Book Reviews

Schumpeter's thesis always seemed particularly relevant when one looked at the French scene. The 252 French intellectuals, young and old, listened respectfully when Jean Paul Sartre, the playwright, wrote that ~~Marxism remains the unsur passable philosophy of our era." All through the Sixties the French uni versity students flocked to the Sartre standard, even erupting without visible grievances into the type of violence that, in America, was blamed on the Vietnam War. The Communists, of course, con tinued to get something like a fifth of the French vote. Combined with the two-fifths commanded by the socialists, the Communist vote might have pushed France over the brink. The fact that it didn't was due to a semi-Stalinist headstrong lead ership that refused to follow the Ital ian ~~Eurocommunists" who have tried to sneak up on the bourgeois by pretending to a belief in the eternal relevance of democratic procedures.

IN DEFENSE OF DECADENT EUROPE 253 Time has passed in France since the student outbreaks of 1968, and the intellectuals have had some sec ond thoughts. They are now discov ering that, in Raymond Aron, they have had the sort of thinker that goes in the United States by the name of neo-conservative. Former socialists such as Jean-Francois Revel are, amid some continuing confusions, coming to see that Aron has all along been right in champi oning the virtues of a free economy and classical, as opposed to collec tivist, liberalism. Developments in Europe It was thirty years ago that Aron, a professor of sociology, joined forces with Jean Monnet in the effort to unite western Europe both economi cally and politically. Despite a «par liament" at Strasbourg, Monnet's hopes have never been fulfilled. The nations of the Ctwestern rump of Europe" have followed different courses. West Germany has been the most capitalistic. Spain has just re cently emerged from the extreme authoritarianism of the Franco years. Portugal was saved by a miracle from going wholly Com munist. Switzerland remains its in dividualistic self, but the virus of social democratic welfarism has sapped the economic strength of England, Scandinavia and, to a les ser extent, the Low Countries.

France and Italy have survived, one gathers, because of a cynicism that has always enabled productive Lat ins to elude the tax collector and maintain the health of the ((other," or subterranean, economy. Western Europe might be called «decadent" for a number of reasons. But Aron uses the word affection ately, as if to say, «If this be dec adence, make the most of it." The true decadence, he thinks, is what he calls ~~the Marxist vulgate." And he wonders that so many in the Europe of his affections should have been so impressed by Marxism Leninism-and even Stalinism over the years. Aron's chief rhetorical tool is his Gallic sarcasm. Marxism, he notes, has never yet managed to create a state that has shown any tendency to wither away. Nor has the pro letariat, or the «working class," ever taken the lead in pulling off a revo lution. Lenin and Trotsky, in Rus sia, relied on a small band of profes sional revolutionaries drawn from the intellectual classes. They were terrorists even more than they were Marxists-Lenin believed that it was better to kill a hundred inno cent people than let one guilty per son go free, and he actually put this in writing. In China, Mao depended on his professional revolutionary of ficers, and he worked through the peasantry, not the city proletariat.

Eastern Europe was taken over by the Red Army in 1945 and 1946 and 254 THE FREEMAN April forced to become Communist in spite of itself. In Cuba and Chile, Marxists succeeded by cheating. Castro posed, for a period, as the voice of the anti-Batista middle classes. Al lende, in Chile, was voted into office as a ttdemocrat." Fortunately, the Chilean middle classes caught on to the swindle before Chile weRt under completely. The Cuban middle class es were not so lucky. A Parade of Ironies What impresses Aron is that all of the ttMarxist" and Hproletarian" revolutions occurred in parts of the world that had never been industri alized. This was certainly not what Marx had predicted. Lenin's theory that the West European countries must have colonies to exploit if they were to preserve high standards of living at home also proved an utter fallacy. The Dutch were far better off after their loss of Indonesia; the French were never so prosperous once they relinquished Indochina and Algeria. As for the West Ger mans and the Japanese, they have proved conclusively that the need for ttlebensraum" is a delusion.

Aron concludes from his parade of ironies that Marxism-Leninism and Maoism are theories for ttthe use of fanatics and dunces." The whole theory of central planning, he says, would be disastrous if it were to be adopted in any.advanced economy. Where there are thousands of differing relationships between prices, not even a central planning board consisting of Solomons could provide a system that would bring the right materials to the right place at the right time and in the right quan tities. Without a capitalist outer world to provide pricing informa tion, the Soviet and the East Euro pean economies would be in a truly appalling mix-up. As for ttsurplus value," which might better be defined as the wage that is earned by those who provide the machinery and the requisite management skills, it exists in any economy that seeks the means to perpetuate itself. In socialist coun tries it is siphoned off by the state for various purposes which include, besides the development of new business, the maintenance of all the special privileges of the bureauc racy. It is no accident, to use a Marx ist expression, that there are few pri vate cars in Russia, or that a peasant, seeking a hoe for his pitiful private plot, has to improvise one for himself.

True enough, there is no un employment in Soviet Russia, but this is because every existing job is split in many ways. Russia boasts that it outproduces the United States in steel. But with all its steel capacity it cannot provide its work ers with decent housing or small tools. Aron piles irony upon irony. But 1980 IN DEFENSE OF DECADENT EUROPE 255 the strangest irony of all is that the West has been ~~unaware of its own superiority." Aron paints a picture of western Europe as ~~its own vic tim." He suggests that it has en gaged in ideological drug addiction. The question, with Aron, is whether it can emerge from its dope dream in time to arm itself against the new Genghis Khans who' use Marx to cover their predatory instincts. The response to Aron's book in France is encouraging. One hopes it has not come too late. ® PERCEPTION, OPPORTUNITY, AND PROFIT: STUDIES IN THE THEORY OF ENTREPRENEURSHIP by Israel M. Kirzner (University of Chicago Press, 11030 S.

Langley Ave., Chicago, III. 60628), 1979 274 pages. $15.00 cloth Reviewedby Brian Summers IF economics is to be of any practical use, it must relate to the real world. But most economists make unrealis tic assumptions--equilibrium, per fect competition, and the like which, if not handled with great care, lead to absurd policy conclu sions. Perfect knowledge is implicit in many of these assumptions. If we assume that individuals have per fect knowledge of all available opportunities, then nothing remains to be discovered. With the assumption of perfect know ledge, human action is reduced to a mechanical alloca tion of given resources among a given hierarchy of ends. But, Israel Kirzner points out, people do not instantly perceive all opportunities. There are always op portunities for mutually beneficial exchanges waiting to be discovered. For example, a basket of oranges may be available in the market for $5, while consumers may be willing to pay $12 for the same oranges converted into marmalade. The en trepreneur who perceives this, and who keeps his other costs below $7, brings about a mutually favorable trade between orange growers and marmalade users while earning a profit for himself.

This insight-that the free mar ket profit and loss system facilitates the discovery of opportunities for mutually beneficial exchanges sheds new light on the workings of the market economy. For instance, advertising is seen not as a device for manipulating consumers, nor merely as a means of conveying information. Rather, ad vertising alerts consumers to the availability of products. If an adver tisement is colorful, funny, or noisy, it is because the advertiser believes that this is needed for consumers to notice that a purchase opportunity exists.

256 THE FREEMAN Besides casting new light on the free enterprise system, Professor Kirzner offers profound insights into the consequences of government in tervention. For example, in a thought-provoking chapter on indi vidual liberty, he points out that freedom is usually ~~identified with the power to achieve chosen goals. Loss of freedom quite similarly, comes to be identified with thwarted desires. Freedom comes, from such a perspective, to be something whose curtailment triggers immediate pain. One cannot lose freedom, in this view, without feeling its loss. The matter is seen quite differently from the entrepreneurial perspec tive on freedom. ~~The entrepreneurial view of freedom permits us to see how free dom to choose may inspire the dis covery of opportunities that may be invisible to those to whom this free dom is denied. Those to whom the freedom to choose has been denied will, in such cases, have no inkling that they are being denied an otherwise attainable goal. One de nied the right to choose to enter college may never realize that he possesses the intellectual potential to be admitted to college. Denial of freedom to choose, from this perspective, does not necessarily in flict the pain of thwarted desires. In fact, one may lack freedom and be convinced that one's well-being is wholly unaffected by its lack."

Thus, the very nature of govern ment intervention precludes a c~n crete specification of all the liberties which have been impaired by the growth of the state. Similarly, it is impossible to know-much less measure-all the costs of interven tion. We simply cannot know what exchange opportunities might have been noticed had government inter vention not removed the means of exploiting them. Perhaps the most important chap ters in this book deal with property rights. Rather than viewing prop erty rights as arising solely from (1) ~~mixing labor" with unowned re sources and (2) voluntary transac tions, Kirzner offers a finders creators-keepers approach. Accord ing to this view, entrepreneurs dis cover and hence create new values. An entrepreneur who discovers that he can buy a product for $8 and sell it for $10 can be thought of as creat ing the $2 profit. Perception, Opportunity, and Profit is replete with such profound insights. The style is easy to follow, but where Kirzner has broken new ground, the reader had best proceed with careful deliberation. And when the reader is finished, he may find that some of his old assumptions have been dropped along the way.' the Freeman VOL. 30, NO.5 • MAY 1980 Aunt Elsie's Recipe Rae C. Heiple 259 "Take pride in your work, and let other people be, so they can do the same."