2024 Review
I re-read this book as part of my re-reading-my-20s challenge, but just realized I was actually 19 when I read it. So, I guess strictly speaking, it doesn't count. Bother.
This book did, however, impact me in a very profound way. I can trace many of my views about government and society to the arguments found here. And it really was this book. Looking at my reviews of other Thomas Sowell works, I seem confident and comfortable in his thoughts and arguments. This is where I was introduced to them. This is where it started.
But this is not where I would recommend starting. One reason Sowell remains timeless is that for the most part, he engages with ideas and not current events. You can read something written by him in the 1980s and feel like it applies to the 2020s. That is, to an extent, still true here. His philosophy remains consistent and applicable. But it is hard to miss that this was published in 1979. He casually uses certain words that are socially unacceptable today like 'retarded' in the original sense of the word and not in a derogatory way, but it still jars and references the USSR and Burger court as ongoing considerations.
For a new reader, I'd probably recommend something written more recently, like Social Justice Fallacies.
For a fan of Sowell's thoughts, this is one you don't want to miss. It is the foundation, in many ways, for The Vision Of The Annointed: Self-congratulation As A Basis For Social Policy.
I'm glad this was my introduction and I'm glad I re-discovered it, even if it didn't fit into the category I thought it did!

2012 Review
Thomas Sowell should be required reading for everyone everywhere! So worth looking into and reading.

As with most of Sowell's writing, including his newspaper columns, this book exhibits Sowell's ability to examine an issue from a novel angle, to see aspects of the issue that others have missed.
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. Sowell also makes one of his favorite points: determining what should be done versus who should make the decision.
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.
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. A current example would be the Left-wing assertion that since the political Right cannot articulate a reason why homosexual marriage is a threat to heterosexual marriage, the political Right must be irrational. Similarly, it may be difficult to explain why a three-person marriage is a bad idea. 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.

Having read quite a few Thomas Sowell books by now, and liking them all, I'm quite surprised that this book may just be above them all. Why? It's just so beyond well-written that no review can do it justice. If you feel like modern societies have been overtaken by both institutional and decentralized lunacy even though, in theory, there is more knowledge easily available than ever in human history, and you ask yourself how people still can act in such a deeply irrational manner, you need to read this book. You may or may not agree with Sowell's politics, but once you begin to understand the terrible incentive structures that guide our institutions, the world just opens up before you. This book is pure lucid wisdom.

This book is pretty heavy, but if you can handle it it's immensely interesting. I recommend it to anyone that is interested in broadening their outlook on concepts and themes that are still just as relevant today as they were in 1980, when Sowell wrote this book.

If you want to know what truly drives our economy and society, read Thomas Sowell's opus. On target, and disturbing. The book is a bit dated but still highly relevant. I listened to the audio version. I would recommend reading it as there are quite a few passages that I would have liked to cover again.

This book was written before I was born, and is based on an book written before my father was born. The internet doesn't exist, nor do smartphones. And yet, the book is still eerily relevant. Dense at times, pedantic at times. But the strong mix of sound economic theory combined with political and judicial history is very helpful. The world has not yet shifted. The expert so roundly derided in this 40 year old tome has only become more powerful, as has the intellectual class. With the results that Sowell, Hayek predicted. Almost everything that Sowell writes can be reinterpreted, of course. But at least Sowell acknowledges the problems. Incentives matter. Strongly recommended.

Here are a few of my favorite quotes.

The unifying theme of Knowledge and Decisions is that the specific mechanics of decision-making processes and institutions determine what kinds of knowledge can be brought to bear and with what effectiveness. In a world where people are preoccupied with arguing about what decision should be made on a sweeping range of issues, this book argues that the most fundamental question is not what decision to make but who is to make it-through what processes and under what incentives and constraints, and with what feedback mechanisms to correct the decision if it proves to be wrong. Those convinced that they have "the answer" on whatever economic, legal, social, or other issues are the preoccupation of the moment are of course impatient with questions about institutional processes and their respective advantages and disadvantages for making different kinds of decisions. That is all the more reason for others to look beyond the goals, ideals, and "crises" that are incessantly being proclaimed, in order to scrutinize the mechanisms being proposed in terms of the incentives they generate, the constraints they impose, and the likely outcomes of such incentives and constraints. (P.19-20)

Intellectuals almost automatically explain the misfortunes of groups in terms of victimization by elites who are rivals of intellectuals. By asserting or defining (seldom testing) misfortune as victimization, all other possible explanations are arbitrarily ruled out of order, and with them perhaps hopes of in fact remedying the misfortune. The victimhood approach also requires ignoring, suppressing, or deemphasizing successful initiatives already undertaken by the disadvantaged group or portions thereof-thereby sacrificing accumulated human capital in terms of know-how, morale, and a favorable public image of groups usually portrayed as a "problem." In the victimization approach, intergroup statistical differences become "inequities," though in particular cases they may be due to group differences in age, geographical distribution, or other variables with no moral implications. Victimhood as an explanation of intergroup differences extends internationally to the Third World-typically countries that were poor before Western nations arrived, remained poor while they were there, and have continued poor after they left. The explanation of their poverty? Western exploitation! An economist who treats this as a testable hypothesis notes that "throughout the underdeveloped world the most prosperous areas are those with which the West has established closest contact" and contrasts this with "the extreme backwardness of societies and regions without external con- tacts."210 But like other victimhood approaches, Third-Worldism is not really an hypothesis but an axiom, not so much argued explicitly as insinuated by the words chosen ("the web of capitalism,"211 "the imperialist network""') and established by reiteration. (p.390)

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 ranging from Gettysburg to the Gulag Archipelago. A frontal assault on freedom is still impossible in America 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. That something that cost so much in human lives should be surrendered piecemeal in exchange for visions or rhetoric seems grotesque. Freedom is not simply the right of intellectuals to circulate their merchandise. It is, above all, the right of ordinary people to find elbow room for themselves and a refuge from the rampaging presumptions of their "betters." (p.417)

A remarkable book about the ways in which various economic, social, and political institutions facilitate or hinder the transmission and use of knowledge in society. I approached this book thinking it would simply be an elaboration on Friedrich Hayek's famous essay, "The Use of Knowledge in Society." But there is so much more to it than that. I was especially intrigued by Sowell's identification of "articulated rationality" as merely one mode of knowledge transmission, which might or might not be superior to alternative modes in different contexts. Often, we have ways of knowing that something works without being able to verbally explain *why* it works. And this fact has important implications for a wide range of public policy issues.
Another feature of this book that surprised me was how conservative Sowell is on issues of crime and military defense. I tend to think of Sowell as more of a libertarian than a traditional conservative, but these are two issues where the gap between him and libertarians seems especially large.
I've heard Sowell refer to this as his best book. I agree. And given the high quality of many of his other books, that's high praise indeed!

This is an amazing book about knowledge, which is scarce, diffused, and has a cost. The breadth of considerations Sowell tackles is almost mind boggling.

This may be Sowell's best work, or it's at least on par with his other two favorites of mine, Basic Economics and A Conflict of Visions.

I really can't recommend this book enough, the only draw back is that it's dense and perhaps a pretty difficult read.

In a strong field, I think this is the best Thomas Sowell book I have read. Most of his other books I feel like he is helping me better articulate ideas that I somewhat suspected or subconsciously knew. This book was a complete paradigm shift for me and I see things I once thought trivial and mundane in a totally different light.

While many of the examples provided are dated, the logical approach presented for making decisions is timeless. This book is a foundational work worthy of being read by those seeking to understand proper ways to use information to make decisions.

How nominally liberal government can botch regulation by investing reduced freedom in return for worse socio-economic outcomes. Obviously regulation requires more thought (plus attention to historic outcomes). Regulatory agencies are living organisms with self-preservation and growth motives independent of their mission.

Knowledge is power. Sowell's analysis of how knowledge is transmitted in the society as capital can influence law, politics and history is captivating and compelling.