Book Reviews

530 BOOKS The Lost City: Discovering the Forgotten Virtues of Community in the Chicago of the 1950s by Alan Ehrenhalt Basic Books. 1995 • 310 pages. $24.00 Reviewed by Stephen J. K. Walters C an individuals have too much freedom? Can markets serve up too many choices for consumers? Do we need more "authority" in the America of the '90s? In The Lost City, Alan Ehrenhalt answers these questions affirmatively; he blames our '60s-era rejection of authority and enshrine ment of personal choice as the most impor tant of life's values for the lost sense of community that today makes our cities nightmarish and our suburbs sterile. Those who cherish liberty might be tempted to ignore such views, or dismiss them as the tired rantings of a reflexive statist or deluded nostalgic-the kind of person who, had he been born in Rome rather than Chicago would be pining for the good old days when Mussolini made the trains run on time.

But those who ignore The Lost City will miss an entertaining and stimulating book. Ehrenhalt may not be much of a political economist or philosopher, but he is a top flightjournalist. His vision of the '50s never veers into fuzzy sentimentalism; it is clear eyed, objective, and wide-ranging. Whether he is describing '50s life in a blue-collar enclave in southwest Chicago, in a bustling South Side ghetto, or in a leafy commuter suburb, Ehrenhalt has a talent for makingyou feelpart of the timeand place. His book is like an opened time capsule; after examining its holdings a while, you will be convinced-as Ehrenhalt is-that we have lost something precious since that capsule was sealed. It is only when Ehrenhalt gets down to the task of diagnosing how our culture mutated-how "Ozzie and Harriet" devolved into "Married... With Children"-that he stum bles. His errors arise from widely shared presumptions and impulses, however, so it behooves those who respect markets and value freedom to take them seriously.

Consider, for example, Ehrenhalt's ver dict that "The difference between the 1950s and the 1990s is to a large extent the differ ence between a society in which market forces challenged traditional values and a society in which they have triumphed over them." We hear echoes of this notion every day in the popular media's assertions that murderers kill because movies taught them to, that teens get pregnant because corpo rations use sex to sell their wares-even that the traditional values of loyalty and thrift have died because free-agent athletes change uniforms too readily. But let's get real: the marketplace is culture's servant, not its master. The goods purchased in free markets do not determine their buyers' tastes, they reflect them. If the marketplace serves our cultural predisposi tions too well, blame not markets but our selves. The Lost City would have been incompa rably better had Ehrenhalt not shied from identifying the true sources of America's cultural decay. In fact, he comes close. He notes the awesome cultural influence of the dissatisfied: "[T]he cultural images that come down to us as history are written . . .

by the dissenters-by those whose strong feelingsagainst lifein a particular generation motivate them to become the novelists, playwrights, and social critics of the next." He just underrates the power of these mal contents' ideas; he fails to see that our repudiation of '50s mores and institutions has not been a triumph of the market but a mere intellectual mutiny. The at-home mothers Ehrenhalt credits with keeping' 50s neighborhoods ""glued together" and with seeing that the young avoided sin did not hustle off to office jobs because markets seduced them. Rather, they were seduced by Betty Friedan and others who taught them that women at home were oppressed that Harriet Nelson was a myth or a sellout.

In truth, the last few decades have been a huge lab experiment, the dissenters of the '50s and '60s deciding what next to put into the test tube. A little gender feminism here, some radical egalitarianism there, then some environmental deism. On and on we go, heaping intellectual fashion on academic conceit on untested social theory. Stir with the heavy hand of the State and get: the lost culture. For details, see Thomas Sowell's The Vision of the Anointed. What should occupy us is this: Why does the marketplace of ideas not work as well as the one for autos or beer? Why is Susan Faludi better known than Hayek? Why is Ralph Nader a hero? Why is Paul Ehrlich not bankrupt? Considering such questions and studying the special attributes of the intellectual marketplace might be a neces sary condition for the reconstruction of a civil society-or, at the least, might keep us from losing it once it is restored. D Dr. Walters is professor of economics in the Sellinger School ofBusiness and Management at Loyola College in Maryland.

Hazardous to Our Health? FDA Regulation of Health Care Products edited by Robert Higgs Oakland, Cal.: Independent Institute. 1995 • 113 pages. $14.95 paperback Reviewed by Doug Bandow T here was a time when people actually trusted the federal government. How ever, "I'm from the government and I'm here to help you" is now considered to be a topjoke line, along with "the check is in the mail." Nowhere is the first line more ap propriate than the Food and Drug Admin istration (FDA). The FDA has long seen its mission as restricting the availability of such products, irrespective of the cost to the public. One estimate is that 200,000 people have died over the last three decades because the FDA prevented them from using drugs, many of BOOKS 531 which were available in other countries. Thousands more have died when denied access to medical devices. Hundreds of thousands ofpeople suffered in smalland big ways as the FDA prevented-and continues to prevent-doctors from providing safe and effective treatments.

It wasn't supposed to be this way, of course. In 1938 Congress empowered the FDA to monitor drug safety. However, the agency had to act within a specified time in order to block product sales and its impact on the pharmaceutical market was modest. But the FDA gained power over time, in what Robert Higgs of the Independent In stitute calls "a process of 'punctuated pol itics.,,, Although the agency itself has reg ularly sought to increase its power, the major expansions have been granted by Congress in response to perceived crises. Probably the most celebrated example of this phenomenon occurred after the wide spread international use of thalidomide, which generated birth defects. As a result, in 1962Congress approved new legislation that greatly expanded the FDA's power. The agency could monitor efficacy (which had not been at issue with thalidomide) as well as safety, and could take as long as it wanted-years in some cases-to conduct its reviews. The FDA also began regulating clinical trials.

Unfortunately, as Higgs and his collabo rators detail, this constant if episodic in crease in FDA power has given an inefficient and unaccountable bureaucracy a strangle hold over the drug and device industries. When it comes to this agency, observes Higgs, "one encounters claims for what amounts to a variant of central planning that are virtually identical to the claims now recognized as discredited in relation to so cialist central planning for the whole econ omy." No group of federal bureaucrats, however good their intentions, can deter mine the most appropriate and effective treatment for thousands of doctors and mil lions of patients. But the issue is far more than efficiency. It is also morality. After all, what is more basic than the ability to decide one's own 532 THE FREEMAN • JULY 1996 medical destiny? Observes Higgs, today the government "presumes to exercise control over people's lives that cannot possibly be justified unless one views people as having no more rights than the sheep in a flock."

The agency also regulates devices, some 6,000 of which are now used in diagnosing and treating patients. Only in 1990 did Con gress allow the FDA to strictly control these products, but the agency quickly employed its new power: approval rates fell dramati cally and backlogs became huge. Between 1991 and 1993,for instance, the review time for so-called 510(k)applications (simple re quests for "substantially equivalent" de vices) more than doubled. Reports Higgs, "the buildup of the huge backlog in 1992and 1993 ... led bewildered applicants to speak of a 'black hole' and 'eternal limbo.'" Perhaps even more astonishing is how the FDA ignores the First Amendment in its zeal to control not just advertising, but the flow of any information from drugmakers to patients and doctors. Paul Rubin of Emory University tells the long, sad story. Aspirin manufacturers cannot inform consumers that use of their product helps reduce the risk of heart attacks. Pharmaceutical firms cannot distribute peer-reviewed journal articles on the use of approved drugs for other purposes that have not been specificallyokayed by the FDA. Companies cannot underwrite the travel of doctors to discuss such uses, no matter how widespread. And much, much more. "By impedingthe free flow of informa tion," notes Rubin, "this set of policies also has substantialdetrimentaleffectson health."

As Hazardous to Our Health? makes clear, the FDA's record is execrable, mak ing reform imperative. Given the over whelmingincentives for the agency to inflate and misuse its power, administrative reform is no option. Higgs advocates abolishing the agency. Absent that, he suggests limitingthe FDA to certifying drugs: "This change would curtail the agency's capacity to do harm while preserving its capacity-on the questionable assumption that it actually has such a capacity-to act beneficially." Although a short volume, Hazardous to Our Health? ably makes the case for individual freedom. And that, ultimately, is the most important issue. Concludes Higgs: "Citizens who value liberty should have no trouble rejecting a system that simulta neously harms the public health and de prives citizens of their ability to make vital choices about their own health." D Mr. Bandow is a Senior Fellow at the Cato Institute and the author ofThe Politics of Envy: Statism as Theology (Transaction).

A History of the Mont Pelerin Society by R. M. Hartwell Liberty Fund, Indianapolis. 1995 • 269 pages • $20.00 Reviewed by William H. Peterson I deas have consequences on the right and left. R. M. Hartwell ofOxford University and a recent Mont Pelerin Society president points to Britain's Fabian Society as a counterpoint to MPS, a worldwide group of 450 mainly economists dedicated to the ideas of freedom and free enterprise. The Fabian Society, founded in 1884 and later a think-tank for the Labor Party, re jected outright Marxism while setting a successful organizational strategy-careful marketing of soft socialist ideas advanced slowly, by degrees. The basic idea: undercut private property rights. It did so by pushing state-protected trade unionism and other state interventions such as social security and unemployment insur ance. And it did so by claiming that capi talism worsens inequality and exploitation, that it is rife with robber barons and virtue less inheritors such as playboys.

Prominent Fabians included Ramsay MacDonald (later a Labor prime minister), H. G. Wells, George Bernard Shaw, and Beatrice and Sidney Webb (later Lady and Lord Passfield). By 1945 Fabian ideas tri umphed. Churchill was out, and a postwar Labor Government boldly enacted cradle to-grave welfarism and nationalization of basic industries such as coal and steel. The Mont Pelerin Society was founded in 1947 when state ascendancy and Marxist or Keynesian planning were sweeping the globe. Principal organizer and longtime MPS president was F. A. Hayek, who stressed that MPS was to be a scholarly community arguing ideas against collectivism while not engaging in public relations or propaganda. At the first MPS meeting in Switzerland were Hayek, Karl Popper, and Lionel Rob bins of the London School of Economics, Milton Friedman, Aaron Director, and George Stigler of the University of Chicago, Leonard E. Read and F. A. Harper of the Foundation for Economic Education, Henry Hazlitt of Newsweek, Ludwig von Mises of New York University, Bertrand de Jouvenel of Paris, Trygve Hoff of Oslo, and 27 other devotees of a free society.

The MPS declaration ofaimsincluded ideas on reaffirming and preserving private prop erty rights, a moral code for both public and private activity, intellectual freedom, state behavior limited by the rule of law, and "the right of each individual to plan his own life." Prominent MPS members who advanced to policy positions included Chancellor Ludwig Erhard of West Germany, President Luigi Einaudi of Italy, Chairman Arthur Burns of the U.S. Federal Reserve Board, and, currently, Prime Minister Vaclav Klaus of the Czech Republic. Eight MPS members, including Hayek, Friedman, and Stigler, won Nobel prizes in economics. And according to Martin Anderson of Stanford's Hoover Insti tution, of 76 economic advisers on Ronald Reagan's 1980 campaign staff, 22 were MPS members, including Anderson himself. Hartwell also notes the MPS intellectual push for a free society has ever been up hill against counter-ideas. Even today gov ernment almost everywhere is still looked upon as the guardian of "social justice,"

the purveyor of "affirmative action," the regulator and restrainer of "unbridled capitalism," the educator of the young, the pensioner of the old, the compassionate redistributor of income and wealth from the "haves" to the "have-nots." Hartwell also notes MPS members, if united on the idea of freedom, have had to BOOKS 533 deal with sharp internal differences over means. Substantive debates within the so ciety have ranged over social security, pub lic schools, economic development, the gold standard, compulsory arbitration as a way to head off strikes, Milton Friedman's idea of a negative income tax, and other welfare reforms. More than once, Ludwig von Mises, perhaps the most uncompromising MPS member, accused some MPS members of harboring socialist tendencies. Hartwell believes MPS, along with doz ens of regional free-market think-tanks it helped spawn across the globe, has changed the world for the better. He holds that, thanks to MPS as an intellectual venture, freer trade prevails, and few thinkers now boost state planning or question the superior efficiency of the market and its close tie to human liberty.

Hartwell's sometimes narrowly focused yet fascinating book on the role and duel of ideas is a clarion call for, in his words, "continued vigilance in the defense of the free market and in opposition to the omnip otent state." The Hartwell MPS history gives rise to three conclusions: Thought precedes ac tion. Think-tanks and ideas indeed have consequences. Ideas, good or bad, triumph in the end. D Dr. Peterson is an adjunct scholar at the Heri tage Foundation and the Distinguished Profes sor Emeritus ofBusiness Philosophy at Campbell University in North Carolina. An Endless Series of Hobgoblins: The Science and Politics of Environmental Health Scares by Eric W. Hagen and James J. Worman The Foundation for Economic Education • 1995 • 140 pages. $9.95 paperback Reviewed by Robert H. Nelson T he idea of the scientific professional emerged in the progressive era around the beginning of this century. There should 534 THE FREEMAN • JULY 1996 be a clear boundary, the founders of scien tific professions said, between science and politics. Ever since, most scientists have believed, their role is to do careful research, publish it in scientificjournals, and leave to others the dissemination of the results for decision-making purposes in government.

Indeed, a scientist who was perceived as a "lobbyist" or "publicist" risked the disap proval of his or her professional colleagues. Like so many other features of the pro gressive design, this separation of science and politics has not worked. When main stream scientists refuse to assume active leadership roles, it leaves a vacuum that all-too-often is filled with all manner of hucksters and zealots. Those scientists who do speak out are often those with the stron gest ideological blinders, while mainstream scientists are content to do research, publish in academicjournals , and leave to others the dissemination of the results in the public arena. The end result, unfortunately, be comes "science by press release," leaving much of the public confused and poorly informed about many matters of vital im portance to public health and welfare. It thus is welcome that James J. Worman, professor of chemistry at Dartmouth Col lege, has decided to review the current state of scientific thinking on several recent con troversies in environmental policy. With his co-author, Eric Hagen, they report on three substances: Alar, asbestos, and dioxin.

Alar is a chemical available since the 1960s for preserving apples for longer peri ods, aiding in their marketing. In the early 1980s studies of mice fed massive doses of Alar showed cancer tumors. Based on these studies, the Environmental Protection Agency (EPA) in 1985 proposed a ban. However , EPA was forced to cancel this action when the agency's own Scientific Advisory Panel challenged the scientific validity of the earlier studies. Although new studies were done, they had many of the same problems. For example, the doses of Alar were so high that most mice died prematurely. As a result, it was impossible to say whether resulting cancers were due to general toxic effects of the Alar on the immune system, or were actually due to some cancer-causing characteristic of Alar. Complicating matters, in rats Alar did not produce cancer at any dose. Moreover, when the dose for mice was cut in half-and was still equal to the equivalent of a person eating 14,000pounds of apples per day for 70 years-no cancers showed up. By 1989 a United Nations panel including experts from most industrialized nations concluded that Alar was "not oncogenic [cancer causing] in mice" and recommended Alar for use within an "acceptable daily limit."

Nevertheless, pressured by environmen tal crusaders, in 1989EPA again proposed a ban. This was not enough for the Natural Resources Defense Council (NRDC), how ever. Taking matters into its own hands, NRDC enlisted actress Meryl Streep and the CBS television program 60 Minutes to warn Americans that they should not eat apples. The resulting mass hysteria virtually wiped out apple sales for a time in some parts of the United Statesand also even tually caused the removal of Alar from the market. In its national publicity campaign, NRDC asserted that Alar posed a risk 25 times greater than even EPA considered to be the case. Furthermore, lost in all the controversy was fact that 95 percent of apples were not receiving any application of Alar at all. Editor Daniel Koshland of Science maga zine was moved by the whole sorry episode to protest the use of "scare of the week" tactics and to warn the public that fund raising and other incentives meant that "public interest groups have conflicts of interest, just as do business groups."

An Endless Series of Hobgoblins tells similarlydepressing stories for asbestos and dioxin. It has been known for many years that exposure to significant concentrations of airborne asbestos fibers, most likely to happen in the workplace, causes cancer and other lung disease. Although the effects of much smaller exposures are still not known, many uses of asbestos were tightly con trolled in the 1970s. Then, in the 1980s, attention turned to the lingering effects of past use of asbestos. Under pressure from the Sierra Club, Audubon Society, and other groups, Congress in 1986 enacted the Asbestos Hazard Emergency Response Act. Although the Act did not directly require it, the very fact of its passage and other alarmist statements stirred exaggerated public fears, resulting in many school dis tricts across the nation acting to remove any remaining asbestos in the walls and other parts of schools. Staggering costs-nation wide in the several billions of dollars per year-were incurred, often by financially strapped school systems. Yet, by 1991 EPA was stating that "removal is often not a school district's or other building owners' best course of action. " Indeed, the removal process itself frequently left greater asbes tos residues in the airwhich would not disappear for many years-than had previ ously existed. The Occupational Safety and Health Administration (OSHA) projected seven casualties per 1,000asbestos removal workers, likely to cause more total deaths among the workers than would be averted by the asbestos removal itself.

Dioxin is a chemical that is highly toxic for many animals. Yet, its impacts vary greatly from one animal to another; a guinea pig is 5,000 times as susceptible to dioxin as a hamster. Inadvertent experiments due to accidental releases of dioxin suggest that human beings may be among those species facing lesser risk, or even no risk. In the aftermath of an industrial accident in Seveso, Italy, in 1976 that dumped very large quantities of dioxin over the area, only 200 cases of chloracne have ever been definitively linked to this event. To be sure, the facts to the contrary did not inhibit Newsweek magazine in 1982from reporting that there had been a large increase in birth defects. Researchers have failed to find scientifi cally verifiable connections between cancer and exposure to Agent Orange (another dioxin) in Vietnam, even though the U.S. government agreed to distribute $180 mil lion to those exposed. Vernon Houk, the government official responsible in 1983 for the dioxin evacuation of Times Beach, MisBOOKS 535 souri, in 1991 stated that he considered his own past decision a mistake. The contro versy, to be sure, is continuing. Acknowl edging that some past fears have not proven out, EPA still maintains that dioxin is a probable carcinogen. At the same time, leading scientists have concluded that "studies on dioxin have failed to produce any conclusive evidence that dioxin is a human carcinogen."

These events are familiar to many of those who follow U. S. environmental policy closely. Hagen and Worman do not break new ground, but they do provide well writ ten summaries accessible to a general audi ence. An Endless Series ofHobgoblins adds to the rapidly mounting body of writings findingthat this nation has wasted many tens of billions of dollars on minor or perhaps nonexistent risks. The public has been ill served on risk matters by government agen cies, the media, environmental groups, and scientists too timid to speak out. It is to be hoped that more mainstream scientists will follow the example of this book in making their expertise on risk matters available for public benefit. D Dr. Nelson is professor of environmental policy at the School of Public Affairs of the University ofMaryland and seniorfellow ofthe Competitive Enterprise Institute. Human Action by Ludwig von Mises The Foundation for Economic Education • Fourth revised edition, 1996 • 907 pages.

$49.95 cloth Reviewed by Hans F. Sennholz H uman Action is the legacy of a genius, left to us and to be passed on from generation to generation. Most books, like their authors, are soon forgotten. Human Action lives, and its influence will live throughout the centuries. It is one of those books to which we return again and again-it never fails us, never ceases to instruct. In the world of economic literature, Hu536 THE FREEMAN • JULY 1996 man Action now holds the position which Adam Smith's Wealth of Nations used to occupy. Smith had derived his economic knowledge from universal propositions which he deemed clearly established. He proceeded from the assumption that nature has endowed man with a motivating power that prompts him to better his condition. And he accepted the axiom that the individ ual aiming only at his properly understood interests tended to promote the public good. Government and other institutions that in terfere with the smooth operation of the natural order are bound to defeat their own end. Yet, the economics of Adam Smith encompassed only a small phase of the whole range of human action, only "eco nomic action." Economics dealt with indi vidual action as it was affected by the profit motive and economic selfishness. From Adam Smith to John Maynard Keynes, economics was a philosophy of the "eco nomic side of man."

Professor Mises widened the scientific horizon and greatly enlarged the field of economics. On the foundation of classical economics and the teaching of his Austrian predecessors he presented a general theory of choice and preference in all human ac tion, a more universal science which he called "praxeology." Praxeology is a theoretical science which either deduces the ends from the application of certain means or, inversely, the means from the attainment of chosen ends. It shows man how he must act in order to attain definiteends. Praxeology thus derives substantive truths about man and his work. It is the science of every kind of human action. It applies to all ends and all means, both material and ideal, the sublime and the base, the noble and ignoble. Man arranges them in a single row, and subjects them to his preferences, to his individual scale of gradation and choice. Catallactic chores (Le., exchanges) are embedded in this ar rangement. No treating of economic prob lems proper can avoid starting from acts of choice; economics is merely a part, although the best developed part of the more univer sal science, praxeology.

Unfortunately, most economists still are blind to the general theory of human action. Like the Medieval philosophers and Mer cantilistic economists before them, they continue to search either for the ultimate destiny of mankind or for the perfect society as they envision it. They do not search for the principle of praxeology which corrects old creeds, sweeps away erroneous notions, and discloses universal laws. D Dr. Sennholz is president of The Foundationfor Economic Education. BOOKS FROM FEE The Foundation for Economic Education stocks more than 400 titles on a wide variety of subjects, including econom ics, histoI}T, philosoph)', religion, and education. Write or call to request a free copy of the latest FEE book catalogue: 30 South Broadwa)', Irvington-on-Hudson, NY 10533; phone: (914) 591-7230; E-mail: freeman@Westnet.com; fax: (914) 591-8910.