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A World of Wealth
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A World of Wealth

How Capitalism Turns Profits into Progress

Thomas G. Donlan
FT Press, 2008
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Editorial Rating

8

Qualities

  • Innovative
  • Well Structured
  • For Beginners

Recommendation

Journalist Thomas G. Donlan is one of the U.S.’s strongest advocates of capitalism. The editorial page editor of Barron’s, he is a convinced, and often convincing, champion of free trade, free markets, deregulation and investment. These ideas went into something of an eclipse in the U.S. following the disastrous events in the real estate and asset-backed securities markets. However, getAbstract finds that Donlan’s book presents a spirited explanation of why these events were essential to putting the world back on course for economic growth and rising global prosperity. His style is concise, clear, pointed and frequently witty. True believers in the church of capitalism will value his defense of their doctrine; skeptics will likely respect his well-argued points, though they may conclude that he can be as much an apologist for capitalism as a proponent of it.

Summary

The Basics of Capitalism

Markets work. Freedom is the reason why. Free market capitalism holds the best solutions for issues such as poverty, environmental ruin, immigration, energy costs, the health care crisis and whatever else politicians have addressed lately with ill-advised regulation and control.

These problems are rooted in economics. Poverty is an economic issue concerning the distribution of wealth. Capitalism creates wealth, so it can solve the problem of poverty. Environmental degradation is an economic problem that involves property rights – people protect what they own, but pollute and destroy what they do not own. Capitalism can encourage conservation by harnessing the power of property rights.

Economics is not about what people should do, but about what they actually do. Economic theory depends on empirical observation. The most important objects of observation are supply and demand. Prices are the mechanism through which capitalism allocates limited resources. Value is not intrinsic; it is contingent upon supply and demand.

Pareto’s Law, which has many applications, expresses the 80:20 principle. A business derives 80% of its revenue from...

About the Author

Thomas G. Donlan, editorial page editor of Barron’s, writes on the economy, politics and investing. He is a frequent media source and guest.

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