Virtues of Capitalism: v. 1 (Collected Works of Arthur Seldon) [Paperback]

Arthur Seldon is little known in his home country, the United Kingdon or abroad except among classical liberals, libertarians and those who inhabit the strange world of think tanks. Yet this little known figure is one of the intellectual giants of the twentieth century and will one day be acknowledged as such.

Liberty Fund is publishing a seven volume Collected Works of which is the first and which presents two works: Corrigible Capitalism, Incorrigible Socialism and Seldon's magnum opus, Capitalism. The first of the two was originally published by the London based free-market think tank, the Institute of Economic Affairs of which Seldon was the first Editorial Director.

Corrigible Capitalism, Incorrigible Socialism is a reprint of a 1980 paper entitled 'A Credo for private Enterprise' which the author presented to the New Zealand Employer's Federation. This is a vigorous defence of the liberal market order in the face of a continued onslaught by the proponents of the socialist or mixed economy. Whilst Seldon's case is inspired by the Classical liberal case of the 19th Century, this paper can be seen as a further development from the Planning Debate from the 1920s and 30s. Seldon incorporates in his structure the post-war so-called Keynesian developments introduced the various socialist governments under the guise of Conservative or Labour and also takes a broader world perspective. Interestingly, Seldon makes the following comment about China:

"But increasing coercion will be required to suppress the trend to initiative stimulated by knowledge of the West, and it is hardly likely to survive the century. Forty years later in China, where the individualist trading tradition is stronger and markets are a Chinese cultural inheritance, the regime is less self-concious (or guilt-ridden) about the use of 'capitalist' devices, and the return to official recognition of markets is easier. For this reason alone China is likely to emerge economically stronger than Russia in the coming decades"

Yet who could tell in those early days of the Thatcher government who would heed Seldon and the liberals clarion call to the return to markets. While individual politicians may lay claim to the collapse of Communism, none of them have anywhere near the power of individuals to truck, barter and exchange. It is that power which brought about the demise. No more, no less.

In Capitalism Seldon celebrates the economic organisation. Writing from the perspective of one who began life in poverty and enjoyed a modicum of success through his own efforts in the marketplace despite many great adversities Seldon highlights the improvements of mankind which came about not through some central plan or social organisation but through individuals recognising an opportunity to produce goods and services which met a need expressed by the demand in the market. The unintended consequences of human action indeed. Seldon holds that as the textbook understanding of the economy suggests there may be market failure, then correspondingly it should be recognised that there is an equivalence government failure. Whether that failure is inherent such as destroying or altering the price signals which reflect consumer demand or which comes about from the involvement of politicians in the process who corrupt the market for their own ends (the economics of politics or public choice approach) Seldon recognises that there is no perfect system. Using an analytical approach much grounded in the Austrian School of Economics, Seldon sets out a case where private is at least as good as if not mostly better than public. He develops this approach by pointing out the natural tendency of markets to flexibility and therefore creating new structures such as property rights to overcome such failures whils the political processes set in stone many of the rules which become obsolete very quickly. To Seldon's credit it is his credibility which comes about through being no stranger to poverty which gives his case the authority it carries in contrast to the well meaning middle and upper classes who adopt top down approaches to resolving these issues rather than leaving it to the creativity and ingenuity of the people (the market) themselves.

All in all this is an excellent addition to the Liberty Fund library. To top it all off there is an excellent scholarly and succint preface by Colin Robinson who succeeded Seldon as Editorial Director of the IEA and who did sterling work in that regard.

This book is a must read for socialists and liberals (and conservatives) everywhere. There never has been such a heartfelt exposition of the case for Capitalism which has done so much to help so many throughout the world.

Arthur Seldon is little known in his home country, the United Kingdon or abroad except among classical liberals, libertarians and those who inhabit the strange world of think tanks. Yet this little known figure is one of the intellectual giants of the twentieth century and will one day be acknowledged as such.

Liberty Fund is publishing a seven volume Collected Works of which is the first and which presents two works: Corrigible Capitalism, Incorrigible Socialism and Seldon's magnum opus, Capitalism. The first of the two was originally published by the London based free-market think tank, the Institute of Economic Affairs of which Seldon was the first Editorial Director.

Corrigible Capitalism, Incorrigible Socialism is a reprint of a 1980 paper entitled 'A Credo for private Enterprise' which the author presented to the New Zealand Employer's Federation. This is a vigorous defence of the liberal market order in the face of a continued onslaught by the proponents of the socialist or mixed economy. Whilst Seldon's case is inspired by the Classical liberal case of the 19th Century, this paper can be seen as a further development from the Planning Debate from the 1920s and 30s. Seldon incorporates in his structure the post-war so-called Keynesian developments introduced the various socialist governments under the guise of Conservative or Labour and also takes a broader world perspective. Interestingly, Seldon makes the following comment about China:

"But increasing coercion will be required to suppress the trend to initiative stimulated by knowledge of the West, and it is hardly likely to survive the century. Forty years later in China, where the individualist trading tradition is stronger and markets are a Chinese cultural inheritance, the regime is less self-concious (or guilt-ridden) about the use of 'capitalist' devices, and the return to official recognition of markets is easier. For this reason alone China is likely to emerge economically stronger than Russia in the coming decades"

Yet who could tell in those early days of the Thatcher government who would heed Seldon and the liberals clarion call to the return to markets. While individual politicians may lay claim to the collapse of Communism, none of them have anywhere near the power of individuals to truck, barter and exchange. It is that power which brought about the demise. No more, no less.

In Capitalism Seldon celebrates the economic organisation. Writing from the perspective of one who began life in poverty and enjoyed a modicum of success through his own efforts in the marketplace despite many great adversities Seldon highlights the improvements of mankind which came about not through some central plan or social organisation but through individuals recognising an opportunity to produce goods and services which met a need expressed by the demand in the market. The unintended consequences of human action indeed. Seldon holds that as the textbook understanding of the economy suggests there may be market failure, then correspondingly it should be recognised that there is an equivalence government failure. Whether that failure is inherent such as destroying or altering the price signals which reflect consumer demand or which comes about from the involvement of politicians in the process who corrupt the market for their own ends (the economics of politics or public choice approach) Seldon recognises that there is no perfect system. Using an analytical approach much grounded in the Austrian School of Economics, Seldon sets out a case where private is at least as good as if not mostly better than public. He develops this approach by pointing out the natural tendency of markets to flexibility and therefore creating new structures such as property rights to overcome such failures whils the political processes set in stone many of the rules which become obsolete very quickly. To Seldon's credit it is his credibility which comes about through being no stranger to poverty which gives his case the authority it carries in contrast to the well meaning middle and upper classes who adopt top down approaches to resolving these issues rather than leaving it to the creativity and ingenuity of the people (the market) themselves.

All in all this is an excellent addition to the Liberty Fund library. To top it all off there is an excellent scholarly and succint preface by Colin Robinson who succeeded Seldon as Editorial Director of the IEA and who did sterling work in that regard.

This book is a must read for socialists and liberals (and conservatives) everywhere. There never has been such a heartfelt exposition of the case for Capitalism which has done so much to help so many throughout the world.

Have you have ever wondered:

- Why do we in the West have living standards that far exceed those found anywhere else on earth?
- Why is it that a Harry Potter novel can be published and shipped overnight to almost anywhere on the globe where people can afford to read the story of the boy wizard?
- What has caused the most momentous increase in living standards in nominally Socialist China in the space of a decade?

Could the answers to the above be central planning? An efficient state bureaucracy perhaps? The resounding answer, as Arthur Seldon demonstrates in this seminal work, is the free market. By harnessing the power of individual self-interest, free markets have delivered economic growth, unparalleled prosperity.

Arthur Seldon defenestrates some popular socialist myth such as these:

- Before the NHS there was no health insurance;
- Before state-controlled education, schools in England were rubbish
- Government bureaucrats know better than poor parents in determining what form of social security and health insurance to obtain

Instead, the book argues that free markets can and do deliver better health insurance and choice in school selection. To demonstrate this point, he uses the examples of school vouchers in the US, where governments use a free market solution to give choice to poor parents. He contrasts the success of free market solutions to the state of the government-run NHS. Obviously, markets cannot solve all the problems that nations state face such as defense and policing.

But how did capitalism get such a bad name? How is it that at a time when former Communist countries, like Poland and China, are embracing free markets capitalism is in a funk in rich France and Germany. Indeed, commercialism (and the profit motive) are often derided in The Netherlands (where I live). Seldon argues that this is the case (especially in Europe) because of an education system that emphasises egalitarian values such as equality to the detriment of free markets.

Seldon makes a very important point that inequality is not necessarily a bad thing; inequality is a necessary condition for and by-product of free markets since markets reward those who take risks. If equality were forcibly imposed such as in the former USSR, then there would be no incentive for entrepreneurs to take risks. This would, in turn, retard the development of the society. Why is it that the most innovative, wealth-generating companies such as Google emerged in the United States and not, say, the former Soviet Union.

Free markets are not perfect. Ever so often, a deep recession (or even a depression) can weaken faith in capitalism. However, ever since the Great Depression, the free market - and the capitalist system based thereon - has shown a remarkable capacity to re-invent itself. According to Seldon, socialist thinkers like Marx, mistake capitalism's periodic crisis for its death knell. How wrong they have turned out to be.

At a time when it is almost rude to speak well of free markets (at least among well-educated Westerners) it is very refreshing that Arthur Seldon has penned a wonderful book that reminds one that even though free markets are imperfect, the economic system based thereon is the best we've got; the free market has delivered growth and preserved individual freedom. Read this book for some perspective; it deserves my 4 stars.