Tuesday, January 13, 2009

Defending capitalism - real capitalism

Laurence M. Vance has an article today on Mises.org that recommends two books on capitalism aimed at the general reader. "These defenses of capitalism are not only vigorous; they are uncompromising, up to date, understandable, and eminently readable. And neither one is a textbook on economics," Vance writes. The two books are Robert P. Murphy's The Politically Incorrect Guide to Capitalism and Thomas J. DiLorenzo's How Capitalism Saved America.

I've read, reviewed, and given away copies of DiLorenzo's book. Murphy's is still on my wish list.

Why is it that capitalism is always under attack in times of economic crisis but never interventionist schemes such as corporatism, socialism, or fascism? Though the titles of the two books might suggest we live under capitalism, in fact we do not and have not lived under such a system. Vance writes:
Real capitalism — that is, capitalism based on secure private-property rights, sound money, the division of labor, social cooperation, freedom of contract, freedom of association, voluntary exchange, and the absence of government control, oversight, and regulation — is the answer to the current economic crisis.
I agree emphatically, but we've never had "real capitalism." Ayn Rand explained why in the pages of Atlas Shrugged. Ludwig von Mises presented his answer in The Anti-Capitalistic Mentality.

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