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Applied Economics: Thinking Beyond Stage One QUOTES

Applied Economics: Thinking Beyond Stage One QUOTES

1 " When I was an undergraduate studying economics under Professor Arthur Smithies of Harvard, he asked me in class one day what policy I favored on a particular issue of the times. Since I had strong feelings on that issue, I proceeded to answer him with enthusiasm, explaining what beneficial consequences I expected from the policy I advocated.
“And then what will happen?” he asked.
The question caught me off guard. However, as I thought about it, it became clear that the situation I described would lead to other economic consequences, which I then began to consider and to spell out.
“And what will happen after that?” Professor Smithies asked.
As I analyzed how the further economic reactions to the policy would unfold, I began to realize that these reactions would lead to consequences much less desirable than those at the first stage, and I began to waver somewhat.
“And then what will happen?” Smithies persisted.
By now I was beginning to see that the economic reverberations of the policy I advocated were likely to be pretty disastrous— and, in fact, much worse than the initial situation that it was designed to improve.
Simple as this little exercise might seem, it went further than most economic discussions about policies on a wide range of issues. Most thinking stops at stage one. "

― Thomas Sowell , Applied Economics: Thinking Beyond Stage One

2 " Where recyling takes place only in response to political pressures and exhortations, it need not meet the test of being incrementally worth its incremental costs. Accordingly, studies of government-imposed recycling programs in the United States have shown that what they salvage is usually worth less than the cost of salvaging it. "

― Thomas Sowell , Applied Economics: Thinking Beyond Stage One

3 " The feeling that the government should “do something” has seldom been based on a comparison of what actually happens when government does and when it does not “do something. "

― Thomas Sowell , Applied Economics: Thinking Beyond Stage One