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  • Author: Richard M. Salsman
  • Publication Date: 12-2011
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: New York: W. W. Norton Company, 2011. 382 pp. $28.95 (hardcover). Reviewed by Richard M. Salsman The financial-economic crash of 2008–9, dubbed the “Great Recession” by pundits who have insisted its severity was second only to that of the Great Depression (1930s), has been blamed on “greed,” tax-rate cuts (2003), the GOP, and looser regulations in the prior decade—that is, to what passes today for full, laissez-faire capitalism (the same culprit fingered in the 1930s). The crash has also renewed interest in Keynesian economics, which holds that free markets are prone to failures, breakdowns, and recessions due to excessive production (supply) and can be cured of slumps only by state intervention to boost demand and dictate investment. And the crash has led to the worldwide adoption of two pet policies of John Maynard Keynes (1883–1946): massive deficit spending and inflation to “stimulate” stagnant economies. In fact, economies continue to languish not in spite of Keynesian policies but because of them. One key factor precipitating the recent revival of Keynes was the awarding of a Nobel prize to Keynesian Paul Krugman in fall 2008, during the worst weeks of the crisis, when the $700 billion bank bailout (TARP) was debated and enacted. A half dozen new books since 2008 also have helped revive Keynesian notions; one is subtitled “return of the master,” another eagerly reports that the crash has “restored Keynes, the capitalist revolutionary, to prominence.” As in the 1930s, when Keynes first exerted strong influence on policy, he is depicted today as capitalism's savior, favoring a mixed economy to quell popular angst of recessions and prevent more authoritarian alternatives (fascism, communism). Like most intellectuals today, British journalist Nicholas Wapshott (formerly senior editor at the London Times and New York Sun) falsely attributes the recent financial crisis to overly free markets; he also admires Keynes, his demand-side theories, and his interventionist policies. Yet unlike typical hagiography on Keynes, Wapshott adopts an ideas-oriented approach to Keynes's revival in his book, Keynes Hayek: The Clash That Defined Modern Economics. Like most interpreters, Wapshott believes that Keynesianism somehow “saves” capitalism from itself and from ultimate political tyranny, although he does not deny (or bother to hide) the many cases where Keynes expresses an unvarnished hatred for individualism and free markets. He acknowledges (and welcomes) the return of Keynesian policies, but he worries they may have been hastily implemented and thus ineffectual, given that multi-trillion-dollar stimulus schemes in the three years since 2008 have not boosted growth or jobs. Wapshott rightly recounts how Keynesianism was discredited during the 1970s “stagflation” (which it could not explain) and successfully challenged by “efficient market” theorists and classically oriented supply-siders (“Reaganomics”). But he exaggerates the reach of pro-capitalist ideas and policies in recent decades, and pins blame for the recent crash on what is still free about markets, not on the state interventions that necessarily render otherwise efficient markets dysfunctional and destructive. Yet Wapshott's main goal in Keynes Hayek is to have us understand Keynes's recent revival in the context of a long-running battle or “clash” between the ideas and policies of Keynes and those of Austrian economist Friedrich Hayek (1899–1992), who is portrayed as the champion of free markets and skeptic toward state intervention. Wapshott mostly succeeds in achieving his goal, but in the end he draws the wrong conclusion—namely, that the Keynesian revival is warranted—because he believes, not merely with Keynes, but, we see, also with Hayek, that markets fail when left free. In fact, free markets do not fail, but widespread belief that they do has helped revive Keynes. . . .
  • Topic: Economics
  • Author: Ari Armstrong
  • Publication Date: 12-2011
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: New Brunswick: Transaction Publishers, 2012. 180 pp. $34.95 (hardcover). Reviewed by Ari Armstrong How often does an author defend the right of citizens to own guns and the right of homosexuals to marry—in the same book chapter? In his new book Capitalist Solutions, Andrew Bernstein applies the principle of individual rights not only to “social” issues such as gun rights and gay marriage but also to economic matters such as health care and education and to the threat of Islamic totalitarianism. Bernstein augments his philosophical discussions with a wide range of facts from history, economics, and science. The release of Capitalist Solutions could not have been timed more perfectly: It coincides with the rise of the “Occupy Wall Street” movement that focuses on “corporate greed” and the alleged evils of income inequality. Whereas many “Occupiers” call for more government involvement in various areas of the economy—including welfare support and subsidies for mortgages and student loans—Bernstein argues forcefully that government interference in the market caused today's economic problems and that capitalism is the solution. The introductory essay reviews Ayn Rand's basic philosophical theories, with an emphasis on her ethics of egoism and her politics of individual rights. Bernstein harkens back to this philosophical foundation throughout his book, applying it to the issues of the day. . . .
  • Topic: Economics, Education, Health
  • Political Geography: America
  • Author: Craig Biddle
  • Publication Date: 12-2011
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Merry Christmas, readers! And welcome to the Winter 2011 issue of The Objective Standard. I'd like to begin by congratulating Antonio Puglielli, the winner of the second annual TOS essay contest. Mr. Puglielli's entry, “'Dog Benefits Dog': The Harmony of Rational Men's Interests,” won him $2,000 and publication of his essay in TOS (see p. 67). Second place went to Caleb Nelson (winning $700) and third place to Deborah B. Sloan (winning $300). Congratulations to Mr. Nelson and Ms. Sloan, as well! As Mitt Romney and Newt Gingrich vie for the GOP presidential nomination, and as Republicans marshal efforts to secure as many Senate seats as possible, advocates of liberty need to keep an eye on the one principle that unifies our political goals and grounds them in moral fact. In “The American Right, the Purpose of Government, and the Future of Liberty,” I identify that principle and discuss its application to issues of the day, including “entitlement” spending, corporate bailouts, and the Islamist threat. If you wonder which side of the abortion debate has the facts straight—or why the issue should matter to anyone other than pregnant women—you will find answers in “The Assault on Abortion Rights Undermines All Our Liberties,” by Diana Hsieh and Ari Armstrong. And if you already know the answers, I think you'll agree that this is the article to circulate on this matter. You may think that Steve Jobs was an impatient man, and you may know of evidence to support that idea, but in Daniel Wahl's “The Patience of Jobs,” you'll discover that Jobs, once again, breaks the mold. He was not patient, yet he was. How can that be? (Hint: The answer has nothing to do with Buddhism.) Get ready to fall in love with Linda Mann's still lifes and her manner of discussing them. Why do they grab your attention? Why do they hold it? Why are they so fascinating and rich and beautiful? I press Ms. Mann for answers, and she delivers. The interview is accompanied by color images of the paintings discussed. What's so great about the National Gallery of Art in Washington, D.C.? Sanctum sanctorum—it's the holy of holies—says Lee Sandstead, and he has facts and photos to prove it. Chris Wolski reviews the movie The Help, directed by Tate Taylor. And the books reviewed in this issue are: Steve Jobs, by Walter Isaacson (reviewed by Daniel Wahl); This is Herman Cain! My Journey to the White House, by Herman Cain (reviewed by Gideon Reich); American Individualism—How a New Generation of Conservatives Can Save the Republican Party, by Margaret Hoover (reviewed by Michael A. LaFerrara); Disabling America: The Unintended Consequences of the Government's Protection of the Handicapped, by Greg Perry (reviewed by Joshua Lipana); The Right to Earn a Living: Economic Freedom and the Law, by Timothy Sandefur (reviewed by Loribeth Kowalski); Keynes Hayek: The Clash That Defined Modern Economics, by Nicholas Wapshott (reviewed by Richard M. Salsman); Capitalist Solutions: A Philosophy of American Moral Dilemmas, by Andrew Bernstein (reviewed by Ari Armstrong); Toyota Under Fire: Lessons for Turning Crisis into Opportunity, by Jeffrey K. Liker and Timothy N. Ogden (reviewed by Daniel Wahl); Dare to Stand Alone: The Story of Charles Bradlaugh, Atheist and Republican, by Bryan Niblett (reviewed by Roderick Fitts). This issue of TOS completes our sixth year of moving minds with the ideas on which a culture of reason and freedom depend. Our seventh year will be, as every year is, bigger and better than the last, and we thank you for your continued business and support. We couldn't do what we do without you. Have a joyful Christmas, a happy New Year, and a prosperous 2012. —Craig Biddle
  • Topic: Economics, Government
  • Political Geography: New York, America, Washington
  • Author: Ari Armstrong
  • Publication Date: 04-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: With Congress debating far-reaching bills to expand federal control of health care, politicians and pundits blaming the economic downturn on allegedly free markets, President Obama fulfilling his promise to "spread the wealth around," and dozens of czars overseeing wide swaths of American life, it seems that capitalism is in retreat. A rousing defense of capitalism, therefore, could not have come at a better time, and that is what Andrew Bernstein provides in his new book, Capitalism Unbound. Bernstein ably defends the achievements of the Industrial Revolution, presents the moral foundation for capitalism, skewers socialism, and indicates in some respects how several disasters-including the recent housing bust-were caused by government meddling in the economy. Capitalism Unbound is an updated and highly condensed version of Bernstein's 2005 book, The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire. With the new book, Bernstein promises "the essential points-presented in a simple, easy to read format" (p. ix). He begins his sixteen-page Prologue, "The Primordial Struggle for Individual Liberty," by mentioning that capitalism rests on the "moral code . . . of an individual's inalienable right to his own life" (p. 1). After recounting the American Revolution as a key example of the furthering of individual rights, Bernstein applies the principle of rights to issues such as contracts, property, and employment. He then defines some key terms, including capitalism ("the system of individual rights, including property rights, in which all property is privately owned"), freedom (protection "against the initiation of force by either private citizens or the government"), and statism ("the subordination of the individual to the state [and] the repudiation of inalienable individual rights") (pp. 10-11). The prologue concludes with a discussion of some of history's most horrifying instances of statism, including tribal dictatorships, Soviet communism, National Socialism, and Islamic theocracy. The rest of the book is divided into three parts, about the historical, moral, and economic superiority of capitalism, respectively. In Part One, "The Historic Superiority of Capitalism," Bernstein first summarizes the impoverished conditions of preindustrial Europe. He then explains how, inspired by Enlightenment thinkers, innovators of 18th-century England and 19th-century America achieved profound advances in technology and economic production, created goods and services that radically improved the living conditions of the common person, and often amassed fortunes in the process. These productive giants include steam engineer James Watt, steel titan Andrew Carnegie, and oil pioneer John D. Rockefeller, who by the height of his dominance had driven oil prices from fifty-eight cents to eight cents per gallon (p. 52). Bernstein reviews many of the economic advances of the Industrial Revolution, such as the enormous expansion of cotton cloth-spun English cotton increased twenty-four-fold between 1765 and 1784 alone-enabling "hundreds of millions of people worldwide . . . to dress . . . comfortably, cleanly, and hygienically" (pp. 34-35, emphasis removed). . . .
  • Topic: Economics
  • Political Geography: America, Europe
  • Author: Daniel Wahl
  • Publication Date: 09-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Very few economists predicted an economic catastrophe in 2007. Even following the crash, many continued to claim that our present economic course was fine. As for today? “Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order [to] prosper” (pp. xi–xii). The source of such seeming obliviousness, according to Peter and Andrew Schiff, is the early-20th-century economist John Maynard Keynes. According to the Schiffs, Keynes taught that governments could smooth market volatility, increase employment, boost growth, and raise living standards simply by going into more debt and printing more money. Although they grant that Keynes was smart, the Schiffs say he developed some very stupid economic ideas—ideas that are false, dangerous, and causing the collapse of America's economy. The Schiffs set out to counter these harmful ideas in How an Economy Grows and Why It Crashes. The book is an extended allegory of U.S. economic history, with supplementary discussions and illustrations. It begins with three men living on a tropical island, each subsisting on one fish per day, which he catches with his bare hands. One of the men, Able, devises a better way to catch fish: a net. Thus equipped, he hopes to catch more fish, and faster, leaving himself spare time to make new clothes. . . .
  • Topic: Economics, Government
  • Political Geography: United States
  • Author: Craig Biddle
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Welcome to the Fall 2010 issue of TOS—and a special welcome to our new Canadian readers who, with this issue, are discovering the Standard via newsstands in Canada's largest bookstore chain, Chapters/Indigo. We are excited to add our northern neighbors to the list of countries we infiltrate with principled discussion of the moral and philosophical foundations of freedom.
  • Topic: Economics, Islam
  • Political Geography: America, Canada
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: I recently spoke with Professor John Allison about his efforts and successes in creating pro-capitalist programs in American universities. Professor Allison was the CEO of BB for twenty years, during which time the company's assets grew from $4.5 billion to $152 billion. He now teaches at Wake Forest University. —Craig Biddle Craig Biddle: Hello, John, and thank you for joining me. John Allison: It is a pleasure to be with you. Photo courtesy Wake Forest University CB: Let me begin with a couple of questions about your work at Wake Forest. I understand that you joined the faculty in March 2009 as a Distinguished Professor of Practice—a fitting title given your decades of applying philosophy to business. What has your work at the university entailed so far? And how have your ideas been received? JA: I've primarily been involved in teaching leadership both to students and to some of the administrators in the university. I taught a course on leadership last fall, and I've been participating in various courses taught by other professors on finance, mergers and acquisitions, and organizational development. But my focus is on leadership. My ideas have been well received. The students take great interest in talking to someone who has been in the real world and been successful in business. I think they appreciate that perspective. CB: Through the BB Charitable Foundation, you've established programs for the study of capitalism at a number of American universities. How many of these programs are there now? What unifies them? And what generally do they entail? JA: BB has sponsored sixty-five programs to date, and they're all focused on the moral foundations of capitalism. While many people recognize that capitalism produces a higher standard of living, most people also believe that capitalism is either amoral or immoral. Our academic question is: How can an immoral system produce a better outcome? We believe that capitalism is moral and that this is why it is so successful. We think it is critically important that we not only win the battle over economic efficiency, but that we engage in and win the debate over ethics as well.
  • Topic: Economics
  • Political Geography: America
  • Author: Daniel Wahl
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Very few economists predicted an economic catastrophe in 2007. Even following the crash, many continued to claim that our present economic course was fine. As for today? “Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order [to] prosper” (pp. xi–xii). The source of such seeming obliviousness, according to Peter and Andrew Schiff, is the early-20th-century economist John Maynard Keynes. According to the Schiffs, Keynes taught that governments could smooth market volatility, increase employment, boost growth, and raise living standards simply by going into more debt and printing more money. Although they grant that Keynes was smart, the Schiffs say he developed some very stupid economic ideas—ideas that are false, dangerous, and causing the collapse of America's economy. The Schiffs set out to counter these harmful ideas in How an Economy Grows and Why It Crashes. The book is an extended allegory of U.S. economic history, with supplementary discussions and illustrations. It begins with three men living on a tropical island, each subsisting on one fish per day, which he catches with his bare hands. One of the men, Able, devises a better way to catch fish: a net. Thus equipped, he hopes to catch more fish, and faster, leaving himself spare time to make new clothes.
  • Topic: Economics
  • Political Geography: United States
  • Author: Chak Kakani
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Over the past few years, the Indian government spent $8.5 billion to host the Commonwealth Games (CWG), a multisport event akin to the Olympics, which were held in New Delhi from October 3 through 14, 2010.1 The official purpose of the CWG was to generate “national prestige” for India.2 But the Games did no such thing. In fact, the CWG were a national disgrace. The games showcased a contradiction embraced by Indians that threatens to destroy the economic and political progress they have achieved over the past two decades.
  • Topic: Economics
  • Political Geography: India, New Delhi
  • Author: Andrew Schiff
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: The author and investor discusses his book, the state of economy, the cause of America's financial problems, and investment possibilities under the circumstances
  • Topic: Security, Economics
  • Political Geography: United States