Book Reviews

Lord Bauer is anything but an ideologue. He would gladly admit to a bias for freedom, but he works strictly from the facts when he crit icizes the conventional wisdom about such things as foreign aid. His most recent book, Reality and Rhetoric (Harvard University Press, Cam bridge, Mass., 184 pp., $15.00), takes off from his personal experiences as a student of British colonial office practices in the Twenties and Thir ties in West Africa and Southeast Asia. Detailed as a young economist to make investigations of the rubber industry in Malaya and Sumatra and the cocoa industry in West Africa, Bauer was impressed with what a light hand the British colonial office ruled in the days before the Fabians took overits guidance.Boththe rub ber industry and the cocoa industry were the creation of native individ uals who were glad to borrow where they could but who did the necessary clearing and planting on their own.

The British "imperialists" gave the local entrepreneur a free hand as 757 758 THE FREEMAN December long as he did not engage in tribal warfare. Bauer observes that before 1885 there was not a single rubber tree in Malaya or a single cocoa tree in Ni geria and the Gold Coast in Africa. There was nothing that might be called an infrastructure to enable peasant.s to get their goods to distant markets. The change came about through local initiatives, not through any top-down planning in London. Chinese traders were drawn to the rubber trade in Asia. "Some started their own plantations," says Bauer, "while others brought seeds and consumer goods to the indige nous people of Malaya and Nether lands India (now Indonesia)." By the late Nineteen Thirties more than half the rubber acreage in Southeast Asia was owned by Asians. Foreign borrowing accounted for little ofthis: the acreage, says Bauer, "repre sented the results of capital forma tion through direct investment in the face of initially low incomes."

In West Africa, says Bauer, there were (and are) no European-owned plantations. Cocoa, ground nuts, cot ton and kola nuts have been pro duced on farms established, owned and operated by individual Africans. Local traders, financed by Europe ans, have provided necessary capi tal. The local trader, unhampered by government, "made available con sumer goods and production inputs, and provided the outlet for cash crops." Bauer quotes Sir Keith Han cock as rightly calling West Africa "the Traders' Frontier." A Fabian Legacy It was the triumph of Fabian ideas in Europe in the late Thirties that changed everything in West Africa and Malaysia for the worse. Govern ment marketing boards were set up with monopoly powers. The free trader was practically abolished. Little proprietors had to sell to the marketing boards at specified prices. The boards, with surpluses to use as the politicians saw fit, were, in a way, functioning as tax collectors. A younger generation of native intel lectuals journeyed to London to study economics under Fabian pro fessors such as Harold Laski. They returned home to become the advis ers to government. When, in the last years of British colonial rule, the sit uation was described to colonial sec retary Oliver Lyttleton and to An drew Cohen, the head of the African Development Department of the co lonial office, they remarked cyni cally that the African peasant had no future anyway.

So things stood in Africa when the British were busy turning over local governments to politicos such as Nkrumah. In a "one man, one vote, once" situation, Nkrumah used the Gold Coast-Ghana Cocoa Marketing Board as his financial power base for years to deadly effect. With traders 1985 REALITY AND RHETORIC 759 prohibited, the economy stagnated. Bauer writes ofWest Africa, but he is quite aware of the whole African and Third World-situation in var ious detail. Not all Third World countries are alike, but the foreign aid policies of the West have had the unfortunate effect of dragging them down to a dead level. The Third World is a political concept, ·not an economic one. Tanzania, in East Af rica, has good soil and good growing weather, but President Nyerere, a proponent of single party socialism, has used extensive aid from theWest to ruin his economy. He has driven his peasants into villages and col lectivized their farms. The result has been poor food production. In Zaire, another big aid recipient, President Mobuto has expelled independent traders. This has resulted in a re version to subsistence production.

The aid money from the West keeps Mobuto in power. Mobuto takes it as a bribe to keep him in the western political camp, but the money does not trickle down. There is plenty of lavish spending of aid money in the Third World, but Bauer asks how the poor benefit from such brand new capitals as Brasilia, Islamabad, Abuja in Nigeria and Do doma in Tanzania. New govern ment-owned airlines provide pres tige for the "in" politicos, but the vast majority of the people can't use them or even operate them. Bauer thinks it is a sophistry to say that foreign aid to the Third World keeps employment up i~ the donor countries. The provision of British ships to India, Poland and Vietnam in the Seventies did benefit labor and management in British shipyards, butthetaxpayersputoutthemone~ They will never get it back from the recipients of their largesse. Bauer thinks it would have been more sen sible to use the shipyards for other purposes.

Bauer blames the politicians for much of our trouble, but he does not exempt his fellow economists. They generalize on the basis of demo graphic change and forget such "core" things as wages and prices. It is our good fortune that Bauer has a "bully pulpit" in the House of Lords to tell us what is wrong. @l FREEDOM WITH JUSTICE: CATHOLIC SOCIAL THOUGHT AND LIBERAL INSTITUTIONS by Michael Novak (Harper & Row, San Francisco), 1984 253 pages _ $17.95 cloth) Reviewed by John K. Williams No DEFENDER of liberty can regard with equanimity the abhorrence of the free market in a free and open society displayed by many main stream church bodies and leaders. All such defenders of liberty are therefore indebted to Michael Novak for his volume, Freedom With Jus760 THE FREEMAN tice. While the work is self-con tained, it usefully supplements N0 vak's influential earlier work, The Spirit of Democratic Capitalism; in deed, men and women committed to economic and political freedom, and anxious to promote a creative inter change of viewpoints with clerical opponents of these freedoms, would do well to have both volumes on their bookshelves.

Part I of Freedom With Justice ex plores the relationship between eco nomics and religion, examines the tension between classical liberalism and Catholic social ethics, and re lates these analyses to two much dis cussed issues in contemporary West ern democracies: first, poverty and welfare, and second, the creation of employment. In Part II Novak proffers a de tailed exposition of Catholic social ethics and a no less detailed analysis of the thought of John Stuart Mill, described as "a .quintessential Lib eral." In the third and final section of his volume, Novak addresses "some of the problems with which Catholic social thought is bound to be wrestling during the rest of (the twentieth) century" -for example, the amelioration of poverty, the pro tection of human rights, and the fos tering of a sense of identity which, in a large and complex society, can not be mediated through "society as a whole."

Novak presents his readers with an abundance of precise and detailed documentation. Moral issues which no defender ofliberty can ignore, and moral insights which all such de fenders can welcome, inform almost every chapter of the book. No think ing person-religious, nonreligious, or antireligious; socialist, libertar ian, or conservative-could respon sibly shrug off the case Novak develops. It is, however, unlikely that any reader of the work would agree with Novak's stance in toto. Statist read ers will be dismayed by Novak's challenging of their dogmas. This re viewer found Novak's analysis ofhu man rights impressionistic, his de fense of a "safety-net" welfare system unconvincing, and his sur prisingly naive trust in "limited" in terventionism incomprehensible. Contemporary reformulations of classical liberalism-for example, that developed by Robert Nozick are, unfortunately, not discussed.

Novak issues a challenge to pro-so cialist clerics, and provides defend ers of liberty with ample ammuni tion to take the fight to local church communities. Agnostics might enjoy startling their neighbors by pur chasing several copies of Freedom With Justice and presenting them as Christmas gifts to their commu nity's clerics! But all readers of The Freeman-religious or nonreli gious-would do well carefully to study this volume. (j Index THE FREEMAN-Volume 35, January-December, 1985 Prepared by BE'ITINA BIEN GREAVES of the Foundation staff NOTE: In page references, the number preceding the colon designates the month, those following refer to pages. All articles have at least three entries-author, subject, and title-except in a few cases when title clearly indicates subject matter. Books reviewed are listed on page 768. A ABC of a market economy (Hazlitt) 2:68-74 ADAMSON, Michael The international debt problem: the case of Argentina. 12:732-736 AFRICA Agricultural technology, economic incentives and world food problems (Pasour) 7:427-433 Anti-apartheid threat (Davenport) 8:452-454 Essay on caring (Foley) 4:230-234 AFRICAN famine: the harvest of socialist agriculture (Osterfeld) 10:607-609 AGRICULTURAL technology, economic incentives and world food problems (Pasour) 7:427-433 AGRICULTURE Mrican famine: the harvest of socialist agriculture (Osterfeld) 10:607-609 Economic reality and U.S. government farm programs (Pasour) 6:325-331 Profit-maker-friend or foe? (Baetjer) 4:196-206 AMERICAN dream/heritage Disease from which civilizations die (Williams) 9:525-537 Growing pains (Barker) 12:743-748 Spirit of freedom (Bearce) 6:341-349 AMERICAN economic progress (Asmus & Billings) 8:455-464 AMERICA'S two elites (McDonald) 11:644-647 ANCIENT Chinese story (D. Russell) 2:111-119 ANDERSON, Bill Comparable worth: social justice or social transfer?