• "Well written, well researched, and the thesis put forth is well argued.... Woods has opened up an area of historical analysis that should invite further study."
    -Journal of American History

  • "During these times that challenge our freedoms there is no one more qualified to make U.S. history relevant to the fight against big government than Thomas Woods."
    -Barry Goldwater Jr.
    Former Member of Congress

  • "I strongly recommend Woods's work."
    -The Honorable Ron Paul,
    U.S. House of Representatives

  • "Written with great clarity and fluency, making the complex philosophical and theological concepts approachable."
    -Journal of American Studies

  • "A must-read."
    -Barron's

  • "An excellent reading source for anyone interested in financial markets, and much more so for anyone interested in learning about capitalism without all the misinterpretations being thrown about in the financial media."
    -Asia Times

  • "Provocative, well-written, and deserves to be read."
    -Catholic Historical Review

  • "An engaging and important contribution to scholarship on the history of American Catholicism."
    -Journal of the Historical Society

  • "Woods and [co-author Kevin] Gutzman appeal to both left and right in this constitutionalist jeremiad…. The authors' exegeses of the Constitution and court decisions, heavy on original intent arguments, are lucid and telling."
    -Publishers Weekly

  • "A marvelous read. Every chapter taught me something new and unexpected."
    -Tom Bethell, senior editor,
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  • "The hottest book today is Meltdown, by my friend Tom Woods."
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    FOX News Channel

  • "Should be required reading."
    -Economic Affairs (London)

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    -David Gordon, The Mises Review

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    -Peter Schiff

Beware the Free Market! Exploitation, Child Labor, Poverty…!

Well, not really.

  • J

    If increased productivity necessarily leads to increased real wages and an improved standard of living, without any reforms or societal changes being necessary, how do you reconcile that view with places like Bangladesh, China, and elsewhere, where sweatshops are still common and the standard of living for those who labour in the factories is still very poor? If your assertions were wholly true, then would we expect to see the workers wholly replaced with machines or, if they are more productive (for what they cost) than available machinery, their standard of living significantly improved? Instead, we see corporations ‘outsourcing’ (necolonialism) to nations where labour (and also environmental protection) .

    When you mention Bangladesh, you ignore the social aspect- that is, you ignore the greater socio-economic system of the nation and the results of that system. If you seek to justify the market economy on the grounds that it is best for the common man, then should you not also support attempts to aid in bringing about a change in the overall socioeconomic system, instead of addressing the economic while ignoring the greater social aspect?

    You present a false dichotomy in comparing only the most extreme Laissez-faire systems with ‘non-market’ systems. You ignore systems such as Social Democracy, which embrace the market wile recognizing the need for certain regulations, such as mandating transparency in banking and passing workplace safety laws.

  • http://www.thomasewoods.com Tom Woods

    Regarding your first point, I’ll share some recent comments by a friend of mine who is writing a book on sweatshops:

    1) The process is not instantaneous. It takes time. In the early east asian tigers (Taiwan, Hong Kong, etc) it was a couple of generations to move from sweatshops to middle income. It’s happening faster now but is still a process.

    2) Real wages have been improving in China but it’s also geographically specific. Many regions in China have been left behind. Look at the “marketization index” that examines individual regions in China. Those that have granted the most freedom have seen the biggest increase in incomes. It’s not surprising to see low standard/wage factories in some regions of china and better wages in others (and some rural regions without sweatshops still). There was just a nice feature I read on how sweatshop workers improved their lives in China. I think it was Time online but I’m not sure and can’t find it in my email right now.

    3) Sweatshops are a stage in economic development when institutions allow for growth. In countries with low economic freedom they might not move much past sweatshops until they improve their institutions.

    The key problem we face is that we have practically unlimited wants but finite resources, particularly labor. Thus we need to find a way to make that limited labor productive enough to meet as many of these wants as possible. Capital equipment is what accomplishes this. There is a clear and obvious connection between the amount of capital equipment per capita and the standard of living of the population.

    You then argue that the whole population should be replaced by robots if this were true. First of all, you need to show me why the logic in what I said is mistaken before raising the prospect of Robot World. A world in which robots do everything – e.g., give massages, drive trucks, provide financial advice, give aerobic instruction, write newspaper articles, and build and maintain more robots – is rather unlikely for obvious reasons, but were we to approach it, we would actually be approaching a world in which with relatively little human exertion all our material needs would be met.

    The artificial substitution of capital for labor occurs when the state makes labor so artificially expensive that firms desperately search for substitutes. Spain is a perfect example – firms are paying a 50% tax per employee! Is there anyone on earth thick enough not to see the depressing effect this has on employment? As a result, McDonald’s is looking to replace its cashiers with machines. This will be costlier than employing people at a market wage to perform this task, but not so costly as employing them under the Spanish system.

    Regarding social democracy, I have a blog post on the front page of the site on Scandinavia that answers this oft-heard objection. With welfare states collapsing all over Europe, I hardly think this is a decisive objection.

    Regarding bank transparency, banks were far, far more transparent 100 years ago, when the regulatory apparatus was much smaller, than they are now. They had to be. No one would trust them otherwise.

    As for workplace safety laws, you are really missing the point of what I’ve said. No one is saying that workplace safety laws are incompatible with prosperity. I am saying that they are superfluous at best and harmful at worst. I realize I am contradicting my eight-grade teacher in saying so. I recommend this piece by George Reisman.

  • http://onecoldwintersnight.com/ Roy

    Thank you, Thomas, for that great response. J’s views are deeply embedded in the psyche of the masses. I have come across this hurdle many times when attempting to educate friends and family. What I’ve noticed with the proliferation of awareness regarding the Federal Reserve and the Business Cycle is that there’s a LANGUAGE to speak about these issues and it is different than what is already in people’s lexicon from the newspapers, TV, etc.

    Thank you for spending your energies on explaining how to resist but also giving it a language so that people can talk about ideas in an intelligent way.

  • http://twitter.com/mahilena mahilena

    You are welcome to guide your guests or add this link in your new article honoring me…this way they can see all the full anti-capitalist posts and add their comments…while I realize you are doing this to show your students how to respond you should giveyour post readers the ability to dispute your comments as well, which I will soon and send them to you anyways you can either post them or not thanks anyways again for the publicity…

    The U.S.A. was founded with skepticism on the Concentration of Wealth & Power ..
    http://mahilena.typepad.com/blog/2011/06/on-free-marketeconomic-political-theories-a-bit-on-current-events.html.html

  • Anonymous

    “The U.S.A. was founded with skepticism on the Concentration of Wealth & Power ”

    …which is precisely why free-market capitalism is far better than the corporatism the State’s own policies promote. It is also why, during the 19th Century we prospered like no country on Earth!

    Personally, I ‘ll take the freedom of choice, not only of goods, but of services, where to place my labor, and what little I have to invest in, that the free-market allows over the stymied *centralized* system we have at present. I love decentralization and freedom of choice, therefore, I love free-markets.

  • http://www.TomWoods.com Tom Woods

    They can dispute my arguments right here in the comments section.

    You’re right about skepticism of the concentration of power, which is why the framers believed in federalism instead of the hyper-centralized regime you support.

  • Anonymous

    And precisely this that contradicts nearly every point you’ve given in support of the State. This is nothing *but* indoctrination…

    http://marketplace.publicradio.org/display/web/2011/07/07/pm-prepping-for-a-security-clearance/