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J. EDWIN MALONE, Fertig’s “ Prosperity Through Freedom ” - Ralph Raico, New Individualist Review 
New Individualist Review, editor-in-chief Ralph Raico, introduction by Milton Friedman (Indianapolis: Liberty Fund, 1981).
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Fertig’s “Prosperity Through Freedom”1
FOR SOME TIME the average reader in this country has been inundated with the semi-mystical economics of the New Liberals, the authors ranging from such men as Galbraith and Schlesinger to the small-town literati writing in the Sunday supplements. They defend, and the next minute attack, individual freedom with all the aplomb of consistent thinkers. While there are several scholarly books which present detailed analyses of the Statists’ programs, works of the quality and simplicity of, for example, Hazlitt’s Economics in One Lesson are rare. Lawrence Fertig, nationally syndicated columnist, has made a worthwhile contribution to this field with his recently published Prosperity Through Freedom, a work one could honestly recommend, although it leaves something to be desired as an argument for conservatism. The book ignores what may be an important motivation of our predominantly welfare-oriented public, and a few of the arguments are not as convincing as they might have been had the author risked being more sophisticated in his argumentative style. Mr. Fertig has, perhaps, underestimated both the strength of the public’s fear of capitalism’s so-called “plague”—depressions—and the public’s requirement that unpopular opinions be presented in a more systematic manner.
Private enterprise must be preserved, Mr. Fertig begins, because it achieves those goals which are generally accepted as the ends of a political society; it guarantees human freedom, it provides the most efficient economic system, and it responds to the self-expression of every individual. In view of the brevity and level of analysis of this work, the author is surprisingly successful in showing that welfare statism and socialism consistently fail to accomplish any one of these goals.
There is an outstanding number of widely-accepted illusions in this country about the success of European and Asian experiments with socialist economics, and the author carefully examines the most important of these.
Although Prosperity through Freedom is presented in the form of a series of essays covering a great multitude of topics, it is essentially an elaboration of four important contentions introduced in the first chapter. The first of these is that, “. . . today socialism stands repudiated by leading Socialists of the Western world . . . [i.e., the] doctrines formulated by Karl Marx which were at the apex of [their] popularity only a decade ago, are now dead.”
Mr. Fertig clearly shows that there is an increasing awareness on the Left of the dangers of concentrating economic power in the hands of government and of the impossibility of reconciling government domination of large industries and the maintainance of a free market. Here he compares the development of West Germany and Great Britain at the end of World War II. It is well known that the British Labor Party, then in control, renounced the doctrine of nationalization of major industries subsequent to their abortive experiment. But in Germany things turned out differently. The United States sent an advisory commission with instructions to help the Germans revamp their economy. According to Mr. Fertig, a U. S. government document, not declassified until 1961, states, in brief, that the committee prescribed inflation. The Economics Minister of Germany, Ludwig Erhard, threatened to resign if this policy were adopted. The German government supported Erhard and the commission left, probably shaking their heads in anticipation of the ruin to come. Interestingly enough, one member of the committee was Walter W. Heller who now heads President Kennedy’s Council of Economic Advisers.
Most revealing is Mr. Fertig’s contention that we are being urged to embark on a dangerous course of radically altering our economic system to meet the Soviet surge of growth. This, of course, becomes one more reason for increased government interference in the market. But, the author points out, no one has yet been able to prove either that our present growth rate would not be insufficient if the government would cease its interventionist policies, or that Soviet claims concerning their own growth rate are true. He shows, in fact, that present government policy is the real villain in hindering America’s economic growth, that several Soviet economic projects have admittedly been rather ludicrous flops, and, by the admission of a leading Soviet economist, the widely accepted growth-rate figures in the Soviet Union are a myth.
The liberals seem to have a special aptitude for piling false premise upon false premise, thereby deriving a maze of unrealistic conclusions. We are told that the Soviet system is the more dynamic, although this is clearly not the case. Next, the liberals say that underdeveloped countries are more interested in food than freedom, and are, therefore, naturally inclined to ally themselves with the more dynamic economic system. In conclusion, they claim, the only way we can compete with the Soviets for popularity is to buy neutrals off. After examining instances in which the “spend-to-defeat communism” program has been attempted, the author contends that even if such a program could be maintained, it could not succeed. He concludes, “You do not kill communism by raising standards and you need not necessarily get it where the standard of living is very low. Communism flourishes where there is no strong opposing ideal to offset it.”
Finally, the author examines the argument that the welfare of the people can only be achieved and maintained by increased government spending. He finds that this is a conception not only based on false premisses, but, moreover, a very dangerous one for the economic and political future of the nation:
Who provides the countless improved conveniences of life—from automobiles and wonder drugs to electric dishwashers and frozen foods? Who provides the means by which people get more education, more medical care, more opportunity for expressing themselves and making progress in life according to their own lights? Plainly, it is business and professional organizations and the people who work in them who advance everybody’s welfare and give us the remarkable kind of life which exists in this country. The government has had little to do with this throughout our national history.
Government, states Mr. Fertig, already spends a third of the gross national product and is apparently planning to spend more. It is precisely this that stifles investment in industry and thereby prevents an increase in productivity. Sharing with the government the responsibility for depreciation of the dollar is union labor. But even here, the responsibility is easily traceable to government. It is the legal immunity of labor unions that has allowed them to cut their own throats by totally unrealistic wage demands. Such demands seriously endanger their members’ real wages, not to speak of the incomes of the majority of workers who have chosen not to join a union, and retired persons who perhaps bear the brunt of inflationary union demands. Of course, the fact that these retired people have savings in what is now an inflated currency becomes merely another reason for increased government welfare spending.
Prosperity Through Freedom does not present sophisticated and detailed analyses of these problems. It is directed primarily to the reader who has little more than an introductory knowledge of economics. Mr. Fertig’s arguments are presented in quite readable style, often citing actual examples to contradict the beliefs of the New Liberals. The drawback to this method of argumentation lies in the fact that it will take only a perceptive reader, not necessarily a sophisticated economist, to notice that the author’s heavy reliance on example isn’t really conclusive. Only detailed and logical analysis of these problems can successfully refute the New Deal philosophy. Well chosen examples, by themselves, can be, and often are, explained away by claiming that they are merely exceptions to the rule.
Only once does the author make what appears to be a mistake common to conservative critics. He is perfectly justified in his criticism of the strong Keynesian bias in college economics courses. But he extends his argument by saying that teachers should be “subjective” in pointing out the advantages of the free enterprise system—i.e., college courses should be biased in favor of the conservative position. Why conservatives who are convinced that the facts clearly justify capitalism still hesitate to approve an objective presentation of those facts in the classroom is something of a mystery to the reviewer.
More important, Lawrence Fertig fails to come to grips with what may well be the central issue. It is probably the case that most people are content to allow the government to play a dominant role in the economy because of their belief that the free-market system is inherently plagued with periodic depressions. Although realizing the importance of this view, he offers no argument against it. In failing to do so, I believe that he has done a serious disservice to the purpose of the book.
In short, while Prosperity Through Freedom will win few converts to laissez faire, it will at least demonstrate to our unaware public the practical dangers to individual liberty and well-being of an increasingly large and dominant government.
[1 ] A review of Lawrence Fertig, Prosperity Through Freedom (Chicago: Regnery, 1961).
[* ] J. Edwin Malone is an undergraduate majoring in the history of ideas at the University of Chicago. He has recently joined New Individualist Review as an Editorial Assistant.