by Arthur Seldon
In this new condensed version of his masterpiece, Capitalism, Arthur Seldon explains why, despite its apparent imperfections, the market system is infinitely preferable to the alternatives. The market system has, since the eighteenth century, brought enormous gains in living standards, in contradiction to the Marxist theories that predicted capitalism’s collapse.
The institution of property rights has facilitated trade and investment, whilst the price mechanism has enabled people to benefit from dispersed knowledge about individual preferences. Yet politicians, needing to win votes in the short-term, have largely failed to recognize the benefits of a market system with the minimum of government intervention. The development of the welfare state has been disastrous, almost destroying the voluntary provision of health and education, whilst creating institutions that serve producer interests at the expense of consumers. Seldon’s message is clear; if capitalism is to yield its best results the political process must be confined to the minimal duties of the state.
This condensed version of Capitalism includes a foreword by the late Milton Friedman, an introduction by John Blundell and Philip Booth, and commentaries by James Bartholomew and D.R. Myddelton.
About Arthur Sheldon
Summary of Capitalism; A Condense Version
The summary as can be downloaded from the website of the Institute of Economic Affairs:
- "Capitalism is the only economic system that preserves individual freedom while raising living standards.
- The industrial revolution, and the consequent rise in prosperity, would never have taken place under either the medieval guilds or state socialism.
- Inequality is a necessary result of allowing people to advance as individuals in the market. Measures to enforce equality slow down progress and innovation, harming everyone.
- Individual property rights provide incentives for owners to conserve and improve their assets. Collective or ‘public’ ownership leads to neglect and the waste of resources.
- Market prices enable the collection and exploitation of scattered knowledge about people’s preferences. Socialist central planners have no comparable device for obtaining this information.
- Rationing by price has many advantages over political rationing. So-called ‘free’ services, such as the National Health Service, induce waste and mutual impoverishment.
- Capitalism puts man’s long-term interest as consumer above his interest as producer. In contrast, state socialism puts jobs before services and governments tend to favor organized producer interests over consumers.
- For capitalism to yield its best results, the political process must be confined to organizing the minimal duties of the state, such as defense, where the market may not be able to operate. The living standards of the West are still restrained and unnecessarily unequal because the political process has too many beneficiaries.
- The welfare state has largely destroyed the voluntary provision of services, such as education and health, which preceded it. In the absence of the market, quality of service has suffered, producer interests have triumphed and the Victorian culture of ‘self-reliance’ has been undermined.
- A world of capitalist countries is more likely to be peaceful than a world of socialist states. Individuals and private firms, including multinationals, trading in an international market, have a clear vested interest in favor of world peace."
About the Institute of Economic Affairs (IEA)
According to its website, "The IEA is the UK’s original free-market think-tank, founded in 1955. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. Given the current economic challenges facing Britain and the wider global environment, it is more vital than ever that we promote the intellectual case for a free economy, low taxes, freedom in education, health and welfare and lower levels of regulation. The IEA also challenges people to think about the correct role of institutions, property rights and the rule of law in creating a society that fosters innovation, entrepreneurship and the efficient use of environmental resources."