Book Reviews

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN Conservatively Speaking IN a delightful foreword to Rene Wormser's Conservatively Speaking (Wayne E. Dorland Co., Box 264, Mendham, New Jersey 07945, 323 pp., $10.00), Bill Buckley says the author does much of his writing, so to speak, in the subway. Since Mr. Wormser rivals Albert Jay Nock in the art of relevant quotation, it is obvious that a library as well as a subway seat has been involved in the creation of a remarkable book. What Bill is trying to tell us is that Mr. Wormser, a lawyer and estate planner, is the most diligent man alive. Like Anthony Trollope, he can write anywhere. Conservatively Speaking is a Herculean effort to understand every possible aspect of our contemporary muddle, both domestic and foreign. A President of the United States, seeking proper counseling on ways to meet the manifold problems of the republic, could substitute Rene Wormser for an entire cabinet without fear of losing anything in the exchange.

There is art in the composition of Rene Wormser's book. He begins by telling us how we were misled by liberalism. By this he means con temporary liberalism, not the c1assi cal kind. The liberal, he tells us, ~~shows little faith in the capacity of the individual to take care of him self." It follows in the liberal's mind that Papa State must know best: hence the contemporary liberal's addiction to controls and the quasi socialism of paternalistically deter mined transfer payments. Mr. Wormser quotes from some of his own past writings to make his points. He also quotes Milton Friedman. Mr. Wormser wisely follows his chapter on liberal misleading with 315 316 THE FREEMAN May discussions of the liberal suborning of education and liberal penetration and control of communications. The quotations come thick and fast here. So do the names. Back in 1905, which was long before Tom Hayden and Jane Fonda started to preach the virtues of ~~industrial democ racy," Jack London and Upton Sinclair created something called the Intercollegiate Socialist Society, which later became the League for Industrial Democracy.

A Collectivist Bias The worst of it was that Jack London and his Fabian socialist friends infected our professional educators, from John Dewey at Co lumbia Teachers College to the au thors of the Carnegie Corporation's report on education for the ~~new age of collectivism." The collectivist bias of George Counts and William Kil patrick, both of Columbia Univer sity, has been transmitted to the National Education Association, whose Political Action Committee on Education has a terrifying politi cal clout. Educators with a leftist outlook have trained a whole gener ation of journalists and TV and radio commentators. The poisoning of the wells of thought has been antecedent to the legislative deba cles which Mr. Wormser next con siders. Mr. Wormser deals with ~~our dis astrous inflation" in a chapter that neatly reconciles the thinking of the Friedmanites, who contend that in flation is a purely monetary phenomenon, with the reasoning of Lawrence Fertig, who thinks that the satisfaction of the demands of the big labor ~nions has something to do with the case.

The Friedmanites are right when they say that it is the politicians who start the printing presses run ning at the Treasury. But Wormser observes that there are ~~inflation propellants" (a most felicitous phrase). When labor strikes for wage increases that are in excess of productivity increases, it forces the politicians to give an inflationary boost to the money supply in an attempt to absorb higher prices. In sistence on the government's duty to create full employment is an obvious ~~inflation propellant." So are gov ernment interventions of all sorts. Inflation is admittedly a monetary phenomenon, but the politicians would not seize upon it if what Wormser calls the ~~propellants" were not at work in society. Wormser thinks a. basic Hpropel lant" to inflation was set in motion when we abandoned the gold stan dard. He quotes von Mises: ~~The eminence of the gold standard con sists of the fact that it makes the determination of the monetary unit's purchasing power independent of the measures of governments. It wrests from the hands of the 1980 CONSERVATIVELY SPEAKING 317 economic Tsars their most redoubt able instrument." True enough, if budgets were balanced, inflation might be contained without going back to gold convertibility. But without the discipline supplied by a fixed standard of value, the tempta tion to inflationary spending is too strong.

Mr. Wormser's estate planning specialty enables him to discuss our ((egalitarian" tax system with both wisdom and justified passion. Our tax code so thoroughly penalizes savers that it is a miracle that the economic system expands at all. In taking money away from producers, our welfare state shrivels the very tax base that is needed to sustain cradle-to-grave security. Money paid into the social secu rity fund is dissipated, and taxes must be substituted for the income that should be coming from the in vestment of State-collected insur ance funds. We are now bungling our energy problem by failure to let the market work. And economic hopelessness has something to do with the wave of crime, particularly among those who can't find employment because of unrealistic minimum wage legislation. Foreign Policy On top of our domestic bungling, we have had a disastrous foreign policy. Mr. Wormser thinks we have permitted ourselves to be used by nations more experienced than we.

We rushed to pull the Allies' chestnuts out of the fire in World War I. Woodrow Wilson could not prevent a thoroughly bad peace. His League of Nations could not correct the mistakes of Versailles, and Hit ler was the inevitable result. Franklin Roosevelt did no better than Woodrow Wilson-the World War II settlements let Joe Stalin move deeply into Europe. We forswore our own legal heritage when we stooped to Bill of Attainder justice at Nuremberg. This does not excuse the seizure of American hos tages by the Iranian ((students." But Nuremberg, in any long-term perspective, means that we do not come into any international court with clean hands. Wormser is rightly critical of our policy of fighting no-win wars. He thinks we would do better without the United Nations. The U.N. has acquiesced in the separation of East and West Germany. It remained inert while the Berlin Wall was being built. It did not protest the invasions of Hungary and Czecho slovakia by Russian tanks. It has done nothing about Fidel Castro's Hessians in Mrica. But it did take action against Rhodesia, a country that threatened no one.

All through the period of detente we have fooled ourselves. The loss of Iran has left us vulnerable in the oil-bearing Middle East. The West 318 THE FREEMAN May needs the oil of Iran and Saudi Arabia-but in pursuing detente the West has allowed itself to fall be hind in the armaments needed to defend the oil routes. In spite of everything Mr. Worm ser retains some optimism; after all, we have had a ~~tax revolt," at least on the Pacific coast. Rene Wormser is confident enough in his own pow ers to feel that his own estimable book is not a ~~vain and futile exercise." Ii WILL CAPITALISM SURVIVE? A CHALLENGE BY PAUL JOHNSON WITH TWELVE RESPONSES edited by Ernest W. Lefever (Ethics and Public Policy Center, 1211 Connecticut Avenue, N.W., Washington, D.C. 20036) 69 pages. $3.00 paperback Reviewed by Bruce Alan Johnson FEW people know that we could fit 2'h Americas into the massive con tinent of Africa, but that wasn't hard for me to believe after a three-month safari through many of its countries. And throughout this 1979 business travel, one phenome non stood out boldly in almost every one of the countries I visited: the cities of the developing nations of Africa are crowded beyond anything imaginable to comfortable Americans. These cities grow by thousands each year, as people pour in from the jungles and outlands in search of employment and a better way of life.

Instead of finding pots of gold, how ever, they invariably find poverty worse than they left behind, starva tion' epidemics, massive unem ployment-and crime. Why aren't these striving peoples finding the employment that one would expect to find in countries developing industries and interna tional trade? That, too, was appa rent. In almost every case, the de velopment of a healthy, growing, free economy was held in check by a central government operating either out of raw fear or oppression by design. In the latter case, these cen tral governments decry the ~~poisons of the West," when many of them know only too well that with the inception of industrial capitalism in the 1780s, wealth, productivity, and the economic well-being of the indi vidual has risen unlike any period in the history of mankind. But, as the distinguished British historian Paul Johnson notes in this impressive little book, ~~most gov ernments fear and resent" this never-ending one-way flow of people from countryside to city. Indeed at the very same time they view the free market system as a force, and a force that threatens the power of central governments. And yet, Johnson points out, ~~There are now 1980 OTHER BOOKS 319 literally scores of million-plus cities all over the Third World," and many of these cities have become havens for individuals seeking to raise their standard of living and find greater freedom of choice (cities and city-states like Hong Kong, Singapore, Taiwan, Mexico City, Is tanbul come to mind), but only when the central governments agreed to let the market mechanism function unhampered by restrictive legisla tion or wealth-skimming policies of confiscation. After noting that short of evacuating these developing cities by force or terror, nothing will stem this human flood, Johnson observes: t~There seems to be an almost irresistible urge in human beings to move away from the status society to contractual individualism, the central feature of industrial capital ism."

Beginning with an eleven-page essay bearing the book's title, the publishers have chosen to use what was presented by Johnson as a speech to Bermuda businessmen in 1978 as a springboard for responses from twelve other social figures whose views range from close sup port for the free market viewpoint to outright castigation of the free way of life. Every now and then there comes along a book in the freedom literature which actually does stimulate some hard thinking on the collectivist assaults on the freemar ket way of life. Will Capitalism Survive? is one of those books, and its 69 pages are veritably packed with provocative commentary designed to sharpen the skills of that natural aristocracy of mankind who believe in and practice a way of life which denies the omniscience of govern ment guidance. Mr. Johnson sees five principal threats to capitalism's future: the intellectual challenge of collectiv ist-oriented universities and aca demies; an irrational passion-rid den ecological movement neglecting such crucial factors as social costs; the unchecked growth of Ubig gov ernment" and unionism; and the ever-present threat of Soviet en croachments wherever nations are poorly armed or inclined to accept Soviet overtures of ~~aid."

Some of the respondents are think ers of clarity: Berkeley's Paul Sea bury; First National Bank of Chicago's (and National Review's) Alan Reynolds; American Enter prise Institute's Michael Novak; Hudson Institute's Herman Kahn; and Congressman Jack Kemp. And indeed it must be said that many of their arguments are barbed attacks on ·some of Johnson's points. (Johnson's claim, for example, that the 1974 birth of the OPEC cartel spells the end to cheap energy in America is deftly refuted by Alan Reynolds.) But these differences of opinion merely serve to further clarify and refine the excellent 320 THE FREEMAN points made by Paul Johnson in one of the most readable economic es says I've ever seen. For decades The Freeman has ar ticulately shown why it is that social improvement can begin only with the improvement undertaken by the individual-you and I-in our daily lives. The Ethics and Public Policy Center has rendered a fine service in this direction by offering a challenge and twelve responses which exam ine the need for the preservation of economic freedom, not least because only under a capitalist system can man maximize his own potential for achieving good, and hence that of his society. @ HANDSOME BLUE LEATHERLEX FREEMAN BINDERS $3.00 Order from: THE FOUNDATION FOR ECONOMIC EDUCATION, INC.

IRVINGTON-ON-HUDSON, NEW YORK 10533 the Freeman VOL. 30, NO.6 • JUNE 1980 Runaway Investors Robert G. Anderson 323 The flight from dollars to things signals the economic collapse that is inevitable unless sound money is restored. A Market Choice of Money Ellis W. Lamborn 330 The Federal Reserve System is one more failure of governmental effort to regulate the value of money. Union Contest with Government Clarence B. Carson 337 Union violence threatens the government's monopoly of the use of force for the protection of life and property. Exploitation and Freedom P. Dean Russell 350 When private ownership and the profit-motivated market economy disappear, human freedom disappears at the same time. Socialism In Theory and Practice Shawn A. Bozarth 356 As seen through the eyes of a U.S. exchange student in Britain. The Right to Discriminate Scott W. Bixler 358 Laws forbidding discrimination deny individuals the freedom to choose and to trade.