Capitalism at Work: Business, Government, and Energy; Book 1 of Political Capitalism (A Trilogy).

• Author: Gordon, Richard L.
• Position: Book review

Capitalism at Work: Business, Government, and Energy; Book 1 of Political Capitalism (A Trilogy)

Robert L. Bradley Jr.

Salem, Mass.: M & M Scrivener Press, 2009, 485 pp.

Robert L. Bradley Jr., for many years had to balance loyalty to his employer, Enron, with his belief in Austrian economics. With the collapse of Enron came the opportunity to resolve the conflict in favor of Austrian economics. Bradley chose to undertake the slow development that would produce a definitive study rather than an instant bestseller. He ultimately' decided to produce a three-volume treatment. The first of these, the book under review here, deals with two overriding conceptual issues relevant to the Enron collapse and their implications to Enron and earlier debacles. The first is what is the essence of free-market economics and whether the Enron experience undermines the case for free markets. The other is the invalidity of resource pessimism. Later volumes will deal with similar problems such as the Insull holding-company collapse in the Great Depression and then a concluding volume on Enron itself.

The essence of free-market economics is a classic issue in which the defenders must deal with the standard attack by interventionists that free-market economists unwisely uncritically worship business. This charge is an absurdity. Taken literally, it is an outlook, as Bradley recognizes, that is impossible to maintain. Given the differences within and among industries, support of a given business usually means opposition to a larger number of other businesses. Blindly to support the old-line steel companies is to undermine electric-furnace producers and industries that heavily use steel. (This, alas, is a real-life example.) Moreover, free-market economists are well aware that support for free markets is support only for businesses that are devoted to thriving by competing in free markets. It is further well recognized that at best business people are reluctant to make strong defenses of free markets and at worst act instead to secure political favors that shelter them from competing vigorously. To characterize this search for favor, Bradley prefers Gabriel Kolko's term "political capitalism" over the concept of rent seeking that he is aware dominates the economics literature.

Bradley divides into two parts his development of this argument. The first portion uses three examples of free-market advocates--Adam Smith, Samuel Smiles, and Ayn Rand--as sources of models of proper concepts of free markets. The first chapter of the second part reviews contributions of interest to Bradley by four...