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Sowell's tragic (or constrained) vision of man and society is based on
the acceptance of the realities of the human condition – we are all limited
by independent realities which we ignore to our own detriment. According
to Sowell's vision: 1) Human nature is essentially unchanging and unchangeable
– there have been no great changes in the fundamental intellectual and
moral capacities of human beings; 2) Human capabilities are severely and
inherently bounded for all – man is sharply restricted in his capacity
for improvement and has only a very limited ability to affect his surroundings;
3) Life is inherently harsh and difficult – suffering and evil are inherent
in the innate deficiencies of human beings; 4) Man is basically self-centered;
however, things can be improved within that constraint by primarily relying
on incentives (rewards and punishments) rather than on dispositions; 5)
Resources are always inadequate to fulfill all of the desires of all of
the people; 6) Social outcomes are a function of incentives presented to
individuals and the conditions under which they interact in response to
those incentives; 7) Given the moral limitations of man and his egocentricity,
the fundamental moral challenge is to make the best of the possibilities
within the constraints of man's nature; 8) There are no solutions, only
trade-offs that leave many desires unfulfilled and much unhappiness in
the world; 9) It is imperative to have the right processes for making trade-offs
and correcting inevitable errors; and 10) It is better to cope incrementally
with tragic dilemmas than to proceed categorically with moral imperatives
– for amelioration of evils and for progress it is generally preferable
to rely on systemic characteristics of social processes (such as moral
traditions, the marketplace, the law, or families) rather than solutions
proposed by government officials.
Knowledge
and Decision Making
Sowell portrays society as a collection of interconnected and overlapping
decision-makers who operate under the inherent constraint of scarcity and
consequently face the necessity of dealing with trade-offs – some desirable
options must be foregone in order to pursue others. The goal of decision-making
processes is to optimize well-being subject to constraints of time, wisdom,
and resources. No social value is categorically a good thing to have more
of without limits – all are subject to diminishing returns and ultimately
negative returns. A person needs to accept somewhat less of one thing in
order to get somewhat more of another.
Information means specific things that a man needs to know in order to
make decisions affecting his own well-being. The relevant question is which
among a number of options will optimize the satisfaction of the decision-maker.
A continuing flow of information about the relative costs and benefits
of doing or choosing one thing or another is needed to answer this question.
Such knowledge can be extremely costly and is often widely scattered in
uneven fragments – the communication and coordination of these scattered
fragments is one of the basic problems of society.
According to Sowell, the crucial systemic process is the market with its
continuing flow of signals which allows decision-makers to review a constantly
changing mix of options and resulting trade-offs and respond in a fine-tuned
fashion by making a series of incremental adjustments based on the information
attained. If decisions are to be incremental and flexible, they are best
made by economic institutions rather than by political, administrative,
or judicial ones.
Any individual's personal knowledge is quite small compared to the organized
systematic knowledge through which society functions. Sowell argues that
only by viewing the economic, social, and political orders as systems can
we understand the real role of knowledge in society. In order to cope with
the constraint of inadequate personal knowledge, a variety of social institutions
and processes coordinate innumerable scattered fragments of knowledge enabling
a complex society to function. These social arrangements can largely be
understood as mechanisms for economizing on knowledge.
Decisions are best made through systemic processes that encourage each
of us to act upon the limited information we possess while permitting others
to respond freely to our initiatives just as we react to theirs. Social
causation thus operates in systemic ways with innumerable interactions
producing results controlled by no one but falling into a pattern determined
by the incentives and constraints inherent in the logic of the specific
circumstances. Since no individual has complete information, knowledge
in the entire system is sorted and coordinated in fragments by the simple
process of each transactor seeking the best deal from his own perspective.
As a result, multiple individual choices, determined by immediate and narrow
considerations, produce unintended consequences that are socially beneficial
in the aggregate.
Sowell explains that better decisions are made through the market process
as opposed to the political process because markets economize on the knowledge
needed by any one person to make good decisions and because they convey
a sharper sense of constraints, trade-offs, and incentives (rewards and
penalties). In addition, people can generally make a better choice out
of numerous options than by following a single prescribed process. Another
virtue of the market is the promptness and effectiveness with which it
transmits feedback thus enabling decision-makers to correct errors and
adapt to changing conditions. Feedback mechanisms (including incentives
to act on that information) are critical in a world in which no decision-maker
is likely to have enough knowledge to be consistently right the first time
in his decisions. There is an independent reality which each person sees
only imperfectly, but which can be understood more fully with feedback
that can validate or change what was previously believed. Effective feedback
is the implicit transmission of others' knowledge in the explicit form
of effective incentives to the recipient.
Nobody needs to have complete information in order for the economy to convey
relevant information through prices and achieve the same adjustments as
if everyone had such knowledge. Prices are a mechanism for carrying out
the rationing function and are a fast and effective conveyor of information
through a society in which fragmented knowledge must be coordinated. Accurate
prices resulting from voluntary exchanges allow the economy to achieve
optimal performance in terms of satisfying each person as much as he can
be satisfied by his own standards without sacrificing others' rights to
act according to their own respective standards. Prices maintained by force
convey misinformation. Regulatory measures such a price-fixing obscure
the true cost of a course of action compared to its alternatives, inhibit
the feedback that permits transactors to communicate, and create distortions
that harm rather than help consumers.
The
Superiority of Systemic Rationality
According to Sowell, knowledge consists largely of the unarticulated experiences
and rationality of the many as embedded in customs, traditions, and systemic
processes such as the market, family, language, and law. Knowledge is a
multiplicity of social experiences distilled over generations in cultural
processes.
Sowell argues that systemic rationality is superior to individual intentional
rationality. Even the most outstanding individuals are very limited – man
lacks the moral and intellectual pre-requisites for deliberate comprehensive
planning. The inherent constraints of human beings are sufficiently severe
to preclude dependence on individual articulated rationality. Sowell is
highly skeptical about the capacity of elites to master complexity and
to choose on behalf of others. Not only are the elite and the ordinary
person close in capability and morality, there are no uniquely correct
answers that would justify transferring decision-making authority to elite
surrogate decision makers. There are no solutions, only trade-offs with
respect to problems such as crime, poverty, and irresponsibility. As a
result, the preferred decision-making mechanism is systemic processes that
convey the experiences and revealed preferences of the many. The historic
systemic wisdom expressed inarticulately in the culture of the many is
more likely to be correct than the special insight of the few. The degree
of social rationality does not depend on the degree of individual rationality.
The relevant comparison is between that total direct knowledge brought
to bear through social processes versus the secondhand knowledge of generalities
possessed by a smaller elite group.
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« Sowell portrays society as a collection of interconnected and overlapping
decision-makers who operate under the inherent constraint of scarcity and
consequently face the necessity of dealing with trade-offs – some desirable
options must be foregone in order to pursue others. » |
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Sowell puts his hopes for social order in sturdy institutions – he does
not look for unsupported benevolence for society to progress or for solutions
to social problems. To the extent that he envisions social changes he thinks
in terms of trade-offs rather than solutions. Trade-offs must be incremental
rather than categorical if limited resources are to produce optimal results
in any social system as a whole. Results depend on the kinds of social
processes at work and the incentives, constraints, and modes of interaction
generated by such processes. Incentives may be positive or negative (rewards
or penalties) and may be structured so there are gradations corresponding
to different kinds of results.
Systemic causation in the form of legal traditions, family ties, social
customs, price changes, etc., creates an unintended order which arises
as a consequence of individual interactions directed toward various and
conflicting ends. These social processes are to be judged by their ability
to extract the most social benefit from man's limited potentialities at
the lowest cost. The world is a system of innumerable and reciprocal interactions
constrained within the confines of natural and human limitations – individual
problems cannot be solved one by one without creating or adding to problems
in other areas.
Sowell takes evils for granted as inherent in human nature and seeks to
discover contrivances by which they can be contained. He seeks the special
causes of peace, wealth, and a law-abiding order rather than the causes
of war, poverty, and crime. Since war is a rational activity engaged in
by most nations whenever they have a prospect of gaining anything by it,
the goal should be to raise the costs of war to potential aggressors through
the threat of force (i.e., by military preparedness and military alliances).
Since war originates in human nature, peace (not war) requires explanation
and specific provisions to produce it. In addition, with respect to Third
World countries, we need to explain the causes of prosperity and development
(not the causes of the natural condition of poverty) through responsiveness
to systemic economic incentives. Likewise, counterincentives such as moral
training, social pressure, and punishment must be created and maintained
in order to prevent or deter crime since incentives to commit crimes are
commonplace.
A man has insufficient personal knowledge to rely on reason alone when
making decisions. Rational decision-making has costs in terms of time and
other resources – the cost of a decision is the cost of the process of
deciding. Sowell explains that rational principles themselves suggest a
limit to how much rational calculation to engage in. Trade-offs apply to
the decision-making mechanism itself. For example, the sorting and labeling
of people, activities, and things involves a trade-off of costs and benefits
– the more finely tuned the sorting, the greater the benefits and the costs.
Beyond some point, sorting categories finer would not be worth the additional
cost for the particular decision-making purpose. Also, culture offers a
way of economizing on deliberate decision-making by providing a wide range
of beliefs, attitudes, values, preferences, traditions, and customs (whose
authentication has been historical and consensual) as low cost inputs into
the decision-making process as long as there is freedom for the individual
to choose whether prospective incremental improvements in the particular
decision are worth the additional cost of more rational calculation. These
and other social arrangements such as firms, legal traditions, family ties,
churches, politics, ideology, voluntary associations, the expert, etc.,
can be viewed as devices for economizing on knowledge.
Informal relationships such as personal ties within families and communities
are able to acquire much knowledge at lower cost than formal organizations,
generally able to apply it in more individualized fashion, and are less
likely to adopt previously made decisions as precedents. Informal social
processes can adjust the time, scope, and specialness of treatment of the
pertinent characteristics of each individual and each episode. Social processes
which rely on emotional ties and social penalties such as guilt, fear,
shame, or stigma, facilitate mutual accommodation without the use of force
and avoid the inefficiencies of force as a social mechanism. Sowell explains
that informal relationships or decision-making processes are generally
preferable but are not categorically superior to more formal relationships
or processes. There must be some discernible benefits peculiar to particular
more structured relationships and precedental decisions that can be shown
to be greater than the benefits of the corresponding informal decision
processes. The apportionment of decision-making between informal and formal
processes involves a trade-off of flexibility for security.
Freedom
and Other Process Characteristics
One of the most important trade-offs is between the amount of freedom and
the amount of other characteristics desired in a society such as material
goods, scientific progress, or military power. For Sowell, freedom is a
process characteristic referring to a social relationship among people
– exemption from the arbitrary power of others but not release from the
restrictions of circumstances.
Power is exerted to the extent that someone's pre-existing set of options
is reduced – it is not an exercise of power to offer a quid pro quo that
adds to his existing options. Sowell explains that using political power
to deal with economic processes reduces freedom. He argues that efforts
to produce social benefits must focus on general processes and on power
restrictions, meaning restricting the ability of some to reduce the options
of others. The most that man can do for freedom through social processes
is to establish widely known rules which limit how much power is granted
to one person over another and limit the specific conditions under which
the power holder is authorized to exercise it.
According to Sowell, rights are rigidities and boundaries that limit the
exercise of government power and carve out areas within which individual
discretion is free to shape decisions without being second guessed by political
or legal authorities. Rights involve the legal ability of people to carry
out certain processes without regard to the desirability of the particular
results, as judged by others. Although rights belong to individuals, they
originate, take their meaning, and find their limits in the needs of social
processes. Political and legal institutions protect the rigidities people
want in some areas of their life such as exemption from force or fraud
as exemplified in laws on murder, kidnapping, property ownership, etc.
The social benefits of property rights are that they present an economic
process with greater efficiency, a social process with less strife, and
a political process with more diffused power and influence. When general
rights (such as those listed above) involve virtually universal desires,
incorporating them into law eliminates the transaction cost of pointlessly
litigating anew. In addition, peace of mind and a sense of independence
and dignity are benefits from operating under known rules applicable to
all, rather than being personally assessed and controlled by other individuals.
Political and legal systems should be limited to areas in which they have
a relative advantage as decision making processes (such as reliability).
According to Sowell, rights can also mean legal entitlements regardless
of their moral merits. In this sense, rights are simply factual claims
about the availability of state power to back up individual claims. Social
trade-offs are involved in the creation of rights which includes a loss
of flexibility – something that is incrementally preferable at a given
point becomes categorically imposed at all points by the force at the disposal
of the state.
For Sowell, equality is a process characteristic – a social process which
ensures equal treatment represents equality whether or not the actual results
are equal. Equality is the equalization of processes. As long as the process
itself judges everyone by the same criteria, there is equality of opportunity.
There would be a major conflict between allowing freedom of individual
action and prescribing equality of social results.
The argument is not that it is literally impossible to reduce or eliminate
specific instances of inequality, but that the very processes created to
do so generate other inequalities including inequalities of power caused
by expanding the role of the state. Equal results may be attainable only
by causing processes to operate very unequally toward different individuals
or groups. Attempts to equalize economic power lead to greater and more
dangerous inequality in political power. Social results such as differences
in income are not deemed sufficiently important to override the process
goals of freedom of civil and economic action.
Justice means adherence to agreed upon rules the violation of which deranges
the expectations of others and adversely changes their future conduct as
they lose confidence in the general reliability of existing and future
rules and agreements. Justice derives its importance from the need to preserve
society through the provision of general principles. Sowell explains that
men will suffer more by a breakdown of order than by some injustices. What
is involved is a trade-off between individual justice and the social benefits
of certainty. Judicial activism would derange the whole process. A better
verdict may be reached in a specific case but at the cost of damaging the
consistency and predictability of the law. There cannot be a law-abiding
society if no one knows in advance what laws they are to obey but must
wait for judges to create ex post facto legal rulings based on evolving
standards rather than known rules. The losses of poorer judicial decisions
are offset against the prospective guidance of known rules leading to fewer
criminal law violations or needs for civil litigation. General stability
of expectations and standards are more important than the particular benefits
of wisdom and virtue. A judge should therefore apply the rules even if
in the specific instance the known consequences will appear to be undesirable.
Law exists to preserve society. It follows that criminal justice is concerning
with deterring crime, not with finely adjusting punishments to the individual.
Sowell explains that law represents the evolved and codified experience
of all men who have ever lived – it is the experience of the many, rather
than the wisdom of the few.
Sowell contends that the best processes should be used and protected because
the attempt to produce the best results directly is beyond human capacity.
It is our bounded rationality that makes general rules of social processes
necessary. However, adopting a systemic view does not entirely exclude
the individual factor.
For Sowell, individualism means leaving the individual free to choose among
systemically generated opportunities, rewards, and penalties. Each individual's
best contribution to society is to adhere to the special duties of his
institutional role. What is morally central is fidelity to duty in one's
role in life. In carrying out defined roles the individual is relying on
the experiential capital and unarticulated historical experience of the
ages. For example, a businessman should promote stockholders' interest
rather than attempt to improve society and a judge should carry out the
law, not try to change it. Specialization is highly desirable. There is
a superiority of experts within a narrow slice of understanding. Practically
every individual has some advantage over all others because he possesses
unique talents, resources, and information. What is denied is that expertise
confers a general superiority which should supersede more widely dispersed
types of knowledge.
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This article represents an introduction to Thomas Sowell's systematic vision
by presenting his essential ideas in a logical, accessible manner. This
is done by rewording and rearranging the ideas found in Sowell's most relevant
works including: Knowledge and Decisions (New York: Basic Books,
Inc., 1980), A Conflict of Visions (New York: William Morrow and
Company, Inc., 1987), The Vision of the Anointed (New York: Basic
Books, 1995), and The Quest for Cosmic Justice (New York: The Free
Press, 1999). Although this brief article can hardly do justice to Sowell's
work which is powerful, clear, and nuanced, it can provide a background
for readers who wish to study Sowell's work in greater depth and detail.
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