Book Reviews

A REVIEWER1S NOTEBOOK JOHN CHAMBERLAIN Public and Private Enterprise IN ADDITION to being a good econ omist, John Jewkes, the eminent Professor of Economic Organiza tion at Oxford, is a man with an exquisite taste for historical irony. His Public and Private Enterprise (Universi ty of Chicago .Press, $2.25), which is made up of his Lindsay Memorial Lectures given at the University of Keele, .invokes Alexis de Tocqueville at the begin ning. But it is not to hail the many prophecies of that remark able Frenchman which happened to come true. Rather it is to quote from one of Tocqueville's rare his torical mistakes. "Everywhere," so Tocqueville said of the eighteen thirties, "the State acquires more and more di rect control over the humblest members of the community, and a more exclusive power of govern ing each of them in his smallest concerns .... Diversity, as well as freedom, are disappearing day by day."

This was written at the time of the Jacksonian revolution in Amer ica and the movement toward free trade in England. Far· from "dis appearing" in· the eighteen thir ties, "diversity" and "freedom" were just about to take off on the grand flight that was to make the nineteenth century such a· wonder ful period. What Professor Jewkes is intent upon establishing is to show that Tocqueville was right in retrospect if wrong in prospect, for the world previous to the eighteen thirties - the world of mercantil ism and emperors who said Hl'etat, c'e.st moi" - was indeed a world in which diversity had a hard strug gle. For just about a hundred-year span after 1830, history was to re verse itself. But now, as Professor Jewkes laments, Tocqueville's words might correctly be applied. "Everywhere, and not merely in Socialist countries," says Jewkes, "that part of the national income taken in taxation;· of the working population employed by the state; of capital expenditure incurred by 509 510 THE FREEMAN August public authority, have all been on the increase over the past thirty or forty years."

Professor Jewkes does not expect a powerful reversal in social and political thinking that will change things. All paths, he· says, "seem to lead to wider government re sponsibilities." Professor Jewkes doesn't like the contemporary in tellectual atmosphere, but the note worthy thing about his Lindsay lectures is that they don't tangle head-on with prevailing dogma. In stead of affirming fundamental doc trine, Jewkes suggests a rather pragmatic cost-effectiveness ap proach to affairs. He speaks of the lessons to be drawn from "the case by-case method." And so, without any fanfare about basic principles, or the phi losophy of freedom, we get down to Professor Jewkes's cases. Jewkes on Education Education is one thing that con cerns Jewkes. He wonders about the "rate of return" to the com munity from the push to eradicate the college dropout problem. The cost-effectiveness of trying to force-feed the expansion of uni versity training is questionable.

Says Jewkes, "A person who is trained as a doctor instead of be coming, say, a carpenter will pre sumably show higher earnings in consequence. But if many more doctors were trained, the earnings of doctors themselves, including the existing doctors, would fall. It is conceivable that the total earnings of all doctors might decrease'. Would the rate of return on invest ment in education then be consid ered negative?" This is the sort of dryly ironical skepticism that pervades Profes sor Jewkes's book. He doesn't like the accent on using the schools to solve problems that seem to demand immediate attention. For when a drive is on to educate more people in, say, industrial design or the commercial use of foreign lan guages, the stress on specifics may "tend to drive out of the curricula those broad subjects of study which no one can defend as having direct relevance for economic expansion but which contribute much to gen eral intelligence and the instinct for orderly living without which economic achievement would be in conceivable."

Jewkes likes generalists. But not when the generalists are conform ists. "University education, even at its best," he says, "tends to bring about conformist thinking; for Universities cannot operate without standard tests and proce dures." Jewkes has no good answer to the problem of battling conform ity, but he does at least raise the question "of providing leisure and resources by which the young can 1967 PUBLIC AND PRIVATE ENTERPRISE 511 learn in their own ways and pursue their eccentricities." Curiously, he is very skeptical of the value of spending huge sums on "research and development." "If we take the United States alone," he says, "where the sta tistics are most complete and where research expenditure has reached astronomical levels, the annual per centage rate of growth in indus trial production is not higher than it was half a century ago. The num ber of patents taken out in that country have not been increasing."

Jewkes wonders at the fact that "Japan, which shows the most im pressive rate of economic growth in recent years, has not engaged in research and development on any extraordinary scale." On the basis of Jewkes's evidence one would have to say that endowing a young man with funds and sticking him in a fancy laboratory is not neces sarily the way to enable him to "pursue his eccentricities" in a fruitful manner. The conclusion to be drawn from Professor Jewkes on the subject of education is that the state might pay less attention to it without any adve1 1 se effects on the body politic. But Jewkes doesn't belabor the point. Other Governmental Failures The cost of a National Health Service is another subject which Jewkes inspects in his dryly iron ical way. He concludes that a free national service paid for largely out of general taxation "not only discourages people from paying privately for their medical services but leads them to be content with a service of lower quality than they might otherwise have been p,re pared to pay for."

Professor Jewkes does not at tack the prevalent idea that "the outstandingly successful new func tion of government in our time has been the maintenance of full em ployment." Instead, he remarks on the "happy-go-lucky fashion" in which governments have accepted this new responsibility. "Persistent inflation" has been one result of carelessness. Government interven tion to wipe out "massive unem ployment" may justify itself to Jewkes "on the critical counts," but the "recent efforts of govern ments positively to engineer eco nomic growth have been among their most palpable failures." A Case lor the Free Market Instead of going minutely into the failures of government-fos tered "growthmanship," however, Professor Jewkes ends his lectures by making a case for the "free mar ket as a strong civilizing influence." He thinks capitalist publishing has done more to civilize people than anything that socialists have done 512 THE FREEMAN August anywhere. The paperback book, he points out, "was devised and has been spread over great markets by men looking for private gain. The interest in great music has been stimulated in recent years by many inventions but especially by the long-playing record and refined de vices for reproducing sound, which were invented in thelaboratories of commercial firms and widely dis tributed by many firms in vigorous competition. The sense of form and colour has been fostered all over the world by the opportunity of amateur activity and experiment through the cheapening of the cam era."

If our young are really looking for a man who questions all the cliches, Jewkes shouid be their prophet. He is not as· flashy a phrase-maker as Galbraith, but he is a far more effective critic of what has become the new "conven tional wisdom." + THE FREEMAN SEPTEMBER 1967 Vol. 17, No.9 II'" Professor Yale Brozen explains why personal choice and freedom depend upon market pricing as distinguished from authoritarian "rule by men" ............ p. 515 II'" Lest we forget, the National Forest Products Association reminds us that there are more ways than one to con serve scarce resources - an exercise II'" Meanwhile, Henry Hazlitt reminds us, human efforts at remaking the world are yielding all the disastrous consequences of world-wide inflation ...p. 556 III' And Admiral Moree" adds a caution about the home-grown variety of compulsory collectivism p. 558 in common sense . ...... p. 528 ~ That individual freedom of choice more fruitfully serves mankind than the most brilliant philosopher king could have planned for us, is the "new idea" Leonard Read proposes ............ p. 530 III' How can government best help small businesses? By getting off their backs, says Lawrence Fertig ....p. 538 ~ Dr. Roche hopefully concludes his series on POWER with a faith that man ... can and will learn to live as a creature of God, in His world p. 541 II'" Reverend Mr. Mahaffy traces in greater detail the philosophical differ ences between socialism and freedom and shows why the latter affords the only way to achieve the good intentions of the former p. 562 II'" FEE's "books of the month" in clude Dr. Sylvester Petro's The Kings port Strike, reviewed by John Chamber lain; Free Markets or Famine, edited by V. Orval Watts, reviewed by Henry Hazlitt; and The Sociological Tr,adition, by Robert A. Nisbet, reviewed by Gary North p. 571 Anyone wishing to communicate with authors may send first-class mail in care of THE FREEMAN for forwarding.