The full case for capitalism is spread out among thousands of works of history, economics, and philosophy. Here are 10 books that will give you the basics (and, indeed, much more). I don’t necessarily stand by every word in every one of them, but if you take the time to read them all, I do guarantee you’ll learn an incredible amount about free markets.
- Atlas Shrugged—Ayn Rand. Atlas is not primarily a novel about politics. Its theme, as Rand explains, is “the role of the mind in man’s existence–and politics, necessarily, is one of the theme’s consequences.” Nevertheless, there is no better place to find out what capitalism is all about. It shows in concrete detail the true nature of self-interest, wealth production, the profit motive, economic freedom–and the disastrous consequences of interfering with those things.
- Capitalism: The Unknown Ideal—Ayn Rand. This is a collection of non-fiction essays by Rand and others on various aspects of capitalism. Although it touches on a number of issues pertaining to the history and economics of capitalism (e.g., the Great Depression, monopolies, labor unions, child labor, and so on), the focus is on the morality of capitalism: what is capitalism, why is it a moral system, and why has it been regarded as fundamentally immoral? Its lead essay, “What Is Capitalism?”is available online.
- Economics in One Lesson —Henry Hazlitt. First published in 1946, this continues to be the best introduction to free market economics in existence. Hazlitt covers a range of issues with startling clarity–from rent control to minimum wage to the function of profits to the causes and effects of inflation. In every case, Hazlitt explains, many people reach wrong conclusions because they do not consistently practice the art of economics, which “consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” You can read the entire book for free.
- Basic Economics—Thomas Sowell. Like Hazlitt, Sowell covers a wide array of topics and does so with a level of accessibility that is rare for economists. But Sowell’s book is also filled with an endless number of real life examples illustrating his points–examples that clarify and entertain, as well as educate. Unfortunately, Sowell is not a consistent defender of capitalism, and his work is filled with references to “society’s resources” and other such collectivist notions. But so long as you approach him critically, you can learn a lot about the free market.
- Capitalism and the Historians—F.A. Hayek (ed.). One of the things that’s most lacking is a well-researched, well-written, objective introduction to the history of capitalism. Today, you have to cobble together the facts from a bunch of different works—this collection is a good place to start. The authors address some of the most common distortions about the early days of capitalism, particularly the notion that capitalism impoverished workers. Perhaps more important, they show how to think clearly about historic criticisms of capitalism. Regrettably, the writing is a bit dry, but the volume is admirably brief so you should still find it a quick and pleasant read.
- The Birth of Plenty—William J. Bernstein. How did capitalism end mankind’s history of poverty and make the West rich? Bernstein does a good job identifying some of the important elements: private property rights, reason and science, capital, and industrial energy. There are other books on this fascinating (and controversial) topic, but most are dry, academic, and unfocused. Bernstein’s is none of those things.
- Interventionism—Ludwig von Mises. Mises is one of the most important (and underrated) economists in history, and his work is indispensable for understanding the economics of free markets.However, much of his work is very technical and written for economic specialists. Interventionism, on the other hand, is written for a popular audience and is a good introduction to Mises’s ideas. One word of warning: although Mises’s economics are stellar, much of his political philosophy is problematic.
- The Clash of Economic Ideas—Lawrence H. White. White is a brilliant economist, and this book does a masterful job of integrating the history of economic thought with economic history: he introduces you to the ideas of many of the great economists, and then shows you how those ideas played out in actual practice. The book will not be released until March, but the individual chapters have been published as working papers.
- The Myth of the Robber Barons—Burton Folsom. One reason people don’t support free markets is because they don’t know what business involves and so they cannot appreciate why it’s so urgent that businessmen be left free. Another reason they don’t support free markets is because they’ve been taught that capitalism unleashed destructive Robber Barons during the 19th century. This slim volume goes along way toward remedying both those problems.
- How an Economy Grows and Why It Crashes—Peter D. Schiff and Andrew J. Schiff. One of the most helpful ways to learn economic principles is to boil them down to simple stories and examples. This endlessly entertaining book does just that, and in the process clarifies such difficult concepts as the nature of trade, savings, credit, interest, and government and consumer debt.
So what do you think? Are there any books you would add to the list? Any that you think I shouldn’t have included?