The other side of the coin.

How Capitalism Saved America By Thomas DiLorenzo Crown Publishing Group US$14.95

Despite its subtitle, The Untold History of Our Country, from the Pilgrims to the Present, Thomas DiLorenzo's effort at chronicling the world's largest economy is more than mere recounting. It's an in-your-face rebuttal of the traditional view of the facts that have shaped U.S. history.

According to DiLorenzo, it was capitalism that saved the pilgrims, the first U.S. colonists, from starving to death in a hostile environment. The American Revolution, pitting the 13 colonies against the British crown, was to a great extent a rebellion against the rigorous control that the British imposed on the early U.S. economy from across the Atlantic. The 19th-century robber barons--businessmen often described as having grown fabulously rich through deceit, fraud and exploitation of workers--were in reality, he argues, men who improved the lives of millions of Americans by offering them new and innovative products, ones that made life better and did so cheaply. Through his dissection of a hundred-year-old slice of U.S. history, DiLorenzo makes the case that it is important to differentiate between the "good capitalists," such as Rockefeller and Vanderbilt, and their competitors, who grew fat on public subsidies and government business deals.

Defending robber barons is just one of DiLorenzo's attacks on conventional wisdom, such as the belief that Franklin Delano Roosevelt's New Deal economic program brought the United States out of the Great Depression during the 1930s. To the contrary, according to DiLorenzo, Roosevelt's policies of the time kept a chokehold on the economy until the end of World War II.

In what is surely music to the ears of today's neoconservatives, DiLorenzo argues that the deregulation of the energy sector brought the country out of the 1970s energy crisis, and, contrary to popular thinking on the matter, loosening the regulatory grip on private power companies was not the source of the blackouts that gripped California and parts of the northeastern United States just a few years ago. The real culprit was the state's decision to fix the prices that power companies can charge consumers.

In his most recent work, The Real Lincoln, DiLorenzo echoed the capitalistic teachings of Ludwig von Mises and Friedrich Hayek, arguing that the U.S. president sealed the relationship between government and business, tainting U.S. capitalism in the process--as fatal a concoction for the economy then and as it was later, when government intervention, he believes, led to the Great Depression. In How Capitalism Saved America, DiLorenzo gives no ground on state intervention, yet he seems to sidestep the argument of Mexican writer Octavio Paz, who recently argued that a totally free-market system leads to monopolies, a phenomenon that the blind forces of laissez-faire economics seem incapable of correcting.

Exponential. When it comes time to point the finger, DiLorenzo blames a long list of U.S. presidents for failing to understand that, as with any economic crisis, the only thing for a government to do is cut spending and ride it out. Yet DiLorenzo stops short of scolding current U.S. President George W. Bush, under whom the federal debt has ballooned to record-high levels. Neither does it appear to bother the author that lately, present-day economic management has done nothing to narrow the yawning income gap between the rich and poor. For example, between 1950 and 1970, for every US$1 that 90% of the population earned, the wealthiest 0.01% earned $162. Between 1990 and 2002, the gulf between rich and poor widened exponentially, with that same wealthy tip of the pyramid earning $18,000 for every $1 taken in by the bulk of the population. Such inequalities, which historically have led to social upheavals across the planet, don't seem to dissuade DiLorenzo in the least.

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