How Capitalism Saved America: The Untold History of Our Country, from the Pilgrims to the Present [Hardcover]

Thomas DiLorenzo (Author)

Book Description

Release date: August 10, 2004 | ISBN-10: 0761525262 | ISBN-13: 978-0761525264 | Edition: Book Club Edition

Whether it’s Michael Moore or the New York Times, Hollywood or academia, a growing segment in America is waging a war on capitalism. We hear that greedy plutocrats exploit the American public; that capitalism harms consumers, the working class, and the environment; that the government needs to rein in capitalism; and on and on. Anticapitalist critiques have only grown more fevered in the wake of corporate scandals like Enron and WorldCom. Indeed, the 2004 presidential campaign has brought frequent calls to re-regulate the American economy.

But the anticapitalist arguments are pure bunk, as Thomas J. DiLorenzo reveals in How Capitalism Saved America. DiLorenzo, a professor of economics, shows how capitalism has made America the most prosperous nation on earth—and how the sort of government regulation that politicians and pundits endorse has hindered economic growth, caused higher unemployment, raised prices, and created many other problems. He propels the reader along with a fresh and compelling look at critical events in American history—covering everything from the Pilgrims to Bill Gates.

And just as he did in his last book, The Real Lincoln, DiLorenzo explodes numerous myths that have become conventional wisdom. How Capitalism Saved America reveals:

• How the introduction of a capitalist system saved the Pilgrims from starvation
• How the American Revolution was in large part a revolt against Britain’s stifling economic controls
• How the so-called robber barons actually improved the lives of millions of Americans by providing newer and better products at lower prices
• How the New Deal made the Great Depression worse
• How deregulation got this country out of the energy crisis of the 1970s—and was not the cause of recent blackouts in California and the Northeast
• And much more

How Capitalism Saved America is popular history at its explosive best.

Editorial Reviews

From Publishers Weekly

Don't be misled by this book's subtitle: rather than a work of history, it's a work of ideology cross-dressing as history. Its value lies in its lively polemic rather than its claims to novelty or historical depth. DiLorenzo (The Real Lincoln) aims to counteract what he believes is the "anticapitalist mentality" among other historians by showing how capitalism has permeated American history since the Pilgrims, how the role of marketplace entrepreneurs has been lost to historical view, and how all government regulation has been injurious to the national welfare. These arguments he presents via brief sketches of some of the major eras of the nation's history. He argues, for example, that the monopolistic robber barons are incorrectly made to stand in for their era's other forgotten great entrepreneurs, and that it wasn't the excesses of the 1920s that caused the Great Depression but rather Herbert Hoover's mild pre-crash attempts at government regulation. What's beguiling is DiLorenzo's single-mindedness. The book ought to prove bracing for those similarly minded and to those of contrary views whose arguments have grown flaccid for want of energetic attack. But the author's notes and bibliography give the game away. There are scarcely any references to works of history. Instead, he cites the great theorists of capitalism, such as Ludwig von Mises and Friedrich Hayek. There's nothing wrong with that, but it leads one to suspect that the book aims less to enrich historical understanding than to score points. (On sale Aug. 10)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Booklist

Extolling free markets and upbraiding government intervention, economist DiLorenzo offers a tour of American economic history that is intended to counter the anticapitalist ideas embedded in best-sellers such as Barbara Ehrenreich's Nickel and Dimed (2001) and Michael Moore's Downsize This! (1997). While calling these anecdote- and emotion-driven tomes utter economic nonsense, DiLorenzo does acknowledge their influence. Most people, to the extent they understand the principles of free markets, are suspicious of them, citing robber barons, petroleum trusts, and the Great Depression. Inveighing against "myths" that the failures of capitalism were the cause of such historical episodes, DiLorenzo attacks the political response to them as pernicious to consumers, who, he argues, ultimately pay for price controls, regulations, subsidies, and government corporations. To the author's understandable frustration, these types of government intervention accumulate decade after decade, with "political entrepreneurs" almost always overpowering the ability of the market to operate freely. DiLorenzo's presentation challenges widespread beliefs about economic history. Gilbert Taylor
Copyright © American Library Association. All rights reserved

See all Editorial Reviews

Product Details

• Hardcover: 304 pages
• Publisher: Crown Forum; Book Club Edition edition (August 10, 2004)
• Language: English
• ISBN-10: 0761525262
• ISBN-13: 978-0761525264
• Product Dimensions: 8.3 x 5.8 x 1.1 inches
• Shipping Weight: 15.2 ounces
• Average Customer Review: 4.4 out of 5 stars  See all reviews (63 customer reviews)
• Amazon Best Sellers Rank: #297,315 in Books (See Top 100 in Books)

More About the Author

Thomas J. DiLorenzo is the author of The Real Lincoln and How Capitalism Saved America. A professor of economics at Loyola College in Maryland and a senior fellow at the Ludwig von Mises Institute, he has written for the Wall Street Journal, USA Today, the Washington Post, Reader's Digest, Barron's, and many other publications. He lives in Baltimore, Maryland.

Most Helpful Customer Reviews

204 of 224 people found the following review helpful

5.0 out of 5 stars Comments from one who actually read the book... and understood it August 29, 2005

By M. Goodson

Format:Hardcover

It is quite obvious that many posting reviews on this book have not actually read it. This may seem fantastic, but one should not be terribly shocked at human irrationality (it's all around us). In fact, the author of the book in question wrote in some length of the anti-capitalistic mentality that contributes to this kind of behavior.

I comment specifically on the "review" by A. Epstein as his protests are typical. However, it is clear that "Arwin Ascendi", "Panopticonman", "Sgt. Rock", "Steven S.", and "F Hayek" also have not read the book (at least, their "reviews" contain no information to suggest so). Epstein wrote:

"25,000 children die every day around the world from hunger. 1 in 4 American children go starving every day. And this is the proud economic system that the author talks about? Capitalism has shown to be nothing but a smoke screen to make the rich richer. Unfortunately, the rest of the world hasn't figured out the trick just yet."

1. Societies of the world are not organized under capitalism. Therefore, the reference to the number of child deaths in this world is irrelevant.
2. The use of the word "starving" in this case is a dysphemism. Compare the "hunger" experienced by the thousands of dead children invoked by Epstein with the "starving" experienced by 1 in 4 Americans. The words of a Russian immigrant who fled soviet Russia during the 1980's illustrate my position well. When asked why he decided to leave the Soviet Union for the United States, this immigrant replied "Why would anyone not want to live in a country where the poorest members of society are also the fattest!"
3. The statistics cited in this book (compiled by the U.S.... government) illustrate nicely that not only are the "rich" getting richer, but the poor are getting richer faster than the rich. If Epstein had actually read the book, then perhaps he would have decided to attack these figures and/or the author's reasoning and conclusions directly. Personally, I believe Epstein to be motivated by envy of those who are more intelligent, industrious, talented, vigorous, and lucky than himself and others. He does not want equality of opportunity, but equality of results... for himself and every other envious and mindless sloth. Many fail to understand that the less gifted and even the lazy see greater and greater return on their efforts under capitalism. In fact, everyone sees a greater return. Epstein is merely upset that there exist some individuals who will always be more efficacious than others. Epstein's position is in opposition to human nature... to reality itself. Murray Rothbard expressed this truth well when he wrote: "On the free market, every man gains; one man's gain, in fact, is precisely the consequence of his bringing about the gain of others. When an exchange is coerced, on the other hand - when criminals or governments intervene - one group gains at the expense of others."
4. A good proportion of this book is devoted to the argument that America's economic organization has been becoming less and less capitalistic over the last 150 years, and that we have never had a purely capitalistic system. All of the legitimate complaints that Epstein may have about our current economic organization should be redirected to the system known as mercantilism which the author painstakingly compares and contrasts with a free market (i.e. capitalism). If Epstein had read the book, then he would know this and any argument that he has would reflect this.

Epstein also wrote:

"They're too busy working all their lives just to put food on the table to realize the capitalistic system would collapse if more than 1% of the people owned wealth. They don't realize the Federal Reserve, the World Bank, IMF, et al, does the dirty work of the wealthy by making sure recessions take place about once every 10 years and all poor countries are taken advantage of. To fight inflation, or a better word is "to fight more people trying to make a living."

1. Under capitalism there would be separation of government and economics, and the wealthiest members of society would also be those individuals who are the most efficient at providing for the "common man". Capitalism would allow the common man to make poor people rich and rich people poor. Under capitalism, the consumers (actually, the producers spending their earned dollars... i.e. "certificates of performance") are sovereign. Our centrally controlled and manipulated economy today entrenches the power of the largest corporations and mingles their power with that of government. This is not capitalism. This, as the author emphasizes, is mercantilism. Epstein does not seem to know that the author emphasized time and again in his book that WE HAVE MUCH LESS CAPITALISM IN AMERICA THAN EVER... and that this trend continues.
2. Epstein's diatribes against the Fed, World Bank, IMF, et al are actually right on point... however, he demonstrates his lack of understanding by subtly associating these organizations with capitalism. Capitalism, once again, is the separation of economics and government... i.e. economic freedom. Epstein truly shows his ignorance by associating with capitalism these government-sanctioned organizations designed to manipulate our economy.
3. Epstein's brief description of the business cycle (periodic recessions), and its cause being rooted in the actions of these government-sanctioned institutions are right on target... no doubt more than he understands. Once again, under capitalism there is no place for such institutions and their insane monetary policies. These policies and institutions are more suited to (and necessitated by) mercantilism and other forms of central planning like socialism. They don't fight inflation as they claim... they literally cause it... robbing the common man in the process and rewarding political pressure groups at our expense. THIS HAS NOTHING TO DO WITH CAPITALISM.

Epstein also writes:

"I await the future when people sit back and figure out it's better to work together and make sure everybody has a great life, rather than this constant competition where you grab what you can and don't think twice about that poor person over there."

1. The only way to organize society such that everyone has "a great life" is to give individuals the freedom to pursue their own values... that is, they're OWN LIVES. In other words, economic freedom... i.e. CAPITALISM.
2. Capitalism also provides the same freedom to assist those in need. It used to be, during the most capitalistic period of U.S. history (the early to mid 1800's) that when a farmer experienced a series of unfortunate events he was actually wealthier than before his misfortune... due to good will from neighbors.
3. Under capitalism it is every businessman's purpose to enhance the lives of the common man. The capitalist entrepreneur accomplishes this by taking resources at a given market value (that is, valued by members of society) and transforms this capital using intelligence, labor, and additional capital (tools, mechanization, etc.) to create something of increased value. The entrepreneur literally creates value in the world... HE IS AN ARTIST IN EVERY RESPECT. The collective results of the actions taken by the many entrepreneurs who have been fostered and rewarded by capitalism has ensured our increased standard of living. The profits GIVEN to these men of ability BY THE MASSES has not only rewarded them and provided to them the incentive to continue their great acts, it has given to them the means to continue and improve upon their production. Hence today the common man can purchase his food and housing, indeed all of his values, at a tiny fraction of what was once required. The entrepreneurs have along the way also eradicated child labor, long work weeks, poor working conditions, and horrid back-breaking labor. Capitalists have done far more to enhance the welfare of human beings than have all the humanitarians to have ever lived. Read more ›

96 of 106 people found the following review helpful

5.0 out of 5 stars Capitalism conquers greed December 27, 2004

By Peter Lorenzi

Format:Hardcover

There is one silly argument being made among these reviews that conservatism and capitalism are unrelated. Actually, DiLorenzo, a superb colleague of mine, is more of a libertarian and true free-market thinker than a Tory conservative of the George Will mode. Understand this, and you will have a better appreciation for DiLorenzo's approach to capitalism and its cleansing powers.

People and markets proposer because we act in our own self-interest. Adam Smith was right and some label him 'liberal'. 'Liberal' means something quite different outside the United States. Those who equate Oliver Stone's "greed is good" mantra for capitalism are missing the point. "Greed" is "reprehensible acquisitiveness" and the beauty of capitalism is that the market speaks louder than government dictates or "greedy capitalists". When the government says, "I'm here to help you," it's time to hold onto your wallets. With capitalism, it's your choice. Greed doesn't work; markets do.

DiLorenzo writes with a clear, accessible style. While he is an accomplished researcher and academic, he discovers and disseminates knowledge for a much larger public than other academics. And he is brave enough to take on well-entrenched conventional wisdom, be it the nanny state or worshipful devotees of Abraham Lincoln.

We have a problem with unchallenged soft-headed, bleeding heart, liberal thought on many college campuses. DiLorenzo is part of the solution to the excessive political correctness rampant on many college campuses. Read this and open your eyes and mind. This is a nice companion piece to David Landes' "The wealth and poverty of nations: Why some nations are so rich and others so poor...." And it fits with the recent studies of the differences between English and French law, and the impact of their respective legal systems on economic success. Read more ›

155 of 177 people found the following review helpful

5.0 out of 5 stars A marvelous talent August 17, 2004

By Jeffrey Tucker

Format:Hardcover

Thomas DiLorenzo has a marvelous analytical talent-a knack for drawing the reader's attention to the material that matters-and his new book employs this talent in defense of the whole history of free enterprise in America. How long have we waited for a book like this? A very long time.

Having just read it, I'm confident in predicting continued success and sales. It seems like just the right book to give a market skeptic. "You have doubts about capitalism? Read this."

After years of interacting with students in an urban business-school environment, DiLorenzo knows precisely what are the main points of contention. The chapters are short but careful in choosing just the right episodes to highlight and arguments to present to make his case. His main points are drawn from the Austrian tradition: the classic texts by Mises, Hayek, Rothbard, Reisman, but also the public choice school, and also the best economic historians of our time.

He begins with a definition and sweeping defense of capitalism, along with an eye-opening illustration of why such a defense in necessary, citing an egregious history of intellectual defenses of communism. Who remembers that John Dewey called Soviet communism "intrinsically religious" with the "moving spirit and force of primitive Christianity"?

The text never slows, as he marches through the history of the pilgrims, the American Revolution, the 19th century debate over internal improvements, the advancement of workers amidst capitalist advance, the myths of the Robber Barrons, the great depression, the New Deal, the energy crisis, and the modern debate on the environment, social regulation, and the war on vice....

It occurred to me while reading this that this whole book is a kind of guerilla manual for beating back the most common economic myths one is likely to encounter on campus or in public debate. Master this book and you have overcome most of the bad economic thinking of our time. Read more ›