Book Reviews

During the Thirties, when he was becoming an expert on Spanish and Latin American literature, Wolfe kept hoping for a reconciliation with Stalin. The Moscow purge trials disillusioned him, but not all at once. He worked on an autobiography, A Life in Two Centuries,which he left in a two-thirds finished state when he died in 1977at the age of 8l. The early reviewers of the book were left wonder ing how to date Wolfe's final conclusion that Com munism would destroy human liberty if it were not vigorously opposed. What was needed was a documentation of Wolfe's letters, speeches, and Voice of America scripts. Here is where Robert Hessen of the Hoover Institution at Stanford, California, stepped in. Poring through 61 linear feet of Wolfe material in the Hoover Institution archives, Hessen has, in effect, completed the Wolfe autobiography. His book is published as BreakingWith Communism: The Intellectual Odyssey of Bertram D. Wolfe (Hoover Institution Press, 311 pages, $24.95cloth, $18.95paper).

Hessen warns his readers that Wolfe's most important friendships, with Sidney Hook, Ed mund Wilson, and Stalin's daughter Svetlana Alliluyeva, leave barely a written trace. But there is enough written evidence in the Hoover archives to date Wolfe's break with Communism as coming on March 13, 1938. The bullet that ended the life of Lenin's favorite theorist Nikolai Bukharin end ed Bert Wolfe's hopes that a peaceful world would ever be possible under Communism. Bukharin had been one of the theoreticians who went along with Lenin in the NEP period, when capitalism had a brief recrudescence in the Rus sian countryside. On July 16, 1971, Wolfe wrote a letter to Stephen Cohen of Princeton detailing the way in which Stalin, a master of chess moves, man aged to undermine Bukharin. Other letters to Cohen, who was writing a book on Bukharin, are equally revealing. To Cohen, Wolfe wrote that Bukharin, "the good Bolshevik," was the "most decent and humane of the Bolshevik leaders."

In a letter to Leonard Wilcox, Wolfe painted a masterly portrait of V. F. Calverton, who main tained an apartment on Morton Street in New York's Greenwich Village,where he staged brilliant parties that brought unorthodox manuscripts to his ModernMonthly. I lived just around the comer on Barrow Street, and had the good luck to be invited to the Calverton evening sessions and to the monthly luncheons at Teutonia Hall underneath the Third Avenue Elevated. The luncheons and dinners were mildly alcoholic. Discussions eventu ally became good Modern Monthlyarticles. Stuart Chase was one of Calverton's discoveries. Calver ton would have disliked being called a capitalist, but he was a born entrepreneur who kept the left of-center writers of the day from falling into rigid 356 THE FREEMAN • SEPTEMBER 1990 molds. If he had survived his leukemia I am sure he would have become a leader of aNew Right.

In 1951Bert Wolfe gravitated to work as a Voice of America script writer. One of his more notable coups was his revelation of the murder of the Pol ish army officers in the Soviet Katyn Forest. Ger mans insisted it had been done by the Russians. In this case the Germans happened to be right. The diaries, letters, and newspaper clippings found on the dead bodies in the Katyn ended abruptly at a cold-weather date in 1940 when the Russians still held Katyn. Stalin asserted that the Polish officers were killed by Hitler's men in August 1941. Yet they were wearing cold weather clothes, and in no pocket was there a scrap of paper dating later than early May, when scarves are still welcome in the Katyn climate. Eugene Lyons, writing in Don Levine's Plain Talk magazine for October 1949, was ahead of Wolfe's Voice of America account of the Katyn Forest murders. But Plain Talk had few readers; Wolfe was the first to bring it to the attention of thousands. The Soviets have now admitted that they did the killings.The May Reader'sDigesthas published a full account of the Katyn Massacre·by a roving editor, Rudolph Chelminski, who first heard of it from his Polish-born father.

How Wolfe, an intelligent man, could have stayed with the Soviets for all those years of the Twenties and early Thirties may seem an insoluble mystery to many. But the Wolfe case was far from being unique. It was an emotional commitment to pacifism that brought Wolfe into the Far Left fold in World War I times. He stayed there, as did many others. The nicest touch is added to this collection of Wolfe papers by editor Hessen, who quotes John Maynard Keynes as saying, "What do I do when I discover I am wrong? I change my mind. What do you do?" D THE FARMFIASCO by James Bovard ICS Press, 243 Kearny Street, San Francisco, CA 94108 • 1989 356 pages • $18.95cloth Reviewedby Hannah Lapp B. eyond the traditional.lYromantic percep tion of American farming lies the reality of our inept Federal farm policy-the bureaucratic quagmire so disgusting that few peopIe dare face it, much less get in and explore it. It's easier just to assume that somehow food and fiber will keep reaching our grocery store shelves, and to hope that the nation's farmers will keep doing their job, perhaps with a helping hand from the Feds. Enter James Bovard, who with his new book, The FarmFiasco,has quickly earned himself the title of America's leading critic of Federal farm policy.He delves into the farm program labyrinth with the intent to conquer it, and actually comes through with his senses intact enough to enlighten the rest of us.

From Bovard, you won't hear sympathy for the good intentions of farm programs: farm policy is "trampling individual rights, sacrificingthe poor to the rich," and harming farmers themselves, as well as consumers. No excuses for the hundreds of bil lions spent in farm programs over the past decades: the subsidies defeat their purpose by bungling markets for agricultural products and creating inefficient production methods on the farm. No apologies either for the U.S. Department of Agri culture and the political figures behind the whole chaos: most of them don't understand economics, and even those who do are too addicted to the power and money in farm programs to venture interrupting the·flow. The problem of dependence on subsidies by segments of American agriculture has not received the public attention it deserves-at least not before The Farm Fiasco came out. There hasn't been a general shortage of food, which gives con sumers a sense of security in the status quo. The yearly billions spent by the government on agricul ture don't alarm many taxpayers who have come to accept as truth the usn ~s version of farmers as a welfare case and farm aid as serving to keep America fed. Meanwhile, the complaints arising from the farm sector itself are often interpreted as proof of the need for more subsidies rather than evidence of farm policy failure.

Still, the American public will allow itself to be misled only so far before people start asking ques tions. And present agricultural policy invites some very provocative questions, such as: "Why should tobacco production be subsidized?" "Why were millions of good milk cowssuddenly ordered slaughtered one year?" "Why should the largest, wealthiest ag corporations receive the biggest share of handouts?" Or, "Why should certain indi viduals be paid to not farm?" Once the public becomes informed on these and other pertinent questions, a general outcry could erupt, for which some farmers, politicians, researchers, and con sumer advocacy groups are already preparing themselves by joining in the protest against farm subsidies. Bovard's book is a major contribution to this movement, particularly because of our need for accurate information on the subject. He has researched both the history and reasoning behind Federal meddling in agriculture, which he traces back to the early 1900s,and to which he accords a part in the severe depression of the 1930s. He details the chain-reaction economic consequences of government interference in production and marketing of agricultural goods, and the negative environmental impact of various crop programs.

Farm policy, he asserts, is our perfect example of the failure of central planning. Although Bovard's assault on the notion of farmers' deserving Federal handouts will be per ceived by some as heartless, he is in many ways vocal in defense of agriculture. The free market, he contends, would do much better justice to agri culture as a whole, and particularly to independent farmers who in many cases have been trodden underfoot by farm programs. "Every dollar of aid the government gives welfare farmers," he says, "makes it more difficult for self-reliant farmers to prosper and survive." Bovard overthrows the myths surrounding farm subsidies in extremely blunt terms. At times he is derisive, as when he questions the "learning curve" of USDA officials who feigned astonish ment when the Dairy Termination Program's slaughter of nearly two million dairy cows in a few months' time severely disrupted the beef market.

Often he is severe in his criticism, using such terms as "massacre of the innocents" and "schizophre nia" to describe various farm programs. At other times, the absurdities of USDA games with the marketplace evince themselves in a comical style. "In 1948," says Bovard, "the government spent $206million buying a third of the potato crop. The government was soon buried in potatoes and end ed up dashing them with kerosene and leaving them to rot in such places as alongside New Jersey highways. The nation was outraged, and in 1951 Congress abolished potato price supports. The USDA learned its lesson: Never again would it allow a surplus crop to rot near the highways of OTHER BOOKS 357 New Jersey." Uncle Sam's great farm fiascois not a pretty sub ject, and James Bovard doesn't attempt to word it nicely.What he does accomplish is to bring out the facts for public scrutiny in this extensively re searched and documented book. D Hannah Lapp is a dairy farmer and writer in Cassadaga, New York.

THE COMING SOVIETCRASH: GORBACHEV'SDESPERATEPURSUIT OF CREDIT IN WESTERN FINANCIAL MARKETS by Judy Shelton The Free Press, Front and Brown Streets, Riverside, NJ 08375 • 1989 • 246 pages • $22.50cloth Reviewedby LawrencePerson F or many years, it was said that capitalists would sell Communists the ropes for their own hanging. Now,however, it has become clear that the Soviets don't even have enough money to buy the rope. Still, despite the Soviet Union's worsening economic crisis, Mikhail Gor bachev doesn't seem overly concerned, and Judy Shelton shows why: The West seems willing not only to sell Gorbachev the rope, but to finance the sale as well. The first section of this book, "The Financial Condition of the Soviet Union," is in many ways the most interesting. Using the Soviet Union's own statistics, Shelton shows that the Soviets have been running huge budget deficits for several years, despite their claims to the contrary. By issuing credits for state ventures that fail to meet their pro duction quotas, Gosbank, the Soviet central bank, has created an annual budget deficit that is almost double that of the United States. In a Western economy, those deficits would likely give rise to spiraling inflation. However, because prices of many Soviet goods are fixed, that inflation takes the form of severe shortages of consumer goods.

Although the broad outlines of Soviet economic problems have been known for years, Shelton fills in a number of details about how the U.S.S.R. manages its deficit financing and how that financ ing affects Soviet citizens. Faced with an increas ingly resentful population and an economy head358 THE FREEMAN • SEPTEMBER 1990 ing toward collapse, Gorbachev's perestroika plan attempts to stave off the crisis in two ways. The first involves loosening the reins of central economic control. Local managers are to get more leeway in making hiring and firing decisions, and badly managed concerns are to be allowed to go bankrupt. While this probably will help increase the efficiency of some ventures, such a policy promises Soviet citizens only the down side of cap italism (bankruptcy and unemployment) without any of its benefits. Since most Soviet citizens feel that they've already sacrificed enough for the benefit of the state, the second part of Gorbachev's perestroika plan is as vital as the first. By raising imports of Western goods, he hopes not only to modernize Soviet industry with Western technology, but also to increase the availability of consumer goods and placate the restive population. But such a strategy requires large amounts of hard currency to pay for those imports, since the ruble is Monopoly money on international currency markets.

In her second section, Shelton tells "How Moscow Acquires Outside Financing." Although previously barred from Western markets by the Soviet Union's default on money owed on Czarist loans and bonds, the Soviets recently negotiated favorable settlements on those debts with the English and Swiss governments. This, in turn, opened the door for borrowing from Western banks, and also cleared the way for the Soviets to issue their first Eurobond. The Soviets obtain still more financing through foreign branches of the Moscow Bank, as their location provides a loophole for lawsthat bar cred it to the Soviet Union itself. They also plan to get capitalist financing from their joint ventures with Western companies. Finally,although the Jackson Yanik Amendment prohibits the federal govern ment from issuing loans or credits to the Soviet Union, Gorbachev intends to circumvent that restriction by gaining admittance to the Interna tional Monetary Fund and World Bank.

Shelton finds all these developments disturbing, and with good reason. She argues that since money is fungible, lending the Soviets money to buy more butter also allows them to buy more guns. To that end, the last and shortest section of her book, "Guidelines for the West," provides eight general rules for dealing with the Soviets, including not trading economic assistance for political conces sions and not becoming overly enchanted with either Gorbachev himself or his country's moves toward capitalism. Although advocates of laissez faire trading policies will no doubt have quarrels with the idea of increasing government monitoring of international trade and finance, her suggestions for the most part are quite sound. This book does have a few flaws,starting with its title. Though eye-catching, it would be somewhat misleading were it not for the more accurate sub title. Indeed, although Shelton hints at a Soviet collapse, she never comes right out and predicts it, nor does she mention non-economic factors (such as ethnic dissent) that might contribute to a col lapse. She also fails to more than touch on the many other problems of socialism that led the U.S.S.R. to its current economic malaise (though to be fair, the failures of central planning are so numerous and deep that entire books have been devoted to the subject).

More serious is the lack of statistics on Soviet military strength. Since the fungibility of capital is one of Shelton's key points, statistics on the growth and/or maintenance of Soviet force levels during Gorbachev's tenure might provide valuable rein forcement for her case. She also tends to overstate the Soviet Union's ability to copy Western technol ogy successfully, stating at one point that "High quality products can be carefully copied, repro duced in quantity, and the knockoffs sold to for eign buyers as Soviet products" -ignoring the fact that the Soviet Union's technological infra structure is so poor that in many cases they not only don't have the tools to build such products, they don't even have the tools to build the tools. Still, these are minor flaws next to Shelton's overall achievement. Written in a clear and largely jargon-free style, The ComingSoviet Crash sheds considerable light on a heretofore unknown aspect of both Communist economies and East-West relations. As such, it should be required reading for businessmen thinking about working with the Soviets, and anyone else seeking the truth about glasnost and perestroika. D Lawrence Person is a writer and editor in Austin, Texas.

ECONOMICSAND THE ENVIRONMENT: A RECONCILIATION edited by Walter Block The Fraser Institute,626 Bute Street, Vancouver,British Columbia, Canada V6E 3M1 • 1990 • 351 pages • $19.95 paper Reviewedby WilliamH. Peterson I s the face of Marx turning from red to green? Strategically the global movement-one might almost say global steamroller-for environ mentalism could be a way for socialism or central planning to preserve and perhaps even to expand the intellectual battle lost in the collapse of Com munism in Eastern Europe. This thought arises in a reading of current events, with America's $21 billion Clean Air Act of 1990 mirroring the costly White House-Con gressional politics of environmentalism; with Cor nell astrophysicist Carl Sagan barnstorming the country decrying "global warming"; with frenzied Green Parties springing up from Europe to Asia to Africa to North and South America, as cases in point.

It also arises in a reading of the revealing Fraser Institute production of a valuable work that says to the reader: "Hey! Wait a minute. Slow down. Reflect. Tailpipe emissions, for one thing, are cleaner by 96 percent since 1969.So no need what soever to throw out free enterprise with the acid rain bath water." The key, then, to this work lies in its subtitle, A Reconciliation.Fraser senior research fellow and editor Walter Block holds in his tone-setting con tribution that ecology is really a branch of eco nomics, even if he is willing to concede that eco nomics just may be a branch of ecology. The foundation of each is, or ought to be, pri vate property rights. He accordingly says that eco logical and economic costs are inseparable-two sides of the same coin. The two are intellectually indistinguishable insofar as our relations with nature are involved-but only if all costs are fully taken into account.

Maintains Block: The free enterprise system is based precisely on this cost-recouping premise, with no trespasses, poaching, or other violations of private property rights taking place. Free markets and not politicized bureaucrats should therefore OTHER BOOKS 359 call the environmental shots. Capitalism itself, in other words, has a cleansing action. He writes: "Which fuels are most ecologicallyfriendly? With out a free market that generates prices reflective of relative scarcities and a private property rights system that forces all costs to be counted, we can not rationally decide which courses of action are most economically or ecologically sound." In a cute aside, Block notes the furor over cloth versus disposable plastic diapers. Yes, he ob serves, in purely economic terms, when the par ent's time (the largest cost element in the decision) is taken into account, there is no contest. Dispos ables win hands down. But some environmental ists object vociferously. They contend: Plastic dia pers are neither biodegradable nor recyclable, as are cloth diapers.

Block concedes that cloth diapers are recy clable, but rebuts that washing them implies soap for cleaning and bleach for disinfecting, which pose environmental threats of their own. Too, electricity is necessary for washing, drying, and ironing, which in turn requires oil, gas, hydro, coal, or nuclear power-or more ecological problems. In addition, there is the problem of disposing of the resultant dirty water with its human wastes. So, he argues, the price system with its business of trade-offs comes up with viable answers. Naturally enough, Block finds strong support among his contributors. Montana State University economist Richard Stroup, for example, holds that risks from hazardous wastes are minimized through what he calls "3-D" property rights. These are rights that are definedclearly,so as to reside with a particular person or private entity; defended readily against non-owners who might wish to use a property without permission or not pay a rent to the owner, or who might otherwise appropriate the rights of private property; and divestible,or transferable, by the owner to others on whatever terms are mutually satisfactory to buyer and seller or donor and donee.

But three-dimensional property rights in no way diminish the stewardship and conservation called for by sound ecology. Quite the contrary, the "tragedy of the commons" is precisely avoid ed through private ownership. Incentive-moti vated Weyerhaeuser and International Paper, to cite two examples, are not going to "rape" their own private forests but rather conserve them in perpetuity for future generations, afa Adam 360 THE FREEMAN • SEPTEMBER 1990 Smith's Invisible Hand, through scientific tree farming. Nor is a private property rights system a one way stream of benefits, Professor Stroup reminds us. Private property owners can miscalculate, they can incur unforeseen exigencies, they can also be sued, i.e., they are vulnerable to liability as when their property such as a truck inflicts injury or damages on others. Or again if, say, a chemical plant discharges toxic wastesinto a river or the atmosphere, and thereby infringes on the rights and safety of others, the courts are duty bound to grant injunctive relief to the plaintiff or plaintiffs.

This note on courts is vital to the argument of this book. Its contributors say over and over that free enterprise and sound ecology don't exist in a legal limbo-supply and demand function under the rule of law. They say the environment is better protected by law than legislation-a subtle but important distinction-stressing the ecological role of case and common law and of our third and much overlooked branch of government: the judici~ D Dr. Peterson, an adjunct scholar at the Heritage Founda tion, holds the Lundy Chair of Business Philosophy at Campbell University, Buies Creek, North Carolina.