Date: Mon, 14 Jun 2004 18:19:53 -0400
From: "M.A. Johnson" <michaelj-AT-america.net>
Subject: Re: New book on anti-capitalism



Capitalism Saves Us All
by Bernard Chapin

Contrary to what many thought in 2000 after
George W. Bush became President, we are now
living in a time of unprecedented government
growth and spending, and it seems quite likely
that the federal government will continue to
expand for the foreseeable future regardless
of who wins the election in November. That is
why are fortunate that Thomas J. DiLorenzo’s
new book, How Capitalism Saved America: The
Untold History of Our Country, from the Pilgrims
to the Present, will be released shortly.
DiLorenzo’s work is a pragmatic celebration
of some Americans resisting big government’s
siren call and embracing freedom over misguided
state intervention whenever they could. Hopefully
some in Washington will learn from its contents.

Di Lorenzo’s is not a traditional history. It is a
concise work of economic history in which the
author picks and chooses historical events that
best support his theme. The ideas and arguments
of immortal economists like Adam Smith, Ludwig
von Mises1, F.A. Hayek, Milton Friedman, and
Murray Rothbard provide structure and authority
for many of the author’s views. By the end of How
Capitalism Saved America, it will become readily
evident to the reader than when our leaders made
use of free market solutions we thrived, but when
they chose to have government answer we
floundered.

Some readers may greatly profit from the author’s
discussion of historical events which are practically
forgotten today. Di Lorenzo informs us that the
failure of the Jamestown settlement in 1607 (and
the accompanying starvation of its inhabitants) was
largely due to an absence of private property
rights. They had no incentive to farm, as what they
harvested they could not keep, so they chose not
to produce at all. In 1611, when a "high marshal"
was sent to the colony, its fortunes immediately
reversed after the marshal allocated three acres of
land for each man’s personal cultivation.

What this reviewer appreciated most about this
book is the way in which the author debunks
popular myths. What is more intrinsic to being
American than having the opportunity with which
to better one’s lot? Di Lorenzo illustrates that even
the poorest of the poor continue to have the
chance to rise through our capitalist system, and
they frequently make use of this opportunity.

"The critics suggest that there is little or no room
for the ‘poor’ to advance, that class of people is
essentially stuck in the bottom 20 percent. But this
is unequivocally false. In reality, the bottom 20
percent (like all other quintiles) is constantly
made up of different people. A family in the
lowest income quintile today, as recorded by the
census data gatherers, will typically move up into
a higher income category over the next five or ten
years and be replaced in the lower category by a
different family…"

Readers would be wise to remember the next time
they are challenged with the mantra, "social
justice," to retort that the only way to achieve it is
through, "capitalism."

Capitalism, through its cheaper goods and higher
wages, has distinctly benefited the working class.
A hundred years ago, the fattest of the fat cats
could not purchase the same type of goods that
your average retail worker can purchase today, and
the fact that such unbelievable wares are available
is strictly due to the incentives created by a
capitalist system. In a socialist economy, they
would never have been invented or discovered in
the first place.

We find as well that those dubbed "robber barons"
were not as they enriched far more often than they
robbed. Men like James J. Hill, Cornelius
Vanderbilt, and John D. Rockefeller were brilliant
entrepreneurs who employed thousands and gave
stability to countless American families. The
charitable organizations and nonprofits they
bequeathed remain viable today and many of their
innovations benefited all Americansnot just those
they directly employed.

This review would not be complete if it did not
mention the non-partisan nature of How
Capitalism Saved America. Di Lorenzo attacks all
interventionists regardless of their political
orientation. He excoriates the Republican Hoover
Administration for its part in causing the Great
Depression and then turns to examine the ways in
which the Democratic Roosevelt Administration
exacerbated the problems inherited from Hoover.
The period appears to be an age where the
temptations of state intrusion into the economy
appealed to a majority of our legislators. The
author views Roosevelt’s New Deal as being
merely a continuation, and logical outcome, of the
policies enacted by the previous administration.

Herbert Hoover, in contrast with his reputation,
was in no way a devotee of laissez-faire
government. Here the author effectively juxtaposes
him with President Van Buren who was in many
ways his presidential antithesis. Hoover stood
opposed to "destructive competition" and believed
that some people in America made far too much
money. He was one of the first to try hyperactive
state solutions as a response to economic
problems. As we now know, his interference made
things infinitely worse. There were many examples
of governmental futility during the administration,
such as the Railway Labor Act where he
empowered unions over employers (which would
become a way of life under Roosevelt). Hoover
believed anti-trade tariffs actually benefited
American workers and nowhere was this more the
case than with his visible support of the
Smoot-Hawley Tariff. He seemed to create "more
government" wherever he could as he formed the
Bureau of Aeronautics and created a policy
distributing licenses to radio broadcasters. Giant
public works programs marred his presidency in
the same way they marred Roosevelt’s:

"In 1929 Hoover devoted a sizable chunk of the
federal budgethalf a billion dollars, or 13
percent of the total budgetto public works
spending. At the same time he pressured state
governments to increase their own public works
spending. By 1931, total government public
works spending would be as high as at any other
point in the decade…"

In lieu of this fact, it is easy to highlight the
senselessness of both Roosevelt and Hoover with
the hilarious words of Harry Hopkins, "I’ve got
four million at work [in federal jobs] but for God’s
sake, don’t ask me what they are doing." Only
through a "don’t ask and don’t tell policy" have a
couple of generations of historians been able to
venerate The New Deal and the gigantic figure who
embodied it.

Specifically, for those who have not read Jim
Powell’s FDR’s Folly, the chapter, "How the New
Deal Crippled Capitalism" issues a proper
indictment of the conventional wisdom that
Roosevelt’s terms in office saved the country and
capitalism itself. While not as in-depth (obviously)
as Powell’s book-length treatment, this author’s
facts, charts, and argumentation are more than
enough to dash our society’s unwarranted worship
of Franklin Delano Roosevelt. Unemployment
never fell below 14.6 percent between 1932 and
1940 and between "1930 to 1940 net private
investment was minus $3.1 billion." What The
New Deal really represented was masterful
electioneering and showcased, once again, that
while FDR was a brilliant politician, he knew little
about how to improve the economic health of our
citizenry.2 Di Lorenzo’s narrative debunking the
legend is brief but powerful.

Perhaps the best quotation in the book belongs to
Thomas Jefferson when he said "that government
is best which governs least." If politicians accepted
this view today then the jangling cries of thousands
of progressive activists (who confuse government
programs and meddling with moving forward)
could easily be discounted. Capitalism made
America what it is and Di Lorenzo’s work
provides a great service by reminding everyone of
how integral free markets have been to our liberty
and advancement.

Notes:

1. Di Lorenzo dedicated the book to Ludwig von Mises.
2. The confusion of FDR on economic matters
    is nowhere more visible than in this exchange
    from FDR’s Folly: "FDR imagined he could
    fix the world gold price from his bedroom.
    Morgenthau reported that when he visited
    FDR on Friday, November 3, he suggested a
    10- or 15-cent rise from the previous day,
    and FDR decided on a 21-cent rise.
    Morgenthau asked the rationale for 21 cents,
    and FDR reportedly replied that 'three times
    seven' is a lucky number." pp. 7172