Book Reviews

The casual reader might presup pose that Leonard Read's silence about Jimmy Carter or Jerry Ford or Ronald Reagan in his most recent books proceeds from an indisposition to mix it up in the prize ring. But Leonard, actually, does not mind a fight. His theory of waging political war is to go for the jugular, which happens, as he says in his new book, Liberty: Legacy of Truth (Founda tion for Economic Education, $6.00), to be ((whatever the preponderant thinking" is at ((any given time." It is the theory that makes the politico, not vice versa. Looking at the kinds of govern ment that prevail in the world to day, Leonard Read concludes ((that the preponderant thinking is anti freedom-authoritarian." So he goes for the jugular by tackling socialism on the philosophic plane. He opposes bad thinking with good thinking. If Leonard Read has ever de spaired of winning his fight he has never, in the course of writing more than a score of books, ever shown it.

A less resilient character would have given up long ago. But now his attack on the philosophical jugular seems to be working. A lot of the same old politicians whom Leonard disdains to mention were returned to office in the last election. But there are new faces showing up on Capitol Hill, and some of them actu ally believe in liberty. The important thing, in any case, is not that there is to be a mix of old and new political personalities. What really counts is that a signifi cant number of the traditional high-tax, big-spend crew that has 123 124 THE FREEMAN February been knocking the stuffings out of the American dollar since the Nine teen Thirties are now lining up for trips to the confessional. They are catching the signal from a shift in the upreponderant thinking" of the moment. If all goes well, the next time Leonard Read writes an essay bearing on the reflection of ideas on the political horizon it will take on a tone that is somewhat different. In stead of saying HThose sanctified ideas and ideals of our Founding Fathers must be born again,"

Leonard will be substituting the words uare being" for umust be." The Pleasures of Aging Leonard Read copyrighted his new book on his 80th birthday in September of 1978, and he concludes it with an essay called uThe Plea sures of Aging." But, on Leonard's own showing, there are no distinct pleasures involved in watching the clock move on. Longevity's purpose, he says, is ulearning, not lengthen ing." And he quotes an anonymous authority as specifying that uone does not grow old-one becomes old by not growing." All of this puts the stress in continuing with the more pleasurable and profitable things that one has always done. In brief, a non-retirement program. So Leonard Read exults in ~~no let-up in travel, seminars, and the many chores at FEE." By working-and by treating older hobbies as u mere pastimes"-the non-retired Read frees himself ~~from all fret about the discouraging prospects that the senior years have a tendency to im pose."

At the recent Mont Pelerin Soci ety meeting in Hong Kong, Fried rich Hayek, who is in Leonard Read's age bracket, was complimented on seeming more youthful and energetic than he seemed ten years back. Hayek's answer was that he had Utried old age and didn't like it." Leonard Read has yet to ~~try it." He quotes the likes of Cervantes, but his own model is Don Marquis' im mortal cat Mehitabel, who always rose to the challenge by saying Uthere's a dance in the old dame yet." In addition to the bigger ttdance" of fighting the basic philosophy of socialism, this latest Read book ad dresses itself to the problems raised by coercive State control of educa tion, to the need to oppose the Ustrike syndrome" by exposing Uthe folly of violence," to letting un trammeled human beings find energy sources wherever they exist, and to instigate what seems to me an odd crusade against legalized holidays.

This last must seem a real poser to libertarians. Surely only a work aholic would be willing to give up Christmas, Thanksgiving, the Fourth of July and sundry other holidays. Natural Law would seem1979 LIBERTY: LEGACY OF TRUTH 125 ingly prescribe the need for periodic breaks, expressed in terms of ritual. If most of us didn't have them we would go off our rockers. I would settle with Leonard Read for customary holidays as opposed to legal holidays. After all, Christmas, Thanksgiving and the Fourth of July had customary sanction before they had legal sanction. But the case against the legal holiday is not that it is a tthollow day" in contrast to a tthallowday." It is a tthollow day" if you go and get yourself involved in a car accident or a horrible New Year's hangover. But what would we tennis players or bike riders or joggers or skaters do if it were not for the weekend? Would Leonard Read say it is tthollow" to go to church of a Sunday morning? If you are going to crusade against the legal holiday, first make sure that custom, in default of law, has a fair chance of taking over.

CompulsoryEducation There would be less need of legalized holidays if Leonard Read could first win his battle against the idea of State-controlled compulsory education. If kids are going to be compelled to sit in classrooms for extended periods between their fifth and seventeenth years, they need legalized time off. One State com pulsion breeds the necessity for another, if only as countervailing action. The Read essay on ttElementary Education" is a bit of an histor ical eye-opener to me. I had always supposed that the idea of compul sory State-operated schools came from Prussia via Horace Mann. But Leonard Read traces it to Napoleon, who thought that ttpublic instruc tion should be the first object of government." ttNo one," so Napoleon decreed, ttmay open a school or teach publicly unless he is a member of the imperial university." It so happened that Thomas J ef ferson invited Pierre Samuel du Pont de Nemours, the physiocrat, to recommend an appropriate form of education for the United States. Du Pont wrote a 161-page book advocat ing the Napoleonic school system. So Jefferson, despite his generally vol untaristic philosophy, was beguiled into accepting the idea of compul sory public education.

It took more than a hundred years to see what a ttscraggy bush" (Read's description) would grow from the roots planted inadvertently by du Pont and Jefferson. During all those years nobody contested the right of people to found private schools and colleges that could compete in per formance and ideas with the State supported public school. But now we can really see the ttscraggy bush" for what it is, with the Department of Health, Education and Welfare try ing to impose its so-called Affirma tive Action programing on private schools whose only connection with 126 THE FREEMAN February government is to accept students who may happen to be the beneficia ries of GI grants and State guaranteed loans. Leonard Read opens his book with some heartening essays on faith, hope and charity. We will need all of these to carry through with some of the specific crusades to which he invites us in his later pages.

LIBERALISM by Ludwig von Mises Foreword, Louis M. Spadaro 207 pages. $15.00 cloth; $4.95 paper THE ULTIMATE FOUNDATION OF ECONOMIC SCIENCE by Ludwig von Mises Foreword, Israel M. Kirzner 148 pages. $15.00 cloth; $4.95 paper Both titles available from: Institute for Humane Studies 1177 University Drive Menlo Park, Calif. 94025 Reviewed by Brian Summers THE great Austrian economist Lud wig von Mises (1881-1973) has in valuable insights for the serious student. But some of his works are much more difficult to grasp than others. Where does one begin? Liberalism is an excellent intro duction to Mises' thought. This 1927 book was entitled Liberalismus in the German original, and was pub lished in the U.S. in 1962 as The Free and Prosperous Common wealth. It is a lucid exposition of the principles of classical liberalism the free enterprise policies which unleashed the productive forces of the nineteenth century and created the capital we are now consuming.

Mises bases his case for the free market on the enormous productiv ity of the division of labor. When workers, investors, and entrepre neurs are free to specialize in those areas of production for which they are best suited-and are free to ex change their products in an unfet tered market-standards of living are infinitely greater than when each family tries to produce its own food, clothing, shelter, fuel, medicine, and all the other essen tials of life. From this fundamental observa tion, Mises develops the entire lib eral program. He champions a com pletely free market because, as he demonstrates, all government in terventions reduce the standard of living by disrupting the division of labor. Similarly, he opposes union monopoly privileges, which restrict labor mobility, raise unemployment, and plunder nonunion workers-the principal victims of union violence and threats of violence.

The popular alternative to inter ventionism-socialism-is shown 1979 OTHER BOOKS 127 by Mises to be intrinsically un workable. Not only does socialism stifle personal initiative, it destroys the means of economic calculation by placing all factors of production in the hands of the state. With no competitive bidding for labor, capi tal, and natural resources, the bu reaucrats in charge of the state monopolies cannot compare the costs of different methods of produc tion. Socialism is inherently waste ful. Mises' foreign policy proposals are in keeping with his domestic pro gram. He favors nonintervention, free immigration, and democratic elections as the only means to further the international division of labor and thus raise the standard of living of all peoples. Tariffs, im perialism, and colonialism are op posed as violent disruptions of peaceful exchange. In these times of political turmoil, terrorism, and war, one insight of Mises is especially pertinent: without government regulations, trade barriers, special privileges, public services, oppressive taxation, and other restrictions on the free movement of men and goods, it would matter little which govern ment one lived under or what party happened to be in office. Roll back the state, and politically inspired conflicts will tend to disappear. It is a point worth pondering.

The Ultimate Foundation of Economic Science, first published in 1962, is difficult reading for those unfamiliar with Mises. The Ulti mate Foundation of Economic Sci ence is a critique of positivism, which has dominated economics for several decades. The positivist paradigm may be .summarized as follows, using the example of minimum wage laws: 1. The positivist observes data. (Increases in the legally mandated minimum wage have been followed by increases in unemployment.) 2. He constructs a theorem to ex plain the data. (An increase in the minimum wage, other things being equal, will increase unemployment.) 3. He Htests" the theorem by further empirical observations. (He observes further instances· of in creases in the minimum wage and studies unemployment data before and after each increase.) If he be lieves that the data conform with the theorem (if he observes what he believes to be a convincing number of cases in which increases in the minimum wage are followed by in creases in unemployment) heac cepts the theorem. If he believes that the data do not conform with the theorem (if he observes what he believes to be significant cases in which increases in the minimum wage are not followed by increases in unemployment) he rejects the theorem.

This paradigm is vitiated by the 128 THE FREEMAN fact that the data used in steps 1 and 3 cannot derive from controlled ex periments. In our example, the le gally mandated minimum wage is only one of the many factors that infl uence unemployment statistics. It is impossible to obtain data in which all the factors except the minimum wage remain constant. In contrast with positivism, Mises' methodology does not need con trolled experiments because he treats economics as a praxeological science-a science of human action. Mises' paradigm may be sum marized as follows: 1. The praxeologist postulates that all conscious human action is directed toward goals because it is impossible to conceive of a person consciously acting (trying to do something) without having a goal (the goal being the CCsomething"the person is trying to do). 2. From the actions of men, the praxeologist deduces their goals.

(An employer strives to earn profits. Earning profits is thus one of his goals. Hence, the employer's utility increases with his profits, and his disutility increases with his losses. Of course, this does not preclude the existence of other goals, such a goal as keeping an employee's friend ship.) 3. Assuming a given set of actors' goals, the praxeologist constructs a theory based on the human actions that necessarily follow from the set of goals. (As an increasing minimum wage forces an increase in an em ployee's wage rate, other things being equal, the disutility incurred in paying the wage increases. When the disutility involved in employing a person exceeds the utility involved in continuing his employment, the employee will be released. Thus, the praxeologist constructs the theorem: An increase in the minimum wage, other things being equal, will in crease unemployment.) In these difficult days, with mainstream economics in disarray, and freedom under constant attack, we welcome the reappearance of these two books by Ludwig von Mises, and hope that this time their lessons will be heeded. ® the Freeman VOL. 29, NO. 3 • MARCH 1979 The Crisis in Public Finance: No Ways or Means John Semmens 131 Since public finance is neither fair nor feasible, the alternative is to rely on private enterprise and the open market.