Failure of Laissez Faire Capitalism and Economic Dissolution of the West by Paul Craig Roberts
Summary and takeaways from the book.
Keywords:
Capitalism
Socialism
Money
Jul 7, 2026
Dr. Paul Craig Roberts "
was the Assistant Secretary of the Treasury in the Reagan administration, associate editor and columnist for the Wall Street Journal, columnist for Business Week..." and more.
Laissez Faire Capitalism - let it be or leave alone - is a point of view that economies function best when governments leave it alone and do not interfere.
This book is a critique of Laissez Faire Capitalism. The author writes about how economics, politics, and social structure were hijacked and corrupted by those with money. This is responsible for the economic, political, and social problems we see today.
"Private power was abused on a grand scale."
"Not only is the United States effectively bankrupt, but also the military-industrial complex and the financial oligarchy of the country have seized the power and initiated an unprecedented re-distribution of income, wealth, and power to the top. "
The high inflation which paralyzes the economy, and the constant wars are the outcome of feeding the military-industrial complex (MIC) and the Financial Industrial Complex (FIC).
Bad Economics and Bad Economists
The author blames bad economic policies supported by academics, economists, and the government. He particularly blames bad economists who blindly follow the mainstream ideology.
"Economists share the responsibility for the decline of the economies of the Western World. Rather than impartially analysing the changes in the global world economy in order to develop responses, the different economic schools are slaves to their ideologies.
Frequently, what does not fit into the theory is neglected. Furthermore, many economists are corrupted by service to interest groups and politicians who misuse the democratic system for their own purposes. By contrast, economists carrying out real scientific work are rare. They are hardly heard by policymakers."
The author quotes Nobel Prize Winning Economist Friedrich Hayek: "
Hayek expressed in his classic‚ The Road to Serfdom in 1944: 'Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire.'"
Central planning does not work
Marxist Central Planning is not the answer. The author gives example of Soviet planned Marxist economy which was ideological and had no feedback about profitability in planning.
"
The Soviet economy failed first, because its gross output indicator was more inefficient than the price and profit indicators used in the West."
"
The problem with planning is not only government inefficiency, but also the power of organized interest groups to use planning to elevate their interests above those of society."
"Marxian central economic planning is simply not achievable."
Laissez Faire Capitalism (leave it alone) does not work either
The author argues that economies are a social institution that society needs to function. Just as we have laws that regulate our life, we need good laws to regulate economic activities. The author compares an unregulated economy to a lawless society where there is murder and theft.
"
Why should not all human behavior be unregulated? Why is it that economists recognize that robbery, rape, and murder are socially dysfunctional, but fail to see unlimited debt leverage and misrepresentation of financial instruments as socially dysfunctional?"
The author gives example of laws and regulation in medicine, food production as examples where laws and regulation lead to a better society and gives confidence to consumers.
"
For example, regulation that contributes to the quality and safety of food and medicines encourages specialization in production and lower costs, and regulations enforcing contracts and private property rights add to economic efficiency."
Consequences of Laissez Faire Capitalism
Laissez Faire Capitalism has led to Class War in USA, political issues, economic pain, and social displacement. The author has several chapters which cover this and how Laissez Faire Capitalism led to these.
"Williams finds the US inflation rate as of October 2011 to be 11.1%, which is 3.2 times the government's official rate of 3.5%."
* * *
"
Economist Herman Daly put it well when he wrote that the elites who make the decisions “have figured out how to keep the benefits for themselves while 'sharing' the costs with the poor, the future, and other species” (Ecological Economics, vol. 72, p. 8)." The author calls it '
Fraud By Banksters'.
'Banksters' did a
financial Coup d'état.
Others, "
...document the financial crisis associated with subprime derivatives and credit default swaps as the result of stupidity, greed, and criminality on the part of both government policymakers and financial executives."
"These interest groups are committed to financial fraud and to war."
The
message in this book is that government intervention and central Marxist planning is bad. The alternative Laissez Faire Capitalism (leave it alone) is better because there is feedback about profitability in planning. Markets discover price better than governments can set it as governments are driven by ideology. However, this lack of government interference and no laws has allowed financial executives to hoard money printed by the Federal Reserve. This is crony capitalism. Although the author does not mention it, this is the Cantillon Effect. Those close to the money printing machine benefit the most. All this led to high inflation (>11%), economic paralysis, hijacking of politicians, and major social displacement.
In a review of this book,
Cato Institute writes: "
What Roberts really is assailing is crony capitalism-where vested interests capture the process and the levers of power. That, indeed, is problematic. But the solution is not more crony capitalism, which is enabled under the solutions Roberts suggests. The solution is to embrace globalization, which contains all of the incentives to foster smart policy at home."
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The Big Print: What Happened To America And How Sound Money Will Fix It by Lawrence Lepard
Toward a Libertarian Society by Walter Block
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