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Book Review of: A World of Wealth

How Capitalism Turns Profit Into Progress

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Review of A World of Wealth, by Thomas G. Donlan (Hardcover, 2008)

(You can print this review in landscape mode, if you want a hardcopy)

Reviewer: Mark Lamendola, author of over 6,000 articles.

If you realize that money doesn't grow on trees, you also realize that every dime spent by the federal government is a tax one way or another. With that fact in mind, you can look at the nation's $9.4 trillion federal tax burden and realize that Tax Freedom Day never arrives for the vast majority of Americans.

So it's reasonable to wonder why the proposals of both of the leading candidates in the 2008 Presidential "election" to dig our financial hole even deeper don't automatically disqualify them from any job that entails responsibility. Providing a glimmer of hope against this backdrop of madness is Thomas G. Donlan's  common-sense analysis of the effects of making capitalism part of public policy.

Let me clarify here that Donlan was not writing about the 2008 Presidential election (such that it is), nor did he voice his views on any of the candidates. I interjected the election (such that it is) into my review as a point of reference.

The book has a few errors of fact, none of which bear on any of its central points. For example, Donlan talks about "printing money." Those cotton fiber Federal Reserve Notes make up such a small percentage of our total money supply that all of them together amount to not much more than a rounding error. I hope in a future revision he updates the language because "printing money" is a code phrase among people who don't understand how a currency works and who propose regulating the value of the dollar instead of letting the market do that. I was pleased to see Donlan didn't fall into that line of thinking.

Perhaps overdoing things, Donlan proposes the market as the cure to nearly every social ill. This is the classic Libertarian Party line, which is mostly right but which oversimplifies in some cases. Having studied economics at the graduate level, I have some inkling of what those cases are, but I don't claim authoritative knowledge. Since we are a very, very long way from a "Free minds and free markets" system, there's no immediate threat that we will have too much freedom in this country or too much reliance on the marketplace.

One reason Donlan's position carries so much weight is the track record of the statists (the opposing camp) is horrendous. It's marred by enormous losses of property, life, and liberty. It's littered with social strife, wars, hardship, and heartbreak on top of ignorance, inconveniences, and a constant stream of petty annoyances. It's loaded with waste, corruption, fraud, and a long list of negatives that market forces could mitigate or even prevent. While a completely Libertarian system would probably not be ideal, it would be a far sight better than what we endure today.

Even a tepid ala carte adoption of Donlan's recommendations would confer enormous benefits on society. Just as gradual deterioration brought us to where we are, so can gradual (or incremental) improvement bring us to where we want to be. My point here is it's not necessary to agree with everything Donlan says or recommends to accept the general thrust of what he's saying or to validate anything he says. Each of his major points stands on its own merits, and usually in a very solid way.

A World of Wealth isn't a scholarly work, and Donlan doesn't pretend it is. He says upfront that he has "issued commentary and marginalia." Donlan has been immersed in this subject for decades, and has established some credentials reflecting that fact. He's well-known and highly respected among people who read the current literature on economics, business, and politics. Pundits seek his opinions.

Donlan reads more than just those books and periodicals that support his worldview. As a matter of fact, he even lists The New York Times in his "Reading Further" list. That is quite remarkable when you consider that the NYT consistently pushes the statist agenda, completely in conflict with Donlan's views. Because the NYT pushes a failed philosophy, its writers and editors must rely on selective fact picking and other deficiencies in reporting to make things sound plausible. That is, they write with the purpose of justifying their preconceived views and so filter out information that doesn't conform. To their particular choir, the music sounds sweet. To independent thinkers, it's laughable.

In some circles, the NYT is known as the NYP, the "P" standing for "Pravda." Essentially, if you want to brainwash yourself into embracing excess government as the solution instead of the problem, you would want to read the NYT every day. This is why, for example, so many people who want to present the Save the Criminals movement as actually sane look to the NYT for exactly the disinformation they need.

From this, we can see that Donlan does expose himself to various viewpoints and he isn't afraid to recommend that other people do the same.

A World of Wealth isn't footnoted or backnoted. It lists no references, other than those mentioned in context. There isn't a bibliography. The book is Donlan's take on things after years of reading, writing, and speaking on the subjects it covers.

A World of Wealth consists of 11 Chapters. Perhaps it shows some humor on Donlan's part to have Chapter 11 as the final chapter in a book about money. A World of Wealth also has an insightful, thoughtfully written introduction and a topical index.

Chapter 1 brings us directly into the "Energy Crisis," a misnomer that Donlan recognized as such by his inclusion of it in quotation marks. Ill-conceived government "energy policies" have invariably caused enormous harm with no upside, and yet the federal government persists on inflicting us with one bad policy after another. Dolan presents solutions that, when given brief life between the end of one bad energy policy and the beginning of the next, have produced solid results. Similar solutions in other areas just plain work.

In Chapter 2, Donlan proposes market solutions for pollution and related ills. Here is where theory and reality have a hard time remaining convergent. Market forces cannot do the job by themselves, because it's too easy to bypass the market. Dolan hints at this with his discussion of commons (if you follow economics, you know what this means), but seems to overlook that in many cases the commons effect either weakens market forces or neutralizes them entirely. So in this area, I disagree with Donlan and believe the government could actually do something useful. The fact that the government often fails in this regard, and sometimes dramatically, is a problem. But that doesn't mean the market is the sole solution.

Donlan talks about free trade in Chapter 3, and he makes a great deal of sense. But he overlooks some key factors that render his conclusions incorrect. The problem with free trade is similar to that with pollution. The market can't account for everything.

For example, the EPA does not regulate in Mexico so Mexican factories have a huge cost advantage. The air pollution from Mexican factories, by the way, wafts right over to the USA. Mexican factories can turn their cost advantage into lower prices at market. We can't force Mexico to adopt American regulations (remove the cost advantage), but we can levy a tariff (remove the price advantage). The same is true of Canada. Drive through Sarnia, Ontario sometime and look at how the pollution just blows across the river to the American side.

Ross Perot was right, though Donlan doesn't see this. That huge sucking sound was American jobs, contrary to Donlan's unsubstantiated assertions to the contrary. The problem is Donlan left out key facts. Those jobs were not replaced due to comparative advantage with better jobs. Or any jobs at all. The US federal government legislated those jobs into fleeing the country. Forever.

Comparing factories in one country with those in another and ignoring the difference in regulatory costs is the classic apples to oranges comparison. I was surprised that Donlan didn't account for the primary driver of American job loss: those folks in Congress who make several times the average wage and don't care about the costs of their endless stream of idiotic regulations. Apparently, they see nothing wrong with vaporizing a few million jobs if doing so means their actual employers, the lobbyists, will be able to make a few extra bucks.

Trade will never be truly free as long as nations are operating under different rules. And they always do. The solution we have is to levy tariffs. The solution we need is to decrease regulation.

As an example of regulation run amok with outsized costs added to consequences the opposite of what was intended, consider the EPA. Congress and the EPA have taken sensible pollution controls too far, driving industry into countries with no pollution regulations. The net effect is a dramatic increase of pollution. Giving those countries the bonus of a cost advantage in our markets and thus punishing law-abiding citizens and corporations is not a solution.

The current mania over immigrants defies logic. Donlan adroitly addresses the truth of the matter in Chapter 4. In Chapter 5, he explains how investment and productivity are related and how these lead to higher wages for even those at the lowest levels. A classic example is what Henry Ford did, which at the time permitted factory pay far above what any competitors could offer. If you understand why Donlan's points in Chapter 5 are true, you'll be well-prepared for what he says in Chapter 6 about the Capitalist take on taxes. I personally can find nothing wrong with what he says, or nothing right with current tax policy in the USA.

While Donlan speaks much truth in Chapter 7 when he talks about regulatory harm in finance markets, he also overlooks where regulation helps and what its proper role is or should be. He seems one-sided, here. His remarks about health care in Chapter 8 are similar in that way. The problem, as I see it, is the regulation process is politicized and thus guided by the wrong things. It could be my own views that are narrow, as an unpoliticized regulatory process is perhaps an oxymoron. Donlan's remarks in these two chapters provide plenty of food for thought and for lively conversation with informed, thinking people.

Chapter 9 takes on the disgraceful federal "retirement" programs cooked up by a Congress that apparently can't understand basic mathematics. I personally refer to these schemes as Antisocial Insecurity and MediFraud. But Donlan is above such inflammatory (though accurate) language and simply analyzes these "failed from Day One" programs on their merits (or lack thereof). He also presents actual solutions based on reality, a concept the US Congress is obviously unfamiliar with.

Don't read Chapter 10 right after a meal. Its title is "A Capitalist Look at the Current Economy." It aint pretty. But it is highly informative.

The final chapter basically reviews capitalist theory. For the most part, putting this theory into practice provides a positive outcome. It certainly would work wonders if applied to our present system.

Today, leading politicians are proposing more of the same old bad public policy. Einstein defined insanity as doing more of what's not working. Are any of our leading politicians sane? Why do we put up with that?

One of the most easily measured acts of insanity is the profligate spending. You will find this nicely detailed in reports produced by the National Taxpayers Union. Since World War II, we've paid for much of that insane spending with currency debasement, which is a coward's way of taxing us. And what a hefty tax it is. The dollar has lost 95% of its value since World War II.

More strikingly (not mentioned by Dolan), it has lost half of its value in the last ten years alone. If you're not in the habit of emptying your home of half your possessions every ten years and asking your boss to cut your pay in half every ten years, do you think Congress should be allowed to do that very thing to you? It can, and it did.

The mudstream media, which seem to have a ban on accurate reporting, are pretending our only choices are different flavors of the same old stupidity, theft, and carnage. This is clearly not true. Donlan shows that other choices do exist. Thus, readers of this book are informed rather than disinformed.

If you have to work to pay for your food and the roof over your head, then consider this book essential reading. Consider signing a copy and dropping it off in person at the office of your Congressional (mis)Representative.



About these reviews

You may be wondering why the reviews here are any different from the hundreds of "reviews" posted online. Notice the quotation marks?

I've been reviewing books for sites like Amazon for many years now, and it dismays me that Amazon found it necessary to post a minimum word count for reviews. It further dismays me that it's only 20 words. If that's all you have to say about a book, why bother?

And why waste everyone else's time with such drivel? As a reader of such reviews, I feel like I am being told that I do not matter. The flippancy of people who write these terse "reviews" is insulting to the authors also, I would suspect.

This sound bite blathering taking the place of any actual communication is increasingly a problem in our mindless, blog-posting Webosphere. Sadly, Google rewards such pointlessness as "content" so we just get more if this inanity.

My reviews, contrary to current (non) standards, actually tell you about the book. I always got an "A" on a book review I did as a kid (that's how I remember it anyhow, and it's my story so I'm sticking to it). A book review contains certain elements and has a logical structure. It informs the reader about the book.

A book review may also tell the reader whether the reviewer liked it, but revealing a reviewer's personal taste is not necessary for an informative book review.

About your reviewer

  • Books are a passion of mine. I read dozens of them each year, plus I listen to audio books.
  • Most of my "reading diet" consists of nonfiction. I think life is too short to use your limited reading time on material that has little or no substance. That leads into my next point...
  • In 1990, I stopped watching television. I have not missed it. At all.
  • I was first published as a preteen. I wrote an essay, and my teacher submitted it to the local paper.
  • For six years, I worked as an editor for a trade publication. I left that job in 2002, and still do freelance editing and authoring for that publication (and for other publications).
  • No book has emerged from my mind onto the best-seller list. So maybe I'm presumptuous in judging the work of others. Then again, I do more describing than judging in my reviews. And I have so many articles now published that I stopped counting them at 6,000. When did I stop? Probably 20,000 articles ago! (It's been a while).
  • I have an engineering degree and an MBA, among other "quant" degrees. That helps explain my methodical approach toward reviews.
  • You probably don't know anybody who has made a perfect or near perfect score on a test of Standard Written English. I have. So, a credential for whatever it's worth.

About reading style

No, I do not "speed read" through these. That said, I do read at a fast rate. But, in contrast to speed reading, I read everything when I read a book for review.

Speed reading is a specialized type of reading that requires skipping text as you go. Using this technique, I've been able to consistently "max out" a speed reading machine at 2080 words per minute with 80% comprehension. This method is great if you are out to show how fast you can read. But I didn't use it in graduate school and I don't use it now. I think it takes the joy out of reading, and that pleasure is a big part of why I read.

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