Book Review: Capitalism by Arthur Seldon
JUNE 01, 1991 by CARL HELSTROM
Basil Blackwell, 3 Cambridge Center, Cambridge, MA 02142 • 1990 • 419 pages • $29.95 cloth
This book outlines the great ideological struggle between individualism and collectivism. Written with originality and vigor, it presents the latest arguments for capitalism and against socialism. The author, a leading libertarian thinker, clearly demonstrates capitalism’s superiority over socialism, not only in theory, but in prac tice as well.
Seldon’s education, his experience in private industry, and his pioneering work with the Institute of Economic Affairs (IEA) in Great Britain lend special forcefulness to his exposition. Born in 1916, a year before the Russian Revolution, Seldon grew up around London where the teachings of Fabian socialism inculcated British society.
His secondary school history instructor, an old-style liberal, first emphasized the benefits of capitalism to the young Seldon, whose personal belief in socialism began to wane even as socialistic ideas continued their ascendancy in Great Britain. He entered the London School of Economics in 1934, with a budding interest in classical liberalism and capitalism.
Seldon’s growing suspicions about socialism were confirmed during World War II. “The interlude of war,” he writes, “provided a practical lesson in socialism as it would be in real life.” The wartime command system was continued after the war by socialists enamored with its accomplishments. As Seldon explains, “The intellectuals taught it; the public was led to think it was desk-able; therefore the politicians acquiesced in it for electoral expediency even more than from philosophic conviction; and the bureaucracy reveled in its extended powers.”
After World War II, Seldon became an economic adviser to British retail and brewing companies. in 1956, he became acquainted with the newly formed IEA, founded by agricultural entrepreneur Antony Fisher. Moved by Friedrich Hayek’s Road to Serfdom, Fisher started the IEA to promote classical liberal ideas. He hired Arthur Seldon and Ralph Harris to run it, beginning an “intriguing partnership of complementing contrasts . . . [that] led for over 30 years to the most rewarding work that could have been wished for a life’s career.”
The history of the IEA is an important and interesting story in itself. A small and isolated voice at first, the IEA utilized a broad-based, educational approach, and eventually flourished to Harris’s knack for public relations and research and publishing leadership. It has been instrumental in rekindling academic and popular interest in the freedom philosophy and market economics.
“Over the century,” writes Seldon, “socialist thinking has prevailed over liberal teaching on the consequences, in all human behaviour, of state coercion, concentration of power, monopoly and producer myopia,” mainly bemuse people could see the imperfections of capitalism in the world around them. The socialists promised a perfect world, free from selfishness, struggle, and want, through centrally directed programs.
Socialists, however, built their case on the theory that the breakdown of capitalism and the success of socialism are inevitable. Over time every socialist experiment failed, proving that socialism as a system is not only illogical, but also impractical. According to Seldon, “. . . the vision of socialism not only remains a vision after a century or more of proselytizing; it is never likely to become reality until it resolves the unending circular reasoning in which it is entrapped: that human nature will not become selfless until scarcity is replaced by superabundance, but superabundance will not replace scarcity until human nature becomes selfless . . . .”
The crucial question has become: Which system, based on real historical evidence, can make the best guarantees for the most people? Seldon’s answer, of course, is capitalism. He presents a clear, revitalized vision of capitalism by synthesizing new ideas, especially the innovations of Friedrich Hayek and the public choice theorists in the United States, with older classical liberal principles. He also systematically analyzes socialism, emphasizing particularly the empirical and historical proof that socialism has failed.
Despite his predilection for the capitalist system, Seldon tests capitalism as rigorously as socialism. Both systems claim to solve the same inherent human problems—ignorance, scarcity, unfairness, and want. So capitalism must prove itself with more than economic arguments. He finds the modern theory of capitalism to be imperfect, but concludes that capitalism is better than socialism because it offers relatively more to the world—more goods and services, more freedom, more security, and more opportunity.
Seldon’s arguments are comprehensive and significant. He lays the groundwork for further intellectual advancement, and inspires classical liberals to continue the fight for a truly free society.
Mr. Helstrom is Director of Development at the Atlas Economic Research Foundation in Fairfax, Virginia.