CAPITOL IDEAS: The Economist
Bethell, Tom
CAPITOL I D E S TOM BETHELL The Economist HEN I CAME TO WASHINGTON, in 1975, the first wave of the so-called energy crisis was underway. I was at an advantage compared to most people because...
...As to their nostrums and remedies: "Virtually everything that was supposed to make things better made things worse," he says...
...A year earlier I had interviewed Gov...
...So we had to wait in line at the gas pumps...
...Sometimes, I suspect, it's actual hostility to markets—which have no alternative in economics...
...Free market prices are not mere arbitrary obstacles to getting what people want...
...It took him about that many words to explain it...
...Ronald Reagan knew, however, and the first thing he did as president, with one signature, was to abolish the price controls on oil...
...Have you ever tried to find an apartment there...
...Sowell, born in North Carolina in 1930, was "lucky in many ways," he says...
...He, too, took the trouble to write plainly...
...Born in North Carolina in 1930, he came along "just before racial quotas made the achievements of blacks look suspect...
...I highly recommend it...
...Tom Bethell is a senior editor of The American Spectator...
...Today a senior fellow at the Hoover Institution, Sowell taught economics at several universities, including Cornell, UCLA, and Howard University in Washington, D.C...
...This forces leftists to conceal their views in obscurity and algebra...
...Thomas Sowell...
...Despite how obvious all this might seem, there are a never-ending stream of political schemes designed to escape the realities being conveyed by prices—whether through direct price controls or by making this or that "affordable" with subsidies or by having the government itself supply various goods and services as a "right...
...Anyone interested in understanding plain-language economics should read two books by Sowell...
...The latter takes all costs into account, the former only those that will be incurred before the next election...
...In Applied Economics, just out from Basic Books, Sowell applies the underlying economic principles to the real world—medical care, the economics of housing, racial and ethnic discrimination, the economic development of foreign countries...
...Writing plainly looks easy, but it takes energy...
...I'm sure no one told Carter what the real problem was...
...On the contrary, if we were to take the new readings seriously and imagine that the patient's fever was over, the dangers would be even greater, now that the underlying reality was being ignored...
...It was all the fault of the oil companies...
...Sowell writes about the basics of economics in language that is as straightforward as I have ever seen, and this is worth mentioning because he is one of the few trained economists who make the effort...
...Perhaps they only pretend to...
...So, Louisiana wouldn't be sending the natural gas across state lines...
...If you don't understand fractional reserve banking, you will after you read his lucid pages...
...He said something I never forgot...
...He was good at explaining these things...
...I was at an advantage compared to most people because I knew what caused it: price controls...
...Those who advocate free markets talk themselves out of a job...
...Once you have learned the technical jargon in any field, it's easy to use and substitutes for thought...
...They were "far better than they would be for black children of a later era," he writes...
...He must be one of the most prolific authors in the country, having written more books than I can easily count...
...In Washington I repeated this to anyone who would listen...
...Years later his niece told him she had gone to the same Harlem school he had attended...
...Edwin Edwards of Louisiana for a magazine in New Orleans...
...He was the man to quote on energy In the late 1970s the problem flared up again...
...They say Edwards was a crook, but I don't care...
...Jimmy Carter talked about "malaise" and wore a sweater in the White House...
...When we consider the tyrannies that have been overcome in the 20th century, he says, "our task is infinitely easier, our dangers nothing worse than unpopularity...
...We didn't have a national energy policy—that was it...
...He told me that customers for natural gas sold across state lines were required by law to pay about one-third of what they paid within the state...
...When he was nine his family moved to New York and he went to public schools in Harlem...
...It was a formative experience for me...
...It was "greed...
...By then, price controls had been dropped on everything except oil...
...The effects of rent control have been so bad that even the New York Times now editorializes against it...
...Prices are like thermometer readings—and a patient with a fever is not going to be helped by plunging the thermometer into ice water to lower the reading...
...JUNE 2004 THE AMERICAN SPECTATOR 39...
...A famous editor of the Financial Times in the 1960s refused to hire economics graduates...
...Here is Tom Sowell on price controls: TOM BETHEL...
...One day I went to the Brookings Institution and interviewed Barry Bosworth, who worked for Jimmy Carter...
...He "happened to come along right after the worst of the old discrimination was nolonger there to impede me, and just before racial quotas made the achievements of blacks look suspect...
...There was no Department of Energy...
...With a government monopoly ensuring them a supply of customers, with iron-clad tenure protecting their jobs, and with seniority rather than performance determining their salaries, why should the education establishment worry about anything as irrelevant as reality...
...Milton Friedman was Sowell's thesis adviser at the University of Chicago...
...His newspaper column is published three times a week...
...He expects no improvement in education...
...Edwards explained it to me, and you are unaware of the social havoc that can be wrought by politicians who ignore it, you might as well not bother to read the newspapers at all...
...Prices are symptoms of an underlying reality that is not nearly as susceptible to political manipulation as the prices are...
...Equally important is its companion volume, Applied Economics...
...He said no, she had gone to the same building...
...The first is Basic Economics, which came out a few years ago, and is now in paperback...
...What has happened to government education in his lifetime is a shameful and disgraceful thing, and no one is better placed to know this than Tom Sowell...
...He had learned the hard way that they could never explain things clearly...
...How could knowledge so fundamental to the operation of society be so scarce, so thoroughly rejected by otherwise intelligent people, including economists with Ph.D.'s...
...I should interview David Freeman of the Ford Foundation...
...But it takes courage not to be discouraged, to endure and to keep on telling the truth when you can see with your own eyes how little headway you are making, on the surface at least...
...If there are seeds of improvement growing beneath the surface, Tom Sowell will have done much to prepare the ground...
...In short," he concludes, "killing the goose that lays the golden egg is a viable political strategy, so long as the goose does not die before the next election...
...It was a great insight, and one that would have amused Dr...
...Few economists bother to write plainly...
...Rent control in New York, which has endured for over 60 years, has had the effect of driving most large company headquarters out of the city...
...He brilliantly illuminates the key difference between the political and economic analysis of policy...
...If you don't understand the price mechanism at the level that Gov...
...All educated people should learn economic fundamentals...
...If the free-market idea is right, he said, there is no need for 38 THE AMERICAN SPECTATOR JUNE 2004 economists...
...More likely they want an obedient proletariat at their disposal—one that will respond to their slogans but not think independently...
...But hardly anyone would...
...Fill in the blank: "The rich get richer and the poor get .") Not surprisingly, Sowell is scathing about the "anointed" intellectuals who have done so much to undermine public life in this country...
...As an expositor of economic principles and their application to the policies of our day, Sowell has no rival today...
...But his greatness as a commentator on the American scene is somehow more than that...
...To me, it raises the question whether liberals care about education at all...
Vol. 37 • June 2004 • No. 5
