Thomas Sowell, Economic analysis should be based in real life behavior of human beings

The Soviet Union was just one of a number of countries that had once had surplus food to export before the government took control of agriculture and which later had food shortages, hunger and sometimes even starvation, and which were forced to import food, even when there was ample fertile soil within the country.

People in these countries might have had a right to food, sometimes explicitly specified, but what they were lacking was actual food to go with that right. Conversely, denying people a right to food is not denying them actual food. Countries where food is provided through free markets are often countries where obesity is a far greater problem than malnutrition.

To analyze the market does not preclude the existence of non-market activities or prejudge their effectiveness, any more than automotive engineering precludes the existence or prejudges the effectiveness of alternative modes of transportation.

What economic analysis of markets does is utilize a body of knowledge, analysis, and experience that has accumulated and developed over a period of centuries to systematically examine the consequences of various economic actions and policies. The fact that these consequences can determine the poverty or prosperity of millions of people— and billions of people worldwide—is what makes it important to understand economics.

The real question is not which system would work best ideally, but which has in fact produced the better results with far from ideal human beings.

Even with the more modest task of evaluating different policies within a given system, the real question is not which policy sounds more plausible, or which would work best if people behaved ideally, but which policy in fact turns out to produce better results with actual people, behaving as they actually do.

Related

Facebook Comments