A monumental work. Very interesting, though it took me a couple weeks to finish the entire book. The author makes a lot of great points and underlines them with numerous, easy-to-understand examples. Not an easy read, but worth it I think. 4.5 stars

Another great book by Thomas Sowell. Many of the issues today have been going on since this was first written almost 40 years ago. He makes the solid case for smaller government, and the free market approach. By showing many examples of unintended consequences for government programs that end up creating a bigger problem than originally existed, he shows how the "cures" actually are the problems.

He also discusses how non elected officials and shadow government agencies have created far more laws than those who officially run the country, and have a disturbing amount of power in certain areas. Given this was written 40 years ago, and the size of bureaucracy has increased significantly since that time, it is a dire warning of what is to come.

Still a critical read for the 21st century

Sowell considers how knowledge includes both articulated discussions and information that is not, or perhaps cannot be articulated. This leads to differences between centralized and distributed decision makers and between intellectuals and “experts” versus the unwashed masses. (This also implies limits in current AI and computer systems which can only use articulated information).

Although written in the 1970’s, the examples in law and politics are relevant today. You can find material to help understand crime and punishment, censorship, to what extent should we put all our trust in health care experts, and much more.

Why should we resist activists of crises who seek to impose their solutions, ignoring tradeoffs? How would we all have more freedom if the US government worked as the founders intended? Many of Sowell’s later books addressed parts of these and other subjects. Even if you have read them, you will still find new things here.

Required for all who claim to be free thinkers!

This is truly the single secular book I wish was required study as part of high school education and voter's privileges. Thomas Sowell is an intellectual giant, and this is his magnum opus.

In this book he turns his keen intellect to an analysis of the economics of knowledge in society. The often unseen and subconscious acquisition, evaluation and flow of knowledge is integral to the efficient operation of our individual daily lives and to the general well-being of social structure. This point is demonstrated time and again in the pages of this book. Sowell also examines the consequences of the denial of the economics of knowledge through theoretical analysis and by careful examination of multiple real-life case studies. The far-reaching effects of government policies which disrupt the flow or deny the cost of knowledge, purposefully or by unforeseen consequence, are surprising and often led me to change my mind on a wide variety of political issues.

Knowledge and Decisions is not an overly academic work. It is approachable by anyone with a decent education to a senior high level. That said, a careful read will take some time but will be amply rewarded. If the effort is given, the reader's understanding of the consequences of political decisions in the lives of individuals and social institutions will be greatly expanded. One simply will not get through this book without seeing and understanding things quite differently.

Out of all of Sowell's books, this might be his masterpiece. It provides one of the clearest articulations of the epistemic dimension of economic and political decision-making according to the best available neoclassical economic analysis. It is written in some of the best prose ever presented in the economics profession. Don't get me wrong, I don't agree with everything Sowell says. The book has two main weaknesses, none of which are especially dire. In fact, they are the inevitable result of who the author is and what the book intends to do. Explaining what the weaknesses are is actually a good way to explain what is so great about the book:

1) The book recapitulates several decades of neoclassical, Chicago School, and Austrian School economic thinking. It therefore lacks scholarly originality. It mostly restates the accumulated insights of generations of scholars before him. It does not propose new economic theses or offer new proofs to existing ones. However, there is a time and place for scholarly synthesis. While this book is no substitute for reading Hayek, Friedman, and others, it is an excellent introductory text or a companion piece to them, and in some ways it exceeds the originals in its scope and clarity. In fact, the book DOES manage to offer something new in the novel connections and bridges that it draws between disparate fields of analysis, such as economics and sociology, and the striking examples and thought experiments it uses to illustrate its arguments and conclusions.

2) The book is written by a conservative-libertarian economist who inevitably brings some of his biases and prejudices into the book's arguments. This is most evident in his treatment of cultural and social issues, where some of Sowell's arguments are tainted by a deep conservative bias that leads the author to a selective reading of statistical facts around family, abortion, crime, etc. On these issues, I remain unconvinced by some of Sowell's normative arguments. The worst part of the book, for me, is the last section on war and geopolitics, which seems polemical and tacked on, not to mention excessively apologetic towards American foreign policy with all its many flaws. Nonetheless, there is something to learn from his analysis even when I disagree with it.

However, what the book fails to achieve in political prescriptions, it more than makes up for in its positive analysis of institutions. The book's dispassionate, lucid, and sharp analysis is at its best when it presents a nuanced and positive analysis of the epistemic challenges and hazards of decision-making in various areas of life. It summarizes decades of accumulated wisdom, articulates the relevant problems in novel ways, and offers ample material for thinking for beginning students and advanced economic scholars alike. Although Sowell comes from a very different intellectual tradition that Michel Foucault and other left wing critics of organized power, there are some interesting similarities between their analyses of the relationship between knowledge and power, and these should be studied further. Indeed, developing a better understanding of institutional failure - both market failure and government failure - is at the heart of any politics of liberation and emancipation. On this issue, conservatives, libertarians, and progressives can learn from each other and cooperate.

Occasionally reading this felt a bit like a textbook, rather dry. But what it occasionally lacks in enjoyment it more than makes up for in insight. I doubt it is possible to come away from reading this book without learning how to seriously think about economic processes.
The final chapter about how class interests broadly form the political opinions of the intellectual class is masterful. "Leviathan always swims left" is a phrase somewhat popular in recent times, but Sowell explained how that works in practice way back in 1979.

Thomas Sowell's book are frequently more philosophical and theoretical. He uses historical examples to support this points, and the books may not seem relevant in the any current situation. His books are more for understanding a framework for evaluating "current" solutions and responses. When viewed that way, the book will have a greater on someone's thinking, outlook and understanding.

This book is brilliant, but then again you already know that because it says "by Thomas Sowell" on the cover! And even though the reader of the audiobook, Robertson Dean, does a tremendous job, I agree with another reviewer who recommends the print version, simply because the material is very complex at times and you may want to mull over certain things. This book is very long, and if you're not at the top of your game intellectually, possibly a bit tedious at times. I'm weak in the area of economics and not as sharp as I used to be, so I admit I struggled at times. But I learned some solid principles about the "cost of information" that will enrich my thinking on many subjects. I came late to Sowell and now can't get enough of his genius.

inadequate, skewed by what hope for vs what do, not what decision but who makes decision, authenticate first, less checks with more supposed intellect, lower expectations to reach consensus, economics and value of alternative uses, black unemployment lowest in 49 unions most adverse effect, regulation wonders recreate sensible economics, British subsidies of GA ended 1751 did not work, Fed agencies do 10 times more regulations that lawmakers, if you don’t want government on your back take your hand out of their pocket, from urgent to unproductive, Jefferson concern with power of judges, across countries similar money distribution difference is degree of power given to govt, mental testing eugenics abortion, intellectuals love central govt and control, crime down 30s up 60s, objective truths vs intellectuals truth, pro-American Japan and Germany, Rome defeated by intellectuals bigger govt, man slave of power, what at stake is man’s freedom vs man’s insatiable wants.

There are no words that I can write that would make justice to this masterpiece.

This book was originally published in 1980 and it describes the collapse of America's institutions and the power grab of the non-elected bureaucratic machine as if it was written last week.

Apart from its power of premonition, the book is about decisions and the knowledge (or lack thereof) that drives them. Sowell goes through segments of society, including even criminal justice, showing how the decision making process in each segment translates to transfers of knowledge and what happens when these transfers are tampered with.

Sowell also dedicates a good part of the book to go after intellectuals and their flirt with tyranny. This probably was edgy in 1980 but today it is more or less common knowledge.

Having read several other books by Sowell (an economist)--one on economic history (Marxism) and the other on political ideas (A Conflict of Visions), I picked this one up when I had been doing some study of Knowledge Management. This book is on economics as well, specifically on the distribution of knowledge in economic systems, but I found it to be very useful in thinking about the use of knowledge in business organizations. Sowell is of course an economic thinker in the line of Hayek and Friedman (Milton, not Thomas). Thus much of his analysis of decision-making concerns the socialist model, where centralized knowledge is necessary to centralized decision-making. That bureaucratic socialism failed so fabulously was due in large part to the impossibility of centralizing enough timely knowledge to make decisions (planning) that made sense for a whole economy. The anecdotal examples

of this from the former Soviet Union were so ubiquitous at the time that there arose an entire class of jokes within Russian society about the ineffectiveness of Soviet economic "planning." The analysis of K&D is well-stated, well-documented, and convincing. It's also helpful to keep in mind that it was written in 1980. But his analysis is by no means confined to Soviet communism, or even economics, per se. Sowell remains a very down-to-earth economist, and he always shows that economics is not just about numbers or money. It is about people and their decisions regarding the use of limited resources. Herein lies the tie-in to my interest. Anywhere you have people, knowledge, and limited resources, an understanding of how decisions get made and how the distribution of knowledge affects those decisions will be of some benefit, whether it's Ebay, macro-economics, or Knowledge Management in product development. I can't say that this is really easy reading, but it goe

s down much better than you might expect. It's a well-written book and worth the effort.

Freedom has always been embattled, where it has not been wholly crushed. The desire for freedom and for its opposite, power, are as universal as any human attributes. Historically, freedom is a rare and fragile thing. It has emerged out of the stalemates of would-be oppressors. Freedom has cost the blood of millions in obscure places and in historic sites raging from Gettysburg to the Gulag Archipelago. A frontal assault on freedom is still impossible in American and in most of Western civilization. Perhaps nowhere in the world is anyone frankly against it, though everywhere there are those prepared to scrap it for other things that shine more brightly for the moment.

Dr. Sowell’s Knowledge and Decisions is a landmark work that makes an important contribution to our understanding of the differences between the market process and the process of government. The book is an expansion on the ideas first displayed in Leonard Reed’s seminal “I, Pencil”. Nobody knows every single step involved in making something as simple as a Number 2 pencil and nobody can know enough to make all the trade offs required to make enough pencils for people to use. The most fundamental question to ask, according to Sowell, is “not what decision is to be made but who is to make it – through what process and under what incentives and constraints, and with what feedback mechanisms to correct the decision if it proves to be wrong.”

While Dr. Sowell’s starting point is economics, he branches further into decision making in the political realm. He also attacks fuzzy thinking brought on by rhetoric appealing to “society”. There is no one named “society” who decides anything. Even in the most democratic nations few issues are decided by specific nationwide referendums. There are still people put in charge (by election or appointment) who make decisions for the whole. These people respond to incentives just as we do in our everyday lives, but often the results of their decisions are not evaluated against a concrete set of criteria – simply the intention of their actions or the feelings they elicit.

What is clear in Dr. Sowell’s work is his appreciation for the exceptional system of government established in the United States. One of the peculiarities of the American Revolution was that its leaders pinned their hopes on the organization of decision-making units, the structure of their incentives, and the counterbalancing of these units against one another, rather than on the more usual (and more exciting) principle of substituting the “good guys” for the “bad guys”. The American Revolution was very different from the French Revolution of the same era. The French Revolution was based on abstract speculation of the nature of man by intellectuals, and on the potentiality of government as a means of human improvement. The American Revolution was based on historical experience of man as he is and has been, and on the shortcomings and dangers of government as actually observed. Experience – personal and historical – was the last court of appeal of the founders of the United States and the writers of the Constitution. They were establishing a government for the flesh-and-blood people as they knew about, not such creatures as they might hope to create by their activities.

The founders of the United States knew “enlightened statesmen will not always be at the helm.” The question facing them was not how to give expression to the ides of those presumed to be morally or intellectually superiors, but how to guard freedom from the inherent weakness and destructive characteristics of men in general. Their answer was a series of checks and balances in which ambitions would counter ambitions and power counter power.

There are people who would throw away the Constitution in whole or in part because things have changed since America’s founding. To argue about “change” in generalized terms is to argue with oneself, for no sane person denies change since the writing of the Constitution. The question is - what kind of change: technological, verbal, philosophical, geographical, demographic, etc., and in what specific way does the change affect a particular constitutional provision or its application? It is hard to image why the writers of the Constitution would have set up a congress or president as decorative institutions if they thought there would be nothing for them to do in meeting the evolving needs of a nation. The central question is not what is do be done, but who is to decide what is to be done and under what incentives and constraints? Democracy is not simply the right to change political personnel, but the right to change policies. The reduced ability of the electorate to change policy is one of the consequences of growing government.

One of the main thrusts of Sowell’s work is to resist the impulse to give all the decision making authority to a single person or body. In his chapter on “Trends in Politics”, he entreats people to resist the call of totalitarianism. Almost by definition, the movement to totalitarianism is a one-way movement. No totalitarian government has ever chosen to become free or democratic, though a free and democratic nation may choose to move toward totalitarianism (see: Germany 1933).

A totalitarian government does not need to even pay lip service to the incentives influencing its decision making. It is central to totalitarian ideology that it convert questions of fact into questions of motive. Facts are a threat because they are independent of ideology, and questioning the motives of whoever reports discordant facts is a low-cost way of disposing of them. Hitler’s use of the reiterated big lie and numerous Soviet revisions of official history are part of a pattern of control that extends to basic data itself. This is more than the usual political lying common to systems of various sorts. It is monopolistic lying, with the exclusion of alternative sources of information. Political truth is whatever will advance the interests of the cause or movement.

In addition to incentives and constraints, a key component to any decision is the time horizon. A politician's time horizon is inherently very short (the next election), so the voters’ longer time horizons are crucial for transmitting a more farsighted perspective to government decision making. Consequences that take much time to become visible are less likely to be understood by the average voter in retrospect, and given the turnover of elected officials, the prospect of long run negative consequences may be little or no deterrent to an individual decision maker at the time the political decision is made. This is why there was more stability when the national parties were stronger. Members of a political machine have a large investment in its future election prospects. The more independent the individual politician is, the less is his fate tied to the long run consequences of his decisions in a particular unit of government.

Much like how Tom Sowell’s A Conflict of Visions describes the two main worldviews of people, this book is a thought provoking examination of the types and cost of knowledge and how it impacts political decision making.