Montreal, August 15, 2005 No 157




Dr. Edward W. Younkins is a Professor of Accountancy and Business Administration at Wheeling Jesuit University in West Virginia. He is the author of Capitalism and Commerce.




by Edward W. Younkins


          Andrew Bernstein is best known as one of the most passionate, interesting, and knowledgeable lecturers associated with the Ayn Rand Institute. He is also the author of Cliff's Notes for Ayn Rand's Anthem, The Fountainhead, and Atlas Shrugged and the writer of the fine Objectivist-oriented novel, Heart of a Pagan. His provocative new book, The Capitalist Manifesto, is written for rational individuals everywhere and is a tribute to men of the mind and to capitalism the social system of freedom, morality, individual rights, the human mind, creativity, wealth, peace, and progress.


The system of the mind

          The theme of Bernstein's powerful work is that capitalism is the system of the mind. Part I of his book performs a practical task by focusing on the nature and history of capitalism. Part II provides rational, philosophical, moral, and economic explanations for capitalism's superiority. Part III then refutes moral arguments against capitalism and applies its principles to solving specific issues and problems in society.

          The author examines the rise of capitalism in its full historical context. He explains that capitalism was the outgrowth of European and American Enlightenments and that the political, technological, and industrial revolutions of the late 18th century involved the application of pro-reason Enlightenment principles. The only nation founded on Enlightenment themes and principles, the United States, became the center of technological and industrial progress. During the 18th century in Western culture, there was an emphasis upon reason, science, progress, and the rights of men. Enlightenment thinkers, such as Newton and Locke, espoused secular rationalism, metaphysical rationalism, the inherent orderliness of nature, humanism, and the lawfulness of human nature and the rest of nature.

          Bernstein, a self-proclaimed hero-worshipper, discusses the heroes of the Enlightenment as well as those of late 19th century America which he labels as "The Inventive Period." In this work the author clearly expresses his admiration for the "capitalist heroes of history," including, but not limited to: Franklin, Jefferson, Smith, Whitney, Carnegie, Rockefeller, Watt, Morse, Vanderbilt, Hill, Morgan, Harriman, Edison, Jenner, Bell, Singer, Field, Westinghouse, Eastman, Duryea, the Wright brothers, and Goddard.

          Bernstein thoroughly chronicles pre-capitalist systems of political economy. Before the industrial revolution, there was widespread famine, filth, plague, and destitution; and living standards in Europe were as low or lower than in the poorest regions of the Third World today. He documents how tyranny suppressed minds and rights and undermined man's means to make technological and industrial advances. The author also illustrates how the capitalist revolution of the late 18th century was based on its inherited scientific advances of the Age of Reason.

The Historic, Economic, and
Philosophic Case for Laissez-Faire

by Andrew Bernstein
University Press of America (2005)

          The book discusses how the British industrial revolution in the late 18th century was an integral part of the Scottish Enlightenment. Bernstein explains that the supposed Golden Age of workers in pre-capitalist Europe is simply a myth and that capitalism and the industrial revolution greatly raised living standards (e.g., sanitation and hygiene) and life expectancies. The author provides much factual evidence to establish capitalism's historical achievements compared with those of its predecessors with respect to the enormous practical benefits it brings to man's life. According to Bernstein, in two centuries capitalism has brought greater improvement in the material conditions of men's lives than have the statist regimes of all preceding centuries combined. He illustrates that capitalism generates freedom and prosperity wherever it has been implemented.

          The author discusses the enormous productivity of the so-called "Robber Barons" the productive geniuses who were enormous benefactors of the human race. The Robber Barons, for the most part, were market entrepreneurs (rather than political entrepreneurs) who succeeded by pleasing customers and not through government subsidies and legislation. The Robber Barons enriched more than they robbed, employed thousands thereby giving stability to American families, and developed innovations that benefited all Americans. In conjunction with this, Bernstein explains that anti-capitalist historians such as Hofstadter and Josephson ignored the role of the mind in the production of the wealth achieved under capitalism.

          Bernstein's magnum opus thoroughly documents how capitalism eradicated impoverishment and created prosperity. It explains how poor immigrants used their rationality and free will to choose to emigrate to America and how the poor in America employed their rational consciousness to "vote" to work in factories rather than to toil in the farms and fields.

The only moral political-economic system

          Part II of The Capitalist Manifesto explains that capitalism embodies the rational principles upon which human survival and prosperity depend and that capitalism is the only moral political-economic system. The philosophical and moral theories presented in this section are grounded fully in the work of Ayn Rand. In addition, the economic principles discussed are congruent with the works of Austrian economists such as Ludwig von Mises and Austrian-Objectivists like George Reisman. For me, this section on deeper philosophical and conceptual issues was the most stimulating and interesting part of the book.

          Bernstein correctly argues that rational egoism is a requirement of human life and is the moral code underpinning capitalism. Capitalism liberates the creative human mind which serves as man's survival instrument. The author explains that morality arises only because of the objective factual requirements of human survival and flourishing on earth and that what is good is what promotes man's life.

"The Capitalist Manifesto is interesting, jargon free, clearly written, and accessible to a wide range of readers. It argues convincingly that wealth comes only from adherence to the rational principles of the free enterprise system. The book is a fine statement of the moral and economic arguments for capitalism."

          The author explains that the mind's fullest functioning requires the legal protection of individual rights. Each human being has the fundamental right to act on his own thinking and thus requires protection from the initiation of force or fraud. Capitalism requires a government that protects rights and that does not itself violate its citizens' rights and freedom. Bernstein observes that the U.S. Constitution is flawed because it allows the government to initiate force against American citizens.

          Egoism is the pursuit of an individual's rational self-interest. Bernstein explains clearly why a man should be the beneficiary of his own actions. He validates egoism as a universal principle and as the only proper moral code. He defends capitalism as the logical political-economic consequences of an egoistic approach to ethics and as the embodiment of rational philosophical principles.

          Bernstein maintains that individual rights and capitalism are necessary for man's life-gaining quest for values. He thoroughly discusses the nature of value and the standard by which values are judged. He explains that the concept of value is based on metaphysical facts of reality and identifies the relationship between values and the nature of human beings. The ultimate value is an individual's life and the standard of value is man's survival qua man. The author identifies man's mind as the primary means to gain values, to promote one's life, and to seek one's happiness. He also describes virtues as a means by which a man achieves values. It follows that productiveness is one of the moral virtues.

          When men are free they can use their minds to attain their goals and further their lives. Bernstein explains that reason does not function automatically and that irrationality is evasion or the refusal to think. To use one's mind as a tool of survival involves the choice to focus on reality. Focus involves a man's decision to activate his mind and to be alert for opportunities to form his ideas, values, and principles.

          The author describes altruism, the surrendering of values, as a code of self-sacrifice. Rejecting altruism, he explains that each human being should pursue and gain the values his life and happiness require. He thus rejects Kant's ethics of duty that maintains that each person has unchosen obligations to others and thus should perform selfless service to them. Kant's moral philosophy deprives self-interest of any and all honor. The rejection of self-interest is also a rejection of all human values because to pursue one's self-interest means to pursue values and goals. Kant's vision of morality thus consists of total, abject, selflessness.

Economic ills are caused by statism

          Bernstein illustrates that capitalism is the only system that helps the poor, is the cure for racism and bigotry, and is the solution for problems in education and healthcare. He also explains that slavery is founded on the initiation of brute force and that abolition involves free capitalist nations struggling against statist regions that reject individual rights. In addition, the author evaluates the economic performance of capitalist nations such as America, South Korea, Hong Kong, and Taiwan versus that of socialist regions like Soviet Russia, Cuba, Socialist Scandinavia, North Korea, and China. Real-world performance indicates that the non-capitalist nations of the world are not only repressed but have much lower living standards. Bernstein observes that, when the mind is suppressed, industrialization and technological development are stifled. Furthermore, it is statism that gives rise to evils such as war, imperialism, and slavery.

          The author describes how capitalism liberates both the producers who set the economic terms and the customers who apprehend the value of products. Economic calculation provides a standard of action for planning under capitalism because of the existence of market prices that result from the thinking and actions of countless people. He explains how capitalism applies a vastly greater and incalculable amount of knowledge and mind power to solving problems of production and distribution than does socialism. The author states that the problem of socialism is that it requires economic planning without the benefit of an intellectual division of labor.

          The book details how economic ills commonly ascribed to capitalism such as monopolies, unemployment, inflation, and economic downturns are actually caused by statism. Coercive monopolies stem from the government making laws debarring entry into a field. Unemployment results from minimum wage laws and the granting of coercive power to unions. Inflation is a product of government expanding the money supply which leads to debasement of the monetary standard. Depression and recession are brought about by regulations and interventions that strangle the economy.

          Statist regimes are at chronic war with their own citizens and invariably hate America, the world's freest nation. Bernstein observes that statism needs war and survives by looting, whereas a free country requires peace and survives by production. He states that world peace requires the establishment of global capitalism (i.e., international free trade). Capitalist nations would protect their citizens' freedom of speech, freedom of the press, and economic freedoms such as the right to own property, to start their own businesses, and to seek profits. Pre-capitalist and non-capitalist systems are politically oppressive and economically destitute and their citizens have few or no rights.

          The charges that capitalism is responsible for imperialism and slavery are false. According to Bernstein, a government that fails to recognize the rights of its own citizens exists under no moral constraints with respect to foreigners. Individuals of any nationality are its potential victims. Imperialism is simply warfare to conquer a territory. Like war and imperialism, slavery is founded on the initiation of force. Slavery relies on force and thus undermines the role of the mind in man's life.

A systematic treatment of capitalism

          Bernstein's masterpiece provides a systematic treatment of capitalism as developed over centuries through a number of disciplines including philosophy, economics, political science, law, history, and so on. The Capitalist Manifesto is interesting, jargon free, clearly written, and accessible to a wide range of readers. It argues convincingly that wealth comes only from adherence to the rational principles of the free enterprise system. The book is a fine statement of the moral and economic arguments for capitalism. This tour de force presentation thoroughly and eloquently addresses virtually every question or criticism anyone has ever made about the morality or practicality of capitalism.

          This solid work is a real contribution to understanding the philosophical, moral, and economic underpinnings of capitalism. Its underlying theme is that the mind is man's tool of survival and that the mind requires freedom. Bernstein's well-written book persuasively argues that capitalism rests on a sound moral foundation. By doing that, it serves an essential function.

          Although this book is written for the educated generalist or layperson and the college student, it should be read by everyone especially by journalists and politicians. Hopefully, it will be adopted as a textbook both here and abroad with foreign editions and translations. Bernstein's seminal work is a triumph in the crusade for freedom and individual rights. We certainly need more books like this.