Authors Forum: Our Benefactor, Capitalism

0:00Well, my book is published by a division of Random House called Crown Forum and it's the same publisher of Ann Coulter's books. And they do great artwork. They did have a picture of the Mayflower here, I guess, coming on into a harbor. And I asked them to put a picture of Ann Coulter in that rubber dress of hers so I would sell more, but they didn't think that would be appropriate as far as that goes. But I probably would have sold three or four times more had I done that. But the genesis of this book was I didn't have any trouble getting it published because my publisher came to me and it was at the time of the Enron scandal and all that and they were convinced that there would be a new round of bashing of capitalism and since they liked my writing they asked me to write a book that was sort of a popular defense of capitalism that draws on mostly historical episodes of American capitalism. So that's what it was. I proposed the title Real Capitalism since I wrote The Real Capitalism.

0:59Lincoln, I thought Real Capitalism would be a follow-up, but they chose this title, How Capitalism Saved America, which I don't like that much, but they are the marketing pros. And so it's aimed at a general audience, kind of like Tom Woods' book, I picked a number of historical episodes, it's not a comprehensive economic history of America or anything of that sort, but one of the things that motivated me to put the first chapter together is that It seems to me that most Americans, apart from academics, who hear the word capitalism, really think of mercantilism, or sort of neo-mercantilism. They think of all the deals that they read about in the paper, these cozy relationships between the defense contractor and the government or some Enron and the government.

1:45That's capitalism. But it's corporatism or mercantilism. It's something else. And so I thought I'd just lay out in as plain English as possible for me what capitalism is in the first chapter and relying heavily on the work of von Mises and Hayek and Friedman and others, all the heroes, most of the people in this room, intellectual heroes. And then I wrote a chapter on anti-capitalism to talk about some of the reasons for anti-capitalism. Hayek has wrote a famous essay on this, The Socialism and the Intellectuals, I think the name of it was, and then of course von Mises wrote the anti-capitalist mentality, and I quote those extensively, and just talk about mercantilists or neo-mercantilists as opponents of capitalism also, the whole business class. American business people are capitalism's worst enemies for the most part, and most people don't seem to understand that and so I thought it'd be useful to lay this all out for a general audience and it's been adopted in a couple of universities, San Diego State I just found out has adopted it and Karen DeCoster tells me Walsh College might be using it in a few other places and so what the bulk of the book is I try to make it clearly written but drawn on a lot of research that's been done by my

3:13by myself and other people and documented and footnoted of case studies. I start with the pilgrims and the real fascinating story of how the American pilgrims almost starved to death because they practiced essentially collectivized agriculture. Once they introduced some kind of property rights, that seems to have saved the day. I thought that would be a good starting point since property rights are the keystone of capitalism. And then I wrote about the capitalist aspects of the American Revolution, about how it was essentially, partly anyway, an attempt by the King of England to impose British mercantilism on the colonies, to sort of suck them dry through various taxes. That was not the whole reason, but that was part of it, and I think that's underappreciated by most Americans.

4:00And I have a whole chapter on how the capitalism enriched the working class. That's probably the most controversial among some of the critics that I've run across because it doesn't say that prosperity has been caused exclusively by labor unions and government. And so I criticize that view, and that is the mainstream view of most Americans that if it weren't for government regulation and labor unions would all still be out there picking cotton 16 hours a day or something worse than that. The robber barons, I have a chapter on the robber barons and I can hardly improve on Bert Folsom's work and Tom addresses this too in his book. I think he has a nice division between the real capitalists who made their money by providing great goods and services at low prices versus what he calls political entrepreneurs like Leyland Stanford for example who used his political connections as governor of California and the U.S. Senator to have a law passed making it pretty much illegal to compete with

5:05him in the railroad business in California and even I could make money if competition was illegal in business. And so like Folsom does, I wrote this chapter trying to distinguish between the real crooks, the real robber barons like Leland Stanford and more of the free market entrepreneurs like James J. Hill who built the Great Northern Railroad. I've written a lot on antitrust over the years. I have a chapter called the Antitrust Myth. I first started writing about this in the early 80s in academic journals, and I'm more convinced than ever that antitrust always was from the very beginning a protectionist racket and a fig leaf for protectionism, tariffs, fig leaf for tariffs. For example, three months Three months after the Sherman Act was passed, Sherman Ant Trust Act was passed, Senator John Sherman himself was the Senate sponsor of the McKinley Tariff Bill, which at the time I think was the biggest tariff increase in history at the time, if not the biggest, one of the biggest, and so it wasn't at odd that what the man people call the sort of the godfather of free enterprise, three months after his Sherman Act passed,

6:24which was named after him, he wasn't necessarily the main sponsor, but was named after him, championed protectionism, some of the most extreme protectionism in the history of America at that point. So I think it was all a fig leaf. I also expand on Murray Rothbard's work on Herbert Hoover and what an interventionist he is, I tried to expand on it anyway, and most Americans are totally unaware of that. The average person out there believes this sort of high school civics lesson that Herbert Hoover was an advocate of laissez-faire capitalism, that's what caused the Great Depression, FDR came to the rescue with massive interventionism. Naturally, exactly the opposite is true, I think. If you look at what Hoover did, he made some great speeches.

7:10The people in this room would probably think were great speeches after he was president. You read some of his later years, he sounded great, kind of like Ronald Reagan, his speeches sounded great, but when he was in office, he wasn't so great, he was quite the big interventionist. And of course I draw on the work of Bob Higgs and Galloway and Vedder and others who have written about the Great Depression, and to try to, in plain English, write about what the FDR's policies of the Great Depression years did and the conclusion is they essentially made the Great Depression longer and more severe than it would otherwise have been in addition to massively politicizing the economy. And so I cover a lot of what I think is important ground, the energy crisis of the 70s and I end up with a chapter on current attacks on capitalism and I do a couple of brief reviews of books by Roger, not Roger Moore, the fat guy, Michael Moore. Roger Moore is James Bond, not James Bond, I'm a big James Bond fan, by Roger Moore, but Michael Moore and Eric Schlosser and some of the more people who consider themselves sort of the heirs to the muck-raking, anti-capitalist journalists of the early 20th century that they call themselves.

8:33and he brought himself to Upton Sinclair, the propagandist for socialism in the book The Jungle, way back when, and it even says so in the back of Schlosser's book, Fast Food Nation, that he's sort of like the 21st century version of Upton Sinclair, or some others, and so I sort of take that on, which is pretty easy because, especially with Moore, the things he writes He's very popular, he's a New York Times bestseller all the time, every book he writes, and he says such things as, on unions, he looks at labor unions who negotiated with employers for temporary pay cuts to save their members' jobs, literally save their members' jobs, the company did not go under, the economic crisis ended, the jobs were back there and the pay goes up, those are sellouts to him, he calls them dumb, the name of the book is Stupid White Men, Those are the stupid white men, the ones who save the jobs if they own their union members.

9:37The smart white men are the ones who maintain their belligerence and did not negotiate or renegotiate their contracts with their companies and everyone gets laid off. Everyone lost their job. Those are the smart guys. But these are the kind of books that are being written and also in colleges and universities these are being used as, in most universities, all freshmen are given one or two books to to Read during freshman orientation. And books like this are the kind of books that they're reading. And so I was looking at mine as sort of an antidote to that. It won't be used much as a replacement for these books because faculty committees are usually overwhelmingly run by leftists. But one of the things I found with my Lincoln book and one of the things Tom is finding out is guess what?

10:25Students can read books without their professors telling them which books to read. And so a lot of students from all over the place are giving their professors a hard time with this stuff because they have ammunition, they read books like this and they have ammunition now, so we're sort of in the ammunition manufacturing business in writing these books here. And maybe I'll stop there, it's all the time I have for now, let's get a brief overview.