Thomas Sowell: When Statistics Become Dogma.

Thomas Sowell, Minimum Wage, and the War on Poverty

CEO pay soared 1,322% while workers gained 18%.

1,322% Vs 18%? Blame 18% 

A sharp critique of Thomas Sowell, trickle-down economics, 

and the myth that the War on Poverty failed.

A Revisit

This is an old essay. I am somewhat intrigued by the moderation I extended to the man at the time. Here is what I wrote:

“Thomas Sowell is not quite an ass. Many of the things he says, I agree with. But he should be wary of being the darling of the virulent right wing.”

If I were writing that today, I would not be so generous.

Thomas Sowell is far less careful with his conclusions than his reputation suggests. Even that may be charitable.

What passes for rigor is often assertion wrapped in confidence.
What is marketed as dispassionate analysis frequently arrives pre-loaded with ideology.

To call that scholarship is misleading.

Sowell is not merely provocative. He appears to revel in being reviled by his own demographic, even as he finds acceptance in another.

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How I First Encountered Sowell

I first got to know of him on Twitter.

It gave me a perverse joy to drop into right-wing threads and state my preferences as bluntly as I could. It was important for me to put my ideas out there. Yes, perhaps to annoy, but also to see whether there were persuasive counter-arguments that might cause me to rethink or modify them.

Eventually, I discovered he was a favorite of the virulent right wing. So I read more about him.

To be honest, I was impressed. Why not? He attended Harvard and Columbia and earned a PhD from the University of Chicago. A first-rate intellectual by any conventional measure.

So why do I now think differently?

The Problem: Statistics Without Humanity

He is a statistician. To him, people and the outcomes of their choices, vis-à-vis government policy, can only be understood through the prism of statistics.

To be fair, he seemed a little slow in the interview. That might be age, or perhaps a desire to please the Hoover Institution, which sent him on a wondrous intellectual journey studying statistics around the world.

But that does not excuse the fact that he is plainly wrong.

He mocks the minimum wage.

His argument: it causes inflation and reduces the number of jobs available.

Fine. Let’s assume that is true.

But he offers no alternative to paying people peanuts.

A Simple Question

If scientists are smart enough to go to the moon, could they not help economists devise a way to raise minimum wages without causing inflation?

After all, they already devised a way of spending money you don’t have. It’s called credit cards.

Why?

To keep production higher than “real demand.”
To keep the economy producing tomorrow’s needs today.
To keep industrialists happy.
And they, in turn, keep us happy by employing us.

A kind of trickle-down happiness.

Except their happiness apparently collapses if they pay living wages.

The CEO Gap

Let me drop this here:

Between 1978 and 2020, CEO compensation grew 1,322%.
Typical worker pay grew just 18%.

From 1965 to 2020, the ratio of average CEO compensation to the lowest-paid workers grew from 21:1 to 351:1.

Astounding.

Here’s a depiction of the disparity.

Picture the height of the Empire State Building. Now compare it to the height of a homeless man’s tent at its entrance.

It makes no sense. Yet these statistics are rolled out with hesitation, for fear of being labeled “envious” or worse, a communist.

It is difficult to find this level of imperviousness to reason anywhere else in the animal kingdom.

Imagine the head of a pack of wolves eating 351 meals for every single meal the lowest member receives.

Absurd.

Wolves know better.

They hunt together. They survive together.

Can anyone imagine a healthy, well-fed wolf hunting effectively alongside half-starved, worse, starving pack members??

Dear Trickle-Down Defenders

If raising the minimum wage causes inflation, then find a way to prevent inflation when minimum wages rise. America has attracted some of the most intelligent people on the planet. It has created one of the most advanced educational systems on earth.

You can do it. Yes, you can.

The Divorce Statistics Argument

Then Sowell links increases in the minimum wage to divorce rates. Fine. There may be a correlation, however specious.

So what do we do next?

By his logic, we treat minimum wage increases as evil. That is  quite the leap.
When we place too much weight on our own biases, we create the illusion of causality.

Consider this:
Many people who buy ice cream on hot summer days also have sunburns.

Therefore, ice cream causes sunburns.

On hot summer days, people buy more ice cream. On hot summer days, people spend more time in the sun.

Ice cream does not cause sunburns.

The War on Poverty

Then comes the part that broke me.

The interviewer references the Great Society and the War on Poverty, now six decades old.

Sowell responds:

“This has not worked. The evidence is in. After a century, they still refuse to look at the evidence.”

Deep sigh.

Where does one begin refuting something so manifestly simplistic?

Let’s start with Mitch McConnell. Born into a struggling family. Contracted polio as a child. Received treatment his parents could not afford. He is now worth hundreds of millions and sits at the top of the Republican Party.

He too says: “The war on poverty has not worked.”

The irony writes itself.

Who Looked at the Evidence?

Let’s move beyond personalities.

We have had numerous Republican administrations since Clinton. If liberals refuse to look at the evidence, surely conservatives have looked at it?

What did they do with it?

Apart from enormous military spending and wars that depleted American resources and diminished its aura of invincibility, what structural poverty solution was implemented?

Every Republican administration since Clinton has left office amid economic instability. The last one ended in something resembling an attempted coup.

Yet the refrain remains:

“This has not worked.”

The Kenyan Analogy

I love word pictures.

Imagine I am running a long-distance race chasing a Kenyan.

The gap does not close.

Statistically, over the last six Olympics, when you chase a Kenyan athlete, he hears your labored breathing and increases his pace just enough to keep the gap constant.

You lose again.

After six losses, you conclude: running hard is the problem.

You do not propose a new strategy.
You do not improve training.
You simply imply that trying hard was wrong.

That is the logic.ng that had you run less intensely, you might have won the gold.

Absurd.

Final Thoughts: 

Statistics Are Not Moral Verdicts

For too long, right-wing sponsored intellectuals have treated statistics as moral verdicts.

Numbers matter.

But they are not the whole story.

Policy is not merely about numbers and how they 'rithmetic. 

It is about human beings and how they writhe, whether helped, ignored, or abandoned.

The Wolves and the Sheep

The wolves breed faster than we cull them and our sheep keep getting killed in greater numbers.

Sowell: Stop culling them.

Me: When the race is not won, the answer is not to stop running. It is to run smarter.

Surely, if scientists are smart enough to go to the moon, they can devise a strategy to help win the war on poverty.

The problem is not intelligence. It is incentive. The system is functioning exactly as designed, just not for the people at the bottom.

I rest my case.

Don Kenobi 
Co-Founder #BigAgendaAfrica