Virtues of Capitalism: v. 1 (Collected Works of Arthur Seldon) - Hardcover

This book is the first of a seven-volume Liberty Fund collection, designed to honor the life's work of Arthur Seldon, one of the great classical-liberal thinkers of our time. Through his own work, and through his many years of able editorial guidance at the Institute of Economic Affairs (IEA) in London, Seldon was instrumental in promoting the values of a free society, mainly by espousal of sound economic analysis in a wide variety of different policy contexts. He is also well known as the coauthor (with F. G. Pennance) of the famous Everyman's Dictionary of Economics, which I consider the best one-volume dictionary of the subject ever made. (I still have my trusty, dog-eared "Seldon and Pennance" from student days, and I am happy to see that the projected Collected Works will include this classic as volume 3.)

The main component of this first volume is a book entitled Capitalism, originally published in 1990 and therefore somewhat dated, though it is still worthwhile, both as a statement of his general economic philosophy and as a primer on the shortcomings of socialism.

It is partly autobiographical, and many of the personal tidbits are quite fascinating. (I wish there were more of them). At times, the material is organized more or less as a running commentary on the many IEA studies and publications that he edited during his long career. That, too, is interesting and helpful, though perhaps a formal survey with that sole purpose in mind would have been more useful. In addition, the author has attempted to combine these two different objectives with yet a third-the main purpose of the book-which is to provide an overall apologia for what he variously describes as "the price system," "the market economy; or, more often, simply "capitalism."

Seldon's case of capitalism is richly detailed, and a short summary would barely do it justice, though if pressed I might say that in a nutshell what he argues is that capitalism has been given a bad rap, mostly because it has been compared to a theoretical illusion. For too long, discussions of capitalism versus socialism had been carried out on an unfair playing field: all-too-visible shortcomings of actual capitalism were contrasted with the purely theoretical virtues of ideal socialism. This fruitless polemic was initially abetted by the lack of reliable information regarding actual conditions in real, existing socialist economics, and later fortified by leftist intellectuals' reluctance to face the awful facts as they gradually (and inevitably) became public knowledge. Few will now deny that socialism in practice has been a sorry failure everywhere.

Seldon goes further, however, and argues that the really interesting and important comparisons are not theory versus theory, nor practice versus practice, but socialism in practice versus capitalism in theory. That is, we should not compare socialism (theoretical or practical) with capitalism as it is but with capitalism as it could be "The critics of capitalism have persisted in the device of contrasting imperfect capitalism as it is, or has been, with a vision of socialism as it has not so far been, and could not be in the foreseeable future" (283). Seldon proposes instead to "match the socialist tactic of contrasting imperfect capitalism as it has been with 'perfect' socialism as they said it would be; the opposite contrast emphasized here is of socialism as it has been with capitalism as it could be" (104, emphasis added).

This argument should resonate today even more than when the book was first published fifteen years ago because developments in post-Soviet Russia have created something that most market-oriented economists, only a few years ago, would have regarded as theoretically impossible: a seemingly capitalist economy that actually works worse than socialist planning along many significant dimensions.
Any attempt at further summary for a short review runs the risk of oversimplification, and this would be a disservice to Seldon, who presents his arguments and marshals his facts with great skill, flair, and vigor. I will only point out that chapter 12 ("The Values of Capitalism") should be of special interest to readers of this journal, and that the book includes a thirty-page annotated bibliography that should prove quite useful to students interested in further exploration of these topics.

Ethics and Economics
Julio H. Cole
Universidad Francisco Marroquin, Guatemala

This first of seven volumes reprints a paper titled Corrigible Capitalism, Incorrigible Socialism, published in 1980 by the Institute of Economic Affairs, of which Seldon was editorial director for 30 years, and the book Capitalism, published in 1990 by Basil Blackwell. . . .Seldon advocates replacing all socialist politics with the capitalist market, and restricting government activities to a general framework of law for private enterprise.

Reference & Research Book News
February 2005
Volume 1 of "The Collected Works of Arthur Seldon" series, The Virtues of Capitalism offers the in-depth wisdom of classical liberal economist Arthur Seldon, who penned his theories from the 1930s to the late 1950s. The Virtues of Capitalism is divided into two parts; the first is "Corrigible Capitalism; Incorrigible Socialism", in which Seldon explains why he feels capitalism is more open to correction and improvement while socialism resists adjustments to help it fit economic reality, and "Capitalism", a longer work that takes an in-depth accounting of capitalism's positive qualities. An excellent basic resource and foundation of insight into basic liberal economic and capitalist philosophy, The Virtues of Capitalism is especially recommended for academic library "Economic Studies" collections and is essential reading for non-specialist general readers with an interest in economic theory.

Bookwatch
December 2004

Arthur Seldon was born in 1916 and has been writing on classical liberal economics since the 1930s, when he was a student at the London School of Economics during Friedrich Hayek's time there. For over thirty years he was Editorial Director of the London-based Institute of Economic Affairs, where his publishing program was one of the principal influences on governments all around the world, persuading them to liberalise their economies. "The Virtues of Capitalism", the inaugural volume in Liberty Fund's Collected Works of Arthur Seldon, presents the foundation of Seldon's views and theories of capitalism and its alternatives. Entitled "Corrigible Capitalism; Incorrigible Socialism", part one of "The Virtues of Capitalism" was first published in 1980. It explains why, Seldon believes, 'private enterprise is imperfect but redeemable', but the state economy promises the earth, and ends in coercion to conceal its incurable failure. The second part, 'Capitalism', is widely considered to be Seldon's finest work.

It covers a wide range of the classical liberal thought that inspired the movement toward free-market reforms in Great Britain in opposition to the collectivist tide of socialism. In an understandable and eloquent manner, Seldon offers 'Capitalism' as a celebration rather than a defence of classical liberalism.