Book Reviews

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN (:fbSEEDS OF PROGRESS IN his twenty-sixth book, Seeds of Progress (Foundation for Economic Education, $6.00 cloth, $1.50 paper back), Leonard Read talks a good deal about the Law of Attraction. Creation, he says, is a magnetic force. Wise men, applying the Di vine Principle at the human level, draw others to their standard by their exemplary behavior. Whether Mr. Read interprets the Cosmic Order correctly or not I leave to the theologians. But as for himself, he has been a living embodiment of the power of attraction for many, many years. Basically, one Read book is like another, for Leonard Read staked out his ((freedom philosophy," with its free market and limited govern ment principles, back in the Nineteen Thirties and Forties. Once he knew where he was headed, he never swerved-or, as he likes to put it, ~~leaked." But if one Read book resembles another in philosophical orientation, they abound in fresh nuances. Anatole France said criti cism was the adventures of a soul among masterpieces. A Leonard Read book is the adventure of a soul among philosophers. Whether it is the stoic Epictetus or Saint Augus tine, or the Goethe who unburdened himself to Eckermann, some newly encountered philosopher is always setting Leonard Read off on a fresh tangent in building or sustaining the case for the freedom philosophy.

As a result, Leonard Read gets away from the cliches of his subject. There is, for example, his discussion 377 378 THE FREEMAN June of the idea of responsibility. A cer tain type of conservative can be counted on to say there are no rights without reciprocal duties. Implicit in this formulation is the suggestion of compulsion: you must do thus and so in order to earn a given right. The thing won't wash in law, for the Bill of Rights was not accompanied by a Bill of Duties. It won't wash under any theory of democratic politics, either, for if rights are dependent on duties it would set the State up as the arbitrator in a trade. The idea of uinalienable" rights would disap pear. It would mean that a fifty-one per cent majority-or a logrolling alliance of several on-the-take mi norities-has the power to force a single pattern of behavior on everyone. That way lies tyranny. Rights under such a theory become permissions, with dictocrats (a fa vorite Read word) telling the indi vidual what he must do.

Leonard Read, a different sort of conservative (assuming that he is a conservative at all), does not link rights and duties. He prefers to talk about Uthe twin virtues of (responsi ble and responsive'." People should be responsible for themselves. If they are, they will be responsive to others. Quoting Vema Hall, he says that, ((to the extent that an individual turns the responsibility for self over to another or allows govern ment to take it away, to that extent is the very essence of one's being removed." Leonard Read also quotes Josiah Stamp, the English financier who was killed by a Nazi bomb. UIt is easy," said Stamp, ((to dodge respon sibilities, but we cannot dodge the consequences of dodging our respon sibilities." Countries are saved, not by com pulsory enforcement of a code of duty, but by those who are the self responsible. We have all seen what happened when drafted soldiers were compelled to fight wars they couldn't believe in. One has a duty to defend one's country, but if one can't be ((responsive" about it volun tarily as a matter of belief that the State has set a wise course in foreign policy the war will inevitably be lost.

Leonard Read's subtle distinc tions about responsibility and re sponsiveness are important now that the idea of compulsory registra tion, including the registration of women, is once again in the air. The justification that is offered for com pulsory registration is that it is good for the State to know where you are so that it can come and get you if it so chooses. Naturally, this assertion that one's body belongs to the State fails to create a feeling of respon siveness in the young. It results au tomatically in a (Chell no, we won't go" reflex. A responsible govern ment would be less fanatic about compulsion and more concerned with proving the case for a foreign 1980 SEEDS OF PROGRESS 379 policy that would command free as sent and so attract volunteers to the colors. Speaking of duties, Leonard Read takes off from Goethe on the subject of finding one's duty. Goethe said that man is not born to solve the problems of the universe, but to find out what he has to do-Hand to restrain himself within the limits of his comprehension." There should be no compulsion on people to work for the ~~common good," for there are far more conceptions of what consti tutes the common good than there are people. Individual assessments of the common good vary from mo ment to moment with ~~billions of changing perspectives." Going from one philosopher to another, Read quotes William Graham Sumner: ~~Making the most of one's self ... is not a separate thing from filling one's place in society, but the two are one, and the latter is ac complished when the former is done."

Most people who start with an idea and build an institution to sup port it eventually succumb to the feeling that the institution must go on regardless of what happens to its original raison d'etre. Some time ago Ben Rogge led a discussion about the future of The Foundation for Economic Education. Leonard Read, at a FEE Trustees' meeting in a time of financial difficulties, turned thumbs down on the proposal to launch a fund drive to establish an endowment to cover, through earnings or interest, the Founda tion's operating expenses. Such a fund, he argued, might rob the staff of the incentive to do a good daily job of persuasion. The Foundation, as Leonard Read notes, survived its period of finan cial troubles. Manna continues to come from heaven as long as the ~~exemplarity" of the FEE staff sus tains its power of attraction. As to the question. of the far future of the institution, Leonard Read quotes Ralph Waldo Emerson, who said ~~we do not guess today the mood, the pleasure, the power of tomorrow, when we are building up our being."

Taking Emerson at his word on Hunguessability," Leonard Read concludes his book by saying that ~~there is only one appropriate aim for those of us on the Senior Staff: to so conduct ourselves that we shall have superior successors." The fu ture will be determined by present performances. ~~The power of tomor row, as related to human liberty," says Read, His determined by our power on its behalf today. Let us not interfere or try to out-think the Great Ordainer. Be assured of a series of surprises-pleasant and rewarding ones!" On such a note of affirmation Leonard Read ends his twenty-sixth book. I am sure he is already at work on his twenty-seventh. i 380 THE FREEMAN June AMERICAN MADE: MEN WHO SHAPED THE AMERICAN ECONOMY by Harold C. Livesay (Little, Brown & Co., Boston) 1979 310 pages. $11.95 cloth Reviewed by Russell Shannon WHAT is the reason for America's remarkable success? Some people say it's our religious heritage-the principles of Judeo-Christian moral ity and the Protestant work ethic.

Others might argue that the cause is mainly political-the democ racy which allowed first all white men and then anyone aged 18 or older to vote. Yet still others claim that our economic system made America great-a vast market growing be hind our expanding frontier, unhin dered by trade barriers and other legal restrictions, promoting the ef ficiencies which arise from the specialization of labor and the economies of large scale production. But what about individuals? An historian, Harold C. Livesay, ar gues persuasively that some of the credit for America's achievements is due to the contributions of great men. Livesay profiles nine individ uals whose creative endeavors in the field of management revolutionized our system of production and con verted the small craft shops of which Adam Smith spoke in 1776 to the vast industrial enterprises of today. Livesay begins with Eli Whitney, who introduced not only the cotton gin but also the use of interchange able parts, thereby extending the employment opportunities for un skilled labor. Whitney also realized that producers should seek out op portunities provided by changing markets, for he switched from man ufacturing gins to producing firearms when that became more lucrative.

Second on Livesay's list is Cyrus McCormick, inventor of the reaper, But before it could sweep the plains, the reaper had to be sold to farmers with precious little mechanical knowledge and even less ready cash. So, setting up shop in Chicago, McCormick established a chain of dealers to provide prospective cus tomers with service, information, and financing. Andrew Carnegie used the new cost accounting when he integrated production of steel. He realized that a corporation's goal is not simply to produce as much output as possible, but to make for stockholders the highest possible return. As an economist would say, if a producer cannot make money on his product, then the scarce resources he employs could be used more effec tively elsewhere. Thomas Edison institutionalized the process of invention. But while cutting costs and enriching himself, 1980 OTHER BOOKS 381 Edison also wrought wonders for us.

As Livesay writes, ((before electric ity most urban Americans lived dark, smelly, tattle-tale gray lives in the homes and streets lit by gut tering wicks and flickering gas lamps, suffused with the reek of coal smoke, human excretion, and horse manure." By the same token, before Edison, ((farm families (endured) numbing toil and embittering isola tion." Edison helped bring an end to all that. Similarly, Henry Ford made Americans more mobile. Pierre S. du Pont used market forecasting to stabilize production. Alfred G. Sloan likewise put General Motors on a sounder footing. Henry Ford II turned his father's faltering firm into a prodigious business on an international scale. And Edwin Land, in the tradition of Thomas Edison, showed that large modern organizations can enable the inven tive inclinations of individuals to enhance the lives of all mankind. Livesay does not make these men demi-gods. Their quirks and flaws are revealed-from Cyrus McCor mick, who despite his openly pro fessed Christianity opposed the abolition of slavery and allowed his hardworking brother a meager sal ary, to Henry Ford, who bought a Dearborn, Michigan, newspaper to broadcast his harsh and horrid anti-Semitism.

Readers of Livesay's lively book will learn that, by improving ag riculture, transportation, communi cation, and industrial orgnization, these American innovators have al lowed greater numbers of people than ever before to visit, hear, en joy, and even photograph the mag nificent achievements of the past and to anticipate a more attractive future. That is no mean feat. It was due in no small part to our open system which allowed for greater economic and social mobil ity. And now that we have flung open the doors of opportunity for women, blacks, and other minorities, there are even greater chances for individuals not only to advance themselves but also to en hance society. , THE UNITEDSTATES IN THE 1980S Peter Duignan and Alvin Rabushka, editors Foreword by W. Glenn Campbell (Hoover Institution Press: Stanford, California94305) 1980 868 pages • $20.00 cloth Reviewed by Roger R. Ream No ONE can accurately forecast the events of the future. In today's com plex and tension-filled world, it is even difficult to predict what next week's headlines will be. Yet we can make reasonable guesses, based upon the past, as to what problems the 382 THE FREEMAN June U.S. will face during the decade ahead.

The editors of this tome have selected twenty-nine domestic and foreign policy topics which are likely to be major public policyissues during the decade. Taken as a whole, this book offers vital information on many important issues. Thirty-two scholars discuss different topics, providing a wealth of knowledge. The book opens on an optimistic note with Rose and Milton Friedman arguing that the intellectual basis of Fabian socialism and New Deal liberalism ((hasbeen eroded as experience has repeatedly contradicted ex pectations. Its supporters are on the defensive. They have no solutions to offer to present-day evils except more of the same." Although it remains to be determined whether the ideas of human freedom will be the tide of the future, clearly the opportunity exists for reversing the ominous trends of the 1970s. TheHoo~rm~~tiooistaki~ advantage of this opportunity for change by offering specificpublic pol icy proposals. Each author, writing on a specific issue, analyzes a problem, discusses many of the available op tions, then offers practical recom mendations. Among the contributors on domestic issues are Alan Greenspan, economic policy; Martin Anderson, welfare reform; Thomas Gale Moore, energy; Alvin Rabushka and Dan Throop Smith, each on various aspects of tax policy; and John McClaughry, neighborhood revital ization.

Greenspan's essay is particularly important because he discusses an issue with long-term consequences: capital investment. He observes that unemployment and unstable eco nomic conditions in recent years are due to inadequate private invest ment. Two important reasons for this inadequate investment are the infla tion rate and the regulatory environ ment, both of which increase the risk premium. Capital expenditure is going into shortlived, low risk in vestments. Inflation introduces uncer tainties concerning rate-of-return cal culations and the regulatory process presents an unknowable assortment of rulings and delays. Greenspan ar gues that government programs must be curbed and acknowledges that ttal_ though the choices may be hard ones, the potential rewards are large. For if we are capable of defusing the under lying inflationary forces in our econ omy, thereby lowering risk premiums associated with potential new capital investment projects, the 1980s can usher in for the United States a period of sustained expansion.... "

The foreign affairs essays in this book cover ((our dealings with foreign countries during the 1980s . . . [and the] need to understand and accept the limi ts of American power." Among the authors and topics in this section are: P. T. Bauer, foreign aid to 1980 OTHER BOOKS 383 Third· World nations; Ray S. Cline, U.S. intelligence operations; Hendrik S. Houthakker, world energy sources; and Edward Teller, writing on ttTechnology: The Imbalance of Power." This section also includes essays on six geographic regions of the world. The general conclusions these au thors reach, although not with abso lute unanimity, are that the U.S. has lost much of its ability to influ ence events around the world; that foreign aid doesn't cure poverty, or bring modernization and democracy to the third world; and that the Soviets have achieved military superiority and therefore ttthe major problem facing the United States in the 1980s is to gauge the intentions and strategies of the Soviet Union."

The general recommendations in clude increasing our currently slim technological superiority over the Soviets; pursuing a consistent policy of containment of Soviet-Cuban im perialism; and allowing the price mechanism to operate, thereby enabling us to get out from under neath our reliance on Middle East oil. They offer specific proposals for achieving these ends. Richard F. Staar has a particu larly insightful essay concerning opportunities for the U.S. vis-a.-vis the Soviet Union. It is likely that a change of leadership will take place in Moscow in the 1980s. ttOne of the great weaknesses of the Soviet system," Staar writes, ttis that no means exist for any constitutional transfer of power or for the removal of overaged or otherwise disqual ified leaders except by conspiracy." He predicts the struggle for power following Brezhnev's departure may ttinvolve an extended period of dis orientation in Moscow." However, following this period of vulnerabil ity, the new Soviet leadership can be expected to remain narrow-minded and totally dedicated to their system ofterror. Staar recommends specific actions we can take to be in position to exploit the opportunities created following Brezhnev's departure, in cluding projecting the U.S. to the Third World ttas a revolutionary sys tem that has brought prosperity to the American working class ... and where human rights are strongly upheld .... "

Compiling a volume as broad as this book can present several prob lems for the editors. There is the difficulty of selecting the issues which will be of greatest importance in the 1980s. While the verdict on this count cannot be handed down until 1990, it appears that all major areas are covered in this book with the possible exception of crime. The crime rate is approaching such a level in this country that peaceful political, social, and economic activ ity is endangered. The problems dis cussed in this volume contribute both directly and indirectly to the 384 THE FREEMAN increasing crime rate and stem from the same source, a growing disre spect for life and property. The selection of scholars to con tribute to the volume is also excel lent. The topics are thoroughly cov ered and the proposed alternatives are accompanied with well-reasoned arguments. It is unlikely any reader will find himself in complete agreement with a book of this breadth and diversity.

Each author has his own somewhat distinctive philosophical outlook. The intention of the book is to offer public policy proposals. Solutions consistent with free market princi ples are sometimes dismissed be cause they are not politically viable. Several of the authors reluctantly Ubegin with the premise that any serious plan for ... reform must be HANDSOME BLUE LEATHERLEX poli tically, economically, and so cially feasible. . . ." The difficulty here is that we sometimes find our selves trying to make socialism work, rather than proposing bold initiatives which are consistent with the principles of freedom. By con cerning ourselves with the politics of an issue, we sometimes offer solu tions that are not wholly consistent with our principles. The Hoover Institution has done a great service by publishing a book which forcefully analyzes problems confronting the U.S. and offers use ful and creative solutions. The 1980s will present numerous opportunities to restor~ greater freedom and secu rity to Americans. This book brings into focus many of the opportunities and challenges we are likely to face. i FREEMAN BINDERS $3.00 Order from: THE FOUNDATION FOR ECONOMIC EDUCATION, INC.

IRVINGTON-ON-HUDSON, NEW YORK 10533 the Freeman VOL. 30, NO.7 • JULY 1980 Whither Independence-1980 A.D.? C~arence B. Carson 387 A day on which the American spirit of independence is rekindled would be worth celebrating. Democracy and Freedom John V. Denson 399 A timely reminder of Tocqueville's analysis of democracy and how it may be used to thwart freedom. The Welfare State as a Zero-Sum Game Jack D. Douglas 403 The old mercantilism is revived in the modern schemes of redistribution of wealth by force-and war. The GoodPeople Syndrome P. Dean Russell 410 The best of intentions, plus political power, leads to tyranny. Progress in a Free Economy George Reisman 415 Continuous economic progress is possible with freedom; the limits to growth are of socialist invention. Government, Heal Thyself Donald J. Senese 423 The history of government regulation promises, not improvement, but deterioration in the health care field.