"The Way the World Works" is the masterpiece of Ronald Reagan's adviser Jude Wanniski. It was listed as one of the 100 most influential books of the 20th Century by the National Review. I don't think that this is the definitive book about the greatness of free markets and failure of protectionism, but anyway it is an interesting work that makes many good points and all people with serious interest in economics should read it. Perhaps it is the definitive book of supply-side economics.
Early on, the author discusses Arthur Laffer's "wedge model" and the "Laffer Curve." Then comes a discussion of Adam Smith's ideas and "demand-side" versus "supply-side" models.
Next follows a commentary on Marxist ideas, Keynesian ideas, and monetarist ideas. The author criticizes all of these.
The author comments on many national leaders: Caesar, Napoleon, Wilson, Coolidge (with Mellon), Hoover, Roosevelt, Mussolini, Hitler, Truman, Eisenhower, Kennedy, and Nixon. From all of these, it is clear that the author's favorites were Coolidge and Mellon.
The central controversial idea of the book, aside from support for supply-side economics, is the accusation that the stock market Crash of 1929 and the Great Depression were the result of the Smoot-Hawley Tariff Act. Of course this goes against the "conventional wisdom" in the United States that free markets caused the Crash. The author reviews the bizarre issues surrounding the Act: it was passed while Hoover was president, FDR was elected in 1932 after campaigning against the Act, and then FDR rather than ending this bad policy decided to restrict commerce further.
The author continues with many more topics: the United Kingdom, Bretton Woods, gold, India, Venezuela, Brazil, Mexico, Vietnam, Puerto Rico, energy, and recommendations for the 21st Century.
This "20th Anniversary Edition" not only includes an introduction, but also contains reprints of the introductions from earlier editions.
My central criticism of Wanniski's work is that his faith in the judgement of the electorate is wrong given that voters often (if not usually) vote against their own self-interest. The author contradicts himself by praising democracy and simultaneously criticizing most of the elected presidents especially including FDR (he was elected four times).
John Christmas, author of "Democracy Society"
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G. West
Although an old book and extremely bias, I love it.
Reviewed in the United Kingdom on July 19, 2016