How "The Market" Rules Our Lives

By Paul Stiles

Collins. 305 pp. $24.95


How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J.P. Morgan Invented the American Supereconomy

By Charles R. Morris

Times. 382 pp. $28


Lessons from the Front Lines of Doing Business in China

By James McGregor

Wall Street Journal/Free Press. 312 pp. $27

For true believers, the free market is kind of like the Force from the "Star Wars" movies: a mystical power that binds together a world where effort is rewarded and duplicity condemned, with Adam Smith watching over us all like an economic Jedi master.

Others, however, regard the market more as the Matrix -- a cruel subjugator that transforms the masses into supply- and demand-driven slaves in some soulless and hyper-efficient business plan.

So is the market more Force or Matrix, more Adam Smith or Agent Smith? Three books inform this debate from different perspectives: those who created the market, those who suffer from it, and those striving to spread it further.

Paul Stiles kicks off Is the American Dream Killing You? with the tale of a nameless individual who awakens one morning from uneasy dreams to discover that he is an assistant corporate counsel working in the District, living in suburbia, and suddenly finds himself pondering What It All Means. This is Stiles's stand-in for "you" in his book title. Your commute is too long and your time with your kids too short. You feel burnt out, undersexed and overworked. "Staring into the quiet darkness," Stiles writes, "you sense that there is something out there responsible for this daily insanity, this perpetual chaos, this devastating meaninglessness. There is a reason why nothing makes sense, why life's purpose eludes you, why happiness is so fleeting. . . . "

That reason -- no, not a midlife crisis -- is the market. An explicit proponent of the Matrix worldview, Stiles blames everything he dislikes (a long list) on the malevolent market: the decline of traditional families, global warming, "Sex and the City," suburban sprawl, mental illness, the decline of literature, Sept. 11, Janet Jackson's wardrobe malfunction -- take your pick.

A former high-tech executive and bond trader, Stiles is no stranger to the marketplace. But familiarity has bred something far beyond contempt. The market, he writes, is a "totalitarian regime," a "diabolical force" that conflates good with profits and evil with losses and, in the process, steals our souls. Anyone disagreeing is trapped in "the bubble" of commercial media.

This tussle between markets and virtue has emerged only over the past 50 years, Stiles maintains. Yet readers may recall some earlier debates about camels passing through eyes of needles and Roman coins bearing Caesar's face. And there lies the crux of Stiles's holier-than-thou argument: In the battle of God versus mammon, he concludes, God has been cast out. The author's solution: The market must find religion.

Lamenting that the market "has deeply penetrated our national identity," Stiles recommends an economic exorcism, one that should trouble anyone concerned with the establishment clause of the Constitution and the separation of church and state. He proposes a market "restrained by Judeo-Christian values, as codified in law and represented in democratic institutions." This is "a recipe for social success," he claims, "the very recipe that made America."

If Stiles wants a scapegoat for the market he so loathes, he'll find a target-rich environment in Charles R. Morris's The Tycoons, a far more engaging and credible work that traces the rise of the United States in the three decades following the Civil War, an extraordinary growth spurt that made America the world's premier economic power.

Morris, the author of American Catholic, charts this transformation through the lives and deals of the most prominent of the era's robber barons, none of them overly concerned with open and free markets. There's Carnegie, the "repellantly smarmy" steel giant who cut costs, gained share and achieved scale; Gould, the master manipulator of securities markets and railroads; Rockefeller, the "greatest visionary and the supreme manager" of oil markets; and Morgan, the gentleman-banker who became one of the planet's most influential financiers.

Morris's contribution is more contextual than biographical; he weaves the robber barons' lives into a history of the forces shaping the postwar decades. "Carnegie, Rockefeller, Gould, and Morgan would have been dominant figures anywhere, but few places have ever been as open to people of talent as post-Civil War America," he writes. "America's radically different manufacturing culture, its cult of the innovative entrepreneur, its obsession with 'getting ahead' even on the part of ordinary people, its enthusiasm for the new -- the new tool, the new consumer product -- were all unique."

The true protagonists of this tale are not the four men but the new industrial technologies of the era. "The American fascination with machine production is a distinguishing feature of its leap to the front ranks of manufacturing powers," explains Morris. He highlights the Connecticut River Valley during the early 19th century -- with its "machine-geek culture" and traveling patent brokers -- as the Silicon Valley of its time. And Morris explains how George Corliss's famous steam engine so captivated the nation at the 1876 Centennial Exposition in Philadelphia that even Walt Whitman "came and sat before it for a full half hour."

New technologies and business savvy came together to satisfy the needs of America's emerging mass consumer society. In the last quarter of the 19th century, writes Morris, the nation suddenly heard "the roar of a burgeoning new demographic -- the middle class -- clamoring for more stuff." This quest for stuff launched America's economic ascent at the time, and consumer spending still propels the U.S. economy today.

America's post-Civil War transformation pales alongside the changes underway today in China -- a manufacturing powerhouse grafting market forces onto a communist system. As James McGregor puts it in One Billion Customers, "China is undergoing the raw capitalism of the Robber Baron era of the late 1800s; the speculative financial mania of the 1920s; the rural-to-urban migration of the 1930s; the emergence of the first-car, first-home, first-fashionable clothes, first-college education, first-family vacation, middle-class consumer of the 1950s, and even aspects of social upheaval similar to the 1960s."

McGregor has drawn on two decades of experience as a reporter and businessman in China (including a stint as the Wall Street Journal's China bureau chief) to write an entertaining if somewhat glib guidebook for Western capitalists seeking to make good on the Middle Kingdom's boom. He begins with a brief history of China's integration into the global economy, tracing the efforts that brought China into the World Trade Organization in 2001 all the way back to 1793, when British diplomat George Macartney landed a fleet of ships on the north China coast, intent on opening China's markets to foreign goods. McGregor also argues that the massacre at Tiananmen Square in 1989 proved to be a turning point that redoubled China's market-oriented overhaul. "In the aftermath of Tiananmen," he writes, "the Party accelerated privatization and market reforms because its credibility was shredded and could only be rebuilt by quickly improving people's lives."

Through case studies of six disparate business ventures, McGregor illustrates the dangers and allure of the Chinese market. Especially compelling are Morgan Stanley's effort to build China's first joint-venture investment bank and the emergence of Caijing, a crusading business magazine. And few readers will forget McGregor's description of the tycoon Rupert Murdoch sucking up to Chinese bureaucrats while seeking a piece of China's media market. "Once Murdoch got his chance to tell his story to Chinese leaders face to face," McGregor deadpans, "they saw eye-to-eye, dictator-to-dictator."

But in an economy where local competitors often double as regulators, where suspicion of foreigners runs deep and where corruption is just another business expense, some Western investors need all the help they can get. So McGregor offers his "Little Red Book of Business" -- maxims that will keep you from getting bamboozled by the bureaucrats of Beijing. Some seem useful: "The position of HR chief in China is more powerful than in the West because those who are hired often feel personally indebted." Others are truisms: "You will never be successful walking into a meeting cold." And a few are generically insulting: "The Chinese [are] among the world's most individualistic and selfish people."

But most revealing are those addressing moral choices. "If you decide to sell your soul and succumb to China's corruption," McGregor recommends, "get a good price and focus on charity work in your old age."

So, does embracing the market, whether in Beijing or Washington, really mean losing your soul? (If so, count me among the damned.) Some scholars, such as Harvard University economist Benjamin Friedman, maintain just the reverse: Economic growth actually enhances social tolerance and democracy. But markets needn't be faceless forces propelling us toward good or evil. The market economy is an inherently human creation, made up of countless individual ventures and dependent on laws and courts to empower and constrain it. As such, markets will remain works in progress, with prosperity and inventiveness enduring alongside corruption and disappointment.

After all, even the Force has its dark side. *

Carlos Lozada is The Washington Post's economics editor.

The Stock Exchange in Shanghai, China