In Basic Economics, Thomas Sowell provides a clear treatment of the economic principles that underlie capitalist economics. First he explains the fundamental mechanisms of capitalism, then he shows how even educated people tend to misunderstand these basic concepts. This book is not just an introductory course in economics, it is an explanation of its counter-intuitive logic.
As Sowell defines it:
Economics is the study of the allocation of scarce resources that have alternative uses.
“that have alternative uses” – that is the key. Most people understand that capitalism is driven by profits. Producers are motivated to create companies and sell products because they can retain the difference between production costs and the price the customer pays. And customers will pay a higher price for products that are more valuable to them. That is simple enough. But Sowell explains further that producers compete with each other for inputs, the materials needed to make their products. To maximize profit, producers seek the lowest possible input costs, and so they use inputs, whenever possible, with the least valuable alternative use. They are less in demand and therefore lower in cost. This creates efficiency in the utilization of resources. The profit motive thus drives the match of the value of resources with the value the customer seeks. More valuable resources get used to produce what customers value most.
There is an all-to-common characterization of profit as a selfish cheating of the customer, motivated by ‘greed’. With Dr. Sowell’s reasoning, profit is a moral pursuit. A business that does not earn profit is needlessly employing scarce resources that could be used more effectively in some other way. The story of profit capitalism, then, is products being made the same or better, but with less resource inputs – doing more with less. A firm either produces a higher quality product using the same cost of inputs, or makes the same product using lower cost inputs. Resources get utilized efficiently, desired products are produced, needs are satisfied, fortunes are made, and wealth is created. And all with price and profit, not control and coercion.
Sowell is frustrated that the advantages that drive a capitalist economy are strangely dismissed, often, by the very people who enjoy its fruits. The failures of controlled economies should drive us to embrace the benefits of capitalist economics and profit.
The trend of the last century is encouraging:
The twentieth century began with high hopes for replacing the competition of the marketplace by a more efficient and more humane economy, planned and controlled by government in the interests of the people…But the most decisive evidence for the efficiency of the marketplace was that even those who were philosophically opposed to capitalism turned back toward it after seeing what happens when industry and commerce operate without the guidance of prices, profits and losses.
In the United States, mass production produced consumer products. In Hitler’s Germany it produced military power. Hitler hid this build-up brilliantly, with a pervasive dual use strategy, and he successfully used anti-communism to camouflage to the British establishment his intentions in Europe. In a short six years time, the United States had cars, and Hitler had tanks. Hitler had built the Wehrmacht, a monstrous, world conquering war machine.
He lost no time putting it to use. He made a deal with Russia and they split Poland, and then he took western Europe almost without a fight. His mechanized divisions took territory with menacing speed. Blitzkrieg.
After France fell, Hitler paused. What to do about Britain? Hitler had not thought that Churchill would return to power. He had expected Britain to acknowledge his hold on Europe. Churchill of course did not oblige. Only the United States or Russia could possibly amass the power to unseat him in Europe. A neutralized Britain, depriving the United States of a base from which to retake Europe, would neutralize the United States, at least for awhile. But an alliance of the United States with Russia was also a real threat. Conquering Russia would remove that threat, and make Britain a side concern, and give Germany lebensraum. Hitler made his fateful choice.
“Four out of every five Germans killed in action in World War II died on the Eastern Front.” Max Hastings, A Very Chilly Victory, New York Review of Books, August 13, 2009.
World War II was largely a German Russian War. The United States lost 300,000 lives, Britain 400,000 lives, Germany 6 million, and Russia . . . . 27 million. In the battle for Stalingrad alone, the Russians lost 500,000, the Germans, 200,000. In the largest conventional battle ever fought, the battle of Kursk, a battlefield as large as Belgium, the Russians lost 300,000. In this battle, there were three times the number of tanks facing off as there were in the great Allied/German tank battle of El Alamein. In the Battle for Berlin, with victory all but certain, Russia still lost 80,000 lives, 25,000 within the city limits.
The United States and Britain faced 30 German divisions on D-Day, the Russians . . . . . . 160.
It is frightening what it took to defeat the German war machine. Victory over Soviet Russia would have made Germany invincible in Europe for a very long time. Hitler ordered complete ruthlessness. The Wehrmacht took 3 million prisoners in the first 7 months of the war with Russia, and deliberately starved them to death. Only a Stalin, a cold, evil leader with iron clad control, a leader willing to sacrifice any number of his own people, shoot any number of his own soldiers, enslave, deport, or murder anyone in his way could triumph over the vicious Wehrmacht. Under pressure, Hitler was impetuous, prone to snap judgment and blind arrogance. He proved no match for the careful, methodic, detail analyzing Stalin. The stress of war made Hitler blunder, it made Stalin competent.
“Even when the US Army was fully mobilized in 1944-1945, it never became large enough to face the full weight of the Wehrmacht”.
https://thinkagainonline.com/wp-content/uploads/2017/10/ThinkAgain-nsq.jpg00Think Againhttps://thinkagainonline.com/wp-content/uploads/2017/10/ThinkAgain-nsq.jpgThink Again2010-10-26 10:16:432010-10-26 10:16:43The German Russian War
“The more you can know, the more you can learn” E. D Hirsch, Jr.
American public education have declined progressively, and undeniably, despite the massive funding of the academic education establishment. This decline is so broad and profound as to be near unbelievable.
For E. D. Hirsch, Jr. the chief cause of this, amazingly so, is the driving academic theory of education that has come to prevail: the theory known as ‘constructivism‘. Developed from the ideas of Rousseau, and John Dewey, and the philosophical school of Pragmatism, this theory, in essence, concludes that education should not teach. Rather, education should facilitate. A child’s natural development, self-esteem, and skills are to be nudged, but specific content, memory, practice, and factual learning are not to be emphasized. Independent exploration is preferable to directed learning. A teacher is to help students ‘learn how to learn’ rather than prescribe what to learn. There is to be no standard curriculum. There is to be no instruction. Casual reading will teach reading just as well as serious reading. Skills will develop independent of content.
E.D. Hirsch explains how this isn’t so. “Literacy requires the early and continued transmission of specific information”. One learns the use and meaning of words and ideas by matching real thoughts and real ideas with real meanings and with real words. Learning is the actual incremental mastering of real and specific content.
“Factual knowledge that is found in books is key to reading comprehension”.
Thus, alas, youth today are going to school, but are not, in fact, being taught. Knowledge testing documents this all too clearly. We are falling behind much of the rest of the world. Well-dressed thirty year olds think France won the Civil War
The very advantage of effective culture has been for teaching future generations the hard-earned knowledge they would otherwise have to learn at unnecessary repeat cost. Our constructivist education specifically and quite purposely refuses to provide this advantage.
There is disguised politics here, for there is the belief that directed learning and a prescribed curriculum perpetuate social and political inequality. Not for nothing did John Dewey and others see education as a way to bypass politics to effect change. Bill Ayers, the Weatherman radical, is a Professor of Education.
One can be forgiven for noticing that those whose job is to teach embrace a theory that says they shouldn’t teach.
How do we tell the working class and middle class that their taxes pay for a philosophy of teaching that says to . . . not teach?
https://thinkagainonline.com/wp-content/uploads/2017/10/ThinkAgain-nsq.jpg00Think Againhttps://thinkagainonline.com/wp-content/uploads/2017/10/ThinkAgain-nsq.jpgThink Again2010-10-15 20:05:462010-10-15 20:05:46Do not Teach
“Acknowledgement of the death of God is a bomb that blows up many things, not just oppressive traditionalism, but also values like compassion and the equality of human dignity on which support for a tolerant liberal political order is based. This then is the Nietzschean dead end from which Western philosophy has still not emerged.” Francis Fukayama, New York Times Review of Books, April 11, 2010.
Friedrich Nietzsche was a savant intellectual, a genius learner, a tenured Classics professor by age 24, a prodigy of learning what is already known.
One thinks of Joseph Knecht, the character who plays the Glass Bead Game in the Hermann Hesse sci-fi novel about academia: Magister Ludi. In this book, a game is played by special minds in which all forms of art and knowledge are codified into a form of a musical/logical/lexical informatic with which the players competitively uncover new syntheses of insight. Hesse may have had Nietzsche in mind. Nietzsche was an academic philosopher, his entire life was reading, writing and thinking. He never married or had children. He came to believe that humans should be ruled by . . . . academic philosophers. For Nietzsche, an individual’s philosophical journey was to be his and everyone’s God. He wrote theatrically, with anger, condemnation, and provocation, if not hysteria.
Nietzsche scorned utilitarian and bourgeois morality. He saw human nature as Darwinian. He loved to describe the ‘will to power’ hidden in the actions of history, a motivation he found to be greater than survival. Thinking Men take us to something greater, he says, do not resist this. The strong should triumph. Exceptional people (like him) should flourish. Good versus evil is the rationalization of the weak. The notion of universal objective truth will be found wrong, and man will come to name his own truth. God is dead, and the Ubermensch, the Superman, will arise.
Nietzsche himself was continually sickly, and suffered increasing mental imbalance. His final breakdown is reported to have occurred after he witnessed the whipping of a horse. He supposedly then ran to the horse to try to protect it, throwing his arms around its neck, and then collapsed into incoherence.
Mania with psychosis is strongly suggested. His writing and thought is megalomaniacal, racing, and grandiose. He came to see inorganic matter as having ‘motivation’. Thinking has magical power, intuition is supernatural.
In Nietzschean thought there are the inklings of Freudianism, fascism, communism, post modernism, and evolutionary psychology. He provides flamboyant cover for academic chauvinism and condescension, for intellectual elitism, for the cult of the Great Leader.
Academics love him to this day. For Cornel West, and many others, Neitzsche’s works are the most treasured. For those that gravitate to deconstruction, always parsing to uncover and reject what is wrong, Nietzsche invites them along, into tangles of creativity and corruption, idealism and nihilism. We have Francis Fukayama’s dead end.
It has been ten years since the strange episode of Elian Gonzalez. His mother risked and lost her life bringing him to the U.S. on a small boat from Cuba. Castro demanded his return and President Clinton complied. The boy was ‘repatriated’ at the gun point of US Marshals. “The boy should be with his father”, Clinton said. Now, Elian is 16 years, old, a member of the Young Communist Union of Cuba. He attends military school. A museum about him in his home town has his statue with a raised, clenched fist. His birthday has been celebrated personally with Fidel, and his father has become a member of the Cuban National Assembly. The Cuban State Security set up a ‘monitoring station’ next door to his home.
Certain facts have emerged. Elians’ father called relatives in Miami to tell them that Elian and his mother were on their way. Janet Reno suppressed aspects of a report by court-appointed US judges who presided over the hearings in which Elian’s american relatives opposed his return. Elian’s grandmothers from Cuba covertly signaled to the Judge panel that they were under scrutiny by the Castro government and unable to speak candidly. Elian’s father was allowed to visit the US, his other children were not. He was under constant Cuban escort while in the United States.
And so a sitting President of the United States assisted an anti-american dictator in the forced repatriation of an escapee from a communist dictatorship to the United States. The President did this with force of arms, delivering not only the boy, but also a giant PR coup for the dictator, a leader who regularly proclaims himself an enemy of the United States. The President, with this action, essentially declared to the world his view that a nation without civil liberties, without independent judiciary, without freedom of speech or association, without democratic elections, a nation ruled by a secret police, is as good a place to raise a young boy as is the United States, a young boy whose mother gave her life to bring him here.
We are asked to believe that the father truly wanted his son in Cuba rather than in the United States. We are asked to ignore the mother’s heroic efforts to get him here. We are asked to assume there was no coercion from the Castro government.”
“As Scott was a slave when taken into the state of Illinois by his owner, and was there held as such, and brought back in that character, his status, as free or slave, depended on the laws of Missouri, and not of Illinois.” Supreme Court Case: Dred Scott vs. John F. A Sanford, March 6, 1857.
Did Elian Gonzalez determine the results of the 2000 presidential election? Al Gore was running a close race for the Presidency. Florida would be crucial. How would a Gore victory affect Hillary Clinton’s political future? The Florida Cuban community was enraged by Clinton’s actions. Gore, over a barrel, at first approved the decision to return Elian, but then disavowed it. He lost Florida by an extremely narrow margin, and then the election, despite winning the popular vote.
https://thinkagainonline.com/wp-content/uploads/2017/10/ThinkAgain-nsq.jpg00Think Againhttps://thinkagainonline.com/wp-content/uploads/2017/10/ThinkAgain-nsq.jpgThink Again2010-10-09 19:36:082010-10-09 19:36:08The Strange Case of Elian Gonzalez
For Profit
/in All, Books, IdeasIn Basic Economics, Thomas Sowell provides a clear treatment of the economic principles that underlie capitalist economics. First he explains the fundamental mechanisms of capitalism, then he shows how even educated people tend to misunderstand these basic concepts. This book is not just an introductory course in economics, it is an explanation of its counter-intuitive logic.
As Sowell defines it:
Economics is the study of the allocation of scarce resources that have alternative uses.
“that have alternative uses” – that is the key. Most people understand that capitalism is driven by profits. Producers are motivated to create companies and sell products because they can retain the difference between production costs and the price the customer pays. And customers will pay a higher price for products that are more valuable to them. That is simple enough. But Sowell explains further that producers compete with each other for inputs, the materials needed to make their products. To maximize profit, producers seek the lowest possible input costs, and so they use inputs, whenever possible, with the least valuable alternative use. They are less in demand and therefore lower in cost. This creates efficiency in the utilization of resources. The profit motive thus drives the match of the value of resources with the value the customer seeks. More valuable resources get used to produce what customers value most.
There is an all-to-common characterization of profit as a selfish cheating of the customer, motivated by ‘greed’. With Dr. Sowell’s reasoning, profit is a moral pursuit. A business that does not earn profit is needlessly employing scarce resources that could be used more effectively in some other way. The story of profit capitalism, then, is products being made the same or better, but with less resource inputs – doing more with less. A firm either produces a higher quality product using the same cost of inputs, or makes the same product using lower cost inputs. Resources get utilized efficiently, desired products are produced, needs are satisfied, fortunes are made, and wealth is created. And all with price and profit, not control and coercion.
Sowell is frustrated that the advantages that drive a capitalist economy are strangely dismissed, often, by the very people who enjoy its fruits. The failures of controlled economies should drive us to embrace the benefits of capitalist economics and profit.
The trend of the last century is encouraging:
The twentieth century began with high hopes for replacing the competition of the marketplace by a more efficient and more humane economy, planned and controlled by government in the interests of the people…But the most decisive evidence for the efficiency of the marketplace was that even those who were philosophically opposed to capitalism turned back toward it after seeing what happens when industry and commerce operate without the guidance of prices, profits and losses.
The German Russian War
/in All, PoliticsIn the United States, mass production produced consumer products. In Hitler’s Germany it produced military power. Hitler hid this build-up brilliantly, with a pervasive dual use strategy, and he successfully used anti-communism to camouflage to the British establishment his intentions in Europe. In a short six years time, the United States had cars, and Hitler had tanks. Hitler had built the Wehrmacht, a monstrous, world conquering war machine.
He lost no time putting it to use. He made a deal with Russia and they split Poland, and then he took western Europe almost without a fight. His mechanized divisions took territory with menacing speed. Blitzkrieg.
After France fell, Hitler paused. What to do about Britain? Hitler had not thought that Churchill would return to power. He had expected Britain to acknowledge his hold on Europe. Churchill of course did not oblige. Only the United States or Russia could possibly amass the power to unseat him in Europe. A neutralized Britain, depriving the United States of a base from which to retake Europe, would neutralize the United States, at least for awhile. But an alliance of the United States with Russia was also a real threat. Conquering Russia would remove that threat, and make Britain a side concern, and give Germany lebensraum. Hitler made his fateful choice.
“Four out of every five Germans killed in action in World War II died on the Eastern Front.” Max Hastings, A Very Chilly Victory, New York Review of Books, August 13, 2009.
World War II was largely a German Russian War. The United States lost 300,000 lives, Britain 400,000 lives, Germany 6 million, and Russia . . . . 27 million. In the battle for Stalingrad alone, the Russians lost 500,000, the Germans, 200,000. In the largest conventional battle ever fought, the battle of Kursk, a battlefield as large as Belgium, the Russians lost 300,000. In this battle, there were three times the number of tanks facing off as there were in the great Allied/German tank battle of El Alamein. In the Battle for Berlin, with victory all but certain, Russia still lost 80,000 lives, 25,000 within the city limits.
The United States and Britain faced 30 German divisions on D-Day, the Russians . . . . . . 160.
It is frightening what it took to defeat the German war machine. Victory over Soviet Russia would have made Germany invincible in Europe for a very long time. Hitler ordered complete ruthlessness. The Wehrmacht took 3 million prisoners in the first 7 months of the war with Russia, and deliberately starved them to death. Only a Stalin, a cold, evil leader with iron clad control, a leader willing to sacrifice any number of his own people, shoot any number of his own soldiers, enslave, deport, or murder anyone in his way could triumph over the vicious Wehrmacht. Under pressure, Hitler was impetuous, prone to snap judgment and blind arrogance. He proved no match for the careful, methodic, detail analyzing Stalin. The stress of war made Hitler blunder, it made Stalin competent.
“Even when the US Army was fully mobilized in 1944-1945, it never became large enough to face the full weight of the Wehrmacht”.
Do not Teach
/in All, Ideas“The more you can know, the more you can learn” E. D Hirsch, Jr.
American public education have declined progressively, and undeniably, despite the massive funding of the academic education establishment. This decline is so broad and profound as to be near unbelievable.
For E. D. Hirsch, Jr. the chief cause of this, amazingly so, is the driving academic theory of education that has come to prevail: the theory known as ‘constructivism‘. Developed from the ideas of Rousseau, and John Dewey, and the philosophical school of Pragmatism, this theory, in essence, concludes that education should not teach. Rather, education should facilitate. A child’s natural development, self-esteem, and skills are to be nudged, but specific content, memory, practice, and factual learning are not to be emphasized. Independent exploration is preferable to directed learning. A teacher is to help students ‘learn how to learn’ rather than prescribe what to learn. There is to be no standard curriculum. There is to be no instruction. Casual reading will teach reading just as well as serious reading. Skills will develop independent of content.
E.D. Hirsch explains how this isn’t so. “Literacy requires the early and continued transmission of specific information”. One learns the use and meaning of words and ideas by matching real thoughts and real ideas with real meanings and with real words. Learning is the actual incremental mastering of real and specific content.
“Factual knowledge that is found in books is key to reading comprehension”.
Thus, alas, youth today are going to school, but are not, in fact, being taught. Knowledge testing documents this all too clearly. We are falling behind much of the rest of the world. Well-dressed thirty year olds think France won the Civil War
The very advantage of effective culture has been for teaching future generations the hard-earned knowledge they would otherwise have to learn at unnecessary repeat cost. Our constructivist education specifically and quite purposely refuses to provide this advantage.
There is disguised politics here, for there is the belief that directed learning and a prescribed curriculum perpetuate social and political inequality. Not for nothing did John Dewey and others see education as a way to bypass politics to effect change. Bill Ayers, the Weatherman radical, is a Professor of Education.
One can be forgiven for noticing that those whose job is to teach embrace a theory that says they shouldn’t teach.
How do we tell the working class and middle class that their taxes pay for a philosophy of teaching that says to . . . not teach?
Nietzsche Madness
/in All, Ideas, Politics“Acknowledgement of the death of God is a bomb that blows up many things, not just oppressive traditionalism, but also values like compassion and the equality of human dignity on which support for a tolerant liberal political order is based. This then is the Nietzschean dead end from which Western philosophy has still not emerged.” Francis Fukayama, New York Times Review of Books, April 11, 2010.
Friedrich Nietzsche was a savant intellectual, a genius learner, a tenured Classics professor by age 24, a prodigy of learning what is already known.
One thinks of Joseph Knecht, the character who plays the Glass Bead Game in the Hermann Hesse sci-fi novel about academia: Magister Ludi. In this book, a game is played by special minds in which all forms of art and knowledge are codified into a form of a musical/logical/lexical informatic with which the players competitively uncover new syntheses of insight. Hesse may have had Nietzsche in mind. Nietzsche was an academic philosopher, his entire life was reading, writing and thinking. He never married or had children. He came to believe that humans should be ruled by . . . . academic philosophers. For Nietzsche, an individual’s philosophical journey was to be his and everyone’s God. He wrote theatrically, with anger, condemnation, and provocation, if not hysteria.
Nietzsche scorned utilitarian and bourgeois morality. He saw human nature as Darwinian. He loved to describe the ‘will to power’ hidden in the actions of history, a motivation he found to be greater than survival. Thinking Men take us to something greater, he says, do not resist this. The strong should triumph. Exceptional people (like him) should flourish. Good versus evil is the rationalization of the weak. The notion of universal objective truth will be found wrong, and man will come to name his own truth. God is dead, and the Ubermensch, the Superman, will arise.
Nietzsche himself was continually sickly, and suffered increasing mental imbalance. His final breakdown is reported to have occurred after he witnessed the whipping of a horse. He supposedly then ran to the horse to try to protect it, throwing his arms around its neck, and then collapsed into incoherence.
Mania with psychosis is strongly suggested. His writing and thought is megalomaniacal, racing, and grandiose. He came to see inorganic matter as having ‘motivation’. Thinking has magical power, intuition is supernatural.
In Nietzschean thought there are the inklings of Freudianism, fascism, communism, post modernism, and evolutionary psychology. He provides flamboyant cover for academic chauvinism and condescension, for intellectual elitism, for the cult of the Great Leader.
Academics love him to this day. For Cornel West, and many others, Neitzsche’s works are the most treasured. For those that gravitate to deconstruction, always parsing to uncover and reject what is wrong, Nietzsche invites them along, into tangles of creativity and corruption, idealism and nihilism. We have Francis Fukayama’s dead end.
The Strange Case of Elian Gonzalez
/in All, PoliticsIt has been ten years since the strange episode of Elian Gonzalez. His mother risked and lost her life bringing him to the U.S. on a small boat from Cuba. Castro demanded his return and President Clinton complied. The boy was ‘repatriated’ at the gun point of US Marshals. “The boy should be with his father”, Clinton said. Now, Elian is 16 years, old, a member of the Young Communist Union of Cuba. He attends military school. A museum about him in his home town has his statue with a raised, clenched fist. His birthday has been celebrated personally with Fidel, and his father has become a member of the Cuban National Assembly. The Cuban State Security set up a ‘monitoring station’ next door to his home.
Certain facts have emerged. Elians’ father called relatives in Miami to tell them that Elian and his mother were on their way. Janet Reno suppressed aspects of a report by court-appointed US judges who presided over the hearings in which Elian’s american relatives opposed his return. Elian’s grandmothers from Cuba covertly signaled to the Judge panel that they were under scrutiny by the Castro government and unable to speak candidly. Elian’s father was allowed to visit the US, his other children were not. He was under constant Cuban escort while in the United States.
And so a sitting President of the United States assisted an anti-american dictator in the forced repatriation of an escapee from a communist dictatorship to the United States. The President did this with force of arms, delivering not only the boy, but also a giant PR coup for the dictator, a leader who regularly proclaims himself an enemy of the United States. The President, with this action, essentially declared to the world his view that a nation without civil liberties, without independent judiciary, without freedom of speech or association, without democratic elections, a nation ruled by a secret police, is as good a place to raise a young boy as is the United States, a young boy whose mother gave her life to bring him here.
We are asked to believe that the father truly wanted his son in Cuba rather than in the United States. We are asked to ignore the mother’s heroic efforts to get him here. We are asked to assume there was no coercion from the Castro government.”
“As Scott was a slave when taken into the state of Illinois by his owner, and was there held as such, and brought back in that character, his status, as free or slave, depended on the laws of Missouri, and not of Illinois.” Supreme Court Case: Dred Scott vs. John F. A Sanford, March 6, 1857.
Did Elian Gonzalez determine the results of the 2000 presidential election? Al Gore was running a close race for the Presidency. Florida would be crucial. How would a Gore victory affect Hillary Clinton’s political future? The Florida Cuban community was enraged by Clinton’s actions. Gore, over a barrel, at first approved the decision to return Elian, but then disavowed it. He lost Florida by an extremely narrow margin, and then the election, despite winning the popular vote.