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10 of 10 people found the following review helpful
on August 10, 2012
"The workers are the ones that create and own the products they make. The capitalists and their profits are superfluous." "Capitalists do nothing more than exploit workers and cheat them out of the higher wages that are rightfully theirs." "An inherent class warfare exists between the greedy capitalists and their mistreated laborers."

How many times have we heard these assertions and their many variants from union leaders? How many times have we heard them from power-hungry politicians who seek to tax and regulate capitalists virtually out of existence? And how many times have we heard these assertions from capitalists, themselves, like Warren Buffett? Does labor have a right to own the whole of its product and are capitalists superfluous, like the Marxist theory of the exploitation of labor so prevalent in our culture claims? This book gives a resounding NO.

Dr. Reisman's concise, easy-to-read new book explains the misguided, class-warfare, Marxist views of Warren Buffett, who, despite his great business success, has no conceptual understanding or appreciation of the role of capitalism in a prosperous society. And Dr. Reisman takes us much further. He traces the Marxist theory of exploitation of labor to its unfortunate roots in Adam Smith's writing and shows us the argument's most fundamental and fatal flaws.

The book gives a powerful demonstration of how capitalists and profit---not labor and wages---are the prime movers in productive activity. It shows us how the intelligent guiding and directing of production supplied by the capitalist make it possible for people to sell their labor, become more productive, and earn higher income than would otherwise be possible.

The essential role and supreme value of capitalists is completely misunderstood in today's world, and egregiously by the capitalists, themselves. Every business person needs to read this book and appreciate his own work and value. And every person who wants to live in a free and prosperous society needs to read this book and understand the basic role of capitalists in making that possible.

Reviewed by Gen LaGreca, author of Noble Vision: A Novel, an award-winning medical thriller about the evils of socialized medicine.
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9 of 9 people found the following review helpful
on August 8, 2012
Economic inequality is back on the agenda of economists, pundits, policy makers, and just concerned people. For the past few decades, take-home (real) wages of the majority of workers have been stagnant or in decline. Warren Buffett, a multibillionaire investor, is concerned about the trend and proposes to reverse the trend--by favoring higher taxes on the rich and superrich like himself.

Mr. Buffett's fundamental understanding of "wealth" is that unless he and his fellow millionaires and billionaires use it for charity or it is taxed away by the government, it is of no benefit to anyone in the society, other than himself.

In this short book Prof. Reisman shows the many fallacies of that understanding of the role and importance of concentrated wealth under capitalism. Unlike in pre-capitalistic societies, where wealth consisted almost exclusively in consumable goods (food, clothing) and benefited only the owner, great wealth accumulated under capitalism is overwhelmingly invested and used in the production of goods for the market, i.e. productive wealth is at service of the society as a whole.

The wealth of businessmen like Mr. Buffett, as Prof. Reisman demonstrates, serves workers' interests in essentially two ways. First, it provides literally the money to pay them wages. Second, insofar as it consists of or is used to buy capital goods, it is ultimately responsible for the supply of consumers' goods the workers are able to buy with the wages paid by capitalists such as Mr. Buffett.

By this standard, Mr. Buffett's wealth already constitutes a great source of good for the society. He can give it away, if he wishes to, in part or in whole to fight cancer, cure aids, build schools or libraries and any such worthy humanitarian goals, but if he decided not to do so and leave it invested instead, he would still be beyond reproach. Mr. Buffett and thousands and millions of other people of all levels of ability who merely engage in the prosaic task of acquiring wealth by production and exchange, do what no benevolent dictator could ever hope to achieve--run and maintain a great and complex machinery of social production at the highest speed and efficiency that provide food and comforts to millions of people. By establishing new businesses and expanding the new ones, by their relentless drive to earn profits by cutting costs, improving methods of production and management, by introducing new products and expanding markets into darkest corners of the world, businessmen and capitalists, in the very logic of these activities, are great benefactors of precisely the wage earners and everyone besides.

For those steeped in Marxist understanding of capitalism, THAT must be a surprise and cosmic irony, but it is true nonetheless. Evidence is overwhelming and all around us. Products and services that were undreamed of just a few decades ago have become essential attributes of our daily lives.

The lesson of Prof. Reisman's book is as simple as it is profound. For the sake of human progress, for the sake of those who are poor, oppressed by illiteracy and ignorance, without jobs and many opportunities in life, wealth accumulated through peaceful production and exchange is the very means, cold and clean, to lift the poor and disadvantaged out of their poverty, misery and ignorance.

Those who have truly the interests of the poor and disadvantaged at their hearts, should actively seek to provide all the incentives and means to preserve and enhance the growth of wealth accumulation by lowering taxes on property and profits, by abolishing progressive taxation and other obstacles to greater wealth. Achieve that and you will see real wages rising again. That is a truly progressive path to social harmony and shared prosperity.

Study this book and if you are hooked and want answers to many easy and hard questions of theory and evidence, go and study his magnum opus Capitalism: A Treatise on Economics, which is also available on Amazon.
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9 of 9 people found the following review helpful
on August 9, 2012
... to the economic theories of George Reisman.

Reisman's identification of the "primacy of profits" principle is certainly one of the most important discoveries in the history of economic thought. At least since the days of Adam Smith it has been taken for granted that the original income was wages and that profits are a deduction from wages. Reisman shows that the exact opposite is true. In the "early and rude state", as Adam Smith calls it, no wages were paid at all, and all income was profits; the rate of profit was 100%. It was only with the advent of the first capitalists - people who hired workers to help them and invested in buying tools from others rather than making their own tools - that wages (and other money outlays) came into existence. Since that time the rate of profit has steadily been lowered and is today, in our fairly advanced capitalist society, only a few percent. And this is what, over the centuries, has improved our standard of living to unprecedented heights.

Also, this is a truly original discovery - at least, I have not seen it anywhere in the writings of other economists (and I only read good economists). It is a pity that too few, so far, have paid attention to this principle.

Much of what Reisman writes can be found, explicitly or implicitly, in Mises and his other predecessors. But this principle, along with his "net consumption/net investment theory", is a new insight.
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5 of 5 people found the following review helpful
on August 7, 2012
Invaluable reading. The book exposes the ignorance and/or hypocrisy of one of the most successful capitalists of our time. Mr. Buffet enjoys the fruit of free market economy but thinks and acts as its worst enemy. His actions and statements indicate complete disregard to the basic principles and virtues of capitalism and to the relations between freedom, individual rights, property rights and prosperity. Mr. Buffet lived through the communist revolutions in Russia and China and witnessed the death of over 140 million people by starvation, slave labor and executions. He also witnessed the unparalleled prosperity that capitalism brought. Despite that, his views on the morality and practicality of capitalism are these of Carl Marx. Dr. Riesman details the conceptual mistakes that Mr. Buffet and most of his wealthy friends make and their destructive consequence in unparalleled clarity. A must read.
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2 of 2 people found the following review helpful
on August 12, 2012
If you are (or were) a supporter of (former) President Obama, you will probably not like this book. If you are a person who understands how the world really works (or want to be) this is an excellent, informative guide to the secrets of capitalism.

Full Disclosure: I am an unabashed Capitalist, who has read (and appreciated) the entire, 1046-page, treatise "Capitalism," the magnum opus on the concepts of economics, also written by Dr. George Reisman.

This smaller book (59 pages) is a an easy read, either as an introduction for newcomers to the subject, or as a refresher for more experienced scholars. For less than a buck on your Kindle, how can you pass up an opportunity like this? Grab it today.

My only complaint is that the author might have selected a more pleasing image for the cover.

Later, John.

Reviewed by John D Waterman, author of "48 Hours to Chaos," an award-winning, nonfiction book about how the world really works.
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2 of 2 people found the following review helpful
on January 27, 2013
This book speaks to the heart of the matter of what is wrong with "capitalism" and it's view in the U.S. and abroad. Being a little bias, I believe George Reissman to be one of the leading economists today. Dr. Reissman clearly demonstrates an understanding of free markets and the corporate/government marriage that bogs them down. He also addresses the mentality in pop culture that allows for such distortions to take place. Namely, the Marxian Exploitation Theory.
I highly recommend this work.
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on September 28, 2015
His critique of Warren Buffet's position is spot on. He also delves into Adam Smith's allegedly flawed view of labor which was interesting as well as Bohm-Bawerk's work which I know Von Mises referenced extensively in his studies. A quick and enjoyable read.
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on September 10, 2015
The labor theory of value was debunked by Jesus of Nazareth in the parable of the wages, but whose reading that stuff these days! Thanks to Reisman we have a simple, clear repudiation of one of the big lie of economic fairness and living wages.
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on September 24, 2015
No qualms about the economics presented in the book, but at times the tone in the letter section was off-putting. When you have great ideas, you don't need to descend into snark.
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on February 23, 2015
A letter which deserves many other addressees.
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