Parameters and policies in the U. S. economy Book

This is the first time I've ever been able to make the first review of a book on this site, but here we go. The brilliant Thomas Sowell addresses some common questions about markets and minorities using economic analysis. Markets and Minorities is old, but the problems he discusses are still relevant to this day. In fact, they may be even more relevant today with race relations deteriorating in this country.

I won't go into detail about everything he discussed in the book, but I'll mention some things that stuck with me. Sowell dismantles the concept of systemic racism by discussing the current success of the Chinese, Japanese, and Jews. Also, he looks at the economic success of West Indian blacks versus the lower incomes of American blacks as a whole. Other ethnic groups cannot easily distinguish West Indian blacks from other blacks, so how can the relative lack of economic success among blacks be explained by systemic discrimination. If there was systemic discrimination against blacks, wouldn't West Indian blacks be at just as much of a disadvantage?

He also rails against government intervention in market transactions. Basically, all government intervention takes away choices from the lowest on the totem pole. He uses minimum housing requirements as one example: when "slums" were no longer allowed to be rented, low-income people spent more on better housing that was up to par, but also needed to divert resources from their non-housing expenditures. He also makes the point that minimum wage laws decrease the disincentive to discriminate. In a truly free labor market, there is a higher cost to discrimination because excluding groups of people from a company or industry will force that company or industry to pay higher wages (supply goes down, price goes up). With minimum wage laws, the costs to discriminate for jobs at this wage level are much lower. There are less jobs for the unskilled to work, so the number of applicants for jobs right at the minimum wage level will be artificially high. The company or industry can choose whomever they want out of these applicants; there is little cost of discrimination.

Finally, he has a great chapter on slavery where he discusses the reasons why pure slavery was concentrated in the Deep South and why slaves in northern areas transitioned toward freedom more quickly. In the case of jobs requiring skills or geographic dispersement, slaves would be more productive as free men than as pure slaves. Cotton picking did not require special skills and did not require geographic dispersement (i.e., slaves were relatively easy to patrol due to their close proximity to each other). Cotton growing was also concentrated in the same areas that slavery was strongest - the Deep South. Slavery quickly weakened in other places where there was not a main industry that was so conducive to unskilled, close-proximity labor. Sowell also makes the very interesting argument that slavery may not just have been a net negative for all people, but actually a net negative for white people. He points out the fact that white incomes in the Deep South were the lowest in the country in pre-Civil War times and are still among the lowest in the country today.

All in all, this is a great short introduction to some of the ideas espoused by Thomas Sowell. I only touched on a few of the many ideas he develops in Markets and Minorities. There is a lot of good information in here, and I believe his analyses to be sound and fair.