How Capitalism Saved America

The Untold History of Our Country, From the Pilgrims to the Present

by Thomas DiLorenzo

Hardcover: Crown Forum (August 10, 2004)
ISBN-10: 0761525262
ISBN-13: 978-0761525264
Paperback: 304 pages Three Rivers Press (August 23, 2005)
ISBN-10: 1400083311
ISBN-13: 978-1400083312

"The free market is an institution of social importance because of its capacity to guarantee effective results in the production of goods and services."

"“(T)he free market is the most efficient instrument for utilizing resources and effectively responding to needs.”"

"A truly competitive market is an effective instrument for attaining important objectives of justice." Quotes taken from Paragraph 347 of the Catholic Church's Compendium of the Social Doctrine of the Church

I know some people are wondering why I am starting out this review with quotes from the Official Teachings of the Catholic Church. Simple. This book demonstrates the truth of what the Catholic Church teaches on capitalism & the free market. Over the years you hear that the Catholic Church puts capitalism on the same level as socialism as an economic system. It doesn't. It approves as capitalism as these quotes show. It disapproves of mechantilism which often masquerades itself as capitalism. This book along with Thomas Woods' book The Church and the Market: A Catholic Defense of the Free Economy shows us what capitalism really is & how it is ment to function properly. (I will get to Thomas Woods book at another time.)

I just recently discovered this book. That is why I am just getting arround to reviewing it.

While Tom Woods' book debunks the "social justice" anti-capitalist views within the Catholic Church, this book sets out to debunk the myths that anticapitalists use to justify their attempts to turn America into their socialist nightmare. Another of Tom Woods' books, How the Catholic Church Built Western Civilization shows the origins of capitalism via the Catholic Church. In a sense this book is a sequel that shows how (when allowed to function properly) capitalism has lived up to its promise.

With so many myths about what capitalism is out there he starts out this book in the logical way, by explaining what capitalism really is. He then goes on to show the link between private property & capitalism.

Of course, after explaining what capitalism is, he then looks at anticapitalism. Obviously, that means he looks at socialism & what is wrong with it. But socialism isn't the only form of anticapitalism. There is another that often masquerades itself as capitalism, mercantilism.

After laying the groundwork he then takes us on an economic trip through the history of the USA, the good, the bad & the ugly. He shows that when capitalism is allowed to function properly, it has worked to bring about a better life for us all. But when socialism or mercantilism is in the ascent, then the results are not so pretty.

I won't go into detail about a lot of the things he looks at, why ruin your fun. But, I will look at a couple of things he talks about that I found especially interesting. Before I do, I have to comment on an arguement that I have seen by those who oppose his point of view, that he misrepresents history. In the areas where I am familiar with the historical facts he was very accurate. I feel it safe to assume that he got the rest as accurate.

1 chapter that esp caught my interest was his chapter on "robber barrons". I bet you think he is going to unconditionally defend all those who were labelled as 'robber barons". WRONG!!!! He shows the difference between the real market entrepenuers & the politcial entrepenuers that were the real "robber barons".

As a railroad buff, I knew that in the late 1800s railroads got a bad name. Sadly many of them deserved the bad name. They used government largesse to poorly build their roads while ripping off the public. But, there were the good guys. James J. Hill was 1 of those. He built the Great Northern RR without any government help. & unlike those railroads that got the land & cash, the GN never went bankrupt. Why? Because he knew that he had to provide a product at a reasonable price that would appeal to the consumer. In this case, a high quality railroad that charged reasonable prices & provided excellent service. Meanwhile we have the gang at the Union Pacific (UP) & Central Pacific (CP) who reaped the government largesse. Did they play fairly, or honestly? NO! CP's Leland Stanford used his politcal connections to create a monoply for the CP in California. & let's not forget 1 of the fruits of the UP's cupidity has gone down in history as the Crédit Mobilier scandal.

& while Hill's GN was charging fair rates, the others were ripping off consumers. The result, the government passed laws that punished Hill & forced the GN to charge higher rates. Yup, the villians who were overcharging the consumers were rewarded in the name of consumer protection. I especiall like how DiLorenzo sums up this section of his book. "(A)lthough this designation (robber baron) definitely does not apply to James J. Hill. It does apply to his to his subsidized competitors, who deserve all the condemnation that history has provided them. (Also deserving of condemnation are the politicians who subsidized them, enabling their monopoly and corruption.)" I couldn't agree more.

As I read thrugh the part on John D. Rockefeller & Standard Oil I began to wonder how much cheaper gasoline would be today if they had left him alone.

The other chapter that caught my interest in a special way was his look at the Great Depression. In particular what President Herbert Hoover did & didn't do. If you haven't guessed, the reason is because Hoover was from Iowa. (I'm a proud Iowa Boy, remember!) Hoover has been portrayed as being laissez-faire versus Roosevelt who was interventionalist & ended the depression. WRONG!!!!! on both counts. Hoover was just as interventionalist as Roosevelt, with just as disasterous results. The Smoot-Hawley Tarrif stands out as a prime example of Hoover's misteps. (Even Ben Stein said so in Ferris Bueller's Day Off. He was adlibing as the econ teacher beacuse he was an economist. & he talked about what a disaster it was.)

As for Hoover's false rep, I have to agree with DiLorenzo's opinion. "It is truly stunning and reflects a remarkable feat of propaganda." Although he doesn't say why Hoover got this rap, I have my suspicions. If the truth was out there then the myth of FDR would collapse from its own weight.

& the battles against capitalism continue to today. We have the real "stupid white man", Michael Moore spreading his lies. Ironically, as a socialist he has made a fotune using capitalist methods. he found a product that some people will buy & he has sold it. (As for how he & so many other big government socialists don't practice what they preach, I've already coverd that in another book review.)

The only people who will not like this book will be those who are out to destroy capitalism. For those who buy their message but are sincerely searching for the truth, this book will be uncomfortable & in the end, an eye opener that will make you angry, at the lies you were told in the past.

The new X-Files movie just came out. 1 of the TV series tag-lines was "The truth is out there." Well, the truth about capitalism is out there. & this book contains it. This is 1 of a much needed, but too few, books that have come out in recent years that stands up for the truth about capitalism. Thank God that he wrote it.

This book is a must read for those who want the truth. It is a primer to help anyone who wants to defend capitalism. Given that it is an overview, it doesn't cover everything in detail, it can't. But I hope it will inspire many more books besides those mentioned in his bibliography that will go into details of the various eras.

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Thomas J. DiLorenzo is an American professor of economics at Loyola College in Maryland. He is a senior faculty member of the Ludwig von Mises Institute and an affiliated scholar of the League of the South Institute, the research arm of the League of the South and the Abbeville Institute. He holds a Ph.D. in Economics from Virginia Tech. He has authored or co-authored over 10 other books on subjects such as antitrust, group-interest politics, and interventionism generally including The Real Lincoln.

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Note: As you can guess from the way I started this post out, I am not a "social justice" fan. I am for true social justice as really taught by the Catholic Church & found in the Cathechism & Social Doctrine Compendium. That is why I am a fan of Tom Woods book as well as this book. The socialists inside & outside of the Catholic Church may not want to hear the truth, but they are helping to get the truth out, if you really want to help the poor, help capitalism to work as it should.