Book Reviews

56 BOOKS Overcoming Welfare: Expecting More from the Poor and Ourselves by James L. Payne Basic Books • 1998 • 243 pages. $26.50 Reviewed by Robert Batemarco W hen freemarket advocates criticize welfare they are commonly accused of having nothing to put in its place. James Payne meets this objection head-on in Over coming Welfare by making a crucial distinc tion between "sympathetic giving" and "expectant giving." In so doing, he provides an alternative that is consistent with freemar ket principles and keeps defenders of the sta tus quo from occupying the moral high ground. Sympathetic giving means giving out of pity and seeking nothing in return from the recipient. It characterizes all twentieth century government "antipoverty" programs. Payne echoes the views of numerous scholars that those programs not only fail to reduce poverty (indeed, by rewarding irresponsible behavior, they generate more), but also lead to resentment on the part of givers, receivers, and intermediaries alike.

Expectant giving means that the giver expects that the receiver will give something back. The quid pro quo, however, is usually not something that directly benefits the donor. What the recipient most often "contributes" is some action that will eventually lead him to overcome his state of need. It is the demand of something in return that makes expectant giving superior to its alterna tive. The specific demand-whether swearing off drugs, keeping a curfew, or rendering some useful service-is less important than that the act symbolizes that the recipient is ultimately responsible for himself. That's a heretical idea in an age when everyone is encouraged to label himself a victim to whom society owes a living. But it's an .idea that must be revived. Payne not only shows that expectant giving can work, but also cites much evidence that it has worked. Britain's unjustly maligned Reform Act of 1834 actually was a rare gov ernmental effort to replace sympathetic giv ing (home relief) with expectant giving (the workhouse). Even more important were the "charity theorists" -most notably Octavia Hill-who not only preached the virtues of expectant giving, but also practiced them. By treating the poor as responsible people with problems to overcome, Hill and her fellow poverty fighters were able to elicit construc tive responses from them, turning many of the indigent into productive members of society.

Payne's analysis of how we moved from the sound expectant approach to the bankrupt sympathetic approach is equally interesting. He implicates many factors, most important the spread of the idea that income redistribu tion is an appropriate function of government. Once government programs were in place, whatever lip service was paid to expectant giving was always superseded in practice with government handouts. The political incentives that virtually guarantee this result are well charted territory in the public choice litera ture, but Payne presents them with great clar ity and force. He also blames the elite classes' acceptance of moral relativism (the notion that no choice or lifestyle should be judged as any better or worse than any other) and what I call infantile leftism (that no act, however irresponsible, should have any negative consequences for the actor). Both ideas have exacerbated the prob lems inherent in government programs and infected many privately funded efforts as well.

It is usually easier to diagnose problems than to propose solutions, and this book's less convincing sections are those offering political escapes from our welfare trap. Payne suggests attaching a taxpayer representative to each welfare program to expose the flaws in it. (Admittedly, he does not consider this to be a panacea.) This is a worthwhile objective, but it is hard to imagine that legislators would appoint people who would take on the task with the requisite seriousness. Besides, the flaws in our welfare system have already been exposed for all who care to inform themselves.

Another imperfection in the book is that, as important as the distinction between sympa thetic and expectant giving is, there is a paral lel distinction the author fails to make. That is the distinction between self-esteem and self respect. The former refers to feeling good about oneself, regardless of whether those feelings are merited. The latter, on the other hand, must be earned. Self-esteem is bestowed on a something-for-nothing (sym pathetic) basis, while self-respect results from constructive effort to better oneself. Payne uses the term "self-esteem" exclusively, when "self-respect" is often what he really means. Those qualifications aside, Overcoming Welfare is an outstanding book. In writing it, James Payne has made a valuable contribu tion to the debate over welfare policy. 0 Robert Batemarco is director of ana/ytics at a mar keting research firm in New York City and teaches economics at Marymount College in Tarrytown, New York.

Coolidge: An American Enigma by Robert Sobel Regnery Publishing. 1998 • 462 pages. $34.95 The Presidency of Calvin Coolidge by Robert Ferrell University Press of Kansas • 1998 • 272 pages • $29.95 Reviewed by Raymond 1. Keating F ew u.s. presidents have suffered more at the hands of statist historians than Calvin Coolidge. The reason for the nearly unani mous scorn directed at the 30th president was Coolidge's generally limited government philosophy, which he quietly brandished while in the White House. Those historians love to criticize Coolidge because he presided over peace and prosperi ty and had no interest in federal programs to "manage"· the economy and "solve" social problems. Recently, for example, Nathan Miller, author of Star-Spangled Men: Ameri ca s Ten Worst Presidents, ranked Coolidge among the worst not for anything he did, but BOOKS 57 because he supposedly did "nothing." (See the review in The Freeman, March 1999.) That's the ultimate source of the discontent regard ing Coolidge-he actually accomplished much, but not the government activism desired by so-called liberal observers.

During the Coolidge administration federal expenditures fell from $5.06 billion in 1921 (under President Warren Harding) to $3.12 billion in 1929. Along the way, Coolidge stopped various government boondoggles, most prominently the McNary-Haugen bill, which would have had the federal government buy up farm surpluses to sell abroad and hike prices domestically. The federal debt fell by 30 percent between 1921 and 1929. At the same time, tax rates were slashed. The top personal income tax rate dropped from 73 percent to 25 percent, and the capital gains tax from 73 percent to 12.5 percent. Coolidge got Congress to eliminate the recent ly imposed gift tax and to reduce the estate tax. The corporate income tax was also cut. The consequences of these policies were positive. Real annual economic growth aver aged 6.2 percent from 1922 to 1929 and con sumer prices fell. Coolidge's record was not perfect. He favored high tariffs and supported limitations on immigration, although he fought unsuccess fully against an anti-Japanese provision in the Immigration Act of 1924. Initially he opposed federal relief for the Mississippi flood of 1927, but eventually relented under massive congres sional pressure. Coolidge downsized the relief plan, but it set an expensive precedent.

Taken as a whole, however, Coolidge's record was admirable, and these two new books take major steps toward a far more just historical assessment. Robert Ferrell's effort is the more work manlike of the two. He has a formidable grasp of the period and the key events of the time. Many of his interpretations, however, suggest a strong faith in government action. For example, Ferrell declares that "something had to be done" regarding farmers' woes during the 1920s-the implication being that govern ment had to do something. Nonetheless, he manages to restrain such leanings and provides sound historical report58 THE FREEMAN/IDEASON LIBERTY • JULY 1999 ing on Coolidge, his career, and his adminis tration. Of note, Ferrell observes about Coolidge's stint as governor of Massachu setts: "Crowning his accomplishments as gov ernor was consolidation of the common wealth's 118 separate government depart ments into 18, a courageous thing to do, for many people lost lucrative posts." He also writes that "Regulation in the Coolidge era was thin to the point of invisibility." And he honestly summarizes Coolidge's fiscal record: "During the 1920s, the Coolidge administra tion reduced the debt, kept the budget flat, and brought in sufficient revenues through markedly reduced tax rates, both personal and corporate."

Where Ferrell falls far short is in his understanding of economics. He breaks into Keynesian rhetoric, for example, in declaring that Coolidge failed to see the problem of "underconsumption." Based on this Keyne sian model, Ferrell concludes: "The economy was the greatest problem of the moment, and Coolidge understood it less than some of his contemporaries. If he failed in the presidency, this was the major failure." In reality, aside from his failure to understand the benefits of free trade, Coolidge may have had the best grasp of how the economy works among all twentieth-century presidents. Robert Sobel's book is a highly readable popular biography. It is largely based on sec ondary sources, but the author's interpreta tions are fresh. Among the many interesting issues Sobel touches on is Coolidge's request "for legisla tion to abolish the rights of states and munic ipalities to issue tax-exempt securities, argu ing that new investment funneled into these securities could be better employed in the pri vate sector." Coolidge's argument holds even greater validity today, given the tremendous waste that has been financed by such instru ments over the past seven decades.

Sobel also reports that Coolidge believed that "government should remain out of the economy, and businessmen should not inter fere with the proper functions of govern ment." Again, given today's convoluted tax system, web-like regulatory regime, cam paign-finance controversies, and extensive corporate-welfare expenditures, his philoso phy looks very sound. My sole complaint with Sobel's book again lies with his understanding of economics. While Sobel gets much of Coolidge's eco nomics and its effects right, he asserts that Coolidge was "not a 'supply-sider.' " However, this statement seems to grow from the standard misunderstanding of supply-side economics. Coolidge, after all, showed a consistent understanding of how high tax rates dulled incentives for working, investing, and risk taking, and thereby restrained the economy's productive capacity. Ferrell and Sobel manage to grasp the com plete Coolidge. While most historians have offered a caricature of a president completely beholden to business interests, both authors understand that at Coolidge's core were his religious beliefs. As Sobel points out, during the same speech in which Coolidge noted in passing that the "chief business of the Ameri can people is business," he also declared: "The things of the spirit come first."

In another speech, Coolidge sagaciously observed: "Prosperity is only an instrument to be used, not a deity to be worshiped." Despite certain weaknesses in both books, they go far toward setting straight the histori cal record on Calvin Coolidge. D Raymond J. Keating is chief economist for the Small Business Survival Committee, a columnist with Newsday, and a contributing editor to The Freeman. H. L. Mencken Revisited by William H. A. Williams Twayne Publishers • 1998 • 195 pages • $35.00 Reviewed by George C. Leef H enry Louis Mencken is known to many . lovers of freedom as a sharp-tongued satirist who lampooned politicians, crusading moralists, overstuffed intellectuals, and any one else he thought was a public menace. He is well appreciated for his acidic barbs (FDR, for example, was "King Roosevelt II"), but most people who think well of Mencken do so just because he disliked big government and its champions. Not many are familiar with his life and career as a journalist.

William H. A. Williams's H L. Mencken Revisited admirably supplies the details of Mencken's life and career. The book is not a detailed biography, but covers the main fea tures of the great Baltimorean's life, with the primary focus on his thought, writings, and battles with the many people he believed were ruining the United States. One of Mencken's virtues was his consis tency. He was a man of principle, and Williams's book makes this very clear. Williams often refers to Mencken's "libertari anism" and quotes him as saying, "My liter ary theory, like my politics, is based chiefly upon one idea, to wit, the idea of freedom. I am, in brief, a libertarian of the most extreme variety, and can imagine no human right that is half as valuable as the simple right to pur sue the truth at discretion and utter it when found." Instances of his commitment to the philosophy abound in the book.

For example, he vigorously opposed all attempts to silence free speech, even for those with whom he was in complete disagreement. During the Red Scare of the 1920s, he not only wrote to condemn the arrest and depor tation of anarchist Emma Goldman, but also tried to get the Justice Department to return her papers seized in a raid on the office of her magazine and urged the Bureau of Immigra tion to allow her to return to the United States to visit relatives. He even contributed money to the Emma Goldman Recovery Committee. Why worry about the treatment of a leftist radical? Because, Mencken knew, preserva tion of the marketplace of ideas supersedes disagreement with particular ideas. Williams writes, "Mencken belonged to no political organizations, and he invariably had little sympathy for the liberal or radical goals of those he defended. He was motivated by lib ertarian principles and basic human sympa thy." Mencken thought little of most politi cians. He subscribed to the belief that "public officials, under democracy, were predomi nantly frauds, and hence did not deserve to be taken seriously."

He blasted most for what he saw to be their BOOKS 59 self-serving attempts to manipulate the "booboisie" for their own gain. For instance, he denounced WoodrowWilson's last attorney general, A. Mitchell Palmer, for his "medieval attempts to get into the White House by pumping up the Bolshevik issue." Many people at the time, and perhaps to this day, regarded the incessantly satirical Menck en as simply a nihilist. Williams argues other wise: "Beneath the surface of his satire, Mencken was a very different figure from the cynical nihilist depicted by so many of his crit ics. He never denied the importance of values or their necessity in society. He never sought to destroy those values in which he believed. He did attack, sometimes ignorantly and intol erantly, ideals that seemed to him hypocritical or false. Even then, he usually produced his condemnation by juxtaposing the qualities he admired against those he rejected.... He was in his own way a moralist, angrily decrying the erosion of those values necessary to a humane and civilized society."

Williams also defends Mencken against other attacks by leftists who feel compelled to besmirch the name of anyone who dis agrees with them. Mencken died in 1956, but in recent years he has been subjected to charges of racism and anti-Semitism. The "racist label is based on nothing more than snippets of Mencken's colorful writing and hardly squares with a man who helped many black authors, had black friends, testified in favor of an anti-lynching bill, and repeatedly slammed the Ku Klux Klan." As to alleged anti-Semitism, Williams quotes Sheldon Richman's observation that Mencken never blamed Jews for anything. Moreover, he had numerous Jewish friends, and denounced the Roosevelt administration's policy of refusing admittance to Jews seeking to flee Germany, condemning "political mountebanks who fill the air with hollow denunciations of Hitler, and yet never lift a hand to help an actual Jew."

If you are among that group of people who are fond of H.L. Mencken's flamboyant writ ing but know little about the man, this is a book you would do well to acquire. D George Leef is book review editor ofThe Freeman.

60 THE FREEMAN/IDEAS ON LIBERTY. JULY 1999 Eat the Rich: A Treatise on Economics by ~ 1. O'Rourke Atlantic Monthly Press. 1998 • 265 pages. $24.00 Reviewed by William H. Peterson E at the rich. Why not? Everyone knows that they're responsible for the poverty of victimized masses. To their rescue comes Compassionate Government selflessly trans ferring wealth from the rich to the poor. The transfer, however, comes at a steep price to society in terms of disincentives to the rich (as well as the middle class) but more so to the poor whose plight is compounded by the law of unintended consequences. The poor, you see, get to be truly victimized by the "com passion" of their own government. This is the theme that P. 1. O'Rourke plays, grandly, in this lighthearted work with the tongue-in-cheek subtitle of "A Treatise on Economics." Economics then is taught via numerous examples of official mismanage ment and unscrupulousness.

One of the foremost lessons concerns the consequences of living under the rule of men rather than the rule of law. The rule of men, says our hardy world traveler, is the pits. O'Rourke wittily cites his experiences in Albania, Sweden, Cuba, Russia, Tanzania, China, and elsewhere to make his point. There, men in power seem bent on building monuments to themselves-funded mainly by, naturally, the poor. One such monument is seen in Shanghai's giant new gleaming Pudong business district. The only catch: no business, even though the place boasts of regional headquarters for the likes of Hewlett-Packard, Siemens, Sharp, Coca-Cola, SmithKline Beecham, and Sony. O'Rourke writes: Nobody seemed to be there at all. In the middle of a Tuesday afternoon, nothing was going on. We drove up and down empty streets along concrete fences decorated with those international cross-out silhouettes indicating prohibition of this or that: No spitting. No martial arts. No cutting trees.

No firecrackers. No breaking the phone. Yet ~1. 's Chinese escort could brag in the face of this monumental office real-estate glut, rolling his eyes slightly: "The floor space of high-rises in Pudong exceeds New York City." That was in 1997. Office space in Pudong was set to grow by a third more in 1998. The Chinese communists, according to the Asian Wall Street Journal, had literally ordered Shanghai to be a world-class city apparently regardless of cost. The beneficia ries? Certainly not the poor Chinese peasant. O'Rourke, a roving editor for Rolling Stone, has covered such official misdeeds in previous books such as Give War a Chance and Parlia ment ofWhores (in which he held that the whores include anyone who is on the take from the wel fare state).His winking cynicismand irreverence can lift a reader's sense of gloom, on surveying political shenanigans at home and abroad, into laughter at the follies of government. Often, a good horselaughis a more effectiverefutationof statistpompositiesthan a lengthy article, and ~J.

lampoons with a Menckenesqueverve. Continuing his economics lessons, ~J. plugs Adam Smith's Invisible Hand idea, quoting the famous passage: "It is not from the benevo lence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." He rejects the cliche that in free societies the rich get richer and the poor get poorer. He amends that line with a punch line: "The rich are getting richer. The poor are getting richer. And we're all getting older." With anecdotes and humor he demonstrates that economic liberty makes for the creation of wealth and that economic repression makes for poverty. Thousands of people who would otherwise shun a conventional treatise on eco nomics may learn the fundamentals of human action from this unconventional one. Lastly, ~1. finds economic virtue in the Tenth Commandment condemning covetous ness. He says that if you want a donkey or a pot roast or a cleaning lady every week, "don't bitch about what the people across the street have. Go get your own."

Great message. D William Peterson is an adjunct scholar at the Her itage Foundation in Washington and Distinguished Lundy Professor Emeritus ofBusiness Philosophy at Campbell University in North Carolina.

Cyber Rights: Defending Free Speech in the Digital Age by Mike Godwin Times Books • 1998 • 305 pages. $27.50 Reviewed by Royce Van Tassell O n June 26, 1995, Time magazine started the "Great Cyberporn Panic of 1995" with a story legitimizing Martin Rimm's scaremongering study of pornography online. Three weeks later, after Mike Godwin and others in the online community had complete ly discredited Rimm's study, Time realized that Rimm had duped them and issued what amounts to the only full-page retraction in its 70-year history. In his book Cyber Rights, Mike Godwin, chief counsel for the Electronic Frontier Foun dation, uses that and other cases to show how important full free speech rights on the Net are. Without them, Godwin maintains, the Net could not help the rest of America hold the mainstream press accountable and facilitate the vigorous, uninhibited exchange of ideas we find there. This book is a passionate argu ment that speech in cyberspace must enjoy the same protection as "ink on dead trees."

Godwin believes that the Net represents the most complete extension of the American experiment in democracy. It permits every one, "not just lawyers or journalists or policy makers, or the rich and well-connected ... to level the playing field, to hold media and political institutions accountable, and to tell the truth." It makes everyone with a computer and a modem a modern "pamphleteer." Any one who recently logged onto the seattle.gen eral newsgroup saw how vibrant the discus sion of racial preferences and affirmative action can be, as opposed to the staid, often redundant discourse found in the traditional media. Without the Net's anonymity, such frankness would never have emerged. Freedom of speech must be more than a notion to which we sometimes pay lip service. Godwin tells adults to relearn a lesson we've all tried to teach children: "Sticks and stones may break my bones, but words will never BOOKS 61 hurt me." When we tell children this, we know that the reason some people want to restrict certain kinds of speech is precisely because words can hurt. But just as children must learn to rise above adversity and learn to cope with the power of words, so must adults even when the words hurt or offend.

Cyber Rights is not without its flaws. God win makes the claim that libel law may be coming to an end, but it is rather difficult to take that seriously. Furthermore, his passion for the Net sometimes colors his judgment. He states at one point that, "the Net [is] reduc ing and perhaps erasing the imbalance of power between mass media and private indi viduals. The power of the Net allows anyone with a will and the energy to write the oppor tunity to publish their ideas." While the sec ond half of that statement is true, I am not convinced of the first. Earning a voice in pub lic discourse comparable to the current posi tion of, say, the New York Times or Tom Brokaw is as much a product of luck as it is of effort or knowledge. Godwin's writing is for the most part clear and succinct. He distills the legalese of speech law into simple prose, and then illustrates the application and importance of those princi ples in cyberspace with well-told stories. On occasion, his transition between the explana tion of a principle and the ensuing illustration jarred me, but it was not difficult to pick up the trail again.

Cyber Rights is an enjoyable and impor tant book. For lawyers conversant in First Amendment law, Godwin dispels some of the preconceptions that have led many of them to segregate speech on the Net from speech in the traditional media. For legisla tors and policymakers, it is an excellent primer on why they must not rashly alter the rules of speech in new media. Lastly, God win helps the average citizen understand how the Net can improve society and per haps re-establish some of the community lost in our increasingly distant society-if it is left free. D Royce Van Tassell is an analyst with Citygate Asso ciates, a policy and management consulting firm in Sacramento, California.

LEVIATHAN alWAI "Many men desire peace; but not many desire the things that make for peace." - Thomas if Kempis This issue's special section on the war in the Balkans falls squarely within FEE's 53-year tradition of exploring the ideas that make for freedom and peace. As Leonard E. Read, FEE's founder and longtime president, once explained: "War is liberty's greatest enemy, and the deadly foe of economic progress. If war be evil there must be a way to avoid it; there must be a rationale,.a type of thinking, patterns for living, that lead to peace." In 1995, FEE published Leviathan at War, an anthology of articles from The Freeman and other FEE releases. Edited by Edmund A. Opitz, Leviathan at War includes more than 20 essays on the causes and economics of war, free trade as a foundation for peace, war's effect on individual liberty, and related topics. What makes Leviathan at War such a valuable collection?

• Leonard Read's classic "Conscience on the Battlefield," penned during the Korean War to debunk the popular notion of war "as a means to peace among nations" • Daniel Webster and S.H. Liddell Hart's historic essays on conscription, along with Dean Russell's "The Conscription Idea," written in 1953 • Essays by Ludwig von Mises, Ayn Rand, Hans Sennholz, Samuel H. Husbands, and Edmund A. Opitz, along with fresh ideas from a younger generation of writers • "The War Prayer" by Mark Twain 192 pages, indexed, paperback Specially priced this month: $10.95, postpaid (3 copies to a single address: $25.95, postpaid) To order, caI/800-452-3518, or fax 914-591-8910. Visa, MasterCard, American Express, and Discover orders welcomed. Or send your check or money order to: FEE, 30 S. Broadway, Irvington-an-Hudson, NY 10533. Offer ends August 31, 1999.