All Commentary
Saturday, June 1, 1991

Book Review: The Market Economy: A Reader edited by James L. Doti and Dwight R. Lee

Roxbury Publishing Company, P.O. Box 491044, Los Angeles, CA 90049 • 1991 • 375 pages • $26.95 cloth; $17.95 paper

This anthology lives up to its title. It outlines the characteristics and philosophical premises of a free society insofar as its political and economic ramifications are concerned. It points up how the world works better under freedom, under a regimen of social cooperation and division of labor; and it does so through the reprinted essays and thoughts of a good number of champions of liberty.

Here, to cite some examples, are Frederic Bastiat and his satirical “Candlemakers’ Petition” pleading with the French government to stop the “unfair foreign competition” of the sun; here’s David Ricardo on comparative advantage demonstrating the gains for international society stemming from free trade; here’s John Smart Mill setting down the limits of government so the free individual can live and let live.

Of more recent vintage the editors—Professor Doti of Chapman College and Professor Lee of The University of Georgia—serve up “Roofs or Ceilings? The Current Housing Problem” by Milton Friedman and George J. Stigler, a 1946 attack on the rent controls established by the World War II price-fixing agency, the U.S. Office of Price Administration. The Friedman-Stigler article, originally published by The Foundation for Economic Education, is still timely and relevant as the idea and application of rent controls continue to repress the supply of homes and thereby exacerbate the urban housing problem today from New York City to various cities in California.

Or here is an excerpt from Charles Murray’s Losing Ground in which Murray observes the difficulties of fighting poverty through “helping the poor.” One difficulty is the bureaucratic problem of defining eligibility which almost always includes some who are not truly needy and excludes others who are. Another difficulty seen by Murray is the problem of inadvertently subsidizing poverty—i.e., extending it indefinitely by inducing some welfare recipients to give up the search for independent livelihoods, to become wards of the state as long as they can.

Economists Doti and Lee reach out to non-economists to bolster their case for a market society. They include some of Ayn Rand’s thinking in the form of the Hank Rearden statement on the moral meaning of capitalism as it appears in her novel, Atlas Shrugged. And they present Henry David Thoreau’s case for civil disobedience in which Thoreau defends withholding his taxes so as not to help finance slavery or the Mexican War, an action which led to Thoreau’s spending a night in the Concord jail.

In all, the 44 selections here add up to invaluable insights to the classical liberal philosophy of limited government and free markets.

Dr. Peterson, an adjunct scholar of the Heritage Foundation, holds the Lundy Chair of Business Philosophy at Campbell University, Buies Creek, North Carolina.

  • William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.