Wealth, Poverty and Politics

Category: Business & Finance
Author: Thomas Sowell
This Month Hacker News 1


by wprapido   2020-01-01
My 2010's read highlights:

- https://www.amazon.co.uk/Lessons-21st-Century-Yuval-Harari/d...

- https://www.amazon.co.uk/Factfulness-Reasons-Wrong-Things-Be...

- https://www.amazon.co.uk/Laws-Power-Robert-Greene-Collection...

- https://www.amazon.co.uk/Why-Nations-Fail-Origins-Prosperity...

- https://www.amazon.co.uk/Wealth-Poverty-Politics-Thomas-Sowe...

- https://www.amazon.co.uk/Noonday-Demon-Andrew-Solomon/dp/009...

- https://www.amazon.co.uk/How-Write-Thesis-MIT-Press/dp/02625...

by dmix   2018-11-30
Sadly most interventions that western governments keep making in the name of the little guy keep benefiting the megacorps, whether by unintended side effects or from flaws in the policy-writing process (ie, countless small political-favours, lobbying, etc).

Thomas Sowell wrote a great book about this:


There have been countless policies since the 1950s intended to offset wealth disparity that have backfired and hurt the poor. For example, the rent control and other "tenant friendly" laws in Toronto and NYC in the 1970s resulted in decrepit urban ghettos littered with arsoned apartment buildings, because the only way a landlord could "renovate" was burn down their own building. Just look at pictures of Harlem in late 1970/1980s...

It also created a massive disincentive to invest in new low-income property, as the developers knew they'd make less money targeting the poor. So development went towards upper/middle class housing (resulting in an even worse lack of low-income housing in NYC and to a lesser extant Toronto by the 1990s).

Modern rent control laws have attempted to factor these "unintended side-effects" but there are a hundred similar examples in that book. It keeps happening and happening with every clever scheme concoted to help the poor.

The only winners of the massive growth in the US gov since the 1970s were consistently large firms, who had their competition wiped out or huge barriers of entry created in their markets in the name of 'progress'. And countless well-meaning socially conscious economic policies usually works for a small group while hurting a much larger group in the process, or works at the beginning then as the side-effects build up it becomes a net-negative...where it would have been better off to let the market function as is.

by dmix   2018-11-10
> it is the cultural norm and everybody's expectation. To a lot of people you may as well be a Martian to defy it.

Incentives play a major role in defining such a culture. It doesn't have to be a positive seemingly self-selected incentive to want to live in the suburbs, but negative ones play a major role as well, such as the insanely high costs to own property... due to severe limitations on developing high density multistory buildings in cities, which is why modern cities are exclusively full of either a mega skyscrapers or a single family homes. Or the ease of an automobile-first lifestyle - which is almost always a reaction to poorly developed mixed density urban areas, causing urban sprawl, not a cause of it.

Just because a lot of people have responded to opting the easiest options given to them doesn't mean the easiest option was the result of market/personal choices. Rather it was ultimately a result of the intention, or more often unintentional, side effects of government policy, not a prolonged series of personal choice.

This is hardly limited to just urban sprawl and land development. Thomas Sowell has a brilliant book on how this same cycle has been applied across US culture/politics/economics for decades after WW2 - well beyond just real estate - to nearly every major sector which influences modern US lives: https://www.amazon.com/Wealth-Poverty-Politics-Thomas-Sowell...

If one considers government economic and social policy by their results, not simply their good intentions, this pattern can be seen in countless places. Yet the popular reaction by the media and political parties is so often to blame personal choice and 'unrestrained' markets for the output.

by dmix   2017-09-30
Thomas Sowell is brilliant at highlighting the unexpected nature of many parts of economics as well as the countless government policies initiated in the name of helping the poor or lower class that end up either doing little to help or, more often, ultimately helping the upper-middle class and above the most.

He helped me grow beyond a cliche idealistic libertarian worldview into something much more practical and based in real world policy.

I highly recommend his 'Wealth, Poverty and Politics': https://www.amazon.com/Wealth-Poverty-Politics-Thomas-Sowell...

Or for something more lightweight see his book 'Basic Economics': https://www.amazon.com/Basic-Economics-Thomas-Sowell/dp/0465... --- Despite it's name it's not an economics 101 guide, it basically a teaching-through-example guide by listing policy after policy that were implemented in the realworld, for ex:

- rent control in NYC/Toronto in the 1970s which severely reduced access to affordable housing, disincentivized building maintenance, incentivized arson, and gave countless upper/middle class residents cheap rent for beautiful properties

- various industry licensing pushed by market incumbents not protecting consumers, such as interior designers requiring 4yr bachelors degree to choose the colorscheme of an apartment

- etc, etc

He digs into their good intentions but unintentional self-defeating side-effects. Many of which have countless analogies to today (see Uber vs Black cabs in London).

After reading it I'm hardly surprised Japan's economy has stagnated, to the point where it's almost so obvious it saddens me. They are one of the worst proponents of the type of heavy handed economic-intervention he critiques.