Participating in the economy is a part of everyday life, yet much of what is commonly accepted as economic fact is wrong. Keynesian schoolteachers and the liberal media have filled the world with politically correct errors that myth-busting professor Robert Murphy sets straight. Murphy explains hot topics like outsourcing (why it's good for Americans) and zoning restrictions (why they're not). Just like the other books in the P.I.G. series, The Politically Incorrect GuideT to Capitalism pulls no punches.

Customer Rating:
Summary: rare austrian perspective
Comment: This book is a great addition to the politically incorrect series. What's incredible is how wide the breadth is--everything from antitrust to the IMF--in a short 200 pages. It's rare to see such a concise book cover so many topics.

For readers who are familiar with introductory economics and/or have read Thomas Sowell's Basic Economics, Milton Friedman's Free to Choose, etc., most of the arguments will be familiar. For example, Murphy shows how price controls create shortages, unions lead to unemployment, monopoly is hard to achieve in a free market/most antitrust suits are filed by competitors better at winning battles in courtrooms than free markets, how discrimination is difficult in a free market, how the environment is best secured through strong property rights, etc.

Murphy does present some Austrian perspectives that many readers (even of Friedman/Sowell/etc) who read the book may not be familiar with. Even if you don't embrace Murphy's more reactionary proposals like "free banking" and highway privatization, he presents food for thought.

The main reason I'm writing this book a positive review is its final few chapters on trade and on financial markets. The book expands on traditional arguments for why free trade is good and demonstrates how some modern day assaults on free trade (for example, some assaults on comparative advantage as an outdated theory) are flat out wrong.

His explanation of financial markets is really the cream of the book. Even those with familiarity with economics are sure to learn a lot from his rather original explanation of how such markets function. At a time when speculation has become especially unpopular, Murphy brilliantly demonstrates how speculation on stocks/bonds, futures contracts, and derivatives make markets more efficient.

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Customer Rating:
Summary: Great Myth Buster!
Comment: I heard about this book on "Pro Business With Dr. Mike Beitler," a free-market, libertarian internet-radio talk show. Dr. Murphy and Dr. Beitler systematically destroyed the myths about capitalism one after another. It was the most intelligent discussion I've heard in a long time. How refeshing after the socialist vs. socialist debates we saw with Obama and McCain.

I would recommend this book along with Beitler's "Rational Individualism" Rational Individualism: A Moral Argument for Limited Government & Capitalism.

You will find both books direct and insightful.

Paul Bauer

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Customer Rating:
Summary: An enjoyable book!
Comment: Some democrats will find this book horrifying, but can't argue all of the facts presented. The author skips through various subjects, presenting cases for Capitalism along the way. While one or two are somewhat weak, most are strongly presented and can sway the most left leaning liberal into seeing the authors point. I really enjoyed reading it and agree whole-heartedly with 90% of the arguments presented. I have been passing it around to friends, and each of them has enjoyed it as well. It is certainly worth the price to purchase.

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Customer Rating:
Summary: Excellent Resource!
Comment: Dr. Murphy does a great job destroying the myths about capitalism. His book deals with every argument ever made against capitalism. His writing style is very engaging. This book is a pleasure to read and a great resource for libertarians. Great work Bob!

Michael Beitler, Ph.D.
Author of "Rational Individualism: A Moral Argument for Limted Government & Capitalism"Rational Individualism: A Moral Argument for Limited Government & Capitalism

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Customer Rating:
Summary: A mixed bag
Comment: The book has many pros and cons. It's a quick easy read full of interesting insights into how money is used by private and government institutions and the roles played by individuals (consumers, workers, shareholders) in the economy (domestic and international - via free trade), as well as the potential positive effects of a free market on social issues like poverty, slavery, gender and race discrimination.

On the other hand it suffers by being a purist economic doctrine: it assumes humans are rational (overly optimistic), it assumes government is always bad, it assumes the economic "laws" it proclaims are true when there are opposing economic theories to explain the same outcome, it doesn't take into account overall complexity of economies, it ignores human social evolution (centralized governments inevitably arise as human populations and population densities increase). Finally, it pigeon-holes those with dissenting views as "Marxists", "Socialists", and "Leftists", who "hate capitalism" to prove its point while using strawman arguments. The fact is, economic theory of the kind argued for in the book is not an all-or-nothing proposition. It can work well in most instances, but it's always going to have drawbacks and there will always be room for legitimate intervention since individuals are ultimately tied to central governments (which is why books that explain systems in a way that would be "best" without any government involvement are shouting in the wind).
In other words, it provides a useful framework (like the Constitution) but the inner-workings are much more complicated and don't fit neatly into it (thus, in addition to the Constitution we have enormous legal books filled with laws of the land).

I found it interesting that there isn't a chapter exclusive to the topic of income taxes, even though it's clear the author believes said taxes must certainly be bad since it's a government intrusion. I presume he thinks it's best if we have volunteer fire departments and police force. We should also fix the roads and bridges ourselves or privatize everything like it was done and failed miserably in places like Argentina.

I found myself disagreeing with most of the analysis in the first half of the book. It was superficial and also demonstrated the authors lack of experience with his subject. For example, the when he argues that rent control causes housing shortages because landlords decide not to rent out apartments is bogus. Rent control is indeed negative for landlords but it doesn't cause housing shortages. When there is rent control, landlords rent out everything they can to make as much (or little) as possible since it's always better to have more money coming in. Having owned buildings myself, it's clear that the author is using Libertarian "education" rather than real world experience to build his cases.

Likewise when he talks about CEOs getting huge paychecks even if they drive a company into the ground, he says it's ok because nobody would take on that job if it didn't provide big money. Fact is, plenty of people could and would do the job for far less than those salaries. He says shareholders agree to it so it's ok, but later in the book he admits that shareholders rarely wield power - instead, it's management that does. He goes on to say that workers get a paycheck even if a company isn't profitable so why complain about CEOs getting paid even if the company isn't profitable. This is absolutely absurd - workers get a pink slip, not a million dollar farewell package when the company is in the red. The book is rife with borderline retarded assessements such as these.

The second half of the book is much better but this is partially because it deals with topics that are much harder to evaluate. But even here he often faulters into nonsense. He argues that outsourcing is good because cheap labor cuts costs and this savings is transmitted to consumers. That's not the case. When a manufacturer goes overseas, you don't start paying less for items. They remain the same price, but the company's profits increase because their expenses have decreased. Many times you often also get an inferior or dangerous product as a result, and inefficient customer service. But it's the consumer that feels this, not the manufacturers.

There is something to be said for allowing monopolies because they do tend to bring prices down. Still, there is a balance - fierce competition also brings down prices as well as spurns innovation for better products. Additionally, monopolies have a knack for crushing competition even if that competition has a superior product so that potential buyers don't even get the opportunity to utilize it.

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