Book Reviews

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN Ethics and Economics ECONOMICS did not begin as the ((dismal science." It began, in Adam Smith's The Wealth of Nations, as a grand essay on the consequences of human choice, sometimes statisti cally predictable, sometimes not, in a field that presumes a framework of law, culturally determined habits, and common notions of justice and morality. Smith, whose first interests were ethics and jurisprudence, knew that an economist must use deductive logic as much as arithmetic and algebraic thinking if he is to make sense of his subject. It was for a very sensible reason that Ludwig von Mises, reverting to the Smith prac tice, put his own study of economics into the wider, and eminently Smith ian, perspective of (thuman action," a subject of such vast scope that it brings everything from ethics to 756 physiology, psychology and politics into the picture. The good economist must be a learned man, versed in general history as well as statistics, and with a wary eye for what judges, legislators and bureaucratic ad ministrators do to hobble or direct the choices of millions of marginal bargainers they have never seen.

Smith, the learned Eighteenth Century man par excellence, backed into his study of economics by way of ethics and jurisprudence, which were the general substance of many of his lectures and of his book on the theory of the moral sentiments. It was the ((policeman's" duty, he ob served, to provide cleanliness, safety and a cheap access to economic good~ to the members of a society. (By ttpoliceman" Smith meant the politician, or the statesman.) It was only as an afterthought, which came ETHICS AND ECONOMICS 757 to him when he observed the work ings of the mercantilist system of state intervention, that Smith de cided the proper way for a policeman to provide for Hplenty" or cCopulence" was to get out of the way of the producer. Natural Liberty Force was necessary to the happi ness of human beings when it came to providing for the safety of the realm, and for preventing plagues. Force was necessary to restrain human viciousness-hence the de sirability of the common law and a court system. But force, in the mar ketplace, was an inhibiting thing.

cCNaturalliberty" was the key to the Uwealth of nations." The Eighteenth Century mercantilists, who persisted in using the state to coerce traders, were anti-plenty-and therefore morally delinquent in their approach to the third duty of the policeman to see that people were as affluent and well-nourished as their industry and aptitudes could make them. The ethical cast that Smith gave to his economics colors most of the bicentennial essays, assembled by Fred R. Glahe for his book, Adam Smith and the Wealth of Nations (Colotado Associated University Press, Boulder, Colorado 80309,172 pp. 1978, $12.50). For one example, James M. Buchanan of Virginia Polytechnic Institute is preoccupied with CCthe justice of natural liberty." If a man's aptitude is for driving a truck or a taxicab, Buchanan asks, is it just to exclude him from com peting for the trade of carrying goods or human beings from here to there? The answer must be that excluding men from markets is im moral. Naturalliberty implies equal liberty, and if the Hpoliceman"-Le., the State-is arbitrary in prescrib ing licensing processes it must in deed be called unjust.

In his essay on cCSmith Versus Hobbes," Joseph J. Spengler of Duke University observes that, in theory, justice may flourish under the ideal collectivist state or under a free economy cCbuttressed in a minor de gree by collectivist supplementation when pronounced externalities are involved." But in reality, so Speng ler avers, when the state mixes into economic matters those who control the government apparatus get the cream while the underlying popula tion must be content with the thin nest of skim milk. This is palpably unjust. The market system is much more just in that it tends to promote a high degree of correspondence be tween individual performance and reward. Two Views of Man The difference between Smith's view of human nature and Hobbes' view is rooted in a theory of man. Hobbes thought the uncoerced human being would soon revert to 758 THE FREEMAN December the law of the jungle. He therefore supported the leviathan state as a restraining influence. But Smith, according to Thomas Sowell of the University of California in Los Angeles, another contributor to the Glahe book, thought that man, though a striver for self-interest, could be counted on to be held in check by public opinion, the law, and other representatives of moral ity. The Smith view leads to the limited state as the just state, with the ~(policeman" exercising his Hob besian nature only in fighting crime and in defending the realm at its borders.

Another Glahe contributor, Pro fessor William J. Baumol of Prince ton and New York University, deals with ~~Smith Versus Marx on Busi ness Morality and the Social Inter est." Curiously, Smith had a much lower opinion of the morality of businessmen than Marx, who tended to see the capitalist as an individual beyond good and evil who served something called the ~~his toric process." Smith trusted the market mechanism to keep the businessman from achieving the monopoly for which his greed might hunger. The Hinvisible hand," in providing for competition, dictated a moral outcome despite the natural propensi ty of some businessmen· to conspire to limit the market and raise prices. Marx, who thought monopoly was inevitable, was not concerned with individual morals. His ~~invisible hand" worked through classes, and the end-the seizure of the monopolies by the proletariat-was decreed in the stars no matter how individual capi talists behaved.

The Morality of the Market Leonard Billet of the University of California. in Los Angeles endorses James Buchanan's ethical choice of subject by calling his contribution ~~J ustice, Liberty and Economy." What particularly impressed Billet about Smith's The Wealth ofNations is its concern with the immorality of Britain's treatment of its North American colony, where the ~~rights of Englishmen" were ignored by the mercantilists of London working in cahoots with a stupid government. Smith's economic principles, says Billet, ~~are fundamentally moral principles. They are favorable neither to robbers nor to barons." Ethics plays a less prolninent part in the essays contributed to Glahe by Milton Friedman, Harry G. Johnson and Ronald Max Hartwell. Friedman writes eloquently about the relevance of Adam Smith to the modern day . Johnson is less im pressed with Smith's value to mod erns now that the ~(corporation in its internal acti vities is organized in a nonmarket, bureaucracy-like fash ion, with decision-making by com mittee and consensus procedures."

1978 ETHICS AND ECONOMICS 759 As for Ronald Max Hartwell, he is primarily interested in Smith's rela tion to the industrial revolution, which was hardly begun in 1776. Whether Smith foresaw the economic effects of the steam engine seems to Hartwell to be beside the point. Smith certainly knew that the England and Scotland of his time were in a take-off phase in growth. Man of Letters and Economist Adam Smith was not only a moralist, he was also a man of let ters, an educator, and a clubbable man in a clubbable society. In a fascinating book, Adam Smith: Man ofLetters and Economist (Exposition Press, Hicksville, New York 11801, 297 pp., $10.00), Clyde E. Dankert deals, among other things, with Smith as a literary stylist. He re marks in particular on Smith's fondness for triplicates, such as the ~~butcher, baker, and brewer" and the tendency of man to ~~truck, bar ter, and exchange." The triplicates not only achieved balance, they pro vided for nuances. Dankert also notes Smith's ability to combine in dignation and elegance of diction, as when he spoke of ~~that insidious and crafty animal, vulgarly called a statesman or politician." Always the ethical man, Smith believed in ~Just indignation," which he sometimes tempered with humor and some times did not.

GOVERNMENT BY JUDICIARY: THE TRANSFORMATION OF THE FOURTEENTH AMENDMENT by Raoul Berger (Harvard University Press, 79 Garden Street, Cambridge, Mass. 02138) 483 pages. $15.00 Reviewed by L. Edward Robbins RAOUL BERGER, renowned constitu tional historian, charges that the United States Supreme Court-a presumed fount of constitutional wisdom-is itself acting unconstitu tionally by sitting as a ((continuing constitutional convention," revising the Constitution at will. Such action transforms our government from one of several coordinated branches, each equally capable of checking abuses by the others, to a govern ment by the judiciary. The consequences are ominous. Judges are no less fallible than other men, no less ambitious for power. Their unchecked authority is as antithetical to liberty as that of anyone. Originally, judicial review was ~~divorced" from policymaking. It was merely a process through which the Court might void legislative or executive action deemed unconstitu tional, and the Constitution's mean ing was determined not by judicial whim or fancy but by looking to the intent of its framers.

760 THE FREEMAN Judicial review has now become a power through which the Court par ticipates actively in policymaking. The question posed by the Court on review is no longer whether a par ticular policy is consti tu tionally permissible, but whether such policy corresponds to judicial notions of societal Uoughts." Such review in fringes the democratic prerogatives of this nation. Revisionists cry that the Con stitution must be continually mod ified to meet the exigencies of gov erning a changing nation such as ours. Berger replies that liberty can be enjoyed only through a fixed Con stitution which places specific limi tations or nchains" on ambitious, self-interested individuals. Further, the Constitution provides expressly for its amendment as exigencies demand. Revisionist interpretations render these provisions a nullity. Thus recourse to amendment is both sufficient and mandatory.

Berger builds his case against re visionism through a detailed analysis of the Fourteenth Amend ment. Drawing extensively on legislative history, he argues that the amendment was originally intended to compel the states to secure, through the privileges and im munities clause, only those rights traditionally understood as c~funda mental" or ~~absolute," excluding such matters as legislative reappor tionment and school desegregation. He then traces the imposition by the Court of these and other unintended measures through a misplaced em phasis on the equal protection clause. Needless to say, Berger's work has not endeared him to many of his onetime liberal fans who relied heavily on his Executive Privilege: A Constitutional Myth (1974) and Im peachment: The Constitutional Prob lems (1973). They would have pre ferred that a more lenient standard be applied to the judiciary. But Berger's scholarly integrity pre cluded such duality. He has judged the executive and judiciary by the same standard-the framer's intent-and found them both wanting. ® Keep your 1978 Freeman in an attractive blue leatherlex FREEMAN BINDER.

Price: $3.00 Order from: The Foundation for Economic Education Irvington-on-Hudson, New York 10533 Index THE FREEMAN-Volume 28, January-December 1978 Prepared by BETTINA BIEN GREAVES of the Foundation staff NOTE: In page references, the number preceding the colon designates the month, those following refer to pages. All articles have at least three entries-author, subject, and title-except in a few cases when title clearly in dicates subject matter. Books reviewed are listed on page 768. A ADVERTISING What the interventionist overlooks (Richman) 9:542-545 "AFFECTED with a public interest" (Foley) 9:515-524 AFRICA Perspectives on hunger in the world (J. A. Sparks) 11:643-651 AGRICULTURE Farm strike-will it do more harm than good? (Cade) 4:211-214 Perspectives on hunger in the world (J. A. Sparks) 11:643-651 Tyranny of minorities (Shannon) 1:17-20 ALL these rights (Goodman) 1:9-16 ARE successful businessmen just lucky? (Summers) 12:719-720 AUSTERITY, waste and need (Pasour) 12:743-752 AWAKE or asleep? (McMunn) 3:184-187 AYAU, Manuel F.