Welcome to Keith Knight, Don't Tread on Anyone and the
Libertarian Institute. Today I'm joined by Doctor Phil
Magnus to discuss Thomas Sowell. So often I hear from the critics
that he is a pop economist that no intellectual actually
respects. So I thought I'd get us an
intellectual to see what contributions, if any, has
Thomas Sowell given the world. Dr. Magnus, thank you for your
time. Thanks for having me.
What is Thomas Sowell's greatest contribution in the field of
economics? When you come across a statement
he's just a pop economist, what comes to mind as his best
achievement? Well, when I hear a statement
like that, my immediate thought is this is someone who hasn't
read Thomas Sowell beyond maybe a superficial delving into some
of his political op eds. This is someone who isn't
familiar with his academic and scholarly background because if
you actually look at Thomas Saul's work, turns out he is a
multi faceted economist with essentially 1/2 century of
scholarly works as well as popular works to his name.
And this really goes back to his earliest forays into the
profession, you know, back in the 1960s.
He makes his name as a historian of economic thought, working in
particular on what He starts as a Marxist and does write several
papers, including in some top journals analyzing Marxist
economics. But then he shifts his focus to
the topic of his dissertation, which is Jean Baptiste, the
Classical economist, and writes a well regarded scholarly
manuscript on that. I know he does shift later in
his career into taking up questions of cultural economics,
some of the philosophical underpinning of economic
evaluation and visions of the world.
He even writes a book essentially assessing price
theory as an economic term. But it's again, it's a multi
faceted polymath of a scholar who is dug into a wide variety
of topics, all of which he seems to approach with a very
penetrating scholarly lens, at least certainly in his books and
and journal articles. You do get distillations of that
in some of his op eds and popular writing, but that's
exactly what offense and popular writing are supposed to do.
One of my favorite things that I learned from Seoul is just how
to analyze claims that are given to you.
So if someone says what wages have stagnated, what Thomas
Seoul does is he looks at the data that Robert Reich provides
and says, well, according to this, wages have stagnated.
The problem is you're not focusing on individuals.
You're focusing on groups that go in and out of certain
categories. I say in my book, this is the I
summarize Thomas Sowell's basic economic section like this.
I said, imagine a guy goes to see how college kids age.
So in the year 1980, he goes to a college and all the freshmen
are 18 years old. He comes back 40 years later and
all the freshmen are still 18 years old.
So people at this college don't age at all.
Like, well, what happens is people go in and out of this age
group. People go in this income bracket
for a very short amount of time and then gain on the job skills
and then work themselves up. So yes, the Robert Reich example
doesn't count because you're not actually following individuals.
Never. It took me 10 years before I
ever heard someone say, does this follow individuals or
groups which people move in and out of when it comes to incomes
or economics? What can Thomas Soul teach us?
Yeah. So this is a fascinating feature
of souls approach to economics. He is an interlocutor of myths.
He's a debunker of myths. And he he tends to take a social
scientific approach to it, but does so in a very accessible
way. Like you just explained, he
likes to study patterns over time, but doing so on terms and
parameters that reflect reality, not terms and parameters that
reflect just a statistical relic.
So, you know, an example you just gave, he is debunking a
statistical relic by bringing in another dimension that was
neglected in the original presentation of the same data.
And he has done this in a multitude of of areas of social
science, one that I like to to draw attention to.
Seoul is actually a very powerful debunker of what I
would call the pseudo scientific claims that emerged in the mid
20th century trying to link race and intelligence and other
certain characteristics. Again done on a very collective
basis trying to group an entire race or nationality and assert
that maybe this group is less intelligent than the other or
vice versa. Souls answer to that was not
just to scream and shout, hey, this is a racist approach even
though it is and then dismissed it out of hand.
Is is said, let's dig deeper into the data and we can
actually find other dimensions that are not accounted for and
the people that are asserting this correlation.
And that is if you start treating people as individuals
and you looked at historical antecedents, historical
examples. So one of his most famous works
on this as he looks at the history of immigrant communities
that come to the United States and their level of achievement
over time, but looking at them at an individual basis, and he
finds there's a historical pattern.
People that arrive in poverty, say in like the late 19th
century, over the course of a couple generations, you start
measuring educational and economic attainment.
They rise out of poverty. It completely debunks the notion
that there's some genetic characteristic that a afflicts
certain immigrant groups or ethnicities or nationalities or
races. And, and he's basically saying
when we see examples of this argued in the present day, we
have to look to the historical antecedents to it.
We actually see that there are other patterns and and this
simply means that we're at a certain stage of the pattern.
I forget what God he's written so much.
I can't remember where he says this.
I thought that he sort of explained income mobility
through immigrant groups that come to America, start poor and
overtime get richer. But I thought he said that that
just could be a selection process.
There's only very few smart, you know, people from this country,
they come here and they lift themselves out of poverty, but
that's a selection process. I remember his race and IQ thing
being there was a, there were intelligence tests in the First
World War where black, black Northerners and white
southerners. Black northerners outscored
white Southerners in a number of ways.
So you could just what he basically did was he took people
with similar cultures, different races, but similar cultures.
That was his variable. That's what I couldn't remember.
Was there anything else in the race and IQ thing that he used?
Because I think that gets a little more attention today,
yeah. Yeah.
So especially looked into immigrant groups from Eastern
Europe and Southern Europe that at the time were discriminated
against visa be Northwestern Europe.
A lot of the immigration laws at the time tended to favor
Northwestern Europeans and deprecated other groups that
were immigrating to the United States.
And and again, he studies data and he finds similar debunking
patterns in here. So there's a there's an
interesting characteristic when he's taking on these questions
of like race and IQ, he doesn't just dismiss wrong research out
of hand, he debunks it. He goes through and it and tries
to scrutinize errors of logic, errors of thinking, errors of
statistical inference that have occurred and LED people on these
straight paths. And then doing so in such a way
that corrects the interpretation.
And you know, lo and behold, his correction actually verifies a a
much stronger position argument against the race and IQ types of
of people literature than you would find by just dismissing
them out of hand. I want to read my favorite
immigration quote from Seoul, and then I want you to tell me
whatever topic comes to mind for another great soul contribution,
he says. In civil rights rhetoric or
reality, Japanese immigrants to the United States also
encountered persistent and escalating discrimination,
culminating in their mass internment during World War 2.
But by 1959, they had equaled the income of whites, and by
1969, Japanese American families were earning nearly one third
higher incomes than the average American family.
It's not all doom and gloom, ladies and gentlemen.
You can't apply yourself. Progress is real, people.
And that's exactly the case. And he's also referring to this
in a time when there's a breakdown in racial barriers
that are sustained and imposed by the state.
You know, racial discrimination is often an instrument of the
state. Segregation is certainly the
case. Japanese internment was
certainly the case and he's pointing out these are
government actions that reinforced race racist norms at
the time. But as you start to break them
down, you actually see that the racist norm is undermined as
well as the discriminatory mechanism.
So this and this is a recurring theme in Souls work.
It's also a very thorny area of social commentary, but one that
he applies pretty rigorous economic analysis.
You know, he's, he comes out of that Chicago School tradition
that looks at discrimination as an economic mechanism as well as
a social one. And, and, you know, when you
consider it that way, considering it through the tools
of economics, you often find explanations that are at odds
with political analysis of the same subject.
And Seoul is, you know, somewhat notorious for picking fights
with the sacred cows of the political establishment,
political literature and doing so on economic terms.
So, you know, he gets a lot of criticism and and push back in
that area precisely because he's added a different way of
understanding some of the same problems.
And it's a way that's less ideological.
It's a way that's less wedded to prejudicial precepts that people
bring into the question. He has a book, Black Rednecks
and White Liberals. I'm sorry, I'm there.
I've been sick. He summarizes his thesis in
Economic Facts and Fallacies. He says many of the social or
cultural differences between American blacks and American
whites nationwide today were in antebellum times pointed out as
differences between white Southerners and white
Northerners. These include ways of talking,
rates of crime and violence, children born out of wedlock,
educational attainment and economic initiative or lack
thereof. So he's telling you that there's
a big cultural aspect. It's always important to say,
gosh, I really wish the system would change.
I wish Lindsey Graham would go do the right thing in Congress
for the first time in his entire life, but it turns out you don't
have to wait. You can embrace cultural traits
that make you more successful when it comes to the cultural
aspect of things. What are Souls contributions
here? Well, here he's writing at a
time when I'd say the academic focus on on race and culture has
gone in a very different direction.
And remember, Seoul is an economist of the mid to late
20th century United States is when his his most active
commentary period is his most active scholarly contributions
come from that era. Now he's writing in a time when
the other major economic contributions to the study of
race and culture come from figures on the far left.
Someone like Gunnar Meredall has Nobel laureate, shares the Nobel
with Hayek even though they're very different in their
viewpoints, writes this multi volume work called The American
Dilemma, which is a purported analysis like a sociological
socio economic analysis of the status of African Americans in
the mid 20th century. And it has some interesting
insights. But Miradol is very complicated
as a figure because he's also a die hard eugenicist.
He believes that there are genetic traits that cause and
are related to poverty and not just a eugenicist against black
people. He's also a eugenicist.
He's a Swedish, so he is involved in the creation of
Swedish eugenics laws and sterilization laws with him and
his wife. So he's importing kind of this
this viewpoint that there is a social determinism between
heredity and intelligence, economic ability.
And he takes the same framework and he applies it in the very
progressive left wing way to the United States.
Seoul was an individualist. He's coming in and he's
basically offering an analysis of some of the same problems,
same issues, but doing so in a way that explicitly rejects this
scientific determinism that's coming out of the predominantly
in the political left at the time.
Now, we do know in the 20th century, the far left and the
far right often converge. And it, you know what I like to
call the, the horseshoe of eugenic theory.
It's both a progressive idea and something that's adopted by the
racial obsessed right at various points in history.
And you have a figure like Seoul who would reject both.
Seoul offers an individualistic retort to the collective
approaches of the far left and the far right and then studying
race essentially. Yes.
So I believe he says we can dismiss this.
The races have inherent intelligence, and this is just
the way things are going to be forever.
By saying at one point, Baghdad led the world in scientific
discoveries. China led the world in in
innovations and contributions. The British people were a
primitive island during the time of the Roman Empire.
Sometime later, the people of Britain ran the world.
There's a massive disparity between Western Europeans and
Eastern Europeans, bigger than the difference between black and
white Americans. So once you see this, it's just
so encouraging to know that there's not.
Everything's within our power. But there's much more than just
this stagnation. You have tweeted about Thomas
Ole's research on Marxism. I that book I have not read so
I'm hoping he mentions it violates the non aggression
principle and that's why Marxism is bad.
Why is Thomas Soul against Marxism?
Well, a big part of it is he actually starts out his academic
career as a convinced Marxist. He's he's against Marxism
because he's actually been through the motions of studying
Marx in death some of his earliest academic work.
He writes a couple of journal articles that are exploring
dimensions of Marxist theory, surplus value, all the all the
usual standard canards of Marxist economics.
And he actually comes to and arrives at a position of
rejecting this when he sees central planning at work through
his own professional career. You know, he spends some time
studying labor economics. He also spends time in the
military. He spends time in the
bureaucracy. And he sees elements of planning
at play in each of these. And they start causing him to
question his precepts. He also tells a story that, you
know, when he arrives at the University of Chicago, he was
still a committed Marxist even through Milton Friedman's
classes. But it's, it's actually these
observations of the real world that caused him to to
essentially turn on Marxist ideas and conclude that this is
just not a viable system of economic thinking.
Planning does not work. He eventually comes around to
kind of a more Hayekian view that I think is implicit in a
lot of his that his writings, especially the several of the
books that he publishes in the 1980s in particular, really
adopt and expound upon Hayekian knowledge problems as the
undercurrent of economic organizing.
And you know, if you accept that premise, central planning
becomes impossible, Marxism becomes impossible.
Though he does that, he writes an entire book length assessment
of Marx, actually digs into the weeds of of some of the stuff
that I work on. For example, looking at Marx's
reception in his own time, Visa V the post Soviet Union uptake
on him. And he points out, quite
correctly, that Marx is a very fringe, obscure figure in the
19th century, lives in the same neighborhood as John Stuart Mill
for most of his adult Simon London.
And Mill has no idea who this guy is, even though they're
working and writing on ostensibly the same social
problems. And Saul points this out.
He also then points out and says that it's actually political
actors that elevate Marxism as an idea into not only the the
the academic mainstream, but into political operas,
operationalization of it in the Soviet Union and other Marxist
communist countries that emerge in the 20th century.
And you know, Seoul will look at this and he sees there's
essentially a veneer here of theory that is actually
legitimizing and authorizing some very bad actors to attain
power, to attain enrichment for themselves, to attain the perks
of political control and political office.
So we also basically offers an explanation of why Marxism
devolves almost invariably into the same totalitarian result.
And why is that? Because equality is impossible,
so only a tyrant would ever try to give you such a lie.
And once you give the state so much power, they have no
incentive to make them equal to everyone else.
It's a, it's a cultural precept that people in that side of the
spectrum adopt. It's a very unconstrained vision
of society. If you're a Marxist, I mean,
you're, you're trying to reorder the world.
You know, they, the Hayekian insight comes out in The Road to
Serfdom, where Hyatt points out, why did the why did the worst
always rise to the top of these totalitarian societies?
And it turns out there are certain characteristics and and
in the way that they view the world, they see themselves as
remaking the world. And any and every action
undertaken in pursuit of that goal is legitimized by the goal
itself. Very similarly, Seoul expands
upon this idea, contrasting constrained and unconstrained
visions of allocation of culture, of society.
And he said there are certain characteristics that emerge in
in certain types of visions of the world that lead people to do
horrible things in pursuit of that vision because of the
belief that the vision itself. Is a desirable end to attain.
I remember just reading his book, he was talking about the
importance of, you know, liberating the masses and the
the importance of getting the working class, you know, the
power to, you know, really take on the bourgeoisie.
He goes ask these people, you know, before we give, you know,
have a dictatorship of the proletariat.
See how comfortable they are with giving the working man
school choice When you realize there is not one freedom that
they'd really they're not even comfortable giving them a little
say over their lives. They're like, OK, they it's not
about empowering the masses. It's about a dictatorship of the
proletariat. Basically, it's about, I believe
he refers to it as it's not about individuals being
empowered to make decisions, it's about empowering
politicians as coercive surrogate decision makers for
the masses which they claim to represent.
That's his thesis in Discrimination and disparity.
And there's the keyword, what they claim to represent, you
know, persons of a certain vision that view themselves as
reordering all of society necessarily have to speak on
behalf of other people. And they speak on on behalf of
them as treating them as as collective units.
Yet there's never really any voice of the other people that
they're purporting to do all these actions on behalf of.
Then eventually, you know, a devolution into a totalitarian
society, which is what occurs in the Soviet Union.
And who gets killed? It turns out to be the very same
masses. They're the starving peasants
that are the victims of the supposed dictatorship of the
proletariat at the top is actually screwing them over, and
doesn't mind that it's screwing them over because that's what's
necessary to attain the society that they desire.
So that this is a fundamental contradiction that seems to come
out of very unconstrained visions of society is they'll
profess to be acting on behalf of a greater good, but in
action. What materializes is something
that makes the greater masses entirely expendable to their
political objective. One of the things that really
helped me see through the lockdown and mask mandate
madness was Thomas Old's book Civil Rights Rhetoric or
Reality. He says it's true that black
incomes rose after the Civil Rights Act of 1964, but that's
not how you measure if a law had a good effect.
You want to see what trend was occurring in the 20s, thirties,
40s and 50s with this demographic and then see the
change afterwards, he said. What the what happened was, of
course, Jim Crow laws should be repealed in their evil.
But he says, is this the sole explanation for why people have
an increase in income or an increase in accessibility to
access to products and services? So when it came to the
lockdowns, I said, oh, you know, deaths went down after this mask
mandate was imposed. What was happening before then?
And time and time again, you find out there's no correlation
between lockdowns, mask mandates and COVID deaths, especially
comparing countries. When it comes to this trend of
how Seoul was able to verify the claims of researchers, what
comes out to your mind when you look at his attempt to really
empirically analyze historical narratives that will just take
for granted? Well, he's a, he's a very
innovative social scientist. And that seems to be like the
core underlying theme of his work is to scientifically test
claims, whether they're popular, unpopular, conventional wisdom
or completely out of left field. You know, he wants to take
nothing for granted. He actually wants to see what
the data show. And this is a very rare mindset
to encounter among intellectuals in particular, You know,
intellectuals, I think in the worst sense.
They're they're Hayeki and secondhand dealers and ideas.
They come to a problem already thinking that they know all the
answers. Seoul, actually, he engages,
even though he does so in a very acerbic way at times.
And I love the acerbicism, but he engages people that basically
act as know it alls with his own state of intellectual humility.
And he says, well, wait a minute, let's question the core
assumptions of an assertion. And, and, and let's do so in a
way that sets up a natural experiment using historical
data. Let's actually tease out what
the data say on a, a subject and you get some really interesting
deeper understanding. And again, you know, as I
pointed out, he often comes to a conclusion in the end that
verifies and validates what was taken for granted.
Like in the the race and IQ thing, he rejects racial IQ
science. That's a fundamental derivative
of his work, but he gets there through scientific analysis and
testing of the claims rather than just asserting same thing
you see in in other aspects. And I think this is a big part
of his conversion from Marxism. It's it's testing the theory
against reality. And he starts to see breakdowns
in reality, both on a micro level of observing, planning and
practice and then in in a large societal trends of observing
this trend toward totalitarianism and Marxist
societies. That's the convincing evidence.
Not it's not like let's go pour back over Marx and have the 27th
new interpretation of Dos Capitol that finds something
supposedly hidden that every other Marxist has somehow
missed. Seoul's not interested in that.
He's interested in testing it in practice.
I love the Marxism one that he ends social justice fallacies
with, he said. You know, since the rich are
only rich because they extract their money from the surplus
value of the poor, we should see the places with the most
billionaires have the most amount of poverty, he says.
Turns out America has a lot more billionaires and a lot less
poverty than places in the world that have no billionaires but a
lot more poverty. I'm like OK I wish I would have
read those three sentences 10 years ago.
I would have saved myself some humiliation.
Let me give you a disparity and I want you to use Souls
methodology to refute this. If I say men are 50% of the
population yet 95.5% of people killed by police, therefore
discrimination exists. The average income of a 16 year
old is way lower than the average income of a 46 year old.
Therefore men and young people are systematically discriminated
against using Souls methodologies.
What, if anything, is wrong with my logic?
The very first thing is you're you're treating people as a
group. You're treating people
collectively and a lot of the phenomena you're talking about
are individual instances you'd want to dig in.
Can you make that inference from a summary statistic to
causality? And so would say, basically, no,
you can't. You actually need more data,
better data that tells the actual causality now.
So, for example, on on police shooting, it's not enough to
simply say this percentage of persons in such and such group
represents whatever share of police shootings you have to.
You actually have to dig into the data and figure out if the
particular instances of police shootings have a racial
component to them. So for example, if you had a
subset of data that showed police encounters between
different racial groups of the same nature, let's say we took
all traffic stops between police and and private citizens and
then we divided them on racial lines and you could detect which
traffic stops ended peacefully, which ones escalated.
That's a that's a much more narrow subset of the data.
And I could see Souls as someone who would would like advocate
that type of an approach because if you detected that kind of
disparity, it's very different than saying, well, 80% of this,
90% of that result in an escalation just based on the
summary statistic. He'd want to get down to what is
the mechanism? Are there geographic
disparities? Are there other patterns at play
that determine the nature of why police stops occur?
I guess in other words, you can't just reduce a descriptive
statistic in the causality without investigating the
causality. Is that descriptive statistic?
It might be something causal, it might not be, but you actually
have to dig deeper into the data to figure out what's really
going on. Visa vie what the political
claim is. I love his warning and
methodology and the vision of the anointed.
He says there's a scam, here's what's going to happen, there's
a huge crisis that needs our attention.
There's a solution which is going to be coercively imposed
by a state that people must fund.
There's going to be results. And regardless of what the
results are, they're either going to prove that we're right
or going to prove that we need even more funding.
We were wrong. It was worse than we thought.
We need to double down. So he says this in like the
early 90s, before the current hysteria that we get when it
comes to other things. Do you think of the vision of
the anointed? Was this a great contract
distribution? Does school choice come to mind?
Take this wherever you want in our last few minutes here.
What else about Seoul should people appreciate?
Well, he has a, a very skilled gift at distilling complex ideas
into accessible terms. And then this really comes
through. So I love conflict of visions as
a, a great way of articulating ways of looking at the world
both social scientifically and philosophically.
And I think it's the expressions that he has there of, of, you
know, dividing ways of looking at the past, ways of looking at
the present into different categories and groups of vision,
different categories of, of philosophical underpinnings.
This makes thousands of years of complex political philosophy
very accessible and understandable in a cohesive
framework. So I think there's a, there's,
you know, I, I hear the term pop economist used as a slur, but
this is a very snobbish approach.
Actually. What he's doing is he's taking
some very complex and difficult to access ideas and distilling
them in a way that is accessible and yet also still intelligible
to a mass readership. There's value to that.
In fact, I I I deprecate scholars that speak in
obscurantism and jargon and intentionally obscure the
accessibility of their work because that's really often just
a a cloaking mechanism. It's a veneer that their
arguments aren't nearly as strong as they claim them to be.
I mean, you hear this all the time.
You encounter Marxists and challenge them so well.
You just don't understand Karl Marx like I do because I was
trained in the such as that school of, of Marxist thought.
And it's, it's actually, no, you, you, you don't have good
arguments on your side to coherently and intelligently
explain your position to an educated layperson.
That's a sign of weakness of your position.
So Saul takes his readership very seriously in speaking to
them in accessible ways. He's not lecturing down at them.
He's saying, let me walk you through the logic of my position
in a way that you can understand and then I want you to evaluate
it and challenge me. So we'll invite that challenge.
He may be dismissive of a stupid challenge, but he will none the
less invite the challenge. And he says, explain to me in
accessible, intelligible terms what your position is and why
you think that and all do the same in return.
So he's he's actually engaged his readers in a conversation in
ways that I think is it is extremely rare among
intellectuals, among academics, among people that have his
caliber of scholarly achievement.
Yes, I wish Matthew Desmond would take note and do that same
thing with the 1619 project. Let us know where I know you're
an economic historian at the Independent Institute.
Where can people find your work and what are you working on now?
Yeah, listen, independent.org is where I publish a lot of the
material and it's it's our website.
I am working, you know, much much as soul did on the history
of Marxism and and trying to explain why this takes over
large swaths of the Academy in the 20th century.
Why we get to where we are today despite this being very early on
and discredited way of economic thinking and then further
discredited in practice from the events of the 20th century.
So is that why you and Bob Murphy are engaged in this back
and forth? Because the fact that Marx was
not popular in his time means academics really don't take him
seriously? It's only the Bolshevik
revolution which made him popular, because that's the
whole thing. That's essentially the gist of
the argument. And, and you actually find soul
hints at this. And, and in his book on Marx,
you know, it's observing that in his own lifetime he's an
extremely fringe peripheral figure.
But he is noticed by economists in the decade or so after his
death, mostly the marginalist pick him up and notice him as a
a relic of the older system, also a potential challenger to
marginalism. And they engage with him in
depth and deconstruct his arguments.
But by about 1900, by about the turn of the century, Marx has
been defeated intellectually in economics.
There are very few people that think that he emerged from those
discussions and battles of the late 19th century as the
superior economic system. He's seen as something, you
know, I'll paraphrase. John Maynard Keynes, of all
people, writes that Marx is the author of an obsolete textbook
of no interest to the modern world.
And this isn't just Keynes saying, hey, I'm going to
dismiss the guy. This is Keynes saying
marginalism 1 over the labor theory of value.
And yet you have the Bolshevik Revolution, which is just like
this giant influx of state support for the propagation of
Marxism that resuscitates and revitalizes it in intellectual
circles. Thank you to everyone for
watching Keith Knight. Don't tread on anyone in the
Libertarian Institute. Doctor Magnus, thank you for
your time. Absolutely, thanks for doing
this.