From the Publisher
An Extraordinary New Work On the Nature and Value of Capitalism For the intelligent, open-minded reader who seeks to understand the economics and politics of the modern world, Jameson Books is pleased to announce the availability of George Reisman's recently published monumental work CAPITALISM: A Treatise on Economics (Jameson Books/LPC Group).
Aimed at both the intelligent layman and the professional economist, and written in language that each can understand, this book is arguably the clearest and most comprehensive explanation of the nature and value of modern capitalism to date.
This book offers an extensive body of positive economic theory, based on the writings of Ludwig von Mises and on the earlier economists of the Austrian and British classical schools. To this the author adds his own considerable contributions.
The book's scope and organization are indicated by its division into three main parts: (1) Foundations of Economics, (2) The Division of Labor and Capitalism, and (3) The Process of Economic Progress.
These sections, in turn, include chapters like: Wealth and Its Role in Human Life; Natural Resources and the Environment; The Dependence of the Division of Labor on Capitalism; The Price System and Economic Coordination; Price Controls and Economic Chaos; Socialism, Economic Chaos, and Totalitarian Dictatorship; The Influence of the Division of Labor on the Institutions of Capitalism; Monopoly Versus Freedom of Competition; The Concept of Productive Activity; Productionism, Say's Law, and Unemployment; The Productivity Theory of Wages; The Net-Consumption/Net-Investment Theory of Profit and Interest; Keynesianism: A Critique; and Gold Versus Inflation. Some of these chapters contain the most powerful critiques of Marx, Keynes, the pure-and-perfect-competition doctrine, and environmentalism to be found anywhere.
The book can serve as a complete and effective alternative and antidote to many of today's micro- and macroeconomics textbooks, and will educate professors as well as students. Its importance and appeal to a general audience are evident in its description of prevailing attitudes toward capitalism, and its challenge to learn why they are wrong, as well as the cause of self-destructive political behavior on a massive scale.
Quite unusual for a serious work of political economy, Reisman employs compelling eloquence to topple, in a tour de force, such widely held popular beliefs as:
The profit motive is the cause of starvation wages, exhausting hours, sweat-shops, and child labor; of monopolies, inflation, depressions, wars, imperialism, and racism.
Competition is the law of the jungle.
Economic inequality is unjust and the legitimate basis for class warfare.
Economic progress is a ravaging of the planet and, in the form of improvements in efficiency, a cause of unemployment and depressions.
War and destruction, or massive peacetime government spending, are necessary to prevent unemployment under capitalism.
Economic activity other than manual labor is parasitical.
Businessmen and capitalists are recipients of unearned income and are exploiters.
Retailers and wholesalers are middlemen having no function but that of adding markups to the prices charged by farmers and manufacturers; advertisers are inherently guilty of fraud-- the fraud of attempting to induce people to desire the goods that capitalism showers on them, but that they allegedly have no natural or legitimate basis for desiring.
On the basis of such widely-held, mistaken, beliefs, Reisman shows, people turn to the government: for "social justice"; for protection and aid, in the form of labor and social legislation; for reason and order, in the form of government planning. They demand and for the most part have long ago obtained: progressive income and inheritance taxation; minimum-wage and maximum-hours laws; laws giving special privileges and immunities to labor unions; antitrust legislation; social security legislation; public education; public housing; socialized medicine; nationalized or municipalized post offices, utilities, railroads, subways, and bus lines; subsidies for farmers, shippers, manufacturers, borrowers, lenders, the unemployed, students, tenants, and the needy and allegedly needy of every description.
Reisman convincingly demonstrates the fallacy and counterproductive nature of these ideas and demands. His thesis is that never have so many people been so confused--and made poorer as a result--about a subject so important, as most people now are about economics and capitalism. He argues that in its logically consistent form--that is, with the powers of government limited to those of national defense and the administration of justice (protecting citizens against force and fraud)--capitalism is a system of economic progress and prosperity for all, and is a precondition of world peace.
Following an exhaustive economic analysis of virtually every aspect of capitalism, the book's concluding chapter is devoted to a long-range political-economic program for the achievement of a fully capitalist society.
Reisman's treatise is certain to constitute as much of a challenge to the theoretical preconceptions of today's economists as it does to the political preconceptions of today's laymen. As an analytical tool for understanding both micro- and macroeconomics, it is unsurpassed. As a coherent philosophy of liberty, it will prove appealing to readers worldwide--readers who have seen the diminishing of both their national prosperity and individual freedom as a result of government economic intervention.
From the Author
The purpose of my book is to help achieve and secure the freedom of the individual from government interference, so that he may enjoy his right to the pursuit of happiness and achieve ever growing material prosperity. To this end, I have integrated essential ideas of the Austrian school, i.e., those of von Mises and Böhm-Bawerk, with some needlessly abandoned ideas of the British classical school. My book further integrates such reconstituted economic theory with important elements of Ayn Rand's philosophy of Objectivism.
On the foundation of these integrations, I have been able to develop what I consider to be the important original contributions that my book presents on the subjects of profits, wages, saving, capital accumulation, aggregate economic accounting, monopoly, and natural resources, among other vital subjects. Based on the same foundation, my book presents what I consider to be the most powerful critiques of Marx, Keynes, the pure-and-perfect competition doctrine, and environmentalism to be found anywhere.
Major economic fallacies--beliefs held by a majority of today's intellectuals--are convincingly explained and refuted, including, among many others, the theories of Marx and Keynes, the pure‑and‑perfect‑competition doctrine, environmentalism, and the beliefs that the greed of unregulated business drives down wages and forces up prices, and that automation and international free trade cause unemployment.
My book shows that mass unemployment and depressions are the result neither of "overproduction" nor "underconsumption" but governmental policies of pro-union and minimum wage legislation coupled with credit expansion and its deflationary aftermath. It shows that falling prices due to increased production are not deflation but the source of rising real wages, that deflation is monetary contraction, and that falling prices are what allow the economic system to recover from deflation. The ultimate protection against both deflation/depression and inflation, the book shows, is a 100-percent reserve gold standard.
I think that another especially important accomplishment of my book is its demonstration, in diametric opposition to prevailing belief, that capitalism is an economic system that is as fully planned as an economic system can be. In contrast to socialism, which makes economic planning a monopoly of a handful of government officials and reduces the rest of the population to the status of mindless automatons duty-bound to carry out the plans of the officials, the economic plans of capitalism are those of all of the hundreds of millions or billions of its individual participants. All these individual plans are coordinated, harmonized, and integrated by the workings of the price system, which, in turn, is based on private ownership of the means of production and its corollaries the profit motive and economic competition. Socialism, on the other hand, is a system of planless chaos, a true "anarchy of production," with as much chance of planning as people would have of being able to move about if walking were an activity monopolized by government officials.
I believe that my book can be read and understood by the intelligent layman as well as by the professional economist and that it can serve as a textbook of economics at any level of study. I consider it to be a complete and effective antidote to the misconceptions about capitalism that are so often taught in economics courses and in numerous other courses, such as those dealing with history, literature, sociology, anthropology, and those which can be found in the various special studies programs serving this or that academic pressure group.
From the Inside Flap
This book ranks among the most comprehensive, intellectually powerful and readable defenses of capitalism ever written.
A principal theme of the book, consistently demonstrated, is the natural harmony of self‑interests--of businessmen, wage earners, and consumers--under capitalism, a consonance most will find astonishing given the prevailing misunderstandings of capitalism.
Basing this work on the integration of the theories of the Austrian school and needlessly-abandoned doctrines of the British classical economists, the author also offers his own original contributions on the subjects of profits, wages, saving, capital accumulation, natural resources, monopoly, aggregate economic accounting, and other vital economic phenomena.
Major economic fallacies--beliefs held by a majority of today's intellectuals--are convincingly explained and refuted, including, among many others, the theories of Marx and Keynes, the pure‑and‑perfect‑competition doctrine, environmentalism, and the beliefs that the greed of unregulated business drives down wages and forces up prices, and that automation and international free trade cause unemployment.
George Reisman's Capitalism is a book of moral philosophy as well as economics, as for example was Adam Smith's The Wealth of Nations. It is a landmark defense of capitalism--capitalism not only as a prerequisite for the continued material progress of civilization and a rising standard of living for all, but also as the only system that is consistent with human nature and a free society.
From the Back Cover
"Reisman's exposure of modern mercantilist fallacies takes its place alongside
that of Adam Smith."
-JAMES BUCHANAN,
NOBEL LAUREATE IN ECONOMICS, 1988
"Every commentator on current affairs who is not a fully trained economist ought
to read The Government Against the Economy [revised and expanded in Chapters
6-8 of Capitalism] if he wants to talk sense. I know no other place where the crucial
issues are explained as clearly and convincingly .. . "
-F.A. HAYEK,
NOBEL LAUREATE IN ECONOMICS, 1974
"A magnum opus on the nature of capitalism, one that has depth, breadth, foresight
and style. It is a book on economics that stands head and shoulders above all others
as a monumental tribute to the human capacity to engage in productive work and the
moral worth of a system of principles wherein such work is fully appreciated. While
detailed and touching on nearly every possible nuance of the subject, this is a very
readable book which anticipates all the questions and objections educated, thoughtful
people may have about an economic system that has not been given its full and proper
due by anyone before Reisman took up the task. Ludwig von Mises would be gratified
to know how one of his students has carried forth the task he began."
- TIBOR R. MACHAN,
PROFESSOR OF PHILOSOPHY,
AUBURN UNIVERSITY
"Reisman develops powerful and highly original theories of aggregate profit and interest,
savings and capital accumulation, wages, and aggregate economic accounting. At once
an introductory, intermediate, and advanced text, as well as a mine of information on
current political and economic issues, it advances economic theory by several leagues
and paves the way for a genuine twenty-first century liberalism."
-JERRY KIRKPATRICK,
PROFESSOR OF MARKETING,
CALIFORNIA STATE POLYTECHNIC UNIVERSITY
"Reisman has compiled one of the best defenses of the economics and morality of
liberty I've seen written in recent years."
-WALTER E. WILLIAMS,
PROFESSOR OF ECONOMICS,
GEORGE MASON UNIVERSITY
"Reisman's Capitalism is the most rigorous and relentless case for laissez-faire
capitalism written in our time. It is both a brilliant rebuttal of the charges against
the market order and a discerning master plan for the restoration of capitalism.
-HANS SENNHOLZ,
PRESIDENT,
FOUNDATION FOR ECONOMIC EDUCATION
"For two full academic years prior to its publication I had the fortunate opportunity
to use working manuscripts of Capitalism as primary readings for my graduate
business economics classes at Johns Hopkins University. The student response
has been overwhelmingly positive. Capitalism 's value as a treatise that provides
a comprehensive, logically consistent view of the economic world cannot be overstated.
It is brilliantly structured and offers the best integration of important new economic
insights and time-tested truths available anywhere."
-ROBERT D. MILLER,
LECTURER,
JOHNS HOPKINS UNIVERSITY
"An excellent alternative to the standard texts used in most college introductory
economics courses today because it includes a review of the Keynesian arguments
along with a clear and convincing refutation ...Reisman has taken a complex
subject and made it understandable. In my experience, students who have read this
work come away believing that economic principles are important and that
economics actually makes sense."
-GEORGE A. MANGIERO,
ASSOCIATE PROFESSOR OF ECONOMICS,
IONA COLLEGE
"A sweeping and compelling case for the free market, which, as Professor
Reisman shows, is the key to civilization."
-LLWELLYN H. ROCKWELL, JR.,
PRESIDENT,
LUDWIG VON MISES INSTITUTE
About the Author
George Reisman, Ph.D., is Pepperdine University Professor Emeritus of Economics, and the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996; Kindle Edition, 2012), The Government Against the Economy; Warren Buffett, Class Warfare, and the Exploitation Theory; The Benevolent Nature of Capitalism and Other Essays; Labor Unions, Thugs, and Strom Troopers; and, most recently, Piketty's Capital: Wrong Theory/Destructive Program. His website is capitalism.net. His blog is georgereismansblog.blogspot.com. See his Amazon.com author's page and follow him on Twitter @GGReisman.
Dr. Reisman is married to Edith Packer, J.D., Ph.D., a clinical psychologist, with whom he lives in Laguna Hills, California.
He was personally a student of Ludwig von Mises, whose NYU seminar he attended for eight years and under whom he obtained his doctorate in economics in 1963. He is the translator of von Mises's Epistemological Problems of Economics (New York: D. Van Nostrand, 1960). From1957 until her death in 1982, he was an associate of Ayn Rand.
