Twenty-first century capitalism Book

A collection of lectures by Professor Heilbroner, he speaks on the topics of the economy, market system, capitalism, and the future of such subjects. His conception of the economy is strange. He views the field of economics as simply a technical study of how to effectively distribute and use scarce resources. In a certain sense, this is true. But economics includes the relationship and interaction between each individual and its resources, as well as the study of how to satisfy current and future desires--which may be unknown and must be discovered; concisely, it is a study of human action. If economics is, as Heilbroner believes, calculation, then there would be no need for innovation nor the entrepreneur. A smart enough man can simply calculate the input vs output and guarantee profit. But the entrepreneur must make discoveries which are not yet known, and therefore not yet calculable. The role of the entrepreneur is, thus, missing from Heilbroner's conception of economics.

Heilbroner does link together similar thoughts between Smith and Marx, but both were indeed wrong about the effects of the market in inequality, ignorance of the masses, and the tendency towards monopoly in the system. Inequality of income is simply one measure of human wellbeing. Access to technology, food, education, and many others are also useful. In that sense, the common man is more equal to the wealthy than ever before. The market is not to blame for the ignorance of the masses. If the common man wishes to watch sports, listen to music, or waste away his day, it is his choice to do so. The market merely supplies and satisfies his utmost wishes. The tendency towards monopoly is a fallacious idea. There are alternative uses and alternative supply for every good and service. A company with increasing market shares simply means it is doing a better job at satisfying the consumers.

On the topic of advertising, Heilbroner sees no difference between market advertising and government propaganda. But there is a world between them. Some companies do indeed propagate false advertising of their products. However, consumers quickly wise up, spread the news, and boycott current and future products. The main function of advertising, though, is to spread information about a new product. If, for example, a company creates an environmentally-friendly engine, advertisements are used to make consumers aware of such a product. Government propaganda, on the other hand, is false information promoted for nefarious reasons. First, government steals and uses public money to send these messages and second, then lies to its own citizenry: commonly to support wars, to promote race hatred, amongst other dirty deeds.

Finally, Heilbroner's understanding of capitalism seems shallow at best. Viewing capitalism mechanistically, he fails to understand capitalism is simply individuals owning property and buying and selling to each other. Trade is mutually beneficial, otherwise no trade would occur. Yet Heilbroner seems terrified of the supposed instability of such a system. He is unaware of the natural internal feedback system which continues price and production stability. As a result, he is overly optimistic about the role and efficacy of government at regulating, taxing, licensing, redistributing, and overall controlling the economic sphere. For further information, research public choice theorists such as James Buchanan and Elinor Ostrom.

If any reader wishes to continue learning economics and improve their understanding of the world, read other books by Ludwig von Mises, Friedrich von Hayek, Milton Friedman, or Henry Hazlitt.