Book Review - How Capitalism Saved America
People are often ungrateful. While capitalism has brough enormous wealth to nearly everyone in this country, people still think it is some kind of evil, exploitive system. They try to bend the rules to favor, well, themselves.
"How Capitalism Saved America," by Thomas DeLorenzo, explains just this. In his pamphlet, he describes, not how this economic system saved this country, but a very brief economic history of the US, from the perspective of a Capitalist. He outlines first how capitalism saved the earliest colonists from starvation. He further explains how the American Revolution was a capitalist revolution. Then, he devotes the rest of the book to the assualts on capitalism by it's two biggest enemies - the mercantilists, and the "anti-industry industry."
This is what most of the book is about. As I noted at the beginning, those who often are the biggest beneficieries under the capitalist system hate it the most - like entertainers and academics. It was capitalism that allowed for the vast expansion of the influence of the university. And it made entertainers much, much more wealthy than the rest of us, for entertainers used not to be so well off.
He focuses on the era of the so-called "robber barons," the depression era, and the energy crisis. He uses both micro-economic theory and macro-economic theory to show how the anti-capitilists have attempted to destroy the economy.
Much of the attack on economic systems stems from a lack of understanding of economic postulates. Almost all legitimate economists agree on the basics of micro-economic theory. There is very little room for dispute here. Where most economists disagree is over macro-economic theory. Hence, Keynesians, Classicalists, Moneterists, and all those people argue against one another. Those who are not economists might put themselves into one category or another, but then they lack a full knowledge of their own positions.
I will briefly focus on one story he tells, that of James J. Hill. Mr. Hill built the line between Minneapolis and Tacoma. He was the first transcontinental railroad builder who constructed his line without government subsidies. However, he did not go bankrupt, like the remaining lines who received subsidies did.
Capitalism does not let a society construct projects beyond their natural cost. Some people marvel in the fact that a transcontinental railway was constructed with such speed, essentially, seven years. However, to achieve this goal, there were several costs of which we are still paying. The rapid development of the Pacific coast did lead to environmental degradation, as any state-subsidized project would do (the Soviet Union was this on a massive scale). This is not the DeLorenzo argument, but that of Russell Kirk (who is, ironically, one of the founders of the modern conservtive movement). Los Angeles has essentially sucked the Colorado river dry, and the buffalo almost went extinct. In addition, the construction of the railways led to the rapid displacement of the tribal Indians. Rather than gradual assimiliation, like those on the eastern seaboard, those of the plains were forced, essentially at gunpoint, onto reservations (this is largely what westerns are about). So now the tribes are going to make a stink, and this will become a problem in the future. Mr. Hill did complete his line approximately fifteen years after the other lines, so there was no hurry. Although the construction of the other lines may have spured development, we could have waited a while to complete the lines. And the automobile and the steamship may have beat the construction of the other lines, anyway.
Back to the book. Mr. DeLorenzo does not take a 100% laisse-faire approach, as some people perceive it. He does recognize the need for minimal intervention - like to prevent fraud, for example. Instead, he attacks those who have no knowledge of capitalism, but who attack it anyway.
Mr. DeLorenzo is essentially a propagandist. To understand where he is coming from, one needs to read his other work, "The Real Lincoln." According to this book, Lincoln was a white seperatists whose wet dream was to establish a mercantilist state, and if he could have gotten away with it, would have made Stalin look like a nice guy.
This book is much more informative than his last book, however. As there is a constant attack on capitalism itself, this is a book I recommend everyone read. With the exception of libertarians - you guys have enough of your own propaganda to go thru. Most everyone else needs a dose of pure capitalism, since this system is what supports our style of living, and there is so much spite about our economic system, we need to learn to like it a bit better.
"How Capitalism Saved America," by Thomas DeLorenzo, explains just this. In his pamphlet, he describes, not how this economic system saved this country, but a very brief economic history of the US, from the perspective of a Capitalist. He outlines first how capitalism saved the earliest colonists from starvation. He further explains how the American Revolution was a capitalist revolution. Then, he devotes the rest of the book to the assualts on capitalism by it's two biggest enemies - the mercantilists, and the "anti-industry industry."
This is what most of the book is about. As I noted at the beginning, those who often are the biggest beneficieries under the capitalist system hate it the most - like entertainers and academics. It was capitalism that allowed for the vast expansion of the influence of the university. And it made entertainers much, much more wealthy than the rest of us, for entertainers used not to be so well off.
He focuses on the era of the so-called "robber barons," the depression era, and the energy crisis. He uses both micro-economic theory and macro-economic theory to show how the anti-capitilists have attempted to destroy the economy.
Much of the attack on economic systems stems from a lack of understanding of economic postulates. Almost all legitimate economists agree on the basics of micro-economic theory. There is very little room for dispute here. Where most economists disagree is over macro-economic theory. Hence, Keynesians, Classicalists, Moneterists, and all those people argue against one another. Those who are not economists might put themselves into one category or another, but then they lack a full knowledge of their own positions.
I will briefly focus on one story he tells, that of James J. Hill. Mr. Hill built the line between Minneapolis and Tacoma. He was the first transcontinental railroad builder who constructed his line without government subsidies. However, he did not go bankrupt, like the remaining lines who received subsidies did.
Capitalism does not let a society construct projects beyond their natural cost. Some people marvel in the fact that a transcontinental railway was constructed with such speed, essentially, seven years. However, to achieve this goal, there were several costs of which we are still paying. The rapid development of the Pacific coast did lead to environmental degradation, as any state-subsidized project would do (the Soviet Union was this on a massive scale). This is not the DeLorenzo argument, but that of Russell Kirk (who is, ironically, one of the founders of the modern conservtive movement). Los Angeles has essentially sucked the Colorado river dry, and the buffalo almost went extinct. In addition, the construction of the railways led to the rapid displacement of the tribal Indians. Rather than gradual assimiliation, like those on the eastern seaboard, those of the plains were forced, essentially at gunpoint, onto reservations (this is largely what westerns are about). So now the tribes are going to make a stink, and this will become a problem in the future. Mr. Hill did complete his line approximately fifteen years after the other lines, so there was no hurry. Although the construction of the other lines may have spured development, we could have waited a while to complete the lines. And the automobile and the steamship may have beat the construction of the other lines, anyway.
Back to the book. Mr. DeLorenzo does not take a 100% laisse-faire approach, as some people perceive it. He does recognize the need for minimal intervention - like to prevent fraud, for example. Instead, he attacks those who have no knowledge of capitalism, but who attack it anyway.
Mr. DeLorenzo is essentially a propagandist. To understand where he is coming from, one needs to read his other work, "The Real Lincoln." According to this book, Lincoln was a white seperatists whose wet dream was to establish a mercantilist state, and if he could have gotten away with it, would have made Stalin look like a nice guy.
This book is much more informative than his last book, however. As there is a constant attack on capitalism itself, this is a book I recommend everyone read. With the exception of libertarians - you guys have enough of your own propaganda to go thru. Most everyone else needs a dose of pure capitalism, since this system is what supports our style of living, and there is so much spite about our economic system, we need to learn to like it a bit better.
posted by EricMatthew at 10:48 PM
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