Why Capitalism?

The financial crisis caused many genuinely to reconsider the desirability and feasibility of capitalism. In Why Capitalism?, renowned economist Allan Meltzer addresses what he feels are key issues that critics of capitalism routinely fail to adequately recognize . These include the power of incentives and capitalism's adaptability to varying morals, ideals, and cultures. Meltzer argues that while capitalism is not perfect, it is the best option for providing growth and personal freedom. Citing Kant, he stresses that most of the faults and flaws on which critics dwell are human faults and are not systemically inherent to capitalism. Other topics he addresses include the regulated welfare state and how it invites corruption, arbitrary decisions, and circumvention; and irresponsible deficit spending and the unsustainable, unfunded promises by politicians eager to please. Why Capitalism? is a short, powerful book that will raise the level of the current debate among politicians, scholars in the political sciences, and general readers interested in the political issues brought to light by the recent financial crisis, written by one of the strongest voices the public dialogue on the fundamental economic ideas on which the United States economy is based.
"A concise alternative to current economic policies for those who look with suspicion at the writings of economists and financial specialists...A lively, politically challenging contribution to a developing discussion on how to change international monetary arrangements." --Kirkus Reviews

"Allan Meltzer's Why Capitalism is a thoughtful, historically-based analysis of the roles of government and free markets in a democratic society. Meltzer has thought deeply about the workings of both and has a good sense of which functions each best can be trusted to serve. His analysis of financial regulation in general and of the Dodd-Frank bill in particular is the best I have seen." --Robert Lucas, University of Chicago, 1995 Nobel laureate in Economics

"If you want a realpolitik view of the world, Meltzer's your guy. You know right away that you are in for quite a ride when, in the introduction, he acknowledges the range of his influences, from Immanuel Kant (for example, human nature as 'crooked timber') to Karl Popper to Friedrich Hayek, and to Milton Friedman, among others. He takes you back in time and sketches from a broad perspective the old battle of capitalism versus communism and socialism, and extols the genius of the freedom of capitalism. For those interested in recounting the perils of government regulation and failed attempts at income distribution, it's a treasure, especially in the last chapter. There, the author describes the role of the Federal Reserve, particularly in moderating inflation, Meltzer's specialty."--Journal of Environmental Investing

PREFACE ; CHAPTER 1: WHY CAPITALISM? ; CHAPTER 2: REGULATION AND THE WELFARE STATE ; CHAPTER 3: WHY BIG DEFICITS NOW? ; CHAPTER 4: SOURCES OF POSTWAR PROGRESS ; CHAPTER 5: FOREIGN AID ; CHAPTER 6: WHY INFLATION WILL RETURN ; INDEX