Book Reviews

A REVIEWER'S NOTEBOOK The World AfterOil JOHN CHAMBERLAIN THURMAN ARNOLD, the old Roose veltian trust-buster, used to remark that the easiest way to make money was to enter a field that has been monopolized and give it some real competition. Something like this happened when the West, shocked by what the Organization of Petro leum Exporting Countries (OPEC) had done to give a fifteen-fold lift to energy prices, began to strike back. Bruce Nussbaum, an associate edi tor of Business Week, makes plain the dimensions of the West's re venge in a remarkable book called The World After Oil: The Shifting Axis ofPower and Wealth (New York: Simon and Schuster, 319 pp., $14.95). It is a story full of ironies, reminis cent in a way of what happened to Spain when gold from the Indies of570 fered the deceptive promise of an easy street forever and ever. To be sure, the West did not rely wholly on direct energy competition with the Arabs of the Middle East.

It did turn its attention to the dis covery and exploitation of new oil fields (in Alaska, the North Sea and Mexico), and it did put a new em phasis on coal. Atomic energy was a disappointment in America, but the French began to make something of it, using it for the generation of 35 per cent of their electricity. The biggest blow to the OPEC mo nopoly, however, came by way of an indirection that might have escaped Thurman Arnold's attention. What happened is that the entrepreneu rial genius of the West, looking for profits that no longer could be had THE WORLD AFTER OIL 571 from the old high-cost "smokestack industries" (steel, automobiles, heavy machinery), sought out "energy-sip ping" businesses in the new area of high-tech. The age of the computer, able to base phenomenal accom plishments on smaller and cheaper silicon chips with a voluminous memory capacity, would have come eventually if the Arabs had never tried to create an energy monopoly.

But what high-cost fuel and high cost labor did was to force inventive enterprisers to do in five years what they might otherwise have strung out through twenty. The new industries expected in the twenty-first century are already here. Computers, biotechnology, electron ics, says Mr. Nussbaum, use· only a fraction of the energy that the old industries consumed. Automated factories with robot-run assembly lines need only a small percentage of the energy to operate compared to yesterday's people-run Detroit plants. It is, says Nussbaum, a massive long term trend that "will reverse itself only if oil returns to something ap proaching $10 a barrel." Looking Ahead Mr. Nussbaum suspects that the future belongs to the United States and Japan, though there could be some surprises if it turns out that the Japanese can't create with the same facility that they imitate. The West Germans seem to beoutdistanced at the start simply because their whole tradition has pointed to predominance in the heavy "dino saur" industries. Mechanical engi neering and bulk chemicals do not make for "energy-sipping. " The West Germans are avid for Siberian gas for the compelling reason that a na tion of mechanical engineers cannot find the teachers to transform a whole educational system over night.

Soviet Russia, according to Nuss baum, is in the worst fix of all the major powers, even though its nu clear missile facade is imposing. It desperately needs the income that will be supplied by the new Siberian gas line, for its oil revenues are de clining along with OPEC's. With the military taking just about every thing from the civilian sector, the Russian worker turns more and more to vodka· for his solace. Life expec tancy in Russia decreases, and agri culture fails to feed even those with shorter life spans. Tens of billions have to be spent on imported foods, and the masters of the Soviet mili tary empire have to scrounge up $30 billion in subsidies to keep Cubans and Poles and Angolans in line. With an economy much larger than Japan's, the Soviet Union uses only a tiny percentage of microelectron ics in its products, and most of this goes into military technology. What it has is either copied or stolen from the West. The copycat miniaturiza572 THE FREEMAN September tion is enough to turn "dumb" mis siles into "smart" ones, but there is little left over to diffuse electronic benefits throughout the civilian economy. And even with the most accomplished copying and KGB-en gineered thievery the stuff the So viets gave to the Syrians could not cope with what the Israelis did with American computerized equipment.

Third World Prospects As for the Third World, Mr. Nuss baum thinks that only a half dozen countries will "be able to make it to the twenty-first century." The lucky ones will probably be "Brazil, South Korea, Taiwan, Hong Kong, Israel and Singapore." Raw materials aren't going to help a Third World country much. Copper, for example, is al ready being replaced by optic fibers, and when western technology be gins mining the sea beds the profits will go to multinational corpora tions. Mr. Nussbaum worries about "re gional dislocation" in America. Sili con Valley is, as he says, a "Pacific basin" phenomenon. There could be a "dark side" to the future, particu larly if Washington goes in for a protectionism designed to save the heavy industries of the Middle West. But if Congress takes wise mea sures, high-tech industries, "seeded" by rebuilt universities in the North east and Middle West, will begin to spread outside the Pacific basin. With John Chamberlain's book re views have been a regUlar fea ture of The Freeman since 1950.

We are doubly grateful to John and to Henry Regnery for now making available John's autobi ography, A Life with the Printed Word. Copies of this remarkable accountof a man and his times our times-are available at $12.95 from The Foundation for Economic. Education, Irvington on-Hudson, New York 10533. new robot factories putting sales people to work and reviving depen dent jobs, Ohio and Michigan will again become prosperous. What Nussbaum does not allow for is the possibility that desperate na tions on the one hand, and desperate individuals on the other, may be have irrationally even to the point of giving in to the Samson complex and pulling down the temple. With Taiwan, South Korea and Singapore "making it" to the twenty-first cen tury on their own, would Red China be willing to sit idly by? As for west ern individuals without jobs, the dangers of Luddite antipathy to ward robots must be reckoned with politically. But no author can fore see every possible eventuality. Mr.

Nussbaum has at least written a pi oneering work. In doing this he has vindicated an old truth: monopolies are bound to fail. ® 1983 OTHER BOOKS 573 FREE ENTERPRISE:A JUDEO· CHRISTIANDEFENSE by Harold Lindsell (Tyndale House Publishers, Inc., 336 Gundersen Drive, Wheaton, III. 60187) 1982 180 pages. $5.95 paper SOCIALJUSTICEAND THE CHRISTIAN CHURCH by Ronald H. Nash (Mott Media, Inc., 1000 E. Huron, Milford, M148042) 1983 175 pages. $12.95 cloth Reviewed by Buddy Matthews THE movements known as Christian Socialism and the Social Gospel are more than a century old. The churchmen involved are critical of what they understand capitalism to be; some advocate socialism; all be lieve that government should inter vene in the economy in order to as sure "an equitable distribution of wealth." Contemporary "liberation theologians" embrace Marxism, and ecclesiastical agencies syphon funds into the coffers of revolutionaries.

The man in the pew is turned off by such interpretations of the Gospel, and more and more theologians are coming to realize the affinity be tween their religious faith and the vision of a free people enjoying polit ical liberty and the free economy. Two recent books lend support to this development. Theologian Lindsell, editor for many years of Christianity Today, finds biblical support for the eco nomic order popularly called free enterprise. His book is something of an economics primer, basic and in formative. The book also examines Marxism and rejects the flimsy claim that this secular doctrine is compat ible with Christianity or Judaism: "... Marxism and the Judeo-Chris tian faith are and ever must be anti thetical." Lindsell points out that the first principle offree enterprise is private property and this is established in God's moral law as expressed in the commandment "Thou shall not steal."

Hence, any system which attempts to do away with private property, as does Marxism, violates a basic law in the code given to Moses. Lindsell examines the examples of free en terprise used by Jesus in some of his parables, and concludes that only in the free market can man practice the rights and liberty given him by his Creator. This does not mean, however, that Lindsell gives a blanket sanction to everything people do in the name of free enterprise. "In general," he writes, "the law of supply and de mand constitutes the working basis for selling and buying. There are some instances, however, when this law should be superseded by the law of love," which means Christian stewardship and the Good Samari574 THE FREEMAN September tan ethic. Dr. Lindsell here adds an important point which is often miss ing in the writings of free market economists: the ethical position. He feels that free enterprise must unite with Jesus' teaching that you should "love your neighbor as yourself." It is not only socialist economics we are fighting but also socialist ethics and morality. "Free enterprise, in order to be free, rests on the pillars of trust and truthtelling. In this it stands in opposition to socialist ethics and morality."

Ronald Nash, a professor of phi 10sophy and religion at Western Kentucky University, approaches the question somewhat differently; he seeks to answer some of the basic philosophical problems of a free so cial order. What is a liberal? What is a conservative? What is the State? What exactly is justice and how is it related to equality? His findings are often very enlightening. "The main stream of contemporary American conservatism," he writes, "is under stood best as a fusion of classical lib eralism's concern for individual liberty and nineteenth century con servatism's concern with moral ab solutes and social order." This im plies a desire "to conserve the political convictions that gave birth to the U.S. Constitution ... " Dr. Nash's approach is reasoned and persuasive. He deals with the nature of capitalism and socialism, examining the rationale behind each system. He cites all the major objec tions critics have raised against cap italism and then shows why these objections can not be rationally or morally sustained. Believing in the unity of all truth, he avoids using the Bible as a proof text-if free market principles can be shown to be true, then they will be consistent with the Bible.

Religion and capitalism, properly understood, are, in fact, allies. These two volumes join the increasing number of studies which demon strate the connection. @ BENJAMINFRANKLIN by Ronald W. Clark (Random House, 201 East 50th Street, New York, NY 10022) 1983 530 pages. $22.95 Reviewed by Robert M. Thornton WHEN war broke out between the American colonies and Great Brit ain in 1775, Benjamin Franklin was sixty ..nine years old and famous, not only in the colonies but in England and on the continent as well. The other outstanding Founding Fa thers were relatively young and un known: Washington was 43, John Adams 40 and Jefferson a mere 32.

1983 OTHER BOOKS 575 Had not the colonies successfully gained their independence, the lat ter three may never have become fa mous. But Franklin's fame does not de pend on the American War for In dependence, and Mr. Clark does a very good job explaining why. He devotes attention not only to Frank lin's splendid efforts to bring about American independence, but to all the man accomplished in the sixty years from the time of his arrival in Philadelphia as a young man to his death in the same city at age 83. Franklin was a remarkable com bination of characteristics that might seem incompatible with each other. He was a sharp man in business, but a generous public benefactor. He was fascinated by scientific theories and sought practical uses for his discov eries. He was an avid reader and revelled in good company, especially that of attractive and intelligent women. He loved England and France but refused to compromise with either on the subject of Ameri can independence. He was ready to be the peacemaker, but when war came he never hedged at fighting it out to the bitter end. He practiced honest diplomacy for the most part, but if deception and intrigue were called for, he acted accordingly.

Franklin was an excellent printer, publisher and writer. His Poor Richard's Almanac was, for twenty five years, an outlet for his homely aphorisms and pungent articles. He helped found the first subscription library in this country, the first fire department, and the academy which became the University of Pennsyl vania. Among other things he in vented the Franklin stove, bi-focal glasses, and the lightning rod. His electrical experiments and discov eries put him in the top rank of those pursuing the subject in the mid eighteenth century. He was the first scientist to identify the Gulf Stream. The list seems endless! When relations between Great Britain and the American colonies deteriorated in the 1770s Franklin was not a firebrand revolutionary but hopeful that a break would not oc cur. He had lived in London for the better part of·two decades and was deeply attached to the country. But when British policy forced a choice, Franklin took the side of his home land.

Just what did Franklin contribute to the cause of American indepen dence? Well, he was the superb dip lomat-his reputation as a scientist, natural philosopher, writer and wit gave him a great advantage over other American representatives. We must remember that Europeans usually thought of American colo nists as country bumpkins and primitives. They were astounded at Franklin who was as well-read and brilliant of mind as any in England or· on the continent. He cleverly 576 THE FREEMAN played on this prejudice by affecting the homespun manner and appear ance when it suited the occasion. Just as in some societies courtship is a complicated affair, so it was in diplomacy in eighteenth century France. One had to know who to talk to-and when and how-to get any thing done. The intricacies of a roy;l court were learned only by the pa tient man, not by those accustomed to being direct and straightforward.

John Adams, for all his brilliance and devotion to the cause of liberty, got nowhere in France. He lacked the patience to wine and dine and cultivate the right people. Franklin, on the other hand, knew how to woo and charm influential Frenchmen in order to accomplish his purpose which was to get help from France for the American colonies in their fight for independence. Had he not HANDSOME BLUE LEATHERLEX been successful the revolution might have been lost, or would have dragged out even longer than it did from 1775 to the signing of the peace treaty in 1783. Let's face it, the colonists may have had all the brave determination in the world. That is essential to achieving a great goal, but it also is necessary to have the means to do so. The colonists did not have the means to defeat the British or the money to obtain them. France sup plied both men and equipment, and Franklin deserves the most credit for getting this aid. It required a shrewd man to playoff France against Eng land and vice versa, leaving the new nation free to pursue its own destiny without being at the mercy of either nation. George Washington may have been the indispensable man, but Ben Franklin ran a close second. @ FREEMAN BINDERS $4.00 Order from: THE FOUNDATION FOR ECONOMIC EDUCATION, INC.

IRVINGTON-ON-HUDSON, NEW YORK 10533 the Freeman VOL. 33, NO. 10 • OCTOBER 1983 Letter from the Paper Planet Ernest G. Ross 579 The trouble with fiat money-as it might seem to a visitor from outer space. From Caves to Computers Bettina Bien Greaves 587 The blessings of freedom to specialize and trade. Computers and Capitalism John Jefferson Davis 594 Assessing the impact of the computer upon the way we live. Why Not Deregulate Labor? John A. Davenport 601 An article-review of the case for deregulating labor relations. Judicial Monopoly Over the Constitution: Jefferson's View Clarence B. Carson 605 A strict construction of the idea of limited powers. The Ethics of Crime Gary McGath 616 How the welfare-state idea is used by the criminal to justify his actions. The Myth of Self-Regulation Ridgway K. Foley, Jr. 621 Behind many of the efforts at industry self-control lurks the coercive power of the state.