The Morgan Freeman of economics, Thomas Sowell, is interviewed by Reason Magazine for the first time in 38 years.
I dunno why during 2016 campaign so many were surprised that Dr. Sowell is a never-Trumper. For his whole life he has been employed by anti-Trump institutions and publications such as National Review. Dr. Sowell opposes all forms of protectionism and opposes stimulus spending. It’s obvious that Trump’s economic positions (with the exception of tax cuts and deregulation) clash with Sowell’s own perspectives. Also, Trump and Sowell are very different temperamentally, and Sowell is sorta an egghead and Trump isn’t.
From the interview:
Thoughts on the Trump trade war?Oh my gosh, an utter disaster. I happen to believe that the Smoot-Hawley tariffs had more to do with setting off the great depression of the ’30s than the stock market crash. Unemployment never reached double digits in any of the 12 months that followed the crash of October 1929, but it hit double digits within six months of passage of Smoot-Hawley, and stayed there for a decade.
Sowell is mostly right about economics. Like Milton Friedman and Hayek, he’s right about free market capitalism being the best of all alternatives such as socialism and communism. I agree Keynesianism does not work as well as its proponents argue, and that monetarism is better.Like Sowell, I support a supply-side approach.
But I also think Sowell is sorta overrated as an economist though and not as brilliant as his fans may be inclined to believe he is. The comparison between the Great Depression and now is completely unfounded. The economy is running on all cylinders now. The data is strong overall. As I correctly predicted in early 2018, the Trump tariffs have had no discernible negative effect on the U.S. economy. Inflation as measured by CPI hardly budged and data such as exports and unemployment is strong. There was no trade war, and Chinese imports have actually increased due to a strong U.S. dollar. That’s not the say the tariffs were good, but they were not nearly as bad as all the doomsayers were predicting either. It was pretty much a ‘big nothing’. Also, the Smoot-Hawley act was far more drastic than the Trump tariffs relative to the size of the U.S. economy at the time. The Smoot-Hawley act raised the tariff rate to 59% on than 25,000 imports, whereas the Trump tariffs cover a much smaller scope of goods and only raised tariffs to 10-20%. Sowell has let his irrational dislike of Trump distort his perspective on economic reality.
We have a seemingly quite different president now, Donald Trump. Yet in this regard there is a striking similarity in his dismissal of personal achievement. He says to Jeff Bezos, “You didn’t create Amazon. Subsidies from the Post Office did.” He takes that as a premise for threatening firms and even whole sectors of the economy with a variety of ad hoc regulatory attacks.That’s true. The fact that we don’t have people who are educated to be able to analyze arguments but who are swept along by rhetoric is one of the reasons that allows people to get away with these kinds of things.
Except Trump never said that or even intimated that Bezos doesn’t deserve credit for the creation of Amazon. This is more of a criticism of the interviewer for putting words in Trump’s mouth.
Subsidies are unavoidable. The universities Sowell teaches and speaks at are also heavily subsidized, and National Review is subsidized by donors and has never made a profit as far as I know. Imagine an economic environment where every business gets a subsidy in one form or another. Then that in theory levels the field.
You define an intellectual as a job category that’s markedly different from other highly educated professions, which may include doctors or rocket scientists. What’s the difference?
An intellectual is someone whose product begins and ends with ideas. A doctor’s product does not begin and end with ideas. It ends with the treatment of a patient. A pilot’s product includes the service of flying a plane. There are objective things that people do that we can know. With ideas, it’s only a question of whether you happen to like or not like the ideas.
Guess he has never heard of a theoretical physicist or a medical researcher. A pilot does not have a doctorate. Treating a patient who has difficult to diagnosis or rare disease requires research, hence a doctorate.
When I asked about the Civil Rights Act, you immediately thought in terms of education and Brown.If you don’t get a good education, whatever else you get is not going to make a major difference, economically or socially. That’s why I’m so much in favor of the successful charter schools. This happens too often in the history of ideas. Segregation was made the reason the black kids weren’t doing well, so people attack that factor. But now you have black kids doing well in predominantly black schools, and people are against them because they haven’t been integrated. Integration was a means to an end, and when you achieve the end, you don’t condemn the end because you didn’t get there by the means you thought you were going to get there by.
To some extent this is true, but he ignores the role of family wealth. Wealthy kids who don’t graduate college still fare as well as poorer and middle-class kids who do. As this study shows, it’s not the school that helps, but rather being born into a rich family that can afford a private school. But blacks in predominantly black schools still lag whites.
Did the 1964 Civil Rights Act turn out to do what people hoped?In some respects, yes. In a deeper respect, no.
That act and the 1954 Brown v. Board of Education decision were welcomed, as they should have been, but they set off expectations that were wholly unrealistic. I was going to school and the professor came in in a state of agitation, and he said, “The most amazing thing has happened today. I think we should talk about that rather than what I planned to cover,” and everyone was elated that the end of segregation was going to bring all these wonderful things. When I was asked my opinion, I said, “It’s been more than half a century since Plessy v. Ferguson and we still don’t have separate but equal. What makes you think this is going to go faster?”
The problem is the idealization of equality. People will never be equal, nor should they be.
Wasn’t that a violence bubble? Isn’t that Pinker’s point—that the incidence of violent acts has fallen sharply over the past 30 years?It has never come down to the level in 1960, which it reached over a period of centuries coming down.
That is Pinker’s point. Over many centuries, violence has come down. And Sowell is only looking at criminal violence and ignoring large-scale violence such as war, in which there is a pronounced decline since the 40’s.
You have long been critical of the idea of “racial IQs” as ill-defined and, in any event, ever-changing. Twenty years ago, the controversial book by Charles Murray and Richard Herrnstein, The Bell Curve, poked this hornet’s nest. They talked about a mix of factors influencing IQ but considered estimates of racial IQs as part of their argument. Did they go down the wrong path?
I know that there is a genetic component in intelligence. But that does not itself get into race, because all races—at least all that I’ve ever known about—have a wide variety of IQs. So even a race with a low average IQ has millions of people with IQs higher than that of millions of people in a race with a higher average IQ. I think the spectacular success of some of these charter schools, where you’ve got kids in the middle of Harlem and the South Bronx and Bedford Stuyvesant scoring higher on statewide math and English tests than kids in the most affluent school districts in the state of New York—that ought to be a setback to those who are into genetic explanations.
Had he spoken with Dr. Murray, he would see that they would agree that in spite of blacks having a lower IQ, there are still many blacks that are smarter than whites. Dr. Murray does not deny this. This is evident to anyone who studies IQ and knows how a normal distribution works. Obviously there will be overlap. However, the difference is more dramatic at the extreme tails, and there is often zero overlap. This is why there are very few, if any, blacks in gifted programs that have extremely high cutoffs (IQs over 150).
A for the supposed success of charter schools, there is still a dramatic performance gap between blacks and whites, indicative of an underlying IQ disparity.
kids in the middle of Harlem and the South Bronx and Bedford Stuyvesant scoring higher on statewide math and English tests than kids in the most affluent school districts in the state of New York—that ought to be a setback to those who are into genetic explanations.
That s a pretty blanket statement. How many kids? A few? What race? Probably Asian or white. It is not that surprising if a handful of kids from a low-income, low-performing school are able to outperform a handful of student from a high-performing school. That is what a statistical outlier is. But that does not refute Dr. Murray’s argument.
I discuss how Thomas Sowell is wrong in further detail here:
Thomas Sowell on The Bell Curve
Sowell also refuses to give Trump credit for brokering trade talks with China and brokering peace with North Korea. He still think it’s the Cold War in which every country that has unclear weapons is a threat.
Overall, Thomas Sowell is wrong about race and IQ, overestimates the efficacy of charter schools, and is wrong about Trump and overestimates the harm of tariffs. He makes some good points about the superiority of capitalism, but he’s still a relic of the 80’s and his views reflect a stubborn attachment to these outdated beliefs.