Friday, May 13, 2005

What Makes Capitalism Great?

What one book on politics and/or economics would you recommend to someone new to free market, libertarian, conservative or classical liberal ideas? I can easily list a number of worthy authors: Fredrick Hayek, Milton Freedman, Adam Smith, Frederic Bastait, Ludwig von Mises, Thomas Sowell, and Henry Hazlitt. However, if I had to recommend one book I’d have to pick my favorite (and a favorite of Alan Greenspan’s), Ayn Rand’s “Capitalism: the Unknown Ideal.”

Start with the title. Rand doesn’t mince words. She takes the word, capitalism, originally used by socialists as a pejorative, and waves it proudly. Instead of “free markets”, “conservatism,” or “libertarianism,” this feisty gal takes the bull by the horn and is ready for battle. Not only is she going to defend the free market as an effective economic system, which it obviously is, but she’s on a crusade to redeem capitalism as a moral ideal – one that has never been fully appreciated in just those terms.

In the 1960s, when the book came out, this was a radical idea. Most defenders of capitalism argued that despite any moral worth or, even worse, despite its unseemly appeal to man’s base desires, capitalism works better than the rest. They generally conceded the moral high-ground to the socialist’s “good intensions,” but damned human nature as unworthy of such lofty ideals.

Rand took the opposite approach. She boasted that capitalism enabled human achievement because it is morally superior and truly ideal. Capitalism respects the source of human achievement: the individual mind. Only individual rights and liberty, which are capitalism’s essence, can secure a society where one can nurture the capacities required to live this life to the fullest. What are these capacities? The human mind – reason – is man’s essential tool to understand reality, harness nature, sustain his life, and create a life worth living in society worthy of admiration. For Rand, this is a spiritual as well as material enterprise.

Her book quickly refutes the fallacies about the free market and it does so in concise, rigorous, but inviting manner. Many of the authors that I’ve list above have done the path-breaking analysis that is exploited by Rand and her colleagues in the economic essays. But for Rand, the economic arguments are a consequence and manifestation of the essential truth: capitalism respects the source of wealth creation and human greatness at its root.

Many free market advocates note the influence of her thought. Dr. Sciabarra, at New York University, starts with Rand and he has gone on to publish books on her life and work. So, too, has Dr. Machan, of the Hoover Institute. Indeed, some would say half of the libertarian movement started with Rand. But so did many conservatives. Her style may not be everyone’s cup of tea (my style is more restrained, measured, and less combative) but she knew what it took to get her agenda in the public debate. She has helped changed the course of American politics more than people are aware. Her book, Capitalism: the Unknown Ideal, will give you a taste of the power of her ideas. And you won’t be apologizing for our great heritage ever again.


Blogger onehouse said...

for someone new to the whole idea of open markets, the invisible hand etc; the book they should read first (besides it's short and easy to understand) is "The Richest Man in Babylon". Concise, informative and life altering. The George Clason classic is a perfect primer. .

5/14/05, 3:04 PM  
Blogger Always On Watch said...

For many years, most universities have been lamenting the faults of capitalism--never mind that their lamentations and condemnations are specious and unsupported by the evidence.

I've not read much of Ayn Rand, but from what you've said here, I think that I would agree with her thesis. Capitalism has done more FOR the world than has any other system.

Here's the first review from Amazon (apparently of the audio version):
"From Library Journal
As an interesting relic of the past, this outlandish piece of propaganda is worth the listener's time, even though the author's overconfident sense of her own rightness and persistence at pressing her points with little respect for opposing views can quickly become more than a little annoying.... Americans have seen many of the abuses come to pass that Rand, writing in 1946, claimed would never happen....Narrator Anna Field's cold, crisp voice is actually well suited to such a heartless piece as this. Recommended. Mark Pumphrey, Polk Cty. P.L., Columbus, NC"

I find it interesting that:
1. This negative review was the first in line.
2. It's PC in many respects and waffles.
3. It recommends the book.
4. It's posted on one of the most capitalistic sites (in that Amazon is a beacon of private enterprise)

The many vociferous protestors of capitalism don't seem to realize that most other systems would censor them.

In any case, I'm glad to hear that a professor is using Rand's material.

5/14/05, 7:41 PM  
Blogger said...

Jason, It is obvious that you are a man after my stop that!
Re: Your Comment on my Radical thread:
I was thinking the same thing the other day. All the hostilities blamed on Iraq, when in fact Islam was dancing the day the towers came down
BTW Excellent Blog.....glorious

5/17/05, 9:30 AM  
Anonymous Anonymous said...

People looking at the US from the outside, and indeed some of those within our own borders, consider capitalism in the way it was viewed by Marx and Engels. The fact is that it fits well with our culture -- taking risks with the hope of substantial gains. Perhaps a modern day equivalent of the "frontier" mentality. But as socialism unravels in Europe, and many in Europe fear a return of fascism, they should be looking at what is going on here as a viable alternative. The bottom line with Europeans is that politicians do not trust the judgment of the average citizen, and citizens themselves are too preoccupied to become involved in democracy.

Agree with your choice, but Thomas Sowell has to be high in the reading list; his genius is that he simplifies a complex subject.

Semper Fi . . .


5/17/05, 2:09 PM  

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