/lit/ - Literature

[Anonymous No.16337879]

i recently heard that this book is not entirely credible, what issues are there with Sowell and what is a better economics book?

[Anonymous No.16338077]

>>16337879
Whoever told you that is raging simp. The book is gold, anon.

[Anonymous No.16338122]

>>16337879
Well it's largely polemical and not really trying to explain or justify marginalism in whole or anything like that.
Sowell's just continuing Milton Friedman's project but that's totally absurd today and Friedman could only get away with that because stagflation was recent and people were scared/confused about inflation which hasn't been a serious issue for like over 30 years in advanced economies. You see central banks have been doing everything Friedman would say should cause hyperinflation for well over a decade and consumer prices have barely budged.
The cambridge capital controversy, which may be arcane and confusing, really gets at why neoclassical economics is worse than pseudoscience:
https://en.wikipedia.org/wiki/Cambridge_capital_controversy

For alternative non-monetarist takes you can see for something more polemical try The Age of the Economist by Daniel R. Fusfeld
http://gen.lib.rus.ec/book/index.php?md5=4B9E89EB1295E2D7150B4B61D6A0667A
Or something more textbooky see Macroeconomics by William Mitchell
http://gen.lib.rus.ec/book/index.php?md5=C7520E0E99E6EE9C83698CF67A115A71

[Anonymous No.16338132]

>>16338077
>>16338122
Dubs

[Anonymous No.16338210]

>>16338122
This. Good post.

[Anonymous No.16338248]

this is what they recommended at my uni

[Anonymous No.16338307]

>>16337879
Pic related is what you want.

[Anonymous No.16338379]

>>16337879
Provides all the ammo you need to make commies tear their hair out

[Anonymous No.16338493]

It’s actually a lot more credible than people think. It explains incentives, scarcity, price theory, price controls, supply/demand, investment, comparative advantage, externalities, etc, all of which you’d read in any standard economics textbook. It even says things that are favourable to Keynes. The only “non-credible”/opinionated part is chapter 8 where he rails against anti-trust laws.

If it seems anti-communism that’s because reality is anti-communism.

[Anonymous No.16338510]

My only form of economic education is what I learned at a levels, should I start reading a beginner to economics book or am I sorted?

[Anonymous No.16338513]

It's not so much that it isn't credible. He gives good information on the basics of how economies work. It's just that he heavily downplays the dirtier aspects of capitalism.

[Anonymous No.16338541]

>>16338493
the USSR wasn't communism.

[Anonymous No.16338549]

>>16338513
>the dirtier aspects of capitalism
Such as?

[Anonymous No.16338612]

I've not read it, but I know of Sowell. One of the common pitfalls in economics education is that explaining certain basic principles in a white room scenario leads you to draw certain conclusions that don't really capture the nuance of that particular scenario. The example in microeconomics 101 that springs to mind is that of surplus labor. There are a ton of factors that influence wages, but when you first learn about surplus labor then you must conclude that a minimum wage results in unemployment but that's a gross oversimplification. Economists know this, but it gives a professor the opportunity to either lean into it or not based on their own inclinations. I've read enough of Sowell's opinions on other matters that I would assume that he'd take the opportunity to push his policy preferences on students of economics based on seemingly logical conclusions that come from simplified scenarios.

[Anonymous No.16338618]

>>16337879
Why don't you read it and see for yourself. No one here is going to explain (if there is anything) and provide you with the sources.

[Anonymous No.16339078]

>>16338493
>explains
He doesn't really attempt to use marginalism but uses anecdotes to make his political case for liberalism. I can just as easily actually use marginalism to justify price controls or whatever under some given context. That's not to mention the disingenuous assumptions e.g. when he's talking about trade offs and public spending he's assuming full factor utilization.

[Anonymous No.16339338]

>>16339078
Tf are you on? He doesn’t use anecdotes.

[Anonymous No.16339409]

>>16338612
That's always been my problem with economics classes or discussions with people who think of themselves as economists. They always presuppose a simplified example who's constraints force a specific conclusion, and that's just not how the world works.

[Anonymous No.16339555]

>>16338541
kek
kys faggot

[Anonymous No.16339879]

>>16338122
You can't deny that the prices of things hasn't gone up considerably in contrast to many people's wages.

[Anonymous No.16339941]

>>16338612
>it gives a professor the opportunity to either lean into it or not based on their own inclinations
Correct, and 99% of them will lean toward neoliberal capitalist dogma because they're on the payroll of big banks and corporate-funded DC think tanks. This is why Anglo-American economics departments are academically worthless and riddled with pseudoscience that just so happens to support the interests of the ruling class.

[Anonymous No.16339962]

>>16339879
In an environment of widening income inequality, new money printing only serves to inflate asset bubbles rather than consumer prices.

[Anonymous No.16339963]

>>16339338
What are you talking about? Practically every chapter has half a dozen very specific real world examples (anecdotes) about what the subject at hand

[Anonymous No.16340070]

>>16339879
Sure I can. I'll give you $1000 dollars to buy a computer/TV, you can use it in 1980 or 2020. Inflation hasn't been much of a monetary issue like Friedman thought or we'd be in hyperinflation by now... it's a supply issue and all the things that are significantly more expensive you'll notice something queer there.

>>16339962
>new money printing only serves to inflate asset bubbles rather than consumer prices.
But why? People have a bias to saving vs. consumption? That goes against a lot of conventional wisdom. People are more than willing to borrow to finance consumption just as much as for gambling lol

[Anonymous No.16340125]

>>16340070
>But why? People have a bias to saving vs. consumption?
No. Widening income inequality means the average consumer is not experiencing increased purchasing power, hence consumer prices are relatively stable. Rich people, on the other hand, are only getting richer, and they tend to park their money in stocks, bonds, and real estate. Hence the prices of investable assets are bid up, not e.g. the price of laundry detergent.

[Anonymous No.16340225]

>>16340125
>income inequality
That obviously varies greatly by country. If it was JUST that you'd see places with relatively more "equal" income distributions like say Japan have higher rates of consumer inflation against saving vehicles than more unequal countries like America since more wealth is relatively not in wealthy hands to hoard but the Japanese save more of their income than Americans for some reason.

[Anonymous No.16340262]

>>16337879
Sowell presents an atypical political economy.
This makes it a very bad book if you want to learn economics, a discipline that rules Sowell's thinking as undisciplinary.

If you want to learn political economy it is a very bad book because it is wrong. Try some historical materialism.

[Anonymous No.16340263]

>>16340225
I am only talking about economies with widening income inequality like that of the US. Believe it or not, Japan is *still* recovering from the asset bubble of the late '80s.

[Anonymous No.16340272]

>>16340070
>Sure I can. I'll give you $1000 dollars to buy a computer/TV, you can use it in 1980 or 2020.
That's a corollary of technological advancement, not affordability.

[Anonymous No.16340278]

>>16340262

[Anonymous No.16340319]

>>16340272
When you introduce time you bring investment into the picture. If there's noting comparable going on to make certain other things more affordable that arises other questions.

>>16340263
>Japan is *still* recovering from the asset bubble of the late '80s.
In 1980s Japan you didn't see anywhere near the massive salary differentials like in America today between workers and CEOs.

[Anonymous No.16340346]

>>16340319
>In 1980s Japan you didn't see anywhere near the massive salary differentials like in America today between workers and CEOs.
The more egalitarian the society, the more propensity to consume-vs-save drives consumer-vs-asset price appreciation. In highly inegalitarian societies like our own, such propensity is virtually irrelevant.

[Anonymous No.16340409]

>>16340070
>Inflation hasn't been much of a monetary issue like Friedman thought or we'd be in hyperinflation by now
Wages are stagnant while asset prices and cost of living has shot through the roof. Yes, inflation is a massive problem, but it has to be because the world is creating new debt every day to sustain itself, only way to get rid of it is through inflation.

[Anonymous No.16340436]

>>16338122
Dubs and good post.

[Anonymous No.16340467]

>>16340346
Ya I have no idea what you mean. I just don't think income disparity matters that much when it comes to asset price inflation specifically, the prime driver of that inflation just as much comes from the middle class who view things like homes as investments to maximize a return on than real estate tycoons or whatever.

>>16340409
If the price of labour is being held constant and not going up than how can you claim the price is to high? You're complaining about the price of certain things and not others. No inflation isn't much of a general problem... the point is the amount of money out there has grown astronomically over the past decade and consumer prices have barely budged which should be embarrassing to people like Sowell who claim inflation is a pure monetary phenomena. Without that massive increase in money all you know real living costs could be even higher and nominal wages much lower.

[Anonymous No.16340484]

>>16340467
Widening income disparity is the only driver of asset price inflation relative to consumer price inflation. New money creation accrues to assets not consumer products in inegalitarian societies like our own.

[Anonymous No.16340559]

>>16337879
>i recently heard that this book is not entirely credible
Moronic.

[Anonymous No.16340565]

>>16340484
ok that's a nice hypothesis, go and prove it. Go and prove land prices in Europe and America have diverged significantly against consumer goods or something. I doubt it. Regardless of income distribution (outside of unrealistic extremes) it's a similar phenomena

[Anonymous No.16340609]

>>16337879
The book won't be considered credible by left leaning people but that's normal in the context of economic discourse. The book is still a good introduction to economic thinking from a free market perspective, even though it does not portrays itself as coming from a any particular ideological viewpoint. (This is made clear in the first few pages of the book, where Sowell makes it clear that he intends to present economic principles that apply to all and not just to some schools. This could be disputed however.)

Is this reason enough to discard the book? Probably not, as all economic textbook will be equally "biased" in this respect. Various schools of economics operate on the basis of different theoretical assumptions, and a big part of making one self familiar with the entire field of economic is to be aware of what these differences consists in and what their impact is. Keynesian inherent price rigidity, classical price flexibility, the ability to aggregate economic variables, the refusal to recognize aggregation as a legitimate move, theories of market failures on the basis of perfect competition models, "process" centric views of the economy where perfect competition is regarded as a chimera and thus not a valid too to declare a market "failure", etc. These are only some of the examples of the theoretical differences that drive economic debates at a theoretical level.

Just to give an example, Sowell gives the following definition of the science of economics:

>Economics is the study of the use of scarce resources which have alternative uses.

and let's contrast this definition with the following quotes from Lajoie's "Introduction to post keynesian economics":

>... the most common definition of economics is the efficient allocation of scarce resources. This definition, however, only applies to neoclassical theory...

> Economists ... should not focus on the allocation of scarce resources; rather they should concentrate on going beyond scarcity, when, and if, ever, scarcity arises.

The question of whether or not scarcity is central, and thus the very nature of the science of economic, is contested. There is thus no way to really get out of this debate. One can merely familiarize oneself with the landscape.

[Anonymous No.16340623]

>>16340565
The data is where I got it from in the first place. Go to Fred2 and look at the S&P versus inflation versus income inequality. It couldn't be more obvious.

[Anonymous No.16340653]

>>16340609
Most "free market" people are closer to Rothbard than Friedman today lol

Also political economy was always about how income distribution gets distributed... "scarcity" is a little to vague since you get into ethics... it's not like Sowell wants to eliminate intellectual property or anything to "solve" scarcity but wants to "reward" and provide "incentives" to people to "do things" that they otherwise wouldn't

>>16340623
Ya that's all going to vary by country and various contigent factors over time... you can show a very tight correlation between consumer prices and the "money supply"... until you can't.

[Anonymous No.16340694]

>>16340653
>you can show a very tight correlation between consumer prices and the "money supply"... until you can't
That's my point. The increased money supply goes into assets, not consumer goods. All money supply growth in excess of productivity growth results in either cpi appreciation (high equality) or asset bubbles (low equality).

[Anonymous No.16340721]

>>16339963
Anecdotes are personal stories. Sowell uses real world examples to demonstrate how economics plays out, which is quite different. There’s nothing wrong with that.

[Anonymous No.16340725]

>>16340653
>Most "free market" people are closer to Rothbard than Friedman today lol

I honestly wouldn't know but I'm not sure what this is supposed to contradict in my post. Sowell is quite admittedly pro free market and most neoclassical economists are some variety of free market economists as that term is understood today. This is especially true since even Keynesian are to some extent "free market economists", so that the label is quite inclusive. My understanding is that Rothbard and his school are somewhat marginal.

>it's not like Sowell wants to eliminate intellectual property or anything to "solve" scarcity

For Sowell, scarcity is not a problem to be solved. As he states:

>Without scarcity, there is no need to economize—and therefore no economics.

In other words, scarcity is not a "problem" that can be solved, but rather to necessary precondition to the phenomena that is economic, and thus the study of economics. Just to emphasize:

>But it is not the prices that cause the scarcity. There would be the same scarcity under feudalism or socialism or in a tribal society.

In other words: scarcity is an inherent feature of reality. It's not a thing to be solved. (For Sowell.)

>"scarcity" is a little to vague since you get into ethics

Scarcity isn't an ethical concept.

[Anonymous No.16340898]

>>16340467
>You're complaining about the price of certain things and not others.
Yes because you are not seeing inflation everywhere. You're seeing inflation in financial assets, houses, technology goods, food and so on. All at the same time where wages are stagnant, millennials are the first generation to have it worse than their parents in this regard. A vast majority of all millennials will never own a home, for example. M2 has spiked everywhere while velocity has gone down, that should tell you everything you need to know.

[Anonymous No.16341282]

>>16339879
depends on what you're talking about. food is the cheapest it's ever been, for example. and televisions are practically free

[Anonymous No.16341353]

>>16340565
you're wrong, real estate increases like 10% a year whereas inflation is more like 2%

[Anonymous No.16342360]

Imagina if I was a latin american country about to get fucked and both needing and wanting radical economic solutions
Who do I call for help?
Who is the modern day Chicago school of economics?
Who is Friedmann?

[Anonymous No.16342385]

>>16341282
>consooom products

[Anonymous No.16343289]

>>16338510
respond pls

[Anonymous No.16343327]

>>16338510
You can read basic economics as a way to understand the basics. But like all things take his opinions with a grain of salt, most of what he said is a good foundation of economics and policies that have had negative/positive effects.

[Anonymous No.16343367]

>>16343327
That’s what I’m wondering about - is a levels (british highschool) economics already basic education? Can I just skip Sowell or whatever and move on to more complicated stuff?

[Anonymous No.16344114]

>>16340725
I mean most people who claim to support the "free market" support crazy stuff like the gold standard or are extremely into the idea of abolishing political legislation and have all problems solved by individual litigation.
Also you're being totally dense on scarcity by ignoring property. A lot of people think property is an ANSWER to scarcity. Without property I don't have to pay for anything. You can clearly see all kinds of things that have an infinite supply also have a price. Scarcity isn't necessarily natural it's a consequence of policies to establish some "fair" distribution of output... by pure executive fiat you can eliminate all kinds of scarcity or create it.

>>16340898
Inflation is a general phenomena not just something specific getting more expensive. The things that are getting more expensive are doing that for supply reasons. Middle class home owners want their net worth to go up by making their homes worth more and any financial savings they have to as well. There's a lot of ways to make housing cheaper but it's politically problematic. Also technology is generally deflationary and food hasn't gone up that much against wages (besides temporary supply issues especially right now).

>A vast majority of all millennials will never own a home, for example.
Yes because their parents can't afford having their house become worth significantly less. That's what happens when you treat housing not as a consumer good but store of wealth.

[Anonymous No.16344188]

>majoring in econ
how does it feel to be a living meme

[Anonymous No.16344339]

[Anonymous No.16345840]

>>16343367
respond :(

[Anonymous No.16346099]

>>16342385
anon claimed that prices had gone up relative to wages but they haven't across the board. TVs are a perfect example if you compare them to how expensive they were 20-30 years ago. and food being so cheap is the main reason why the world population has exploded and everyone in the west is a fucking fatass

[Anonymous No.16346237]

>>16344114
What's so crazy about gold standard?

[Anonymous No.16347040]

>>16346237
It's a totally arbitrary constraint on spending. Every government that pegs their currency ends up losing control in the long run any ways.

[Anonymous No.16347391]

capital in 21st century is the most important economics book rn and i cant remember the name but read that one w monsters in the title by warren mosler

austrian economics is oligarch propaganda

[Anonymous No.16347490]

>>16338307
Based, but you should disclose that this is heterodox MMT trying to disguise itself as a run of the mill econ textbook.

[Anonymous No.16347519]

>>16347490
mmt shouldnt be heterodox, any economist who isn't retarded would reafh the same conclusions if they studied finance and not just econ

[Anonymous No.16347575]

>>16347490
The MMT-specific material is actually rather limited. It's much more balanced, better written, and with more philosophical depth than the average econ textbook. It covers the full ideological range from Marx to Hayek without resorting to caricature, and generally promotes a spirit of open-mindedness that you don't see in the robotic efforts of those stricken with neoclassical autism.

[Anonymous No.16347602]

It's an excellent starting place for economics. But you obviously dont get the full picture from one book. Retards on /lit/ think that you should learn endogenous growth theory and multiple equilibria models in your first book. No. This is a book for beginners and explains many of the basic concepts very well, and it will change how you think about the world. READ IT

[Anonymous No.16347611]

>>16342360
The IMF

[Anonymous No.16347617]

>>16347602
The Sowell book? Fuck no. It's trash.

[Anonymous No.16347625]

>>16347617
It explains the price mechanism extremely clearly, and introduces the reader to many other interesting economic concepts and issues. What's not to like for a beginner?

[Anonymous No.16347631]

>>16339879
>You can't deny that the prices of things hasn't gone up considerably in contrast to many people's wages.
overall inflation has been very little since the 80s but the prices of some of the post important services (health care, child care, higher education and housing) have all outpaced inflation over the same time period

[Anonymous No.16348756]

>>16337879
Ludwig von Mises is the greatest economist to ever live, and Rand is the greatest philosopher of capitalism to ever live.
Read them.

[Anonymous No.16348925]

>>16347625
This. Sowell gets shit wrong but it is undoubtedly the greatest beginners economics book ever penned. Only soccies afraid of someone being given a rational start disagree. Soccies fair best in social engineering theory and politics, their retardation becomes blaringly obvious when they try to talk economics.

[Anonymous No.16350185]

>>16338541
cope

[Anonymous No.16351620]

>>16338379
From a guy who doesn't understand surplus value.
>>16338493
>If it seems anti-communism that’s because reality is anti-communism.
Until reality overturn itself. But you don't know about Hegel as well do you?

[Anonymous No.16351682]

>>16348925
>Sowell gets shit wrong but it is undoubtedly the greatest beginners economics book ever penned
No it's not or it would be recommend to you by someone besides conservatives. You see liberals and conservatives cite say Adam Smith because he was intellectually original and actually important. A good "beginners economics book" would just explain in simple terms what marginalism is, its history and why it became the dominate economic idea by the late 19th century and you could do that very well in under a hundred pages. You wouldn't need to get into polemics over public or private enterprise or any policies because you could leave that as questions to ponder with very simple intellectual tools.

[Anonymous No.16351703]

>>16344188
Idk about others but reading this book was the entirety of my Econ 101 class. So you don't necessarily need to major in economics to end up reading it.

[Anonymous No.16351803]

>>16338122
>You see central banks have been doing everything Friedman would say should cause hyperinflation for well over a decade
Like what for example?

[Anonymous No.16351921]

>>16351620
>Until reality overturn itself.
Wishful thinking

[Anonymous No.16351939]

>>16351803

[Anonymous No.16351950]

>>16351939
For context according to Friedman "to much money printing" was causing inflation in the 1970s (not market driven oil or wage prices or anything else)... central banks got inflation under control by the 80s by jacking up interest rates (not supply factors like globalization)

[Anonymous No.16351959]

>>16351939
>>16351950
I don’t think you get what Friedman said or what monetarism is about at all. Friedman lived till 2006 and witnessed it all ‘cept the Great Recession and its aftermath, but he didn’t live to see none of his major models be disproven, none have they been disproven to date

[Anonymous No.16352082]

>>16351959
What was monetarism about than?
>Inflation is always and everywhere a monetary phenomenon
That's literally a direct Friedman quote.

Nixon tried to do wage-price controls (which were done in a very dumb stupid way) and that failed and stagflation kept going on which "proved" Keynesianism wrong. Everyone wanted a way to get inflation under control and Friedman came along and said only independent central banks could control inflation by means of tight money supply growth and interest rates more than trying to directly control prices/spending. Carter fully embraced this idea and put monetarists in control of the Fed who jacked up interest rates to try to make money tight which caused a recession by Reagans first term. Inflation got under control and the common wisdom became Friedmans ideas (ignoring all the other more contingent factors and how the Fed really abandoned the core aspects of monetarism). Reagan juiced the economy by lowering taxes (increasing consumer spending) and running big deficits (providing safe savings for the private sector). Clinton tried to eliminate that public debt and benefited from foreigners diving into risky private American tech stocks and such... that popped under Bush in the early 2000s and so began the modern economy where there's permanent low interest rates and big public debt with little consumer inflation and uncontrolled money growth. None of this history doesn't make any sense from a monetarist perspective.
You have European countries literally implementing negative interest rates today and are experiencing deflation and have high unemployment which proves how absurd Friedmans ideas are. Central banks can't control shit with interest rates... fiscal stuff like taxes and spending are obviously way more powerful. Cutting interest rates have way less of an effect on spending than cutting taxes.

[Anonymous No.16352182]

>>16337879
Racist hands wrote this post

[Anonymous No.16352206]

>>16352082
So what school of economy and/or economic theory do you subscribe to then?

[Anonymous No.16352767]

>>16352206
Don’t do that. Just read the fucking books and engage in long form discussion midwit

[Anonymous No.16352789]

>>16352767
Ah, so you have no alternative? I’m not gonna debate someone’s critique if he’s got no better alternative

[Anonymous No.16352984]

>>16352206
Post-Keynesian broadly speaking. Monetarism was a failed project because any "money supply" is vague and any definition is probably always wrong since it's largely uncontrollable endogenous factors driving that and the nominal rate of interest doesn't matter much compared to stuff like "animal spirits" since investment is based on largely irrational expectations not autistic sound calculations and people aren't thinking in real terms or learning much so governments can make people work more by just offering more money instead of trying to impose deflation and austerity to "be more competitive".

[Anonymous No.16353059]

Capitalism and Communism is a false dichotomy. There is no current economic consensus because the state of human economics no longer remains stable for long enough to form one. Market realities used to shift over centuries, then since the industrial revolution they shifted by decades. Now the realities of the market may even shift from year to year for awhile. In such an environment a general theory is almost impossible to make and consensus is certainly impossible

[Anonymous No.16353085]

>>16339879
All of your stuff is made by people who are being paid poverty wages.

[Anonymous No.16353092]

>>16339941
>they're on the payroll of big banks and corporate-funded DC think tanks
As opposed to what, the socialist book club at the local community college?

[Anonymous No.16353597]

bump

[Anonymous No.16354582]

>>16353092
The academic institution they work for, you fucking retard.

[Anonymous No.16354733]

>>16354582
such as?

[Anonymous No.16354771]

>>16354733
Whatever university they work for. Are you mentally disabled?

[Anonymous No.16354840]

>>16354582
But they already are on the payroll of the universities they work for

[Anonymous No.16354870]

>>16354840
Exactly, genius.