Jimmy Akin

Since it’s Sunday, I thought I’d give a little example from Thomas Sowell’s book Basic Economics that deals with religion.

This entry also might be called "Market Ecumenism" or "How the Market Promotes Not-Killing-Each-Other-Over-Religious-Differences."

After explaining that the purchase prices different groups are willing to pay for limited goods and services competitively determines the prices of those services, the Master writes:

Most people may be unaware that they are competing [against other purchasers when they buy an item or hire a worker] and simply see themselves as deciding how much of various things to buy at whatever prices they find, but scarcity [of goods and services] ensures that they are competing with others, even if they are conscious only of weighing their own purchasing decisions against the amount of money they have available.

One of the incidental benefits of competing and sharing through prices is that different people are not as likely ot think of themselves as rivals, nor to develop the kinds of hostility that rivalry can breed. For exmaple, much the same labor and construction material needed to build a Protestant church could be used to build a Catholic church. But, if a Protestant congregation is raising money to build a church for themselves, they are likely to be preoccupied with how much money they can raise and how much is needed for the kind of church they want. Construction prices may cause them to scale back some of their more elaborate plans, in order to fit within the limits of what they can afford. But they are unlikely to blame Catholics, even though the competition of Catholics for the same construction mateirals makes their prices higher than otherwise.

If, instead, the government were in the business of building churches and presenting them to different religious groups, Protestans and Catholics would be explicit rivals for this largess and neither would have any financial incentive to cut back on their building plans to accomodate the other. Instead, each would have an incentive to make the case, as strongly as possible, for the full extent of their desires and to resent any suggestion that they scale back their plans. The inherent scarcity of materials and labor would still limit what could be built, but the limit would now be imposed politically and would be seen by each as due to the rivalry of the other. The Constitution of the United States of course prevents the American government form building churches for religious groups, no doubt in order to prevent just such political rivalries and the bitterness, and sometimes bloodshed, to which such rivalries have led in other countries.

The same economic principle, however, applies to groups that are not based on religion but on ethnicity, geographical regions, or age brackets. All are inherently competing for the same resources, simply because these resources are scarce. However, competing indirectly by having to keep your demands within the limits of your own pocketbook is very different from seeing your desires for government benefits thwarted by the rival claims of some other group. Market rationing limits the amount of your claims on the output of others to what your own produtivity has created, while political rationing limits your claims by the competing claims and clout of others (pp. 54-55).

. . . by which I mean that I’m reading his book Basic Economics. (Thanks to those who recommended additional books; I’ll check ’em out!)

Sowell’s book is very good. Quite easy to read (just like his columns). In fact, it’s designed to be able to be read by high school students. He even has a set of study questions in the back for homeschoolers to use with their kids.

I’m impressed enough with the book that if I had any homeschool high schoolers, I would set them to reading the book immediately. Having a basic understanding of economics is something that (a) virtually all young people lack and that (b) will serve them very well in life.

Homeschoolers: THIS BOOK WILL GIVE YOUR KIDS A COMPETITIVE EDGE OVER OTHER YOUNG PEOPLE AS THEY MOVE OUT INTO THE WORLD OF WORK.

It is also likely to help solidify them conservatively so they don’t flirt with braindead liberal economic policies that will hurt both them and society in the long run.

And, of course, having more voters out in society who understand economics is a boon to society as a whole that will make things better for everyone in the long run.

Now, there are occasionally a few big words in Sowell’s writing–words that I wouldn’t have known when I was in high school–but then I went to a public high school (or, as I referred to it at the time, a sucking vortex of madness and pain), and homeschoolers either will already know these terms or will know how to look them up in a magical book known as a "dictionary."

But what momentary discomfort there may be at encountering an occasional twenty-five cent word will be more than made up for (a) by the increased knowledge of economics that the kid will have and (b) the fact that he will now know the twenty-five cent word.

But beyond that, Sowell is just entertaining and easy to read. If you’ve looked at some of his columns that I’ve linked, you already know that. In his book, his style is much the same, and he illustrates his economic principles with countless interesting examples from all over the world and all through history.

Parents (and non-parents) should read this book, too. He is startlingly clear about things and puts many in a perspective that cuts through the typical rhetoric we often have economic issues wrapped in by politicians and pundits eager to advance their own causes. He even cuts through the illusions that we ourselves tend to have.

Consider:

Many people see prices as simply obstacles to their getting the things they want. Those who would like to live in a beach-front home, for example, may abandon such plans when they discover how expensive beach-front property is. But high prices are not the reason we cannot all live on the beach front. On the contrary, the inherent reality is that there are not nearly enough beach-front homes to go around and prices simply convey that underlying reality. When many people bid for a relatively few homes, those homes become very expensive because of limited supply. But it is not the prices that cause the scarcity, which would exist whatever other economic or social arrangements might be used inestead of prices (p. 7-8).

See? Bet you, like me, have often perceived prices as the barrier between you and getting what you want. But that’s too short-term a view. The real reason is that there is a limited supply of what you want and other people want it, too. In a free market, prices simply the mechanism by which you and others figure out how much value you are going to place on getting the thing you want.

If people start valuing something less, prices drop. You can see this at work on Amazon. The books that are newly out and all the rage right now are expensive. But if you look at books there were all the rage a few years ago, you can now get them dirt cheap (like for a penny plus shipping costs) on Amazon’s used book service. This is the case with a bunch of the diet and nutrition books there. The ones that everyone’s talking about this year are expensive, but the good ones that are a few years old (like Atkins’ books) are now incredibly cheap. Less demand, lower prices (and bargain-hunter’s paradise: the obvious strategy being to wait until the "fad" factor has worn off a particular book and you can get it for a song).

I’m going to be keeping Sowell’s book right next to my copy of The Rules of Acquisition.

Now if I could just get Borg implants so Sowell could tell me what to think via direct neural interface.

GET SOWELL’S BOOK.

. . . ABOUT THIS ARTICLE ON "THE END OF THE AGE OF INFLATION."

In it, the author (Robert Samuelson) argues that the main powerhouse driving the economy in the last number of years was not the economic and tax policies of different administrations that were often touted, nor simply the effect of technology and the Internet, but the end of the era of double-digit inflation that we experienced in times past.

According to Samuelson, it was inflation that posed the greatest risk to the economy and that caused the recessions that used to plague America with far more frequency than they do now.

Unfortunately, the end of the era of inflation means that we can’t expect the economy to grow at such a rate in the future and that nobody knows that the shape of the future economy will be.

Even more unfortunately, I don’t know enough about economics to evaluate what Samuelson says.

That’s why I’d like Thomas Sowell to do one of his neat-o, spiffy columns on it.

But . . .

That’s not overly likely to happen, a realization which caused me to finally break down and buy Sowell’s book Basic Economics (reputed to be one of the easiest-to-read introductions out there).

Maybe when I’m done I’ll know enough to have an opinion about what Samuelson says.