Knowledge and Decisions

A Tour Through the Vast Emptiness of Ignorance

MAY 01, 1996 by JANE S. SHAW

Ms. Shaw is a senior associate at PERC in Bozeman, Montana.

Physicists tell us that a solid rock is mostly empty space interspersed with occasional dense specks of matter. “In much the same way,” says Thomas Sowell, “specks of knowledge are scattered through a vast emptiness of ignorance, and everything depends upon how solid the individual specks of knowledge are, and on how powerfully linked and coordinated they are with one another.”

Knowledge and Decisions takes us on a tour through the vast emptiness of ignorance to show how dispersed knowledge forms the architecture of human institutions. Building on F.A. Hayek’s insights in “The Use of Knowledge in Society,” Sowell analyzes economic, political, and legal decisions in terms of their use or neglect of this knowledge. The book includes page after page of lapidary examples, from discussions of rent control, affirmative action, and intelligence tests to the reasons that people dislike “middlemen.”

Sowell also addresses American history over the past century. Because the United States is now a nation of employees (rather than self-employed farmers), many people do not bear the consequences of their decisions directly. With feedback from their decisions weakened, they tend to demand political changes that reduce others’ freedom and ultimately their own. And “experts,” who have incentives to ignore dispersed knowledge, “solve” problems by overturning alternatives that people have found to be more valuable.

Sowell addresses other aspects of decision-making, such as constraints, trade-offs, and incentives. But knowledge is paramount, partly because few understand its importance. As this book achieves greater recognition, that understanding should grow.


May 1996



Jane Shaw is president of the Pope Center for Higher Education Policy.

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November 2014

It's been 40 years since F. A. Hayek received his Nobel Prize. His insights, particularly on the distribution of knowledge and the impossibility of economic planning, remain hugely important today. In this issue, we look back on the influence of his work. Max Borders and Craig Biddle debate whether liberty must be defended from one absolute foundation, further reflections on Scottish secession, and how technology is already changing our world for the better--including how robots, despite the unease they cause, will only accelerate this process.
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