Review Questions for Andrew Bernstein’s Capitalism Unbound

This set of review questions is part of the Liberty In the Books program, a monthly discussion group. These questions cover Andrew Bernstein’sCapitalism Unbound.

Reading I: Through Page 60

1. How does Bernstein distinguish today’s American economy from laissez-faire capitalism? (Page x)

2. How did American colonists oppose British economic controls prior to the revolution? (Pages 2-5)

3. In what ways did the U.S. Constitution protect individual rights? (Pages 6-8)

4. In what ways does capitalism protect economic liberty? (Pages 9-10)

5. What is statism, and what are some key historical examples? (Pages 10-14)

6. What is the relationship of “human rights” and “civil rights” to individual rights? (Pages 14-15)

7. What fantasy have enemies of capitalism promoted regarding living conditions before the Industrial Revolution? (Pages 19-20)

8. What were the actual economic conditions of pre-industrial Europe? (Pages 20-22)

9. What were the special problems regarding sanitation and house fires in pre-industrial Europe? (Pages 22-24)

10. What was Thomas Malthus’s theory of population? Under what conditions is he right, and when is he wrong? (Pages 24-26)

11. What is the relationship between intellectual freedom and material prosperity? (Pages 26-28)

12. Who are some of the heroes of the Scottish Enlightenment, and what were their accomplishments? (Pages 29-34)

13. What was the impact of the work of James Watt and Matthew Boulton in the clothing industry? (Pages 34-35)

14. What were the major industrial advances in the fields of metals, agriculture, and transportation during the early industrial era? (Pages 35-37)

15. How do people improve their material conditions, and how did the industrial revolution illustrate this? (Pages 38-41)

16. What is the connection between free minds and free markets? (Pages 41-42)

17. What were the economic impacts of the Northern Securities Company, what was the response by the federal government, and how did this response mark a turning point in American history? (Page 41)

18. What were the advances in communications, construction, technology, and transportation in 19th Century America? (Pages 44-49)

19. What were Andrew Carnegie’s achievements in transportation and steel production? (Pages 49-51)

20. What were John Rockefeller’s achievements in oil production? (Pages 51-52)

21. Were American industrialists “Robber Barons?” Why have they been described as such? (Pages 53-57)

22. Why does Bernstein write, “freedom is fundamentally freedom of the mind?” (Pages 57-59)

23. Why, in Bernstein’s view, has capitalism so often been denounced despite its profound benefits? (Pages 59-60)

Reading II: Pages 63 to 131

1. Why do so many intellectuals denounce capitalism? (Pages 63-66)

2. What is the connection between altruism and collectivism? (Pages 64-68)

3. Why does a welfare-state mixed economy dominate Europe and America? (Pages 68-70)

4. What does selfishness mean? (Pages 71-72)

5. What is a value? What is a sacrifice? (Pages 72-74)

6. How can values be objective? (Pages 74-77)

7. What is the relationship between reason and survival? (Pages 78-80)

8. Why is productiveness a virtue? (Pages 80-82)

9. Why is “cynical exploitativeness” not in one’s rational self-interests? (Pages 82-84)

10. How is rational self-interest necessary for benevolent goodwill? How does self-sacrifice undercut goodwill? (Pages 85-90)

11. How does capitalism protect one’s right to life? (Pages 91-93)

12. What is socialism? (Pages 97-98)

13. How did the West prop up socialist systems in the 20th Century? (Pages 99-100)

14. What were the results of 20th Century socialism? (Pages 98-102)

15. Does socialism allow a rationally planned economy? (Pages 103-106)

16. What is a coercive monopoly, and how do such monopolies violate individual rights? (Pages 107-110)

17. Can unions exist under capitalism? On a free market, what are unions prohibited from doing? (Pages 110-115)

18. What is the relationship between unions and employment? (Pages 110-115)

19. What are the harms of inflation? (Pages 115-116)

20. What caused and prolonged the Great Depression? (Pages 117-123)

21. What caused the modern housing bust? (Pages 123-130)

Review Questions for Amity Shlaes’s The Forgotten Man

Amity Shlaes’s book The Forgotten Man is an excellent book for a reading club. This was the first book we covered in Liberty In the Books (back when my questions weren’t very detailed). We split the reading into four monthly meetings, skipping some of the material. See also my detailedreview of the book.

Shlaes Reading I: Introduction, Chapter 1, Chapter 3

1. Who is the “forgotten man?”

2. Why is Hoover upheld by some as a an alleged champion of “laissez faire?”

3. What are some of the differences between Hoover versus Coolidge and Mellon?

4. What were the major federal policies of 1929, and what were their effects?

Shlaes Reading II: Chapters 4-6

1. What were the general Federal Reserve policies of the early 1930s, and what were their effects?

2. What was the intellectual climate during the Hoover/FDR era?

3. What was tax policy — and unemployment — by the end of Hoover’s term?

4. What were the themes of FDR’s campaign rhetoric?

5. What were the powers and consequences of the NRA and AAA?

6. What were the general trends in FDR’s monetary policy?

7. What was the basic nature of the struggle between Willkie and the TVA?

Shlaes Reading III: Chapters 7-9

[Sorry; no questions available.]

Shlaes Reading IV: Chapters 11, 13, 15, and Afterword

1. In what ways did the Federal government go after businesses and wealthy citizens?

2. What the were labor controls of the later 1930s, and what were their effects?

3. What was FDR’s response to the Supreme Court’s antipathy to some of his programs, and what was the result?

4. How did the fight between the TVA and private utilities play out?

5. What were the major themes of the 1940 election?

6. What is Shlaes’s take on the “recovery” of FDR and the results of his federal spending programs?

McPheters: FBI Agent, Mormon Bishop

Yesterday I dropped by the local Costco and was surprised to run across an author at a book signing. The author was Mike McPheters; the book isAgent Bishop, the account of his life as an FBI agent and Mormon bishop. I asked him if I could come back with my video camera, and he agreed.

In the following video McPheters discusses his past and his book.

[February 21 Update:] Then we discussed several political issues: welfare, the draft, drug policy, and immigration. My goal was to discuss some tough questions with a light touch; I wasn’t trying to provoke debate. I should note, though, that I regard the draft as a violation of individual rights, I oppose the drug war and believe it causes enormous harm, and I favor open immigration (with the caveats that I mention in the interview). I broke up our conversation by topic.

McPheters on Church and Welfare

McPheters on the Draft

McPheters on Drug Policy

McPheters on Immigration

Ralph Carr Shows Politicians Can Stand for Liberty

The following article originally was published December 21 by Grand Junction’s Free Press.

Ralph Carr shows politicians can stand for liberty

by Linn and Ari Armstrong

If you still have last-minute Christmas shopping to do, we have a suggestion. Adam Schrager, the thoughtful 9News reporter, wrote a book called The Principled Politician: Governor Ralph Carr and the Fight Against Japanese American Internment. This delightful account of important Colorado history came out in paperback earlier this month.

Carr served as governor from 1939 to 1943, an era spanning parts of two of the nation’s greatest challenges: the Great Depression and World War II. Carr responded to both these crises by defending liberty and individual rights.

As Carr entered office, Colorado government faced a $1.8 million deficit. Unlike many of today’s politicians, whose answer to deficits is to raise taxes and “fees” or increase government spending, Carr called for fiscal responsibility.

Schrager writes that Carr “announced plans to abolish many of the state bureaus and boards established by the last administration.” He also “proposed shifting the net income tax benefiting schools into the state’s general fund.” During a speech he “told the crowd that anyone who joined the civil service to have an easy job financed by taxpayers… could expect to be fired.”

We wish we could hear Carr’s common-sense wisdom reflected in today’s political debates. (All quotations are from Schrager’s book.) “The way to save money is to stop spending it.” “Spending and lending is unsound and… thrift and the full payment of debts… is simple and common honesty.”

While seconding the nomination of Wendell Willkie, who lost the presidential contest of 1940, Carr said, “If we are ever to save this country, we must first save business. Every one of you is in business — big business and little business, farmers, stockmen, laboring men, industrialists.”

Carr turned down a chance of running with Willkie (a wise move in retrospect) to continue his work in Colorado. Carr said, “What have we done to justify your returning us to office? We have taken the income of the state of Colorado. We have lived within it. We added not a dime of new taxes. We cut the levy for state purposes… and we balanced your blooming budget.”

Carr opposed Roosevelt’s expansive political controls: “The New Deal has usurped the powers of the state [and] undermined personal liberty.”

Carr added, “It is not disloyal to oppose and to question the policy of one who has not yet proved himself omnipotent and to require that he too be limited and circumscribed by those same ideals and standards governing others. We insist that the president recognize and follow the Constitution which created him.”

Carr summarized his basic political philosophy with an eloquence rare in politics: “The individual is supreme and government is established only to protect and foster his rights.” He later added, “Every time the individual submits to a central government for a solution of another problem of business or life, there is a consequent surrender of individuality, of privilege, of right.”

Carr argued that the term “liberal” had been stolen by the left. He said, “The true liberals are those who consistently follow the proposition that liberty means freedom to exercise individual rights unaffected by external restraint or compulsion… The underlying theory of the Constitution is found in the proposition that every man may use the talents which God has given him, may reach any goal toward which he sets his eyes, and may enjoy the fruits of his ambition, his study and his toil, provided only that he does not use his powers to injure his fellows.”

The fate of the nation changed on December 7, 1941, when Japanese bombers attacked the U.S. base at Pearl Harbor. Carr rose to the challenge, setting up “an emergency meeting of the Colorado Council of Defense for the next morning,” Schrager writes.

While most Coloradans responded to the crisis admirably, some turned to paranoia and racist threats. Some called Japanese Americans “vipers” and “yellow rats.” Various politicians and media personalities wanted to put them into concentration camps. The Denver Post wrote, “To hell with the Japs!” Nels Smith, governor of Wyoming, said “there would be Japs hanging from every pine tree” if sent to that state.

Carr rejected racism. He said, “We have among us many of a new generation of Japanese people born in the United States — sincere, earnest, and loyal.” He offered a “hand of friendship” to immigrants. He urged protection of the Bill of Rights and the “security, freedom, and opportunity” it offers.

In a public address, Carr granted the existence of enemy “fifth columnists” and assented to federal relocation policies. Yet he also spoke for “loyal German, Italian, and Japanese citizens who must not suffer for the activities and animosities of others.” He warned against “the danger of inflammatory statements and threats against these unwelcome guests” forcibly sent to Colorado.

Though we may not approve every detail of Carr’s career, he has richly earned his place in history as a man who defended liberty. We thank Schrager for telling his inspiring story.

Review Questions for Epstein’s Essay on Standard Oil

As I recently noted, Liberty In the Books, which I co-moderate, reviewed Alex Epstein’s essay, “Vindicating Capitalism: The Real History of the Standard Oil Company.”

I strongly recommend that free-market activists join a reading group in their area — or start a new one. See my notes for some ideas about how to do that. (Alternately, if you live out in the boondocks, you can follow the Denver group’s lead on your own.)

Following are my review questions that we used to guide our discussion. Remember, the point of review questions is to inspire discussion and keep it basically attached to the assigned reading. There is no need to discuss every question on the list. Page numbers here refer to the printed edition; I also include the section headers. This reading, assigned in advance of our meeting, worked great for a two-hour discussion.

1. Describe the views of John D. Rockefeller expressed by:‎
a) Henry Demarest Lloyd, 1881 (Pages 29-30)
b) Ida Tarbell, 1904 (Page 30)
c) Howard Zinn, 1980 (Page 31)
d) Paul Krugman, 1998 (Page 31)

2. What is the view of free markets expressed by Ron Chernow and John Sherman? (Pages 31-32)

The “Pure and Perfect” Early Refining Market

3. What is the theory of “pure and perfect competition?” (Pages 32-33)

4. What is Epstein’s basic economic critique of the doctrine of “pure and perfect competition?” (Page 33)

5. What were the benefits of kerosene to human life? (Page 33)

6. What caused the dramatic increase in kerosene refineries from 1859 to 1864? What were some of the problems with earlier refineries? (Pages 33-35)

7. What was the trend in refineries from 1865 to 1870? (Page 35)

The Phenomenon

8. What regional advantages contributed to Cleveland’s oil refineries of 1863? (Page 36)

9. What were the characteristics of Rockefeller’s first refinery? (Page 36)

10. What in Rockefeller’s background contributed to his success in business? (Pages 36-37)

11. In what specific ways did Rockefeller improve efficiency, expand markets, and advance technology in his industry? (Pages 37-39)

12. What is “vertical integration,” how did Rockefeller practice it, and what are the benefits? (Page 38)

13. What was the state of Rockefeller’s venture in 1870? (Page 40)

The Virtuous Rebates

14. What was Ida Tarbell’s view of the railroad rebates granted to Rockefeller, and what is Epstein’s criticism of Tarbell? (Page 41)

15. Why did railroads grant Rockefeller rebates? (Pages 41-42)

16. Were Rockefeller’s practices “anticompetitive?” (Pages 42-43)

The Missing Context of Standard’s Rise to Supremacy

17. From 1870 to 1880, what challenges did oil refineries face, what was the growth of Standard Oil, and what was the shift in oil prices? (Pages 43-44)

18. Why doesn’t Epstein believe that cartels can succeed? (Pages 44-45)

19. What was the strategy of the South Improvement Company, and what were the results? (Pages 45-46)

20. What was the Pittsburgh Plan, and what were the results? (Pages 45-46)

From 10 to 90 in Eight Years

21. According to Epstein, what motivated Rockefeller to buy out various competitors? (Pages 46-47)

22. Did Rockefeller’s treatment of some competitors to “a good sweating” constitute “predatory pricing?” (Pages 47-48)

23. What was the state of Standard Oil in 1873 and 1874? (Pages 48-49)

24. What arguments did Rockefeller make to competitors to persuade them to sell their businesses to him? (Pages 47, 49)

25. How did the Pennsylvania Railroad attempt to compete with Standard Oil, and what was the result? (Pages 49-50)

26. How did Standard Oil operate from 1870 to 1880, and what happened to the level of oil production and to kerosene prices? (Pages 50-51)

The 1880s and the Peril of the “Monopolist”

27. Did Standard Oil operate according to standard antitrust theory in the 1880s? (Page 52)

28. What was the “peak oil” theory articulated in the mid 1880s? Was was the problem with this theory? (Sound familiar?) (Page 52)

29. Why did Rockefeller expand oil production in the 1880s, what did he find, how did he cope with “skunk oil,” and what did this do for Standard Oil? (Pages 52-53)

30. What new competitors did Standard Oil face in the 1880s? (Pages 53-54)

31. What was the difference between Standard Oil and government monopolies? (Pages 54-55)

The Standard Oil Trust and the Science of Corporate Productivity

32. What was a trust, and what legal problems did it overcome? (Page 56)

33. What were Standard Oil’s successes as a trust? (Pages 57-58)

34. What were Rockefeller’s skills as a business manager? (Pages 59-60)

35. What changing market conditions did Standard Oil face from 1899 to 1914, and what happened to the company’s output and market share? (Page 60)

36. What were the journalistic and political responses to the successes of Standard Oil? What was the motivation of this reaction? (Pages 61-62)

Rand on Prohibition, Hoover

Yesterday I briefly discussed Rand’s take on Prohibition and FDR. Jeff Britting turned me on to a couple of comments that Rand made about Prohibition and Hoover. Mark Wickens looked up these quotes and sent me the result. Here’s what Rand had to say:

Only one thing is certain: a dictatorship cannot take hold in America today. This country, as yet, cannot be ruled — but it can explode. It can blow up into the helpless rage and blind violence of civil war. It cannot be cowed into submission, passivity, malevolence, resignation. It cannot be “pushed around.” Defiance, not obedience, is the American’s answer to overbearing authority. The nation that ran an underground railroad to help human beings escape from slavery, or began drinking on principle in the face of Prohibition, will not say, “Yes, sir,” to the enforcers of ration coupons or cereal prices. Not yet. (“Don’t Let It Go, Part II,” The Ayn Rand Letter, Vol. 1, No. 5, December 6, 1971, page 21 of the bound volume.)

President Nixon opened the way for [McGovern] (just as another “conservative,” President Hoover, opened the way for the welfare-state policies of President Roosevelt). (“The Dead End,” The Ayn Rand Letter, Vol. 1, No. 20, July 3, 1972, page 85 of the bound volume.)

It has been an interesting hundred years, and I suspect our times will grow more interesting still.

Did Resurrection Myth Precede Jesus?

Sheera Frenkel of The Times (of London) reports a debate of a Dead Sea tablet called Gabriel’s Vision of Revelation. She writes:

Israel Knohl, a biblical studies professor at the Hebrew University of Jerusalem, argued yesterday that line 80 of the text revealed Gabriel telling an historic Jewish rebel named Simon, who was killed by the Romans four years before the birth of Christ: “In three days you shall live, I, Gabriel, command you.”

Professor Knohl contends that the tablet proves that messianic followers possessed the paradigm of their leader rising from the grave before Jesus was born. …

Professor Knohl defended his theory at a conference at the Israel Museum in Jerusalem marking 60 years since the discovery of the Dead Sea Scrolls. He said that New Testament writers could have adapted a widely held messianic story in Judaism to Jesus and his followers.

Others, of course, dispute this interpretation of a damaged text.

I regard it as an intriguing but unproved theory.

But it won’t affect modern Christianity, either way. If it were shown definitively that resurrection stories preceded Jesus, Christians would respond by saying that of course the resurrection was prophesied, and this is not diminished by its application to a false prophet.

It’s not as though this is the only myth suspected to precede Christianity; other resurrection myths are known to precede it. For example, Paul Tobin summarizes:

The myth of Adonis was known to the Greeks as early as the fifth century BCE. The Egyptian myth of Osiris dates back to at least 4,000 BCE and was recorded in detail by the Greek biographer Plutarch (c46-120 CE). The Persian Sun-God Mithras was mentioned in the writings of the Greek historian Herodotus (c480-c245 BCE). The cult of Mithraism reached Rome in the first century BCE.

The way the early church fathers defended against the mystery religions showed that they knew these pagan myths antedated the Christian ones. Justin Martyr (c160-165) claimed that the devil plagiarized Christianity by anticipation with the pagan religions in order to lead people from the true faith. He claimed the myth of the virgin birth of Perseus, an ancient Greek legend that preceded Christianity, was pre-copied by the “deceiving serpent” (Dialogue with Trypho: 70). Similarly he asserted that the cultic rites of Mithraism had a diabolical origin (Apology 1:66). Tertulian (c160-c225) made the same claim: that it was the devil that provided this “mimicry” [notes omitted].

If you believe that there is a God who can raise people from the dead, that you will live forever in Heaven, that you talk to God, etc., then you’ll hardly be troubled by conflicting resurrection stories. This is, after all, about faith. If we restrict the discussion to proof, then all resurrection stories are easily recognized as myths.

Gibbon on Roman Religion

Finally I’m reading Edward Gibbon’s Decline and Fall of the Roman Empire (I know; it’s about time. Gibbon assumes more background knowledge than I have, so thank goodness for Wikipedia). I came across this interested quote from the first part of Chapter II of the first volume:

The policy of the emperors and the senate, as far as it concerned religion, was happily seconded by the reflections of the enlightened, and by the habits of the superstitious, part of their subjects. The various modes of worship, which prevailed in the Roman world, were all considered by the people, as equally true; by the philosophers, as equally false; and by the magistrate, as equally useful. And thus toleration produced not only mutual indulgence, but even religious concord.

While the era had some serious problems, such as slavery, which Gibbon describes elsewhere, and while Christian unity did bring some advantages, on the whole “mutual indulgence” has a lot going for it.

I am not so much concerned that many people do not regard all religions as equally true; what concerns me is that many philosophers fail to see them as equally false, and many political leaders find right-wing Christianity particularly useful.