Book Reviews

The big organization bred collec sivism, with all its corroding ef fects on the freedom of· the indi vidual to be himself. What was the nature of the mis .:ake that led to "enmassment"? [n The Bewildered Society (Arlington House, $8.95) ,a book which the author describes as a strange mixture of "puffs and pans," Dr. Roche tends to blame everything on the propensity of baffled human beings to try to fight fire with fire. His description of what happened is compelling. The genius of a free people unleashed tremendous cre ative forces in an open environ ment. Seeking the advantages of "economies of scale," our Rocke fellers, Carnegies and J. P. Mor gans turned little companies into big companies, using the special legal advantages accorded to the corporation to gain ends that had a tremendous potential both for good and for bad. If men had only been willing to tackle their en vironment without asking for spe cial favors from government, so Dr. Roche avers, the railroads, the steel companies, the oil refining companies and the real estate op636 THE FREEMAN October erators would have developed in an orderly way t:tIat would not have hurt the little man. But the temptation was too great: the State, throughout the nineteenth century, had too much to give, and it was in the cards that force ful and adaptive men would com bine to conjure special advantages out of the Great Benefactor in Washington.

Men Are Known By the Company They Keep Dr. Roche is ambivalent about the men whom Matthew Joseph son called the Robber Barons. They are to be blamed, so Dr. Roche says, for courting government to gain such special privileges as tar iffs and grants of land. But in act ing as a pressure grol;lp the nine teenth century tycoonery was be having like everybody else. The government owned title to most of the empty continent. Settlers in search of a good quarter section of land rallied to the slogan, "Vote yourself a farm." Everybody was in on the take, as was perhaps in evitable under the circumstances. When "society" as a whole is to blame for a state of mind, there is little point in .making special villains out of those who proved most efficient in providing what people wanted. The "robber baron" enriched himself, but in many in stances he also enriched even those who were forced to sell out to him.

What Dr. Roche seems to be telling us is that the American people in the latter half of the nineteenth century should have found some nongovernmental way of protecting themselves against the "enmassment" called into be ing by the corporate form. After all, nobody compelled farmers to make themselves dependent on cash crops and monoculture agri culture. Producer and consumer cooperatives might have been formed to bring the benefits of "economies of scale" to the little fellow. When Edison developed the power plant, farmers might have availed themselves of small-scale electrical power components, as "Boss" Kettering of General Motors originally suggested. If in dividuals had formed associations to buy tracts of land and then sub divided the acreage to suit them selves, we could have avoided some of the uglier results of urban sprawl. When Henry Ford started making his Model T, he hoped that people would divide their time be tween working for employers and raising their own vegetables on their own acres. The car might have enabled a man to take indus trial employment in prosperous times without quitting a base on the land that could tide a family over periods of depression.

1972 THE BEWILDERED SOCIETY 637 Turning to Government Instead of trying to solve their problems by voluntary association and individual ingenuity, however, the American people allowed them selves to be seduced by the idea that Big Government could be utilized to control and regulate Big Business in such a way that the little competitor would have a chance. For a time, "trust-busting" beguiled the common man. But the Populists, the Mugwumps and the Progressives discovered to their chagrin that business had an uncanny way of dominating the very State machinery that was supposed to give protection to the "public" or to the "consumer." Theodore Roosevelt tried to dis tinguish between "good" and "bad" trusts and wound up in the arms of George Perkins of the House of Morgan. To fight World War I, Woodrow Wilson had to call Bernard Baruch and other Wall Street tycoons to Washing ton to head up the war production agencies. The bankers soon learned how to make use of government created paper to enrich them selves.

As Dr. Roche tells the story, "reform" could not stay the proc esses that led to ever greater "en massment." The New Deal at tempts to save the small farmer ended by giving superior help to the big farmer, who used the universalized benefits of the AAA to buy machinery that his little com petitor could not afford. Instead of halting the movement to the central city, our "progressive" agriculture reforms hastened it. Wartime Interventions Two big wars and a couple of small ones .completed the cen tralizing process. Education was forced into line when the govern ment, in order to fight the wars, had to subsidize the universities to provide research and develop ment for the so-called military industrial complex. In spite of everything, Dr. Roche has not lost his nerve or his sense of proportion. His his torical chapters are enough to make anybody a pessimist, but, in a sudden right-about-face, our hitherto gloomy analyst discovers that only some "twenty-five per cent of all goods and services are produced by the 500 largest indus trials." Controverting Professor Galbraith, Dr. Roche says this must mean that "seventy-five per cent of our goods and services are not produced by 'the technostruc ture.' " Continuing his exploration of the factors that are currently working to halt the processes of "enmassment," .Dr. Roche notes that the big producers need the small producers just as much as the small businessman needs the 638 THE FREEMAN October big. Western Electric, for example, has 40,000 suppliers. And the small businessman provides the major support to America's 6,000 non profit organizations, 320,000 churches, and 100,000 private wel fare organizations. We don't, in short, need the Big State to solve our problems. "Enmassment" need not grow if indi vid uals have the will to do things either alone or in voluntary groups.

Softness at the Top Will enough people read Dr. Roche to rekindle an old faith in the individual? This is, indeed, the question. The day I finished read ing The Bewildered Society I picked up The New York Times and opened it to a story of a sur vey "of 456 of the richest, most powerful and most influential per sons in the United States." What the survey reveals is "a high level of acceptance of Government in tervention in the economy, ap proval of most of the. things that make up the welfare state, and rejection of hard-line anti-com munism in foreign policy." With such softness at the top, has Dr. Roche a chance of making his gospel stick? We can only hope that his still, small voice will somehow reach 456 "leaders" who know not what they do. ~ THE SPOILS OF PROGRESS: Environmental Pollution in the Soviet Union by Marshall I. Gold man (Cambridge, Mass.: MIT Press, 1972), 372 pp., $7.95.

Reviewed by Gary North. ONCE AGAIN, Professor Goldman has demonstrated his remarkable grasp of the· economics of the So viet Union (see the review in the November, 1968 issue of THE FREEMAN). This time he focuses on the whole problem of pollution: ownership, social costs, pricing, responsibility, legislation, and so forth. First, he demolishes the myth of "clean socialism." There is no guarantee that the state owner ship of the means of production will result in cleaner skies, purer water, and rational allocation of clean resources. The actual prac tice of the Soviet Union indicates the reverse: "One of the major arguments throughout this study has been that the concentration of economic and political power in the hands of the Soviet state can be and has been a major factor in the creation of environmental dis ruption. In the .Soviet govern ment's drive toward industrializa tion and economic growth all too often there has been no person or group around with any power to stand up for the protection of the environment."

1972 OTHER BOOKS 639 State power, in theory, may be a tool for doing good, but in prac tice we measure the results. The quest for aggregate economic growth - a mania, says Goldman, which was first given to the mod ern world by the Stalinist Five Year Plans - has granted bonuses to managers for minimizing fac tory costs at the expense of the environment. Fines for damaging the environment seldom match bonuses for reaching quotas. And even these fines are seldom im posed on factory managers. "So far it is the poacher (that is, in dividual citizens) that [is] being harassed, while governmental in stitutions (factories and munici palities) are frequently left to themselves. The real polluters for the most part are not rigorously regulated or penalized .... Yet it is the government institutions (municipal, service, manufactur ing, and agricultural) that are re sponsible for damage hundreds of times more destructive than that of the poachers."

Marxism propounds two eco nomic theories that are almost guaranteed to produce environ mental disruption: the abolition of private ownership and the free (yr~tuitous) cost of SCllrce economic resources. "In a socialist society it would seem that it would be more diffi cult to stimulate preventive action in both the case of public and pri vate social costs. Because private land .ownership is prohibited in the USSR, the individual has less of a vested interest in fighting the construction of a new factory in his neighborhood or the mining of some raw material in the area." The best motivation, operation ally, is simply "the fear of private loss." Thus, the USSR has elimi nated what Goldman calls the first line of defense against pollution. By regarding natural resources as free goods, managers have been led to underestimate costs, waste resources, locate factories uneco nomically, and destroy valuable as sets. Developers of· Black Sea re sorts used sand from the beaches to make cement. This removed the protection from the pounding win ter waves. In 1968 all the trucks in the Abkhazia Republic had to be used in order to bring in ma terials to save collapsing hotel foundations. The erosion in some cases cannot be reversed, and whole sections of the beaches are disappearing.

Lake Baikal, the largest mass of pure water on earth, is steadily being polluted. Kislivodsk, the mountain resort protected from the weather by a ring of moun tains, has had its mountain cover cut away by a limestone quarry, and the winter is now getting in. The Caspian Sea is being lowered 640 THE FREEMAN October rapidly. Dust storms now hit the Ukraine every other year. Yet the only successful protest against one government agency is a protest by some other agency. Lying managers, rigged cost benefit analyses, bureaucratic in transigence, impotent national leg islation, utopian schemes, and pol lution of all kinds are the spoils of Soviet progress. Expenditures to curb air pollution in the Soviet Union are only one-tenth of ex penditures in the United States. Their spirit may be willing but their price system is weak. Gold man's book is a ringing refutation of all those who would argue that capitalism is the primary cause of the "environmental crises." ~ HANDSOME BLUE LEATHERLEX FREEMAN BINDERS $2.50 each ORDER FROM: THE FOUNDATION FOR ECONOMIC EDUCATION IRVINGTON-ON-HUDSON, NEW YORK 10533 the Freeman VOL. 22, NO. 11 • NOVEMBER 1972 Six Ideas to Keep Us Human Edmund A. Opitz 643 The first of two articles on six humanizing concepts that might save us from the "new materialism."