Dark Horses

Most people who study the matter are now agreed that top-down regulation as a method of dealing with our nation’s ills is an idea whose time has passed. On the track record of four decades, it simply hasn’t worked. Why it hasn’t is another, more difficult, question, to which, however, we have in recent years been getting some cogent answers. Among the most notable of these is Thomas Sowell’s Knowledge and Decisions (Basic Books, $18.50), which compares the workings of the market pricing mechanism with the regulatory technique of government as methods of handling information about human needs and aspirations. Sowell, a professor of economics at UCLA, argues that the market is an effective conveyor of such data, while government regulation isn’t.

“Information” in this context means specific things that a person needs to know to make decisions affecting his own well-being. Deciding what to do and when involves alternative uses of time, energy, and resources—the relevant question being which among a number of options will maximize the satisfactions of the decision-maker. To answer that question requires a continuing flow of information about the relative costs of doing one thing or another, and in what proportions.

MS

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M. Stanton Evans

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Most people who study the matter are now agreed that top-down regulation as a method of dealing with our nation’s ills is an idea whose time has passed. On the track record of four decades, it simply hasn’t worked. Why it hasn’t is another, more difficult, question, to which, however, we have in recent years been getting some cogent answers. Among the most notable of these is Thomas Sowell’s Knowledge and Decisions (Basic Books, $18.50), which compares the workings of the market pricing mechanism with the regulatory technique of government as methods of handling information about human needs and aspirations. Sowell, a professor of economics at UCLA, argues that the market is an effective conveyor of such data, while government regulation isn’t.

“Information” in this context means specific things that a person needs to know to make decisions affecting his own well-being. Deciding what to do and when involves alternative uses of time, energy, and resources—the relevant question being which among a number of options will maximize the satisfactions of the decision-maker. To answer that question requires a continuing flow of information about the relative costs of doing one thing or another, and in what proportions.