April 1, 2020 Print

Throughout history, great thinkers have approached the issues of markets and wealth creation through the lenses of their own times. In looking back over centuries of trade, Eamonn Butler’s book An Introduction to Capitalism reminds the reader that allowing people to work, create, and innovate will always be the best way to create a prosperous and liberal future. 

An Introduction to Capitalism, which was published in 2018 by the Institute of Economic Affairs, is a primer that details the best and worst aspects of two competing economic systems that have defined the lives of people all over the world. Butler lays out basic concepts about capital, develops a rationale for free enterprise, and sets out a moral vision that illustrates how lives are transformed when people are able to make choices that incentivize growth and improvement.    

For those who are not clear on the historical antecedents of capitalism, Butler hits the highlights of supply and demand from the Salamanca School in the fifteenth and sixteenth centuries, Adam Smith’s commentary on specialization, Ricardo on comparative advantage, and von Mises and Hayek’s rejection of centralized planning. He tips his hat to 21st century thinkers like Gary Becker and Deirdre McCloskey, noting how both celebrate the entrepreneurial spirit that has always enabled people to thrive.   

Butler is careful to outline problems that arise when regulations, interventions, and cronyism distort market processes, and he is clear that a highly taxed and government-controlled economy is easily corrupted by both politicians, unscrupulous cronies, and businesses boosting their own power. His point that capitalism thrives on diversity, while socialism requires absolute conformity, should remind advocates of the collective that their expectations of a socialist paradise are unrealistic. 

Globalization has lifted billions of people from poverty to prosperity, driven by the engine of capitalism, and Butler’s belief in the benefits of the free movement of goods, services, and people underlies the An Introduction to Capitalism’s main message: that the spread of free enterprise empowers the poor, harnesses the creative genius of each person, and sets us free to build a peaceful and prosperous world. 

An Introduction to Capitalism is available at Amazon.com in hardcover and in PDF format at iea.org.uk.