Knowledge And Decisions

Those convinced that they have “the answer” on whatever economic, legal, social, or other issues are the preoccupation of the moment are of course impatient with questions about institutional processes and their respective advantages and disadvantages for making different kinds of decisions. That is all the more reason for others to look beyond the goals, ideals, and “crises” that are incessantly being proclaimed, in order to scrutinize the mechanisms being proposed in terms of the incentives they generate, the constraints they impose, and the likely outcomes of such incentives and constraints. Where these mechanisms insulate the decision makers from the forces of feedback, the dangers are especially great, not only in terms of counterproductive consequences but also in terms of a steady erosion of freedom.

The intellectual debt I acknowledged to Professor Friedrich Hayek in the first edition of Knowledge and Decisions must be repeated here. He was one of those people who fit Justice Oliver Wendell Holmes’ definition of a great thinker with great impact on the world. The hallmark of such a thinker is not personal notoriety but the fact that “a hundred years after he is dead and forgotten, men who never heard of him will be moving to the measure of his thought.”¹⁵ Hayek's thought, though little known to the general public even within his own lifetime (the Nobel Prize committee being an exception, however), has inspired numerous other scholars, writers, activists, and organizations around the world. I am proud to say that he inspired Knowledge and Decisions and especially proud that his book review gave it high praise.¹⁶

Others whose help was acknowledged with the original publication of this book include my editor and friend, Midge Decter, whose advice also caused me to reshape my later book, The Vision of the Anointed, even though she was no longer an editor by then. Finally, a special acknowledgment must be made to a lady whose critiques of the manuscript and whose “friendship and encouragement” were mentioned in the original acknowledgment and who is now my wife. For me, that is the most dramatic and most positive change since this book first appeared.

Thomas Sowell

Hoover Institution February 4, 1996

ACKNOWLEDGMENTS

The debts to be acknowledged in the writing of this book are so numerous and varied that any listing must be partial, and accompanied by apologies to those not mentioned.

Intellectually, this book is a product of an odyssey of the mind that goes back more than three decades. Those from whom I gleaned particular insights have ranged across the philosophic spectrum, from Karl Marx to Milton Friedman, and the fields have ranged from biology to law. If one writing contributed more than any other to the framework within which this work developed, it would be an essay entitled “The Use of Knowledge in Society,” published in the American Economic Review of September 1945, and written by F. A. Hayek, later to become a Nobel Laureate in economics. In this plain and apparently simple essay was a deeply penetrating insight into the way societies function and malfunction, and clues as to why they are so often and so profoundly misunderstood.

The immediate environment within which the research for this book began was the Center for Advanced Study in the Behavioral Sciences, in Stanford, California, where I was a fellow in 1976-77. Preparatory planning for this work was begun during 1974-76, when generous grants from the American Enterprise Institute in Washington, D. C., and the Hoover Institution at Stanford University permitted me the time needed for reflections and reconsiderations. Several months in residence as a Senior Fellow at the Hoover Institution in 1977 enabled me to complete the research begun at the Center for Advanced Study and to proceed with the writing.

The person with whom I discussed this book most during its writing was Mary M. Ash, an attorney in Palo Alto, California. Her legal mind was helpful in her critiques not only of the discussions of law but also of material throughout the book. Her friendship and encouragement sustained my efforts and my spirits.