Book Reviews

56 BOOKS The Choctaw Revolution by Peter 1. Ferrara Americans for Tax Reform Foundation. 1998 • 191 pages • $20.00 Reviewed by George C. Leef T he u.s. government's treatment of Amer ican Indians was despicable. Everyone knows that, at least in a general way. The forced resettlement of the Choctaws, of which the "Trail of Tears" is the most infamous episode, is undoubtedly among the sorriest instances of governmental duplicity, venality, and incompetence in our abundant history thereof. We have become accustomed to "oppressed minority groups," with grievances far more imagined than real, demanding compensation at the expense of people who had nothing to do with the alleged injustices, or preferential treatment that necessitates abandoning equal ity before the law. So it is shocking to read of an instance where a "victim group" has cho sen a different path. That is precisely the sub ject of Peter Ferrara's The Choctaw Revolu tion.

Ferrara relates the intriguing story of how the Choctaw tribe of Mississippi improved their lives not through political coercion, but by freeing themselves from paternalistic, enervating federal policy. It is a story that might just open the eyes of those who always proclaim their compassion for the oppressed, yet clamor for more government intervention to help them. Ferrara is a well-known Washington policy analyst who has made his name mainly by exposing Social Security as doomed. Now he has given us a detailed look at federal Indian policy, an area as fraught with interventionist nonsense as Social Security is. Through repeated treaty violations and land grabs, the government turned the Choctaws (and most other Indian tribes) into wards of the state, dependent on Bureau of Indian Affairs (BIA) bureaucrats for education, health care, housing, roads, law enforcement, and more. Ferrara quotes Chief Phillip Martin on the situation they faced: "The government could give us the bare essentials to survive, but if we wanted more, we would have to earn it ourselves." That was easier said than done.

Seeing that the federal government was doing a pathetic job of providing the Choctaws with the essentials, Martin decided that it was time to stop relying on the BIA and to start contracting for services directly. This is a right recognized for Indian tribes under the Indian Self-Determination and Assistance Act, but as the Indians should have known from history, having a right on paper and being able to exercise it are two different things. Martin found the BIA bureaucrats fighting his efforts to contract for services at every point. That the Choctaws would have been better off without the bureaucrats was irrele vant. Ferrara writes, "Instead of pursuing the broad public interest as they are supposed to do, they pursue their own narrow parochial interest in their own turf, power, funding and jobs." The BIA repeatedly withheld informa tion and technical assistance, arbitrarily imposed onerous requirements, delayed approving Choctaw initiatives, and even threatened retaliation against them for trying to exercise their rights. Eventually, after years of perseverance, the Choctaws were success ful in contracting the BIA almost completely off their reservation, but it was a nasty, unseemly battle for freedom. Ferrara quotes one honest BIA official on the results of their fight to run their own affairs: "The tribe is doing an exemplary job. They're a more pro fessional outfit than we ever were."

Another typical political fight the Choctaws (and other tribes) have had to wage is the avoidance of federal taxation of gambling casino proceeds. The profits from casinos go to fund improved housing, roads, education, and other things for Indian tribes. They also represent marginal competition for the big gambling interests in Las Vegas and Atlantic City. Nevada and New Jersey congressmen have introduced bills to subject Indian casinos to federal regulation and taxation, claiming without any evidence that they are "riddled with corruption." Donald Trump, quite will ing to use politics to further his interests, lob bied personally for the bills. So far, however, the Indians have defended successfully against this attack. Ferrara closes with a list of useful sugges tions for improving government policy toward Indian· tribes. He argues that "tribes should have the freedom to run their own lands"

and advocates treating Indian reservations as enterprise zones free from capital gains taxes and regulations on both Indian and non Indian business enterprises. Of course, the entire country should be given that treatment, but if we must proceed in small steps, beginning with Indian reserva tions is sensible. Why not allow some of the poorest Americans the freedom to prosper, as the Choctaws have begun to? It would be a wonderful demonstration of the benefits of liberty. D George Leef is book review editor of The Freeman and director ofthe Pope Centerfor Higher Education Policy. The Great Depression: An International Disaster of Perverse Economic Policies by Thomas E. Hall and J. David Ferguson University of Michigan Press • 1998 • 216 pages • $42.50 cloth; $19.95 paperback Reviewed by Michael R. Adamson T homas Hall and 1. David Ferguson state two purposes in writing this book. Their first is to apply macroeconomic theory to an actual event, "the greatest macroeconomic disaster in U.S. history." Their second aim is historical. They seek to tell the story of how powerful officials in several countries "com mitted an incredible sequence of policy errors that generated a cataclysmic event reaching around the entire globe." The authors succeed admirably in their first objective, but do less well in their second. As economists relying on macroeconomics to explain the decisionmak ing processes that culminated in and sustained BOOKS 57 the Depression, they demonstrate the limits of macroeconomics alone in analyzing and explaining historical events.

Nonetheless, The Great Depression is a valuable book. It is well written and the authors carefully explain many obscure prac tices of the interwar financial world, such as the Federal Reserve's real bills doctrine. Moreover, they ably marshal the secondary literature in economics to answer such ques tions as: why the depression was so severe, why it lasted so long, and why it was a global phenomenon. Their answers to those questions reflect a monetarist consensus that synthesizes the work of Milton Friedman and Anna Schwartz, which focuses on the domestic sources of the depression found in Fed policy, and that of Peter Temin and Barry Eichengreen, whose work indicts the pursuit of the interwar gold standard for making the depression an inter national phenomenon. Although the authors do not include the analysis ofAustrian econo mists, they rightly point to the role of the Hoover and Roosevelt administrations in per petuating the Depression. Indeed, the authors reach the conclusion of Murray Rothbard and other Austrians: government intervention made conditions worse.

In applying macroeconomic criteria as the test of policy outcomes, the authors also applaud several federal policies that constitut ed unprecedented economic intervention . Accepting the idea that a central role of the government in monetary policy is essential, they approve of the banking and financial laws of the 1930s that established federal deposit insurance, and strengthened the power of the Fed. Similarly, given Fed failures, they view the Reconstruction Finance Corporation as a useful alternative lending institution. They also endorse the questionable idea that heavy federal defense spending ended the Depression. As Robert Higgs has argued, the war masked the Depression by putting people back to work, but did not end it in terms of restoring material well-being. The book also fails to demonstrate the authors' main contention that it was policy errors of well-intentioned officials who were "grossly ignorant about the goals, tools, and 58 THE FREEMAN/IDEASON LIBERTY • AUGUST 1999 impact of economic policy" that caused the Depression. They suggest that had policymak ers just known better, they wouldn't have enacted the series of misguided policies that created "an absolute disaster." The historical literature leads to a rather different conclu sion. For instance, as Herbert Stein has shown, New Deal officials were cognizant of monetary policy as a tool, but simply regard ed it as ineffective. Holding dim views of financiers and bankers as a class and eager to demonstrate the capability of the federal gov ernment in restoring prosperity, they instead developed fiscal policy as a tool to manage the economy. The problem was not so much one of ignorance as of the mindset of the New Dealers.

Economic ignorance alone does not ade quately explain historically how the series of misguided policies that caused and sustained the Depression came to be. What may seem today to be misguided policies were not nec essarily obvious at the time. During the 1930s, few private or public leaders in Amer ica other than a small number of economists, Wall Street bankers, and Fed officials pointed to monetary policy as a primary cause of the contraction. Ultimately, The Great Depres sion fails to clarify for the reader precisely what the authors believe should have been obvious to contemporary policymakers, enabling them to avoid the calamity. On the whole, the main macroeconomic conclusions of the book are sound: that policy mistakes of the 1920s and 1930s were the most important factors in causing the Great Depression; that the severity of the 1929 1933 contraction in America was due to bank failures that resulted from Fed inaction; and that the duration of the Depression owed to the lack of pro-active Fed policy after 1933 and the economic incoherence of the subse quent New Deal program.

This book, while limited in some respects in its explanatory power, helps to refute the still-popular notion that the Depression was caused by an inherent flaw in the market economy, inexplicably causing economic collapse. D Michael R. Adamson is a Ph.D. candidate in history at the University of California-Santa Barbara. The Noblest Triumph: Property and Prosperity Through the Ages by Tom Bethell St. Martin's Press • 1998 • 378 pages • $29.95 Reviewed by William R. Allen P roperty is a multifaceted and fundamental topic. Tom Bethell here gives us a broad survey, dealing with economic, political, and legal theory; episodes of economic and polit ical activity; and assessments of institutional constraints and procedures from ancient Greece to virtually the day before yesterday. Since the fiasco in the Garden of Eden, we have lived in a world of scarcity. The ineluctable state of limits implies not only frustration but also conflict. But there are many ways to compete, and communities dif fer enormously in how the economic/social/ political game is played.

How we survey our possibilities and for mulate our strategies, how we interact with each other and coordinate our efforts, is deter mined largely by the rules of the game. Those rules basically are subsumed under "rights to use of property." The right to use property we "own" is necessarily limited-I cannot use my hammer to break your window-but what are those limits, how are they determined, and by whom? Property rights go far to define the nature of the community, providing con straints, opportunities, and incentives with respect to what we do and how we do it and determining how we adapt to our niggardly circumstances. Some systems of property rights are much more conducive than others to living together productively and civilly. The implications of who has what property rights include subtle aspects of political and social philosophy. "The Western concept of human rights presupposes individualism,"

Bethell writes, and individualism finds much of its operational manifestation in private rights in property. Equality before the law and freedom of contract are antecedent to a free market economy. All this is pursued, elaborated, and illustrat ed by Bethell with references to a mass of varied literature, from ancient to modern. He is centrally concerned with "the legal and polit ical foundations that are essential to econom ic growth." In an individualistic open market with well-defined property rights, options can be discovered; opportunities can be identified; negotiations and exchanges can be conducted; division of labor and coordination can be effectuated; long-range plans can be confi dently formulated; and credit can be obtained. Moreover, good stewardship of assets is ratio nal. Bethell persuasively argues that "private property is a necessary (but not a sufficient) condition" for a society to enjoy the "four great blessings" of "liberty, justice, peace and prosperity."

Some origins of private property are found in Roman law, but our heritage comes mainly from long-developing English common law. Perhaps the operational high point of private property is seen in mid-eighteenth-century Britain. Unfortunately, intellectuals of the eighteenth and nineteenth centuries-includ ing the classical economists-did not ade quately spell out the significance of property relations for a flourishing society. Here, I believe, Bethell is excessively impa tient with and ungenerous toward writers of a century or two ago who did not foresee the insight of a handful of analysts of our own gen eration. The way was left open for much social istic silliness in both advocacy and action dur ing the last two centuries, but he is too harsh on good economists for not being better. The author recounts much of the utopi anism provided, before and during modern times, by the Jamestown, Plymouth, and New Harmony experiments; by Sir Thomas More, Jean Jacques Rousseau, William Godwin, Robert Owen, and Karl Marx; by the fiasco of the twentieth-century communism; and by the misdirection and mismanagement of modem "emerging Third World economies." He accounts for the rise and fall of the Ottoman Empire and the Irish famine of the 1840s and tries to explain intricacies oftoday's "intellec tual property" within a framework of proper ty rights. And he devastatingly quotes the naivete of agitators, politicians, jurists, and economists: see especially Theodore Roo sevelt's insidious distinction between "rights BOOKS 59 of property" and "rights of men."

Seminal work on the implications of prop erty rights is to be applauded, but I fear that such interest is not likely to be sustained. Today's younger economists may not con sciously defame private property, but most do little to defend it. At any rate, innovative academic scribblers can use felicitous help from writers who can reach a wide, non-specialist audience. Mr. Bethell, with a style that is typically graceful but.withjournalistic assurance, has played his expository role well. D William Allen is emeritus professor of economics at UCLA. Two Lucky People by Milton and Rose D. Friedman University of Chicago Press • 1998 • 655 pages • $35.00 Reviewed by Bill Field I still remember, after more than 30 years, my mounting excitement as I read Capital ism and Freedom for the first time and dis covered the wondrous moral and economic benefits of being "free to choose." Reading it changed my professional life. Here was solid economic reasoning, but economics with a heart, and-unbelievably-economics that was exciting. All my subsequent economic thinking has been driven by this experience.

While I eventually wandered off the Friedman reservation, I still have a warm feeling for the book and author who started it all for me. Two Lucky People, the memoirs of Milton and Rose Friedman, is not a work primarily focused on economic theory or policy. The book assumes that readers are familiar with the Friedmans' economic ideas, although it does provide summaries and defenses of many of their positions. Rather, Two Lucky People is an easygoing narrative of the expe riences of a happily married couple, with some sections written by each individually and others by the two combined. The Friedmans clearly qualify as a tradi tional family unit, with Milton the primary 60 THE FREEMAN/IDEAS ON LIBERTY • AUGUST 1999 breadwinner and Rose focusing on homemak ing. Milton, despite his obvious affection for his wife and family, is drawn back time after time in his account to his professional experi ences and economic ideas. Rose, despite her obvious competence and interest in econom ics, is drawn back to the family and its expe riences. It is heartwarming to see a couple of such extraordinary intellectual ability experi encing the ups and downs of daily life.

As Rose and Milton carry us through their lives and careers, they provide us with glimpses of many of the greatest and not so great economists of the twentieth century. Their reminiscences demonstrate that person al foibles and prejudices exist among the intellectual elite as surely as in the general population. Some instances are touching; oth ers produce a sense of revulsion. Examples of the latter include the anti Semitism encountered by the Friedmans in academia in general, faculty cliquishness that escalates into personal animosities, and the incredible close-mindedness of leftists to the failures of socialism. Milton also provides us with interesting portraits of the presidents he advised. Noone should be surprised at the picture of Richard Nixon as having a powerful intellect and vast knowledge, but often carrying out policies he knew were socially undesirable in pursuit of short-run political advantage. Friedman's admiring portrait of Ronald Reagan shows much more respect for his intellect than most Washington commentators.

Of interest is the section devoted to the evo lution of the "Free to Choose" television series, especially the resistance encountered from leftists within the public television establishment. While pressure from sponsors and other sympathizers eventually forced almost all public stations to show the series, there was much opposition, as exemplified by the decision of the New York station to run the show's initial program opposite the Super Bowl. Today, when the Friedmans' ideas are almost mainstream intellectually (if unfortu nately not in policy), it is hard for many of us to remember (and for younger people to have any notion of) the long-term resistance they faced. For many years the Duke University library carried none of Milton Friedman's books because of faculty hostility to his ideas. At the same time, the library had a complete collection of the works of Karl Marx. When Capitalism and Freedom was published in 1962, it was reviewed in almost no general publications-even though it was obviously aimed at a broad audience and Milton was already known internationally.

Rose and Milton present all this informa tion about their lives with a minimum of mal ice. The dominant tones of the book are opti mism and pride. A sense of vindication is evi dent: the free market is winning the battle of ideas and ultimately will win the battle over policy. As Milton stresses, advocates of the free market are inherently patient, long-term thinkers. He is perfectly willing to be judged by the economics profession and others 25 to 50 years in the future. He is confident, and surely with good reason, that his work in pos itive and normative economics will stand the test of time. D Bill Field is a professor of economics at Nicholls State University. Global Greens: Inside the International . Environmental Establishment by James M. Sheehan Capital Research Center • 1998 • 213 pages • $25.00 Reviewed by Jane S. Shaw O nly a policy wonk could love this book, but its contents are vital for understand ing a major change underway in environmen tal and foreign policy. Ahead of many others, James Sheehan has recognized the growing power of the international environmental movement. Sheehan, who directs internation al policy activities for the Competitive Enter prise Institute, describes the exercise of this power in Global Greens.

The book centers on "NGOs" (nongovern mental organizations) that emphasize envi ronmental issues. To a person concerned about freedom, the term "nongovernmental organization" may sound benign, but most NGOs are not friendly to liberty at all. They are ideologically committed to greater gov ernment control to address environmental problems, and they perceive international pressure as the way to achieve that control. According to Sheehan, about 4,000 NGOs are actively involved in environmental issues. These include large environmental organiza tions such as Greenpeace and the World Wildlife Fund, but also an array of others, including labor unions, so-called consumer groups, and women's organizations. In gener al, their goals are to force changes in people's lives, especially in the industrial countries, supposedly to protect the planet from human caused harm. The prominence of NGOs reflects the rise of international treaties as a way of dealing with environmental issues. For reasons that aren't fully clear, the governments of the United States and other industrialized coun tries now allow international treaties to shape important parts of their environmental poli cies. According to Sheehan, the momentum began in 1972, with the first United Nations Conference on the Human Environment. It slowed during the Reagan administration, when President Reagan withdrew from nego tiations over the Law of the Sea Treaty, but picked up again with the Clinton administra tion. Today, many NGOs are official partici pant-observers at United Nations confer ences, summits, and functions. As the U.N.'s influence grows, so does theirs.

As a result, an ever-growing collection of summits, conventions, treaties, and frame works undergird environmental policy in the United States. During the 1980s, Sheehan reports, 250 environmental treaties or conven tions were enacted. Treaties, to cite just a few examples, limit the use of chemicals that are believed (by many) to deplete stratospheric ozone, ban trading in certain animal species, and have begun to influence the use of fossil fuels. Forty-seven places in the United States are now designated U.N. Biosphere Reserves (including the Everglades) and 19 are World Heritage Sites (including YellowstoneNation al Park). These give the green NGOs leverage to control land use in and around those places. BOOKS 61 The international noose is tightening. In 1992, the Rio Summit (the U.N. Conven tion on Environment and Development) took center stage. This meeting launched a prolif eration of activities and agreements, includ ing a global-warming treaty (signed by Presi_dent Clinton, but not ratified by the Senate); a U.N. commission on sustainable develop ment; conferences on such topics as women, housing, and population; and the World Bank's Global Environment Facility (which Sheehan calls a "$2 billion slush fund for Third World environmental projects").

Sheehan describes in detail several impor tant international treaty negotiations of recent years, including the 1994 International Con ference on Population and Development, the 1996 World Food Summit, and the 1997 Kyoto Protocol on global warming. He observes that NGOs did not always achieve their goals at such meetings. However,as time goes on, they have become increasingly adept at influencing treaties in the direction they want, a fact that bodes ill for our freedom and prosperity. Sheehan's reporting of each event is thor ough and well-footnoted. In some of the negotiations he discusses, he was a firsthand observer. His book is clearly written and has no visible gaffes. It includes lists of promi nent NGOs (including information about their funding) and other reference material. Why then is it not more exciting? The rea son is probably that it deals mostly with facts-a lot of facts-rather than with ideas.

Sheehan provides extensive details that illus trate his theme: the growth of international environmental organizations. He doesn't explore the reasons behind this growth or speculate on its future directions. Such discus sion would have added interest. Still, Sheehan has provided a valuable ser vice in marshaling so much information about the network of environmental NGOs. His descriptions of the Greens in action around the world throw light on activities that have to date escaped widespread scrutiny, and pro vides material that I and others will draw on in the future. 0 JaneShawis a seniorassociateofPERCin Bozeman, Montana.

What'swrongwith libertarianism... . ..And how to fix it "An exciting corner in the nlarketplace of cOlllpeting ideas ... stilllulatillg and provocative." -Israel M. Kirzner :m:::;;:lili!!!i1~~~!~~~!!~~~1~:~1j!~lj!j!!j1jj~~ll~~~i:l\!i,\(i,(1j1~111i,:i1tiJi;.j:::.:~: It looks like the era of big governlllent isn't over after all. Politicians who favor new governlllent prograllls and higher nuninlUll1 wages are as popular as ever. Nor have libertarian ideas lllade real progress in the universities. Why? In this special issue of CRITICAL REVIEW, libertarian plulosophy is put through a conlplete overhaul and tune-up. Every lllajor version of libertarianisnl self-ownership, Objectivisnl, Aristotelianislll, and free-lllarket econonlicsis subjected to rigorous scrutiny, and the evolution of nlodern libertarianislll is exalluned to see why it has not fulfilled its potential. A lllust read for anyone who takes libertarianislll seriously. Also available:a new special issue devoted to F. A. Hayek.

Single issues.$10. I-year (4-issue) subscriptions: $29 U.S., $35 foreign, $15 students with copy ofID; add $15 for foreign air lllail. Check/lll.o.lVisa or MC no. and expo date to CRITICAL REVIEW, P.O. Box 10, Dept. 308L, Newtown, CT 0647°; fax (203) 270-8105; enlail info@criticalreview.colll; www.sevenbridgespress.colll The Pursuit of Happiness An Open Letter to the California Legislature by Charles W. Baird A s a student of public choice theory, I understand why you support SB 1241, a mandatory agency-shop bill for California State University (CSU) faculty. After all, in the words of Ambrose Bierce, "politics is a strife of interests masquerading as a contest of principles." The California Faculty Associa tion (CFA) supports you in the political mar ketplace, so it is quite natural for you to give them the power to extract more dues money from faculty. If they have more dues money, they can give more to you. I imagine from your perspective this is a virtuous circle.