HOW CAPITALISM SAVED AMERICA: THE UNTOLD HISTORY OF OUR COUNTRY, FROM THE PILGRIMS TO THE PRESENT
By Thomas J. DiLorenzo
Crown Forum, $25.95, 304 pages
Partly due to presidential campaign heat, anti-capitalism, which is usually masked, seems in vogue in beer joints and more polite circles.
For example, Michael Moore’s movies attacking business are box-office hot. McDonald’s, Safeway and Coca-Cola catch flack for the obesity of many Americans. Now the FDA casts obesity as a “disease” (is it catching?), to the delight of tort lawyers. A plank in the Democratic platform sees the poor underpaid and would hike the minimum wage from $5.15 an hour to $7. (Why not $100 an hour, so everyone can be rich?)
CEOs get hit for “outsourcing jobs” and engaging in “globalization.” How foul. And so on.
Thank heaven then for economist Tom DiLorenzo, author of “The Real Lincoln,” a bestseller among libertarians, in which he bravely challenged many myths surroundingtheGreat Emancipator. Here our author, a modern-day Adam Smith, sets out to correct current misperceptions about capitalism and does so through the telling vehicle of U.S. history. He dedicates his new work to Ludwig von Mises as “the twentieth century’s most dedicated and accomplished champion of free markets, individual liberty, and the free society.”
Well, what about the pilgrims? Investors in the Mayflower expedition blundered. They worried that the pilgrims, far beyond any overseeing, would work their own garden plots rather than company land. So the investors required that all goods produced be “common wealth,” a system of communal land ownership (or to use a dirty word, communism).
The result: shirking, destitution,disaster.Within months of their arrival on Cape Cod, half of the 100 or so pilgrims perished from cold and starvation.
So — per Governor William Bradford writing in his classic “Of Plymouth Plantation” — it was decided “after much debate of things” that the pilgrims “should set corn every man for his own particular [use] … and so assigned to every family a parcel of land for present use … This had very good success, for it made all hands industrious.” Thus was Plymouth saved.
What about the “robber barons”? Do John D. Rockefeller, Cornelius Vanderbilt, Andrew Carnegie and other famed entrepreneurs deserve such a put-down?
Mr. DiLorenzo concedes that some did. Leland Stanford, for example, after serving as governor and U.S. senator from California, used his political ties to get the state to pass laws blocking competition for his Central Pacific railroad. Here Mr. DiLorenzo distinguishes between market entrepreneurs and political entrepreneurs — the latter are those who get compliant government to intervene on their behalf. Such two-way compliance helps explain why the Washington, D.C. area, teeming with special interests, is such a lively economy today.
As for John D. Rockefeller, Mr. DiLorenzo notes that one of the oil tycoon’s sharpest critics was journalist Ida Tarbell, whose brother was treasurer of Pure Oil, a company unable to compete with Rockefeller’s low Standard Oil prices. Standard’s share of the refined petroleum market rose from 4 percent in 1870 to 25 percent in 1874 and to about 85 percent in 1880. Tarbell parlayed her articles from McClure’s magazine in 1902 and 1903 into a powerful book, “The History of the Standard Oil Company,” which our author says is “a classic of antibusiness literature.”
The fact is that Rockefeller’s Standard Oil helped save the whale — and America’s consumers — as it drove down the price of refined oil from 30 cents a gallon in 1869 to 10 cents in 1874 to 8 cents in 1885. Kerosene quickly replaced whale oil as America’s means of lighting lamps while gasoline-powered cars soon replaced the horse as America’s chief means of ground transport.
Similarly, Mr. DiLorenzo straightens out the record on FDR and how his New Deal supposedly “got us out of the Great Depression” and so “saved capitalism” from itself. Mr. DiLorenzo tags this scenario as “the biggest economic myth of the 20th century,” yet almost every U.S. history book perpetuates the story, despite readily accessible data and other evidence to the contrary. The author cites such evidence, likens the New Deal to “economic fascism,” and reasons:
“FDR’s economic policies made the Great Depression much worse; caused it to last much longer than it otherwise would have; and established interventionist procedures that have been a drag on economic prosperity and a threat to liberty to this day.” Amen.
William H. Peterson is an adjunct scholar at the Heritage Foundation and contributing editor to the Foundation for Economic Education’s “The Freeman: Ideas on Liberty.”