The Power of Capitalism
A Journey Through Recent History Across Five Continents
LID Publishing, £19.99
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Disillusion with capitalism has never been greater. Even American politicians are talking about increasing tax rates to 70% (see page 42). German academic Rainer Zitelmann thinks critics of capitalism overlook the extent to which free markets have generated prosperity. His book looks at multiple case studies to make his point about the superiority of markets.
Some cases involve direct comparisons between various neighbouring countries with different economic systems (West Germany and East Germany, North and South Korea). Others examine the effects of economic reforms, such as those in China since 1978 and in Britain and America in the 1980s.
He also looks at why development aid in Africa has been such a failure and whether the financial crisis was the fault of too little or too much regulation. The book then concludes with a look at why intellectuals tend to dislike capitalism and a call for greater economic liberalisation.
The book is well written and gives a good, concise summary of the case for freer markets. However, even the examples Zitelmann cites suggest there is a difference between direct state intervention in industry, which is generally negative, and the state provision of welfare and public services, which, up to a point, doesn’t seem to reduce growth that much.