Capitalism: A Treatise on Economics (Hardcover)

~ (Author) "The subject of this book is the principles of economics..." (more)
Key Phrases: United States, New York, Ayn Rand (more...)

Editorial Reviews

From Publishers Weekly

Reisman's ringing manifesto for laissez-faire capitalism free of all government intervention is at once a conservative polemic and a monumental treatise, brimming with original theories. that is remarkable for its depth, scope and rigorous argument. He rejects the Keynesian doctrine that government must adopt a policy of budget deficits to cope with unemployment, contending, to the contrary, that federal intervention in the economic system is a root cause of inflation, credit expansion, depression and mass unemployment. Reisman staunchly defends capitalists as risk-takers who raise the average worker's real wages and living standards, increasing productivity and improving the quantity and quality of goods. Socialism, he says, is the system that exploits labor and causes stifling monopolistic control. Professor of economics at L.A.'s Pepperdine University, Reisman frequently espouses unfashionable, some would say "extreme," views; for instance, he opposes mandatory recycling, defends insider trading of stocks as justifiable and beneficial and condemns laws banning child labor as an "inappropriate" response to a social ill. His call for a pro-capitalist political movement dedicated to the abolition of the welfare state, elimination of Social Security and Medicare, dismantling of public education, private ownership of all land, abolition of personal and corporate income taxes and a 90% cutback in government spending seems to put this tome beyond the pale of mainstream political debate?although it does come with advance raves from two Nobel laureates in economics. Conservative Book Club and Laissez Faire Book Club selection.
Copyright 1996 Reed Business Information, Inc.

Review

"An expositon and defense of capitalism on a par with those of Mises and Hayek ." -- The Free Radical, June/July 1997

"Capitalism is . . . what a consistent, intelligent advocate of capitalism would say on almost any economic issue." -- FORTUNE, April 28, 1997

"Provides a comprehensive explanation of the nature and value of modern capitalism." -- Journal of Economic Literature, June 1998

"The most important tome about Austrian economics since Ludwig von Mises' Human Action and Murray Rothbard's Man, Economy, and State." -- 1997 Foundation for Economic Education Book Catalogue

See all Editorial Reviews

Product Details

• Hardcover: 1046 pages
• Publisher: Jameson Books (November 1, 1996)
• Language: English
• ISBN-10: 0915463733
• ISBN-13: 978-0915463732
• Product Dimensions: 11.2 x 8.3 x 2.2 inches
• Shipping Weight: 5 pounds
• Average Customer Review: 4.6 out of 5 stars  See all reviews (38 customer reviews)
• Amazon.com Sales Rank: #557,139 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

46 of 48 people found the following review helpful:

5.0 out of 5 stars The greatest book on economics of all time, November 14, 1999

By A Customer

I agree with all the praise that has been lavished on GeorgeReisman's Capitalism. I actually think this is the greatesttreatise on economics of all time, greater even than The Wealth of Nations or Human Action.

An achievement of this kind is always an integrated whole. But if I were to single out one insight as the greatest one, it would be the "primacy of profits" principle, the insight that wages are a deduction from profits, not vice versa. This lays the ground for the most thorough and fundamental refutation of the Marxist exploitation theory that is possible; it also lays the ground for what actually constitutes economy-wide profit (the "net consumption" theory of profits) and the actual relationships between profits, wages and investment, and for many other things as well. To make a comparison, I think this discovery ranks with Adam Smith's original discovery of the principle of division of labor, or the early Austrians' discovery of marginal utility. I sincerely hope that this principle gets thoroughly understood by economists in the future.

Some other highlights I could mention merely because they have not been mentioned by the other reviewers:

The demonstration that the rise in the average standard of living rests entirely on lower prices for goods and services (a fact which is merely obscured by the presence of inflation).

Understanding the extent of the gulf between a precapitalist, non-division of labor society and a modern division of labor society. (E.g.: understanding why a rise in population would be a threat in the former kind of society, but a source of great benefit in the latter kind.)

The demonstration that one of the things capitalism is regularly accused for - the concentration of great fortunes in relatively few hands - is actually to the benefit of everybody, not merely the owners of those fortunes.

Plus much, much more.

After reading the book review guidelines, I will refrain from a spiteful comment I wanted to make to an earlier reviewer. But I will say this: Reisman's monumental achievement would not have been possible without a thorough understanding of all his predecessors, from Smith to Mises. But I do not think it would have been possible without a thorough understanding of Ayn Rand's philosophy either. Arguing this point would lead to far, so I will leave it at that - except for saying that the "primacy of profits" principle is the economic implementation of the idea that Atlas carries the world on his shoulders.

65 of 70 people found the following review helpful:

5.0 out of 5 stars The "Das Kapital" of Liberalism, January 28, 2002

By	Ingo Wechsung "iw2163" - See all my reviews (REAL NAME)

Capitalism, which appeared in 1998, is the life work of George Reisman, an economist unfortunately hardly known, who teaches at a private American university. This work can rightly lay claim to being one of the most comprehensive and intelligent defenses of capitalism that has ever been written. In over 1,000 closely printed pages, Prof. Reisman not only deals with all conceivable economic subjects, but places special value on demonstrating the errors of anti-capitalistic doctrines - from Marx, to Keynes, to the environmental movement. His foundation is, on the one side, the Austrian school, above all von Mises, with whom he studied, and, on the other side, the Objectivism of Ayn Rand, with whom Reisman was also acquainted and - together with Rothbard - debated. On this foundation he places a crystal clear, convincing structure of thought; in its totality a stirring plea for Laissez-Faire capitalism as the only system that is consistent with the nature of man and a free society. Rothbard and Reisman, incidentally, seem to have become estranged after their studies together. While in the case of Rothbard, to my knowledge, Reisman is never mentioned, Reisman in Capitalism shows Rothbard among others to have accepted the fundamental tenet of the Marxian exploitation theory, namely, that in reality the workers are the producers of goods.

If Reisman deals with Rothbard this way, then one must not be surprised when he deals with the real anti-capitalists in such a devastating way that only tatters remain. All this without ever becoming abusive or polemical, for he is concerned with ideas, not persons. Drawing the conclusion that only irrational dolts could hold the erroneous doctrines just refuted is always left to the reader. And, indeed, I admit it, not a few chapters made me ashamed. I was ashamed of what nonsense I myself had partly believed, had partly simply never questioned. All the more, as after working through a chapter of Reisman's, everything seems very simple and logical. "You too could have gotten there yourself if you had only thought for a moment," one says to oneself. Later the shame gives way to the good feeling of having mined an intellectual treasure.

Reisman devotes special attention and its own chapter to the environmental movement, which he conceives as the ideological heirs of the socialists and for the present the most dangerous enemies. Socialism in its time set out as a movement which claimed reason and rationality for itself alone and proclaimed itself as the only scientific world view. After the catastrophic failure of the socialist experiment, this anticapitalistic movement did not inquire into the rational and economic causes of the failure, but preferred to throw reason as such overboard. The result was a green movement dangerous for freedom, which, for example, in all seriousness and partly with success, can declare inhospitable frozen wilderness in Alaska to be "sacred ground, which must never be desecrated by oil derricks and pipelines."
In view of the new bugbear of the anti-globalization movement, this view seems to be out of date. Nevertheless, one will discover rather that the philosophical foundations of the environmental movement, which Reisman elaborates, appear much more open in the case of the enemies of globalization. Here they also erupt in concrete acts of violence, while in the case of the Greens they are rather obscured, present in the background. They include hatred of the free, productive human being, who applies his reason for the improvement of his condition and sees himself as well as his equals as the only instance constituting value. The anti-globalization scene uses indiscriminately the arsenals of socialists, statists, nationalists, and environmentalists in order to recommend to us mankind, state, nation, or mother earth, indeed, even "animal rights" as the highest, sacred values. The point being, "my concerns shall never be my concern," as Stirner said.

Politically, Reisman is an advocate of the minimal state. In the last chapter of Capitalism, titled "Toward the Establishment of Laissez-Faire Capitalism," a strategy is outlined for achieving the minimal state. This is also certainly worth reading by those anarcho-capitalists who are realistic enough to seek the way to their ideal in the gradual weakening of the state. Hopefully, they will do so in common, up to a point in time who knows how remote, with the advocates of the minimal state.
In short, the approximately 200 marks which I spent for Capitalism have been the best investment of my life in books. One cannot recommend the purchase only to people who enjoy reading the daily newspapers: after the reading of Capitalism, the fallacies of the untaught and the unteachable jump out at one in thick, fat letters, day in and day out-and not only out of the economics section.

31 of 31 people found the following review helpful:

5.0 out of 5 stars Fortune magazine's review of Reisman's CAPITALISM, April 15, 1997

By A Customer

The review is by David R. Henderson, research fellow at the Hoover Institution, and is titled THE LATEST CAPITALIST MANIFESTO. It appears in the issue of April 28, 1997, on p. 62. What follows is the verbatim text of the review, with paragraph breaks indicated by a pair of brackets[].

[]EVERY SO OFTEN A BOOK IS PUBLISHED that commands attention for its scope, ambition, and physical size. Capitalism (Jameson Books, $95.00), by Pepperdine University economist George Reisman, is such a book: It's an exhaustive survey and an impassioned manifesto, and is the size and weight of the phone book of an extremely large city. As Reisman writes on page 61 (out of 1,046): "The remainder of this book can be summarized as demonstrating a single proposition: In every possible way, with no valid objection, the solution for the economic problem is capitalism." Reisman backs up his claim. He shows, among other things, why capitalism is necessary to end poverty, mass unemployment, and environmental destruction.

[]Much of what Reisman covers will be familiar to students of economics, but CAPITALISM covers some of the more standard economic topics--the chaos caused by socialism, productivity as the source of large fortunes in a capitalist society, price controls--in a fresh and clever way.

[]Take price controls. Economically literate readers know that price controls, by holding prices below free-market levels, often create shortages. Reisman goes further, presenting at least three insights about the harm done by price controls.

[]First, many observers noted the apparently arbitrary distribution of gasoline due to price controls in the 197Os. In some areas of the country, people lined up for blocks to get gasoline; in others lines were very short. Reisman shows why. In a free market, companies have an incentive to get gasoline to those willing to pay the most. A relative scarcity in, say, New Jersey, causes a higher price there, inducing oil companies to send more gasoline there: But price controls sever the link between price and supply. Why bother sending more gas to New Jersey if you can't get the higher price? Reisman writes: "It largely ceased to matter to the oil companies how their gasoline was distributed."

[]Second, Reisman shows how price controls drive prices to very high levels in uncontrolled sectors of the economy. Consider New York housing. Some apartments are rent controlled; some are not. Assume that without rent control there would be one million apartments. These apartments would be rented to the million people willing to pay the most. Now assume the government regulates rents on half the apartments--some of the people renting the controlled apartments will displace people who would have paid more. What happens to these people? Same of them will shift over to the uncontrolled market, competing with the half million people already renting in this market. As a result, rents in the uncontrolled sector are higher.

[]Third, by creating shortages, price controls change the relationship between buyer and seller. The seller no longer needs any individual buyer and thus "views the buyer as a petty chiseler seeking values without payment." The buyer "views the seller as an omnipotent tyrant whom he must beg for favors or threaten with reprisals." Reisman illustrates with a shortage-era quote printed in the New York Times from a gas station attendant: "If he's that stupid, he waits in line an hour and doesn't know the rules, l let him get to the pump and then I break his heart."

[]Beyond such classic subjects, CAPITALISM includes much that's new, including a witty critique of the textbook model of perfect competition and Reisman's own theory of investment. His critique of environmentalism, in which he argues that environmentalists constitute the greatest current threat to capitalism, is especially vigorous. "The green movement," he writes, "is the red movement no longer in its boisterous, arrogant youth, but in its demented old age."

[]By and large, Reisman backs up his indictment of environmentalists. He quotes a National Park Service biologist who claims that people are a cancer on the earth and hopes for "the right virus to come along." Reisman notes that these aren't just ideas of the lunatic fringe; John Muir, the founder of the Sierra Club, said similar things, and mainstream environmentalists have not disowned such inhumane sentiments. Reisman also points out that the environment has changed dramatically for the better in many ways with the advance of capitalism. For example, the places in the world with the safest drinking water are places with modern purification plants. Before capitalism, streets served as sewers; before cars, horses created an enormous pollution problem. This is all obvious, but what's striking is how rarely anyone says it.

[]Overall, Capitalism is a book you would want in your library if you want to know what a consistent, intelligent advocate of capitalism would say on almost any economic issue.