Review – Wealth and Poverty – 8/10
December 27, 2008
Wealth and Poverty (Ics Series in Self-Governance)
by George Gilder
I think if you are ever going discuss around the water cooler that you believe in “Supply Side” economics then you owe it to yourselves to read this book as it is the definitive book on this subject.
One of the major misconceptions of this view is that people believe that those who hold to this view are greedy and uncompassionate to the poor. However, the lynch pin of this book is charity. Gilder asserts that capitalism works because people give without any expectation of a return:
CAPITALISM begins with giving. Not from greed, avarice, or even self-love can one expect the rewards of commerce, but from a spirit closely akin to altruism, a regard for the needs of others, a benevolent, outgoing, and courageous temper of mind…Not taking and consuming, but giving, risking, and creating are the characteristic roles of the capitalist, the key producer of the wealth of nations, from the least developed to the most advanced (Chapter 3).
Also, Guilder explains that market forces help prevent greed because even the greedy must find away to service the needs of those they wish to do business with, and as long as the greedy cannot force or deceive the people they are servicing they buyers cannot be harmed.
Also, Guilder discusses the problem of the welfare state destroying marriage, which to some extent has since been corrected within the past decade. Guilder explains that welfare, rather than helping people get out of a dyer situation they find themselves in, it encourages them to be slothful and unproductive making them even more reliant on the government.
One of the fascinating, self prophesying discussions in this book is its discussion on bailing out the auto industry. He mentions (more than twenty years ago now)that this is a bad thing as did not work with companies like Renault which was subsidized by France and he gives some other examples. Gilder explains what ends up happening is that it only ends up strengthening the labor unions which is the very source of the high costs on a car to begin with.
Now that the US automakers have been bailed out, we can wait and see if he was right or not.
Although the book is a little dated now, it is still a good read, and very informative for those who want an understanding of how the market economy works.
