Wealth, Poverty and Politics (2nd Edition) (Thomas Sowell)

Thomas Sowell’s latest book, published in 2015 and now revised a year later, is the usual tour-de-force. It’s not so much that there’s anything startlingly new (although there are some interesting new statistics and several new lines of thought), but that Sowell has a unique ability to clearly and concisely bring together an analysis. In this case, that analysis is of “why are outcomes different for different people?” Sowell writes in opposition to the current vogue for equating differential outcomes with differential justice resulting from “malign actions by others,” with negative nods to Thomas Piketty, John Rawls and a wide range of similar social justice warriors.

This is the second edition of this book, with the original subtitle “An International Perspective” replaced by “Revised And Enlarged Edition.” I do not think the expansion is an improvement. Certainly the book is still excellent, but longer is not always better. The original was pithy; this edition is too often wordy without added benefit.

I have read both editions and compared them; while I have not done a line-by-line comparison, it appears the additions come in two areas. First, a substantial addition of statistics and data points in every area, in particular related to the United States (whence, presumably, comes the dropping of the “International Perspective,” although there is still plenty of that). Probably he does this because one of his re-emphasized points in this edition is the frequent failure of his opponents to address the empirical data (and, as he complains, frequently hide from view the raw data they claim support them). Second, he puts additional emphasis and discussion on the failures of genetic determinism. I conclude that the reader is better off reading the first edition than this second edition. Nonetheless, the reader can’t go wrong with either one.

Sowell is a truth seeker. His main objection is not to those who think it’s “unfair” that some people have more than others, although he thinks that’s demonstrably false, and demonstrates it. His main philosophical objection is to people who won’t think, because they’re afraid of the truth. And his main accomplishment in the book is ruthlessly reasoning to a conclusion, peeling back extraneous layers and illogical reasoning to bring out a clear, defensible, and essentially irrefutable conclusion. This is a skill all but lost in these days of fifth-rate arguments, especially on platforms like Facebook, or, worse yet, Twitter, where most people have no idea what a syllogism is, and believe that depth of feeling is highly relevant to the worth of one’s arguments.

Sowell’s book works on two levels. His basic arguments are fairly well-trodden ground (including being trodden by him), but pithy and exquisitely expressed, and therefore ideal for “beginners.” At the same time, he expands those arguments in ways that aren’t always obvious, and the clarity of his language and thought makes his arguments seem simple and inevitable. So, for example, Sowell discusses that some ethnic groups place heavy emphasis on education, and therefore their children have better educational outcomes. This is not controversial to anyone but true ideologues. But Sowell points out something fairly obvious that I had never considered, nor seen anyone else consider—that it’s not just the quantity, but the quality. The same groups that educate more quantitatively also educate qualitatively differently, with the goal of providing real value to the student (and therefore to society). They choose hard, real subjects—engineering rather than social work; medicine rather than Latino Studies; computer science rather than Gender & Sexuality. The result is they gain more, both absolutely and relatively (and they contribute more to society).

Sowell is, of course, an economist by profession, and this book’s basic point is an economic one—namely, as Sowell quotes Henry Hazlitt: “The real problem of poverty is not a problem of ‘distribution’ but of production. The poor are poor not because something is withheld from them but because, for whatever reason, they are not producing enough.” This seems entirely obvious—that if you produce inadequate amounts of output valuable to others, you may be happy, but you will be poor, and you will deserve to be poor. Yet this truth is everywhere denied or ignored. Sowell drags it back to center focus.

Ultimately, productivity is the only possible concrete measure of human achievement and progress, and it explains why there are “haves” and “have-nots.” This does not imply a perfect linear relationship—as Sowell frequently notes, sometimes people get more because they steal, not because they produce, and this can result in inequality. But that cannot explain more than a fraction of unequal outcomes, and cannot explain outcomes far removed in time from the theft (as Sowell notes, the Spanish stole an awful lot from people in South America, yet quickly reverted to being towards the bottom in prosperity). So the key question for Sowell is, why are some more people more productive than others?

Sowell begins with observing what we all know—that there is a huge range of human achievement, both for societies and for individuals. Sowell evaluates possible drivers for these differences in achievement, dividing them into geographical, cultural, social and political. As far as geography, the simplest analysis, Sowell points out that geography is not egalitarian, but it is not deterministic, either. His basic belief, for which he argues cogently, is that isolation from other human communities is the most deleterious effect of “bad” geography—it’s from interaction with others that people “gain the knowledge to turn natural resources into wealth.” Other problems, from poor soil to poor transport, to (less obviously) lack of seasons resulting in a lack of urgency about time, also contribute. None of this is startlingly new (see Fukuyama or Jared Diamond) but it’s valuable to reiterate the objective, largely unalterable character of this source of inequality. Sowell emphasizes, however, that geography is merely the starting point—many societies and individuals have managed to be highly productive even beginning from a bad geographic position.

Sowell then addresses culture. He points out the success of some frequently transplanted cultures (Germans, Chinese, Lebanese) and the ability of some cultures to successfully change to adapt new ideas (Japan), and the fact that some cultures have failed by rejecting change and regressing (Japan again, but earlier; China in the 1400s). He is unfailingly polite, though he points out that, for example, Arab culture today “lacks cultural receptivity,” as shown by that every year Spain translates more books into Spanish than the entire Arab world has translated into Arabic in the past thousand years. And since cultural receptivity and flexibility is, for Sowell, the touchstone of the ability to flourish in productivity (it is the opposite of cultural isolation), that spells bad things for the Arabs. Other cultures, such as the old American South, come in for similar criticism, and are knocked for laziness and lack of productivity.

Related to the benefit of cultural flexibility is one manifestation of the reverse: the frequent hostility of majorities to productive minorities, which Sowell points out is (rationally) encouraged by majority political leaders for their own benefit. This is where Sowell again addresses education, pointing out that while some cultures value education, and this can be valuable, not all education increases human capital—“some education develops little or no human capital when it produces few, if any, marketable skills—and some education even produces negative human capital, in the form of attitudes, expectations and aversions that negatively impact the economy.” Sowell hammers this point repeatedly: “People who have acquired academic degrees, without acquiring many economically meaningful skills, not only face personal disappointment and disaffection with society, but also have often become negative factors in the economy and even sources of danger, especially when they lash out at economically successful minorities and ethnically polarize the whole society they live in. . . . . In many places and times, soft-subject students and intellectuals have inflamed hostility, and sometimes violence, against many other successful groups.”

Sowell’s next topic is social factors. By this he means characteristics of a group as a whole, as opposed to individual behaviors that create culture. Here is where social (and geographic) mobility becomes important, and Piketty comes into play. Sowell in this section particularly shows his knack for digging deeper than most writers. For example, crucially, he points out that even when mobility is possible, movement may or may not occur. Therefore, measuring mobility by actual movement is inadequate, since cultural or other barriers may result in people choosing not to move up the social scale. And here Sowell again drives home a point that he has hammered many times before—measuring income inequality by pretending there are two groups, “the rich” and “the poor,” by percentiles, is stupid, because the composition of those groups changes continuously, and many actual people who are “poor” at one point in their lives are “rich” later. Where actual movement occurs, this is even more true, and therefore a key indicator of social factor success is both theoretical mobility and actual movement, where a high percentage of the population spends part of its lifetime in the upper brackets of income. (Sowell also here rejects the idea that overpopulation causes poverty, reasoning along the same lines as Angus Deaton did, at greater length and with more moral outrage, in “The Great Escape.”)

This section is where Sowell addresses a topic about which he frequently speaks—the argument that black people’s modern collective (but not individual) inability to compete on standardized test scores and educational attainment shows lower IQ. He does not reject that possibility (as I say, he is all about thinking, not rejecting arguments for ideological reasons), but he points out that prior to the modern post-1960s deterioration of black culture, black students scored much higher test and IQ scores than today (and other students from deficient cultures, like whites from Appalachia, scored lower IQ scores than black students). One prime example is Stuyvesant High School in New York, where entry is purely meritocratic—in 1979, black students were 12.9%; now they are 1.2%. Sowell points out “None of the usual explanations of racial disparities—genetics, racism, poverty or a ‘legacy of slavery’—can explain this retrogression over time.” He attributes it to “ghetto culture, essentially an offshoot of the dysfunctional redneck culture of the South.” (He also explicitly rejects slavery and later discrimination as an explanation for black failures; it’d be interesting to see Sowell feed Ta-Nehisi Coates into his intellectual meat grinder.) This ghetto culture is not confined to black people, of course—there are white subcultures (e.g., Appalachia) with similar bad culture and bad scores, and not just here in the US—Sowell discusses the similar vices and failings of the modern British white lower classes as well. And, as I noted above, in this second edition he expands a variation on this argument to other cultures and peoples, noting, for example, how “backward” Chinese consistently rocket to the top as immigrants in many societies, when they are placed in new cultures.

As part of this, Sowell rejects the currently fashionable attempt to ascribe success to (poorly-defined) “privilege.” Sowell believes in personal responsibility, which may be made harder or easier by the culture one comes from, but that does not excuse failure or prevent achievement. “Slippery use of the word ‘privilege’ is part of a vogue of calling achievements ‘privileges’—a vogue which extends far beyond educational issues, spreading a toxic confusion in many other aspects of life.” So much for “white privilege,” surely one of the stupidest neologisms of the decade, the use of which merely serves to show the ignorance and mendacity of anyone who uses the phrase without laughing hysterically.

Sowell then addresses political factors. Here, he essentially distinguishes between good and bad political choices, though he repeats his point that political choices that are good for individual politicians are often bad for the societies they lead. (Missing from this edition appears to be one of my favorite lines from the first edition: “Few words have been repeated so often or so insistently as ‘diversity,” without a speck of evidence being offered or asked for to substantiate its claims of economic or social benefits. And the evidence to the contrary is huge.” Sowell then pointed out that if diversity is so great, India should be a paradise and Japan a hell, when the reverse is true.) But Sowell’s (related) main point is that political polarization is a huge barrier to national success, as he shows with examples ranging from the Ottoman Empire to modern Malaysia.

Sowell attacks the “welfare state vision,” the idea that people who lack success are merely victims of bad luck and will thrive if given handouts or legal changes in their favor such as increased minimum wages, as an example of unreasoned political polarization. He points out the stupidity of attributing lack of morality to those opposed to the welfare state vision, and that American poor are nearly all not poor by any historical standards (e.g., “Americans living below the official poverty level today have more housing space per person than the average European—not poor Europeans, but the average European.” Of course, “This is not to say that Americans living in official poverty have no problems. They have serious and often catastrophic social problems, but these are seldom the result of material deprivation—and are far more often the result of social degeneration, much of it representing social retrogressions during the era of the rising welfare state and the pervasive, non-judgmental social vision that led to the welfare state.” And Sowell repeatedly points out that identity group politics don’t correlate with improvements for that group, but rather for benefits for grievance leaders. So, in the US, Latinos agitate and stagnate; Vietnamese work and get ahead.

Sowell’s book is in part an analysis of the Great Divergence (why some human societies have reached escape velocity from the poverty that has universally characterized human society until the Industrial Revolution—and others haven’t). Unlike recent authors like Greg Clark and Nicholas Wade, who basically think that the humans in more successful societies have genetically evolved superior traits, Sowell is skeptical of the evolution explanation. It’s not that he rejects it out of hand—he’s open to the possibility that evidence could show, for example, that one group of humans consistently has a higher IQ, though as mentioned above he largely rejects it for black people in America. And, in fact, although he only mentions it in passing, Sowell actually in part rejects the concept of the Great Divergence, noting that “Economic inequalities among nations did not begin with the industrial revolution, and the international inequalities of ancient times were by no means necessarily less than the inequalities of the nineteenth and twentieth centuries, or the inequalities of today.” Greg Clark might disagree, and exploring this point might actually be a fascinating follow-up book by Sowell.

While discussing cultural differences, Sowell makes a point that I had made to myself, but had not seen before in print. A few years ago, the book “Why Nations Fail,” by Acemoglu and Robinson, received wide attention. It’s about the Great Divergence, and among other things attributes modern differentials among nations to their political systems, finding “extractive” ones inferior in results. But I, at least, quit reading the book a few chapters in, when the authors addressed cultural differences among nations, and wholly rejected that cultural differences could explain any differences among national results, with their WHOLE AND ONLY argument being that “Canada and the United States were English colonies, but so were Sierra Leone and Nigeria. The variation in prosperity within former English colonies is as great as that in the entire world. The English legacy is not the reason for the success of North America.” Sowell punctures this PC-based approach with the obvious point that regardless of colonial status, the actual culture of Sierra Leone and Nigeria was in no way made English, and in fact their cultures are almost certainly the main driver of their differences today. He also notes that Barbados, with a mostly sub-Saharan ancestry but an absorbed British culture, is much richer than Argentina, which once was rich but threw it all away with a degenerating culture.

Sowell finally addresses “Implications and Prospects.” Here, speaking of income inequality, he has pithy rebuttals of Thomas Piketty: “To say, as [Piketty] does . . . that ‘the upper decile is truly a world unto itself’ is to fly in the face of the fact that most American households—53 percent—are in the top decile at some point in their lives, usually in their older years. . . . This is not even “class warfare,” but confusion between social classes and age cohorts. . . . . Even the vaunted ‘top one percent,’ so often discussed in the media, is a level reached by 11 percent of Americans at some point in their lives.” And even then the statistics mis-state the level of inequality, for the differences are calculated pre-tax and without including “massive transfers of in-kind benefits.” Finally, of course, true persistent income differences are not necessarily bad—they typically result from the higher productivity of those paid more, who also benefit others (which is why they’re paid more). Sowell also eviscerates the bell-bottom-flavored philosopher John Rawls in four pages: “To say, as Rawls does, that morally nothing should be done to benefit the rest of society if it does not also help those at the bottom can amount to enshrining a veto on progress, on behalf of those with a counterproductive lifestyle.” And, of course, “By pushing the production process off into the background, redistributionists [such as Rawls] avoid confronting the question whether income inequalities might be matched by corresponding inequalities in economic productivity.”

The book does contain the usual Sowell tics, which some readers may find distracting. Nearly every cited authority is called “distinguished,” which is Sowell’s way of complimenting them. But it seems odd after a while, and a reader who’s not overly familiar with Sowell might think it was being used defensively. And Sowell does tend to seem repetitive in places. He’s not, actually—in almost all cases, he’s drawing a somewhat different conclusion but pointing to the same base material, hammering the point home. But again, to a casual reader this can seem repetitive. Neither of these are a big deal, of course, but if I had any criticism of the book, other than that I preferred the first to the second edition, this would be it.


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