A Guide to Capitalism
for Concerned Citizens
by John R. Hendrickson
In a recent
column George Mason University economist Walter E. Williams wrote about
the danger of intervention in an economic crisis such as the Great
“Between 1787 and 1930, our nation suffered both mild and severe
economic downturns. There was no intervention to stimulate the economy,
but the economy always recovered,” wrote Williams.
The policy of noneconomic intervention changed with the onset of the
Great Depression in the 1930s. As Williams wrote:
1930s, there were massive interventions, starting with President Herbert
Hoover and later with President Franklin D. Roosevelt. Their actions
turned what would have been a sharp three-or-four year economic downturn
into a ten year affair. In 1930, when Hoover began to “fix” the economy,
unemployment was 6 percent. FDR did even more to “fix” the economy. As a
result unemployment remained in double digits throughout the decade and
reached 20 percent in 1939. President Roosevelt blamed the high
unemployment on his predecessor.
of government intervention, primarily with President Franklin D.
Roosevelt’s New Deal, resulted in the continuation of the Great
Depression and failure to achieve economic recovery. In addition, the
legacy of New Deal economic intervention continued throughout the
twentieth century and into the twenty-first century. Part of the reason
was the dominance of New Deal-style liberalism until the election of
Ronald Reagan, but also because many Americans supported economic
intervention. Williams argues that:
have been miseducated into thinking that Roosevelt’s New Deal saved our
economy. That miseducation extends to most academics, including
economists, at our universities, who are arrogant enough to believe that
it’s possible for a few people in Washington to have the information and
knowledge necessary to manage the economic lives of 313 million people.
Recession” has seen a continuation of government economic intervention
in both President George W. Bush’s administration and even more so under
President Barack Obama, whose administration is using FDR’s New Deal not
only as an example of economic intervention, but also to launch a new
era of progressive reform. President Obama and the Democrat Congress
have initiated policies ranging from corporate bailouts, massive
economic stimulus spending, and increasing the power of the regulatory
state over the economy. In addition, unless prevented, looming tax
increases will hit the economy in the near future, which will have
severe economic consequences.
to President Obama’s policies concerning the “Great Recession,” the Tea
Party movement rose up to push for a return to not only constitutional,
limited government policies, but also free-market economics. Citizens
who are interested in learning more about economics and capitalism from
a free-market perspective can consult a number of academic resources
ranging from F. A. Hayek and the Austrian school of economics, Milton
Friedman and the Chicago school of economics, or the numerous writings
of the Supply-Side school of economics such as Steve Forbes or Arthur
For a more
introductory lesson in free-market economics and capitalism citizens
should be encouraged to read Leon Weinstein’s Capitalism 101: My Tea
Party Principles. Weinstein, who was born in Russia, wrote
Capitalism 101 as a statement in defense of free-market principles
and with the objective of advancing a civic understanding of capitalism.
Many conservatives, libertarians, and Tea Party members agree with
Weinstein’s argument that the United States is at a fundamental
crossroads. With an escalating national debt of over $15 trillion, the
federal government running yearly trillion dollar deficits, and the
economy still struggling with high unemployment and low economic growth,
a return to free-market principles is needed to avoid a national,
economic collapse. In order to prevent this, not only will free-market
policies need to be initiated, but also the public must be provided with
a renewed understanding of the benefits of capitalism.
that a capitalist economy can’t support a socialist welfare state and
that if we will not change our ways very soon, the American economy and
its political system will collapse,” argued Weinstein.
Weinstein also notes that “during the last years it looked to me that
America was going down the predictable path of wealth re-distribution
and self-destruction,” but he became more hopeful with the emergence of
the Tea Party and the principles they advocate.
of Capitalism 101 is to “present a case-by case study of
volitional science,” and Weinstein notes that his “thoughts and ideas”
for the book were influenced by individuals such as Ayn Rand, Milton
Friedman, F.A. Hayek, and Ludwig von Mises, among others.
Weinstein’s own life experience also adds greatly to his book. Being
born in the Soviet Union (Russia) Weinstein experienced Soviet communism
and its effect upon both the economy and society. “I am very sensitive
to any even small manifestations of socialism and its twin sister —
fascism,” wrote Weinstein.
This is why
Weinstein is trying to fight the good fight of restoring economic
liberty. As he wrote:
This is why
I believe that it is of utmost importance to convince the population of
the United States of America that they have to stop taking their great
lives for granted. If you will not resist with all your might, a
terrible disease called “socialism” will topple America and very
possibly the world as we know it will perish. It will take under its
ruins the ideals of the American Revolution, capitalism, and liberty.
the book Weinstein provides an overview of capitalism and the philosophy
behind capitalism. He covers topics such as human nature, the moral
value of capitalism, profits and competition, among other topics
pertaining to capitalism. In addition the chapters contain various
quizzes that engage the reader to seriously think about capitalism.
These quizzes or exercises will allow the reader to understand the
principles of capitalism. In addition, Weinstein provides some of the
typical responses to economic questions posed by progressives and
is a “statement” of Weinstein’s beliefs of the need to return to
One of the most crucial arguments that he makes is the need to
understand the value of capitalism. As Weinstein wrote:
If we will
not understand and appreciate our values, if we will not pass them along
to the next generation, if we will not teach our children and
grandchildren to cherish those values and defend them, we are
doomed…Capitalism and liberty is the best yet invented way for human
society to coexist…because it is proven to be the best for individuals,
leads to prosperity, and unlike other social structures might (just
might) stop the mutual destruction of humankind.
provides a much needed defense of capitalism and free-market principles
and it is a valuable resource for concerned citizens who want to restore
constitutional principles back to government.
Hendrickson is a Research Analyst at Public Interest Institute.
views expressed herein are those of the author and not necessarily those
of Public Interest Institute or Tax Education Foundation. They are
brought to you in the interest of a better-informed citizenry.
Leon A. Weinstein, Capitalism 101: My Tea Party Principles,
Telemachus Press, 2011, p. i.