How Capitalism Saved America: The Untold History of Our Country, from the Pilgrims to the Present
Thomas J. DiLorenzo. Crown Forum. 2004.
What is the source of America's prosperity and technological achievement? Thomas DiLorenzo, professor of economics at Loyola College and author of The Unknown Lincoln, documents how, though often maligned today, it is our economic system that is responsible for the standard of livng that we currently enjoy.
Throughout our history, capitalism has not had an easy road. From the start, the earliest settlements in Virginia failed because their leaders established shared ownership of land. Rather than doing the amount of work required of them, colonists were tempted to "free ride" on the labor of everyone else. This led to famine and disease, in spite of fertile soil and abundant wild game and seafood. When Plymouth Colony started following the same path Jamestown had taken, William Bradford made a radical decision. He assigned each family its own parcel of land to plant and manage. With the institution of private property, the Pilgrims became more industrious and their colony thrived. Likewise, with similar property rights and only minor taxation, the colonies that came after them in America also flourished.
The author illustrates how the American Revolution was largely a capitalist revolution. British mercantilist policies resulted in the Molasses Act of 1733, placing high tariffs on molasses imported from the French West Indies, and the Navigation Acts, which prohibited trading with any ship built outside the British empire. Numerous goods were mandated to be sent to England first before being allowed to be shipped to the colonies. All of this, including the Stamp Act and the Sugar Act, were enforced by "swarms" of bureaucrats, much to the annoyance of the colonists. The Revolution was to a large extent an effort to escape economic exploitation by the British.
With the writing of the Constitution and the establishment of the United States, a deliberate effort was made to avoid the British mercantilist model, and to limit the role of the federal government in the nation's economy. The rest of the book shows how this system has fared throughout our subsequent history.
As capitalism grew in America, and as workers' productivity increased, their wages increased as well. Between 1860 and 1890 real wages increased by 50 percent. In addition, the average work-week became shorter. Not only did capitalism improve the quality of life for the working class through higher wages, but also through the development of better and cheaper goods as businesses competed to anticipate and meet consumer demand.
In spite of capitalism's success, as the twentieth century arrived it met with critics and "muckrakers" who clamored for more and more government intervention in the economy. DiLorenzo describes how this resulted in antitrust laws, the Great Depression, the energy crisis, and our present state of affairs. He also critiques present-day anticapitalists Eric Schlosser, Barbara Ehrenreich and Michael Moore.
Thomas DiLorenzo's book is full of insights and revelations, including fascinating chapters on "robber barons" James J. Hill and John D. Rockefeller, which show that our actual history is often contrary to popular wisdom. I recommend it highly.
