First of all, the times were different. First of all, the Irish, the Jews and blacks as well, who were moving out of the South, had leaders and organizations that were doing their damnedest to get them assimilated to the norms and the society to which they were moving. Today, you have just the direct opposite. You not only have groups within in these societies that are trying to keep them unassimilable and full of resentment.

But you also have people from outside the group, including politicians but also ideologues and intellectuals, who say one culture is as good as another and why should we expect them to assimilate to our culture. Well, that’s wonderful. You should try to go to China and live without speaking Chinese.

Q: What fallacy does the most damage to our whole society or economy?

A: I guess the single fallacy from which so many other fallacies derive is what I call in this book “the zero-sum fallacy" -- that is, the idea that what one person gains, someone else loses…. A classic example is rent control. When you put in rent control, the tenants gain in the short run; the landlords lose in the short run; the builders lose in the short run. But of course the builders lose the least, because the same material and skills that are used in building apartment buildings are used in building office buildings and warehouses and all kinds of other structures; they lose very little. But when the supply of housing dries up, then the tenants are really in a bad way. So places that have rent control almost invariably have housing shortages.

I start off in the first chapter, in fact, by quoting some lady who was in Egypt back in the 1960s when they put in rent control. She said people stopped investing in apartment buildings. Huge shortages in rentals and apartments forced many Egyptians to work in horrible conditions, with several families sharing one small apartment. So they really pay the price much more so than the landlords or the builders

Q: I didn’t think Egypt has rent control problems like New York City.

A: Saigon -- Ho Chi Minh City -- Hanoi. A leader in Vietnam said, “Americans couldn’t destroy Hanoi by bombing but we’ve destroyed it with rent control. The zero-sum fallacy is the biggest in its scope. At Stanford, for example, they’ve issued an order that the professors at the medical school are no longer allowed to accept any kind of gifts from pharmaceutical companies, including the free samples of medicines they give out, which doctors pass along to their patients.

Well, this assumes that if it helps the pharmaceutical company, it helps them at the expense of the patient. It never occurs to them that there wouldn’t be any transaction between the pharmaceutical companies and the patients unless both of them gained something from it. In my case, I happened to have a medication given to me as a free sample by a doctor -- thank God, not at Stanford -- which has really made my whole life livable. These people pay no price for being wrong -- that’s the problem with third-party decision making. It can be as wrong as two left feet and it costs them nothing.

Q: How does a basic knowledge of economics help someone see through these fallacies?

A: That really is what they would have to read the book to find out. The point is, you can demonstrate time and time again that the things that sound plausible just on the surface -- if you do give them just a little bit of systematic thought -- can suddenly change. One of the chapters is on male-female economic differences. I must say, when I was doing the research on this I was shocked to discover that there is a very significant income difference between young male doctors and young female doctors. I forget what the number is, but it’s not 1 or 2 percent. It was only when I dug into it that I discovered that young male doctors worked 500 hours a year more than young female doctors. Well, you know, if you work 500 hours more a year, you'd expect to get paid more!

Q: Is there any rule of thumb people could use to determine if they were being confronted with a fallacy?

A: Are you telling me that I should tell people they don’t really need to buy my book? (laughs) ... There are only eight chapters in my book. But after you’ve been through them you’ll be able to derive certain principles which you will suddenly realize apply to all kinds of other things that are not discussed in the book.

There are three questions that I think would destroy the left if people could ask them: "What are the facts?"

"What are the consequences of what you are going to do?"

And "What is the trade-off?”

People talk as if you can just save the people whose homes are at risk, and that’s it. Well, if that was the case, why not save them? But at what price? We could ratify the Kyoto Treaty, but the question is "At what price and what benefits would there be to offset that price?"

That’s the question that the politicians and the ideologues don’t want to ask. They don’t want to compare. They don’t want to weigh one thing against the other.