Why Capitalism? by Allan H. Meltzer

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Synopsis

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 has reached 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. Unlike socialism, 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 welfare programs 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 (for example, 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.
 

About Allan H. Meltzer

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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.
 
Published January 23, 2012 by Oxford University Press, USA. 167 pages
Genres: Business & Economics, Political & Social Sciences. Non-fiction

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For him, such choices have brought the world to an unsustainable economic position, which requires “new rules for monetary policy” that will end excessive American fiscal and monetary expansion, as well as Asia's reliance on exports to the U.S. He insists that the post–World War II Pax Americana ...

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Publishers Weekly

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In this polemic, Meltzer (A History of the Federal Reserve) brings forth argument after argument to show how for all of its flaws, “there is no better system for providing growth and personal freedom” than capitalism.

Dec 19 2011 | Read Full Review of Why Capitalism?

The Wall Street Journal

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It is not enough to encourage enterprise and limit regulation—we need a fixed system of value.

Jun 08 2012 | Read Full Review of Why Capitalism?

New York Journal of Books

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“Why Capitalism? summarizes Professor Meltzer’s past scholarship for a general audience and reiterates his policy proposals in the context of the present economic crisis. It will be convincing to those who agree with his brand of monetarism, to those who do not know the history of the Phillip’s C...

Mar 01 2012 | Read Full Review of Why Capitalism?

Suite 101

New book on using social media asks how does a brand become more of a person and become part of the conversation.

Jun 07 2012 | Read Full Review of Why Capitalism?

London School of Economics

In Why Capitalism?, renowned economist Allan Meltzer addresses what he feels are key issues that critics of capitalism routinely fail to adequately recognize.

Sep 18 2012 | Read Full Review of Why Capitalism?

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