Book Reviews

202 A REVIEWER'S NOTEBOOK Passage to a Human World by John Chamberlain I n spite of its occasional hop-skip-and-jump presentation and its reliance on abstrac tions, Max Singer's Passage to a Human World: The Dynamics of Creating Global Wealth (Indianapolis: Hudson Institute, 390 pp., $21.95) is a most comforting book to read. Its broad thesis is that the human race, barring the possibility of destruction by collision with a meteor of asteroid size, is never going to suffer from lack of materials necessary to keep it on an onward and upward course. What kings and barons could have in the Middle Ages, everyone can have tomorrow. The goal of a $3,000-a-year personal income is foreseeable in relatively short order for all save the people in a small minority of Third World states. Even they will be lifted to the $3,000 a-year category in time. Singer begins by establishing some broad facts about the nature of wealth. We are accus tomed to thinking of wealth in terms of gold, oil, growing forests, fertile farmland, and big power plants. We put great stress on the base metals, such as iron and bauxite, or on a steady wood supply. But Singer says that fear that we will run out of crucial metals and forest prod ucts is part of a big "edifice of error. " There is plenty of iron in the ground and plenty of baux ite for aluminum. The cheap metals cost less than ten cents a pound. Copper is "sort of in the middle," as Singer expresses it. But whether cheap or in the middle, metals make up so small a percentage of modem wealth that they have little effect in determining prices. What is im portant about modem wealth is that it consists mainly of ideas.

The way to get rich, says Singer, is to learn. He quotes a Mexican cab driver as saying, "Poverty is the result of people not knowing how to do anything." We are more productive than the people of Abraham Lincoln's time be cause we know more. And what one person knows, another may copy. Singer attributes the building of the "edifice of error" to a self-constituted elite-a "new class" -that he calls the "University-Oriented Americans. " These combine a conviction of in tellectual superiority with a generally low mo rale about their country and the world. The common people, in contradistinction to the UOA elite, have a high morale. Singer conveniently arranges his thoughts about the UOA and the ordinary citizen in two columns. According to the low-morale ideas in Column A, the world is divided into rich na tions and poor nations. WorId population is growing faster than ever and is out of control.

The U.S. is wastefully using a disproportionate share of the world's treasures, and eventually these treasures will be used up. In wasting the resources the U.S. is exploiting poor nations. Continuing the Column A lament, Singer says the UOA elite considers modem technol ogy to be very dangerous and getting harder to control. People working for profits cannot be trusted. They are not idealists. They don't help produce a fairer income distribution or encour age the extension of democracy. All of the low-morale ideas in Column A, says Singer, are wrong. Actually (see his Col umn B), the world is moving quickly toward a time when most, if not all, nations will be rich. India and China, even with their huge popula tions, will be among them. Some nations are moving faster through a transition than others. World population will level off in a way that will not cause harmful crowding. Modem tech nology is a major reason why dangers to health have decreased so rapidly.

As for profits, people who work for them are just as trustworthy as those working for other motives. Our country is an apt vehicle to ex press idealism, for it is full of people who care about real results. Many countries take inspira tion from us even though they have their own definitions of democracy. So much for Col umnB. The pollution problem worries Singer, but only because too many people are percentage point perfectionists about it. We'll never have skies that are completely free of ozone hazards. But we can do much to inhibit the spread of carbon dioxide. Every tree that is planted helps. To gain perspective, Singer amuses himself by asking, "How clean is your house?" It could be kept cleaner and neater, but maybe you have children. How dangerous is your house? It could have more smoke detectors. How many burglar alarms do you have? Is your electrical wiring properly grounded? Do you have "grab bars" to protect against falling in the bathtub?

You do your best to check on these items, and so strengthen your house investment over the years. But you can't spend twenty-odd hours a day on the subject. The point is that our homes are as clean and neat and safe as we choose to make them. The same is true of the larger environment. The coal supply could stand cleaning up. But if we don't reach absolute perfection, it isn't go ing to make much difference to our health. Life spans will still increase. Singer is, however, worried about what he calls sneaky pollutions. One such was the sneaky pollution of scurvy. It was not until sci entists had -learned things about vitamin C that the British Navy prescribed limes for its sailors, 203 and it was.a full forty years before the merchant marine got similar treatment. Singer's book is written largely in terms of high abstraction. He forces his readers to supply the names of his University-Oriented Ameri cans who contribute to the edifice of error. He does not identify any of his prime culprits. They could be faculties at Stanford or Berkeley or the University of Chicago. He could have been much more graphic if he had simply said "Har vard--or Yale, or Princeton-hates America"

and then gone on to name the individual pro jectors of the hatred. You won't find anything about the Cold War in the Singer book. Gorbachev is not in his index. Presumably Singer classifies the possi bility of destruction from nuclear warfare with the likelihood of disaster from collision with an asteroid. It could happen, but as the Soviets scramble to restore grain production to old Czarist-day levels, it probably won't. D THE ELECTRIC WINDMILL: AN INADVERTENT AUTOBIOGRAPHY by Tom Bethell Regnery Gateway, distributed by Kampmann & Co., 9 E. 40th Street, New York, NY 10016 • 1988 • 294 pages • $17.95 cloth Reviewed by David M. Stewart I first read Tom Bethell's essays in Reason in the late 1970s. At the time, I admired his clear, fluid style and effortlessly per suasive arguments on economic issues. But in his monthly column for The American Specta tor in the 1980s, he has become a first-rank critic of contemporary liberalism.

In virtually every political essay Bethell writes, there appears a one-, two-, or three sentence epitome of some tenet or tendency of liberalism. Sometimes the point made is the ma jor point of the piece, sometimes a brilliant aside or parenthesis. Regardless, Bethell can do to liberalism in a couple dozen words what some writers are unable to do in reams. The Electric Windmill shows off Bethell the liberal critic in good form. This wasn't, how ever, Bethell's main intention. In fact, he says in his introduction that "It did strike me as a 204 THE FREEMAN. MAY 1989 good idea to exclude the numerous policy oriented articles that I have written over the years." On a whole, though, the book moves smoothly from "inadvertent autobiography" to, if not policy pieces, political culture pieces. But even in the early essays, concerned with the frrst sev eral years of his life after arrival in the U.S.

from England in 1962, Bethell sprinkles obser vations and comments on the political culture he observed. The frrst essay is partly an account of his first months in the country, partly an account of his contrition for his "wishy-washy liberalism." Bethell says that immediately upon entering the U.S., he "didn't hesitate to suggest various ways in which national customs and folkways could be improved." If he wasn't immediately surprised at himself for offering his advice-after all, "it was un derstood that [Americans] were themselves fre quently aware of their shortcomings and more than willing to take self-improvement lessons from educated Englishmen" -it eventually came to him "what a lot of nonsense I had been permitted to get away with.... after the pas sage of a few months most British immigrants are to be found pensively staring down at the sidewalk, . . . recalling with embarrassment some vile rudeness and vowing not to let it hap pen again."

From New England and Virginia, Bethell went to New Orleans, where he became a re porter on the weekly Vieux Carre Courier. In the essays about this period he traverses New Orleans jazz and a brilliant jazz collector, William Russell Wagner, the vicissitudes of the New Orleans real estate market, and a Kennedy assassination conspiracy investigation. From here Bethell moves on to Washington, D.C., spelunking the Beltway culture, explor ing what he calls (after Joseph Sobran) the phe nomenon of "the Hive" -the liberalism of the intelligentsia. These pieces aren't dry political treatises, though. On the contrary, they really are princi pally reportage. He reports on crime from courtrooms and judges' chambers; on abortion ists and the prolife movement from Pennsylva nia Avenue; on the Hive's vehicle, the Demo cratic Party, in San Francisco; on the "loyal opposition," pragmatic, country-club Republi cans, in Dallas; on AIDS and "safe sex" at Stanford University.

In each essay, though, Bethell leavens his journalistic observations with compact illumi nations on the implications of what he sees or the principles informing the agents' words and deeds. What is most impressive is that he does it on the fly, without sacrificing narrative con tinuity. Thus the incident giving the book its title. Bethell reports stumbling onto ACT '79, the "Appropriate Community Technology Fair, " a gathering of various energy technology vision aries and bureaucrats. "I decided to take a look at the windmill," he writes, "a large three bladed propellor on top of a tall tower. The propellor was churning around merrily, al though there was little or no wind at ground level. . . . It would save about half your elec tricity bill-if you lived in a windy spot. . . . I asked the gentleman from Vermont why the blades were whirring around so smoothly in such still air. 'It's not working off the wind,' he said. 'It's plugged into the power outlet.' It wasn't demonstrating the production of electric ity. Electricity was demonstrating it." 0 (Mr. Stewart is an advertising copywriter and a freelance writer in Rochester Hills, Michigan.) LIABILITY: THE LEGAL REVOLUTION AND ITS CONSEQUENCES by Peter W. Huber Basic Books, 10 E. 53rd Street, New York, NY 10022· 1988· 260 pages • $19.95 cloth Reviewed by George C. Lee!

W hen the solemn judgments of a na tion's legal system become the ob ject of jokes and sarcasm, there has to be a serious problem. There may be plenty of discussion over the correctness or wisdom of Marbury v. Madison, the Legal Tender Cases, Lochner v. New York, or Brown v. The Board, but nobody has ever laughed at those decisions. But how about the case in which a contestant in a refrigerator-carrying race recovered against the manufacturer of the refrigerator for injury to his back; the case in which a church was sued by the family of a person who had committed suicide under the theory that the church had exacerbated the suicide victim's feelings of guilt and depression; the case in which New York City was held liable for compensatory and punitive damages to the wife of a policeman who shot her and then himself, on the grounds that the city was reckless in requiring officers to carry guns off duty; or the case in which a bank was held liable to the widow of a guard who had been shot when another guard went berserk, for having failed to discover the guard's mental de fect? Cases like those cause sensible people to snicker and wonder what this country is com ing to.

If you merely want a bandolier of ammuni tion to use in arguing that our legal system has gotten pretty silly, this book will be of great use. Each of the above cases is mentioned (with legal citations) along with dozens more of the same genre. But if you want to understand how this la mentable situation of liability for almost any injury of any type whether you caused it or not came about, and what its detrimental effects are, this book is a must. It is an investigation into the intellectual history of the liability rev olution, the goals and theories of the "Founders" of this revolution (as Huber refers to a group of legal theorists from the 1950s led by the late William Prosser, who taught law at Hastings College; John Wade, Professor of Law at Vanderbilt University; and California Su preme Court Justice Roger Traynor), the pre dictable ways in which the main players in our legal system-judges and lawyers-seized upon these theories and used them to further their own ends, and how the effects of the lia bility revolution are proving harmful to almost everyone. Peter Huber has written one of those rare and wonderful books that help the reader to see how the world really works.

The Founders' principal belief was that if manufacturers were held strictly liable for any accident that befell a consumer of one of their goods, this soon would be reflected in higher prices and more efforts to design safe products. Consumers would, in effect, buy a no-fault inOTHER BOOKS 205 surance policy along with every item they bought, whether the seller wanted to provide this "insurance" or not. The expected result was more coverage for individuals (who were presumed to be too ignorant to purchase insur ance on their own) and ever-safer products brought into the market. Bringing about this revolution, which was never sanctioned by legislation, required de stroying contract law between buyers and sell ers. Often a sales contract allocated risk be tween the buyer and seller in a way that the Founders thought improper. The contract might, for example, disclaim the seller's liabil ity for various types of harm which could befall the consumer. As long as such disclaimers had legal standing, the dream of universal no-fault coverage for consumers could not be realized for the simple reason that producers would not voluntarily agree to it.

The Founders' solution was simple and bra zen-judges sympathetic to the cause merely declared that liability disclaimers were unen forceable. Contracts were no longer viewed as binding documents of mutual consent, but rather as flypaper that unconscionably trapped the helpless consumer. The struggles of manu facturers and insurers to' keep their potential li ability within bounds they were willing to ac cept were useless. Over a period of only some 20 years, the ancient law of cOl).tractbetween buyer and seller was demolished to make way for the Founders' new world of limitless liabil ity. At the same time that contract law was under a slash and bum attack, tort law was undergoing a massive alteration as well. Having taken ac cidents out of the realm of contract, the Founders needed to expand tort law to make producers responsible for injuries under virtu ally all circumstances.

Under traditional tort law, the plaintiff had to demonstrate that the defendant had acted negli gently, and that the plaintiff's injury had been caused by that negligence. Furthermore, a num ber of strong defenses were available to the de fendant, such as contributory negligence on the plaintiff's part. This law just wouldn't do. The Founders therefore also had to rewrite tort law through judicial fiat, which they did. The concept of negligence was redefined to 206 THE FREEMAN. MAY 1989 mean, roughly, producing anything that isn't perfect. Today, for example, if an automobile or a vaccine isn't one hundred percent safe-and it can always be claimed that the producer could have done something to make the product safer-the producer may be held liable in any case where a person is injured. The judgment may be for tens of millions of dollars, including vast sums of punitive damages. It will do the company no good to argue that the plaintiff was almost entirely to blame for the misfortune. It will do no good to argue that the causal connection between the product and the injury was extremely tenuous or speculative.

The company has money. It must pay. Has the liability revolution brought about the changes anticipated by the Founders? Has the level of safety risen? Huber shows conclusively that it has not. In fact, he makes a convincing case that the revolution has actually decreased the overall level of safety. For example, a new medicine might relieve a great amount of distress and save many lives, but losing even one lawsuit to someone who suffered an adverse reaction to the medicine would more than wipe out the producer's entire profit on the item. So the new product isn't sold in the United States. Or suppose that a manufacturer of a con sumer product tries to incorporate every imag inable design change that marginally enhances the safety of the product. The resulting product will be substantially more expensive than oth erwise, and that factor may cause people to con tinue to use their old and far less safe model.

Like so many grandiose plans for reforming and perfecting the world, this one backfired. The real beneficiaries of the revolution in li ability? Lawyers, of course. Quite a few of them have gotten rich by getting a "good" jury and winning an enormous judgment against some hapless company. Our present liability law shifts resources away from safety promoting activities and into litigation. For all but a few big winners in the liability slot ma chine, this is a bad trade-off. The solution to the mess created by the lia bility revolution, Huber argues, is a return to the law of contract. "Neocontract," he calls it-informed consent between buyer and seller as to how the risks inherent in a transaction will be allocated between them. Revitalizing contract law would permit insur ance to function once again in areas where in surers have retreated in the face of limitless po tentialliability. Insurance, Huber demonstrates, is far better than tort litigation as a means of compensating those who have been injured. In surance works more quickly, fairly, and with much less overhead than does the tort liability system the Founders have saddled us with. In surance also doesn't discourage innovation and safety improvements as our current system does. But insurance cannot work in a legal en vironment in which the chief maxim is "Those who have money must pay as much as the jury says. "

In proposing a return to contract, Huber af frrms another general principle familiar to read ers of The Freeman. Not only do plans for per fecting society backfire, but the solution to the problems created by such plans is a return to individual freedom and responsibility. Many of our nation's problems would disappear if public officials would just allow people to make their own choices, rather than playing nanny all the time. If you fear that a book on the law is going to be a dull read, you need not fear this one. Peter Huber writes with more clarity and wit than I have ever encountered in a work on a legal topic. I wouldn't have thought it possible for a book on law and economics to be so entertain ing. A couple of cavils, if I may. First, the book is not footnoted in the usual fashion with num bers in the text. Therefore, the reader doesn't know whether a case or statement has been foot noted until he looks under the notes for that chapter at the end of the book. If, for example, you wanted the name and citation of the case in which a telephone booth manufacturer had to pay for injuries sustained by someone who was using the booth when a car driven by a drunk smashed into it, you would have to look under the notes for that chapter, only to find out that the information hasn't been provided. The vir tue of traditional footnoting is that if you don't see a number, you know that the author is giv ing you no further information.

My second cavil is the way in which Huber alternates between the pronouns "his" and "her." Apparently this style of writing is em ployed out of a desire to be "non-sexist." But the idea that consistent use of the pronoun "he" is bad or wrong is just plain silly. Enough caviling. Huber has performed a monumental public service in so clearly and thoroughly analyzing this unfortunate develop ment in the law. Get this book, read it, and then talk about it with every thinking person you ~~. D (George C. Leef is Associate Professor of Law and Eco nomics at Northwood Institute, Midland, Michigan, and adjunct scholar with the Mackinac Center.) BEYOND GOOD INTENTIONS: A BIBLICAL VIEW OF POLITICS by Doug Bandow Crossway Books, 9825 W. Roosevelt Road, Westchester, Illinois 60153 • 1988 • 256 pages • $9.95 paperback Reviewed by Carl Helstrom D oug Bandow, a syndicated columnist and Senior Fellow at the Cato Institute, has written a book that will be of par ticular interest to devout Christians. Beyond Good Intentions offers an outstanding analysis of political philosophy based upon a cogent ex egesis of Scripture from an evangelical perspec tive. Most of all, however, this book is a strong personal testimony that emphasizes aspects of Christianity and politics that other recent writ ers have largely ignored.

In the opening pages, Bandow explains how, in his opinion, a Christian should view politics. He shows how the current welfare system has failed, then examines viable alternatives in an excellent section called "The Need for a New Political Paradigm." He concludes that Chris tianity outweighs any other world view because of its unique emphasis on individual morality. He states: "We live in a fallen world, and there is no answer other than personal redemption through Jesus Christ. All human institutions, including government, have been corrupted by man's fall. . . . Christians cannot stand aloof OTHER BOOKS 207 from politics: quite simply, the stakes are too great. " Worldly ideologies and philosophies, Bandow believes, lack this outlook and, there fore, are deficient. These first three chapters are remarkable critiques, displaying Bandow's ability and experience asa policy analyst. Next Bandow presents several chapters of Biblical exegesis, followed by an examination of important issues concerning us today. He demonstrates ways in which the modem-day Christian, interested and involved in politics, can make sound and prudent decisions. The most important part of the book, however, is the last chapter, "Christian Activism in the Public Square," in which Bandow sums up his views.

A Christian, he claims, should put Christ frrst. This may seem to be simple common sense, but he repeatedly emphasizes throughout the book the significance of being "Christian" before being "political." Putting politics be fore principle results in the use of governmental force for religious purposes. A true Christian does not seek to use political power for religious purposes, and is possessed of theological views that are singularly Christian and take prece dence over pragmatic policy-making. These are fundamental beliefs, or principles-the Chris tian's intellectual tools or guidelines for acting in the secular world. The most significant argument Bandow puts forth is that this personal, Christian attitude nec essarily leads to a special view of government and politics, one that emphasizes responsibility, tolerance, and cooperation as the proper politi cal demeanor of the Christian who seeks to live according to the compassionate and righteous example of Christ. Concentrating on this ap proach serves to safeguard private property and to promote a limited government that acts justly, rightly, and without privilege, according to the rule of law. As Bandow points out, this position allows for peaceful coexistence be tween Christians and other peoples.

The author admits that Christianity and clas sical liberalism share many attributes. Here again, however, Bandow reminds us he does not believe that secular philosophies have the necessary moral component to succeed, "resting as they do upon secular premises and ignoring Scriptural principles." What Bandow is getting at from a theological 208 THE FREEMAN. MAY 1989 point of view is what Ludwig von Mises wrote of from a secular perspective in his book, Lib eralism, in which he stated: [Classical] liberalism proclaims tolerance for every religious faith and every metaphysical belief, not out of indifference for these "higher" things, but from the conviction that the assurance of peace within society must take precedence over everything and every one . . . only tolerance can create and pre serve the condition of social peace without which humanity must relapse into the barba rism and penury of centuries long past. ' , Peaceful coexistence is essential to the classical liberal. He believes that the best possible life can be lived within a society that allows for the private ownership of property and the free exchange of ideas and goods, a society that pro vides for lawful recourse in the event of wrong doing. Consequently, the classical liberal be lieves in private property, political liberty, free enterprise, limited government, and the rule of law, but most of all, he believes in peace. He will tolerate another person's views and ac tions, as long as no one is being harmed.

The Christian is concerned first with salva tion, but, according to Bandow, salvation and eternal life with God are individual goals. The way to achieve those goals is through careful attention to Biblical instructions, Christ-like compassion, and right and respectful action. The Christian believes in God as Creator and Designer and in Jesus Christ as His Son who came to redeem us from the bondage of sin. He chooses to seek salvation by accepting Christ, and is commanded by Scripture to do good. Faith in Christ's redemptive power guides the believer during his life on earth. But, as Ban dow says, "Jesus instructed His followers to leave the separation of the weeds and wheat up to the Father. . . ." A Christian must be toler ant, yet principled, persuading by good actions and intellectual power. In other words, Chris tian persuasion should be by peaceful methods, not by political force.

This book is an important work that clarifies the relationship between Christianity and poli tics. It is a spiritual message for those involved in the political arena who struggle with their faith in Jesus Christ, their commitment to civic service, and the proper way to use political power. And it is a sound political statement, reinforcing the concept of limited government, individual responsibility, private property, free trade, and the rule of law. Most significant, though, Beyond Good Intentions is a personal message by a man who believes in what he wri~s. 0 (Mr. Helstrom is a member of the staff of The Foundation for Economic Education.) A Theological Conference at FEE: Lay-Clergy Dialogue July 9-13, 1989 We invite inquiries from ministers and laymen alike for our third theological conference. (You might want to recommend your minister, or ministers might interest one of their church members.) Fellowships are available. Full details will appear in the May 1989 Notes from FEE. For more information, contact: Edmund A. Opitz The Foundation for Economic Education, Inc.

Irvington-on-Hudson, New York 10533 Telephone: (914) 591-7230 IDEAS ON LIBERTY 212 MonopolyGovemment ThomasJ. DiLorenzo Governmentscompeteunfairlywithprivate businessesin the provisionof thousandsof goodsand services. 217 ShipwreckLegislation:Legalityvs. Morality Gary Gentile Who may lay claimto property lostor abandoned at sea? 224 Why PubHcSchoolsFail James L. Payne A lack of market incentivehamperseffortsto deliveran improvedproduct. 226 FaimessDoctrine,R.I.P. JorgeAmador Dismantlinga cornerstoneof governmentregulationof broadcasting. 232 Hunger and Farmingin BlackSouth Africa FrankVorhies Solvingthe problem of low productivityon blackSouth Africanfarms. 238 GATT and the Altemative of UnilateralFree Trade PierreLemieux The advantagesand disadvantagesof the General Agreement on Tariffsand Trade. 244 Book Reviews John ChamberlainreviewsHernando de Soto's The OtherPath. Other books re viewed:Advertisingand the MarketProcess:A ModernEconomicView by Robert B. Ekelund, Jr., and David S. Saurmanand RobertLeFevre:"Truthis Not a Half-wayPlace"by Carl Watner.