Book Reviews

Israel, of course, is surrounded by enemies, and in retaining a war footing it does not quibble about subordinating social power to State power when it is a matter of taxing and drafting to keep its 58 army in readiness. Since the na tion was formed in good part by Marxist ideologues who had grown up in eastern Europe during the period of pre-Bolshevik revolu tionary ferment, "hitnadvut" has had a pernicious tradition to over come. But it is interesting to note that the Israeli Founding Fathers who came trickling into late nine teenth and early twentieth century Palestine from the Jewish Pale of Settlement in Czarist Russia had to jettison all their ideas about an orthodox socialist economy in or der to get Galilee swampland to produce. Even though they were committed ideologically to social1976 THE LOVE OF LIBERTY 59 ism, the Israeli pioneers had to find a form of economic organiza tion that would be compatible with "hitnadvut."

The result was the kibbutz, or voluntary collective. I don't sup pose Leonard Read would fully ap prove of it. The kibbutz does not reward the gifted individual by paying him more than the yeoman laborer. But it conforms to the Read idea of "anything that's peaceful." Nobody is compelled either to join or to remain in a kibbutz. The kibbutz buys its land in the open market - its purchase of fallow acres, open to all comers under the prevailing Turkish law, were made in pure capitalistic and "hitnadvut" fashion. The rules of the kibbutz are made by democrat ic vote. Besides farming, the kib butz engages in everything from manufacturing to inn-keeping. It lives by competition with individ ual enterprise. It has even begun to hire labor from the outside. In short, it functions very much like an employee-owned corporation. It does not even ask the State to help provide Welfare for its elders.

They simply go on working after age 65 at jobs they are still able to do. So there is kibbutz social se curity without bringing in the strong-arm tactics of the State. So this is Israeli "socialism." I don't want to sound lyrical about it; I would not like to live on a kibbutz. But it was interesting to see that where Leonard Read's principles of voluntarism and "anything that's peaceful" are fol lowed, even a nominally collective way of life can flourish. Declining Self-Reliance It was good to be reading Leon ard Read while going about in a strange country. The various es says in The Love of Liberty took on added freshness simply because their principles could be tested by observation of new things. Israel, beginning in Marxist dogma, strains toward "hitnadvut" self reliance. This is a quality that is on the rise both inside the kibbutz and outside, where individuals start factories to make all sorts of useful objects out of olive wood.

In writing about America, which once produced so many Thomas Edisons and Samuel Morses, Leon ard Read has been forced to speak of the fall of self-reliance. It does not strike Mr. Read as mere hap penstance that the figures for those receiving food stamps almost exactly balance the number of "keepers" who work for federal, state and local governments. The total - it is 16,000,000 in either case, or a whopping 32,000,000 in all-live off the rest of us. Mr. Read notes that there are no more Edisons or Morses among the keepers than among the kept. And 60 THE FREEMAN January 32,000,000 nonproducers are giv ing the U.S. more and more the flavor of the drone society. If Mr. Read were prone to pes simism, his essay on "What We Can Learn from a Communist" would have him permanently in the dumps. Quoting Earl Browder, who headed the American Com munist Party for years, he men tions twenty-two specific examples of the development of socialism in the U.S. They range from govern ment debt financing to price con trols, and from the Employment Act of 1946 to government hous ing. Mr. Browder wrote that the single feature that the twenty-two iterns had in common was that they "express the growth of State capitalism." In substance if not in form, said Browder, State capital ism has progressed further in America than in Great Britain. As the Marxists define it, State capi talism is just another phrase for socialism.

The revealing 'word in many ·of Browder's twenty-two items is "guaranteed." 'Who,. asks Leonard Read, is the guarantor? It is the government, which backs its guar antees with "coercively collectiv ized collateral." Instead of panicking at Brow der's list, Leonard Read thanks God for the "mess that we are in." The "mess" is the. evidence that we have been doing things wrong. It sends up signals that are loud and clear. Sooner or later there will be action on these signals. Who Will Lead? Who will lead the way to neces sary change? Mr. Read thinks that appealing to the masses defeats itself. The masses fall easy prey to dicta tors. Name-calling doesn't help. It can be exhilarating to the pejorative verbalizer, but name calling only serves to get peoples' backs up. As the backs rise, the ears close. Heightened consciousness, says Leonard . Read, can't be sold. The way to convince others iS,first, to perfect one's own understanding, to become a member of Albert Nock's - and Isaiah's - saving Remnant. It is only when individ uals become advanced in self-re liance and personal creativity that they project a contagious image.

"Exemplarity," Mr..·Read calls it. He quotes Albert Schweitzer : "Ex ample is not the main thing in in fluencing others; it is the only thing." Exemplarity, of course, works in bad ways as well as in good. Consider the present-day rash of teachers' strikes in communities that have anti-strike laws for pub lic employees. The exemplarity here does not encourage students to believe in law and order, or "anything that's peaceful." The 1976 THE LOVE OF LIBERTY 61 bad example, however, adds to the "mess" that is the) evidence that weare doing things· wrong. If the teachers strike long enough, it will promote a grand efflorescence of private schools - "exemplarity" of the good sort. Leonard Read says that "the abundance we still enjoy is exclu sively the result of a leakage of free human energy." It was inter esting to· me that the Israelis have a word for such leakage. It is "le'histader," meaning "working around the rules." You· can't beat Leonard Read: he applies any where.

~ RENT CONTROL: A POPULAR PARADOX (The Fraser Institute, Vancouver, B.C., Canada, 1975) 212 pp., $3.95 Reviewed by Bettina Bien G1'eaves PEOPLE generally will buy more of a thing at a lower price than at a higher price. At the same time, owners will be less eager to sell at a lower price than at a higher price. Thus, a gap will alwaysap pear between the quantity of a thing people want to buy and the quantity its owners are willing to sell, if government uses force to keep the price doum. This theme is applied to housing in Rent Con trol: A Popular Paradox. The authors in this anthology describe the gap in the number of rental units sought and the num ber that appeared on the market when governments imposed ceil ings on rents: • In Vienna, Austria in the 1920's (1974 Nobel Economics prize win ner F. A. Hayek) • In Paris, France (French jour nalist Bertrand de J ouvenel) .. In the U. S. during World War II (Chicago professors Milton Fried man and George J. Stigler) • In the United Kingdom (British professors F. W. Paish and F. G.

Pennance) • In New York City· (Virginia pro fessor E. O. Olsen) • In Sweden (Swedish lecturer in economics Sven Rydenfelt) • The Institute's Chief Economist, Michael A. Walker, also contrib utes a couple of chapters about the situation in Canada. In each case, would-be tenants wanted to rent more space at bargain prices than owners of real estate offered on the market. Because of the nature of rental housing - it usually deteriorates grad ually - there is generaIIy some lag in the appearance of a housing shortage when government con trols rents. Yet rent controls are bound to have significant side ef fects in time - over and above a gap between supply and demand. Savers look for more lucrative in62 THE FREEMAN January vestments than rent-controlled housing; builders hesitate, or re fuse, to start new construction; tenants fortunate enough to be liv ing in bargain-priced housing units spread out to occupy more space than they otherwise would and refuse to move, even if new and/or better jobs open up else where; and additional housing units cannot be produced over night precisely where and when they are needed. Thus, rent con trols aggravate and prolong eco nomic rigidities and distortions.

There may be widespread agree ment among economists as to the inevitability of a housing shortage under rent controls. Yet ma'ny poli ticians still expect that rent con trols will gain them votes and help them stay in office if the number of happy tenants who enjoy rental bargains outnumber the disgrun tled landlords and dissatisfied would-be tenants for whom suit able housing is not available. Apparently there is renewed political pressure now for rent con trols in Canada (two Canadian provinces have already enacted them in some form). It was this agitation that induced The Fraser Institute to publish this worth while book on the subject. One need not endorse the Institute's scheme for income supplementa tion in hardship cases during de control to find the book helpful. The material should be useful to anyone trying to combat political. control of rents as well as to stu dents looking for examples of gov ernment intervention. The book il lustrates with historical evidence and statistics one of the economic truths stressed by the late Profes sor Ludwig von Mises, namely that government-imposed price ceilings, of which rent controls are one ex ample, produce effects which, from the point of view of the very per sons who advocated them, are even worse than the state of affairs they were trying to remedy.

Whenever enacted and enforced, rent controls have always exag gerated the shortage of rental housing - and they always will. ~ CLEAR AND PRESENT DAN GERS by M. Stanton Evans (New York: Harcourt Brace Jovanovich, 1975) 445 pp., $4.95. Reviewed by William, H. Peterson MR. EVANS, nationally syndicated columnist, chairman of the Ameri can Conservative Union and form er editor of the Indianapolis News, here attacks liberalism with a vengeance. He charges that liber alism has matters backward in its basic approaches, and because of this initial error it also reverses 1976 OTHER BOOKS 63 the fundamental facts of our eco nomic and political life. Hence, our countrY,under liberal guidance ever since the Great Depression, has been reeling from one catas trophe to another. Liberal answers to questions of poverty, pollution control, urban transit, public edu cation, health care, oil profits, na tional defense, and the like are counter-productive, or to put it less mildly, frequently outright disas ters.

Evans' research on liberalism is alone worth the price of admission. He notes, for example, the defini tion of "liberal" as propounded by former Senator Joseph Clark of Pennsylvania in 1953. "A Liberal is here defined as one who believes \in using the full force of govern ment for the advancement of so ~~ial, political and economic justice ~ t the municipal, state, national 3I,'nd international levels." Evans al~o quotes liberal economist Robert Theobald (an early cham pion of guaranteed annual income) who says, "we must recognize the fact that the society's needs may be more important than those of a single person" and "a strict insist ence on existing rights would lead to an intolerable situation for all." Mr. Evans derives his conserva tive stance from what he cans "the American design," from the first principles as laid down by the Founding Fathers. He stresses the idea of having a written in strument of authorization - a Con stitution. He stresses, too, the Founders' concept of, to use the Evans word, "antimajoritarian ism." The Messrs. Washington, J efferson, Madison, Franklin, et al believed in the ultimate authority of the people but they also believed in limits to what a majority in the legislature should be able to do.

Such a majority could be hostile to sound government and the rights of the individual. So Mr. Evans hails the Constitutional de sign of checks and balances, of the separation and subdivision of pow er so that no single branch of gov enment could exercise despotic au thority. Unfortunately, such authority has reared its ugly head time and time again. Mr. Evans notes, for example, how the Federal Com munications Commission has espe cially subjected broadcasters such as Dean' Clarence Manion and Rev. Carl McIntire, both spokesmen for the political right, to harsh "bal ancing" viewpoint requirements which has had the effect of caus ing some radio stations to drop the Manion and McIntire broadcasts. Ironically, the requirements were promulgated under the name of the "Fairness Doctrine." Similarly Mr. Evans takes the Interstate Commerce Commission to task for requiring railroads to 64 THE FREEMAN January acquire a certificate of convenience and necessity to build new track or otherwise enlarge services. The Civil Aeronautics Board is like wise criticized for all but wiping out real competition in air trans portationl Thus does Mr. Evans tear into liberal programs and notions, spelling out facts and cases in a gold-mine of a paperback. He con cludes: There is little likelihood that Amer ica can regain its vigor as a free so ciety, cure its economic ills, or correct its political disorders, if it continues to drift in metaphysical confusion.

We therefore end as we began, in the awareness that our political troubles arise from the deeper realms of ethics and religion. ~ THE INCREDIBLE BREAD MA CHINE FILM (World Research, Inc., Campus Studies InstituteDi vision, 11722 Sorrpnto Valley Road, San Diego, California 92121, 1975) 32 minutes, color, 16mm. Reviewed by Brian Summers THE CAMPUS STUDIES INSTITUTE has a bestselling libertarian paper back (100 ,000 the first year) in The Incredible Bread Machine. Now they have made a movie based on the book. The results are devastating. Here is a documented, fast-paced, all-out assault on statism. Scene: the state seizes an Amish farmer's horses for refusing to pay Social Security taxes. Scene : The . state lays siege to the home of a man who, rifle in hand, refuses to yield to eminent domain. Scene: The parking lot where the home. once stood. Scene : Narcotics agents break into a home, terrorize the occupants, smash the furniture, and discover they .are in the wrong house. Scene: Economist Murray Rothbard speaks of the wonders of government housing while seated before scenes of the government blowing up its own housing proj ects. And on and on.

The film makes effective use of dialogue.N 0 one preaches to the audience. Instead, young .adults rap about freedom, rights, social ism, and the market. The overall effect is to engender an interest in the freedom philosophy. The film is being distributed by the Campus Studies Institute. For classroom use, study guides are available. I the Freeman VOL. 26, NO.2· FEBRUARY 1976 ABicentennialQuestion: An Ascendant or Setting Sun? Clarence B. Carson 67 Can we bring back to life in America the vital principles underlying the Revolution? A Mineral Alert Paul L. Poirot 78 A growing "public sector" diminishes market opportunities to serve consumers. The Businessman and Free Enterprise Benja.min A. Rogge 81 Some suggested ways to help preserve a climate in which business may function. Why Reforming the ICC Is Not Enough William D. Burt 90 If justice and necessity are to prevail. transportation will be deregulated.