Allan H. Meltzer disagrees, passionately and persuasively. Drawing on deep expertise as a financial historian and authority on economic theory, he provides a resounding answer to the question, "why capitalism?" Only capitalism, he writes, maximizes both growth and individual freedom. Unlike socialism, capitalism is adaptive, not rigid--private ownership of the means of production flourishes wherever it takes root, regardless of culture. Laws intended to tamper with its fundamental dynamics, such as those that redistribute wealth, fail. European countries boasting extensive welfare programs have not surpassed the more market-oriented United States. Capitalism does require a strong legal framework, Meltzer writes, and it does not solve all problems efficiently. But he finds that its problems stem from universal human weaknesses--such as dishonesty, venality, and expediency--which are not specific to capitalism. Along the way, he systematically analyzes the role of government, positing that regulations are static, but markets are dynamic, usually seeking ways to skirt the rules. Regulation is socially useful if it brings private costs into line with social costs (for example, the cost of taxes to hire policemen compared to that of the impact of rampant crime); if it doesn't, regulation simply invites circumvention.
Vigorously argued, sweeping in scope, Why Capitalism? reminds us of the fundamental vitality of the one economic system that has survived every challenge, and risen to dominate the globe.
- ISBN-13: 9780199859573
- ISBN-10: 0199859574
- Publisher: Oxford University Press, USA
- Publish Date: February 2012
- Page Count: 168
- Dimensions: 8.3 x 5.6 x 0.8 inches
- Shipping Weight: 0.7 pounds
Publishers Weekly® Reviews
- Reviewed in: Publishers Weekly, page .
- Review Date: 2011-12-19
- Reviewer: Staff
In this polemic, Meltzer (A History of the Federal Reserve) brings forth argument after argument to show how for all of its flaws, “there is no better system for providing growth and personal freedom” than capitalism. Grounded in Kant’s dictum that “most of the faults and flaws on which critics dwell are human faults,” Meltzer defends capitalism while criticizing communism and socialism, the role of government and governmental policies (both historical and current), and the idea of redistribution of income. Too-big-to-fail and fiat currency also have their place in the mix, his choice of topics being both timely and pertinent. Out of these topics, it is government’s reach, policies, regulations, and expansion that seem to have captured the author’s attention. He sums up his stance succinctly: “Much regulation invites corruption, arbitrary decisions, and circumvention.” Reading more like a collection of essays than anything formal, the book is both powerful and opinionated. At times critical and at others solution oriented, Meltzer delivers his ideas in a manner that feels like an extended lecture, intent on demonstrating that it is because “democratic capitalism is not a rigid orthodoxy” that it remains viable. (Mar.)