Knowledge and Decisions

Knowledge and Decisions by Thomas Sowell, Basic Books, 1996. 

Knowledge Has a Cost

Sowell makes the point that knowledge has a cost. Sowell talks about the relationship between economics and knowledge. The kinds of knowledge that are relevant are supply and demand. That is, what people can produce and how much labor is required to produce it, and what people want, and how much they are willing to pay for it. The market and pricing are a way for producers and buyers to communicate this knowledge to each other.

Who Decides

Sowell also makes one of his favorite points: determining what should be done versus who should make the decision. 

Vague Concepts

Sowell expresses his dislike of vaguely defined terms, such as exploitation. Exploitation cannot be defined in objective economic terms, because it is based on an emotional aversion to the imagined immoral intentions of the employer. 

Articulated Rationality

Sowell talks about "articulated rationality". This implies that there is also such a thing as unarticulated rationality. By rational, we mean thought in conformance with reality. We can see that just because a person cannot state logical reasons why they believe something, that does not imply that their opinion is not based upon an honest appraisal of reality. Sowell believes that we should have some respect for cultural rules that have stood the test of time, even if they cannot be justified by rational argument.