Politically Incorrect Guide To Capitalism: Book Report

Length: 8 pages Sources: 1 Subject: Economics Type: Book Report Paper: #1830746 Related Topics: Minimum Wage, Socialism, Foreign Aid, Affirmative Action
Excerpt from Book Report :

Tariffs, like labor unions, are set up to benefit a select few workers according to Murphy. Just as labor union unfairly penalize those who are not a part of them, tariffs build an imaginary economy world of high wages and great benefits for products that are no better than something any other untaxed, un-tariff corporation could provide. It is in this way that Murphy argues that tariffs unfairly burden the American economy and create both distrust and anger in the economic powers that trade with America. If unfair tariffs are allowed to exist, those countries that now import American goods at high prices will begin to import them from elsewhere, or could even decide to produce the goods more cheaply in their own land. This does nothing to benefit American workers and corporations, and is not a behavior associated with free market capitalism.

Racism and the Environment

Murphy's take on the issue of racism is from a free market perspective. He assumes that, in a free market, racism would be all but eliminated due to the fact that a society that holds racist ideals and values cannot function as an economically successful one. There is little doubt, at least in this section of the book; the Murphy is beginning to stretch his arguments from a purely financial economic realm into a more socio-economic realm. If racism is seen as a negative thing by individuals and corporations, then being racist would not benefit either in a free market economy.

Murphy's discussion of Affirmative Action goes along similar lines, as he argues that Affirmative Action is inherently racist as it dictates that a certain number of minority workers be hired, sometimes irregardless of their skills and experience. This most likely does harm to a free market capitalist economy, because it keeps the very best, most experienced, most skilled workers out of the companies and corporations that need them the most, and replaced them with less skilled workers of different races, for the sake of having some racial diversity. Murphy is treading on thin ice here, economically speaking, given that the education and experience gap between the races has been closing for the past half century. But Murphy's argument, from a theoretical perspective, makes economic sense. Why hire someone based on their race instead of their experience or job qualifications? Is this behavior not racist in and of itself? By abiding by the Affirmative Action law, and having to hire a mixture of races, Murphy argues that corporations are once again handicapped, and are unable to compete on the global scale. Unlike other countries, where no form of racial discrimination exists, America and its economy are at a great disadvantage if Affirmative Action is allowed to continue to weed out the best candidates for the job, solely based on race. Murphy's arguments relative to racism and the economy were clear and concise, and the facts behind them are quite compelling.

Welfare and Taxes According to Murphy

Murphy refers to the U.S. As being a "welfare state" and argues that even the staunchest advocate for the poor and downtrodden could not argue for the continuation of welfare as beneficial to those who receive it. For Murphy, welfare is a free pass to continue doing what those who have been financially unsuccessful have been doing since they've been on welfare. It is a self-perpetuating cycle of poverty, and the...


government is helping to continue it. Welfare also hurts the rest of a society or economy because it causes taxes to be higher for those who do work for their living. It's a penalty on those who are productive members of society, and it is an unfair burden on the rest of the society.

Taxes are another subject that is hotly debated between the left and right sides of the aisle. Taxes are cause for debate because Murphy argues that, yet again, the government has crippled the U.S. economy and U.S. corporations by taxing them so heavily as to not allow them to compete with international firms. The playing field is not a level one in this instance, and Murphy uses a couple of arguments quite effectively to illustrate his point. The trickle-down economic model, which Reagan believed in, states that if the richest part of the economy, the part that generates wealth or the corporations are allowed to function more freely and with less of a tax burden, then the rest of society benefits due to lower cost production and better corporate access to resources. This theory, while not completely provable, is quite compelling. It says that a welfare state, where taxes are high and productivity is discouraged through heavy taxation is the exact opposite of what need s to exist in a free market, capitalist society. Nowhere is the author more clear in his arguments, more articulate than in this section of the book.

Sure, lower taxes and the abolition of welfare have been subjects that "conservatives" have advocated for decades, but Murphy does an excellent job outlining not just the "how" but the "why" of the argument from the standpoint of economic theory. He believes that if an economy is to be truly free market, that the government should have the lowest amount of taxes possible. In order to free up corporations from the government stranglehold, corporate tax rates should be cut and set as close to zero as possible. In this way, the workers would benefit directly because of trickle down economic theory, stating that when a corporation is doing well financially, then the workers will be taken care of as well. This again, is an idealist assumption that Murphy makes, assuming that the corporation now having to pay less taxes will not just absorb the extra profits instead of turning around and giving it back to the workers in the form of higher wages, salaries, and better benefits.

IMF and Other Considerations

Murphy argues that the IMF, particularly the way it distributes loans and foreign aid, is a system that is set up to fail, similar to the welfare system. According to Murphy, when a country received IMF aid, they are in a way being told that there will always be someone there ready to bail them out economically. Many of these countries cannot repay their loans, or at best, can only hope to pay the interest, which further cripples their economy immediately after the loans become due. The IMF, as seen by Murphy, is like a world-wide welfare system that rewards less economically-successful countries by giving them the impression that they will be taken care of no matter what. These loans put an unfair burden on the lending countries' economies as well, taking money that could be used to benefit that lending country's economy and society and instead wasting it on IMF loans and hand outs.

One of the most interesting sections of Murphy's book is where he asks if you are a capitalist pig. This part of the book is a type of self checklist or a set of criteria with which to judge for yourself, whether the reader themselves is a free market capitalist or whether they may lean toward the socialist or communist economic perspective. It was interesting to test myself on many of Murphy's most basic economic arguments, and see where I stand as both a reader and an American citizen. I found this to be informative, and I was left asking myself many questions about why I believe the things I do about the economy and free market capitalism.


Murphy's book was an excellent primer for someone who doesn't know very much about why capitalist, free market economies are so heavily burdened in this day and age by government and other social falsehoods. I found this book to be both engaging and interesting, and honestly had a hard time putting it down as I would read through each new section, looking for circumstances in my life where people or corporations behave either as true free market capitalists or as socialists. While I did not enjoy Murphy's labeling, I thought the book was a thoughtful rebuttal to many of the economic and social concepts that plague American society. If his premises are accepted at face value, this book is an excellent read and would help anyone leaning toward the right side of the argument have more concise, well thought out arguments with which to support their position. I liked this book and will likely be reading his other "Politically Incorrect" guides when I have time.

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