The Failure of Laissez Faire Capitalism

Dr. Roberts is perhaps the best qualified person in America to write this essay on the failures of our current economic system. Earning his PhD in Economics from the University of Virginia, he was Assistant Secretary of the Treasury in the Reagan Administration, a Senior Fellow at the Hoover Institute (Stanford) and associate editor to the Wall Street Journal.As a life long Republican and Conservative, he is also uniquely positioned to credibly deconstruct the economic sacred cows that underpin the domestic policies of the last four administrations.Dr. Roberts is more than an economist - he is a philosopher, a journalist, a keen student of history, and a man passionately concerned about American and its future.The first third of this book describes the shortcomings of classic economic theory in rigorous detail, but without drowning us in technical jargon. Included are an introduction to the history of economics and how we got to where we are today and the major players of interest to us as modern Americans. He neatly takes apart the arguments and assumptions of the current crop of yes-men and true believers that dominate the field today. The writing is concise and understandable to the average college educated American. The subject may seem dry and uninteresting but pay attention class - THIS STUFF IS IMPORTANT!! These dry as dust theories affect almost every aspect of our lives and command the fate of nations! Consider the Russian Revolution of 1917 and the rise of modern communism and all the pain and suffering that it caused around the world - all that flowed from an economic theory. When the economic theories behind government actions and policies are wrong, those government policies can be hugely destructive - and they are in fact wrecking the United States!The second part of the book; titled "The New Dispossession" shows us the damage these flawed policies have already caused in lost jobs and lost homes and a blighted futures. But then Dr. Roberts goes beyond economic theory to examine other destructive trends of less obvious origins.Americans have to be wondering what's going on? Have our leaders suddenly forgotten the difference between good and evil? It's almost as if the government has declared war against their own citizens. The middle class is being destroyed; the government is allowing the looting of the entire nation to benefit a tiny minority of the super rich. The word Banksters describes parts of this upside down Robin Hood activities. The government is become the shameless lackey of giant corporations and the super rich - there is hardly a pretense of its role to protect the citizens. The Robber Barons have returned. Additionally the poisonous doctrine of security at any price has allowed the shredding of our Constitution and eroded vitally important civil liberties. A consolidated and co opted press says nothing - in fact acts as lap dog and attack dog for the powers that be.Dr. Roberts shows us over and over that the establishment has been deceiving us for years; about almost everything - outsourcing of jobs is good for America; we don't need those restrictive laws - we're the good guys. Some Banks are too big to fail and their big executives are too important to indict and go on trial for stealing us blind. Trust us, we'll protect you (especially if you have a 7 figure income -or better).The People can not be aroused to action unless they know what is really going on. Do they want their children to live in a Third World Nation? Do they want a much lower standard of living for 95 % of Americans while the rich get ever richer?One of the many facts quoted "during the previous ten years, the US lost 54,621 factories and manufacturing employment fell by 5 million" This destruction of American's vital manufacturing core has been caused by outsourcing. Now here comes the next step; Insourcing - the use of H1b visas to replace American professional workers with lower paid foreign workers.What will that leave as jobs for our children's children - bartenders, cooks, waitresses, and maybe health aides for the elderly?Dr. Roberts lays it all out for us in all its evil glory in the second part of the book.The third part deals with the debt crisis in Europe and explains the historical and political implications of this mess. "The new president of the European Central Bank is Mario Draghi - the former Vice Chairman and Managing Director of Goldman Sachs International" . What a coincidence !Finally there is a nice appendix with lots of interesting graphs from John Williams at shadowstats.com (where people go when they want the truth in statistics).Our people deserve better but they must demand it. The lust for power and greed knows no bonds - only an awakened electorate can take back this country from the corrupt officials and crooks that are now running things. Buy several copies of this book and give them to your friends and family members.

I am giving this book one star because there doesn't seem to be a lower rating available. I bought this book (to my regret) because the title suggested it was of a subject that concerns me. I soon learned that Craig is mad about everything, and most people--at least those who don't agree with him. Early on I noted that he was given to quite sweeping assertions for which I would have liked some support. But I soldiered on because most of what he was saying seemed right to me, and he has, after all, a noted economist..Then he moved to a quite good discussion of how "external costs," including such factors as environmental degradation, don't 't get adequately reflected by the a capitalist cost and price structure. A fair point, although he might have mentioned that the ecological damage in Russia and Eastern Europe was far worse than anything in the U.S. or West Europe. But then he launched into an attack on genetically modified foods, arguing that the health threats such foods present aren't being accurately taken into account. This is a topic about which I have read a bit, and knew that, at the very least, his contentions were arguable,if not flat wrong; and Doctor Huber, whom he seems to regard as the ultimate authority, is at best controversial. Suddenly the ex cathedra tone if the book rang hollow. Surely there are generally accepted examples of external costs that would have been far better to discuss. Craig's dragging this into this book makes it clear that he wants to use whatever expertise he may have as an economist, to support arguments about matters as to which he has no credentials.But rather than just throwing the book aside I skimmed through to see if there was some better material later on. Some pages on I ran across a long discussion of why Russians will be better able than Americans to survive the deluge he predicts is coming. Among the benefits of being a Russian is that these lucky people live (or would that be exist?) in government apartments which are pretty awful, but as a renter you don't have to worry about your place getting foreclosed out from under you. He doesn't mention that you can get thrown in jail for annoying VladimirNot reassuring, but I continued on, until I came across a mention of the attack on the Twin Towers on 9/11. which features a lengthy footnote coyly noting that "more than one-third of the US population is perplexed that a handful of stateless terrorists could outwit" all the intelligence agencies,." and generally infers, very broadly, that it was all pat of plot by the US government to take over. That's when I gave up, figuring I had better things to do than read a book that can offer arguments like this.One can only wonder why a man with a subject of great interest, in a field of his acknowledged expertise, would jeopardize his credibility, and his reader's time, by offering wildly controversial observations like these. Their only effect is to cast doubt on everything he says.

I recommend this book to anyone who wants to understand how we as a society got to where we are now, both economically and politically. This a well documented exposition of how we went from being a democracy to a kleptocracy in the few short decades since Nixon closed the "gold window" in 1971. The wealth is now systematically transferred from the 99.9% to the .1%. Political structures have been implemented to undermine the constitution so the banksters will be able to defend themselves with police and military might should the people get fed up with the ongoing theft. He spends a lot of time documenting how globalization has intentionally off-shored a large portion of manufacturing and other high tech jobs and work visa programs have been implemented so that foreign workers can come in and under cut American workers to improve the profits for corporations. The only segments of the work force that are largely immune are waiters, bartenders, retail clerks, and some health care providers. The informed reader will already be aware of most of these trends, but Roberts provides detail to fill in the blanks on how it has been accomplished so seamlessly, with nary a whimper from the public. They continue to tell us the economy and the jobs picture is improving. What they don't tell us is that the middle class is being gutted and the income disparities continue to widen with each passing year. I think all Americans should read this book as a civic duty.

In these hard-hitting comments, Paul Craig Roberts is searching for the truth on the economic, social and political front in his home country, thereby contesting the vision of other economists on such fundamental notions as growth, market capitalism or free trade.EconomicsAs the author states, the notion of economic growth should include its ecological and social costs (depletion of natural capital and pollution), which are perhaps larger than the value of production increases.Market capitalism means profit maximization and globalism, the latter being a shield for the pursuit of absolute advantage, which is the antithesis of free trade.Markets are not self-regulating. They created ‘too big to fail’ financial institutions, which provoked an implosion of the whole system.Social issuesA ‘free market’ system is in no way socially efficient: in the latest financial disaster, up to 16 trillion US $ were needed to bail out US and foreign banks (their shareholders), while nothing was done to aid the millions of US families who were foreclosed out of their home.Profits are not a measure of welfare. To the contrary, they are creating unemployment by joboffshoring and a decline of the living standard of nearly the whole population. The US unemployment rate is actually between one-fifth and one-fourth of the work force, not the officially published rate.Political and financial issuesThe US population lost its representative government and its civil liberties. Its government is only accountable to the mega rich.The US budget deficit can easily be resolved by ending (illegal) wars, by closing military bases overseas and by cutting the defense budget. But, this means that the US must give up its goal of world hegemony.For the dollar, the author asks: how long can the US retain the reserve currency role, when its economy doesn’t make things to export, when its work force is employed only in domestic services and when its foreign creditors own its assets?Internationally, P. C. Roberts suggests that Germany with its industry, technology and financial rectitude should leave the EU and enter a partnership with Russia (energy and raw materials).Some remarksFor the social issues, some of the author’s comments are correct for one country in particular, but not strictly exact on a world level: job arbitrage (offshoring) is positive for the country which gets the jobs (locally and by emigration).P. C. Roberts exposes Keynesianism as a monetary policy: an expansion of the money supply by the government. But, this is not the end of the story. A government has to use the money, either through its own channels (its bureaucracy) or through private subcontractors.This outspoken book is a must read for all those who want to understand the world we live in.

This important book criticising the laissez faire capitalism of the last couple of decades is written by an assistant secretary of the Treasury under President Reagan and is one of the architects of Reaganomics.I think that's important because its criticism of capitalism is coming from the political right and not from someone with long-standing views.Another reviewer is correct. There is a long introduction by someone else for the German version served up to us on amazon.co.uk. My advice is to skip it and start with the book written by the author because you won't have any trouble understanding the stories based on America.The book is a little repetitive and in need of an effective edit anyway but ignoring the introduction will help get to the core of the matter.What we've seen is the creation of global corporations that are effectively outside the scope of political influence because there is no global government to stand up to them. In fact it's worse than that, these corporations have the means to twist policies in their favour.Our economic models, taught at universities and practised by central banks and governments, don't properly incorporate the effects of these changes. This leads to a misleading narrative about what is good and bad in the media.By pursuing strategies to move production and services offshore to low cost countries, these corporations have managed to enhance their profits by dumping enormous costs on society. The USA (and the UK and parts of Europe) has been hollowed out with middle income jobs transferred overseas. Unemployment increases and the traditional economic levers no longer work because the capacity for the jobs no longer exists. Increasing aggregate demand using traditional Keynesian policies pushes a share of the added value abroad so the benefits leak from the economy while the debts build up.Jobs that are created in our newly modelled economies are often part time, lowly paid and support what the author calls non-tradeable services. Government employees, shop assistants, hairdressers, care workers can't help the economy export and earn the money needed to pay for the imports.This is important. The tradition support for free trade in classical economics comes from David Ricardo, an early 19th century economist who developed the theory of comparative advantage. He argued that because Britain was better at producing textiles than wine and because Portugal was better at producing wine that textiles, both economies would gain by specialising in what they did best and trading.The logic was impeccable in a simple two product, two country example. It falls apart as things get much more complicated. It's entirely broken when you look at offshoring of processes. That's no longer trade but labour arbitrage.This book helped to bring together a lot of uneasy thoughts I've had over the last 15 years or so. I'd accepted the idea that free trade was good and that whilst we lost jobs, we benefited from buying consumer products at prices that could never be achieved with UK production so that meant our incomes bought more.What I hadn't thought about was the remorseless process that is occurring as more higher paid jobs are offshored. The political talk about specialising in complex engineering and technology is nonsense when you think about it properly and look at education standards. Chinese and Indian software developers are still a fraction of the cost of those who live in the developed countries.I recommend this book to help you understand the problems. It does get a little paranoid in places as it rages against a political executive that is remorselessly gaining powers and spying on the general public but these things are happening. It may be naive to believe that it will be used for general public good rather than just the good of the elite.The book doesn't point to solutions. Should globalisation be stopped and could anyone stop it anyway? Do we want a world government to stand up to global corporations and stop them avoiding taxes? is protectionism a valid solution anyway.The answers need another book and may have to be written by another author. At least the book helps you to focus on the big underlying problems.About my book reviews - I aim to be a tough reviewer because the main cost of a book is not the money to buy it but the time needed to read it and absorb the key messages. 4 stars means this is a good to very good book.

Really excellent and must read book. Economics can be argued so many ways that it's a gift to the ruling class who can always find court economists to bestow academic credibility on any devious scheme the former invent for their own purposes.The entire current conventional Western package of economic policies is a giant lie pretending to be there to benefit the people when it's really there to create a wealth transfer to the rich. Immigration and free trade are simply cheap labour rackets which have nothing to do with improving economic efficiency is what PCR is saying. The EU is a power grab by the unelected.One wonders how long before the penny drops with all those workers whose living standards have stagnated or declined while they are told how lucky they are. Graduates doing unskilled work while a tale about 'skills-shortages' is endlessly repeated, vast numbers of adults living with their parents who once would have bought a home, former factory workers fallen into poorly paid work if they can get any, and the whole contraption propped up with debt.If you wish for a graphic illustration as to how the people are lied to, then the book is worth it just for the charts at the end showing how little the US economy had recovered several years after the crash when the manipulated official statistics issued are adjusted to reflect reality.

Paul's thesis is that currently applied economic theory does not fit todays world. Offshoring jobs in the name of "Globalism" is crippling the US economy. To boost executive pay, low and middle class jobs are being relentlessly sent to India, China etc. The US economy is in it's death spiral now, they cannot afford to pay the interest on the debt and print a trillion a year to stay afloat. Paul and other right minded economists have tried to turn the "ship" around before, but are defeated by the economic mindset that supports the one percent taking all the money. Average income is down 10% over the last ten years in contrast to the ballooning wealth of the rich. Check PCR's interview with Corbett Report May 2013.

This a great summary of the current malaise in world economics and an insightful commentary on the base motivations and flawed systemic thinking that governs the current world systems. For those new to the subject and not into conspiracy thinking it will be an "eye opener".Although a great treatment of the "as is" I feel that the book lacks a little of the depth of comment needed on the change that is required to remedy the current system. In particular whether or not the Fractional Reserve Banking system should now be rethought by evolutionary morphing into a new system based on new principles. Many others have written on this but foundational change needs to be set out by these authors and communicated to the "layman" so that in today's political climate the masses continue to have their say on informed change.