Why Capitalism?

Hardcover | February 9, 2012

byAllan H. Meltzer

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A review of the headlines of the past decade seems to show that disasters are often part of capitalist systems: the high-tech bubble, the Enron fraud, the Madoff Ponzi scheme, the great housing bubble, massive lay-offs, and a widening income gap. Disenchantment with the market economy hasreached the point that many even question capitalism itself. 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. Unlikesocialism, 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 welfareprograms 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 (forexample, 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.

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From the Publisher

A review of the headlines of the past decade seems to show that disasters are often part of capitalist systems: the high-tech bubble, the Enron fraud, the Madoff Ponzi scheme, the great housing bubble, massive lay-offs, and a widening income gap. Disenchantment with the market economy hasreached the point that many even question capita...

Allan H. Meltzer is Allan H. Meltzer University Professor of Political Economy at Carnegie Mellon University. He is the author of A History of the Federal Reserve, Volumes 1 and 2.

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Format:HardcoverDimensions:168 pages, 8.25 × 5.5 × 0.98 inPublished:February 9, 2012Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0199859574

ISBN - 13:9780199859573

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Customer Reviews of Why Capitalism?

Reviews

Rated 5 out of 5 by from I would recommend this book to anyone who has doubts as to the future As I said in the title I found this book to be a great summary of Capitalism. It gave me hope that the future woul be assured. One comment that I would make is that it covered only the U.S. contribution to capitalism and that is not enough. We must have and accept those other conditions that are from other countries also. My opinion. - DDC
Date published: 2012-08-13

Extra Content

Table of Contents

Preface1. Why Capitalism?2. Regulation and the Welfare State3. Why Big Deficits Now?4. Sources of Postwar Progress5. Foreign Aid6. Why Inflation Will ReturnIndex