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.