Book Reviews

Junk science,Huber writes, "is the mirror image of real science, with much of the same form but none of the same substance"-the astrologer ver sus the astronomer. While mainstream scientists are appalled by the resulting "hodgepodge of biased data, spurious inference, and logical leg erdemain" as well as "outright fraud," lawyers, he argues, have welcomed the opportunity for legal alchemy, turning "scientific dust into gold." And courts, which once strictly limited expert testimo ny, have increasinglytreated the most idiosyncratic witnesses like respected authorities. Examples of what Huber terms courtroom mal practice are legion. Decades ago came a string of lawsuits attributing cancer to bumps and falls. These cases died out, only to be replaced with suits blaming chemicals for causing cancer and other ills, cars for accelerating without reason, drugs for spawning a variety of ailments, and delivery procedures for inducing cerebral palsy.A Philadelphia psychic even won a million-dollar judgment as compensation for her alleged loss of powers due to a CAT scan. The judge tossed out that verdict, and defendants have won many other cases. But the social cost of junk science remains high: massive judgments, unending attorneys' fees, lost product sales, drugs withdrawn from the market, and attention diverted from the real caus es of most accidents and ailments.

Huber blames the growth of junk science onthe shift in the 1960sand 1970saway from traditional common law rules in an attempt to "rationalize" tort law to better control the causes of accidents: "epidemiology, engineering, accidentology, or some other branch of conventional science would trace out for the jurist all the antecedent causes of a calamity," however remote, allowing the courts to penalize the person or institution considered best able to prevent future harms. Unfortunately, Huber writes, this practice was "a prescription for bringing innumerable new scientific controversies into court," along with ever more exotic experts and theories. For instance, aided and abetted by the 60 Min utes TV show, lawyers and their hired "experts" unleashed a slew of lawsuits against Audi for the alleged "sudden acceleration" of its model 5000. The litigants eventually extended to Audi owners complaining that the adverse publicity had reduced the value of their cars. Alas, as Huber shows,no plaintiff ever proved a singleinstance of sudden acceleration. Indeed, in numerous cases there was clear evidence that the driver had mis takenly stepped on the gas pedal instead of the brake; and extensive investigation by the National Highway Traffic Safety Administration blamed driver error, not manufacturer defect, for "sudden acceleration." Nevertheless, while Audi didn't lose every case, it lost two-thirds of its U.S. sales-and thousands of consumers switched to cars with higher fatality rates.

Another continuing series of junk science cases involvescharges against obstetricians allegingthat improper delivery causes cerebral palsy in babies. Different lawyers choose varying, and often con flicting, theories, but enough juries accept the claims to make these cases "one of the most spec tacularly lucrative enterprises known to lawyers, quite possibly the single largest revenue raiser in all of medical malpractice," writes Huber. Although the best evidence seems to be that cere bral palsy results from factors during pregnancy rather than delivery,this litigation sweepstakes has yet to end. Perhaps worst of all are the "chemical AIDS" cases, where doctors and scientists of dubious rep utations have convinced juries to assess massive damages against firms for creating minuscule risks, risks far below those from lifestyle choices made by every individual every day. The courts haven't been alone in their credulity: the federal govern ment now admits that it may have greatly overes timated the dangers of dioxin, which has resulted in multimillion dollar legal judgments and settle ments, when it evacuated the entire town of Times Beach, Missouri.

Huber ably details how the so-called clinical ecologists have committed scientific fraud in the courtroom, ascribing virtually every human ill to one chemical or another. Yet the facts are really not in dispute. Noted a 1986 assessment by the American Academy of Allergy and Immunology, "the idea that the environment is responsible for a multitude of human health problems is most appealing," but there is no "satisfactory evidence to support" the claim. The advocates carryon, however, advancing religion rather than science. Observes Huber: "What most clearly character izes the clinical ecologists today is their activist faith." The only answer to such zealotry is to return the courts to the pursuit of truth-"the rule of fact," as Huber puts it. And this requires substi tuting good science for "the layman's science of gut feel, the lawyer's science of hunch and impres sion, science that ignores dosage and timing, sci ence without numbers, science without rigor, sci ence without the details." Huber emphasizes that courts should be skeptical not of new research, but of work carried on outside of the mainstream scientific community. The issue, he explains, is "the methods behind a scientific report, not its finely detailed conclusions." Raising the stan dards for professional witnesses would be emi nently reasonable. As Huber observes: "If the law is capable of holding defendants to profes sional standards, it is capable of holding witnesses to the same."

Obviously, even the "good science" that Huber lauds doesn't offer certainty in every case. But it is far better-"vastly more accurate, reliable, sta ble, coherent, and evenhanded than the alterna tives," as Huber puts it. Moreover, the risk of mis take is far less than that which results from the "let-it-all-in" attitude that prevails in the court room today. Ultimately, Huber argues, the issue comes down to the purpose of the courts. Russ Herman, presi125 dent of the Association of Trial Lawyers of Amer ica, opines that the "courts are an institution estab lished for the resolution of disputes, not arbiters of scientific truth." Yet the purpose of resolving dis putes should be to accurately ascertain the facts before fashioning a judgment. Holding careful doctors liable for a baby's cerebral palsy, or a chemical firm liable for the harmless use of its product, may both resolve a dispute and enrich a litigant. But doing so doesn't provide justice for the defendant or make society better off.

Indeed, Huber specifically rebuts the argu ment that we should accept questionable scien tific claims in order to err on the side of safety. Not only is there no evidence that litigation has helped control accidents in anything but the most obvious cases, but junk science itself may be dangerous. For example, in many instances it makes no medical sense to pull asbestos out of old buildings. Peter Huber has written an important book. Distorted liability rules have helped create an insurance crisis, drive doctors out of business, stunt commercial innovation, and redistribute wealth in perverse ways. Tort law run amok has also unleashed modern-day witch hunts, with auto companies, chemical producers, doctors, and drug makers among the primary victims. Many courts, writes Huber, essentially "sit back, let everything in, and invite random groups of twelve stout citizens to vote as they please." The results of such a system are not pretty; the time for reform is now. D Doug Bandow is a Senior Fellow at the Cato Institute and a graduate ofStanford Law School. He is a member of the California and D.C. bars.

REFLECTIONSOF AN AFFIRMATIVE ACTION BABY by Stephen L. Carter Basic Books, 10 East 53rd Street, New York, NY 10022 1991 • 286 pages • $22.95cloth Reviewedby Jim Christie I n Clarence Thomas, most Americans discov ered a political and philosophical oddity, a "black conservative" with reservations about affirmative action. Stephen Carter, a constitutional law expert at Yale Law School, describes how such 126 THE FREEMAN • MARCH 1992 labeling limits honest and constructive political discourse. Carter, who tells of his personal experiences -both beneficial and negative-with affirmative action, argues that affirmative action has become a trap for black professionals. For accepting affir mative action's benefits, such as privileged entree into universities, professional schools, and the business world, aspiring black professionals-pri marily those who go into politics, law, and academia-must then be prepared to accept not only its stigma, but also an obligation never to break from its ranks of supporters.

Those who dissent, writes Carter, face the fate of Clarence Thomas-a dreaded association with conservatism, which in the eyes of many blacks (primarily from the generation that still carries the torch of the civil rights movement and among emerging campus diversity militants) is tanta mount to racial treason. Carter, a liberal embarked on dissent, confronts his more vocal colleagues forcefully: "Preferential treatment comes in two kinds, the kind we like and kind we hate. Both kinds have roots in the idea that race is a useful proxy for other information: in the early days of affirmative action, a proxy for dis advantage; today, a proxy for the ability to tell the story of the oppressed." This outlook, says Carter, has given birth to a ruthless dogma among liberal black elites that brooks no criticism, particularly from other blacks. Its vitriolic nature can be seen in the personal denunciations of "black dissenters," as Carter describes them, such as Thomas Sowell, Shelby Steele, and Clarence Thomas, whose Heritage Foundation speech is often quoted by Carter as a converse example of conservatives' expectations of black dissenters. And while Carter defends black dissenters espousing conservative beliefs and policies, he pleads not to be misinterpreted as a "black neo-conservative" as happened to Con tent of Our Character author Steele, a Jesse Jack son backer in 1988.

That Carter displays a certain sympathy for the dissenters may come from his never having a per sonal need for affirmative action. The son of a law professor and a lawyer, raised in upper-middle class neighborhoods in the 1960s, and a National Merit Scholarship runner-up, he made it to Stan ford, and later Yale Law School, on his academic record. He credits affirmative action with helping him to a certain extent, but cautions that it is no substitute for personal drive-an argument that runs throughout the book. Despite growing up in white suburbia and being matriculated in predominantly white, well-mean ing liberal institutions of higher education, Carter wasn't free from racism or race-based assump tions. In fact, at times in the book it seems he bris tles more against condescending attitudes from whites than blatant racism. Carter recounts the hurt of being the subject of epithets in high school and more vicious ones in Palo Alto and Atlanta. But he more poignantly recounts the sting of being told an "error" had been made on his rejection from Harvard Law School, that the admissions committee didn't real ize he was black: "I was told by one officialthat the school had initially rejected me because 'we assumed from your record that you were white.' . .. Suddenly coy,he went on to say that the school had obtained 'additional information that should have been counted in your favor' -that is, Har vard had discovered the color of my skin."

And if there is one thing Carter hates, it is the supposition affirmative action has created among blacks that they can't be the best in: their field, but they can be the "best black." The underlying theme of this book is the per ception of intellectual and political limitations both black and white establishments attach to blacks because of affirmative action-which, Carter senses, is on its way out politically,certainly among many whites who have lost faith in the pol icy, and, he believes, among many blacks who now see it as a social burden. And it is the deep divisions between the black establishment and dissenters that now overshadow what, in Carter's opinion, should be the central is sue for black intellectuals-the future, and the shifting of affirmative action to blacks who need it most, not blacks raised in the middle class or bound for professional careers: "When black peo ple criticize [affirmative action], the response is bewilderment, pain, and, in the end, open hostility.

In the difficult years ahead, we cannot afford the luxury of letting our squabble over preferences, which help mostly those who can best survive with out them, interfere with the needed dialogue on what to do next." D Jim Christie, a graduate of the National Journalism Center, is a staff writer for California Republic.

ADAM SMITHAND MODERN ECONOMICS:FROMMARKETBEHAVIOR TO PUBLICCHOICE by Edwin G. West Gower Publishing Company, Old Post Road, Brookfield, VT 05036· 1990· 256 pages· $47.95cloth Reviewedby NicholasElliott D espite being widely described as the "father of modern economics," Adam Smith is given cursory mention by most modern economists and is only regarded as impor tant for his 18th-century insights. Readers will put down West's book with a com prehension of Smith as a timeless economist whose analysis yields fresh insights into modern economics. This work, published 200 years after Smith's death, is both a reinterpretation of Smith and a review of how later writers have extended his ideas. But the most exciting aspect is the reinforce ment lent to Smith's status as a champion of free markets. Some latter-day economists have depict ed Smith as a moderate interventionist, falsely claimed by libertarians. West looks at each area in which Smith supposedly favored government action and confirms him as a believer in the mini mal state.

West contends that where Smith refers to pro jects that "could never repay the expense to any individual or small number of individuals," he did not have in mind the modern concept of a "public good" (a good the provision of which is indivisi ble or from which recipients cannot be excluded). Rather, he was suggesting that a largenumber of individuals could receive an adequate return, if enabled to do so through liberalized capital markets. The historical context is important, as "public" companies-limited liability firms that could raise capital through equity issue-were often permitted to exist by royal charter. Smith wasn't callingfor government provision when he referred to public enterprises, West says, but for charters to allow companies to undertake certain projects. Smith advocated charters for insurance, bank ing' canals, and water supply.For most infrastruc ture he favored local financing, either through local taxes or through tolls, rather than central government funding. He accepted some govemBOOKS 127 ment financing of education, but believed it should be mixed with local funds, and he argued for teach ers to be paid by the tutored.

In a fascinating chapter on the history of eco nomic thought, West places Smith in the laissez faire school of economics along with Malthus and Ricardo, and contrasts them with John Stuart Mill and Nassau Senior. Whereas Smith presumed that the individual knows his own mind best, Mill and Senior conceded large areas of society to govern ment and saw little reason to set limits. West maintains that those more dirigiste economists didn't appreciate the importance of Smith's analysis of interest groups and how they distort good government-the analysis recently developed into public choice theory. The modern school of public choice, exempli fied by economists James Buchanan and Gordon Tullock, applies economic methods to political behavior. West devotes a chapter to Smith's public choice analysis, but this is a theme that runs throughout the book. Economists examine the costs of monopolies in terms of their upward leverage on prices. Smith recognized these costs but saw others, identifiable through his public choice analysis. He pointed out the costs of lobbying, both to the monopoly seek ing to retain its privilege and to victims seeking its removal. He also considered the costs engendered by the growth of bureaucracy in monopolistic firms, and the general harm to the body politic caused by allowing people to seek special favors from government. These additional costs are not appreciated in modern economics because of its narrow diagrammatic focus.

Smith's failure to spell out a theory of compara tive advantage in trade has drawn criticism from a number of economists, but West defends his more dynamic approach. As Smith saw the division of labor limited by the extent of the market, so trade provided a widening of the market and was a spur to development. George Stigler has criticized what he believes is Smith's suspension of his own public choice analy sis in his policy recommendations. Stigler cites Smith's canons of taxation which suggest conve nience, certainty, minimal exaction, and ability to pay as the basis for a tax system. Smith is naive, says Stigler,to expect politicians to be interested in anything other than maintaining votes and raising revenue.

128 THE FREEMAN • MARCH 1992 Once again, West provides a novel explanation of Smith's position. First, he says, Smith was think ing at the pre-constitutional level rather than referring to the hurly-burly of politics. Second, Smith was indeed appealing to self-interest-that of the sovereign to whom his remarks were addressed. It was in the sovereign's interest to pre vent abuse of the constitution, says West. Smith's "clients were the custodians, the draftsmen, and the innovators of constitution, not a passing gov ernment that is intimidated by the mob," West contends. One of West's aims is to defend Smith against critics who have argued that his work contains little that can be tested empirically.Some Austrian economists would quarrel with the assumption that theories must stand or fall on quantitative evi dence. Had Smith written today, his work might have been cluttered with statistical analysis, but surely his qualitative prose is more accessible.

West includes a chapter on religion to show how Smith presented his ideas in testable form, but also perhaps to remind us that Smith's work ranged wider than economics. Smith looked on religions as moral codes, evolved to bind people to their sense of duty and respect for rules. By the same token, said Smith, joining a church is a way of establishing a reputation for newcomers. Religions provide "valuable, reliable information concern ing the level of risk attached to dealings with par ticular individuals," he suggested. What could have been a narrow and arcane book opens up Smith and contains some sharp reflections on the questions addressed by Smith and on his place in the history of economic thought. West decides that the reason a subse quent generation of economists strayed from Smith's individualism "may be that their under standing of it was too superficial." He could have said much the same of many modern economists, but the departure is something that West's book will help to remedy. D Nicholas Elliott is a financial journalist in London.

ECONOMIC FREEDOM AND INTERVENTION ISM An Anthology of Articles and Essays by Ludwig von Mises Selected and Edited by Bettina Bien Greaves Forty-seven of the preeminent Austrian economist's shorter pieces, all written after Mises came to the U.S. in 1940, gathered from many sources into a well-organized and annotated collection. Topics include: • the importance of private property • interventionism • savings and investment • the dangers of inflation • Keynesianism • Marxism • the proper role of government • bureaucratic management All around the world, long-time advocates of economic planning are being forced by circumstances to admit that their policies haven't worked. This book sets forth, with inescapable logic and clarity, the reasons why. It also shows how capitalism, with ~ts democracy of consumers, helps to reduce conflicts and point the way to peaceful human cooperation. Plus: Mises' original evaluations of F. A. Hayek's The Constitution ofLiberty, Murray Rothbard's Man, Economy and State, Israel Kirzner's The Economic Point of Vie~ and Hans F. Sennholz's How Can Europe Survive?

263 pages, indexed Cloth: $29.95 Paper: $14.95 ORDER TODAY The Foundation for Economic Education 30 South Broadway Irvington-on-Hudson, NY 10533 THEFREE IDEAS ON LIBERTY 132 The Mythologyof State Spending lohnHood Why the facts about expandingstate and localbudgetsaren't reported in most news stories. 134 Kafka'sBureaucraticNightmares lack Matthews Lookinginto the heart of an author's obsessiveand horrifyingnarratives. 137 The Searchfor a SouvenirSpoon DwightR. Lee Longlines,surlyservice,and pitifulproductsabound when there is no competitionfor the consumer'sruble. 139 Lookingfor a StrongMan After the Revolution Doug Reardon Faith in authoritarianismmay pose seriousproblemsfor democracyand economicreformin the former Sovietbloc. 142 Breathe Deep, America,WhileLibertyIs in the Air Arthur R Hall, II A re-examinationof the Founders' Constitutioncan help the United Statesto restore its ideals.