Book Reviews

Great industries, depending on government for sales and con tracts, feel compelled to think twice before taking a case to the public. As in the days of King George III, there is the "court" to consider. There is a "partner shi p" between industry and gov ernment' but since one "partner" has the power to inspect the tax reports of the other, or to deny him a contract, it is not precisely a partnership among equals. The "court" comes first. There is not much point in com plaining about this state of affairs. The defense necessities of the nuclear age make the United States government a huge buyer of hardware. The aircraft manu facturers, the missile makers, the providers of steel, aluminum, and copper, would be not only remiss to their stockholders but tremen dously unpatriotic men if they were to refuse their services to Sec60 retary McNamara. When the mili tary budget is upwards of fifty billion dollars a year, the free en terprise system will find itself im plicated with mercantilist doctrine whether it wishes it or not. Some body is going to get those con tracts, and the business concern that doesn't have its courtiers on hand to present a case to the sov ereign may find itself in hot water in trying to explain .a sagging sales chart to the board of direc tors.

Under the circumstances, it is probably miraculous that we don't have a lot more corruption than we already have of the type which Clark R. Mollenhoff describes in his Despoilers of Democracy (Doubleday, $5.95). With busi nessmen going to work for gov ernment, there are always psycho logical ties to the old company, or the old bank, or the old home town. Even though all physical symbols betokening a "conflict of interest"

1966 MERCANTILISM INVITES CORRUPTION 61 may be stored away for the mo ment in trust, or even disposed of for good, men cannot escape the pull of their pasts. "Integrity" must become a matter of degree because of subconscious factors. So, if Texas gets a contract and California does not, it may not mean very much provided most of the other - and more objective factors are equal. The soil, however, will always be ready for the growth of "raw" corruption. Mr. Mollenhoff's book is concerned with "raw" cases and not with the general development of the modern mercantilist system. A third of his book is devoted to the scandals developing from the Bobby Baker case. A fourth of the pages detail the quarrels that have beset the Department of De fense over such things as the TFX contract (it went to General Dynamics, a Texas company, in stead of to Boeing, of the State of Washington). Then there are chapters on the Billie Sol Estes business, and the stockpile scan dals, and the Otepka case (which involved "security" inside the State Department), and some skuld uggeries and inj ustices in the administration of foreign aid.

Mr. Mollenhoff is a first-rate re porter who belongs to the dimin ishing tribe of those who are cap able of combining indignation with an ability to marshal facts in a calm and orderly manner. Back in the nineteen twenties, when Paul Anderson was reporting for the Natiorn, we used to have a lot of Mollenhoffs around. But in our ideological age they are growing scarce. Today exposures usually follow party lines. So it is refresh ing to get a book which doesn't pull its punches to let a Democrat or a Republican, a liberal or a con servative, get the better of a bargain. Growth of Government Leads to Corruption For my taste as a libertarian, however, Despoilers of Democracy would have been a better book if Mr. Mollenhoff had stopped to consider where the growth of mercantilist capitalism is bound to lead us. Won't it be to a sort of generalized state of diffused cor ruption that takes in just about everybody? The advance of gov ernment - Le., the "court" - into the business domain must turn us all into courtiers of sorts. Where we used to live by competition, we will find ourselves cultivating the courtier's assets of flattery, sub servience, and willingness to con form.

I wish Mr. Mollenhoff had sche mati zed his book along lines that would have separated corruption in the defense sector of the econ omy, which must in the nature of 62 THE FREEMAN March things deal with government, and corruption in things like agricul ture, which don't have to be im plicated with government at all. When Secretary McNamara insists there were compelling reasons for taking a General Dynamics plane instead of a Boeing plane, it is difficult for me, a civilian who is mystified by aerodynamics, to know whether he has a case or not. The only thing that is certain is that the United States, as one of the two superpowers in the world, is' going to need a good military defense. But when a Billy Sol Estes manipulates cotton al lotments and mortgages on non existent liquid fertilizer storage tanks to pile up a few million dol lars, I know that none of this could have happened if the gov ernment had not been implicated in the futile attempt to "control"

agriculture in the first place. Any government is bound to make some mistakes, and have some corruption, when it must go to private industry to get air planes and rifles and army blan kets and armor plate. But the at tempt to control the price level or the distribution of incomes in agriculture is an unnecessary bit of corruption in itself. It makes the government a prime evader of the antitrust laws. I can forgive an Administration for letting poli tics seep into the award of defense contracts. But when an Adminis tration finds itself embarrassed by a Billy Sol Estes, I have no sym pathy for it. Stockpile Manipulation When there is money being passed around, the ravens - or should one say the vultures? - will gather. It could be nobody's fault in the White House or in the office of the Majority Leader of the Senate when a Bobby Baker has an interest in a food-vending com pany that is trying to sell its ser vices to defense plants. This sort of thing will happen under mer cantilism anywhere, and when the mercantilism proceeds from de fense necessities we have to count on Bobby Bakers turtling up. But where is the justification for gov ernment to go into stockpiling of raw materials beyond a certain point?

We have just been witness to what can be done with stockpiles. But Mr. Mollenhoff's pages on the stockpile scandals make one feel a lot less sorry than we should be for certain big metals companies over their mistreatment in the re cent government-manipula ted price crackdowns. There is no moral or legal justification for Federal use of stockpiles to effect price control. But some of the metals companies helped dig their own graves here by encouraging 1966 MERCANTILISM INVITES CORRUPTION 63 the government in mercantilist practices when it came to building up the stockpiles not only for de fense but to support the market. At one point President Kennedy and Senator Stuart Symington were astonished to discover that "the value of the aluminum in the stockpile exceeds the amounts we would need for three years in the event of war by $347 million." Kennedy also said the "excess sup ply of nickel is $103 million." The implication is that some of the big metals companies were willing to connive at price control on the way down. Well, the whole busi ness boomeranged on them when President Johnson decided to work the process in reverse. We've all heard about poetic justice, and we know that sauce for the goose is always sauce for the gander. If we had not permitted mercantil ism to dominate the business of stockpiling in the first place, Lyndon Johnson wouldn't have had a handy boomerang to hurl at the businessmen. He would have had to go to Congress to get price control, which is the proper place to apply for it if we are to have a government of laws and not of men.

Mr. Mollenhoff's book is de signed to improve our civic tone. But it could have a most impor tant by-product in improving our economic thinking. + ~ LIFE WITHOUT PREJUDICE by Richard Weaver (Chicago: Henry Regnery Company, 1965), 167 pp., $4.50. Reviewed by Robert M. Thornton I VENTURE to predict that Richard Weaver's influence over the years will be all out of proportion to the number of books he wrote. The one under review is only his fifth - the second to be published since his death in 1963 - and is made up of eight essays which appeared in various publications between 1956 and the year he died. While not a great .stylist, Weaver was a careful writer who did a lot of hard thinking before he put his ideas down on paper; consequently, he is a great pleas ure to read. Keen insights and provocative ideas abound, and there are no superfluous words in this intellectual feast - all good lean meat!