Tom Wood’s asks: http://www.tomwoods.com/blog/reader-asks-best-book-on-capitalism/
A reader writes:
Hi Tom, I’m 17 years old and come from Luxembourg, Europe. My best friend is a progressive. Which book shall I give him to convince him of capitalism? I probably have just one shot.
It shouldn’t be too difficult!
It should lay out the morality of capitalism.
It should show how capitalism has been working in history.
What book would you recommend?
Before people start recommending Economics in One Lesson, let me note that that’s not what he’s asking for. He wants something on the morality of capitalism with some pro-capitalist history, etc. I’m not sure what to recommend. Any ideas?”
Hi Tom and Young Reader. As a person in his twenties and also a very recently reformed liberal (I’m still growing, but process began about a year ago- I’ve come a long way), I have a unique answer and then a suggestion.
When I was liberal I fervently believed, because the Main Street Media always told me this was true, two things:
1. We live in a capitalist society
2. Capitalism has failed us and is the reason we have such awful inequity
Which leads to
3. Deregulating capitalism will make everything worse.
These were the hardest fallacies to correct within myself, and my friend was likely banging his head against the wall after every discussion in which he would respond, “but evil corporations cannot do that if they didn’t have the power of government to do so.” and I would respond, “but if government doesn’t regulate the corporations, then corporations win!”
First one must be willing to be wrong, only then can one learn new things. But to accept being wrong about something so seemingly fundamental and taught throughout 17 years of school and media is transformative and naturally one goes on the defensive when confronted with the very core of one’s beliefs as being untrue.
So, to break through that defensive layer first we need to address the fallacies before we get to the “capitalism is good” part.
1. We do not live in a capitalist society- government intervention through bailouts and subsidies among other things are regulations and forms of socialism. Too big to fail (the recent TARP is a good example) is the opposite of capitalism and brings the whole system down. This is reality. We are not living in a pure capitalist economy like the media portrays us to be in.
2. When we talk about getting rid of government regulation we are talking about bailouts and subsidies, letting banks fail, and not creating the housing bubble. The housing bubble is a good example of how our Not-Free-Market is controlled and ruined by government intervention.
3. When we are talking about getting rid of government regulation we are not talking about allowing big bad evil corporations to exploit their workers and rape the environment. In fact, regulations allow those things to happen more than if those regulations didn’t exist. If a neighboring corporation pollutes your water and there are no regulations, you can sue him! But if the government comes in and says “this amount of pollution is okay, and if the company violates that it has to pay this amount of a fine,” then corporations will often do a cost-benefit analysis and see that they can make more money by disregarding the regulation and paying the fine. If they pay the fine, then it will be harder for you to get money by suing them because they have already been punished as deemed by the state!
4. Not only that, but corporations write the legislation to often smother competition, further diminishing the free market. If we deregulate we will make it easier for smaller companies to come in and compete with the big guys, making the products more efficient and cost effective.
5. None of this happens in what we have now. The government intervention built the housing bubble, everyone lost their houses, and the big corporations got checks from the government. Our problem isn’t free markets which allow companies to fail and doesn’t build bubbles, it is the government and the government power intervening in the markets!
So, the book that changed my life by illustrating all of this was The Creature from Jekyll Island by G. Edward Griffin. My friend let me borrow his copy while we were in the stalemate of “government is good” vs “government is bad”. What better way to illustrate the fallacy that we live in a capitalist society than by exposing the Federal Reserve system! The most anti-capitalist system there is! It is an entertaining, but informative read. It is long, but reads like a detective story, and just reading one chapter can change your life. It changed mine!
P.S. Oh, it is easy, reads like a fictional novel, but true!
Is filled to the brim with history, interesting, that you won’t get anywhere else.
I think it is actually considered a history book, and shows how capitalism and monetary systems have been in reality for a long time. Finally, it accurately documents the immorality of the folks behind the Federal reserve system and things like bank bailouts.