Book Reviews

Duignan has edited more than thirty vol umes dealing with the Middle East, Africa, and Hispanics in America, and Gann has been right behind him. The authors have a two-part theme; the general post-war recovery, and the special role of the U.S. in creating an Atlantic Community from 1945-58. Together, they have mastered the art of interesting and relevant quotations in a way that would have pleased the late Leonard Read. They quote the British historian Macaulay: It is not by the intermeddling . . . of the omniscient and omnipotent State, but by the prudence and energy of the people, that England has hitherto been carried forward in civilisation; and it is to the same prudence and the same energy that we now look with comfort and good hope. Our rulers will best promote the improve ment of the nation by strictly confining themselves to their own legitimate duties, by leaving capital to findits most lucrative course, commodities their fair price, in dustry and intelligence their natural reward, idleness and folly their natural pun ishment, by maintaining peace, by defending property, by diminishing the price of law, and by observing strict economy in every department of the state.

Let the government do this: the People will assuredly do the rest. Macaulay wrote these lines in 1830. They do not check with much that has happened since, especially after World War II. By the mid-1950s, the state in Western Europe controlled all postal communications, tele phone services, nearly all radio and televi sion stations, as well as large segments of the mining and steel industries. The state accounted for 100percent of the coal mining in Britain and Italy, 98 percent in France, 60 percent in Holland, and 26 percent in West Germany, an anomaly. The state patronized the arts, even to the point of sanctioning pornography. It licensed street walkers. In the name of Keynesianism it has indulged in all manner of national planning. The Marshall Plan was fundamentally a subsidy affair, deemed nec essary to bring city and country together. European peasants had not seen fit to bring their food to city markets that had little to offer in exchange.

If most people took what the state offered without quibbling, there were the important exceptions. Adenauer in West Germany looked with favor on the idea of a free 494 market. Ludwig Ehrhard, minister of Ade nauer's Rhineland economy, abolished price controls, ended rationing, and reduced onerous regulations. In spite of all travails, the post-World War II years impressed Duignan and Gann as "marvelous" -thirty golden years of achievement "anticipated by few." This brings Duignan and Gann back to Macaulay: "Had he returned to survey the post war scene in the West he would have felt vindicated in his optimism." In ' 'overview entries,' , Duignan and Gann summarize such topics as education, both elementary and secondary, the Berlin blockade, the decolonization schemes for Africa and Western Asia. There are chap ters on the progress of the Cold War, with resumes of what was said and done at Teheran, Yalta and Potsdam. The Marshall Plan gets more than its share of attention.

The literature of the U.S., Britain, and Western Europe, and the radio, television, and music are all related to the global scene. "Our task," say the authors, has been to fashion a synthesis based on "the best scholarship." Oswald Spengler's Decline of (he West has been refuted, at least for the thirteen years covered. 0 The Tragedy of American Compassion by Marvin Olasky Regnery Gateway. 1992 • 290 pages. $21.95 Reviewed by Daniel A. Bazikian M arvin Olasky believes that the present American poverty programs and wel fare system have failed, not only in terms of money squandered, but also in regard to human souls corrupted and national char acter corroded. As a Christian, he argues for a biblical model for fighting poverty. In The Tragedy of American Compassion, Olasky develops this argument historically, by chronicling and criticizing efforts to fight poverty from colonial times to the present.

As he states in his introduction, "The key to 495 the future, as always, is understanding the past. " Olasky argues that indiscriminate govern ment handouts of aid do not better the individual; instead, they merely foster fur ther moral laxity and irresponsibility. Pov erty can be alleviated, however, not only as well-to-do individuals help less fortunate individuals, but also as the better-off help the morally and economically downtrodden learn to live out the biblical work ethic in their lives. Personal beliefs and personal values play a determinative role in the economic outcome of one's life. The early American concept of charity, as expressed from both pulpit and printed page, stressed biblical themes. This estab lished the cultural and intellectual frame work for viewing the problem for at least the next 250 years. Charitable aid was encour aged to be given in a spirit of generosity (which in those days was associated with nobility of character, as well as gentleness and humility). Emphasis on a God ofjustice and mercy, and of man as a fallen, sinful creature, led people' 'to an understanding of compassion that was hardheaded but warm-hearted. " Those in genuine need would be helped, but those who were sloth ful were allowed to suffer until they showed a willingness to change.

Other strong concepts also emanated from this theistic outlook: Giving was to be done not mechanically but from a spirit of genuine love; almoners of charity were to acquaint themselves personally with the poor, so as to discern better who deserved aid and who did not; moral and spiritual guidance was to be dispensed along with material aid; because men's sinfulness often prompted them to abuse charity, donors were advised to withhold it at times; and giving was done in such a way as to strengthen and encourage family life. Char ity of this type not only characterized the predominantly Protestant population, but also the small Catholic and even smaller Jewish minorities as well. The growth of cities in nineteenth-century America often intensified the needs of the poor. In response, the new world came to 496 THE FREEMAN • DECEMBER 1993 look to the old for a workable answer. Scottish theologian Thomas Chalmers, a strong critic of the government-run, indis criminate ' 'outdoor relief' established in England's newly industrialized cities, ad hered basically to the same viewpoint on poverty as his American counterparts.

From 1819 to 1823, he devised a plan for implementing his ideas within a specially created, ten thousand-person district (the Parish of St. John) in Glasgow. Within this parish, state, or other indiscriminate aid was excluded and all needed relief was to be met by the donations of parishioners. Chalmers divided his parish into 25 districts, each the responsibility of a deacon who would inves tigate who were the genuinely needy. The effects reportedly were remarkable: Church charitable giving increased (donors were confident of the wise use of their money); the better-off induced the poor through hab its of industry and thrift to improve their lot; and the number of poor in the parish as a consequence shrank. By around the middle of the century, charitable societies in every major Ameri can city were being established mainly along Chalmers' lines. Workers in these organizations shared a view that the under lying causes and long-term needs of the poor were religious. Only when the poor learned to address these needs would they lift themselves (through God's help) out of poverty.

Up to the 1840s,a general consensus still prevailed regarding society's treatment of the poor. Charity was handled mainly through private efforts. Government sup port of the poor was limited. The English system of indiscriminatestate aid to the poor was scorned as degrading to the recipients. That decade witnessed the first serious challenge to this consensus. Horace Gree ley, founder and editor of the New York Tribune as well as a theological Universalist and utopian socialist, believed in the natural goodness of man, as well as the corrupting influence of capitalist society. According to Greeley, every person had a right to both eternal salvation and temporal prosperity, and poverty was to be alleviated by redistributingthe wealthto everyone without mak ing moral distinctions as to the recipients. Later in the century came the attack of the Social Darwinists, who viewed the struggle within society in terms of the survival of the economic fittest. Character, they con tended, was hereditary, and attempting to lift those poor souls from the grips of vice and poverty was therefore useless. Both of these attacks were ably and articulately confronted by those holding Christian views of charity.

Another and more subtle assault on this consensus was to have a more devastating impact. A new strain of liberalism (referred to. as "Social Universalism" by Olasky), combining theological liberalism and politi cal socialism, gained a strong following among the nation's intellectual and literary elite. Theologically, its adherents substi tuted the notion of God's love for all, for the notion of God's love for his people. Instead of emphasizing charity to individuals, the new emphasis (similar to Greeley's) was on aiding the masses through improvement of their environment. The religiously distinc tive principles of traditional charities were also muted or removed. This new charitable outlook found expression in the" settlement house" movement of the 1890s (of which Jane Addams' Hull House in Chicago was the flagship). According to Olasky, this movement would become the inspiration for governmental social work programs of the 1930s and the community action programs of the 1960s. Along with these develop ments, a new discipline, sociology, was emerging, which would leave its strong imprint on twentieth-century work among the poor. In general, these movements looked to the government as the proper agency to bring about the needed social changes and reforms.

These new currents of thought affected the charitable system in important ways. Professionals, rather than volunteers, would now tend to dominate. The roles of non-professionals would be reduced to that of fundraising or giving money. This would bring an increasing social separation be tween donor and recipient. The old compassion (the idea of suffering with the poor) was gone. With the coming of the Great Depression of the 1930s, the private chari table system was overwhelmed, and in stepped the government in the person of FDR and his New Deal. The advent of the New Deal marked a definitive shift in the federal government's role in respect to society's needy. The cultural ethos of the work ethic, however, remained strong in America. This made it difficult for political leaders to act in terms of direct charitable relief. New Deal pro grams, therefore, often emphasized their temporary nature, or involved efforts to pay workers for actual work done (e.g., the Works Progress Administration). At the same time, New Deal leaders reiterated their support for the old work ethic. Their pronouncements notwithstanding, a subtle change in public attitudes toward personal responsibility and rugged individualism was taking place.

As late as the 1960s, the cultural bias against welfare still remained, 110t only among its administrators but also among its recipients. It was left to LBJ's Great Society to breach this cultural wall. Personnel be longing to, or in some way affiliated with, its Office of Economic Opportunity as well as the private National Welfare Rights Orga nization radicalized the poor so as to de mand their full rights or entitlements. The welfare mentality among the poor became firmly implanted, and the number of welfare recipients ballooned. Olasky's chapter on "The Seven Marks of Compassion" constitutes the heart of his study and of his critique. Seven basic ideas motivated the charity workers of a century ago: affiliation, that is keeping the individ ual's family, religious, or community ties strong so as to strengthen his sense of belonging; bonding, or developing a close personal relationship between the charity volunteer and the recipient, in order to coax and encourage the latter to self-sufficient status; categorization, or assigning individ uals to different categories of need (e.g., the need for continuous relief, relief on a tem porary basis, aid in a job search, or just BOOKS 497 designating someone as unfit for relief due to unwillingness to work); along with this went discernment, the willingness to separate worthy objects of charity from fraudulent ones; seeking the goal of long-term employ ment of all able-bodied heads of household so as to instill self-sufficiency and responsi bility in the individual; placing emphasis on freedom, or the ability to work without governmental restrictions so as to improve one's lot in life over a period of time; finally, recognizing the relationship of the person to God, since men and women had spiritual as well as physical needs.

The presence of these principles gave traditional charities their great strength. Conversely, their absence in contemporary charity does so much to explain the spiritual and moral poverty of American compassion and its tragic social consequences: the de cline in upward mobility of the poor; the weakened state of private charity; and the disintegrating state of marriage. These prin ciples, Olasky contends, need to be re inserted and reintegrated into programs to aid the poor. Olasky has set forth his case compellingly and clearly. One hopes that this book will act as a catalyst in bringing about a thorough discussion of the issues involved so that the needs of the poor can be properly addressed. [] Mr. Bazikian is a freelance writer from Wee hawken, New Jersey. Failure and Progress: The Bright Side of the Dismal Science by Dwight R. Lee and Richard B. McKenzie Cato Institute. 1993 • 180 pages. $19.95 cloth; $10.95 paperback Reviewed by William H. Peterson T homas Robert Malthus prophesied fail ure for mankind and so did much to inflict the invective of "the dismal science"

on economics. In his 1798 Essay on the 498 THE FREEMAN • DECEMBER 1993 Principle of Population, Malthus held sex ual appetite would constantly tend to propel population beyond production, setting in motion the triumph of abject scarcity: sub sistence wages, disease, malnutrition, star vation, famine, death, and other unpleasant checks on population growth and rising living standards. Dwight Lee, the Bernard B. and Eugenia A. Ramsey Professor of Private Enterprise at the University of Georgia, and Richard McKenzie, the Walter B. Gerken Professor of Enterprise and Society at the University of California-Irvine, reject such Malthusian doom and gloom. They hail capitalism as a vehicle for constructive change, as a means of bringing about, in the words of Joseph Schumpeter, "creative destruction." Still, they accept the Malthusian idea of the reality of scarcity, limits, and opportu nity costs. Manjust can't do everything and have everything. Scarcity forces him to choose, and in choosing to make mistakes but thereby to learn, to forge ahead. Choice helps explain why Malthus was wrong.

Lee and McKenzie point out that man is a lot more than a biological organism worker, eater, baby-maker. Man thinks, and that's precisely what separates him from all other species. He can choose family size. He can choose to save, invest, invent. He can choose to forgo present consump tion, create capital, engage in division of labor, trade goods with his fellow man, and accordingly accelerate production and technology. To be sure, that acceleration involves some inevitable failures-mistakes. Progress is a kind of process of two steps forward and one step back. Lee and McKenzie note, for example, how the automobile inflicted fail ure on the investors and workers in the once vast horse-and-buggy industry. Even within an industry the pattern of progress and failure holds. The authors cite the brilliance of Nucor Steel in setting up nonunion mini mills that have given old-line giants USX, Bethlehem, and Inland Steel a run for their money. Similarly Apple Computer started PC manufacture in a gqrage to challenge giant IBM, NCR, and Digital Equipment, with Apple itself becoming today an $8 billion giant.

Failure is part of a bigger picture, advise the authors, conceding that the conse quences of competition can result in pain that strikes many as cruel, harsh, and un acceptable. Lee and McKenzie cite Henry Hazlitt's famous one lesson that the major source of error in economic understanding comes from the tendency "to concentrate on ... short-run effects on special groups and to ignore ... the long-term effects on the community as a whole." So the authors see virtue in economic failure and failure in "political virtue." They write: "The biggest threat to the success of the market economy is not the self-correcting failures imposed by market competition, but the self-perpetuating fail ures imposed by political competition for government protection against the disci pline of the marketplace." That protection helps explain the coun terproductivity of government tariffs, indus trial policy, and welfare programs. Of our rising welfare underclass, Lee and McKen zie note that food stamps cost $13.5 billion against an initial prograln of $40 million in 1965. The Aid to Families with Dependent Children budget was $17.8 billion in 1986 compared with $1.7 billion in 1965. In this same period the annual cost of housing assistance to the poor surged to $13.3billion from $300 million. Apparently Uncle Sam can support whatever size of the underclass he can afford.

1 wonder what Parson Malthus, were he alive today, would think of widespread and persistent government failure. D Dr. Peterson, adjunct scholar at the Heritage Foundation and former Lundy Professor at Campbell University, is working on a book on political economy.