising the child shifted from the parents to the government

Chapter 5 - Safety

  • Nothing is 100% safe; the real question is cost/benefit of reducing probability of failure
  • "Everything is unsafe if you disregard questions of degree and alternatives"
  • Reinsurance companies further spread risk
  • Subsidizing car insurance can have unintended consequences of raising prices for all drivers and increasing rates of pedestrian injuries and deaths
  • Government retirement plans are like a Ponzi or pyramid scheme: first in, first out

Chapter 6 - Immigration

Chapter 7 - Discrimination

  • Prejudice vs bias vs discrimination
  • Economic competition often naturally diminishes discrimination

Topic: Economics

Source: Dad?


file:(2017-08-01-Applied Economics)

Created: 2021-03-06-Sat
Updated: 2022-12-31-Sat