Book Reviews

As members of the Tertium Quids, or Old Republicans, both Randolph and Taylor believed that the federal Constitution was tt a law to limit law." As the strictest of strict constructionists, they were made uncomfortable by the behavior of the Virginia Dynasty-Jefferson, Madison, Monroe-in the era that included a stupid second war with Great Britain and the beginnings of the opening of the West. The Louisiana Purchase, which endowed the young American reIN DEFENSE OF STATES' RIGHTS 61 public with a huge trans-Mississippi area reaching well towards the Pacific Northwest, had no validat ing warrant in the Constitution, but Jefferson could not resist the oppor tunity for a glittering deal-and there are probably few today who would condemn him for his subordi nation of strict constructionist pur ity to an enlightened expediency. In the only act ofhis political career that might be termed an inconsistency, John Randolph of Roanoke defended Jefferson's purchase in the House of Representatives. Later, Randolph admitted the purchase was a severe blow to constitutional precedent. It helped establish the ((imperial pres idency."

Foreign Entanglements Kirk is inclined to excuse Ran dolph for what could be called his one serious departure from princi ple. Part of Randolph's program as a Tertium Quid leader was to keep America aloof from foreign quarrels. By getting control of the mouth of the Mississippi through the Louisiana Purchase, Jefferson re moved a dangerous foreign neighbor who might otherwise have menaced Kentucky, Tennessee and the terri tory north of the Ohio. So it could be said that the Purchase was a guarantee that the ((good old thir teen United States" (Randolph's phrase) east of the Appalachians would not have to maintain a big military force to defend Western lands. This would be a plus towards keeping the central government weak and so help the States' Rights cause. John Randolph of Roanoke: A Study In American Politics by Russell Kirk, 588 pages. $9.00 hardcover; $3.50 paper back. Arator by John Taylor Edited and with an introduc tion by M. E. Bradford, 385 pages, $9.00 hardcover; $3.00 paperback. Both of these books are publ ished by and may be ordered directly from Liberty Press/liberty Classics 7440 North Shadeland Indianapolis, Indiana 46250 Whether sophistical or not, the argument did nothing to keep Jef ferson and Madison from becoming embroiled in the foreign quarrels of the Napoleonic period. Not content with the new Louisiana territories, the War Hawks of 1812 thought of seizing Canada. Always logical, John Randolph sided with the New England states in opposing both the Jefferson Embargo and the War of 1812 itself. Before the Embargo and the war, maritime Massachusetts and the agricultural south still maintained something of a recipro cal relationship. The farmers could 62 THE FREEMAN January sell abroad and use the money they received· to purchase goods brought to America in Massachusetts ships.

But with the coming of the war, the fledgling United States felt really impelled to take Alexander Hamil ton's advice and subsidize local manufacturers. The cost of the sub sidy, paid for by tariffs, had neces sarily to be taken out of the agricul tural interest in higher prices. Agricultural Decline In the Early Nineteenth Century Even before the triumph of Hamilton both Randolph and Taylor knew what was coming. Taylor's Arator quotes liberally from an En glish visitor named Strickland, who noticed as early as 1801 that the plantation system of Virginia was in a visible state of decay. The old houses in the tidewater country were falling apart. ttBefore the revo lution," said Strickland, Hthe capital of the country was vested in. the lands, and the landed proprietors held the first rank in the country for opulence and information, and in general received the best education which America, and not un frequently, Europe, could afford them." But by 1801 capital was ttfly_ ing from the fields, to the legal monopolies, banking and manufac turing . . . bribes· offered to . . .

deserters have already produced the most ruinous consequences. Avarice everywhere seizes them with avidity, and rails at agriculture, as sordid and unpatriotic. . . ." Randolph was inclined to put the blame for agricultural decay on the Jeffersonian repeal of the laws of primogeniture and entail, which had historically kept big plantations under the control of favored eldest sons. Taylor, though he blamed the Hamiltonian spirit for the decline of the planter class, was realistic enough to note the failure of the big planters to restore fertility, by sci entific manuring, to lands worn out by excessive reliance on the cash crop of tobacco. Much of his Arator is given over to a learned discussion of proper manuring. The spirit of the times, of course, was against the Tertium Quid phi losophy. The West, with its untried fields, beckoned to both elder and younger sons. With or without the War of 1812, the United States, with its plethora of· natural resources, would have become the home of modern industry. The tariff often distorted the pattern of growth-but even without a subsidy the Ameri cans would have built factories to utilize Minnesota iron ore and Pennsylvania coking coal.

Weakening the Constitution Neither Randolph nor Taylor liked slavery. But they insisted that the Constitution-the ttlaw to limit law" -made a centrally directed emancipation of slaves illegal. The 1979 IN DEFENSE OF STATES' RIGHTS 63 Civil War, which came as firebrands elaborated on the Randolph-Taylor strict construction principles, ended in disaster for everything that Ran dolph held dear. Emancipation did not result in a bloody uprising, as Randolph and Taylor feared it would. But the decline of States' rights has hadits many deleterious results as Randolph predicted. The loose construction of the Con stitution that was started by Jeffer son's decision to buy the Louisiana territory has extended to the most tortuous twisting of the Commerce and General Welfare clauses to jus tify practically anything that a cen tralized Washington government desires to do. If the strict construc tionists had been followed, our wel fare bureaucracy would never have become entrenched. Nor would our gas deregulators have dared tell Texas and Oklahoma what they must do with gas inside their own borders.

It is sad that the slavery issue distorted everything. For, as Russell Kirk says, quoting Randolph, ttchange is not reform." Not in all cases anyw~y. THE CRITICS OF KEYNESIAN ECONOMICS by Henry Hazlitt (Arlington House, New Rochelle, N.Y. 10801) 427 pages. $11.00 Reviewed by Ronald J. Berkhimer KEYNES wrote The General Theory of Employment, Interest and Money in. 1936. It was a difficult book, con fusing and even sometimes con tradictory, but its central message was clear: The solution to un employment and depression is in creased government spending. Such a theory is irresistible to most politicians and Keynesianism achieved widespread acceptance, providing a rationale for the New Deal. The Keynesian program failed to solve the United States un employment problem in the thirties, but the theory was the basis for the Full Employment Act of 1946 and, despite increasing criticism, it still surfaces in efforts like the Humphrey-Hawkins bill.

The ultimate refutation of Keynesianism may be Henry Haz litt's The Failure of the New Eco nomics (1959). But, as a byproduct of the research which preceded his writing that book, Hazlitt has come out with some excellent supple mentary reading in his companion 64 THE FREEMAN volume, The Critics of Keynesian Economics. First published in 1960, it has been reprinted with a new preface and made an alternative Conservative Book Club selection. Hazlitt has collected criticism of Keynesianism by twenty-two writ ers, including some of the best known free market economists. It is fortunate that their comments are thus saved for current students and for history, because each has some thing instructive to say about the theories which have created more furor than anything since Marx-to borrow an expression from one of them. There is considerable range in the rigor of these analyses, and both the lay reader and serious student of economics will find articles at their level of understanding.

Contributors to this volume are men like Mises, Hayek, Roepke, Rueff, Knight and Hahn. When they are done, Keynes' theory is in com plete disarray. Even so, Keynes still has his advocates, for as Mises rue fully observes, uThere is no use ar guing with people who are driven by an almost religious fervor and be lieve that their master had the Revelation." But the general public is gradu ally becoming aware that years of deficit budgets have not created cCfull employment" and that unem ployment, distressing as it is, af fects relatively few people, while in flation hurts everyone. A bill requiring the federal budget to be balanced by the year 1981. was even passed by the Senate this summer. While this may have been temporizing, a similar proposal in volving a constitutional amendment has currently been passed by twenty two state legislatures and needs only twelve more to bypass Congress and the President and bring the amendment back to the legislatures for final approval.

If and when this happens, it will perhaps be the most significant de velopment in political economics since The Wealth of Nations ap peared two hundred years ago, and Keynesianism will be officially dead, at least in the United States. , the Freeman VOL. 29, NO.2. FEBRUARY 1979 Beyond Supply and DemandThe Psychology of Inflation Gregory Wolfe 67 Concerning the moral and spiritual disorders which lead men to politically increase the quantity of money. Who's the Boss? Gary North 75 Consumers bear the costs of ownership and make the market a truly social institution. Christian Principles and Public Policy Edward Coleson 81 Sound national policy rests upon high moral principles-and common sense. The Road Not Taken Henry Hazlitt 90 The results of government economic intervention instead of reliance upon the actions of free men in free markets. I Don't Know William E. Cage 98 The free society grows out of the humility to admit that "I don't know" how to regulate and control the lives of others.