Knowledge and Decisions by Thomas Sowell

Key Takeaways

1. Humans’ most severe restraint is knowledge but still must make important decisions

2. Examine and judge companies, people, etc. based on process / results over lofty goals

3. Realize the importance of incentives, constraints, feedback mechanisms

4. Sowell examines evolution of decision-making processes and how it spreads between different areas

5. No person or group is likely to have sufficient knowledge to make a perfect decisions the first time around

6. There is an independent reality through which each individual perceives only imperfectly, but which can be understood more fully with feedback that can validate or invalidate what was initially believed

7. Ideas are everywhere but knowledge is rare

8. Civilization an enormous device for economizing on knowledge. As people live closer together, ideas and their adoption spread much quicker

9. Need to consider not only how much we know but how well we know it

10. How decisively we act depends on how certain we are of the consequences