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Reply to Mr. Rusher:

IT MAY BE symptomatic of the general concern of conservatives with consistent principles that Mr. Rusher and I continue to dispute various points on the periphery of a central core of agreement. Were we modern-liberals, we could bed down together in the spacious accommodations of complete pragmatism, perhaps even co-authoring a book on the danger to society of “true believers.”

I agree with Mr. Rusher that the key to my thesis is the almost-fact that Senator Goldwater was doomed to lose, right from the start. He was running as a candidate of one of the two major political parties in the country, and the function of a political party at election time is to win the election—not to educate the electorate. A party can win only by offering a candidate and by taking a position near the center of the normal distribution curve of public philosophy; only by offering what, if not an echo, is at least only a semi-choice. If this be true, then the only way a real change can be made in the policies of the country is by moving this “locus of possible choice” to the left or to the right. What the modern-liberals have succeeded in doing is to move this locus significantly to the left. What we must do is move it back to the right.

Is there no role for political action then? Yes, but it is not the central role, which belongs to education in its broadest sense. Political action in local areas (including whole states) where the locus of possible choice is already to the right can be successful—witness the number of conservative voices in the houses of Congress in recent decades. In fact, one of the tragedies of the Goldwater candidacy was that his crushing defeat carried many of these men into at least temporary oblivion as well. As Congressmen or Senators they were in a position to educate the electorate; now the task is more difficult.

If a political party happens by chance to select a candidate not from the center, it will be forced to remake his image so that he appears to be so—and with this remaking goes most of the chance for the candidacy of a Goldwater to be educational. While the last campaign may have trained some conservatives in political action, it did not educate the public to conservatism, nor even sharpen the issues between conservatism and modern, social democratic liberalism. In fact, these issues were hardly debated. For Goldwater to have really taken his stand on these issues would have been immediate political suicide. Thus he was forced to make concessions that will not help conservatives in their long-run battle for men’s minds. For example, when I now criticize social security, I am told that “even Barry Goldwater wasn’t that reactionary.”

I come out right where I did before: The candidacy of Barry Goldwater was not helpful to the chances in the long-run of moving America in the direction of individualism and limited government.

—BENJAMIN A. ROGGE2

The View from London Bridge

STEPHEN J. TONSOR*

The Catholic Church and Nazi Germany by Guenter Lewy. New York, McGraw-Hill, 1964. 464 p. $7.50.

IN OCTOBER 1840, Thomas Babington Macaulay, Whig-Protestant and the most widely-read and influential English historian of the nineteenth century, reviewed Leopold von Ranke’s The Ecclesiastical and Political History of the Popes of Rome, during the Sixteenth and Seventeenth Centuries. In Macaulay’s time Roman Catholicism, after two centuries of decline which culminated in exile and imprisonment for Pius VII by Napoleon, was demonstrating a vitality and dynamism which enabled it to threaten both Protestantism and liberalism. Macaulay and Ranke explored and expanded upon the sins of Rome, but both recognized and were puzzled by her permanence. In a famous passage from Macaulay’s review of 1840 he observed:

Nor do we see any sign that the term of her long dominion is approaching. She saw the commencement of all the governments and all the ecclesiastical establishments that now exist in the world; and we feel no assurance that she is not destined to see the end of them all. She was great and respected before the Saxon had set foot on Britain, before the Frank had passed the Rhine, when Grecian eloquence still flourished at Antioch, when idols were still worshipped in the temple of Mecca. And she may still exist in undiminished vigour when some traveller from New Zealand shall, in the midst of a vast solitude, take his stand on a broken arch of London Bridge to sketch the ruins of St. Paul’s.1

Now, a century later, Guenter Lewy in his recent book has rediscovered the Scarlet Lady and, while most of the secular and religious press of the United States is filled with the spirit of ecumenism and the excitement of Vatican II, has indicted her once more on the grounds of immorality and institutional opportunism. His study is fascinating and complex both because of the problems which it raises and the motives which lie behind its charges. Its tone of ill-concealed hostility and its unnerving assumption of moral superiority are matched only by the thoroughness of its documentation and the clarity of its analysis. Mr. Lewy clearly possesses what Justice Holmes described as an “instinct for the jugular.”

There is a certain naive charm in those historians who discover, with an intensity of moral indignation which nearly lifts them above the moral insensitivity and the common fallibility of mankind, that Popes sin, that prelates mistake institutional advantage for the will of God, that even good men, indeed saints, are not much better than the average run of their fellow men. They somehow forget that moral grandeur is not the hallmark of fallen man; that Moses doubted, that David murdered and fornicated, that Solomon as all his people before and after him, turned away from Jehovah to whore after false Gods and to live in injustice and iniquity; that Peter, reckoned by Catholics as the first pope, denied Jesus three times when Jesus’ hour of passion had come; that Judas among the chosen twelve betrayed; that mistaken Paul assisted at the martyrdom of Stephen. Those who stand at some distance from Holy Scripture and the common experience of mankind are always surprised at the history of Christianity; forgetting somehow that we are formed of the dust of the earth. Perhaps the error lies in a generous overestimation of the moral resources of human nature rather than a deeper commitment to morality. This emphasis upon perfectability and innate goodness is a common characteristic of recent Protestantism, of Whig politics, and of liberal humanism. The view, however, from London Bridge leaves few illusions and holds few surprises. The Old and New Testaments should be required reading for graduate students in history, not because they are good history, nor because they expound the basic religious attitudes and values out of which our society has developed, but because they give us such a long, uninterrupted, and candid view of the nature and possibilities of this creature, man.

AT THE WAR’S END IN 1945 a myth seemed in the process of crystalizing. As with other myths the myth of the opposition of the Catholic Church to National Socialism had its roots in reality. From the outset there had been tension and open hostility between Catholicism and National Socialism; but the myth and the world ignored those wide areas of agreement and open cooperation between National Socialism and German Catholicism, and chose to overlook the curious ambivalence and friendly neutrality so often exhibited between the Holy See and the Nazi State. Only history was capable of pointing the finger of guilt and disestablishing a myth which comforted both the Roman Church and the new Germany.

The truth, when it is finally established, will be far more interesting than the myth and far more consistent with past history and with our experience of human behavior. Yet the truth is not easily come by and there is reason to suspect that the truth in all its ramifications is still and will long be incompletely known. There is a great deal more evidence in the Vatican archives which the Church owes the world. Its effects upon world opinion cannot be more damaging than the silence which has cloaked this important aspect of contemporary history; but when the evidence is all in, there is reason to suspect that an important aspect of the truth will be a sympathetic analysis and understanding of motive. It is precisely this understanding of motive which is absent in both Rolf Hochhuth’s play, The Deputy, and Guenter Lewy’s The Catholic Church and Nazi Germany. Lewy gives us, in his study, with great care, detail, and accuracy, the facts. But in history, aside from the know-nothing histories of the positivists, the facts are always less than the truth.

As we also might suspect, the facts are far more damning than the truth. There is the fact that German Catholicism was hostile to the Weimar Republic; that it marshalled its great power against the ideological and social pluralism, the liberalism, the democracy, the secular tone of Weimar Germany. The Church’s vision was dominated by the ideal of an authoritarian state whose object was the promotion of virtue and true religion. The libertarian secularism of the Weimar Republic could only be considered by the Church as social disease, the work of Jews, liberals, Freemasons, and Bolsheviks.

There was, moreover, the fact to reckon with that German Catholics were enthusiastic nationalists who, since the days of the Kulturkampf, had been stung by the charge that Catholicism was incompatible with German patriotism. In an effort to prove themselves both good Catholics and good Germans they displayed an understandable but excessive devotion to “national rebirth,” militarization, and the revision of the Versailles treaty. Since this “national rebirth” was obviously being achieved under the leadership of the National Socialists, Catholics in large numbers joined the party and enthusiastically supported the Nazi program. As Guenter Lewy points out, such actions were not limited to the secularized laity. Numerous priests and bishops supported National Socialism out of patriotic motivation.

THE CONCLUSION IS plain. Traditional German and Catholic anti-semitism played an important role in strengthening the accommodation between National Socialism and Catholicism. It is too easy to see anti-semitism as George Mosse does in his recent study, The Crisis of German Ideology,2 as the product of volkish ideas and a social response to the crisis of the emergence of German society into modernity. Anti-semitism is much more complicated than the partial explanation which Mosse proposes. It is clear that its roots were to a substantial degree cultural and religious and reach back into German and Christian history to a point well before the beginning of the nineteenth century. It was easy for German Catholics, consequently, to be at best insensitive to the fate of the Jews under National Socialism, though most of them did not support the morally monstrous “final solution.”

There was, too, the very human effort on the part of the Church to derive some advantage from an accommodation with the dynamic National Socialist movement. When Rome was captured by the Allies in World War II, a cynic remarked of the behavior of the Roman citizenry in welcoming the Allied armies, “Everybody loves a winner, but the Romans love them just a little more.” There is a strong (if we are to judge from the historical record) parallel between Rome’s citizens and the clergy of the Roman Church. It is all too easy to see the hand of Providence supporting the successful conqueror and the triumphant tyrant. A belief in Providential history leads almost inevitably to the assumption that “whatever is, is right.”

Additionally there is a confidence in the Church, born of the divine promise and two thousand years of experience, that the Church can outlive its enemies, profit from their concessions, and eventually assist in their undoing. But in accommodating to National Socialism through the Concordat of July 1933, the Church put its stamp of approval upon a criminal regime and opened the way for a recognition of that regime within Germany and abroad. The cooperation of the Church went well beyond the Concordat. The Church played an important role in the Saar referendum, in the remilitarization of the Rhineland, in the Austrian Anschluss, in the German war effort, 1939-1945, and in the “crusade against Soviet Bolshevism.” The Catholic press in Germany was frequently little more than an extension of Goebbels’ propaganda ministry and German bishops and priests often spoke the party Chinese of the Nazis.

Ultimately the worst sins of the German Catholic Church and of the Papacy were those of omission; the failure to speak out against racism, persecution, the violation of the peace, murder on a scale hitherto unknown in human history, in morally unambigious terms. To be sure, there were infrequent statements from the German bishops and the Papacy, but they were couched in the muted and esoteric language of encyclical-Latin. If Jesus Christ had spoken this language he might have been appointed to the Sanhedrin.

THESE ARE THE “FACTS.” There are explanations possible which are more sympathetic than those adduced by Guenter Lewy. George O. Kent’s article, “Pope Pius XII and Germany: Some Aspects of German-Vatican Relations, 1933-1943,”3 is, at certain points, both more exact and more charitable than Lewy’s account. Klaus Epstein’s discussion of the problem, entitled “The Pope, the Church and the Nazis,”4 is the sanest, deftest, and most knowledgable review of the whole matter. Still, if the worst possible construction is put on the “facts,” Pius XII and his fellow bishops emerge as figures of singular moral grandeur when compared with their fellow bishops of earlier date. Given the moral condition of the world in the thirties and forties, that any objective moral standards were maintained (as indeed they were) was a signal victory. That these standards were not forcefully voiced or adequately implemented is only another in the long series of moral failures which serve to remind Catholics of the human dimension of their Church. Nor is this simply an easy way of shunting moral responsibility. “Woe to the world because of scandals! For it must needs be that scandals come, but woe to the man through whom scandal does come.” (Matt. 18:7)

If a more charitable construction is placed on the events of 1933-1945, it is frequently understandable that the protests were necessarily weak and ineffectual Pius XII was frequently forced to weigh saving Catholic souls as against saving Catholic and Jewish lives. His choice was wholly in accord with that which he thought the more important obligation. One is tempted to reply to Lewy’s condemnation of the German Church for having failed to foster an active resistance to Hitlerism by asking where, during the period of 1933-1945, the Jewish resistance was? Is it not possible that those who suffer indignity and persecution without resisting also do God’s work? One may question the reasonableness of such inaction, it is difficult to question the motive.

WHATEVER MAY BE the “ultimate truth,” Catholicism need not fear a temporarily “bad press.” Religion is rooted in responses which are not, fortunately, contingent upon the moral probity of its communicants or its leaders. The more interesting and fundamental questions, however, concern the attitude of the Catholic Church which made the initial enthusiasm of German Catholics for National Socialism possible and, secondly, the danger which this set of ideas still poses for the Catholic Church. In terms of these ultimate questions Guenter Lewy’s final chapter “Catholic Political Ideology: The Unity of Theory and Practice” is perhaps the most interesting and important part of his book.

Since St. Paul, the political theory of Catholicism has been unsatisfactory. It has been unsatisfactory largely because the Church at first saw itself and mankind as pilgrims and strangers on earth. The time between Christ’s ascension and his second coming was thought to be short, and life in the interim was provisional. Political institutions were not important to the Christian who had his treasure elsewhere. As eschatological expectation waned and the institutional Church solidified its forms and achieved victory in the struggle with paganism, some accommodation between the supernatural order which the Church represented and the secular state was necessary. Eusebius viewed the Empire of Constantine the Great as the embodiment of God’s kingdom on earth, and Constantine was elevated, at his death, to sainthood (Catholic churchmen have been making the same error as Eusebius from that day to this.) As the centuries passed Church and State were ever more completely identified. In the Christian East the identification was complete and the State emerged as the dominant partner in this strange and uncertain relationship. In the Christian West the Church with difficulty maintained its independence from the State, and the struggle of the medieval papacy to establish a theocracy left a permanent impress upon Catholic political theory.

In its growing recognition of permanence and its accommodation to temporal society, the Church identified itself ever more closely with the authoritarian culture of the medieval era. It grew progressively more difficult to distinguish the boundaries of the realms of nature and of grace as the so-called “medieval synthesis” developed. So close, indeed, was this identification between the Church and its cultural context that when, as was inevitably the case, medieval society began its long process of transition and dissolution, the Church failed to adjust its institutional structure or its political theory to the new culture which was emerging. It continued down to the last decade to maintain the necessity for a close and intimate association between Church and State and an authoritarian social order. Its views were, and in many instances remain, anti-democratic, anti-pluralistic, anti-liberal, anti-capitalistic. It is for this reason that the Church opposed liberal democratic political and social forces in the reactionary first half of the nineteenth century, when the restoration Church dreamed of a medieval revival and an alliance between throne and altar.

It is for this reason that neo-romantic Papal social theory at the turn of the century created the grotesque intellectual charade of “corporatism,” grounded, as it was, upon an imperfect understanding of medieval society. It is true, as Lewy points out, that Pope Leo XIII revolutionized Catholic political theory by divorcing it from emphatically teaching the necessity of monarchy as a state form for the welfare of the Church. Yet while other state forms were recognized as licit, the presumption of correctness was clearly in favor of authoritarianism. This is the basic reason that the Church welcomed the dissolution of liberal democratic governments in Italy, Germany, and Spain in the 1920’s and 1930’s. Nor need we point to Europe in quest of evidence. One need only recall the rasping voice of Father Charles Coughlin, leaf through an old file of Social Justice, or study the inconography of the Shrine of the Little Flower in Royal Oak to understand the full implications of the so-called “social teachings” of the Church in the 1930’s. In this atmosphere the fact that Father Coughlin circulated the antisemitic Protocols of the Elders of Zion was no accident. It should be remembered that the Church resisted the anti-Christian aspects of National Socialism. Its guilt lay in the fact that it espoused a political phantasm which bore no relationship to the economic, cultural, or religious reality of modernity. Finally, there is no assurance at the present time that Catholic political theory has broken with the traditions of a thousand years.

Implicit in the difficulty is the fact that Catholic theologians have confused the temporal with the divine order, have confused man’s culture, which is man’s creation, with God’s revelation. When man’s culture, which always is imperfect, erring, and inextricably bound up with man’s creaturely imperfection and sinfulness, is elevated to a position of absolute validity (as it is in so much of contemporary Catholic social thought), the Church invites disaster. The institutions of man are neither eternally valid nor unambigiously moral. Even the most perfect of institutions, the Church, bears eloquent testimony to the imperfections inherent in man’s condition. It is for this reason that the Church dare not attach itself to a particular social or political order. The attachment to the older authoritarian order of Western society was the source of the failure of the Church to meet squarely the challenge of totalitarianism.

REVIEW:

Passion and Social Constraint by Ernest van den Haag. New York, Stein and Day, 1963. 368 p. $6.95.

AMONG CONTEMPORARY American sociologists, Ernest van den Haag is perhaps the most creative and the most independent; the unique character of his work is doubtless owing, at least in part, to a most catholic upbringing. Born in Holland of Dutch parents, van den Haag was reared in Germany and later studied in France, Italy, and America. He remained for ten years in Italy, spending part of this time at the University of Bologna. After later receiving a doctorate in economics from New York University, he embarked on a career in psychoanalysis, and although he is a practicing analyst, van den Haag is best known today for his contributions to sociology.

This broad and varied background is reflected in a distinctive contribution to American social science. Whereas the overwhelming majority of his colleagues are modern-liberal in viewpoint, van den Haag is an avowed conservative. Whereas modern psychoanalytic theory has gradually blended orthodox Freudianism into the ego-oriented psychology of the neo-Freudians and their related cohorts, van den Haag holds firmly to Freud. In an age when form and order are held by many to be no longer applicable to art, literature, or even to society, when a slovenly relativism is the favored approach to life and art, van den Haag advocates an old-fashioned reliance on moral and aesthetic “truths.” He calls a spade a spade, and vulgarity, vulgarity. Popular Western culture is vulgar, he says, and for him that vulgarity is not redeemed by the material it offers for his acerb humor.

Both van den Haag’s background and his philosophical position are reflected in Passion and Social Constraint. Opinion and fact are carefully delineated and distinguished, however; a precision not often shown by van den Haag’s modern-liberal colleagues.

The opening section of the book deals with personality, which is handled from an orthodox Freudian point of view. Van den Haag presents the Freudian developmental position clearly, carefully limiting the number of “technical” terms he uses, concisely defining those he does employ, and thus managing to be easy to read without diluting what he has to talk about. In presenting evidence for and against his interpretations, he does not engage in the currently all-too-common serpentine manipulations of logic whereby a particularly embarrassing set of facts is somehow made to lead to a conclusion directly opposed to that obviously called for. In those very few instances when the facts do not seem to justify van den Haag’s interpretation, he quite candidly resorts to a salvation-is-by-faith-and-faith-alone appeal, and invokes Freud to settle the dispute—this touch of dogmatism at least provides a consistent framework for the analysis and interpretation of the existing evidence.

The most controversial aspects of the book derive from van den Haag’s insistence on the inherent “limitations of man’s nature and on the tragic nature of human destiny.” The essence of this strictly Freudian position is that biology sets limits on man’s development; culture determines only to what extent his biological potential may be fulfilled. Social change cannot eradicate basic differences between men. Hence social change will never accomplish all that its egalitarian advocates hope for.

THE SECOND SECTION of the book, that dealing with society, blends the predominantly psychoanalytic approach of the personality section with van den Haag’s conservative approach to sociology. He treats such standard sociological topics as group membership, tensions and rivalry, power and authority, cultural constraints, class and caste, but in a refreshingly original manner. Of particular interest here is the material dealing with prejudice and the Supreme Court’s desegregation decisions. Van den Haag argues that it is impossible to prove “that prejudice is clinically injurious.” If prejudice cannot be shown to be clinically injurious, then no damage has been wrought of which a court may properly take judicial notice. Van den Haag discusses the famous study of Dr. Kenneth Clark, which was cited as evidence before the Court and which declared that Negro children in a segregated school suffered psychological injury. Van den Haag points out that the same tests administered to Northern Negro children in integrated schools showed even greater manifestation of the behavior interpreted by Clark as the outcome of injurious, that is, prejudiced treatment. On the basis of Clark’s logic these findings should lead to the conclusion that desegregation is psychologically more injurious; and therefore that segregation should prevail as a means of protecting Negro children from psychological harm.

Van den Haag’s distaste for what he considers a distorted egalitarianism becomes most apparent in Part III of this book. Interestingly, he, like his modern-liberal counterparts, is vitriolic in denouncing the popular culture of today, but where they blame this deterioration on the corrupting influence of advertising and other mass media, he feels that advertising does not create taste, but merely reflects the abysmally low level of public taste. Advertising has pandered to the populace, but advertising has not created its vulgarity. The responsibility for that lies with the same leveling influences which have lowered the purchasing power of those cultivated persons who have “individual taste” while raising the purchasing power of the masses so fast that they have not been able to acquire, via education and acculturation, a respectable level of personal taste. The free market has operated to translate tastes into economic demand under these circumstances, and that demand has evoked the corresponding supply.

Whatever one’s opinions on the individual and social issues discussed in this highly readable book, one cannot fail to be impressed by the clarity of van den Haag’s exposition. Contemporary sociological jargon is little in evidence here Van den Haag also manages to make seemingly dull topics fascinating by introducing historical examples (Frederick II’s experiment to determine the natural speech of children—their nurses were instructed not to talk to them, but instead of speaking any language, all the children died). This interesting synthesis of psychoanalysis and sociology presents a truly novel discussion of contemporary mass society in a book which the educated layman can enjoy, and which the social scientist should respect.

—RICHARD McCONCHIE1

NEW BOOKS AND ARTICLES

THE FOLLOWING IS A SELECT LIST OF BOOKS AND ARTICLES WHICH, IN THE OPINION OF THE EDITORS, MAY BE OF INTEREST TO OUR READERS.

Milton Friedman and Anna J. Schwartz, The Great Contraction. Princeton. N. J., Princeton University Press, 1965. $1.95. A paperback reprint of those chapters in their monumental Monetary History of the United States, 1867-1960 (Princeton: Princeton Univ. Press, 1963) pertaining directly to the years of the Great Depression. Prof. Friedman remarks in the preface that the idea of a smaller reprint was given him by a student, with the idea in mind of bringing the work within reach of undergraduates and others unable to avail themselves of the complete work.
Vera Lutz, French Planning. Washington, D. C., American Enterprise Institute, 1965. An analysis and criticism of the “soft” economic planning pursued by France in recent years. This, and other worthwhile and scholarly publications, are available from the American Enterprise Institute at little cost. Address: 1200 Seventeenth Street N.W., Washington, D.C. 20036.
James J. Martin, American Liberalism and World Politics, 1931-1941. New York, Devin-Adair, 1963. 2 vols. $22.50. An extremely detailed exposition, largely from the pages of the Nation and The New Republic, of the shift in American left-wing circles from a position generally pacifistic and critical of the Versailles settlement, to one demanding a crusade against the Axis Powers. The New Republic and Nation’s profuse apologiae for Stalin’s forceful measures of internal policing in Russia during this period provide some amusement.
Richard Perlman, Wage Determination: Market or Power Forces. Boston, D.C. Heath and Co., 1965. $1.50. A timely paperback collection directed to the controversy of “countervailing power” or supply and demand in the labor market. Contributor Fritz Machlup proposes that the entrepreneur does equate marginal productivity with marginal costs in hiring simply through his feel of the situation.
Prof. P. T. Bauer of the London School of Economics, a specialist in the field of underdeveloped countries, criticizes in the June 29, 1965, issue of National Review (“Capitalism and African Economic Development”) the ideas on this subject of the in-vogue Swedish economist, Gunner Myrdal. Myrdal, Bauer finds, like so many other writers in this field, “takes the case for comprehensive [government] planning for granted without argument.” Yet, “it is by no means obvious why an economy should progress more rapidly, if what is produced is determined largely by the government, rather than by individual consumers and producers.” Prof. Bauer is, along with B. S. Yamey, author of The Economics of Underdeveloped Countries, an excellent introduction to the field.
Robert L. Cunningham, Professor of Philosophy at the University of San Francisco and well known to NIR readers, dissects the basic claims of the Triple Revolution group on automation in the current (Summer 1965) issue of Modern Age. Far from ranking with the works of Copernicus and Galileo, the ideas of this highly-publicized organization, Cunningham demonstrates, consist largely of a few shopworn economic fallacies, with an admixture of odd linguistic usage.
Edwin L. Dale, Jr., “The Big Gun on Poverty,” The New Republic, August 7, 1965. A writer on economic affairs for The New York Times points out the far greater efficacy in combatting poverty of greater economic growth over particular governmental programs. “Jobs have increased rapidly in the very places where the great bogey, automation, was supposed to cause trouble. . . . By the test of income, 450,000 families moved out of the poverty class last year, almost none of them touched by the poverty program. . . . The main conclusion is that an increase of one percentage point in the national rate of economic growth solves far more problems of human misery, insofar as they stem from unemployment or low income, than all the retraining programs, union resistance to automation, poverty programs, distressed-areas programs and the rest put together.”
Theodore Draper, “The Roots of the Dominican Crisis,” The New Leader, May 24, 1965. An interesting, objective analysis of the situation in the Dominican Republic following the ouster of Trujillo. Draper criticizes especially the incredibly incompetent handling of Latin American relations by the United States in general, and the Johnson Administration in particular. “In effect, the decision against Bosch was a decision against democracy and decency as the bulwarks against Communism.”
Harry Kalvin, Jr., “The New York Times Case,” 1964 Supreme Court Review. Chicago, University of Chicago Press, 1964. Prof. Kalvin of the University of Chicago Law School discusses the content and the larger significance of the Supreme Court’s actions in striking down the libel ruling of a lower court: “In brief compass, my thesis is that the Court, compelled by the political realities of the case to decide it in favor of the Times, yet equally compelled to seek high ground in justifying its result, wrote an opinion which may prove to be the best and most important it has ever produced in the realm of freedom of speech. . . . analysis of free speech issues should hereafter begin with the significant issue of seditious libel and defamation of government by its critics rather than with the sterile example of a man falsely yelling fire in a crowded theater.” The implications of the Times case extend far beyond the usual notions of “democratic open discussion”: “If [a society] makes seditious libel an offense, it is not a free society no matter what its other characteristics.”
Spencer MacCallum, “Social Nature of Ownership,” Modern Age, Winter 1964-65. Mr. MacCallum discusses the sociological role of property in human society and traces its functions logically prior to the State from the point of view of anthropology, and presents it as a workable alternative to state action. His discussion represents a serious and valuable contribution to classical liberal thinking in areas where the point is usually granted to the authoritarian position a priori.
An interesting article appeared in the July 24, 1965, issue of The New Republic: “Concern About LBJ,” by John Osborne. Among the sources of concern cited is the curious tone struck by Presidential Aide Jack Valenti, who recently stated, in a speech in Boston: “The Presidency is a mystical body, constructed by the Constitution, but whose architecture was conceived in the inner crannies of a people’s soul.” Valenti also referred, according to Osborne, to President Johnson as “a father to lead us,” and claimed that the President was fortified by a “Godly osmosis” [sic].
An excellent new journal is called to the attention of the libertarian reader: Left and Right, among whose editors appear Dr. Murray N. Rothbard and Leonard Liggio, both NIR contributors. Left and Right emphasizes an anti-Cold War position, from a libertarian point of view. Subscriptions to this journal, published three times yearly, are available from: Left and Right, Box 395, Cathedral Station, New York, N.Y. 10025, for $2.50 per year. Another interesting publication recently brought to our attention is Innovator, a monthly in the newsletter format, featuring “applications, experiments and advanced developments of liberty.” Subscriptions are $2.00 per year. Write: Innovator, P.O. Box 34718, Los Angeles, Calif.

Coming This Fall From Regnery

LIFE WITHOUT PREJUDICE and other Essays
by Richard Weaver

Selections of his most important and mature essays.

$3.50

NEW GATEWAY EDITIONS

THE INVISIBLE HAND
by Adrian Klaasen, editor

Essays in classical economics by such leading economists as George Stigler, Ludwig von Mises, Friedrich Hayek, Allen Wallis and Milton Friedman.

$2.45

SELF CONDEMNED
by Wyndham Lewis

This is a novel of great style and force about an Englishman who exiled himself to Canada during World War II Considered by T. S. Eliot to be Lewis’ most significant work.

$1.95

FADS AND FOIBLES IN MODERN SOCIOLOGY
by Pitirim A. Sorokin

One of the leading contemporary sociologists exposes the non-scientific and half-scientific elements in modern sociology and the related disciplines. Dr. Sorokin searingly debunks the use of obtuse jargon and sham-scientific slang, testomania—the overuse of intelligence, projection, ink-blot and thematic apperception tests—the “Grand Cult of ‘social physics’ and ‘mental mechanics’ ” and the obsolescent philosophy too widely adhered to by social science.

$2.45

CREATION AND DISCOVERY
by Eliseo Vivas

Essays in criticism and aesthetics. This book includes analyses and critiques of Dostoyevsky, Kafka, Dreiser, Henry and William James, discussions of the major aesthetic theories and problems of aesthetics.

$2.45

In August 1963 We Promised:

“NEW INDIVIDUALIST REVIEW will NOT publish articles by James Baldwin, Ralph McGill, Walter Lippmann, J. William Fulbright, Arthur Schlesinger, Jr., Gore Vidal, Jean-Paul Sartre, or Howard N’Bongo-Bongo, Prime Minister of Anthropophagia;

“NIR will not tell you how affluent you are, or urge you to write your Congressman to triple your income-tax, so that the country can eliminate squalor in the public sector;

“NIR will not attempt to distinguish between in-itself and for-itself in the Theater of the Absurd, or compare Bertholt Brecht favorably with Shakespeare;

“NIR will not claim that Portuguese rule in Angola is the single greatest threat to world peace today;

“NIR will not assert that American businessmen are morally inferior to the Mau Mau.”

WE KEPT THIS PROMISE. This alone would be worth the price of a subscription, even if we sent you 60 pages of blank paper every three months. But we do more—we send you a magazine full of thoughtful and thought-provoking discussions of individualist ideas and proposals, by some of the leading classical liberal writers of today and tomorrow—articles like those in the issue you’ve just read.

HOW CAN YOU POSSIBLY LIVE WITHOUT NIR? SUBSCRIBE TODAY!

ESSAYS IN THE HISTORY OF ECONOMICS
By GEORGE J. STIGLER

One of the most distinguished proponents of the “Chicago School” of economics, Professor Stigler has selected from his published writings the essays to be included in this volume. He ranges over such diverse topics as originality in scientific progress, the politics of political economists, the development of utility theory, Ricardian value and distribution, Fabian socialism, perfect competition, marginal productivity theory, and the Giffen paradox. “Professor Stigler writes with a wit that is even more to be cherished than his erudition. Economics would never have been called the dismal science if there had been a nineteenth-century Stigler.”—The Economist.

400 pages $6.95

THE CREATIVE ORGANIZATION
Edited by GARY A. STEINER

“The creative organization in fact prizes and rewards creativity. A management philosophy that stresses creativity as an organizational goal, that encourages and expects it at all levels, will increase the chances of its occurrence. But it is one thing to call for creativity, another to mean it, and still another to reward it adequately and consistently when it occurs.”

The coexistence of the creative organization and the creative temperament was the topic of a recent seminar sponsored by the Graduate School of Business of the University of Chicago. Here are papers presented by social scientists Bernard Berelson, Jerome S. Bruner, and Paul Meehl; educators Ralph W. Tyler and W. Allen Wallis; and executives B. E. Besinger, Peter Peterson, and David Ogilvy, together with lively exchanges of opinion and an “Overview” by Mr. Steiner.

288 pages $5.00

UNIVERSITY OF CHICAGO PRESS

Chicago/London

VOLUME 4, NUMBER 2, WINTER 1966

HERBERT CLARK HOOVER: A RECONSIDERATION

MURRAY N. ROTHBARD

TWELVE THOUGHTS ON INFLATION

W. H. HUTT

CLASSICAL LIBERALISM AND RELIGION

M. STANTON EVANS RALPH RAICO

THE UNEASY CASE FOR STATE EDUCATION

E. G. WEST

A JOURNAL OF CLASSICAL LIBERAL THOUGHT

Winter 1966

75 cents

Vol. 4, No. 2

Herbert Clark Hoover: A Reconsideration
	3	MURRAY N. ROTHBARD
Twelve Thoughts on Inflation
	13	W.H. HUTT
Classical Liberalism and Religion
	19	M. STANTON EVANS RALPH RAICO
Anglican and Gallican Liberty
	32	FRANCIS LIEBER
The Uneasy Case for State Education
	38	E. G. WEST
COMMUNICATION:
South Africa Reconsidered
	50	THOMAS MOLNAR
REVIEW:
Alchian and Allen’s “University Economics”
	53	STANLEY G. LONG
New Books and Articles
	56

Due to unavoidable technical difficulties, we have been forced to omit the Autumn 1965 issue of New Individualist Review. The present Winter 1966 issue follows the Summer 1965 issue as Volume IV, Number 2. Subscriptions will not be affected by this omission; each subscriber will receive four issues for a one-year subscription.

NEW INDIVIDUALIST REVIEW is published quarterly by New Individualist Review, Inc., at Ida Noyes Hall, University of Chicago, Chicago, Illinois 60637. Telephone 312/363-8778.

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Copyright 1966 by New Individualist Review, Inc., Chicago, Illinois. All rights reserved. Republication of less than 200 words may be made without specific permisaion of the publisher, provided NEW INDIVIDUALIST REVIEW is duly credited and two copies of the publication in which such material appears are forwarded to NEW INDIVIDUALIST REVIEW.

EDITORIAL STAFF

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Complaints of the loss of individuality and the lessening of respect for the person and his rights have become a commonplace of our time; they nonetheless point to a cause for genuine concern. NEW INDIVIDUALIST REVIEW, an independent journal associated with no organization or political party, believes that in the realm of politics and economics the system most effectively guaranteeing proper respect for individuality is that which, historically, has gone by the name of classical liberalism; the elements of this system are private property, civil liberties, the rule of law, and, in general, the strictest limits placed on the power of government. It is the purpose of the Review to stimulate and encourage explorations of important problems from a viewpoint characterized by thoughtful concern with individual liberty.

Herbert Clark Hoover: A Reconsideration

MURRAY N. ROTHBARD*

THE AMERICAN PEOPLE have been subjected to a battery of political and historical myths; of these one of the most virulent has been the Hoover Myth. During the Great Depression, the Democrats held Herbert Hoover aloft as the wretched symbol of poverty and iniquity; but with the passing of the Depression, new times and new issues evaporated the old Democratic antagonism. The field was thereby cleared for the Hoover hagiographers, who have rushed in, unopposed (to paraphrase Mencken’s immortal comment on the Woodrow Wilson idolators), to nominate Herbert Clark Hoover for the first vacancy in the Trinity. We have been regaled ad infinitum with the wisdom, the individualism, the sagacity, the lovability, and the glory of Herbert Hoover; and we have countless times been instructed on the horrors of the smear campaign waged against him by Charlie Michelson and the Democratic National Committee during his Administration. Throughout the Right-wing, numberless pilgrimages were made to Hoover’s suite in the Waldorf Towers, and countless Right-wingers have been honored to refer to him as “The Chief.” It is high time to redress the balance.

The hand-wringing over the Michelson smear campaign may be disposed of at the start. Any public official, any politician, must expect to be subject to vigorous attacks, some justified, some not. Every president since Washington has been subjected to such attacks, and thus the public has been kept alert and vigilant to possible error and wrongdoing. Why should Hoover enjoy a special exemption from criticism? It is curious to see the same people who distributed with zeal and relish A Texan Looks at Lyndon bewail the tragedy of Hoover’s ordeal. Despite the repeated harangues of his idolators that Hoover was not a “politician” and should therefore not have been treated as such, Hoover was a politician and cannot be allowed to escape the responsibility for his chosen profession.

THE MYSTERY OF Herbert Hoover begins, not in 1928 or 1932, but in 1919, when he was boomed for the Democratic nomination for the Presidency by such left-wing Democrats as Louis Brandeis, Herbert Croly, Ray Stannard Baker, Colonel Edward Mandell House, and Franklin D. Roosevelt. Yet, less than two years later, the Left-wing of the Republican Party was able to force Hoover on a reluctant Harding as a Secretary of Commerce whose powers had been vastly enlarged. What manner of man was this to be so beloved by both parties? It might be said that Hoover’s greatness or goodness was so evident as to lead to his being courted by both parties; but to the wiser and more skeptical this story is suspiciously familiar. If a hard-core member of the Establishment may be defined as someone who somehow manages to land in a high government post whichever party is in power, Herbert Hoover may be considered to be the first ur-Establishment man of modern American politics.

It must be noted at the outset that any definitive study of Hoover at this point in time is almost impossible, but the blame for this situation must lie largely with Hoover himself. Hoover never released his papers for study by the scholarly public; hence the only information about his career has come from Hoover’s own Memoirs—almost unbearably self-righteous and free from acknowledgment of error, even for political memoirs—and from Hoover’s friends and supporters. As a result, critics have been discouraged from writing about Hoover, and we are left with a flood of worshippers, none of whom acknowledges a single error or flaw in their hero. Franklin D. Roosevelt, at least, had his John T. Flynn; where is Hoover’s?

One significant example will give much of the flavor of the Hoover reminiscences. Hoover’s recent book on Woodrow Wilson in the war and post-war years of World War I is almost as worshipful of Wilson as recent biographies have been of Hoover; or, rather, the book is a series of paeans to Wilson by Hoover, interspersed with paeans to Hoover by Wilson. Virtually the only act of Wilson’s disapproved by Hoover was his famous call for a Democratic Congress in 1918, a call that angered the American public in its repudiation of the Wilsonian Republicans (such as Hoover) who had joined ardently in the war policy. Naturally, Hoover was shocked at this brusque slap at Republicans who had subordinated themselves to Mr. Wilson’s war. How did Hoover react? In his book, he registers his sharp disapproval of the Wilson appeal; and yet, at the time, Hoover not only did not attack the Wilson plea; instead, he publicly rallied to the President’s support, understandably angering Republicans in the process. Hoover states:

Deeply as I believed that this appeal was a mistake and a wholly unwarranted reflection on many good men, . . . I addressed a letter to . . . a Republican friend, in which I supported the President’s appeal for a Congress favorable to him. I did so because I believed that the President’s hand in the Treaty negotiations would be greatly weakened if the election went against him. The publication of this letter created a storm around my head. The Chairman of the Republican National Committee denounced me violently.1

There is no hint of apology, no hint of remorse for Hoover’s act; instead, there is, characteristicaly, only the proud reference to Woodrow Wilson’s praise of Hoover’s deed:

My dear Hoover:

Your letter . . . has touched me very deeply, and I want you to know not only how proud I am to have your endorsement and your backing given in such generous fashion, but also what serious importance I attach to it, for I have learned to value your judgment and have the greatest trust in all your moral reactions. . . .2

And that is all of Hoover’s reference to the matter; for Herbert Clark Hoover, at least, wrapped securely in the mantle of morality and the enthusiasm of Woodrow Wilson, the case is closed.

THE HERBERT HOOVER story begins in 1899, when Hoover, a very young mining engineer and manager, was sent to China by his employers, the London mine consulting firm of Bewick, Moreing and Co. It is fitting that Herbert Hoover launched his career in enterprise, not on the free market, but in the midst of a mercantilistic struggle among claimants for mixed governmental and private property. Moreing had joined forces with a wily operator and recipient of special privilege in China, one Chang Yen Mao, who conveniently held the simultaneous posts of head of the Chinese Bureau of Mines in two provinces, and head of the “private” Chinese Engineering and Mining Company. Hoover became Yang’s deputy in managing the mines in both of Yang’s capacities, public and private. Herbert Hoover emerged from years of competition among numerous foreign powers for the Chinese prize with the first leg up on his mining fortune.

The next years of Hoover’s life, during which he built a multi-million dollar mining fortune, have not been generally detailed, and they are badly in need of scholarly work. Suffice it to say that Hoover’s high qualities as a mining manager were undoubtedly primarily responsible for the amassing of the fortune, and enabled him to strike out on his own as an international mining consultant in 1908.

HOOVER SOON BEGAN TO display the ignorance of economics and predilection for statism that was to mark his public career. In 1904, at the age of thirty, he informed the Transvaal Chamber of Commerce that he had achieved lower mining costs in Australia because labor had been paid higher wages; thus, Hoover had already adopted the egregious fallacy that wage rates are determined by the good or ill will of the employer rather than by the competitive market, and that high wage rates lead to greater efficiency and lower costs rather than the other way round. Four years later, Hoover reiterated these views, and, in his Principles of Mining, went further to embrace the institution of labor unions. Unions, he declaimed, “are normal and proper antidotes for unlimited capitalistic organization. . . . The time when the employer could ride roughshod over his labor is disappearing with the doctrine of ‘laissez faire’ on which it is founded. The sooner the fact is recognized, the better for the employer.”3 He went on to challenge, in a neo-Marxist manner, the orthodox laissez faire view that labor is a “commodity” and that wages are to be governed by laws of supply and demand. It is not surprising that, in 1912, Herbert Hoover enthusiastically supported and voted for Theodore Roosevelt’s Progressive Party, for Hoover had become the very model of an “enlightened” left-wing Republican, a man of the Establishment Superficially, his views might be called “socialistic”; but it would be more precise to term them “mercantilist” or “state capitalist” or “monopoly capitalist,” for Hoover, like his fellow Establishment liberals then and since, was not about to abandon state power to a dictatorship of the proletariat or even to Fabian social workers.4 In the house of statism there are many mansions.

By 1914, Herbert Hoover, having made a substantial fortune in mining, was eager to try his hand at “public service.” The First World War brought him his chance, and it was Hoover’s luck that the opportunities that came his way were such as to lend him that mantle of saintliness and advanced morality which he was always able to wrap around his political activities more snugly than most of his fellows.

When Belgium was occupied in the fall of 1914, a group of American businessmen resident in London and Brussels formed a Commission for the Relief of Belgium, and Hoover agreed to serve as its head. The massive relief effort to Belgium, continuing throughout the war, gained Hoover immense publicity, and “The Chief” and “The Great Engineer” had now become “The Great Humanitarian.” Actually, while it was no doubt admirable that Hoover and the group of wealthy American businessmen serving as his top aides accepted no compensation for their efforts, the operation was in no sense true charity. Neither was it really humanitarian and apolitical, as Hoover and its eulogists maintained.

In the first place, to be truly charity, aid must be voluntary and not compulsory; and yet the overwhelming bulk of contributions to Belgian relief came not from private citizens but from Western governments. Secondly, from the beginning the C.R.B. was tied in with governmental policy, particularly of the supposedly neutral American, and the definitely warring Belgian, governments. On the American side, Hugh Gibson, secretary of the American Legation at Brussels, was one of the main originators of this unusual Commission. Belgian officials were vital leaders of the whole operation, and the notoriously Anglophiliac Walter Hines Page, the American Ambassador to London, was strongly committed to the whole idea.

The curious point about the C.R.B., and one that highlights the spuriousness of its neutrality and divorce from politics, is the question, why Belgium? Why a massive relief program to Belgium (and Northern France), and none anywhere else in war-torn Europe? The evident answer is that the C.R.B. was conceived as an extremely clever device to focus the continuous attention of the American people on the supposedly unique sufferings of Belgium, and thereby to lead people to keep focussing on the allegedly heinous crime of Germany in warring against “poor little Belgium.” The “poor little Belgium” line was the main focal point of the mendacious propaganda of Great Britain, especially in sentimental and poorly-informed America, and it was undoubtedly instrumental in sucking America into perhaps the most senseless and ill-conceived war in which it has ever engaged. Certainly, it was a war with unprecedently bad consequences, for America and for Europe. As Walter Millis has put it:

When the appeals for aid for the starving Belgians began to come in, offering a sudden practical outlet for the overwrought American emotions, the response was immediate—and the Allies found themselves in possession of still another incomparable propaganda weapon. That the relief of suffering could in any way compromise our neutrality hardly occurred to the Americans who poured out their contributions; but the Allied leaders understood very well that every request for funds in that cause was a conceded demonstration of German brutality and every answering . . . penny doing its part to cement the emotional alliance with the Entente Powers.5

Of course, few Americans stopped to realize that the major cause of starvation in Belgium—and in the rest of Europe—was the brutal British blockade, which cut off even such non-contraband items as food from the people of the Continent.

THE IMAGE OF Herbert Hoover as an “isolationist” is as distorted as that of Hoover as an individualist. While apparently originally opposed to American entry into the war, by the Spring of 1917 Hoover had gone over to the pro-war camp, and sent Wilson a warm telegram of congratulations for his war message. Hoover promptly returned to the United States to take a leading part in the “war socialism” which marked America and the leading European participants in World War I.

It is almost impossible to exaggerate the fateful consequences, for America and the world, of the collectivism and central planning engaged in by the leading countries in the First World War. Here was the watershed of our time; and here was the model of collectivism, in a great many of its features: for fascism and naziism; for the central planning of the early New Deal years and during World War II; and for the “military-industrial complex” of the present day. The totalitarian changes of our age began in the impact of World War I, and Herbert Hoover played a large part in their inception.

Being “The Great Humanitarian,” Hoover was appointed Food Administrator (also known as “Food Czar” or “Food Dictator”) by President Wilson. In accepting, Hoover insisted that he alone have full authority, unhampered by boards or commissions. So eager indeed was Hoover to get started that he set up the Food Administration illegally, several months before it was authorized by Congress. Hoover urged Wilson to set up single Czars in every field, and was also responsible for Wilson’s creation of the War Council, which served as the overall organ for the central planning of the economy.

Hoover’s food-control act imposed the strictest control of any area of war planning. As the historian of government price control in World War I put it, the act “was the most important measure for controlling prices which the United States took during the war or had ever taken.”6 The measure set the pattern for twentieth century American collectivism: Behind a facade of demagogy about the necessity for keeping prices down and regulating business, the Federal government organized a gigantic cartellizing program to keep prices up and “stabilize” business under the guidance of government. Thus, the masses would come to think of the Federal government as their proconsul in control of business, while in reality it was the servant of those business interests who wanted monopoly privilege and a quieter life against the rigors of a competitive market.

TWO OUTSTANDING examples were the Hoover wheat and sugar control programs during World War I. Wheat price control was organized as a result of propaganda that the government must step in to see that wicked “speculators” did not push the price too high; but somehow, the government never got around to fixing maximum prices; instead the prices it fixed were minima, and these minima were systematically pushed higher in order to maintain the bloated wartime wheat prices after the end of the war. The method of such control was through a gigantic licensing system, under which every food manufacturer and dealer had to be licensed—and to keep its license—from the Federal government. Profits were guaranteed at “reasonable” amounts by fixing cost-plus margins, and any overly greedy competitor who dared to raise his profits above pre-war levels by cutting his prices were severely cracked down on. Hoover organized a Grain Corporation, “headed by practical grain men,” which purchased most of the wheat in the country and sold it to the flour mills, all the while undertaking to guarantee millers against loss, and to maintain the relative position of all the mills in the industry. Wilson and Hoover also kept the industry happy by requiring all bakers to mix inferior products with wheat flour at a fixed ratio, something which the bakers were of course happy to do since they were assured that all their competitors were being forced to do likewise. All this was initiated in the name of “conserving” wheat for the war effort.

The fiercely-conducted drive to keep down sugar prices, in contrast, was far more sincere—sincere because the raw sugar came largely from Cuba, and the sugar refiners were in the United States and other allied countries. The fact that increased sugar demand should have raised sugar prices by the workings of the free market made no impression on the sugar refining interests or on the Allied governments. Hoover and the governments of the Allies therefore organized an International Sugar Committee, which undertook to buy all of the sugar demanded in those nations at an artificially low price, and then to allocate the sugar, in the manner of a giant cartel, to the various refiners. On the other hand, of course, the price of sugar could not be forced too low, since then the marginal American cane and beet sugar producers would not be getting their divinely-appointed “fair return.” Therefore, the Federal government set up the Sugar Equalization Board to keep the price of sugar low to the Cuban producers while keeping it high enough to the American sugar refiners; the Board would buy the Cuban sugar at the low price and then resell at the agreed-upon higher price. Since an excessively low price of sugar would have caused high public consumption, production was directly ordered to be cut, and consumption by the public was severely rationed.

The food industry, as well as other industries in the Wilson-Baruch program of war collectivism, were delighted with the cartellizing and “stabilizing” (part of which was accomplished by enforcing compulsory standardization of parts and tools, a standardization which eliminated many small specialty businesses in machine tool and other industries, and forced production into a smaller number or bigger firms). Thus, Hoover

. . . maintained, as a cardinal policy from the beginning, a very close and intimate contact with the trade. The men, whom he chose to head his various commodity sections and responsible positions, were in a large measure tradesmen. . . . The determination of policies of control within each branch of the food industry was made in conference with the tradesmen of that branch, meeting at intervals in Washington. It might be said . . . that the framework of food control, as of raw material control, was built upon agreements with the trade. The enforcement of the agreements once made, moreover, was intrusted in part to the cooperation of constituted trade organizations. The industry itself was made to feel responsible for the enforcement of all rules and regulations.7

DURING HIS LONG REIGN as Secretary of Commerce in the 1920’s, Herbert Hoover carried forth the principles of advancing governmental cartellization of business, production was restricted and cartellized as much as possible by appeals to “elimination of waste,” trade associations of business were promoted, export industries were encouraged and promoted abroad, “standardization” was furthered. It was this encouragement of industrial self-regulation, with the governmental mailed fist kept in the background to crack down on the maverick competitor, that launched the characteristic Hoover emphasis on “voluntary” action, and that enabled him to establish specious distinctions later between his own “voluntary” program and the compulsory measures of FDR. Also typical of Hoover’s “voluntarism” was heavy emphasis on propagandizing the public. Thus, in his program as Food Czar in the First World War:

The basis of all efforts toward control exercised by the Food Administration was the educational work which preceded and accompanied its measures of conservation and regulation. Mr. Hoover was committed thoroughly to the idea that the most effective method to control foods was to set every man, woman, and child in the country at the business of saving food. . . . The country was literally strewn with millions of pamphlets and leaflets designed to educate the people to the food situation. No war board at Washington was advertised as widely as the United States Food Administration. There were Food Administration insignia for the coat lapel, store window, the restaurant, the train, and the home. A real stigma was placed upon the person who was not loyal to Food Administration edicts through pressure by schools, churches, women’s clubs, public libraries, merchants’ associations, fraternal organizations, and other social groups.8

Perhaps Herbert Hoover’s outstanding “accomplishment” as Secretary of Commerce was to impose socialism on the radio industry. Even though the courts were working out a satisfactory system, based on private property rights in radio frequencies—under which one frequency owner could not interfere in the radio signals of another9 —Hoover by sheer administrative fiat and the drumming up of “voluntary cooperation” was able to control and dictate to the radio industry and keep the airwaves nationalized until he could secure pasage of the Radio Act of 1927. The act established the government as inalienable owner of the airwaves, the uses of which were then granted to designated licensed favorites, the favorites being kept in line by the Federal Radio Commission’s unchallenged control of the licensing power. If private “squatters’ rights” had been permitted in radio (and subsequently in television) frequencies, we would have had a genuinely free press in the airwaves. As it is, we have had an air medium totally regulated and integrated into the Federal Establishment. More than anyone else we have Herbert Hoover to thank for government ownership and regulation of radio and television.

Hoover was also the first great proponent of Federal dams, and was the initiator of the Grand Coulee, Hoover Dam, and Muscle Shoals projects. Improvement of navigation or reclamation was to be at the expense of the taxpayer and of the flooded private property owners, for the benefit of the recipients of cheap water and cheap power. Hoover was insistent, however, that the Federal government should not itself go into the power business; instead, it should thoughtfully build the plants and then lease them to private enterprise. Here is another example of state monopoly capitalism: the active use of the Federal government to promote monopoly and subsidize privilege.

UNDOUBTEDLY THE SINGLE most collectivist and despotic governmental action during the ascendancy of Herbert Hoover was Prohibition. It is characteristic of Herbert Hoover that he was one of Prohibition’s most ardent supporters. Prohibition, of course, should be quite congenial to modern conservatism. All the arguments for prohibition of narcotics and gambling apply here too: Statistics show that people under the influence of liquor commit more crimes; let a workingman spend his money on liquor and he will become attached to it and waste his money there rather than spend it on nourishing and wholesome food for his children, etc.

Hoover acted in all this like a typical conservative, i. e., glorifying the State and its sacrosanct Laws over the liberty of the individual. His definitive statement on Prohibition as a whole: “Our country has deliberately undertaken a great social and economic experiment, noble in motive and far-reaching in purpose. It must be worked out constructively.”10 Whereas the only way to break down Prohibition was to destroy its enforcement, Hoover maintained that violation of one law destroys respect for all laws, and greatly expanded the nefarious institution of the Federal Prohibition Agent, attempting to make him incorruptible. To the very last, Hoover stood fast for the “noble experiment.”

As befitting one of the major leaders in the twentieth century drive for replacing quasi-laissez faire by a tightly controlled and cartellized system, Herbert Hoover favored trade unionism, and the dragooning of the worker into large, “responsible” unions that could be integrated into the New Order. Thus, during 1919/20, Hoover directed for President Wilson a Federal conference on labor-management relations. Under Hoover’s aegis, the conference, which included “forward looking” industrialists such as Julius Rosenwald, Oscar Straus, and Owen D. Young, as well as labor leaders and economists, adopted Hoover’s recommendations, wider collective bargaining, attacks on company unions, abolition of child labor, national old-age insurance, and government arbitration boards for labor disputes. In 1920, Hoover arranged a meeting of leading industrialists of “advanced views” to try to persuade them to tie in more closely with the American Federation of Labor; Hoover, incidentally, was always close to the A.F.L. leadership.

Hoover committed two striking acts of pro-union interventionism during the 1920’s. One was his movements against the steel industry: Steel was operating on a twelve hour day, and groups of Social Gospel ministers suddenly found Biblical sanction for the alleged immorality of any working day over eight hours. Hoover assumed the mantle of evangelical cum secular power to force steel to grant an eight hour day. Conducting a skilful propaganda campaign, Hoover induced President Harding to launch several bitter attacks on the steel industry. Finally, in June 1923, Hoover wrote a letter for President Harding to send to Judge Gary of U.S. Steel, sternly chastising the steel companies. This Presidential pressure turned the tide and forced the steel companies to capitulate.

Hoover also played a large role in helping to bring about the compulsory unionization of the railroad industry, and did so long before the Wagner Act. The railroad unions had waxed fat as a result of Federal government favoritism during World War I, when the government had temporarily nationalized the railroads (the government operated the roads, and the old owners reaped the profits which the government turned over to them). During the severe (though short-lived) depression of 1921, the railroads asked for wage cuts, and the unions angrily hit back by calling a nation-wide strike. When Attorney General Daugherty acted to preserve person and property by obtaining an injunction against union violence, Herbert Hoover, winning Secretary of State Hughes to his side, persuaded the weak-willed Harding to withdraw the injunction.

Despite Hoover’s actions, the unions lost the strike, and so they decided to use the power of Federal coercion to establish themselves in the industry. They finally achieved this goal in the Railway Labor Act of 1926, which guaranteed compulsory unionism (collective bargaining for all) to the railway unions, and imposed compulsory arbitration. Most of the railroads went along with the plan because railroad strikes were now outlawed; but the bill was drafted by union lawyers Donald Richberg and David E. Lilienthal, and by Herbert Hoover.

HOOVER WAS ALSO THE victim of a terribly inadequate grasp of economics, leading him to accept the popular “new economics” of the 1920’s.11 The “new economics” stood economics on its head, whereas economics saw that high wage rates in prosperous countries came about as a result of capital investment and high productivity, the “new” thinkers concluded that American prosperity had come about because employers paid high wage rates. In reality, the market determines wages, and not the goodheartedness or the wisdom of the employer. The employer in modern India who decided, out of the goodness of his heart and/or from reading economic nonsense peddled by Hoover or old Henry Ford, to triple his wage payments would quickly find himself bankrupt. Hoover deduced from this the union slogan that during depressions the worst thing that could happen was lower wage rates. It was this lowering that helped wipe out unemployment and end previous depressions relatively quickly; and it was Hoover’s personal use of the mailed fist in the velvet glove to prevent such lowering that kept wage rates increasingly and disastrously above market wages during the years 1929-33. This intervention insured that the Depression could not be relieved by natural market forces, or unemployment be lowered from disastrous Depression-born levels.

It was indeed as a depression-fighter that the nation came to know Herbert Hoover best. In all previous depressions, the Federal government had pursued a laissez faire attitude, keeping hands off and letting market forces bring about recovery quickly; and the recovery always came, no matter how steep the depression at the start.12 But Hoover had long determined that he was not going to pursue such a “reactionary, Neanderthal” course. He would rush in, to plan, to inflate, to push up wages and prices and insure purchasing power. He had determinde that he would plan, that he would use the full resources of government, all the modern tools of the new economics, to push the economy out of the Depression. And he did just that, except that the results were not quite what the Great Engineer had anticipated.

In pushing through his program, Herbert Hoover created virtually all the lineaments of the New Deal; the New Deal was in fact Herbert Hoover’s creation, and historians, now removed from the partisan squabbles of the New Deal period, are increasingly coming to recognize this fact. Massive public works programs, government relief, inflation and cheap money on a grand scale, government deficits, higher taxes, government loans to shaky businesses, farm price supports, propping up of wage rates, monopolizing the oil industry and restricting production, war against the stock market and stock speculation—all these crucial facets of the New Deal program were launched con brio by President Hoover.13

Hoover’s method of forcing wage rates to remain high was typical of his pseudo-“voluntarism.” He lost no time; as soon as the stock market crash broke, Hoover, in November 1929, called all the major industrialists to the White House and told them that they must pledge to keep wage rates up; that, whatever happened, the brunt of the Depression must fall on profits, not wages. This is precisely what did happen; wages were bravely kept up, especially in the larger firms, profits collapsed, and losses, bankruptcies, and mass unemployment ensued and remained unresolved. Since prices continued to fall, fixed wage rates meant that real wages (in terms of purchasing power) rose, aggravating the unemployment problem still further. Only in the small firms, hidden from public view, could quiet and secret wage cuts be agreed upon, and the workers continue to be employed. This was indeed the first severe depression in history in which real wage rates rose rather than fell: with the result that the Depression was intensified and rendered quasi-permanent. Even when wage cuts finally came, hesitantly, after several years of steep depression, they were so designed as to have little effect. For “humanitarian” reasons, they were largely put through in the higher income brackets and among executives: this, of course, could have little effect in stimulating employment where it was needed: among the lower-income, rank-and-file workers.

Addressing the White House conference, Hoover described his wage-floor agreements as an

. . . advance in the whole conception of the relationship of businesses to public welfare. You represent the business of the United States, undertaking through your own voluntary action to contribute something very definite to the advancement of stability and progress in our economic life. This is a far cry from the arbitrary and dog-eat-dog atttiude of the business world of some thirty or forty years ago.14

The American Federation of Labor was ecstatic over this new era in combatting depressions: “The President’s conference has given industrial leaders a new sense of their responsibilities. . . . Never before have they been called upon to act together. . . .” The United States, it proclaimed, would “go down in history as the creator of [an] . . . epoch in the march of civilization—high wages.”15

One of the most irritating facets of Herbert Hoover was his unshakable conviction that he had never committed a serious mistake. He had entered the White House at the peak of economic prosperity; he had left it, after a new departure in economic planning, in the midst of the most intense and long-lasting depression the United States had ever known. Yet not once, either then or later, did Herbert Hoover falter in his absolute conviction that his every act was precisely what should have been done. In his acceptance speech for renomination, Hoover proclaimed:

We might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action.16

Indeed he did, and “utter ruin” was precisely the result. Yet never once did Hoover falter in his attacks against all criticism, from left or right. Neither was this simply campaign oratory, for never once in his later years, when he was considered by friend and foe alike as a living symbol of laissez faire, did Herbert Hoover fail to look back upon every one of his disastrous deeds, from fighting the Depression to bolstering Prohibition, without finding them right and good. Every four years, Hoover could be depended upon to issue a campaign manifesto proving proudly and conclusively that the Republican Administrations, far from being exemplars of laissez faire, pioneered in the burgeoning statism of the twentieth century.

THERE SEEM TO BE several important lessons embedded in the story of the Hoover myth. One, of course, is the great dimensions of the myth, of the total misinterpretation, on all sides, of the Hoover record. Far from being a libertarian, Hoover was a statist par excellence, in economics and in morals; and his only difference from FDR was one of degree, not of kind: FDR only built upon the foundations laid by Hoover. Secondly, the very pervasiveness of the myth poses some sharp questions about the Right-wing that has so earnestly fostered it. There can be only two explanations of this phenomenon: Either the Right-wing shows itself monumental in stupidity, by mistaking statism for laissez faire; and/or, more significantly, the Right-wing’s professed devotion to free enterprise and the free market is only rhetorical, and it will cheerfully welcome a statism slanted in typically conservative directions. A third lesson is that anyone genuinely devoted to freedom and the free market must, once and for all, discard the whole putrescent world-view of the unique diabolism of Franklin Roosevelt and his New Deal. The plain fact is that the New Deal was rooted far back in the past, in the Hoover Administration, and further back into the Progressive period and beyond. Genuine believers in freedom and a free market must cease to regard the American system as having been a grand and splendid one until an unaccountable break came in the 1930’s. They have to realize that they must be far more “radical” than they have ever remotely conceived.

With the current issue, Winter 1966, the single copy price of New Individualist Review has been raised from 50 cents to 75 cents. Our subscription rate has been increased proportionately to $3.00 and $5.75 for one- and two-year non-student subscriptions, and to $1.50 and $2.75 for one- and two-year student subscriptions. This increase has been made necessary by the expansion of the magazine to its present size.

Readers who have entered their subscriptions prior to February 1, 1966, will continue to receive New Individualist Review under the previous subscription rates. No change has been made in the duration of existing subscriptions.

Twelve Thoughts on Inflation

W. H. HUTT*

THE PRESENT WRITER’S interest in the phenomenon of inflation goes back at least forty-five years. He was then an undergraduate at the London School of Economics. The famous Edwin Cannan, at whose feet he was studying, had taken the delightful gesture of suing the British Government under the Profiteering Act for selling pound notes at above their gold value. Cannan wanted to bring home to the public the extent to which inflation had debased the pound sterling.

As a teacher of business administration during the last thirty-eight years, the writer’s attention has been repeatedly forced back to this question of the spasmodic, yet persistent, depreciation of money. How can businessmen co-ordinate the private sector of the economy effectively when the most important measuring-rod of all—the monetary unit—has been left with no reliable, defined value? Units of length, volume, and weight have been universally defined with meticulous care; but dollars, lire, francs, and pounds have been allowed to change in every significant attribute over time. Hence, the aim in this article is to record briefly the twelve most important practical conclusions to which the thought of an academic lifetime on this issue has led the author.

(1) Nearly all inflations have been intentional, calculated actions of governments, however reluctant they may have been. No monetary depreciation in history has ever occurred in which governments have not purposely taken the steps needed to bring it about or, alternatively, have not deliberately refrained from action which could rectify any inadvertently caused inflationary tendencies. If monetary systems had rested solely on private contracts to redeem credit instruments (according to some stipulated standard) inflation could never have occurred.

(2) From time immemorial princes debased currencies. To such an extent did this happen that almost invariably the emergence of representative government in different parts of the world was followed by legislation to remove the right of monarchs to reduce the metallic content of moneys. But curiously, with the transfer of the kingly power to parliaments, no similar constitutional limitations were imposed upon elected governments. There have been suggestions in the United States, since the Second World War, that the continued decline in the purchasing power of the dollar should be brought to an end by incorporating the objective of a stable price index, by amendment, into the Employment Act of 1946; but the leadership which could have forced governments to take so difficult a step has thus far been lacking.

(3) When governments plan the programs which force up the cost of living they are usually reluctant. If they (or their advisers) could conceive of some means other than inflation for keeping their supporters happy they would make use of them; but provided the public generally does not predict the speed with which it is to occur, or its duration, inflation accords governments an easy access to income—unauthorized by democratic process—with which to purchase popularity, as well as an easy means—although a clumsy and unjust means—of temporarily alleviating the most common causes of disco-ordination in an economic system.

(4) Inflation can serve as a sort of palliative or anaesthetic which deadens the pain of a serious economic disease, namely, disco-ordination due to different categories of prices coming to be wrongly related to one another. Various types of restraint on competition permit wage rates and prices to be fixed too high to permit the full flow of output to be purchased from uninflated income, or too high in relation to price expectations. When one kind of labor or its product is priced too high, the sources of demand for non-competing labor and products are reduced; and if prices generally are rigid downwards, a cumulative decline in activity is set in motion. In the absence of inflation, therefore, the symptoms of the disco-ordination so caused are unemployment and depression.

AN ORGANIZED depreciation of the monetary unit, however, may bring about some sort of reco-ordination of the price system, in spite of its injustice. Under favorable conditions, it can cause the prices realized for products to rise more rapidly than the costs of making them. This may render profitable the employment of some presently unutilized or under-utilized productive capacity. For instance, if costs such as wage rates have been fixed higher than the public can afford to pay for the full supply of labor, a slowing down of output, with unemployment, is threatened. Inflation can then raise prices in relation to costs and so keep the economy going. Similarly, if producer-dominated marketing commissions have forced up the prices of primary products (raw materials or food) so that the public begins to be unable to afford to buy all that is being produced, again inflation can, in a crude sort of way, rectify the position by validating the higher prices. But all this depends, of course, upon the public as a whole not expecting it.

Eventually the recipients of wages as a whole and the farmers as a whole receive no more for their services. Their persistent striving to squeeze more for themselves out of the common pool is self-frustrating because the prices of the things which they have to buy are equally forced up by the process; but elected labor union officials can often retain their jobs only if they can show that they have raised wage rates year by year; and organized farmers habitually think it right that they should be paid a little more each year for their products. Hence in this inflationary age, wage rates and primary product prices tend to be raised, again and again, above what the public could afford in the absence of concurrent inflation; and so it seems as if the whole fatuous process has to be kept going.

(5) When the prosperity achieved by inflationary means happens to be accompanied by thrift, economic growth will occur, although in a less productive form than non-inflationary growth; and the easily won and largely illusory development tempo then gives rise to a confusion of growth with rising prices, a confusion which politicians (not surprisingly) encourage. But growth is purely a matter of thrift. Rising prices are not a condition for growth. On the contrary, there are good reasons for regarding inflation as, on balance, a discouragement of growth. In countless ways, rising prices tend to induce consumption. In particular, the “money illusion” all too easily causes insufficient provision to be made for depreciation and the maintenance of “real capital” intact.

(6) The result of trying continuously to co-ordinate by inflation is that the basic causes of the disorder so crudely rectified are never tackled. For this reason, inflation is a more insidious and virulent manifestation of the disease of disco-ordination than unemployment and recession; for the latter, being more painful, create incentives for fundamental reform.

(7) The origin of the most serious disco-ordinations of the modern economic system lies ultimately in the corrupting influence of a tradition whereby governments have come to be regarded as beneficent distributors of favors to the people, the people in turn rewarding governments by keeping them in power. This tradition creates a situation in which governments can intimidate minorities (unless the minorities happen to be able to disturb the balance of political power). Business managements become disheartened and obsequious; and because inflation seems to offer the only way out, they acquire the habit of acquiescence in it. At the same time politically powerful groups or institutions are given virtual carte blanche to pursue purely sectionalist objectives. That is why the private use of coercive power—the most obvious cause of disco-ordination in the pricing mechanism—has come to be tolerated.

(8) The crucial task, yet the most difficult task, of a truly planned regime is to secure co-ordination without inflation; and that means, in the first place, protection of the community from such sectionalist actions—particularly on the part of trade unions—as are calculated to reduce the flow of wages and other forms of income and render its distribution less equitable. A reduced flow of uninflated wages is always the consequence of any forcing up of wage rates (and hence product prices) in certain sectors otherwise than through free market pressures. If governments were aiming at (i) the maximization of the wage-flow, and (ii) equality of opportunity as a determinant of the distribution of wages, they would be ipso facto achieving effective co-ordination, for both rising prices and unemployment would then be simultaneously eliminated. But to achieve this result they would be forced to take the initially unpopular step of enshrining the right of all, and particularly of the poorer classes or races, to keep the price of their labor at a minimum. For instance, if equality of opportunity, distributive justice, and economic efficiency had been primary objectives in the United States, the minimum wage laws, which have slowed down the industrial progress of Negroes in the underdeveloped South, would never have been passed.

For identical reasons, governments would have to prevent other forms of contrived scarcity. A good example is the price supports which have become common where governments have been directly active in agricultural marketing. When the prices of primary products and food are raised, people have less uninflated income to spend on other things; and if the prices of these other things are rigid, that must mean the unemployment of some of the productive factors which manufacture them also. Dynamic forces cause cumulative contraction.

(9) THE TECHNIQUE OF inflation demands that governments and their agencies shall continuously deceive the public about the fact, the speed, and the duration of inflation intended. Ministers of Finance have here no option but to employ what has been called the “necessary untruth.” Unless they do employ this technique, inflation will lead to costs rising as rapidly as prices, or in advance of prices, thereby destroying the whole purpose of inflation. Moreover, yields on fixed interest bonds will be forced up and yields on equities forced down. As Professor Ludwig von Mises has insisted:

These enthusiasts [for inflation] do not see that the working of inflation is conditioned by the ignorance of the public and that inflation ceases to work as soon as the many become aware of its effects upon the monetary unit’s purchasing power....This ignorance of the public is the indispensable basis of inflationary policy. . . . The main problem of an inflationary policy is how to stop it before the masses have seen through their rulers’ artifices.1

The phrase “necessary untruth” was used in 1949 by the Manchester Guardian2 in justifying the conduct of the British Chancellor of the Exchequer, Sir Stafford Cripps, who, just before the British devaluation of that year, and after it had been finally planned, had categorically denied on no fewer than nine occasions that it was intended. The British Government had secretly discussed the proposed step for some time, almost inevitably setting into circulation rumors of what was contemplated. They had finally decided to devalue, it seems, at least three weeks before they were ready to put their decision into effect. They had to discuss it first with the United States, Canada, and the International Monetary Fund. In the meantime it became imperative to mislead the trustful for the benefit of the mistrustful.

It had for some time been governmental technique to pretend, in order to dissuade rational reactions, that “suspensions” of convertibility were merely temporary breaches of obligation. Thus, in 1931 there occured one of the most disturbing examples of the necessity to mislead in order successfully to reduce the value of a nation’s currency: Dr. Vissering, head of the Netherlands Bank, telephoned Mr. Montagu Norman, Governor of the Bank of England. He inquired whether his bank would be justified in retaining the sterling it was holding. Dr. Vissering received from Norman an unqualified assurance that Britain would remain on the gold standard. He believed what he was told. In consequence, his bank lost the whole of its capital; for the very next day Britain abandoned gold. Through the same act., the Bank of France lost seven times its capital.3

Two years later, using the argument that he wanted “to control inflation.” President Roosevelt persuaded Congress to give him extraordinary discretionary powers in the monetary field. Then, in April of that year, he decided to call in all privately owned gold “as a temporary measure.” There was no suggestion that the real purpose was a forced depreciation of the dollar in terms of gold, the issue of an enormous number of notes, with open market operations by the Treasury and Federal Reserve System to acquire government securities and hence perpetuate the depreciation.

The fact that the Bank of France had been called upon to falsify its balancesheet in 1925, in order to maintain confidence, had been regarded as a shocking incident by those who understood what had happened.4 But exactly the same kind of deception is inevitable if inflation is ever to be continuously successful. A delightful euphemism is “creating a favorable climate of opinion”!

Because a policy of creeping inflation must rely upon persistent deception, its survival in the modern world is obvious evidence of the corruption of government and of the disintegration of trustworthy relations between governments.

In 1922, in negotiating a settlement with the American Debt Funding Commission, Britain had confined herself, on the whole, merely to asking that the rate of interest should be 3½% in accordance with her credit standing. Professor B. M. Anderson, at that time economist to the Chase Bank, commented: “The British were superb in this. They were proud, magnificently proud. They asked little consideration.”5 Perhaps Britain was then the loser, in material terms; but can we be indifferent to the moral deterioration which has subsequently become evident, recorded in an era which demands “necessary untruth”?

(10) The disintegration of faith in money (ultimately, of faith in government) has involved the peoples of the world in formidable material costs. In the pre-1914 era, simply because no one ever doubted that “banks of issue” would honor convertibility obligations, there were no balance of payments difficulties, no hot money flights, no devaluation scares, no complaints of world liquidity shortages, no restraints on international settlements, no blocking of foreign balances, and no quantitative trade restrictions for balance of payments purposes. In that co-ordinated era, even such concepts (which the present disco-ordinated age treats as everyday notions) would have been incomprehensible.

The enormous administrative costs of today’s “controls” are obvious enough; but the losses due to the economic distortions they cause—domestically and internationally—are incomparably heavier. World disco-ordination is a product of the continuous misdirection of expectations which the inflationary technique necessitates.

(11) THE ONLY WAY IN which the general public can discourage inflation is to make it unprofitable. They can do this when they are in a position to insist upon fixed income contracts being revised ahead of instead of following the price increases at which official policy is aiming (perhaps via “escalator clauses”), and refusing to accept the dishonest assurance that their insistence can be a cause of inflation. A similar discouragement is effected when investors learn to avoid fixed interest bonds, except at very high yields to compensate for monetary depreciation.

(12) When more and more people begin to understand what is happening, a government which wishes to persevere with inflation is forced to take authoritarian action. It has to discourage or prevent those who understand from using market institutions to escape the destruction of the real value of their savings. In other words, when enlightenment spreads, for a government to engineer rising prices successfully demands eventual resort to price controls, rent controls, import controls, exchange controls, controls of capital issues, “income policies,” and so forth. In the absence of inflation, all controls of this kind (or extra-legal “persuasions” with the same object, backed by arbitrary state power) have no purpose.

TO WHAT GENERAL conclusion are we led after consideration of these twelve points? Is it not that the gradual drift of the so-called “free world” towards a totalitarian concentration of power has had its origin in the creeping inflation which, dating from the 1930’s, seems to have been mainly inspired by Keynesian teachings? Through public acquiescence in perpetually rising prices, we are threatened with an emergence of the sort of social order which, less than three decades ago, the blood of countless patriots was spilled to prevent.

In recording these thoughts, is the writer the victim of a futile nostalgia—a naive longing for the nineteenth century era? Has not inflation perhaps been an inevitable step towards a slow, inexorable transfer of consumer freedom (and the entrepreneurial freedom which is its consequence) to the state? Certainly there are those who, with a dogmatism of Marxian stubborness, will argue that, once the institutions of representative government had been conceded, politicians were bound, sooner or later, to discover the potentialities of twentieth century techniques of persuasion and propaganda; whilst that discovery could not fail to mean the ultimate passing of authority to those most skilled, or most uninhibited, in controlling the minds and purchasing the support of political majorities. If they are right, the stereotype of the state as the donor of benefits was predestined to emerge; recourse to inflation had necessarily to follow; and as the community began to be more difficult to deceive, and started to use the remnants of the free market economy to evade the burden of inflation, the urge to totalitarian government became irresistible.

To those who are inclined, for such reasons, to acquiesce in, or make terms with, the totalitarian trend, the “classical” type of analysis, like that presented above, seems to have become irrelevant. What the rulers of modern society now need, they feel, are formulae which assist officialdom in maintaining a nice balance between plausibility or electoral acceptability on the one hand and mitigation of the more obvious causes of unrest on the other. It comes to be regarded as more important, therefore, for economists to be experts in semantics than experts in explaining dispassionately to students and the public the nature of the economic process. Indeed, governments have no alternative but to choose economic advisors from those who understand their basic problems, all of which center on the need for the retention or winning of office. Accordingly it becomes the duty of the universities to provide the required training. Useful economics, they will insist, is “operational.” That is, it is a kind of economics which takes politically decided objectives for granted, concentrates on the problems which arise in seeking those objectives, and isolates the kinds of data (and types of statistical analysis) which are of service in satisfying the politically powerful and placating the politically weak.

Would inflationary policy (with its eventual totalitarian outcome) have been inevitable, however, if the public had been taught the above twelve truths (if they are truths) about inflation? Suppose economists in the leading universities had maintained their political independence and reiterated with unanimity the simple points we have stressed. Would not the authority attaching to their teachings, together with the almost self evident irrefutability of the propositions themselves (to men of affairs), have forced the abandonment of inflation? And in renouncing the inflationary remedy for disco-ordination, would not the state have been forced to re-assume its traditional task of protecting the co-ordinative mechanism of the price system from sabotage by sectionalist action? Would not suppression of the private use of coercive power have permitted the social discipline of the free market to bring different categories of prices into harmonious relationship with one another, without inflationary validation?

But this was not to be. From the middle thirties—for reasons which cannot be discussed here—Keynesian economists slowly got the upper hand, not only in the counsels of governments but in most of the universities. “Classical economics,” the product of more than a century of disinterested, scientific thinking, was pushed aside as fundamentally wrong. It was replaced by the more plausible doctrines of Keynes’ General Theory—doctrines built on a number of obscurely enunciated propositions which, because obscurity all too easily suggests profundity, greatly impressed the layman—an influence which was magnified through the subsequent elaboration of the propositions by mathematicians.

The fact that, since the war, every unique Keynesian theory which clashes with classical economics seems to have been tacitly abandoned, in the sense that it can no longer be rigorously defended,6 has hardly discouraged the continued indoctrination of students of economics in the new orthodoxy. Indeed, so strongly is a powerful Keynesian establishment now entrenched within the universities, and so influential are the vested interests it has built up, that even non-Keynesian economists have mostly felt themselves forced to attempt to persevere with its concepts. The most widely used textbooks remain Keynesian, and the young student of economics is seldom made aware that ideas like those explained in this article can be seriously entertained except by cranks. Yet the present writer is convinced that, if free and fair competition between the Keynesian and “classical” notions had been permitted, only the latter could have survived.

AS THINGS ARE, THE Keynesian thesis which—as one apologist put it—“removed inhibitions against inflation,” still dominates policy in Britain, in the United States, and, indeed, in most parts of the world. Governments, relying on the fruits of a technological progress which current policy has hampered but not prevented, will not easily renounce the myth that they can foster the spending of a country into prosperity and growth whilst they simultaneously “fight inflation.”

Raico on Liberalism and Religion

M. STANTON EVANS*

IN A RECENT issue,1New Individualist Review carried an article by Ralph Raico which was among other things an extended attack upon a contribution of mine to What Is Conservatism?2 I had intended a reply before this, but the pressure of journalistic duties, followed by a rather hectic session of the Indiana legislature, has intervened. I trust, however, that the nature of the subject will make this belated continuation of it of some interest to New Individualist Review’s readers.

The article which ignited Raico’s displeasure argues that the imperatives of freedom and religious authority were not, as sometimes asserted, incompatible, but complementary. In so alleging, I briefly sketched the outlines of what I call “classical liberal” philosophy and traditional conservatism, trying to show that the alleged contradictions were more a matter of mortal confusion than of philosophical necessity. In rebuttal, Raico contended my discussion of classical liberalism was mistaken, both in the round and in its several particulars; that I had along with other conservatives and divers spokesmen for modernity, erred in calling this school of thought “superficial, unrealistic, and obsolete.”

My first observation on this charge is that my views on “classical liberalism,” however broadly or narrowly the term may be defined, do not coincide with the usual modernist critique of it. I am in general agreement with the economic views of the classical liberals. I happen to think that, in discussing the secular modulations of freedom and the secular conditions most agreeable to its continuance, Herbert Spencer is hard to surpass. It is precisely in this respect, of course, that the views of the classical liberals are nowadays most disparaged.

Where I depart from classical liberalism’s most famous spokesmen is the point at which modern collectivists tend to agree with them—in their mechanical, materialist, and relativist view of human nature and ethical principles. As I tried to argue in my previous article, the classical liberals all too clearly foreshadowed modern-liberalism in this respect, and helped lay the ethical foundation for the rise of the total state they wanted to avoid.

In lumping together the critics of classical liberalism, therefore, Raico is liable to give the reader a wrong impression of my differences with nineteenth century spokesmen for laissez faire. My position is not one of blanket condemnation, but rather one of arguing that, while the secular views of the classical liberals are by and large correct, their ethical views in the long run undermine the freedoms they thought they were protecting.

My argument is so insistent on this point that Raico, despite his tendencies toward amalgam, perforce devotes most of his comment to battling against it. Once more, however, he neglects to keep the categories of the discourse in order. My purpose in What Is Conservatism? was, in part, to examine the philosophical strain in Western society which, as most characteristically put forward in England and America during the past century, I identify with the terms “libertarian” and “classical liberal.” I explicity note that some people who put themselves in this category do not fit my definition, since they do profess religious sentiments. “To the extent they do,” I say in an explanatory note which appears with the article and which in fact appeared with it in its original incarnation as far back as 1960, “I trust my terminology will not obscure the fact that the argument of this essay is not an attack on such ‘libertarians,’ but a vindication of them.”

Raico chooses to ignore the meaning of this statement, feigning to believe my critique includes everyone in the nineteenth century, religious or otherwise, who embraced the principles of freedom. He then cites certain examples of religious devotees of liberty as disproof of my argument. The deficiencies of this tactic are so grave as to be, in themselves, fatal to his position. He in effect ignores the definition I explicitly set forward, as the central condition and point of my article; bootlegs another definition of his own without making it explicit; glosses over the transposition in terms by suggesting I have employed his categories despite my direct statement to the contrary; and then taxes me for violation of his unstated taste in noun substantives. If I had used the categories he appears to favor, there would have been no point to the article in the first place. The purpose of my essay was to examine that class of people who do believe irreligion and liberty to go hand in hand, and to argue that they are mistaken. Of course there have been libertarian spokesmen who also believed in a profoundly religious view of the universe; I acknowledge the existence of such people in my article. More, I cite them as examples of the correct view of things, in opposition to those who believe irreligion the handmaiden of freedom. Burke, Smith, Acton, and Tocqueville are some I mention explicitly. To bring these people up as a rebuttal to my assertions about irreligious classical liberals is comparable to citing Barry Goldwater as proof that Lyndon Johnson is not a Democrat.

Thus launched into obscurity, Raico proceeds to divide his argument unevenly among a number of points. In some places, he seems to object to the argument that there are people who believe liberty can be protected by tearing down religious authority. Secondly, and in this modulation he consumes most of the space in his criticism, he argues that, whatever the general case with people of this description, classical liberalism is not the correct label for them. Like Pascal, I am not much inclined to argue about names so long as I know what is meant by them. If Raico wants to call such people by another name, well and good; let us have the name; we can then go on, using Raico’s terminology, to explore the real issues involved. While he quarrels with my use of the term, Raico ignores the specific content I give it and neglects to say what terminology he would himself apply to the irreligious-libertarian point of view so that it might in some way be discussed. His approach suggests he either does not grasp the import of my article, or else does not want to talk about it. In either event, he has not answered it.

Finally, and this may be the reason Raico neither acknowledges the real nature of my argument nor reformulates it in his own terms, he goes on to suggest that, although there are irreligious classical liberals, their views are a matter of indifference, since the maintenance of freedom is a purely secular business. On this score, he begs the question to which my article is addressed. My view is exactly that the maintenance of freedom is not, and cannot be, purely secular, and that the profession of irreligious, relativist ethics is in the long run harmful to liberty. At no point does Raico close with my views on this score, as he would have to do if he paraphrased them correctly rather than presenting them in caricature.

To sustain his criticism while omitting substantive argument, Raico undertakes a laborious analysis of my statement that the classical liberal “characteristically denies the existence of a God-centered moral order, to which man should subordinate his will and reason,” alleges human freedom, “as the single moral imperative,” and otherwise is a “thoroughgoing relativist, pragmatist, and materialist.” His comment is that the classical liberal is not in fact like this, and that the characterizations are in several instances meaningless anyway.

As to the irreligious nature of “classical liberals,” I have already noted Raico’s principal tactic. At different points in his article, he directly or indirectly accuses me of ignoring or “dismissing” certain religious classical liberals. In point of fact, I “dismiss” no religious classical liberals; they are the very type of correct reasoning suggested by my article, men who combine both ethical affirmation and concern for human freedom. They are the heroes of the piece. This is the most frivolous of his arguments, and I have no doubt belabored it sufficiently already.

MORE TO THE POINT is a second version of Raico’s position—that although irreligious classical liberals do exist, they are no more numerous than the religious sort, and that their irreligion has no necessary connection with their libertarian views. This argument from statistical insignificance is patently incorrect. Whatever the numerical incidence of such people, the issues raised by them are still there, and still distressing. It is their position, not that of an Acton or Tocqueville, which has given rise to philosophical contention within the ranks of conservatives; it is their position which clashes directly with what is understood to be conservative ethical theory; it is their position which is emphasized nowadays in public discourse, in part by critics of conservatism, but also by sectarians within the conservative camp. The whole purpose of the article was to discuss these deep-going differences—to take the “libertarian” and “authoritarian” positions in their most antinomian terms, in order to explore the philosophical tensions between them. To reconcile Acton with Burke, while no doubt a problem to test the mettle of political philosophers, would be nothing to the purpose, since both occupy, comparatively speaking, middle ground. But to explore the possibility of uniting Spencer’s economics with de Maistre’s ethical theory, although clearly too ambitious a project for my talents, is very much to the purpose indeed. The latter effort speaks to the philosophical stress within the conservative camp today, and which was recognized by de Tocqueville more than a century ago. Raico faults me with not taking the solution to the problem as the statement of it.

As to whether the agnostic strain in libertarian philosophy is important enough to merit this kind of treatment, and to justify using “classical liberalism” as an eponym for such belief, the names of Mill and Spencer should be sufficient answer. Raico passes over these giants of classical liberal thought as though they were but random faces in the crowd, preferring the example of John Bright. But to adduce the atypical Quakerism of Bright as proof of the religious character of classical liberalism is no more convincing than to cite the formal devoirs of the National Council of Churches as proof of the religious character of modern-liberalism. The Bright example fails on at least three counts. First, while Bright was sincerely theistic, the emphasis of his public advocacy (and private contention within the Society of Friends) was on the secular aspects of reform, and it was in this secular business that the entire impact of his public career was made. Ficino and Erasmus were, in their way, equally pious; yet it was the pagan secularism they mixed with Christianity which left its mark on Renaissance scholarship, and it was in its thrust toward secularism that the Renaissance helped shape the modern consciousness. Second, Bright occupies little or no place in the theoretical development of classical liberalism, any more than a LaFollette or Borah occupies a place in the theoretical development of modern-liberalism. Bright was all free trade and extend-the-franchise, and while a consistent libertarian and a man of probity, he was a politician and not a philosopher. Third, precisely because Bright was not a philosopher, he was not called upon to square his private theism with the implications of classical liberal chiliasm and environmentalist notions about man. When such a confrontation of thought was made by nineteenth century liberals, it is noteworthy that they either repudiated liberal assumptions (as did Acton), or else repudiated Christian ethics (as did Spencer).

If we would understand the philosophical tendencies of classical liberalism, we must turn to its explicit theorists, as represented in the clear line of development from Hume to Sumner. In this history, Mill and Spencer have a pre-eminent claim upon our attention. It is from them that classical liberal philosophy received its most powerful impulses and most characteristic form. It is from them that the notion of irreligion united with secular liberalism continues to draw sustenance. Mill is still considered the great aboriginal spokesman for civil liberties. Spencer, above all other men, put the impress of his thought on the rationalization of the free enterprise system, ably assisted in America by the complementary efforts of Sumner. To suggest classical liberal thought was religious, with the exception of Mill and Spencer, is very much like suggesting late Victorian culture, with the exception of Darwin and Huxley, affirmed special creation. To argue that we should hold the immense force of the ideas generated and formalized by these two powerful intellects—ideas which long dominated English and American thought and which in their ethical tendencies are all too unhappily attuned to modern disintegration—at parity with the opinions of Madame de Stael is equivalent to saying we cannot identify Communism with Marx and Engels because Proudhon also has his claims in the matter. Mill and Spencer alone would, I think, justify appropriating “classical liberalism” to describe anti-clerical libertarianism, and for making it the object of considerable examination. But they do not, of course, stand alone. To their names might be joined those of Diderot, Condorcet, Faguet, Hume, Godwin, Paine, Bentham, Sumner, Nock, Mencken, and Miss Ayn Rand, to mention only a few.

If any of these deserves to be mentioned along with Mill and Spencer, it is Sumner, whose formulation of classical liberalism looms enormously in any conspectus of American thought. It was Sumner who preached to Americans the evolutionary ethics of which Spencer was the acknowledged master, and taught that all values are relative to the needs of time and place; whose views became embodied in American thought and practice and translated into law through the labors of Mr. Justice Field and others on the Supreme Court; who preached the radical disjunction of liberal sentiment from religious profession, and whose inconsistencies foretold the unhappy results of that separation. Himself a Puritan by temperament and upbringing, Sumner believed the Protestant Ethic could stand on its own secular merits even after society, like himself, had put its religious beliefs in the drawer never to retrieve them. He believed it possible to construct a purely materialist and relativist system while maintaining the strict moral outlook indicated by his Puritan ancestry. The experiment has not worked Once the religious underpinning was removed, the subtle comprehension of material forces desired by Sumner could not be counted on to sustain human motives toward liberty and self-reliance, as our own era has all too conclusively demonstrated. Sumner helped demolish the moral foundations which alone can support a regime of freedom.

So much for classical liberals’ not believing in a “God-centered moral order.” On the secondary point that classical liberals do not believe man should subordinate his will and reason to this order, Raico generously refrains from annihilating me because he considers it of small importance. He then goes on, in a footnote, to say even Christians do not necessarily believe man should subordinate his will and reason to the divine order, citing a commentary in paraphrase of St. Thomas. His construction of this point is in error. St. Thomas believed a portion of the divine order, revealed in the Natural Law, apprehensible by reason; he did not, however, believe it was validated by reason. The ultimate sanction for all truth, natural and divine, is in the Christian view of the will of God. Raico has got Christian orthodoxy hopelessly turned around, as he will readily discover if he opens the Summa to Question XCI, Articles 2, 3, and 4.

On the issue of a causal connection between irreligion and libertarian attachment, enough has been said, I think, to show that Raico has twisted my position inside-out. “Even if a majority of liberals had been atheists and agnostics,” he says in supposed rebuttal to my position, “the connection is so far accidental and historically-conditioned, and not logical.” The burden of my argument, of course, is precisely that there is no logical relationship between the anti-religious views of Mill, Spencer, et al., and the establishment of the free society they desired. On the contrary, I argue that lack of religious grounding leads to slippage from freedom. Mill’s intellectual career is a perfect example of this.

The connection between libertarian views and anti-religious tendencies is, therefore, not causal, but adventitious. That the dominant spokesmen for classical liberalism gravitated to anti-religious thought is a matter not of integral connection but of historical fact. The relation, to use Hume’s terminology, was not causal, but conditional—apparently founded in the assumption which has vitiated modern thought from the Renaissance forward, that supernatural authority is the enemy of freedom. This assumption, far from being my own, is the chief target of my article.

RAICO NEXT objects to my statement that classical liberals elevated human freedom as “the single moral imperative.” Other values, he says, were also cherished by them. The reader of Spencer’s Principles of Ethics and Social Statics will be constrained to disagree with Raico’s interpretation of this author. The necessity of a regime of freedom is Spencer’s “first principle”; all other principles he deduces from the irrefragable rightness of liberty. Raico incorrectly alludes to Spencer in his effort to prove otherwise. Spencer’s summum bonum is the existence of mutually sacrosanct zones of freedom for all men—the ability of each to do as he pleases so long as he respects the equal ability of everybody else. He states and restates this as the first law of moral philosophy, recommended by science, logic, and the intuition of fitness which is the final authority for every value system. “Positive” and “negative” beneficence are not moral values, but utilitarian functions of the human mind which enable it to comprehend and enjoy the balance of freedoms that is the end and justification of all other principles. Negative beneficence consists in refraining from encroachment upon other men’s satisfaction; positive beneficence is the ability to derive part of one’s own satisfaction from the fact that the general system of freedom has displaced the reign of license in which one man’s desires are satisfied at the expense of another’s. In the second category, Spencer’s disquisition greatly resembles Hume’s treatment of “sympathy” in the Treatise, in which benevolent tendencies are ultimately derived from the self-regarding faculties. Spencer’s view is even more mechanical than Hume’s (subsequently modified in the Inquiry Concerning The Principles of Morals), because it clearly views this tendency as a means toward achievement of universal freedom. “Positive” and “negative” beneficence, in Spencer’s system, are props to his first principle of mutual liberty, and derive their sanction from it. Freedom is, for Spencer, quite obviously the “single moral imperative.” Spencer’s inconsistency in bringing “intuition” into play at this juncture is characteristic of the classical liberal position as a whole, even when the matter is not made as explicit as Spencer makes it. My point is that, given the relativist-utilitarian ethics of the Mill-Spencer school, there is no logical reason to exempt human freedom from the potencies of the system. If morality is the function of secular arithmetic or the adjustment of secular means to secular ends, or a coefficient of the evolutionary struggle, then it is altogether possible that, somewhere along the line, freedom must give way to the calculus, the adjustment, or the evolution. This was a conclusion Mill and Spencer were loath to draw, in effect excepting liberty from their mechanical systems. This is, to be sure, an inconsistency; but again, it is not my position, but the position of the classical liberal spokesmen whom I am criticizing.

Finally, Raico questions my use of the terms “materialist,” “pragmatist,” and “relativist,” alternately claiming them to be untrue or professing himself baffled by my meaning. Each of them refers to the classical liberal tendency of deriving value from the conjunction of secular phenomena and subjective apprehension. Spencer is an aboriginal “materialist” in the philosophical sense; value for him arises from the evolutionary progress of history toward its “higher” forms; good and bad are the terms we give to the adjustment of means to ends in the battle for biological and cultural survival. As for “pragmatism,” both Mill and Spencer were pragmatists a half-century before James and Dewey; both test values by their practical consequences. Spencer’s language in Social Statics is pragmatic at every turn. If the reader will peruse Mill and James consecutively on the subject of religion, he will find the first values it because it provides rules for moral life, suggesting a secular substitute would do as well or better, and the second favors it because it evokes a release of vital energies. It should be obvious to the rudest intelligence that both men take a “pragmatic” view of religion—judging it solely by its “practical” effects in the secular world.

Both Mill and Spencer, finally, are clearly relativists in the sense that they deduce value criteria from secular and largely subjective phenomena. Both begin with the pleasure-pain calculus, making right and wrong a function of human comfort; Spencer superadds the asserted “laws” of evolutionary development. To assert this utilitarian view is a form of “absolutism,” as does Raico, taxes credibility even in an Orwellian generation. Presumably, all criteria of value are “absolute” in a sense if one is prepared to act upon them; to a dope addict, securing the next fix is the most compelling of absolutes; but we would be justified in launching further inquiry before anointing him as a moral absolutist. According to received notions of intelligible discourse, “absolutism” holds values to exist independent of subjective apprehension. Mill-Spencer utilitarianism makes values consist exclusively in such apprehension. “The facts are what they are,” Raico says of the pleasure-pain calculus; but “happiness,” as Spencer himself noted, is not a fact, it is a state of mind; the greatest good for the greatest number” is not a fact, it is a matter of opinion. To make these things the measure of value is to throw all fixed and objective values out the window, to make right and wrong a function of secular stress and contention; it is relativism par excellence.

ALMOST ALL of the foregoing, however, is oblique from the main point, and I have gone into it only because failure to respond to Raico’s charges might give some readers the impression that I conceded their correctness. The fact of the matter, however, is that even if I could settle all of these differences to Raico’s satisfaction, or he to mine, the outstanding issues of freedom and authority would be no closer to resolution than before. While clarity in the use of terms is desirable, it is chiefly important as it helps us to advance in substantive understanding. I am therefore reluctant to leave the present discussion with a pro forma defense of my previous article, which I fear would create an unhappy emphasis on lesser issues at the expense of greater ones. Let me, then, repeat what I consider to be the chief topic before us, namely: Can a regime of political freedom long exist without the underpinning of religion and moral sentiment derived from Judaeo-Christion revelation? There is a considerable history of modern Western thought, ranging from Diderot to Mencken, which says it can, and which has worked great influence in contemporary America and elsewhere. The important point about this school is not whether we call it or some subdivision of it “classical liberalism,” but whether its major premises are true or false. A certain number of “libertarians” today appear to think they are true. I for one think they are dangerously false. That is the issue, and the terminology of the thing—while I happen to believe my own usage is justified—is of little or no importance compared to the substance of it.

*Reply to Mr. Evans:**

BEFORE I DEFEND my critique against Mr. Evans’ rebuttal, I should like to explain briefly why I took time to attack Evans’ article in the first place.

In their attempt to carve for themselves a position of relevance in discussions of contemporary social problems, conservative writers sometimes present a sketchy philosophical outline of the historical development of classical liberalism, attempting to show deeper reasons for its decline than those readily admitted by classical liberals themselves. The attempt has been supported by writers such as Russell Kirk, Frank S. Meyer, and Eric Voegelin. Dr. Kirk, for instance, sees the original flaw in the liberals’ excessive commitment to individualism, especially in the form of economic liberty:

. . . central direction endeavors to compensate for the follies of reckless moral and economic atomism. . . . [The liberals’] sentimental liberalism soon became shocked at its own practical consequences; the economic competition and spiritual isolation which resulted from the triumph of their ideas provoked among them a reaction in favor of powerful benevolent governments exercising compulsions.1

Mr. Meyer, an advocate of economic liberty, identifies the seed of corruption in liberalism rather as its supposed utilitarian ethic:

This transformation [from individualistic to collectivistic liberalism] was the result of a fatal flaw in the philosophical underpinnings of 19th-century liberalism. It stood for individual freedom, but its utilitarian philosophical attitude denied the validity of moral ends firmly based on the constitution of being.2

Eric Voegelin imagines he can see a close connection between classical liberalism and Bolshevism: both, he thinks, imply the “permanent revolution,” in that they attempt the impossible—changing the nature of man.3 And so on, with other conservative authors.

It appeared to me that for once someone ought to call a conservative to account for his flamboyant and unsubstantiated claims regarding classical liberalism; for once, the canons of precise definition and relevant evidence, which serious scholars in all disciplines apply, ought to be applied here, too. It seemed to me, furthermore, that Evans had presented us in his article with a startling example of these conservative defects, and that the article could profitably be examined from this point of view.

NOW TO DEAL WITH Evans’ rebuttal. Is it true that I have confusedly interpreted his claims, besides being wrong on a number of factual points?

First comes the terminological question, less interesting than the others, but unavoidable, since here is where I am supposed to have decisively confused the issues.

What does Evans mean by “classical liberalism”? Does he mean what everyone else does—that is, in one description, the social philosophy whose best representatives were Tocqueville and Acton?4 Does he mean that great intellectual and political movement of the eighteenth and nineteenth centuries, so vast and various that no particular philosophical pre-suppositions bind all of its adherents, but only their commitment to individual liberty—to private property, civil liberties, and parliamentary and constitutional government? If the reader considers classical treatments of the subject, say Ruggiero’s History of European Liberalism or (on a more analytical level) Von Mises’ The Free and Prosperous Commonwealth, he will see what is meant by classical liberalism when the world at large discusses the history of ideas.

Evans claims, on the contrary, however, that he was clearly and consistently using “classical liberalism” in an odd sense: he was using it to designate only the atheistic and agnostic classical liberals (what he wants to call the theistic classical liberals is not made clear—possibly he wants to refer to Bastiat and Adam Smith as “conservatives”). It seemed to me otherwise. In my article, I point out that Evans has a footnote to the effect that in his usage “libertarianism . . . signifies the chemically pure form of classical liberalism, with all of its metaphysical implications.” Now, in the first place, it ought to be clear that this passage implies that libertarianism is one subspecies of classical liberalism (its “chemically pure form”), other subspecies of which, less chemically pure, do not share libertarianism’s anti-religious position. This indicated to me that Evans, at least at this point, was using “classical liberal” in more or less its received meaning, and simply wanted to define “libertarian” in an unconventional way.

Then, in the text, Evans equates libertarian and classical liberal, stating: “The libertarian, or classical liberal, characteristically denies the existence of a God-centered moral order. . . .” Now this certainly sounds like a description; that is, it sounds as if Evans is accepting the usual definition of classical liberal, and saying that, while there may have been a few liberals who were religious, characteristically and as a rule they were not religious. If he were keeping to the definition in the footnote, the passage wouldn’t make sense: it would then have to read, “libertarians necessarily and by definition deny the existence . . . ,” etc.

If the reader still thinks it was unreasonable of me to suppose that Evans was using classical liberalism in its usual sense (or, at least, that its usual sense was one of those in which Evans was using the term), let him consider the following, from Evans’ original article:

While labelling someone a classical liberal is not necessarily an insult, it must be pointed out that today’s conservatives, although opponents of statism, are generally not Manchesterians.

Doesn’t this imply that Evans was taking the Manchesterians to be one school (the only school?) of classical liberalism? But how could this be, if he was exclusively using classical liberal to mean agnostic or atheistic classical liberals? Both leaders of the Manchester School, Cobden and Bright, were Christians.

Evans tries to trivialize this terminological point by speaking of varying “tastes” in noun substantives. But there is very good reason for preserving a modicum of consensus on the way terms are to be used. Imagine what trouble would be caused if each time anyone wrote on the history of ideas, he used terms like “liberal,” “conservative,” “socialist,” “utopian,” etc., in odd and unconventional ways. For one thing, intellectual history as an on-going enterprise would become impossible. It is at least equally important to keep to the same definitions of key terms in one and the same article.

LET US ASSUME, though, that Evans had made it clear in his article that in levelling his series of charges he had in mind only the non-religious classical liberals of the past and present: men like John Stuart Mill and Herbert Spencer, and, in our own day, most of the free enterprise economists whose names would come most readily to mind. Is it true that these men “allege human freedom as the single moral imperative”? Evans really does hold that they do, evidentally: An irritating premise of his, which comes out also in his rebuttal, is that a person who is not religious can have no ethical beliefs or concerns. Thus he refers to the religious classical liberals, “men who combine both ethical affirmation and concern for human freedom,” as if an agnostic liberal never affirmed any ethical principles. Evans’ position is that non-religious liberals did not and do not believe that anyone has a moral obligation to tell the truth, or to avoid malice, or to save another person’s life even at no risk to oneself. Can this really be the case?

Well, I quoted in my critique a well-known passage from J. S. Mill’s essay, Utilitarianism, part of which tells us that:

In the golden rule of Jesus of Nazareth we read the complete spirit of the ethics of utility. To do as you would be done by, and to love your neighbor as yourself, constitute the ideal perfection of utilitarian morality.5

Evans prefers in his rebuttal not to take cognizance of this point. Instead, declining to withdraw his claim, he attempts to show that it is true of Herbert Spencer. Even if this were true, it would prove nothing, since innumerable agnostic and atheistic liberals could be cited who do, indeed, believe that there are ethical imperatives beyond simple respect for the liberty of others. Yet far from being “quite obvious” that freedom for Spencer is the single moral imperative, it is quite obviously false. This is not the place to go into a detailed examination of Spencer’s ethical system (I find Evans’ exposition confusing); but this is what Spencer says:

[There are] many actions which from hour to hour are gone through, now with an accompaniment of some pain to the actor and now bringing results that are partially painful to others, but which nevertheless are imperative. . . . Though the pains which the care of many children entail on a mother form a considerable set-off from the pleasures secured by them to her children and herself, yet the miseries immediate and remote which neglect would entail, so far exceed them that submission to such pains up to the limit of ability to bear them becomes morally imperative as being the least wrong.6

The point about natural law and Roman Catholicism is trivial and quickly disposed of. One of the things wrong with classical liberals, in Evans’ view, is that they deny that there is any divine “moral order to which man should subordinate his will and reason.” Of course, the existence of any moral law means that one should subordinate one’s will to it: this isn’t in question. What is at issue is just what Evans meant by the liberals’ denial that reason ought to be subordinated to the moral law. If, as seemed likely, this meant that they denied that the moral law was unknowable by reason and had to be accepted purely on faith, then I don’t see why this should be considered especially atheistic; for the denial of the arbitrariness and irrationality of the moral law is precisely the position of the Catholic Church. Again, I don’t understand Evans’ exposition in his rebuttal on this point: neither his distinction between (in St. Thomas’ view) the moral law being apprehensible by reason, but not validated by it, nor how Evans is using “sanction.” The important point is that if one believes with St. Thomas and the Catholic Church7 that the moral law can be discovered by reason, then there is nothing sinister or atheistic about the liberals’ position. Furthermore, it is then possible for an agnostic to come to an appreciation of morality, without any personal religious faith. On this problem of the connection between morality and reason, Evans blinks the distinction among Christian churches, and seems to want to have Calvin legislating for Christendom.

I do not find that Evans’ rebuttal illuminates to any great extent what he might have had in mind when he charged classical liberals with being “materialists,” “pragmatists,” and “relativists.” We are given no definition of materialism, no evidence that classical liberals were and are “characteristically” materialists. Spencer doesn’t appear to have been a materialist, pace Evans,8 but what if he had been? Mill was a phenomenalist; that is, he thought that matter was nothing but the possibility of certain mental states9 —rather the opposite of a materialist. What do these two examples prove about the characteristic position of classical liberalism?

Evans doesn’t really meet my objection to his use of “pragmatism,” either. He states that Bentham, the Mills, etc., were pragmatists long before Charles Peirce and William James (the founders of the school), because they believed in an instrumentalist theory of value. But the essence of pragmatism lies in its theories of meaning and truth, and the one sentence definition Evans is seeking is not that pragmatism holds value to be determined by “what works,” but that it holds truth to be so determined,10 i.e., the difference between: “this action is good,” and “this statement about the properties of copper is true.”

FINALLY, WE COME TO the modern-day conservative bugaboo, “relativism.” Here, too, Evans, like other conservatives who write on the subject, still owes us a definition. I don’t think the one he gives in his rebuttal—deducing “value criteria from secular and largely subjective phenomena”—is really adequate. For one thing, it is uncertain, on the basis of this, whether someone who holds a fiat justicia, pereat mundus natural law position, but with no supernatural elements, would fall into the category of “relativist”; if he would, it would be a fairly unserviceable definition. For another thing, the definition doesn’t make “relativism” the opposite of Evans’ “absolutism,” which “holds values to exist independent of subjective apprehension.” J. S. Mill’s utilitarianism, for instance, would be both relativist and absolutist in Evans’ definitions: relativist, because its criterion of good is whatever promotes human happiness, and thus it may be said to deduce its criterion from a secular phenomenon—human happiness; it would be absolutist, though, because it insists, for example, that although all the people of a country might think it good to undertake aggressive war, this would not make it a good thing: its goodness is “independent of the subjective apprehension” of the actors, and is to be tested by whether the action actually does promote human happiness and welfare.

There is nothing “Orwellian” in my suggestion that utilitarianism can be considered an “absolutist” ethic; by one definition commonly accepted among philosophers, it is so considered.11 If Evans wants to deny that utilitarianism may be judged to be absolutist, if he wants to continue to maintain that liberals and libertarians were and are characteristically “relativists,” let him provide acceptable definitions and then cite some evidence.

Incidentally, it seems interesting that conservatives typically don’t spend just a bit more time explaining in a clear manner what they have in mind by terms such as “relativism” and “absolute values,” considering that these make up such a large part of their stock-in-trade.

I think I have given good reason to believe that I was justified in my original critique of Evans’ article. The question remains, however, why didn’t I deal with the substantive issues, with Evans’ thesis—why did I limit myself to discussing just his attack on classical liberalism?

FIRST OF ALL, WE MUST ask: Exactly what is Evans’ thesis? Exactly what is the thing in the absence of which a free society cannot be maintained? Is it belief in the “Judeo-Christion” revelation, or a belief in a particular variety of Protestantism? In his rebuttal, Evans traces many of our troubles to the decline of the Protestant Ethic—this decline is supposed to make self-reliance less popular and the welfare state more tempting, and the liberals were, he alleges, foolish to suppose they could undermine the Protestant Ethic and not expect people to gravitate towards dependence on the state. But Max Weber’s point was precisely that the Protestant Ethic was not characteristic of Roman Catholicism, or even of Lutheranism, but primarily of Calvinism and related sects.12 Here the role of the doctrine of predestination was crucial, in Weber’s statement. If it is the Protestant Ethic which is a necessary condition for the preservation of a free society, are we then committed to saying that a free society cannot be preserved without a general belief in predestination?

Let us assume that Evans’ thesis is the one he explicitly states: “A regime of political freedom cannot long exist without the underpinning of religious and moral sentiment derived from Judaeo-Christian revelation.” Why didn’t I go on to discuss this? The answer is that, although I consider this an interesting and important question, Evans purely and simply presents not the slightest evidence for “his thesis.”13 We cannot consider vague references to the moral crisis of our time, plus the example of John Stuart Mill—overworked as these both are—to be evidence in any scientific sense. If someone wanted seriously to maintain that a free society cannot be preserved in the absence of a commitment on the part of the great majority of the people to Christian revelation, a number of questions would immediately arise. Here are a few:

(1) What were the real causes of the decline of liberalism, beginning around 1870? To what extent did Christianity itself contribute to this, in the form of the numerous Christian Socialist and Christian Social movements in Europe and America? To what extent was the decline of liberalism due to the decline of the authority of the science of economics, and to what degree was this, in turn, caused by the view, often supported by Christian moral sentiment, that economics was “inhuman” and “selfish” in its view of human nature?

(2) Assuming that a free society is only possible if people believe that it is called for by the Christian holy scriptures, how can such a belief be long sustained if, in fact, these writings do not call for a free society? Assume that at any given time everyone believes in capitalism because he thinks that it is entailed by revealed Christian doctrine; unless it really is so entailed, then this supposed iron-clad support for capitalism must be expected to crumble as people realize that the entailment does not exist. Now, why does Evans, and why do so many conservatives, suppose that free enterprise and limited government are called for by Christian doctrine? Most of the Christians who have lived, and most Christians today, would disagree with this interpretation. Examples are really superfluous: The whole history of intolerance and persecution, the opposition of most Christian churches to capitalism down to, in our own day, John XXIII’s Mater et Magistra—all this indicates that most Christians have found their faith perfectly compatible with all kinds of infringements on liberty. If Evans could demonstrate that Christian doctrine calls for capitalism, it would represent a real landmark in the history of thought.

(3) Another difficulty that arises for anyone who wants to maintain that Christian revelation provides a much firmer basis for ethics (and thus for a free society) than any secular philosophy is able to propose, is the fact that very few people would be prepared to accept certain clear Biblical statements in this field. Who now agrees with Exodus 18:22—“Thou shalt not suffer a witch to live.” How many friends of freedom are completely comfortable with Romans 13:1-2—“The powers that be are ordained of God. Whosoever therefore resisteth the power, resisteth the ordinance of God: and they that resist shall receive to themselves damnation.” How many people find that, on reflection, there is a great deal of practical good sense in: “Take no thought for your life, what ye shall eat, or what ye shall drink. . . . Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself.” (Matthew 6:25, 34) On what basis do we choose among the various ethical imperatives contained in the Bible, which we will take seriously and which not; which we shall interpret literally and which we shall reinterpret in some more convenient manner?

(4) Evans states, in his rebuttal: “If morality is the function of secular arithmetic or the adjustment of secular means to secular ends . . . then it is altogether possible that, somewhere along the line, freedom must give way to the calculus. . . .” Here we have another hidden assumption—that unlike non-supernatural ethical systems, Christianity presents us with an air-tight body of moral rules: it consists of the orders given by God to man, which are clearly expounded in various revelations and backed up by the very powerful sanctions available to the Divinity. This is, however, a very naive view, I think, and anyone holding it is obliged to acknowledge the existence of the following argument and attempt to answer it: Exactly what is it that God tells us in an unambiguous way concerning our ethical obligations? Are there any rules which we are commanded to follow, telling us what to do under given conditions in a manner much more precise than some ethic such as utilitarianism? If we turn to the Bible, we find a number of such rules given, such as: Thou shalt not kill, thou shalt not steal (sometimes taken as a divine rule governing the proper social attitude towards private property), etc. Now, if the religionist conservative claimed that “Thou shalt not kill” is an unconditional rule (at least in reference to human beings), I think I could understand in what sense Christian ethics is more absolutist than, say, utilitarianism; in what sense Christianity presents what Evans calls “fixed and objective values” which utilitarianism does not present. Utilitarianism, as far as I can see, proposes no such unconditional, absolute rules. Yet surely there are no conservative religionists who favor an absolute, unconditional acceptance of this rule, for that would make impermissable both American military action in Viet Nam and capital punishment. So in just what sense is the Biblical injunction against killing more absolutist than the utilitarian one?

I am not aware that any religionist conservative has really dealt with any of these questions, and certainly Evans has not. It is much easier to flog non-supernatural ethical systems for being vague and indeterminate, and consequently responsible for all kinds of catastrophes, always with the implication that one has himself a really solid ethic in reserve.

FINALLY, I SHOULD like to make the chief point implied in my attack on Evans’ original article somewhat more explicit: the fact is that much too much passes muster in conservative writings that is nothing more than uninformed rhetoric. That almost all conservative publicists are guilty of this, at least sometimes, is scarcely the best kept secret on the Right. I for one am finally getting bored with the sophomoric misuse of technical philosophical terms; with sketchy outlines of the “course” of modern history; with constant attacks on the French Enlightenment, on human reason, and on the hubris of modern man; and with worldly-wise references to Original Sin and the absurdity of progress. Let conservative writers follow the example of present-day classical liberal economists, who adhere to the accepted rules of scholarly discussion in their confrontation with their leftist counterparts. The typical approach of the conservative cultural critics, on the other hand, since it is rhetorical and unanalytical, does not allow for progress being made towards the solution of the issues under discussion. If conservative publicists find the scholarly approach too tedious, they ought to recall that no one is compelled to write on intellectual history or philosophy.

—RALPH RAICO

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Anglican and Gallican Liberty

FRANCIS LIEBER

Francis Lieber, scholar and political writer, was born in Prussia in 1800, emigrated to America in 1827, and soon thereafter became an American citizen. His career was divided between teaching at the University of South Carolina and Columbia College, and such public services as the composition of legal rules to protect non-combatants and their property in time of war (his suggestions were adopted by Lincoln for the Union Army and subsequently embodied in the Hague Conventions of 1899 and 1907). His main energies, however, were devoted to a comprehensive statement of liberalism, the social philosophy which was his lifelong concern. The following selection, from his Miscellaneous Writings,1is a characteristic example both of Lieber’s liberal political thinking and his admiration for his adopted country.

IN THE SPHERE of political freedom there arise, as in all spheres of unfettered action, different schools, to borrow a term from the province of philosophy and that of the arts. It is thus that we have in the province of political freedom an Anglican and Gallican school. The term Anglican has been adopted here for want of a better one. We stand in need of a term which designates characteristics peculiar to the Anglican race in Europe, here, and in other parts of the world. If they are not all peculiar to this race, they are at least characteristics which form very prominent marks of its politics.

It is by no means the object here to show the gradual development of modern liberty and of the Anglican characteristics, their causes, and the circumstances under which they developed themselves, but rather to point out in what at this moment consist the striking features of these two political schools. With this view, it may be stated at once, that Anglican liberty distinguishes itself above all by a decided tendency to fortify individual independence, and by a feeling of self-reliance. The higher the being stands in the scale of nature, the more distinct is its individuality until it reaches in man its highest degree, and among men again we find the same principle prevailing. The higher, the more intellectual, and the more ethical the being is, the more prominent is also his own peculiar individuality. The same progress is observed in the scale of civil liberty. Individuality is almost annihilated in absolutism—whether this be of a monarchical or a democratic cast—while the highest degree of freedom (in the Anglican view of the subject) brings out the individuality of every one and the individual activity of each, as best it seems to him, in its freest play. Independence in the highest degree, compatible with safety and broad national guarantees of liberty, is the great aim of Anglican liberty, and self-reliance is the chief source from which it draws its strength. At no period has the deplorable absorbing concentration of power which characterizes the political systems of the continent of Europe during the seventeenth and eighteenth centuries obtained a footing among the Anglican peoples, although it was several times strenuously attempted. All the maxims of the common law most dear to the people, and most frequently quoted with pride as distinguishing it favorably from the civil law, embody this manly feeling of individual independence.

Everywhere is liberty considered by the Anglican nation to consist, in a very high degree, in a proper limitation of public power. Anglican liberty may be said to consist, essentially, in a proper restriction of government, on the one hand, and a proper amount of power on the other, sufficient to prevent mutual interference with the personal independence among the people themselves, so that order and a law-abiding spirit becomes another of its distinctive features. No people of the past or present have ever made use of the right of association, even where it fully existed, equal to the vast and at times gigantic application of this right to great practical purposes of a social, as well as political, character among the English and Americans. Public interference is odious to them. Government, to them, is not considered the educator, leader, or organizer of society. On the contrary, in reading the many constitutions which this race has produced, and the object of which is to define the spheres of the various public powers and to fix the rights of the individual, we almost fancy to read over all of them the motto, “Hands off.”

This tendency of seeking liberty, above all, in untrammelled action has produced among others the following great effects.

The untrammelled action or absence of public interference (which of course must in its nature be almost always of an executive character) has not been restricted to individuals, but as a matter of course the spirit has extended to institutions and whole branches of power, so that time was allowed to them to grow, to develop themselves, and to acquire their own independent being; consequently, we find the word law possesses a meaning very different from that which the corresponding words have even in their most comprehensive sense with other nations; we find a common law rooted deeper in the people than any enacted law or constitution; we find a parliamentary law (no “reglement”); we find the indispensable principle of the precedent of greater power than minister or crown, even though it be worn by a Stuart, or a Henry the Eighth.

Secondly, a consequence of the principle of self-reliance is that liberty is conceived far more essentially to consist in a great amount of important rights than in a direct share in the government. The latter is sought after as a security and guarantee for the former.

Thirdly, Anglican liberty consists in or produces the utmost variety, as all untrammelled life and unfettered individual actions necessarily do. Equality (if sought in aught else than in equality of freedom from interference, and if believed to consist in uniformity alone) is monotony, and becomes the opposite to life and action.

Fourthly, the Anglican race has mixed up subjects purely social with politics far less than any other race, and, it may be safely averred, has allowed itself to be less misled by phantoms, and adhered more to positive realities in the sphere of public life, than any other division of mankind.

EVERY GREAT PRINCIPLE or movement of mankind has its own characteristic fanaticism, caricature, or mischievous extravagance. This applies to all movements, religious, social, or political, and Anglican individualism leads, if carried beyond its proper line, to selfish isolation and heartless egotism. The fanaticism of Anglican individualism is Utilitarianism as it has been taught by some. But it must not be forgotten that we speak here of civil liberty alone. No American or Englishman has ever maintained that we can do without patriotism, without devotion to the public, and it is a striking fact, admitted by all, that nowhere is shown so much public spirit, during successive periods, as by the Anglican people, although it might have been supposed that their individualism would have led to the opposite. The reason is that Anglican liberty makes the people rely upon themselves, and not upon public power; they feel, therefore, that they ought to help each other and to depend upon their own united action, and not call for the aid of government at every step.

From a point of view, therefore, which belongs to Anglican liberty, the French device—Liberty, Equality, Fraternity, will appear in this light: Liberty is aspired to by all; it is the breath of conscious man. If equality means absence of privilege, unfounded upon political equivalents, it is comprehended within the term of liberty; if it mean, however, social uniformity, it is rather the characteristic of absolutism, and not of liberty. For if liberty means unrestrainedness, it implies variety. Bating the monarch, there exists nowhere in Europe or America a degree of equality equal to that in all Eastern despotisms, or that which existed in the worst period of Athens, where democratic absolutism was consistently carried out; where ultimately the principle of equality required the razing even of talent, fitness, and virtue, and the lot decided upon appointments. After the principle of equality had been established in such a manner, Aristotle described democratic liberty (or what we, according to modern terminology, would call democratic absolutism) as consisting in this: that every citizen is, in regular turn, ruling and ruled. Diversity is the law of all organic life, and despotism and freedom find their parallels in nature, in inorganic matter, and organic bodies. As to fraternity, it is the broad principle proclaimed by Christ; it is the divine principle of all social existence; it is one of the wells from which we shall draw, to irrigate our otherwise sterile life; it is like charity, like honesty, like forbearance, and to be true, ought to be infused into all our actions and measures, but it is no right, it is not liberty; nor does it necessarily indicate freedom. There is in some respects more political fraternity among Mohammedans than, unfortunately, among Christian people. Not that we put any slight value upon fraternity; Christians ought to have far more; but we merely mean to show that it is not necessarily connected with liberty. Fraternity exists often in the highest degree among the rudest tribes. That this device was adopted during the first French revolution was natural. It had a meaning in contradistinction to the utterly selfish and immoral state of things which had existed and which it was a settled purpose to destroy: but its resumption in the present third French revolution leads to misconceptions or rests on a confusion of ideas, which seems as great as if in America a political banner were raised with the motto, Liberty, Love of our Enemy, and Salvation; or Liberty, Production, and Daring. All these are excellent or sacred things, but used as distinctive political characteristics would either have no meaning or might easily be made to mean mischievous things.

QUITE DIFFERENT from Anglican is Gallican liberty. The history of England distinguishes itself from that of all the other nations of Europe by nothing more than by the fact that, in that country alone, the nobility assimilated itself at a very remote period with the people. As early as in the year 1215 the noblemen did not wholly forget the people. The plodding husbandman was included in the Magna Charta; and repeatedly afterwards we find the knights siding with the citizens. The nobility of all other countries, however, were and remained selfish, oppressive and rebellious barons. Louis XI and Richelieu greatly broke their power in France, and Louis XIV completed the work. No citizen-liberty having existed in that country, Louis found himself perfectly unlimited so soon as he had changed the baron into the servile courtier; and now a system of such absorbing centralization began that, when he died, he left France without institutions (if we take the term in the Anglican sense, meaning institutions with an independent and individual existence), as he left her without money and without morality in the leading classes. The absorbing centralization of power went on in all successive periods, and whatever changes of government have taken place, the process of centralization was only speeded on by it. The ball was ever rolling in that direction. The first French revolution, whatever benefit it otherwise produced, accelerated and perfected it much; Napoleon carried it still further, and a minister of the present provisional government, M. Ledru Rollin, lately declared, in one of his proclamations, that France should imitate the example of Paris, which he called the center and representative of French virtue, intelligence, action, and patriotism. How strange a similar declaration of an English minister, with reference to London, would sound in the ear of an Englishman, or of our President with reference to New York, or any state of ours!2

Concentration of the most stringent kind existing, and it being neither disrelished nor suspected by the people, it is obvious that, coupled with the idea of liberty, in contradistinction to despotism, it can produce no other idea than equality—an equal change of “ruled and being ruler”; and since equality, with this political meaning, is a practical impossibility with a nation so vast as the French, we have the further consequence that, practically speaking, equality means in France always the exclusive sway of a certain class. He that seeks now to sway is the Ouvrier, and Bourgeoisie has actually become a name of shame or hatred, as the term noblesse had become in the first revolution.

Gallican liberty, then, is sought in the government, and, according to an Anglican point of view, it is looked for in a wrong place, where it cannot be found. Necessary consequences of the Gallican view are that the French look for the highest degree of political civilization in organization, that is, in the highest degree of interference by public power. The question whether this interference be despotism or liberty is decided solely by the fact who interferes, and for the benefit of which class the interference takes place, while according to Anglican views this interference would always be either absolutism or aristocracy, and the present dictatorship of the ouvriers would appear to us an uncompromising aristocracy of the ouvriers.

The universal acknowledgment of organization makes the Frenchmen look for every improvement at once to government. Self-reliance does not exist in detail. While the British race seeks for one of the great applications of liberty in free trade, the French call for organization of labor, and M. Louis Blanc has proposed a plan, accordingly, which would appear to us as insufferable tyranny, and annihilation of individuality. While we have seen, in the Anti-Corn-Law League, a mighty private association coping with the most powerful interest that ever existed in a legislature, the British land-owner, and ultimately forcing government to fall into its own ranks, we do not find a solitary club in Paris pursuing one detailed practical measure, but all discuss the best organization, and to the Minister of Justice, and of Worship, and to others whom previous “organization” had already created, a Minister of Labor, and even one of Progress has been added, if the papers have informed us correctly. In Anglican liberty the movement not only begins with the people, but also the practical carrying out. In France, liberty is expected to begin practically with government organization and to descend to the people.

This is so true, that a large number of the French (we believe it to be a minority, but it is the active and loud minority) seem to have wholly discarded the idea that liberty is the main object to be striven for, and call for a social reorganization. A very busy and widespread club at Paris has actually hoisted a banner on which the word Liberty is omitted, bearing the following device: Equality, Solidarity, Fraternity. Here, then, we have the caricature of French liberty, as we have in ultra-utilitarianism that of Anglican freedom. Equality and solidarity are necessary elements of all politics. Without solidarity no nation could be a nation, no state a state. Every one is obliged to bear with laws which he considers bad, or the consequences of a war which he condemns. It is the price we pay for living in a civil society; but if solidarity be elevated into a distinctive mark of a specific political or social system it is the death-blow to individualism, and a Spartan republic, destroying even the family, must be the consequence. Here, too, is to be found the reason of the striking phenomenon that at all periods the fanatics who have attempted the abolition of private property always made war against exclusive or individual marriage at the same time. Many communists have preached it, and many religious fanatics in the Middle Ages have attempted it.

The fact that Gallican liberty expects everything from organization, while Anglican liberty inclines to development, explains why we see in France so little improvement and expansion of institutions; but when improvement is attempted, a total abolition of the preceding state of things—a beginning ab ovo—a re-discussion of the first elementary principles.

ANGLICAN LIBERTY produces variety, as was stated before, and demands absence of unnecessary restraint; Gallican liberty demands uniformity and even uniforms, so odious to Americans. A proclamation of the provisional government, dated April 30, 1849, actually begins with the words: “Considering that the principal of equality implies uniformity of costume for the citizens called to the same functions,” etc., prescribing a costume—coat, waistcoat, and pantaloons, to the members of the national assembly—that assembly which, according to the expression of the provisional government itself, is the highest representative of national sovereignty that has ever assembled, and into whose hands that same provisional government will lay down its power. Nothing can show more distinctly the difference between Anglican and Gallican liberty than that this order was possible.

In England and America, the principle of liberty dictates that all that can be done by private enterprise ought to be left to it, and that the people ought to enjoy the fruits of competition in the highest possible degree. In France, on the other hand, the provisional government made arrangements to buy up all the railways so soon as the king had been expelled.

All political changes, according to Anglican liberty, are intended more efficiently to protect the changes which society has worked for itself; according to Gallican liberty, the great changes are intended to be, not political, but social, organized by government: that is, according to Anglican liberty, forced upon society by the successful party, which, nevertheless, may be a very small minority owing to the peculiar power which, in the great system of concentration, Paris exercises over France, and which all movable masses exercise over populous cities—an influence considered salutary according to Gallican views of liberty, and disastrous according to Anglican.

THE OBJECT OF this paper has been to show the difference of the two schools, and it would be foreign to the subject to dwell upon the generous enthusiasm which pervades at this moment large parts of the French people, and, coupled as it is with the fearful reminiscences of former days, has produced some very remarkable effects; but enthusiasm cannot last, and, if it could, it cannot become a substitute for individualism, an indispensable element of our ethical nature. Enthusiasm is a necessary element of all great actions of individuals as well as masses, but he who founds upon it plans of a permanent state of things, whether in worship or politics, deprives his system of durability. Nothing can insure principles against an early withering but institutions. No ruler, however popular or brilliant, no period, however glorious, and no enthusiasm, however generous, can produce lasting good if they do not lead first of all to the foundation of expansive institutions. Nations must neither depend upon popular rulers, nor trust their own enthusiasm. If they do, everything is frail and evanescent, and the continuity of the state, without which there is no law, order, strength, or greatness, is rendered impossible.

This remark leads us to the last observation we mean to make upon the difference of Anglican and Gallican liberty. The Anglican race is a decidedly institution-loving and institution-building race, as the Romans were, who built up the civil law. They are conservative as well as progressive, and believe that conservatism is as necessary an element as progression. The fanaticism of conservatism is a Chinese idolatry of the past and the old. The French, on the other hand, as they appear, at least in modern times, are philosophizing, often brilliant, organizers, and resemble in this more the Greeks, who built up no law but whose philosophers proposed invented governments. The fanaticism of this disposition is a restless re-beginning at every step and denial of the necessity of continuous progress.

It must have appeared to the reader that the writer of this paper is an advocate and lover of the principles of Anglican liberty; that he believes the French are mistaking democratic absolutism for democratic liberty; that the whole Continent will have to pass through long periods of ardent struggle before it can rid itself of the consequences of the unhallowed centralization which absolute princes in their blindness mistook for power and fastened upon the people; that he is a devoted friend to independence and the liberty of the individual, which, in his opinion, need be as little connected with selfishness as Christianity is, although this religion, above all others, throws man upon his individual responsibility, thus raising him immeasurably; that, however dazzling the effects of democratic absolutism occasionally may be, it is still not freedom, which, like dew, nourishes every blade in its own individuality, and thus produces the great combined phenomenon of living nature; and that he would infinitely prefer a life in one of our loneliest log-houses to a barrack-residence of absolute equality, stifling his own individuality and that of every one of his fellow-citizens, however brilliant that barrack might be furnished.3 But whether these are the views of the writer or not, is of little importance. The truth remains the same, that the difference pointed out by him exists between the two modes of liberty, that they differ widely, and that it behooves every sincere friend of liberty to reflect maturely on the subject and to come to clear results; especially on the European continent, where liberty is in a nascent state, and is of course exposed to be seriously injured in the tender age of her infancy; while a closer geographical connection with France often leads to the adoption of measures and views peculiar to that country, when no intrinsic reason for doing so exists. The European continental countries have had their periods of absorbing and life-destroying centralization. The principles of our liberty, therefore, are peculiarly necessary to the people of the European continent. Many of them seem to fall into the same unfortunate delusion of expecting everything from organization by public power.

The Uneasy Case for State Education

E. G. WEST*

This article has been adapted by the author from his recent book Education and the State, published in London by the Institute of Economic Affairs.

THE CASE FOR substantial government intervention in primary education is normally examined by political economists in the context of two principles: “state protection” and “neighborhood effects.” According to the first, if it is generally agreed that the state exists basically to give protection to its members, it must have special obligations to children since they are least able to protect themselves on their own. According to the second principle, the way I choose to act often has serious spillover effects upon my neighbors; and similarly the actions of my neighbors, taken individually, can substantially affect me. The choice of any one individual to educate, or not to educate, his children is shown to be a particular case in point. Even if all individuals choose voluntarily to purchase education they may still “underinvest” from the point of view of society as a whole. This being so there is again said to be a strong presumption in favor of government intervention.

The first part of this article attempts to examine the “protection principle” in more than usual detail. The second part will raise questions which are not normally raised about the empirical foundation for common assumptions about the “neighborhood effects” of education.

WHATEVER THE MEANING of laissez faire, the most ardent of its nineteenth century English supporters rarely argued that it should operate outside the boundaries of a proper legal framework. Within this framework they were prepared to make many exceptions to their general principle of freedom of contract and their special reservation for children was a prominent example of this attitude. However much they disliked overinterfering governments, they believed that some element of governing was necessary. But what was the true duty of government? The answer of one of the classical economists, Nassau Senior, disciple of Bentham and friend of John Stuart Mill, was quite clear:

I detest paternal despotisms which try to supply their subjects with the self-regarding virtues, to make men by law sober, or frugal, or orthodox. I hold that the main, almost sole, duty of Government is to give protection. Protection to all, to children as well as to adults, to those who cannot protect themselves as well as those who can.1

Senior went on to remind his readers that children were more defenseless than others. In view of this the state had extra protective obligations towards them and in particular there was a strong presumption in favor of state intervention in education. This view, which seems to have been readily accepted by liberal economists ever since,2 will now be examined in more detail in order to gather its precise implications.

A MOMENT’S REFLECTION will show that it is much easier to state the “protection of minors” principle than to draw practical policy conclusions from it. If it is agreed that the state should be responsible for seeing that children are protected, the question arises: whom should it appoint to carry out this duty in practice? The first obvious point to clear up before deciding this issue is for the state to ascertain from its members how important a role they want the family to play. If they aim at giving the family a central place, then the question of protecting infants cannot be settled in isolation of this policy, for it establishes a presumption in favor of delegating the duty of child protection first and foremost to the parents and only withdrawing this arrangement when special circumstances require it. For these reasons the following remarks of John Stuart Mill, which seem to have had widespread influence on this subject, were too evasive and too legalistic:

In this case [education] the foundation of the laissez-faire principle breaks down entirely. The person most interested is not the best judge of the matter, nor a competent judge at all. Insane persons are everywhere regarded as proper objects of the care of the state. In the case of children and young persons, it is common to say, that though they cannot judge for themselves, they have their parents or other relatives to judge for them. But this removes the question into a different category; making it no longer a question whether the government should interfere with individuals in the direction of their own conduct and interests, but whether it should leave absolutely in their power the conduct and interests of somebody else.3

Few would disagree with Mill’s general sentiments. If we do not tolerate cruelty to animals still less should we allow the possibility of continued cruelty to children by granting absolute power over them to any single person. But Mill was mistaken in assuming that the common argument, that parents and relatives could judge for their children, was a claim for absolute power. What most people envisage is something in the nature of a fiduciary power, to be removed in cases where abuse can be shown.

Whatever the true interpretation of his statement, Mill’s anxiety to put this question into a different category did not make it any less important or less urgently in need of an answer: for the state is not a disembodied entity; it has to work through individuals to whom it prescribes certain powers. Now the function of supervising a child is such a personal and delicate matter that it is most important to visualize it in the form of a competition for influence between one individual, the parent, who by nature is closer to the child and therefore has better opportunity for gaining knowledge of its best interests, and another individual, appointed by the state, who has the advantage of some presumed expertise in protecting children. When the problem is expressed in this way the question of absolute power is beside the point. Certainly the difficulty is not one which can be solved easily by any universal or dogmatic ruling. Accordingly, the following analysis is not intended to stake an unconditional claim for any of the parties concerned, but is merely an attempt to examine the issues objectively. Insofar as I am critical of the ability of the “protection” argument to justify universal state schooling, it must be emphasized that my criticism is not to the prejudice of the “neighborhood effects” argument for this system.

BEFORE WE CAN CHOOSE those individuals deemed to be best able to protect a child, we have to solve the even more difficult task of defining the danger against which we are trying to protect it. Even state action against physical cruelty is not always simple to administer since the criterion is rarely a matter of unanimous agreement. But at least where physical injury has resulted in permanent damage to an individual, then the evidence is usually so obvious that the case for state protection against further assault is clear enough. In education, on the other hand, the argument is for protection not against physical injury but against ignorance. Here it is often more difficult to see in what respect any faculties can be said to be permanently injured, either in effect or in intention. When, for instance, the head of a temporarily distressed family sees his five- and six-year-old children remaining ignorant of reading and writing, we cannot say that their faculties are injured in the same sense as in the case of physical brutality. In this instance, the faculties of learning need not in any way be permanently damaged; it is quite possible for them to remain intact to be used later. If the state does decide to intervene in such cases, therefore, it cannot be on the grounds of the same sort of protection as that directed against physical aggression of any kind; rather is it likely to be based on the widely accepted principle of government relief of poverty. This initial clarification seems necessary if we wish to avoid using the term “protection” with its more usual connotation.

But there is a much more stubborn difficulty. When we now speak of protection against ignorance, we have to ask: ignorance of what? A person may be most ignorant of one thing but quite expert at another. Too hasty attempts to prescribe learning priorities can lead to results which not only endanger spontaneity and individuality but which can involve fundamental contradictions in any society which professes to encourage and support the ideal of liberty. Confusion on this subject often arises from a dogmatic insistence that the relevant ignorance is necessarily ignorance of what is taught in schools between statutorily prescribed ages. Schooling is only one instrument in the removal of ignorance; if other means are being used, the need for protection may well be superfluous. There are additional sources of learning in real life: the parent, the family, its friends, the church, books, television, radio, newspapers, correspondence courses, etc., “on the job training,” and personal experience. J. S. Mill himself can be quoted in this respect:

Even if the government could comprehend within itself, in each department, all the most eminent intellectual capacity and active talent of the nation, it would not be the less desirable that the conduct of a large portion of the affairs of the society should be left in the hands of the persons immediately interested in them. The business of life is an essential part of the practical education of a people; without which, book and school instruction, thought most necessary and salutary, does not suffice to qualify them for conduct, and for the adaptation of means to ends. Instruction is only one of the desiderata of mental improvement; another, almost as indispensable, is a vigorous exercise of the active energies; labor, contrivance, judgment, self-control: and the natural stimulus to these is the difficulties of life.4

The best means by which individuals are likely to “protect” themselves or their children from “ignorance” should therefore be open to constant comparative appraisal. That a parent, for instance, wishes to take his child away from school at an early age does not necessarily signify that he is negligent. Insofar as the school has become less efficient than other means of education, the parent himself may be acting from motives of protection and be making the same kind of shrewd comparative assessment that he makes before transferring his buying from one source of his child’s food or clothing supply to another. Again, to assume that the education given in a school is always and under all circumstances to be preferred to alternative types of education is probably to assume also that all schools and home environments are homogeneous. This is by no means self-evident—especially in a changing society. It is interesting a recall that J. S. Mill himself was deliberately kept at home throughout his childhood by a father who was strenuously motivated by protective impulses. His father, James Mill, indeed kept his son away from school, “lest the habit of work should be broken and a taste for idleness acquired.”5 It is quite true that James Mill has been the subject of severe criticism from subsequent state educationists on the ground that he was too forceful a task-master. The question is, however, whether a state school could have produced a “better” John Stuart Mill. Such questions, of course, give rise to all sorts of speculations, but no apology is offered for asking them, since, as I hope to show, they lie at the root of the problem I am discussing.

THE “PROTECTION OF minors” argument has in the past been used to support pressure not merely to educate a minority of neglected children but also to establish universal schooling whereby every child is provided for by state schools. There are two major difficulties in the way of our accepting such reasoning, the first political and the second economic. On the political difficulty, it must first be observed that in order to justify a vast and comprehensive system comprising thousands of new state schools one must establish that such provision is needed to fill an obviously widespread deficiency and that the majority of parents and relatives are either negligent or ignorant. Now if this is the contention, it must imply either widespread schizophrenia or self-abnegation, for it envisages an electorate which virtually condemns most parents and relatives for being ignorant or negligent about their children when that same electorate consists to a large extent of the parents and relatives themselves. Otherwise, the question immediately arises of why, if such ignorance and negligence is so serious, should we presume that it will not equally express itself at the ballot box and with equally “unfortunate” results when the parents and relatives choose their representatives?

The extent of this presumed schizophrenia could best be checked by a survey among parents to ask their intentions if given hypothetical refunds of indirect and direct taxes in the form either of money vouchers spendable only on education in lieu of “free” state education or of income tax allowances. The only statistical survey that has attempted to elicit answers to this question suggests that negligence would be far from typical.6 Alternatively we can make an historical investigation to discover parental behavior before the inception of state education, bearing in mind that such state intervention had to be supported by increased tax revenues which might otherwise have been spent voluntarily on education. I think it can be shown from historical evidence that nineteenth century parental behavior was much more responsible than is commonly supposed.7

The second major difficulty in the way of accepting the “protection” argument to justify a universal state school system is an economic one. Nowhere does it seem to have been shown why other forms of state intervention could not achieve the intended result of state protection more effectively and with less cost than the present system of state schools (which amounts virtually to a system of nationalized schools). Much as John Stuart Mill wanted the protection of children, even he did not in the end prescribe compulsory state schools, nor even compulsory private schooling, but only compulsory education. Accordingly he held that the state should be interested not merely in the number of years of schooling but in checking the results of education whatever its sources, and he contended that an examination system was all that was necessary. If a young person failed to achieve a certain standard, then extra education would be prescribed at the parents’ expense. Another sanction which Mill also entertained was to make the right to vote conditional on some minimum degree of education.

Under Mill’s scheme, if it were operating today, it is conceivable that some children would attempt to attain the necessary standards by much more dependence on parental instruction,8 correspondence courses, evening classes, local libraries, etc. These in turn would be measured against particular services offered by the private schools whose relative efficiency would be measured by parents and their children in terms of the size of their classes, for instance, or the qualifications of their staff and the personal attention they gave the children.9 There are examples of this kind of minimum state intervention in other spheres. Thus although the state insists on the acquisition of a minimum competence in driving before allowing persons to take their vehicles on the roads, it has so far found it unnecessary to prescribe the particular way in which persons should acquire the knowledge and the skill, or to nationalize the driving schools and supply training “free” by raising taxes on all. Again, protection against the supply of adulterated food to children (or to anybody else) is effected simply by a system of inspection, reinforced by regulations, breaches of which are punishable by the law.

THE CASE OF FOOD IS interesting. Protection of a child against starvation or malnutrition is in the same category of importance as protection against ignorance. It is difficult to envisage, however, that any government, in its anxiety to see that children have minimum standards of food and clothing, would pass laws for compulsory and universal eating, or that it should entertain measures which lead to increased taxes in order to provide children’s food “free” at local government kitchens or stores. It is still more difficult to imagine that most people would unquestioningly accept this system, especially where it had developed to the stage that for “administrative reasons” parents were allocated those stores which happened to be nearest their homes; or that any complaint or special desire to change their pre-selected stores should be dealt with by special and quasi-judicial inquiry after a formal appointment with the local “Child Food Officer” or, failing this, by pressure upon their respective representatives on the local “Child Food Board” or upon their Congressman. Yet strange as such hypothetical measures may appear when applied to the provision of food and clothing, they are nevertheless typical of English and American state education as it has evolved by historical accident or administrative expediency.

Presumably it is recognized that the ability in a free market to change one’s food market when it threatens to become, or has become, inefficient is an effective instrument whereby parents can protect their children from inferior service in a prompt and effective manner. If this is so, then one should expect that the same arguments of protection would in this respect point in the direction not of a state school system where it is normally difficult to change one’s “supplier” but in the direction of a free market where it is not. In this sense one must question John Stuart Mill’s assertion that in the case of education the principal of laissez faire breaks down entirely; for if by laissez faire he meant (as he seems to have meant) a free market system, then our reasoning suggests on the contrary that this is a technique which with some qualifications is admirably suited to protection of all kinds and not least the “protection of minors.”

So much for the analysis of the basic issues in the “protection” thesis. The conclusion is that if there is a logical case for a universal state school system, as distinct from marginal intervention to meet special cases, we must look elsewhere than the protection principle.

THE ABSENCE OF A justification for state intervention on the grounds of the “protection principle,” brings us to the second line of reasoning, which is widely believed to give still stronger support for such intervention. As previously indicated, this belongs to what is known as the “neighborhood effects” argument; a brief general account of its present place in economics may be helpful prior to the particular application of it to education.10

Roughly speaking, the “neighborhood effects” argument stems from the common observation that “no man is an island.” Many of his actions intentionally or unintentionally affect other people. Where these spillover effects are very pronounced, and do not show any signs of ever being organized or brought under control by the market, one’s normal reaction is to explore the possibility of government intervention. The most obvious instance of the resort to government is seen in the establishment of a state system of law and order to curb and to make socially accountable individual acts of aggression. Here, indeed, we have the basic raison d’être of the state in the first place. Beyond personally aggressive private actions, however, there are other particular “neighborhood effects” which are also identified and often listed in a descending order of seriousness or scope. Several of these are also commonly claimed to warrant state intervention. The most frequently quoted example in economics is the firm whose factory chimneys offend the neighborhood with smoke and thereby cause people outside the factory to spend extra amounts on laundries, bronchitis cures, etc. Another alleged instance is the injury to “local amenities” caused by the “unfortunate” construction of a new house by a private speculative builder. Again there is the individual motorist who parks his car to the detriment of other road users. Campaigns to make socially accountable those responsible for road traffic and aircraft noises or exhaust fumes also belong in the same category of “neighborhood effects.” All of them are cited as cases where the costs taken into account by the individual in the market are unlikely to include any element of what are called social costs.

One must observe already that although most people react to such situations by readily calling upon government to put these things right, they do not immediately see how complicated is their request. For one thing, if they examine more carefully the above examples of social costs they will see that they are not exclusively a consequence of private action. The noise from publicly-operated airways, buses, and trains, for instance, has its ultimate sanction not in private action but in public legislation, that is, in government itself. Nationalized chimneys give off smoke no less than private ones. Public gasworks can spoil amenities while offensive smells can come from publicly operated sewage works.

A further complication is that social costs can be negative as well as positive; that is, some spillover effects may be unintentionally beneficial to the neighborhood. Thus a farmer who drains his own land may improve that of the neighboring farm, even though he cannot charge for benefits rendered Still more complex are the many instances where both positive and negative social costs are produced by the same agent. An example of this is where a new industrial plant gives off smoke (detrimentally) but also reduces unemployment in the same neighborhood (beneficially). Again the owner of the plant could be the central or local government as well as a private company.

It seems to have been widely believed at one time that the moment that one had pointed out a privately originating “neighborhood effect,” such as that of the smoke-laden atmosphere, actual intervention by the state was adequately justified. This, however, is not so. The identification of a “neighborhood effect” is only a necessary but not a sufficient condition for intervention. There are many serious offsetting considerations, the most important being that the task of measuring the chain reaction of costs and benefits is often insuperable. The administrative costs of intervention alone may be so high as to exceed the net benefits which such action sought to secure, even if they could be measured.11 Furthermore, it is likely that a particular mode of state intervention to meet a privately originating “neighborhood effect” may itself incur a second (publicly originating) “neighborhood effect” which has still more serious consequences than the first. For instance, suppose that the government responds to the smoke pollution of a factory by placing a special local tax upon the offending firm. The resulting increase in relative costs of production may so discourage the expansion of the same firm as to encourage it to invest its surplus funds elsewhere. The result may be that the firm’s decision is now the cause of another “neighborhood effect,” not smoke pollution this time but the more serious problem of unemployment.12

How then does the “neighborhood effects” analysis apply to education? Political economists usually have two particular instances in mind. The first is expressed in their contention that the social benefits of education are not confined to the “educatee” but spread to society as a whole, most noticeably in the form of reduced crime and more “social cohesion.” This can be expressed negatively: The private actions of an uneducated person may have unfortunate consequences for others in society. The idea seems to be, for instance, that just as the government can do something about “anti-social” smoke (e.g., by taxation) it can do something about “anti-social” conduct (e.g., by education). The second general example is the idea that education is an investment whose benefits also spill over to the economic advantage of society as a whole. There is nothing in this argument so far to justify government provision of schools. If the government were satisfied that neighborhood effects were substantial, it could increase the quantity of education by a mixture of subsidies, vouchers, and compulsory legislation. But what is the evidence for neighborhood effects? Are economists’ assumptions always well grounded?

CONSIDER FIRST THE familiar proposition that state provision of education will successfully meet the “neighborhood effect” of crime. It will be helpful first to give a few quotations to illustrate the widespread influence of the idea both in the nineteenth century and today.

In 1847 T. B. Macaulay proclaimed in Parliament:

I say that all are agreed that it is the sacred duty of every government to take effectual measures for securing the persons and property of the community; and that the government which neglects that duty is unfit for its situation. This being once admitted, I ask, can it be denied that the education of the common people is the most effectual means of protecting persons and property?13

In the previous year W. T. Thornton had typically expressed the prescription of the Utilitarians:

No one now denies that proper schools for the lower orders of people ought to be founded and maintained at the cost of the state. The expense no doubt would be considerable, but it would scarcely be so great as that already incurred for prisons, hulks, and convict ships; and it is certainly better economy to spend money in training up people to conduct themselves properly, than in punishing them for their misdeeds.14

Such Utilitarian calculation of the crime-reducing potentialities of formal education is still in evidence among responsible authorities today. Thus, referring to the “neighborhood effects” of education, the Robbins Report on Higher Education (1963) said:

There are, of course, also important social and political benefits of education which accrue to the populace as a whole—a better informed electorate, more culturally alive neighborhoods, a healthier and less crime-prone population, and so on. What is not always recognized is that these social and political consequences may in turn have significant economic effects—the efficiency with which goods are exchanged is obviously enhanced by general literacy, to the extent that education reduces crime (even if only by keeping children off the streets during the day) the country can shift resources that would have had to be used for the police function to other ends, and so on.15

The Robbins Report makes this statement before freely admitting that the evidence is still not sufficient to make it anything more than an inspired hunch. The Crowther Report of 1959 and the Newsom Report of 1963, referring to the education of persons between fifteen and eighteen years (which include the most crime-prone ages), although much more hesitant on the matter, nevertheless, as I shall show in more detail below, favored still more education in the current twentieth century campaign against delinquency and crime.

IN THE LIGHT OF THE “neighborhood effects” argument examined in the preceding paragraphs, what can be made of its application to education? It is important to remember the complications; not only must the “neighborhood effect” be first identified in a meaningful way, but also the possible side-effects of the proposed government intervention itself should all be examined before such intervention is fully justified. How far then, first of all, has the particular “neighborhood effect” relationship between education and crime been reasonably established in practice? In other words, what evidence have we to show that the belief in state education as a general insurance against crime is anything more than dogma?

In answering such questions the early economists were inclined to rely upon crude statistics. Because the latter were presented as showing an inverse relationship between crime and education (usually measured by the degrees of schooling) the general inference was that ignorance (or the deprival of schooling) was a major cause of crime. To the extent that poverty was connected with ignorance and undesirable habits, it too was thought to be an important contributory factor. In view of this kind of reasoning it would be intriguing to know the reaction of these early commentators to present-day statistical evidence, for this shows that crime has increased at the same time as state education has been growing. Certainly this does not deny that crime could have grown equally or even more in the absence of state education; but scientific objectivity demands that all things should be suspect, especially where there is a positive correlation. One can at least speculate, judging by their weakness for such crude statistical inferences on this subject, that the early economists would be tempted to point to the possibility that our state education, as distinct from their nineteenth century parochial education, was a predisposing cause of crime!

Today indeed there is at least a growing scepticism about the potentialities of state education as a crime reducer. Thus The Times Educational Supplement in 1963 declared:

It is strange that as education spreads and poverty decreases, juvenile crime should steadily rise.16

Similarly, the idea that poverty is a major cause of crime is not so confidently held. Indeed some social scientists conclude from the evidence that the idea has no firm basis. Lady Wootton writes:

. . . it is a conclusion which would, I think, have surprised our grandfathers. The converse was implicit—and sometimes explicit—in the thought of not so many generations ago; as it is implicit also in the thought of those who express disappointment that the coming of a “welfare state,” which they believe (though mistakenly) to have banished poverty, has not also greatly reduced the criminal statistics.17

The most energetic nineteenth century advocates of state education would no doubt have been also perplexed by the fact that the same welfare state which has failed to reduce crime is one which also includes an extensive education system financed by public funds of unprecedented magnitude.

Today, of course, we would claim to be much more aware of the complexity of crime and its causes. Certainly much more sophisticated reasoning surrounds the subject and it has been established in particular that a proportion of convicted persons is suffering from mental disorders which, it is claimed, need psychiatric treatment. Many other possibly conducive factors are still being investigated and these include divorce, broken homes, the persistence of crime in some families, poor church attendance, mothers’ employment outside the home, health, and type of employment. Meanwhile an ordinary person may be forgiven the thought that highly organized crimes today call for such a degree of skill and intelligence that education can only serve to be a complementary rather than a competitive factor. The cleverer the criminal the more effective the crime. But it is interesting to observe that so far English social scientists have not even yet reported any very clear correlation between education and crime. Thus in 1958 Lord Pakenham published the results of research into the causes of crime (financed by the Nuffield Foundation), which included the following observation:

I do not think, however, that the distinguished experts, including the representatives of the National Union of Teachers who gave evidence before us, would claim that, up to the present, much progress has been made in connecting education and crime.18

Insofar as people today still press for more education to reduce crime they usually mean a lengthening of the school life, i.e., a rise in the school-leaving age. In this connection we touch upon a piece of evidence which English educationists have found particularly perplexing. The Crowther Committee (1959) discovered the fact that the last year of compulsory education was also the heaviest year for juvenile delinquency and that the tendency to crime during school years was reversed when a boy went to work. Not only was this a long-standing phenomenon but also when in 1947 the school-leaving age was raised from fourteen to fifteen the most troublesome age group moved up from the thirteen-year-olds to the fourteen-year-olds.19

HOW SHOULD AN economist treat such information within the general framework of the “neighborhood effect” analysis? It seems reasonable at least for him to conclude that the popular belief, as quoted for instance from the Robbins Report that state education makes the public less crime prone, is unsupported by the available evidence. Beyond this he could argue, but with less certainty, that the evidence showed a prima facie relationship in the opposite direction, i.e., that state education involved adverse external effects and aggravated or even helped to cause the prevailing trend towards increased criminal behavior. Certainly one could not object to the tentative conclusion that if any further official action were to take place it should first concentrate on a proper investigation of this question and that in the meantime there was to be a presumption against any further increases in the duration of compulsory schooling on this account.

It therefore comes as a surprise to find the Crowther Report concluding that there was nothing in the current state of affairs

. . . to make any thoughtful person doubt the value of being at school; indeed, the delinquency may arise, not because boys are at school, but because they are not at school enough.20

As is well known in Great Britain, the Report argued for the raising of the compulsory school-leaving age. In doing so it referred to the beneficial external effects on society of presumed increased economic growth,21 but at the same time it apparently refused to consider the possibility of any adverse external effects. Yet the Crowther policy of first raising the school-leaving age despite the evidence about delinquency and then trying to justify the measure after the event by offering hopes of future improvements in schooling seems to start at the wrong end. Indeed, such proposals seem to substitute dogma for reason and to betray the attitude that come what may the schools should not yield. In this attitude they probably reflect the limitations of state-sponsored committees which inevitably comprise many members and witnesses such as local education officers, state school headmasters, and the heads of teacher-training establishments who have a direct interest and belief in the expansion of state education itself. Such committees seem to welcome the rationality implicit in the “neighborhood effect” argument when it suits them, but are too ready to discard it the moment it becomes inconvenient.

The Crowther Committee contended that delinquency among older pupils probably arose because a boy had more time on his hands to get into mischief when at school compared with when he was at work. The Newsom Report22 (on the education between the ages of thirteen and sixteen of pupils of average or below average ability) pointed out the difficulty of getting enough staff and resources to keep the boys occupied sufficiently. Accordingly this Report recommended that: “The school programme in the final year ought to be deliberately outgoing—an initiation into the adult world of work and leisure.”23 Again, undaunted by the evidence, the Report also recommended the raising of the school-leaving age. Once more the innocent observer must be allowed to question why, if the rate of delinquency declines when boys go out to work, should the commencement of this work be delayed still further in favor of schemes for simulating work in school? Why do we accept indiscriminately arguments about the need to protect young people from the “uncertain pressures of adult life” as long as possible and neglect the possibility that the pressures of school life may be in some cases the crucial ones? Such thoughts are not so revolutionary when it is remembered that, in these days, going out to work does not necessarily mean the end of formal education, since technical colleges and day-release schemes are now typically provided for the young worker’s continued instruction. Those who show an overweening concern about the welfare of school-leavers do not seem to have shown why their proposals for extra protection could not be implemented, for instance, by schemes for appointing special supervisors, which would have the additional merit of being far less expensive than schooling. This is not of course to argue that all expenditure on further schooling is wrong. Where it is appropriate, and this may apply to most people, it is to be welcomed; but to apply a measure to all on the grounds that it is suitable to some is to sacrifice prudence to mere legislative expediency.

The reduction of crime is only one of many kinds of social benefit which society is supposed to expect from education; but it has been selected here for first attention because of its prominence in traditional reasoning and because it is a good illustration of the facility with which unchallenged and unverified theories can become assimilated in the folklore of educational debate. In addition to the errors of fact which are involved in it, such thinking also suffers through a lack of conceptual clarity. What do we mean when we say that education reduces crime? Are we thinking of education in the wide sense or do we mean only formal schooling? If the former, what kind of education have we in mind? If the latter, do we mean only state schooling or do we include non-state schooling?

The “reduction of crime” is only one of the propositions which economists normally associate with “neighborhood effects.” Space does not allow a review of all of them, so the remainder of this article will confine itself to one more example of unsupported assumptions in this field: the assumption that widespread literacy could not have been achieved or maintained today without the predominant role of government.24

MANY ECONOMISTS ARE anxious to remind us that without widespread literacy it would be difficult to maintain a market economy as well as a political democracy. What, then, is to be feared? Was the populace not making itself literate before the government stepped in?

To what extent does nineteenth century history indicate that the English people, for instance, were in need of governmental help on this account? The evidence shows indeed that the majority of people in the first half of the nineteenth century did become literate (in the technical sense) largely by their own efforts.25 Moreover, if the government played any role at all in this sphere it was one of saboteur!

As long ago as the first few years of the nineteenth century it was a subject for government complaint that the ordinary people had become literate; for the government feared that too many people were developing the “wrong” uses of literacy by belonging to secret “corresponding societies” and by reading seditious pamphlets. In 1803, for example, Thomas Malthus echoed the government’s fears by asserting the probability that: “The circulation of Paine’s Rights of Man . . . has done great mischief among the lower and middle classes of this country.”26 Far from subsidizing literacy, the early nineteenth century English government placed severe taxes on paper in order to discourage the exercise of the public’s reading and writing abilities. Yet despite this obstacle, by the time government came around to subsidizing on a tiny scale in the 1830’s, between two-thirds and three-quarters of the people (according to one modern specialist27 ) were already literate. Even then the subsidies were financed from a taxation system which burdened the poor more than the rich.28

Those who argue that the system, not of government subsidy, but of government provision in the form of nationalized schools, was the key to the expansion of literacy have an even more difficult task. Using one of the generally accepted indexes of nineteenth century literacy, the figures showing the number of persons signing the marriage register with marks, it is argued that in 1870 when nationalized schools (called board schools) were introduced, 20 per cent of the men and 27 per cent of the women were signing their names with a mark. Much of the subsequent improvement in literacy, so the argument continues, must therefore be attributed to the 1870 legislation. One must observe, however, first that even if such figures are accepted they indicate that most people were already literate without the help of the nationalized schools. In other words, this evidence does not demonstrate the need for universal provision of these schools. Second, that judging by the growth rate in literacy prior to 1870 it is not clear that at least as good an improvement would not have occurred without the 1870 Act. Third, the men signing the marriage register in 1870, having an average age of 28 years, had on the average left school seventeen years before. If most people learn to read and write at school, an assumption which seems to be implied in this sort of reasoning, the 1870 marriage registers in England reflect the schooling of the early 1850’s. A more appropriate figure to test the literacy rate of school leavers around 1870 is that of the 1891 Census. This shows that only 6.4 per cent of the men and 7.3 per cent of the women were signing the registers with a mark. These men must have left school on an average around 1874. They could therefore have barely benefitted from the new state schools since the building program had scarcely got underway at this time. Finally, there is no evidence that the state school system, which had become universal by the time of the Second World War, has been a complete success. Even by 1948 there were still in England and Wales 5 per cent of fourteen-year-old school-leavers officially classified as nearly or completely illiterate.

Here then we have the paradox of a public managing to educate itself into literary competence from personal motives and private resources, despite the obstacle of an institution called government which eventually begins to claim most of the credit for the educational success. The notion held by many people that had it not been for the state they or at least most of their neighbors would never have become educated is a striking monument to the belief of the Victorian legal theorist Dicey, that people’s opinions and convictions eventually become conditioned by the legislated institutions they make themselves.

COMMUNICATION:

South Africa Reconsidered

THOMAS MOLNAR*

In our Vol. III, No. 4 issue, New Individualist Review carried an article by Professor Denis Cowen, of the Law School of the University of Capetown, “Prospects for South Africa.” Professor Cowen is a confirmed and outspoken opponent of the Nationalist Administration’s policy of apartheid. A reply to Professor Molnar’s communication will appear in a forthcoming issue of New Individualist Review.

THE TONE OF WRITERS against South African apartheid policies is generally so vituperative that one must welcome Prof. Cowen’s article in the Spring 1965 issue of New Individualist Review (Vol. III, No. 4) for its relative moderation. As one example of the usual “approach” to South African affairs in our press, I wish to mention only the document, published in March 1965 by the Carnegie Endowment for International Peace.

Under the title, Apartheid and the UN: Collective Measures, the Carnegie Endowment, supposedly devoted to peace on earth, recommends the most drastic aggression against South Africa, including naval blockade, combat operations by small naval, air, and land forces, and military occupation. The authors of the document go so far in their warlike enthusiasm as to set down in advance the probable casualty figures, dead, wounded, and prisoners: close to forty thousand, although they thoughtfully add that “a percentage of these personnel would be returned to duty.” That they expect a war of no small scale and violence is indicated in their closing sentence: “The statistics are based on experience gained from World War II and Korea. These estimates will vary based upon intensity of combat, enemy capabilities, training of troops, etc. Consequently they should be used with caution.”

I mention this monstrous instance of warmongering by an organization nominally devoted to peace in order to suggest the difficulty Prof. Cowen, mindful of world opinion, must have faced in writing his article—in a climate of clamoring demagoguery in which common sense is practically suppressed, or at least suspected. Yet Prof. Cowen himself seems to me to yield to ideological pressure and consequent unrealistic thinking in too many passages of his text. In what follows I wish to point out these passages.

Cowen shares his premises with the ideological liberals when he assumes that all South Africa must do is to comply with the demands of “world opinion” and the United Nations for peace to descend on that beautiful country and its population. His arguments are surprisingly naive, although he himself warns the reader against the views of liberals and do-gooders. Everything would turn out all right, he says, and the world would turn its attention elsewhere if a non-racial democracy were established in South Africa in the framework of a federal form of government in which the courts would enforce a bill of rights protecting the minority races.

This is, of course, not a new formula; indeed Mr. Cowen, under the disguise of impartiality, has taken out a leaf from the Progressive Party’s program, backed in South Africa exclusively by starry-eyed liberals and misguided intellectuals. I would point out to Mr. Cowen, as I did to Mrs. Helen Suzman, sole parliamentary spokesman of the Progressive Party, that almost the totality of the South African electorate is violently opposed to this program, hence that it is simply not enforceable except by military action such as that outlined in the above-quoted document.

Furthermore, it should also be stated (and Mrs. Suzman, in private conversation, found no counter-argument) that in recent history very few bills of rights, or other legal guaranties, proved more than fragile paper barriers when the (racial, national, religious, etc.) majority wanted to have its own way. After all, what good did the Bill of Rights do for the American Negro in the last one hundred years, since Abraham Lincoln emancipated him and restored him to full citizenship? There is every reason to believe that if full parliamentary democracy is introduced in South Africa, with universal suffrage for all races, the majority which is black, will in no time submerge the entire country. To everybody who tries to view the South African situation with some clarity of judgment it is evident that the white, Indian, Chinese, Griqua, and Coloured minorities would be swept away by a triumphant black majority and by the one-party State.

BEHIND PROF. COWEN’S faith in the “federal” or “democratic” solution (incidentally: democracy has not survived even the first years of independence anywhere in Africa), there is his equally unrealistic belief that the UN is, now or potentially, an impartial enforcement agency of human rights wherever they are threatened. It would be tedious to list the examples of UN failure to act (Budapest and Tibet come easily to mind), except when the two great powers which dominate it, the United States and the Soviet Union, decide to push it in the direction they occasionally favor together. But it is nothing less than scandalous to suggest that Africa, which has witnessed horrible UN atrocities in Katanga, amply documented by the International Red Cross, should again be the scene of “peace enforcement” by that organization I know that among liberals in South Africa there is the same ideology-spawned faith in the moral superiority of the UN as among members of the Western intelligentsia; but the dream of a few utopian minds ought not to become the platform of a country’s policies.

The fact is that the UN, and a number of other agencies and countries whom Mr. Cowen implicity trusts and quotes, are irrevocably hostile to South Africa because it is a bulwark of anti-Communism, hence of Western defenses in the South Atlantic and the Indian Ocean. (Taiwan cannot be accused of “racial discrimination,” yet the same circles are hostile to it.) Displaying a strange naiveté, Mr. Cowen admits the fact of this hostility, even though he and I would disagree on its motives. He admits, namely, that even if South Africa were to comply with the UN claim, now debated before the World Court at The Hague, on South West Africa (which Pretoria has administered since 1920 under a League of Nations mandate), other issues would be found to attack it. He also quotes Kwame Nkrumah who lays claim, in the name of “Africa,” to the South African mineral wealth. He also argues that since the American Negroes hold now “the balance of political power” in the United States (!), Pretoria had better change its racial policies before Washington, pressured by Negro groups at home, intervenes with pressures of its own.

Like an irresponsible Santa Claus, Mr. Cowen chooses to hold out some rewards for the South Africans in case they become good children and obey the UN’s solicitous advice. If South Africa solves its race problem, Mr. Cowen writes, it will provide the world with a beautiful example of racial peace. More than that: Since the ratio of races (white to non-white) in the world is roughly the same as in South Africa, the example would become truly convincing! This is not exactly a scholarly argument, nor does it mention that racial strife exists between all races (in Africa: between blacks and Arabs, Indians and blacks), that it is not an invention of those devilish whites.

In this rather long, yet incomplete, comment on Mr. Cowen’s text I did not wish to introduce a counter-analysis of apartheid and other related matters, domestic and foreign, in the light of which they must be viewed for the sake of intelligibility. I merely wanted to point out that behind Prof. Cowen’s apparently objective and sweetly benevolent arguments one finds the same assumptions, based on the quicksand of illusions, which have so far created tragedy and bloodshed for African whites and blacks alike.

AVAILABLE FOR A LIMITED TIME . . .

Certain back issues of NEW INDIVIDUALIST REVIEW are available to readers at the special rate of 75 cents per copy, or ten for $7.00. Among the issues presently available are those containing:

“Sin and the Criminal Law,” by Robert M. Hurt (II/1)

“National Review: Criticism and Reply,” by Ronald Hamowy and William F. Buckley, Jr. (I/3)

“The Revival of Traditional Liberalism,” by Yale Brozen (III/4)

“The Regulatory Bureaus,” by Christopher D. Stone, Sam Peltzman, and Robert M. Hurt (II/4)

“Is a Free Society Stable,” by Milton Friedman (II/2)

“Civil Liberties in the Welfare State,” by Robert M. Schuchman (II/3)

“Reflections on the Loss of Liberty,” by George J. Stigler (III/3)

“H.L. Mencken: The Joyous Libertarian,” by Murray N. Rothbard (II/2)

“Financing Higher Education,” by Benjamin A. Rogge (IV/1)

“Antitrust and Competition,” by Robert M. Hurt (I/4)

Please order issues by designations in parentheses above. A complete set of back copies (ten issues) may be ordered for $7.00. Please specify. Out of print issues can be provided by xerographic reproduction at a cost of $4.00 each. Address inquiries to NEW INDIVIDUALIST REVIEW, Ida Noyes Hall, University of Chicago, Chicago, III. 60637.

REVIEW:

Alchian and Allen’s “University Economics”

STANLEY G. LONG*

University Economics by Armen A. Alchian and William R. Allen. Belmont, California: Wadsworth Publishing Co., 1964. 924 p. $8.95.

ABOUT A YEAR AGO while riding in a railroad club car I got into a conversation with several publisher’s representatives, who were with one of the well known textbook firms. While talking about texts for the economics principles course, one of them was quite knowledgeable about frequently cited strengths and weaknesses of his company’s products and also those of his competitors. (It is one of the duties of publishers’ representatives, when calling at universities and colleges, to make lists of “strong points” and “weak points.”)

Commenting one one of his firm’s books, I said that it seemed sound, that I was contemplating adopting it, and that I supposed that that particular book was my second choice in the field (although I couldn’t then decide what my first choice was).

“That’s why it’s the number two seller in the field; it’s everyone’s second choice,” returned my friend triumphantly.

Our exchange suggests something about the textbook industry, or at least the section of that industry devoted to producing new principles-of-economics books. Location theory suggests that it is often in the interest of a second mobile hot dog seller just invading a beach to locate near an already existing one. Studies of product differentiation in, say, consumer-durable-producing oligopolies lead us to expect many quite similar brands each trying to capitalize on the success of competitors and being just different enough to give the advertising department some extra push buttons, or what-have-you, to write about. Similarly with our number-two textbook: Everything is there, and its (justifiable) claim for serious consideration rests on being able to persuade some potential customers that it covers each (or most) of the “essential areas” just a little better than any of its slightly differentiated substitutes. See for example any or all of the good texts by Samuelson, Bach, McConnell, Reynolds, Fels, Harris, Ferguson, and Kreps, to name most of the leading contenders in the field. Each has certain distinctions, such as being the first to incorporate the “Keynesian Cross” into an elementary text, being unusually encyclopedic with respect to topics covered, being unusually well written, etc. Yet the nature of the textbook market is such that each book tries to appeal to the largest possible audience, and in so doing often seems to imitate the others. The fact that the book selection process is often one of committee decision accentuates the tendency to include all possible topics.

UNIVERSITY ECONOMICS cannot be considered as simply another entrant into a crowded field trying simultaneously to be discreetly and marginally new and yet enough like “the others” so that potential customers (who are of course, from the standpoint of decision making, the professors, not the students) may continue to use last year’s lecture notes and not be threatened by any really new approach or organization. University Economics, rather, offers a real alternative choice, and in the opinion of this reviewer, a good one indeed. The student who sustains his interest through this book in an introductory economics course will understand a great deal more about resource allocation than he could have obtained from the price theory sections of perhaps any other introductory text with which I am familiar. The probability of continuing interest is increased both by Alchian and Allen’s prose style and by the use of some “gimmicks,” especially a series of provocative questions at the end of each chapter. Unfortunately, our student who has sustained his interest through the book, while having acquired a firm grasp of pricing and allocation theory and of the process of economic reasoning, will not have learned much about macro-economic analysis, that is, the national-income-determination process from what seems to be an overly short and mechanical section on the simple income determination model. The presentation of a simple model to show equilibrium national income and a discussion of monetary and fiscal policy using such a model is more satisfactory elsewhere.1 So, the strength of the text and its emphasis lie in its superior treatment of exchange, production, and distribution. To many of us the strength here will outweigh the cost of having to supplement the macro-economic sections, and I have no quarrel with the authors’ decision to forego a separate section (presumably of equal “weight”) on every possible policy “area.” Let me make it clear that I do not consider the national income sections unusable; it is only the relative strength to which I refer. The implications for a second edition are evident, however.

A STRONG CASE CAN BE made for placing a rather greater emphasis on resource allocation than has been the vogue for at least the last decade. It has been convenient to separate national income determination from price analysis as if these two parts of economic reasoning had nothing to do with one another, and as if the principles of resource allocation were inapplicable in periods of less than full employment. However convenient, this is simply wrong. The reason for this simplifying assumption in the organization of our texts was, of course, that the macro-economic or national income analysis was something rather new, developing from the discussion started by Keynes’ General Theory and finding its way into textbooks only after World War II. The experience of this intellectual revolution and the overwhelming impact of the Great Depression caused a generation of economists to direct most of their energies to this one single problem. Perhaps it was necessary to attack the then “conventional wisdom” in order to pave the way for a more orderly analysis of the goal of economic stability; but it needn’t have been done at the cost of converting the analysis of prices (in many of the texts) to a bag of tricks. (Some of the writers on my list are more guilty of this than others.) Today, moreover, the idea that particular policy proposals are automatically contained in a particular theory, Keynes’ or anyone else’s, seems silly. Theories must be accepted or rejected on their own merits, according to established rules of evidence; and the policy proposals one advocates depend also on what normative goals one has chosen to support.

Once the ideological brush has been cleared, then, income analysis becomes an important tool for analyzing monetary and fiscal policies (or the lack of them); and the saving-equals-investment equilibrium is a simpler notion to understand than the supply-and-demand equilibrium (although it has fewer important uses than the latter). Thus, once we no longer have to knock down Classical straw men or be forced to defend any particular policy along with a body of analyses, I would claim that the essentials of macro-economics are needed to understand public discussion of policies about price stability, growth, full employment, etc.; but that having understood the essentials, most important economic issues involve discussions of resource allocation, or broadly, price theory. George Stigler has claimed that for every time a citizen is called upon to hold a responsible opinion about economic policy when macro-economic theory can be used, he can use price theory ninety-nine times.

Questions devoted primarily to maintaining employment are posed so infrequently, and are even then (as in the appropriation acts) so completely dominated by allocative questions that for practical purposes they are an infrequent and minor problem for the citizen. . . . Would intense concentration on the basic logic of price theory, applied to . . . real problems, give a vastly better and more lasting training than the current encyclopedic texts? Surely the answer is yes.2

I might be inclined to make the ratio 49 to 1, but I qualitatively agree. To put my position rather differently, I would claim that the problem of aggregate demand is a very important one (too much leads to inflation, not enough to depression, etc.), and that it is vital that the supply of money, tax schedules, and government expenditures be in a proper relationship to business and consumer expenditures so that we avoid disaster; but we have the knowledge to take care of this. (Here is not the place to demonstrate that Keynes was a conservative.) Given that we have this knowledge, beginning economics students should learn about it; but not to the exclusion of learning about the analysis of problems of resource allocation which have so much wider applicability.3 It is in this presentation of the problems of exchange, production, and distribution that University Economics excels.

ALCHIAN AND ALLEN take greater care than usual to emphasize that economic analysis and value judgments should be identified and separated. That there should be occasional lapses from this ideal is perhaps inevitable. Even as one who considers himself a classical liberal, I was occasionally disturbed by implicit value judgments in the text, often in the form of omitted qualifications. Although they are mentioned later in the book in short sections, I would like to see more frequent and explicit reference to (i) the existence of externalities; (ii) the fact that the distribution of income depends on acceptance of a set of institutional arrangements about which a value consensus, or even one person’s value judgment, is of a different order than a value consensus about, say, “economic efficiency.” Aside from what I would call purely technical problems, e.g., economic stabilization and the provision of “pure public goods,” those areas about which a classical liberal might question the ability of “open markets” to provide a “satisfactory” answer usually concern situations involving externalities or situations of “unsatisfactory” distribution of income.

An understanding of the working of markets, however, is perhaps our best safeguard against misguided idealists and special interest pleaders being able to alter the economic solution by trying (or claiming to try) to obtain one result (with respect to externalities or income distribution) but achieving another.

At this point, however, I am grinding one of my own axes about which I happen to feel rather strongly. I am often upset by the neglect of these two issues, externalities and income distribution, when policy proposals are being advanced which are designed to further classical liberal goals. However, Alchian and Allen’s analysis must be judged as just that, analysis, regardless of their implicit policy position, which it would seem is classical liberal. As analysis it comes very well indeed. Here is a new introductory economics text that rescues price theory from the status of a mechanical puzzle which some treatments have given it, and while I have dealt with it primarily as an undergraduate text, the first thirty chapters could well be recommended as introductory or review reading for the interested layman.

NEW BOOKS AND ARTICLES

THE FOLLOWING IS A SELECT LIST OF BOOKS AND ARTICLES WHICH, IN THE OPINION OF THE EDITORS, MAY BE OF INTEREST TO OUR READERS.

Two books have appeared recently compiling some of the essays and letters of Randolph Bourne: The World of Randolph Bourne, edited with an introduction by Lillian Schlissel. New York: Dutton, 1965. $2.25, paper. And: War and the Intellectuals, edited with an introduction by Carl Resek. New York: Harper Torchbooks, 1964. $1.95, paper. Bourne is of interest as one of the very few radical American intellectuals of the early 1900’s who was not swept along in the euphoria of “Mr. Wilson’s War.” In many often brilliant passages Bourne is able to capture and express the same anarchistic sentiments felt by many of today’s “conservatives.”
Frank S. Meyer, ed., The African Nettle. New York: John Day, 1965. $5.00 A symposium on the current situation and the prospects for Africa, including articles by P. T. Bauer on African economic policy; W. H. Hutt on the collectivistic policies used to keep living standards for the blacks depressed in South Africa; Sir Roy Welensky; Elspeth Huxley; and others.
The essays of Mihajlo Mihajlov, the young Yugoslavian intellectual, which recently led to his being sentenced to a nine-month prison term (later commuted to five months on probation and suspended sentence) have been issued by Farrar, Strauss and Giroux. Moscow Summer (New York: 1965, $3.50) were held to violate the Yugoslavian law against “damaging the reputation of a foreign state” (the Soviet Union). Specifically in question was Mihajlov’s discussion of the Russian concentration camps, e.g.: “The first ‘death camps’ were not really established by the Germans, since they were founded by the Soviets. In 1921 [under Lenin and Trotsky], in the vicinity of Archangel, the first death camp, known as Homogor, was formed with the sole purpose of physically exterminating the prisoners. . . .” Another indication of Mihajlov’s transgression of the acceptable limits of debate in Yugoslavia as set by the Tito regime is a letter from Mihajlov, quoted in an interesting article in the June 1965 issue of Encounter (“Letter from Belgrade,” by Anatole Shub), in which he maintains that in the U.S.S.R. “serfdom still obtains, because the agricultural workers are administratively bound to the kolkhoz.”
E. G. West, Education and the State. London: Institute of Economic Affairs, 1965. 40 shillings. From the review in The Times Educational Supplement (London), November 12, 1965: “Dr. E. G. West, an economics lecturer in Newcastle University, has produced a remarkably able and lively critique of the system and principles under which education is provided by the state. He denies that the majority of working-class parents are not to be trusted. By going back to the days before the 1870 Act, when education was neither free nor compulsory, he attempts to show that the great majority of working-class parents were prepared to spend money on it. . . . If working-class parents were prepared to back the choice they then possessed with money, why should they be presumed unfit to choose today when they are so much richer?” In another review, Giles St. Aubyn writes: “If myths were as self-evident as truths are supposed to be, they would collapse of their own accord; but endowed opinions tenaciously resist destruction regardless of the errors they contain. Dr. West’s book none the less is calculated to reduce even the strongest fortifications to rubble. Educationand the State is perhaps the most important work written on the subject this century.” [The Sunday Times (London), November 21, 1965.] Copies may be ordered directly from the IEA, Eaton House, 66A Eaton Square, London S.W.1, England.
Martin Anderson, “Urban Renewal: The Claims and the Facts,” Harvard Business Review, XLIII (Jan.-Feb. 1965), 6-20ff. Prof. Anderson of Columbia University is the author of The Federal Bulldozer (Cambridge, Mass.: MIT Press, 1964), a large-scale study of the urban renewal program. Anderson’s scientific investigations have led him to the conclusion that the arguments in favor of governmental urban renewal programs are largely mythical, and that the interest of the public at large—as distinguished from that of certain special interest groups—would be better promoted by abolishing the programs. His findings are summarized in this article, which is available from the American Conservative Union in pamphlet form without charge. Write: ACU, Suite 1101, 1010 Vermont Ave., N.W., Washington, D.C. 20005.
Prof. Colin D. Campbell of Dartmouth College and his wife have written an article entitled “You’ll Never Get Back All Those Old-Age ‘Contributions’ ” in the Washington Post, November 7, 1965, Section E. Campbell points out on the basis of calculations made in the article from typical Social Security payments, benefits, and life expectancy, that the average worker would be much better off if the system did not exist: “Even from a private insurance company, the cost of a $3024 annuity at age 65 is about $45,000, $9000 less than the accumulated amount of a worker’s tax payments.” He further points out that at 4 per cent interest, the typical worker could provide out of savings as much as the Social Security program provides, and still have an accumulated $38,000 to pass on to his heirs. Campbell discusses in brief the inequities in the present system as regards women, bachelors, the poor, and those workers over sixty-five who choose to continue to work. “The Social Security system started out as a program to help wage earners provide themselves with a minimum income in their old age. It has evolved into a combined insurance, welfare, and giveaway program with inequities that are difficult to justify.”
John Gregory Dunne, who writes an occasional column on TV and radio for The New Republic, had a provocative article in the November 6, 1965, issue of that magazine (“Whose Dissent Do You Hear?”). His main thesis: “I think it can be argued that the three major networks are indirectly responsible for the proliferation of paranoid [Right-wing] broadcasters. The reason is that there is nothing on the air today remotely passing for responsible dissent. The news departments of all three networks are in the hands of an Establishment consensus, bounded on one side by Eric Sevareid, on the other by Howard K. Smith.” The frequency with which William Buckley graces the airwaves does not invalidate this description because, “As Proust was the pet Jew of the anti-Semites, so Buckley is the pet Conservative of the Establishment.” Dunne argues for more conservatives on radio and television, which would have the effect of inducing Americans to consider “whether opposition to Medicare can be dismissed simply as hostility to old people, or support of the bracero program only as an excuse to exploit Mexican wetback labor.”
Michael E. Levine, “Is Regulation Necessary? California Air Transportation and National Regulatory Policy,” The Yale Law Journal, LXXIV (July 1965), 1416-47. In this detailed study of the operation of free market forces in Los Angeles-San Francisco air transportation, Mr. Levine concludes: The CAB should draw a lesson for national regulation from the Los Angeles-San Francisco market and amend the present regulatory scheme so that all markets are freed from restrictive economic regulation. . . . [The] air space is public property, restrictions on the use of which were initially imposed in response to fears of economic evils. Since examination of the Los Angeles-San Francisco market shows that these fears are unjustified, there is no reason why we need continue to deny the opportunity to serve the public to those prepared to risk capital to do so. It is neither wise political nor economic policy to mark out an area of activity as the preserve of a few corporations who have the good fortune to have been operating on May 14, 1938.”
Wesley McCune, director of Group Research, Inc., was for some reason or other asked to address the meeting of the Intellectual Freedom Committee of the American Library Association in Washington early this past year (his speech is reprinted in the June 1965 issue of the American Library Association Bulletin). His talk naturally concerned the threat from the Radical Right, and served to “alert” librarians to the “flood” of Radical Right propaganda they may expect to receive soon (what librarians do with such materials is primly left to their own civilized consciences). Typical of McCune’s technique, and indicative of why he so annoys conservatives and classical liberals, is the following: After discussing the activities of the old stand-bys—like Gerald L. K. Smith and Billy James Hargis—McCune warns librarians of one of the newer threats: “. . . a group . . . headquartered at Wabash College and called the Principles of Freedom. . . . The key man in this planned operation is Dean Benjamin Rogge, . . .” whom McCune further identifies through Rogge’s curious and suggestive connections with the Foundation for Economic Education and the Intercollegiate Society of Individualists. New Individualist Review recommends the speech especially to (a) modern-liberals who wish to avoid having to rebut the arguments for consistent capitalism; and (b) conservatives who would like to see a McCarthy-redivivus in action.
Herbert Spencer, “The New Liberalism,” The Freeman, November 1965. This reprinting of excerpts from Spencer’s “The New Toryism” and “From Freedom to Bondage” represents a welcome effort to bring to the general public today some of the classic arguments for liberty as set down by one of the best minds of the last century. These essays were directed to those of Spencer’s contemporaries who, he thought, were forgetting the basic principle of liberalism: “to diminish the range of governmental authority and to increase the area within which each citizen may act unchecked.” This article is a good introduction to Spencer’s political thought, and is available on request from: The Foundation for Economic Education, Irvington-on-Hudson, New York 10533.
Kenneth Vinson, “Prohibition’s Last Stand,” The New Republic, October 16, 1965. A professor of law at the University of Mississippi reports on that state’s curious official attitude on hard liquor: while it is prohibited by law throughout the state, there also exists a state excise tax on it. The situation lends itself easily to the arbitrary use of the police power, which has been employed, according to Prof. Vinson, particularly against civil rights workers and others out of step with the officially sanctioned mores regulating race relations in that state.

Sampling of Distinguished Paperbacks

Literature and Criticism
PORTRAITS FROM LIFE, Ford Madox Ford	288 pages/$1.95
ABEL SANCHEZ AND OTHER STORIES, Miguel de Unamuno Translated and introduced by Anthony Kerrigan	216 pages/$1.45
CREATION AND DISCOVERY, Eliseo Vivas Essays in criticism and aesthetics	478 pages/$2.45
THE ETHICS OF RHETORIC, Richard M. Weaver	235 pages/$1.45
Philosophy
THE EXISTENTIALISTS, James Collins	230 pages/$1.45
THE MIND OF KIERKEGAARD, James Collins	308 pages/$1.45
MAN AGAINST MASS SOCIETY, Gabriel Marcel	273 pages/$1.65
PHILISOPHY IN THE TRAGIC AGE OF THE GREEKS, Friedrich Nietzsche	128 pages/95c
SCHOPENHAUER AS EDUCATOR, Friedrich Nietzsche	135 pages/95c
THE MORAL LIFE AND THE ETHICAL LIFE, Eliseo Vivas Introduction by Joseph Krutch	320 pages/$1.95
Political Science, Economics, History
REFLECTIONS ON THE REVOLUTION IN FRANCE, Edmund Burke Introduction by Russell Kirk	360 pages/$1.45
THE MACHIAVELLIANS: Defenders of Freedom, James Burnham	320 pages/$1.95
THE FAILURE OF TECHNOLOGY, F. G. Juenger	204 pages/$1.25
THE CONSERVATIVE MIND, Russell Kirk	566 pages/$1.95
Psychology, Sociology, History of Science
FADS AND FOIBLES IN MODERN SOCIOLOGY, Pitirim A. Sorokin	355 pages/$2.45
THE CONQUEST OF THE UNITED STATES BY SPAIN AND OTHER ESSAYS, William Graham Sumner	250 pages/$1.45

GATEWAY EDITIONS

Few Readers Realize . . .

. . . the impact a controversial young magazine such as NEW INDIVIDUALIST REVIEW can have upon the mass movements of our age. But who can ignore the lesson of recent events in Andorra? Taking to the barricades with submachineguns in one hand and (thanks to our energetic representative at the University of Andorra Business School) copies of NIR in the other, the Andorran Freedom Fighters held off government troops for three days while, behind closed doors, high level theoreticians in the Andorran Liberal Party debated the questions raised in the last, provocative issue of NEW INDIVIDUALIST REVIEW.

The moderate majority deftly sidestepped the issue of contracting the army and police force out to a private company (amidst shouts of “shame!” and “Yalta!” from one faction) and finally succeeded in getting the Party to broadcast the following statement on the rebel station, Radio Free Andorra:

(1) NIR is not typically conservative;
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APOSTLES OF THE SELF-MADE MAN
Changing Concepts of Success in America
By JOHN G. CAWELTI

Thirty per-cent of the businessmen in the United States will either “make it” or be broken this year. Those who “make it” are termed “successful”—those who don’t are failures. But how does one define success? What does our society say about success and failure? The definitions change with the times, from “Protestant Virtue” to the “Rat Race” and back again. Mr. Cawelti draws from many sources, both literary and otherwise, to trace the evolution of that enigmatic goal everyone strives for—success! “. . . lightened by a pawky humor . . . an extremely entertaining volume to read.”—GERALD W. JOHNSON, The New Republic.

279 pages, $6.95

THE POLITICS OF MODERNIZATION
By DAVID E. APTER

In modernizing societies the mood fluctuates between an exciting sense of new freedom and hope and fear, cynicism and opportunism. In this, the first major study of the processes of modernization, the struggle that has given meaning to our generation, Dr. Apter brilliantly analyzes the basis for both extremes. His main theme is the consolidation of authority during periods of modernization and the exceptional opportunities for creative choice which arise in times of upheaval. His far-reaching, profound analysis is based on the contention that in political life, the significant can only be understood in moral terms.

481 pages, $7.50

A PERIL AND A HOPE
The Scientists’ Movement in America, 1945-1947
By ALICE KIMBALL SMITH

How did the scientists who developed the atomic bomb react to its first explosion during World War II? Mrs. Smith and her scientist-husband, Cyril Stanley Smith, lived at Los Alamos, while he worked on the Manhattan Project. Her intimate association with these men and her reporter’s eye for detail combine to present a living document of the scientists’ efforts to wrest control of the bomb from the military and turn it over to the civilians. “. . . fully and critically documented, compassionately written, painstakingly detailed. It is both lively and exact.”—PHILLIP MORRISON, The Scientific American.

591 pages, $10.00

UNIVERSITY OF CHICAGO PRESS

Chicago/London

VOLUME 4, NUMBER 3, SPRING 1966

THE TRIPLE REVOLUTION: A NEW METAPHYSICS

KARL BRUNNER

AGNOSTICISM AND MORALITY

HENRY HAZLITT

WAGE RATES, MINIMUM WAGE LAWS, AND UNEMPLOYMENT

YALE BROZEN

ECONOMIC DEVELOPMENT AND FREE MARKETS

REED J. IRVINE

A JOURNAL OF CLASSICAL LIBERAL THOUGHT

Spring 1966

75 cents

Vol. 4, No. 3

NIR BACK ISSUES . . .

Certain back issues of NEW INDIVIDUALIST REVIEW can be purchased for a limited time at the special rate of 75 cents per copy Among the issues presently available are those containing

“Sin and the Criminal Law,” by Robert M. Hurt (II/1)

“National Review. Criticism and Reply,” by Ronald Hamowy and William F Buckley, Jr (I/3)

“The Fusionists on Liberalism and Tradition,” by Ralph Raico (III/3)

“Civil Liberties in the Welfare State,” by Robert M Schuchman (II/3)

“The Uneasy Case for State Education,” by E.G. West (IV/2)

“Is A Free Society Stable,” by Milton Friedman (II/2)

A complete set of available back copies (eleven issues) may be ordered for $8 00. The three out of print issues can be provided by xerographic reproduction at a cost of $4 00 each. Address inquiries to—NEW INDIVIDUALIST REVIEW, Ida Noyes Hall, University of Chicago, Chicago, Illinois 60637.

INTRIGUED BY THE EXCITING POTENTIALS OF TOTAL LAISSEZ-FAIRE CAPITALISM?

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INNOVATOR reports on individuals who have found new ways to live in liberty TODAY!

The INNOVATOR is a newsletter of applied philosophy reporting advanced developments, experiments, and applications of liberty. Other subjects include new concepts in legal philosophy, innovations in personal relations and education, and inventions and technical processes that may alter the course of future societal developments.

“PIRATE QUEEN OR CAPITALIST HEROINE?” - “LIBERATE EDUCATION NOW!” “TAX REVOLT!(?)” - “ECONOMIC POTENTIAL OF PREFORM’S ‘FREE ISLES’ ” “SELL THE ROADS” - “FIRE FIGHTING FOR PROFIT IN ARIZONA” and many other articles appeared in recent issues of INNOVATOR.

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The Triple Revolution: A New Metaphysics
	3	KARL BRUNNER
Agnosticism and Morality
	19	HENRY HAZLITT
Wage Rates, Minimum Wage Laws, and Unemployment
	24	YALE BROZEN
Economic Development and Free Markets
	34	REED J. IRVINE
The Sources of Monopoly
	41	SUDHA R. SHENOY
What’s Wrong with Right-to-Work Laws
	45	HIRSCHEL KASPER
COMMUNICATION:
“Fragile” Constitutions
	48	W. H. HUTT
BOOKS:
Kefauver and Populist Economics
	53	SAM PELTZMAN
Freedom Under Lincoln
	56	ARTHUR A. EKIRCH, JR.
New Books and Articles
	59

NEW INDIVIDUALIST REVIEW is published quarterly by New Individualist Review, Inc., at Ida Noyes Hall, University of Chicago, Chicago, Illinois 60637. Telephone 312/363-8778.

Subscription rates: $3.00 per year (students $1.50). Two years at $5.75 (students $2.75).

Copyright 1966 by New Individualist Review, Inc., Chicago, Illinois. All rights reserved. Republication of less than 200 words may be made without specific permission of the publisher, provided NEW INDIVIDUALIST REVIEW is duly credited and two copies of the publication in which such material appears are forwarded to NEW INDIVIDUALIST REVIEW.

EDITORIAL STAFF

Editor-in-Chief • Ralph Raico

Associate Editors • J. Michael Cobb

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EDITORIAL ADVISORS

Yale Brozen • Milton Friedman • George J. Stigler

University of Chicago

F. A. Hayek	Benjamin Rogge
University of Frieburg	Wabash College

Complaints of the loss of individuality and the lessening of respect for the person and his rights have become a commonplace of our time; they nonetheless point to a cause for genuine concern. NEW INDIVIDUALIST REVIEW, an independent journal associated with no organization or political party, believes that in the realm of politics and economics the most valuable system guaranteeing proper respect for individuality is that which, historically, has gone by the name of classical liberalism; the elements of this system are private property, civil liberties, the rule of law, and, in general, the strictest limits placed on the power of government. It is the purpose of the Review to stimulate and encourage explorations of important problems from a viewpoint characterized by thoughtful concern with individual liberty.

The Triple Revolution: A New Metaphysics

KARL BRUNNER*

MAN’S CONCERN WITH salvation is ancient indeed. For millenia he has relentlessly poured out his intellectual resources in this pursuit. The pressures and frustrations of reality have demanded consoling orientations toward the universe and the social environment, and man has proved almost more than equal to this challenge of “existential anxiety.” A profusion of products has been created to satisfy this demand; and over the centuries a rich pattern has evolved, from the biomorphic interpretations of the cosmos as in primitive societies, up to the metaphysical systems of modern philosophy and theology.1

A concern for salvation in this world and this life through the manipulation of institutional arrangements is not entirely new. This secular eschatology shares with other types of Erlösungslehren an essentially noncognitive, emotive-pictorial use of language and the commitment to a global strategy. It holds that redemption from evil cannot be assured by a piecemeal procedure of trial and error. The social order must be totally reshaped in order to achieve salvation. Deliverance comes through a force or a process which invariably destroys the inherited social organization, and thus opens the path to the New Jerusalem.

The theme is old and has been played in many variations; but the clash of ideologies permitted by an open society inevitably generates new conceptions. Among the products recently cast up we note in particular the Manifesto of the Triple Revolution, prepared by an Ad Hoc Committee for the Triple Revolution, and issued in March 1964 with an admirable sense for publicity. A variety of programs on radio and television have since been devoted to the diffusion of the Word. Article in magazines and newspapers have similarly elaborated the message. In this article I intend to analyze the claims and proposals of the “Triple Revolution” group from the standpoint of economic theory, and then indicate some of the wider philosophical implications of this phenomenon.

The Manifesto opens with a declaration that “mankind is at a historic conjuncture which demands a fundamental re-examination of existing values and institutions.” The historic conjuncture results from “three separate and mutually reinforcing revolutions”: cybernation, weaponry, and human rights. The Manifesto, however, barely mentions the last two, and concentrates on the cybernation revolution. It is claimed that the advent of complex computers, data-processing and self-regulating machines, creates an historical break in the evolution of social life. “A new era of production has begun. Its principles of organization are as different from those of the industrial era as those of the industrial era were different from the agricultural.” The new machines, it is claimed, introduce a regime of unlimited productive capacity.2 With cybernation, abundance has become a “fact”; scarcity is the result of obsolete institutions and inappropriate values. With abundance abounding, rationing and allocation mechanisms become redundant.

In the Marxist eschatology, the state was expected to wither away. Not so according to some prophets of the Triple Revolution. The economic organization is expected to vanish, but the state will absorb society.3 While paradise could (almost?) immediately be achieved, inherited institutions and values prevent its realization. An economic organization based on private property and guided by market price signals converts the impact of cybernation into rising poverty, expanding unemployment, and corrosive “alienation of man.” The new machines displace people in droves, first from manufacturing industries and agriculture, and subsequently from the service industries. Man cannot compete with these machines. Poverty, therefore, expands and men become totally alienated from a hostile society. In the new era dominated by cybernation and automation, it has become impossible to achieve full employment in the context of a market economy. Fiscal policy may, admittedly, provide some transitory remedies; but they are of dubious value in alleviating the unavoidably growing unemployment.4

THE NATURE OF THE ultimate society remains strangely obscure, however. We seem assured that it will be a Good Society which will have exorcised the curse of alienation brought on by a market system of economic organization. There is, however, no discussion of the institutional arrangements of the new society of abundance which will have vanquished the Satan of Scarcity. One point only emerges with clarity: The vanishing amount of labor required to assure abundance suggests that any connection of income with productive effort is totally obsolete, and in a “deeper sense” immoral. Incomes must be disbursed independent of productive contribution.

Instead of a description of institutional arrangements and of their manner of operation in the new society, we are offered tortuous debates on the New Morality required for a society which radically dissociates income from productive effort. The agonizing discussions about the inappropriateness of inherited moralities yield no enlightenment concerning the mode of operation of the new society. It is not clear whether any income whatsoever may be claimed by the individual eager to share abundantly in the abundance, or whether a limited income is assigned to every member of society “according to his needs.” The vague references which may be culled from pamphlets suggest the second interpretation. Should this be correct, one wonders about the justification for such limited allocations in the midst of “unlimited” plenty.

We are, however, provided with somewhat more information concerning the transition from the old to the new order. Massive government programs and a massive expansion of the government sector and government activities are necessary to alleviate “the physical and psychological miseries” created by cybernation in a market system. The key word is definitely “massive,” whether it pertains to public education, public works, low cost housing, rapid transit systems, or public power systems. Among the etcetera may be noted income redistribution through taxation (on a massive scale, of course); and extensive use of licensing, and minimum wage laws are also proposed. In summary, the Manifesto, supplemented by individual elaborations and comments offered by its propounders, casts a “cacotopian” gloom over contemporary society and its economic organization, and reveals the promise of a Happy and Good Society achievable through radical social engineering and an appropriate reshaping of moral values. It also traces suggestive outlines of a program to alleviate the pains of transition.

Many people no doubt find the arguments used to support the Manifesto’s approach appealingly plausible. The impact of new machines on the workers directly affected appears quite simple and obvious. Such impressions, however, possess a most ambiguous significance. For many centuries they confirmed that nobody could live on the other side of the earth, and it seemed just as obvious to most men that the sun revolves around the earth. The history of many sciences clearly shows that impressions must be carefully distinguished from observation reports. Impressions transcend a mere recording of observations in that they contain interpretative conjectures bearing on the observations noted. Consequently, they provide no evidence for the underlying and hidden theoretical notions. Moreover, the psychological sense of conviction accompanying such implicit interpretations cannot possibly establish their truth. The history of man’s knowledge supplies many examples demonstrating the inadequacy of the most convincing, most obvious, and most plausible impressions of our environment. A critical examination of the ideas which the Manifesto advances with an overpowering sense of urgency for immediate radical action thus acquires considerable importance. That such an examination can only be conducted by means of technical economic theory is due to the nature of the subject matter. I shall proceed in this manner with some reluctance, since I feel certain that my treatment is destined to receive much less attention in the popular press than did the Manifesto of the Triple Revolution. Yet in the last analysis, after all, it is through economics and not prophecy that we can come to the truth in this matter.

THE EXISTENCE OF “idle” resources has often been observed in both market and non-market economies. On this point, the two types of economic organizations do not differ. They do differ, however, in the manner of occurance and the appropriate interpretation of the phenomenon.

The market process releases signals in the form of price movements which reallocate resources and output. If information about evolving market structures and the reallocation of resources were available without cost, resources would move instantly in the directions determined by the changes in demand and supply. In the context of a “full-information world” with no adjustment costs, economic resources would never be “idle,” and markets would always be cleared. But this is not our world. Information must be produced, or gathered, at a positive social and private opportunity cost. Resources with alternative uses must be invested to collect, evaluate, and comprehend information about market positions. The more information one requires, and the more rapidly one wishes to collect a given amount of it, the greater will be its cost. Similarly, the readjustment of inherited resource-utilization patterns also necessitates a specific allocation of resources with alternative uses. Readjustment involves costs, which rise with both its magnitude and its speed.

Once we recognize the crucial role of the costs of information and adjustment, we can arrive at a more intelligent understanding of the nature of the market process. Idle resources will then appear as a rational attempt to minimize the costs of information and adjustment in the face of shifting demand and supply patterns. Consider, for instance, the position of a landlord having lost some tenants and being left with a number of vacant apartments. There is always a sufficiently large reduction in the rent which would lure new tenants immediately. Nevertheless, landlords rarely choose this option. The likelihood of his taking this action would be substantially greater if the landlord could immediately terminate the tenure of provisional low-rent tenants. But this action is precluded by the tenants’ behavior. They insist, as a rule, on some minimal period of assured tenancy. This behavior is a consequence of the readjustment costs noted above. If readjustments imposed by others proceeded without inconvenience, i.e. without cost, tenants would be indifferent between two apartments differentiated only by the existance or absence of an advance notice before having their lease cancelled. The existence of readjustment costs thus induces tenants to prefer contracts requiring advance notice and preferably longer advance notice. This latter condition is due to the greater costs of readjustment when it must be done at greater speed. Under these circumstances the landlord will reject the option of immediately luring a tenant by lowering the rent. The market has informed him so far that he can rent the apartments at the accustomed prices. He has at the moment no information which would rationally justify a lowering of his rents.

Keeping an apartment vacant, coupled with a continuous sampling of the market and calling information to the attention of potential buyers, thus forms an alternative to immediate and large rent reductions. Both alternatives involve costs: the direct purchase of other resources (advertising, real estate agents, etc.) or the allocation of one’s own resources (showing customers around, etc.). The latter includes most particularly the cost of the immediately available lower revenue foregone by holding the apartment vacant. The resampling of the market yields, on the other hand, information on the maximum price obtainable. The more a supplier samples the market, the greater is the probability that he will find somone willing to pay a higher price; and the higher this price, the greater the return for the landlord. The returns diminish, though, as the period of resampling and information distribution lengthens. On the other side, the marginal cost of information persists or may even increase; and so the landlord will reach a point where he will maximize his profits. A bargain is struck at the best price sampled at the moment. Under this wealth-maximizing action, however, emerges an unused, an “idle” resource, viz. vacant apartments. Yet simply to call these apartments “idle resources” is dangerously misleading. It conveys an impression of functionless, useless, and inefficient waste; and this is not necessarily the case. Vacancy emerges from a rational use of resources in the face of incomplete information and substantial adjustment costs. Holding apartments vacant implies, under the circumstances indicated, a more economical usage of resources, in response to the relevant operation of informational and adjustment costs.

THE SAME FORMAL analysis applies to any asset, as, for example, labor. The workers’ search for jobs and the employers’ search for employees, the collection of information about jobs and employee characteristics, do not proceed without substantial costs. Moreover, the adjustment of the supply of labor services to the range of new job opportunities is not costless; neither is the hiring and firing of employees. A discharged worker could always find a job, quite immediately, at a sufficiently low wage. Yet if the market indicated up to the time he was discharged that he could reasonably expect to find jobs at accustomed conditions and the inherited wage, he would reject the option of an immediate job at lower wages and prefer to sample the market through appropriate search activities. The search would involve costs of various types, foremost of course the potential wage forfeited by remaining unemployed and searching for a job of the same type and wage as the old. The nature of the prevailing relief and unemployment benefit systems modifies this cost, and thus affects the outcome substantially. This sampling of the population of potential buyers of labor services supplies the unemployed worker with an expanding volume of information. If the market situation for his general skills is fundamentally unchanged, the repeated resampling yields a rising maximal wage offer. The rate of increase diminishes, however, with repeated sampling; and the worker will accept employment when marginal adjustment and information costs (modified by benefits) threaten to exceed the expected increment in the maximal wage offered.

The market situation may, however, change fundamentally during a worker’s search for one of two reasons: either because a change in the general supply conditions has permanently lowered the relative demand for his special skills, or because the aggregate demand for output is falling. In the first case, the information collected through persistent resampling of the market will always disappoint the worker. The low wage offers experienced will induce him eventually to readjust his anticipations and, consequently, his labor supply decision. This readjustment presents him with a choice between two courses of action: either to accept employment at substantially lower wages on the basis of unspecialized skills, or to invest some resources (and thus incur additional costs) in order to acquire new skills. In either case, he will eventually find employment—after possibly a substantial revision of anticipations and matching reservation prices.

In the second case, a different situation emerges. The initial anticipation level and reservation price of the discharged worker correspond to the information previously available through his employment. The unemployed worker thus samples the market with the anticipation of finding a similar job at the accustomed wage. But while he slowly acquires information, aggregate demand declines and thereby changes the phenomena sampled.

The maximal wage offers fail to rise in the manner expected and may even fall. Anticipation-level and reservation price will gradually be adjusted downwards, in the absence of legal or institutional constraints. Nevertheless, they will lag behind the decline in aggregate demand. An indefinite period of unemployment will eventually be absorbed as soon as the aggregate demand stablizes, even without a subsequent increase, though such an increase would be a necessary condition for absorption of unemployment in the case where institutional constraints prevent a downward adjustment of wages. Otherwise, this increase in business activity accelerates absorption.

THIS OUTLINE OF AN economic analysis of unemployment may be summarized in the following manner: Unemployment is broadly determined by: (a) the nature of the costs govering information gathering and adjustments in the types and directions of the labor supply (relief and benefit systems and opportunities for choice between employment and non-employment activities may play a crucial role at this point); (b) the magnitude and frequency of relative shifts in demand for products; (c) the magnitude and frequency of shifts in the supply conditions of product markets, particularly in the underlying technology shaping production; and (d) the comparative variability of aggregate demand for output. It is the variability relative to the prevailing speed of information diffusion and the associated adjustment speed of anticipations and reservation prices which actually matter in this context.

It follows from these considerations that larger marginal adjustment costs, smaller marginal information costs, and large and frequent demand shifts compounded by an accelerating technological impact on production tend to raise the average level of unemployment generated by the market process. Furthermore, the larger the relative variability of aggregate demand for output, the larger are the fluctuations of unemployment around its average as determined by the above set of factors.5

The analysis outlined above, based on general economic theory, provides an interpretation of unemployment. It also determines a balance of social costs, the social cost of unemployment juxtaposed with the social cost of lowering average unemployment or holding its level below some ceiling. One may also use this analysis to investigate the nature of institutional arrangements which contribute to reduce both types of costs and, most particularly, assure a continuous close balance of the types of costs.6 Moreover, we can extract some general information from this analysis about the impact of cybernation on the level of unemployment. The effect of cybernation essentially coincides with the broad pattern of consequences emanating from new technologies observed over a long period in the past. It will effect the level of unemployment only in the cases where cybernation involves an accelerated rate of technological innovation. In addition, it would require a continuous acceleration in order to raise the average level of unemployment persistently. So far the balance of evidence assembled by investigators of technological innovation yields little support for the assertion that innovation has been accelerated and definitely no support for the expectation of a continuous acceleration. This finding does not deny the existence of substantial social readjustment costs associated with the impact of cybernation; and one might legitimately raise the issue of the proper distribution of these costs. One could reasonably expect that cybernation would sharpen the wage differential between skilled and unskilled, and within the skilled group itself shift the balance of wages and employment conditions in favor of the professionally better educated. The readjustment costs and the differential impact on labor types will occur, however, independently of the level of unemployment due to the rate of acceleration of the cybernation process. Our analysis cannot be understood therefore to imply a smug indifference. It emphasizes, on the contrary, the importance of appropriate institutional arrangements designed to minimize the social adjustment costs associated with the continuous introduction of new technologies. Economic analysis can even be usefully applied to clarify the consequences of various arrangements for distributing these costs among different groups of our society. No rational choice among these arrangements can be made without careful application of this underlying analysis.7

THIS ANALYSIS, BASED on validated economic theory, yields no “paradox of poverty amidst abundance” nor any general erosion of employment opportunities. The Manifesto of the Triple Revolution is quite correct in its assertion that economic analysis denies such “paradoxes” and gloomy predictions. One might have reasonably expected, therefore, that the Manifesto would present (or refer to) an alternative analysis of economic processes, combined with a careful assessment of the relevant evidence which would enable us to appraise the comparative validity of the conflicting theories. At this point, however, an astonishing fact emerges. The prophets of the Triple Revolution have simply failed to provide any such alternative theory. Analysis appears to be replaced by the assertion that the structure of the world has fundamentally changed. As a result of this unspecified historical break, expanding poverty and rising unemployment are the necessary consequences of the patterns of innovation presently at work. Nevertheless, “observations” are adduced apparently as evidence in support of the non-existent analysis. The following are statements culled from the Manifesto:8

(1) It is noted that productivity per man-hour rose at an average pace above 3.5 per cent since 1961. This acceleration of productivity is attributed to the impact of new machinery.

(2) Prices of machines replacing labor are low compared to the annual wage of the replaced worker.

(3) It is increasingly more difficult to create the increment in aggregate demand necessary to absorb the growing labor force into employment.

(4) Unemployment rates averaged 5.7 per cent in the earlier 1960’s. Teenage unemployment has risen steadily, and minorities exhibit a comparatively high unemployment rate.

(5) Nearly 4 per cent of the labor force sought full-time work in 1962 but could find only part-time jobs.

(6) Many men and women stopped looking for employment and withdrew from the labor force. It is reasonable to estimate that over 8 million people are not working who would like to have jobs today as compared with the 4 million shown in the official statistics.

(7) The number voluntarily withdrawn from the labor force is continuously increasing.

(8) Labor force participation rates are declining.

(9) The stablization of the unemployment rate at 5.5 per cent does not reflect the market’s absorption of labor into employment but rather withdrawal of discouraged would-be workers from the labor force.

(10) During the period 1957 to 1962 more than half of the new jobs were created in the public sector. The private sector almost ceased to create new jobs, with the exception of the service industries.

THE STATEMENTS listed above contain a weird mixture of interpretative assertions, vague conjectures, and observations. Some of the statements have simply no bearing as evidence for the Manifesto’s thesis, but instead contribute to an appropriate psychological receptivity on the part of unwary readers (including the signers of the Manifesto?). This applies particularly to points (1), (2), (4), (8), and (10). All these points are quite consistent with an explanation based on the previously developed analysis of no discriminating evidence and thus no support for the Manifesto’s central thesis. It should be noted, in particular, that the unemployment patterns alluded to under point (4) are quite closely associated with the repeated extensions of minimum wage laws and the rise in minimum wages. Economic analysis implies that both the extension and increase in minimum wages will raise the unemployment rate of teenagers and of the least skilled workers. It is especially Negroes, therefore, who are unfavorably affected by the legislators’ desire “to help the poor.”9 Similarly, the observed variations in the growth rate of labor productivity can be explained within the framework of economic analysis. Neither recent growth rates nor observed accelerations assume levels significantly different from past cyclical experiences. Moreover, the growth rate declined somewhat in the past year and the current year compared to the levels reached in the earlier expansion phases. These observations yield little support, indeed, for the Manifesto’s thesis of a revolutionary breakthrough.

Point (2) deserves some further attention. The statement, while emotively suggestive, is almost meaningless. Information about the machine price relative to the annual wage is not sufficient to yield implications bearing on our issue. And point (3), of course, is not an observation: It remains a sheer unsupported conjecture suggested by the retardation of the economic process over the period 1957 to 1961 compared to the movements before 1957. The sluggish retardation of the 1950’s has been replaced meanwhile by a surging and maintained expansion. Both retardation and subsequent acceleration, nevertheless, require an explanation.

The upswing, beginning in 1949 and ending in the summer of 1953, was supported by a substantial monetary expansion. As a matter of fact, the growth rate of the monetary base (i.e., the volume of high-powered money issued by the Federal Reserve authorities) accelerated until 1952 and moved to levels not reached since 1945. The resulting surge in aggregate demand continued to lower unemployment rates even beneath the typical sharp decline accompanying the first phase of an upswing. A different pattern emerged with the upswing beginning in the late summer of 1954. The initial acceleration in the monetary base was suddenly broken in 1955 and its subsequent growth rate was held to a comparatively low level and even declined gradually during 1957. Some indications suggest that money demand contracted over the middle 1950’s. This fall contributed to maintain the initially acquired momentum for some time in spite of the retardation in the base.10 Still, the pronounced deceleration of the monetary base probably weakened somewhat the movement of aggregate demand. Unemployment declined sharply for some months but resisted further erosion after that. The next cyclic period, beginning in early 1958 and terminating around the middle of 1960, was characterized by a pronounced acceleration of the monetary base followed by a remarkable deceleration. The early acceleration contributed to prolong the rapid decline of unemployment rates from their peak until the turn of the year 1958/59. But the sudden deceleration obstructed absorption of unemployment beyond this level. Unemployment thus rose at the beginning of the downswing from a higher low point than before. Furthermore, the sharply restrictive monetary policies were not attenuated by changing demand factors which contributed to raise the velocity of spending. The period from 1957 to 1961 may very well be characterized as a time of comparative monetary restriction. This monetary restriction differentiates this period from both the early postwar adjustment phase (1945 to 1949) and the first post-adjustment phase (1949 to 1957). The monetary restriction resulted in higher unemployment, a serious retardation of employment in the private sector, and sluggish movement of production and Gross National Product. Monetary policy was however decisively reversed in 1961. There emerged the longest acceleration in the monetary base ever observed and attributable to Federal Reserve action since the Federal Reserve started operations in 1914. Moreover, this acceleration pushed the growth rate of the monetary base to levels not observed since the war. This remarkable monetary expansion gradually and persistently lowering unemployment rates, contrary to the “cacotopian gloom” of the Triple Revolution, was also accompanied by a rapid expansion of production. Gross National Product, and even employment in the private sector.

The comparative stagnation of employment in the private sector from 1957 to 1961/62 was thus a consequence of a severe monetary restriction. If this stagnation had been the first symptom of the cybernation revolution, as suggested by the Manifesto and its supplementary elaborations, then the subsequent movements of private employment and unemployment could not have occured. Yet they did occur and they were the natural outcome of a historic monetary expansion most admirably engineered by the Federal Reserve authorities.11

UNDER THE STIMULUS of an appropriate monetary and fiscal policy, the market process created ample opportunities for employment. The relevant development may be usefully sketched with the aid of the comparative movements of employment and employment potential. The latter describes the “portion of the total population which is of approximate working age.”12 Such a comparison is particularly pertinent for the appraisal of points (6) and (7) mentioned above. These assertions made by the Manifesto would merit attention if the population’s employment potential grew substantially more than actual employment. Morover, the Manifesto’s case rests chiefly on an accelerated divergence of employment and employment potential since the turn of the decade. From 1948 to 1964 total population at working age (twenty to sixty-four) rose at an average rate of 0.9 per cent, whereas employment rose at an average rate of 1.07 per cent. “Since April 1961, while total employment has increased at a 1.7 per cent annual rate, population aged twenty to sixty-four is estimated to have increased at a rate of about 1.1 per cent per annum, and population aged eighteen to sixty-four increased at a 1.3 per cent rate.13 Thus, it follows that, contrary to the assertions trumpeted in the Manifesto, jobs and employment have been growing more rapidly than the population of working age. The assertions made by the Triple Revolution group simply have no basis.

Observations on the relative participation of various population groups in the labor force yield additional information bearing on the relevance of the Manifesto’s ideas. The participation rate of males in the labor force declined from 84.5 per cent in 1947 to 78.6 per cent in 1964. The participation rate of females rose on the other hand from 31 per cent to 37.4 per cent over the same period. The observation makes little sense if one believes that machines remove workers from the labor force and that service industries are increasingly exposed to the calamity of cybernation.

Still there remains the decline in the participation rate of males. How is this to be explained? It is important to recognize that this decline results from the falling participation rates of two specific age groups. Males between fourteen and nineteen years lowered their participation rate from 54.3 per cent in 1947 to 43.6 per cent in 1964, and males sixty-five and over lowered their rates from 47.8 per cent to 28 per cent over the same period. A slight decline can also be found for the age group fifty-five to sixty-four. The other age groups show either no significant change or even a slight increase. Moreover, there is no indication of any break in the participation of the middle group in the labor force. The assertions listed under points (5) and (7) simply do not hold for the central core of our working age population.

But what about teenagers and the oldest group? Do they not confirm the claims of the Manifesto? The answer is, No. Cybernation cannot be used to explain the peculiar pattern of evolving participation rates. The wholesale destruction of jobs under the Cybernation Revolution would create a random pattern of discouragement and defeat involving also the broad range from twenty years to fifty-five years. It would also affect the females over twenty years, whose participation rates have all been rising. What actually occurred is that considerable extension of the Social Security system, of pension plans and associated devices, expanded income outside of employment for older age groups. This gradual change in opportunities modified the comparative advantages and disadvantages of retirement and induced a growing number of older people to prefer a retirement status. It should be noted however that this process operated only on the male worker and is only reflected in the male participation rates. Our argument does not apply to the females, and we do observe that their participation rate in the age group fifty-five to sixty-four rose by 66 per cent from 1947 to 1964 and even increased slightly for those sixty-five and older. Once more, this movement yields no support for the thesis of wholesale and widely ramified job destruction through cybernation.14 The decline of teenage participation also can be understood as a response to peculiar institutional changes and expanding wealth. Expanded schooling has created opportunities for additional education, and increasing income has enabled families to exploit these opportunities. Repeated extentions of the minimum wage laws may also have contributed to the withdrawal of teenagers from the labor force and induced them to stay longer in school.15 Moreover, the decline in the teenagers’ participation rate is a long-run phenomenon and exhibits no acceleration in the last five to ten years. This observation again is difficult to reconcile with the claims advanced by the Manifesto.

THE PECULIAR assertions listed under points (5) and (7) possibly refer to the existence of “disguised unemployment.” This phenomenon is associated with the cyclical sensitivity of the labor force, i.e., the partial dependence of the labor force on aggregate demand. It follows therefore that reported unemployment understates the actual loss in employment occurring during a downswing. The disguised loss of employment has been estimated in several ways. Moreover, it has been suggested on occasion that reported and “disguised” unemployment are both components of some complete measure of employment loss. A more careful examination, based on economic analysis, renders this conception very dubious. The additivity of the two groups appears in the context of an argument which postulates that absorption of labor into employment from either group occurs at approximately equal net levels of marginal productivity; and most particularly, the marginal productivity of the unemployed in either group is supposed to be zero. This assumption is very doubtful, indeed. A growing number of people possess a meaningful choice between employment and non-employment activities, and in the marginal productivity (or marginal utility) of these non-employment activities may be quite substantially above zero. The relevant attraction of such non-employment activities is mirrored in the large turnover of participants in the labor force. An average participation ratio of 50 per cent does not mean that 50 per cent of the population is always in the labor force and 50 per cent is never in the labor force. There prevails a frequency distribution of participation time. Some people participate more continuously, others much less, and the resulting average over a given period yields 50 per cent. But this very behavior reveals the existence of attractive alternatives to employment activities. The positive marginal productivity of non-employment activities existing for a number of groups implies that the opportunity costs of job-searching and job-assessment (i.e. the costs of information) are quite sizeable. It follows therefore that “the net gain from moving into the labor force and the net loss from leaving it. . . can be quite small” for this group of people. The existence of non-employment activities with positive marginal productivity determines a pronounced supply elasticity with respect to market conditions—changing market conditions induce substitutions between employment and non-employment activities. Under these conditions, merely adding together reported and “disguised” unemployment misconceives the nature of productive labor. Additivity also misconstrues and badly exaggerates the loss in welfare terms. The opportunities for non-employment activities are particularly relevant for the so-called secondary labor groups, which include a good portion of the females, and the older and single males. The behavior of this secondary group confirms our supposition: The labor force participation of this group is remarkably responsive to employment conditions. The substitution elasticity between employment and non-employment conditions of this group induces a sensitive shift in time allocation between employment and non-employment activities. This analysis of “disguised unemployment” eliminates the Manifesto’s assertions listed under points (5) and (7) from further consideration until some analysis worthy of attention is supplied.

Unemployment data mean very little by themselves; they require careful interpretation, and only analysis supported by relevant evidence yields a reliable interpretation. The movements of unemployment figures must be considered within the context of shifting patterns created by a changing and expanding economic system. This applies especially to the interpretation of the apparent growth of unemployment since the early fifties. No doubt, unemployment rates during the 1958 recession exceeded the unemployment rates during the 1954 recession. Similarly, unemployment rates during the upswing initiated in 1958 exceeded the unemployment rates during the expansion of 1954 to 1957. During the recession of 1961, however, unemployment rates were lower than at the previous low point and were also lower than during the recession of 1949. In addition, unemployment rates in the autumn of 1965 were close to unemployment rates in late 1948. This evolution in employment rates yields little support for the apocalyptic assertion of a total discontinuity in the nature of the economic process occurring around the turn of the decade. On the other hand, there exists some evidence suggesting that average unemployment rates will gradually rise with increasing affluence given our values and institutional arrangements. Increasing wealth raises the demand for schooling and also the demand for leisure. More extensive enrollment in schools induces a lower labor force participation of younger people, while Social Security arrangements and pensions exert a similar effect on the older age groups. The decreasing labor force participation of these groups reveals itself predominantly through an increasing proportion of intermittent work, increased labor turnover, and an increased proportion of inexperienced workers among both employed and unemployed. These trends are reinforced by the growing participation of women. The range of relevant tradeoffs between employment and non-employment activities will continue to grow. This change in the structure of employment is a natural response to expanding opportunities and not a symptom of impending catastrophe. Slowly rising unemployment rates are therefore not a harbinger of growing and entrenced poverty but the epiphenomenon of deepening affluence and a broader range of relevant choices. Should this argument be supported by subsequent analysis and evidence we would conclude that unemployment rates of the primary group consisting of males between twenty-five and fifty-four years of age provide a much better index of the unemployment situation. This central core group probably reflects the movements of “involuntary unemployment” much more reliably. Interestingly enough, these data substantially refute the dismal projections of the Manifesto of the Triple Revolution.

16 ECONOMIC ANALYSIS yields no case for the Triple Revolution. Of course, the Masters of the Manifesto were aware that “conventional analysis” denies their assertions, so they have dismissed economic analysis.17 It is quite clear, however, that they fail completely to understand the nature of this analysis, why it rejects their assertions, and on precisely what grounds. They provide no critical examination of any empirical theories supported by economics nor any reference to such examinations; nor do we find a comparison of the merits of received economic theories, which have successfully explained observable phenomena, with a carefully and explicitly constructed alternative theory justifying their contentions. Similarly, any careful analysis of the institutional arrangements which are suggestively proposed in order to ease the pain of transition is completely absent. The behavior patterns and the consequences which may be expected to arise from these proposed arrangements pose a serious problem both for the general welfare and for the survival of an open society. Even less is heard about the ultimate society of happy, just, and de-alienated abundance. They tell us nothing of the nature of such a society, of its institutional arrangements and its general mode of behavior. Are we supposed to infer the emergence of a millenium, a paradise maintained for “humanized man” with “creatively adjusted highest values”?

The fundamentally metaphysical character of the whole Triple Revolution venture comes into focus in many details. Analysis and evidence are dismissed in favor of emotive phillipics—a play on words replaces analysis, moral agonizing and impressionistic references substitute for evidence. The play on the words “scarcity” and “abundance,” for instance, provides an excellent example of the irresponsible misuse of language, of the surreptitiously emotive use of a pretended cognitive category. The economist applies the term “scarcity” to describe the relative limitation of an inherited resource situation in the context of a given technology. This limitation exists relative to the values pursued by individual members of a society. Scarcity is reflected in the curcumstances that every allocation of resources to particular tasks involves a sacrifice of some other valuable tasks; and this fact continues to exist even with cybernation. No society of our empirical world will ever be able to extract from its resources a total satiation of the wants of every member of that society. The principle of scarcity continues to prevail even in very affluent societies. The prophets of the Triple Revolutionary paradise carelessly shift the meaning of their words from “abundance” as denial of the economist’s “scarcity” to “abundance” as an emotive-effective description of a large and rising real income per capita. From such a confusion of concepts, only confusion can result.

A similarly effective usage dominates the term “facts.” Direct observations, interpretive guesses, and wild conjectures are equally referred to as “facts.” No doubt, facts may be hard to recognize; but not that hard, provided the difference between metaphysical speculation and empirical-rational procedures is maintained. The impressionistic misuse of language, in particular, is such as to constitute a scandal. Innumerable examples of this could be adduced. Here is a brief sampler:

. . .people are increasingly outside

. . .our social structure. . . . 18

Vague allusions to scientists working for the joy of achievement appear sufficient to justify a totally new society which does not have to rely on wealth incentives.19 And look at this hoary fallacy:

In the society of scarcity, one man’s well-being could be increased only at the expense of other men’s well-being. . . .20

Michael Harrington pronounces that “the question of collectivism has been settled.”21 A survey of his writings shows, however, no analysis nor even a remote hint of relevant evidence supporting this claim. Or, catch this one:

. . .Technology is in charge and men are not in charge.22

And an absolutely delicious example:

. . .at precisely the moment all economic problems disappear . . . we would have a finished society in which men would die not from floods or plagues or famines, not from their own idiocies about the economy. They would die from death, and at that point the historical shell around the fact of death would be broken. For the first time society would face up to death itself.23

A favorite procedure of the group involves references to single examples to support far-reaching generalizations. This applies particularly to the relation between cybernation-automation and unemployment.

The dislocation and disemployment that occur simply add the people to the twenty million families some of whom by now have had several generations living in this state.24

Or, we may read:

But these sectors, which have been soaking up the disemployed from productive and extractive functions, are beginning to fail to soak them up. New jobs are not being created in these fields.25

Both statements are, of course, palpably false. The first implies that unemployment should increase at a rate equal to gross dismissals from work. This assertion is immediately rejected by observation. Piel’s contention cannot survive exposure to observations on the movement of employment in non-manufacturing activities outside the government sector.

THE IMPRESSIONISTIC misuse of language is particularly reflected in a persistent confusion of value statements and cognitive statements. The proper separation of the two types of statements has been painfully slow in man’s history, and the distinction is often felt to endanger most of man’s elaborate constructions for orienting himself in a manner satisfying to his psychological needs. The logical clarification of these statements has therefore encountered deep-seated hostility. The careful separation of value assertions and theoretical statements forms, however, an absolutely crucial precondition for any progress of knowledge. This does not preclude their interaction in the analysis of rational action; but the explicit recognition of the mutual spheres of value assertions and cognitive statements exhibits the logical impossibility of deriving factual statements or even policy statements from value assertions only.

A major consequence of the tangled confusion involving valuations and theoretical statements deserves particular attention. As human beings, we do not respond at random to the various types of statements. Reactions to value judgements are much more pronounced than those to cognitive statements. This response pattern creates a surreptitious domination of value judgements over intellectual processes. A pervasive effect of the very language we use strengthens this pattern. The apparently autonomous existence of language induces a belief that since value judgements are articulated in sentences which exhibit the same grammatical form as cognitive statements, the two types of statements are of the same logical form. Cognition thus becomes irrelevant and even appears obstructive to the reformation of the world in the light of one’s valuation. At the very base of the Triple Revolution is rejection of critical analysis; we can thus recognize a radical rejection of man’s noblest achievement: his struggle, always endangered by entrenched ideologies, to respond intelligently to the challenge of his environment through a systematization of an ancient trial and error procedure.

An act of faith thus replaces the empirical assessment of human institutions; and the patiently piecemeal but reliable improvement of our lot is sacrificed to a dream.

NIR NEEDS YOUR HELP . . .

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Agnosticism and Morality

HENRY HAZLITT*

I THINK I SHOULD begin with a confession of faith—or lack of faith. I am an agnostic. Having made this confession, I think I should go on to say just what an agnostic is, and is not, and just what kind of agnostic I consider myself to be.

An agnostic is, first of all, a man who confesses his own ignorance—specifically, his own ignorance of the ultimate nature of the universe, of the ultimate destiny of man, of whether the universe has or has not a “purpose,” and finally, of whether there is or is not a God or Supreme Being governing the universe.

It is possible to define an agnostic by two negatives: Although, on the one hand, he is not convinced of the existence of God, he is not certain of His non-existence either. A man who declares himself to be an atheist declares that there is no God. The agnostic replies that such a statement is mere dogmatism, and assumes knowledge and evidence that do not exist. Yet, there is a wide range of possible differences, intellectual and emotional, among agnostics; and I think I should explain just where I stand in that spectrum. An agnostic may merely be one who confesses his personal ignorance of whether or not there is a God. He may be willing to admit that perhaps others know, or can know, or at least that mankind may someday know. I should not blankly deny this last possibility, but I regard it as enormously improbable.

The human intellect is wonderful, judged by animal standards; it has recently shown itself capable of accomplishments that a highly intelligent man before the birth of Aristotle would have thought impossible, and, in fact, of accomplishments that would have amazed even Leibnitz or Newton or Darwin. Yet the human intellect is primarily an instrument for dealing with practical problems. While it is capable of amazingly abstract concepts, it can carry back the chain of cause and effect only for a finite and limited distance. This little animal brain, weighing three or four pounds, and these limited animal senses, were not evolved to comprehend infinite time or space, or the complexity of an infinite number of facts; or a First Cause.

The human brain has, of course, achieved wonderful results by inventing and manipulating symbols, as in mathematics; but these results, I think, lead us to deceive ourselves as to the true extent of our knowledge. Any man can say “a million,” or “a billion,” or a “hundred billion,” and write down the symbols or perform various operations with them in a matter of seconds or minutes; but how many men can have a true conception of even a million—a million dollars or a million miles or a million anything else: As an economic journalist I have been stuck, in recent years, with how little impression it makes on people to tell them that we have a five billion dollar budget deficit, or that we have given away more than one hundred billion dollars in foreign aid.

The more a man knows, the more he realizes the extent of his ignorance, and the greater that ignorance seems to him. One of the most striking examples of this is Sir Isaac Newton, the greatest intellect of his age, and possibly the greatest that has ever lived: “I do not know what I may appear to the world,” he wrote, “but to myself I seem to have been only a boy playing on the seashore, and diverting myself in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me.”

I became an agnostic, as I remember, at the age of seventeen or eighteen; and I gave up my belief in God and human immortality painfully and reluctantly. Today my agnosticism is more thoroughgoing than it was then. I remember being for some time attracted by Herbert Spencer’s concept of the Unknowable; but I later decided that Spencer knew too much about the Unknowable. He knew that it was unknowable; he seemed also to know just where the Unknowable began, and the exact dividing line between it and the Knowable. I decided that none of these things were known and probably could not be known.

Today I am not sure that I know even the meaning of the ultimate religious or philosophical questions, let alone the positive or negative answers. What is the meaning of the question: “Is there a God?” or “Is there a Supreme Being?” What is the meaning of the answer: “There is a God” or “There is no God”? How would we establish whether either answer is true? What sort of evidence would we look for to establish the truth or the probable truth of our answer? What necessary consequences would follow from the truth or falsity of either answer? What necessary difference, for example, would the truth or falsity of either answer make in our own earthly goals or our own conduct?

What sort of concept lies behind the words either of the theist or the atheist, “Do you believe in a personal God?” What is meant by “personal” in this connection? That God looks like a human being—like the God painted by Michelangelo on the ceiling of the Sistine Chapel, for example? That he is the size of a human being? Or twice the size? Or how many times the size? That he has a definite location in space—“in heaven,” for example? That he is “within us”? Like a microbe? Exactly what does this spacial metaphor mean, and is it consistent with belief in a “personal” God? Or does a “personal” God simply think or feel like a human being? Think with our limitations, or without them? Feel the way a person feels? But in what respect? Surely not in physical appetites, or in sexual drive, or in energy or fatigue, or in ambition or frustration, or in seeing the same things as beautiful, indifferent, or ugly—or in showing the same tastes and responses that make up at least nine-tenths of all human feelings and actions.

LET US ABANDON THESE insoluble problems and come to a problem that seems at first glance more soluble. Let us ask: How do, or how should, our intellectual answers—whether theism, atheism, or agnosticism—affect our attitude toward the universe—our trusts and hopes and fears, for ourselves or for mankind, our goals, our morality, our attitude towards each other? A large number of modern philosophers have concluded, in despair of knowing what to believe, that the essence or religion is simply such an attitude. I have myself been attracted by the statement of Gerald Heard, for example, that the essence of religion is a belief that the universe is friendly; but this attitude of trust in the universe, as regards its intentions towards mankind, rests on a belief. What is the ground or justification for this belief? To be sure, the universe has been friendly enough toward man in the past to make it possible for him to evolve, to multiply, to live longer, and to increase his material satisfactions enormously. What reason, though, do we have for assuming that this will go on indefinitely, that the earth will not grow cold—or collide with a comet or some other body? Hurricanes, tornadoes, floods, droughts, and earthquakes are, after all, a matter of annual occurrence, and seem to be entirely indifferent to our human hopes or prayers.

I have given time to confessing and explaining my reasons for doubt. I am not triumphant about my doubts. I am not eager to infect anybody else with them. I am not eager to undermine anyone else’s religious faith. In brief, I am not eager to argue for my doubts; I am merely trying to explain them.

What I do wish to state, however, is my conviction that one’s belief or lack of belief on religious matters neither logically should, nor in fact does, affect one’s actions, goals, and moral conduct to anything like the extent that is commonly imagined. This conviction rests on both empirical and on deductive grounds. Those who are acquainted with the history of moral philosophy know that there is no sharp and consistent difference between the moral injunctions preached by the pagan philosophers and by the early Christian philosophers. There is no sharp and consistent difference between the “justice” of Socrates and Plato, between the “golden mean,” the “temperance” and the “high-mindedness” of Aristotle, between the virtues preached by the Stoic philosophers, by Epictetus with his counsels to “endure” and “refrain,” by Marcus Aurelius and his precept to “reverence the gods and help men”—and the virtues recommended by, say, Thomas Acquinas. In fact, as Henry Sidgwick reminds us: “The moral philosophy of Thomas Aquinas is, in the main, Aristotelianism with a Neo-Platonic tinge.” And when Aquinas lists the moral virtues by which others receive their due, his list of such virtues, to the number of ten, “is taken en bloc from the Nicomachean Ethics.”1

It is not merely in moral philosophy, however, but in prevailing commonsense ethics, that we find, in spite of peripheral differences, a great central core of agreement in the moral codes of different nations and peoples and even of historical eras, notwithstanding fundamental differences in religion. Practically all widely-shared moral codes have been against domestic murder and violence, law-breaking, looting, banditry, theft, ingratitude, treachery, lying, promise-breaking, etc. Practically all such codes have been for law and order, domestic peaceableness, promise-keeping, truth-telling, loyalty, mutual aid, good manners, etc.; and all this for the simple reason that justice and morality are absolutely indispensable for the very preservation of society.

For the same reason, whatever different names they may have given to it, or whatever aspect they may have emphasized, all moral codes have implicitly recognized that the very function and goal of a moral code is, on the negative side, to prevent or minimize violence, conflict and strife; and on the positive side, to promote human well-being and happiness. The minimum goal of our moral rules is to avoid conflict and collision, to learn how to keep out of each other’s way. In a wider setting moral rules are necessary so that we can all reasonably count on each other’s statements, promises, and actions, so that we not only may avoid acting at cross-purposes but can co-operate with each other to promote our mutual welfare.

TOO MUCH TIME HAS been wasted in moral philosophy in comparing or contrasting the relative necessity and merits of “egoism” and “altruism.” There is no basic conflict, but coincidence and harmony, between the rules of action that would do most to promote the welfare of the individual and those that would do most to promote the welfare of society. One could hardly promote one without promoting the other, or harm one without harming the other. It is in the interest of every individual to live in an orderly, peaceful, secure, co-operative—i.e., a moral—society. Social co-operation is the heart of morality, and the means by which each of us can most effectively supply his own wants and maximize his own satisfactions.

Whether or not a man believes in God, he has exactly the same reasons for following the rules of prudential ethics. If he is an idler, a spendthrift, or a gambler, a glutton, a drunkard, or a drug addict, he will pay the same penalties for his sins in the one case as in the other. Whether or not a man believes in God, he has exactly the same reasons for obeying the traffic laws: they exist for his own protection as well as the protection of others, and if he violates them he takes the same risks with his own life as well as the same risks with the law. Finally, whether or not a man believes in God, he is likely to have the same sympathy with his fellow men, the same respect for their opinion, the same desire for their good will, and the same impulse to act decently towards them. “It is a curious assumption of religious moralists,” once wrote Santayana, “that their precepts would never be adopted unless people were persuaded by external evidence that God had positively established them. Were it not for divine injunction and threats, everyone would like nothing better than to kill and to steal and to bear false witness.”2 The religious moralists who hold this view assume that those who do not believe in God are moral only because they are afraid of being caught. Yet their own argument also assumes that religious people are moral chiefly because they believe that God will reward them if they are, and punish them if they are not.

Those who are truly moral, in fact, whether theists, agnostics, or atheists, are so because they believe that virtue is its own reward, and sin its own punishment. They believe that good actions promote human well-being, including their own, and that evil actions injure others as well as themselves. In brief, whether we are Catholics, Protestants, Jews, agnostics, or atheists, we can agree on essentially the same moral code. If most of us, even if we are professed Christians, cannot always bring ourselves to love each other, most of us, religious or non-religious, can be brought to see the advantages of being decent and polite and even kind to each other.

Morality, in other words, is autonomous; it is not dependent on one’s religion. As Stephen Toulmin has put it, writing from the standpoint of a religious man:

Where there is a good moral reason for choosing one course of action rather than another, morality is not to be contradicted by religion. Ethics provides the reason for choosing the “right” course: religion helps us to put our hearts into it.3

Finally, as William James wrote: “Whether a God exist, or whether no God exist, in yon blue heaven above us bent, we form at any rate an ethical republic here below.”4 This, I think, is the best if not the only basis on which it is possible for the religious and the non-religious to co-operate intellectually in moral, legal, and political philosophy.

This does not mean that any of us need abandon religious or ontological speculations. On the contrary, we should all strive to keep alive the sense of wonder and awe before the inscrutable mystery of the universe, before the tremendous mystery of existence—not merely of the existence of mankind, but of the existence of anything, the existence of a grain of sand, or of the planets, the sun, the solar system, the stars, the Milky Way, the constellations and galaxies without end. The difference between a philosopher and a philistine, between a thinking man and a Babbitt, is that the thinking man has not lost his sense of wonder. In his Voyage of the Beagle, Darwin tells us how, at one place where the ship anchored, the native savages were enormously curious about the rowboats in which the British came ashore; but they showed no interest in the ship itself. It was so far beyond their understanding that they simply took it for granted. It is a very limited and shallow mind that takes the existence and nature of the universe for granted.

LET US BY ALL MEANS keep alive our interest in ultimate questions; but let us recognize that they are ultimate questions, final questions. Our own conclusions on these matters, if we arrive at any, should not be made the necessary premises for agreement on practical actions or policy.

All of my readers are, I take it, devoted to a greater or lesser degree to liberty; and among the liberties that all of us hold most precious is liberty of opinion—for ourselves and for others. If we respect this, we will not insist that others must accept our own particular religious, epistemological, or ontological premises before we will even condescend to argue with them on moral, legal, or political questions.

Wage Rates, Minimum Wage Laws, and Unemployment

YALE BROZEN*

ALONG WITH THE weather, sex, health, and taxes, one of the most widely discussed topics in America is wage rates. We have had an abundance of guide posts offered for determining the changes which should be made in wage rates. Union strategists have insisted in times past that wage rates should rise when the cost of living goes up, whatever “cost of living” may mean. They do not accept the converse proposition that wage rates should go down when the cost of living goes down, however. In the latter case, they argue that a decline in cost of living means a depression is coming or has arrived and, therefore, wage rates should be raised to increase purchasing power and prevent the depression.

Another guide post offered in times past (and last year by Mr. Reuther) concerns the relationship between wage rates and profits. Still another relates wage rates to an acceptable level of living. Most recently, wage rates and changes in them have been linked to changes in average output per man-hour. The General Motors contract of a decade ago provided for changes in wage rates linked to the change in the consumer price index of middle income urban families, plus an annual improvement factor which happened to be approximately the same as the increase in output per man-hour in the American economy in the preceding several decades.

Four years ago last January, the Council of Economic Advisors entered the discussion of guide posts for wage rate increases. They were moved to do this because, as they said at the time, “. . .wage decisions affect the progress of the whole economy” and, therefore, “. . .there is legitimate reason for public interest in their content and consequences.”1 They repeated their suggested guide posts in 1964 because, as they said, “If cost. . .pressures should arise through the exercise of market power. . .we would be forced once more into the dreary calculus of the appropirate trade off between ‘acceptable’ additional unemployment and ‘acceptable’ inflation.”

The Economic Advisers have advised that, “The general guide for wages is that the percentage increase in total employee compensation per man-hour be equal to the national trend rate of increase in output per man-hour.”2 The Council has provided a measure of recent trends (1952-64) in the annual rates of growth of output per man-hour in the private economy. They suggest that the latest five-year trend in productivity, amounting to 3.2 per cent, should be the guide for wage rate increases. They seem to believe that if wage rates plus fringe benefits in each industry rise by 3.2 per cent, then the average cost of labor will rise by 3.2 per cent.

If hourly labor costs increase by 3.2 per cent on the average in each industry, however, average compensation per man-hour would rise by 4 per cent. Many wage earners obtain wage increases by leaving low paying jobs (such as those in agriculture) for higher paying jobs—without any change in the rates paid for specific positions. The average wage does rise, then, without any change in wage rates, about 0.6 to 0.8 per cent per year. Subtracting this out of the 3.2 per cent rise in output per man-hour for the total private economy would imply that the Council’s suggested guide rate would be achieved with an average annual rate of change of 2.5 per cent per year in money wage rates (including fringe benefits as part of the wage, or employee compensation) in each industry.

The Council does not believe that every wage rate should be increased exactly by the rate of overall productivity increase. Their report says that “specific modifications must be made to adapt (the guide posts) to the circumstances of the particular industry.”3 For instance, they say “Wage rate increases would fall short of the general guide rate in an industry which could not provide jobs for its entire labor force.”4 Also, they would fall short where “wage rates are exceptionally high because the bargaining position of workers has been especially strong.”5

THE COUNCIL OF Economic Advisors should be complimented for its recognition of the fact that wage rates in some industries are too high to permit all those who would like jobs in those industries to obtain them. They should also be complimented for recognizing that money wage rate increases must be smaller in the future if we are to have more rapid economic growth and decreased unemployment without inflation. The Council recognizes that the upward movement of some wage rates and prices is the result of agreements between strong unions and employers, and that “the post-Korean war years were marked by the coincidence of relatively large wage increases with declines in industry employment.”6

The fact that unduly high wage rates decrease the number of jobs available and the number of people working in an industry is obviously understood by the Council and is clearly implied in its report.

Several things are left unsaid, however, which should receive explicit recognition. The Council dwells on the inflation which may be caused by large wage rate increases. They fail to recognize that large wage rate increases for some workers come not only at the expense of causing some to become unemployed, absent inflation, but also at the expense of workers in other sectors of the economy.

I would estimate that 10 per cent of the labor force of the United States receives wage rates about 15 per cent higher than they would in the absence of wage laws and governmental support of trade unions.7 The result is that 90 per cent of the U.S. labor force receives wage rates about 5 per cent lower than they would otherwise obtain. The net result is greater inequality in the division of income and about 3 per cent less total wage income for U.S. wage earners, or about 10 billion dollars less than they would otherwise earn as a group (including those whose wage rate is excessive).

To illustrate this in terms of the experience of one state, let us consider some occurrences in Michigan. Wage rates in transportation equipment manufacturing in Michigan not only rose more than in other manufacturing industries in the state, but also rose, between 1950 and 1957, by 10 per cent more than in the same industry in the other four East North Central states (Wisconsin, Ohio, Indiana, and Illinois).8 Overall employment in the auto industry declined in part as a result of overly large employment cost increases. In Michigan, where the greatest increase in wage rates occurred, the decline in employment was greater than for the industry as a whole. Between 1954 and 1958, there were 85,000 more jobs lost in Michigan than in the other four East North Central states. In 1954, Michigan employed 41,000 more workers in transportation equipment manufacturing than the other four states. In 1958 it employed 44,000 fewer workers in the industry than the other states. Michigan became a depressed area, in employment terms, largely because employment costs increased so drastically in its major industry.

Not only did employment in Michigan suffer; in addition, workers in other industries in Michigan suffered. Those becoming unemployed in the transportation equipment industry sought jobs in other fields. Many found jobs in other manufacturing industries. The consequence was, however, lower compensation for those in the other industries. More jobs were made available only by restricting the rise in wages which otherwise would have occurred. Hourly earnings in these “other” industries rose 6 per cent less than the rise in these same industries in the other four East North Central states. Although employment in these industries in Michigan increased more than in other states, this represents a less productive use of the labor than its employment in transportation equipment. If wage rates and other employment costs in transportation equipment had not been raised so much in Michigan, hourly earnings would have gone up more in the other manufacturing industries. High hourly earnings for auto workers came at the expense of workers in other industries.

THIS BRINGS US TO the second point which the Council failed to make explicit in its concern over the inflationary impact of unduly large wage rate increases. The power of unions is focused on certain sectors of the economy, such as transportation, auto manufacturing, and coal mining. Their use of power and the consent of employers to agreements which incorporate unduly high costs of employment decreases the number of jobs available in these sectors of the economy. Since these are industries in which output per man-hour is high, declining employment in these industries forces men to take jobs in low productivity sectors of the economy. The net result is a lower average output per man-hour for the economy than otherwise would be attained. Excessive wage hikes in some parts of the economy cause our productivity to rise less rapidly (and average wage income to rise more slowly) than it otherwise would.

The experience of coal miners illustrates this point. Coal mining hourly earnings rose by $1.95 or 163 per cent from 1945 to 1960; bituminous coal mining employment dropped from 385,000 to 168,000. By way of comparison, in the same period, manufacturing production worker hourly earnings rose $1.24 or 122 per cent, and manufacturing employment rose from 15,524,000 to 16,762,000. The differential in hourly earnings in favor of coal miners increased from 18 to 39 per cent. Many of the coal miners who lost their jobs (and men who would have found employment in coal mines) took manufacturing jobs. In these jobs, their productivity and their wage income is lower than in coal mining. If we had more coal miners mining coal and fewer coal miners in other industries today, average output per man-hour in the private sector of the economy would be higher (and the record of the annual rate of increase in output per man-hour would be better), average wage income would be higher, and inequality would be less.

Excessive wage hikes in some industries slow the increase in output per man-hour in the economy as a whole for another reason besides forcing people out of high productivity into low productivity occupations. To make men worth employing in coal mining or auto manufacturing at high wage rates, the amounts of capital per man employed must be increased enough to raise the productivity of the men remaining in the industry to the point where employment costs can be covered. This is the process known as automation. Concentration of large amounts of the available capital on a few men in these industries reduces the capital available per man in the rest of the economy. With less capital per man, output per man-hour in other industries is lower than it otherwise would be. The distortion in the allocation of capital caused by distortions in the wage structure prevents average output per man-hour from reaching otherwise attainable levels. The result is a poorer record of increase in output per man-hour, a poorer record of growth, and lower incomes on the average for all.

The most important point that the Council has overlooked is that their proposed guides will have no influence on the determination of wage rates anyway. They worry about some wage rates being too high, about the unemployment caused in some areas of the economy by the overpricing of labor, about the slowing in the growth rate caused by increasing unemployment; but they suggest no effective means for preventing these unhappy events from occurring. They suggest that “an informed public. . .can help create an atmosphere in which the parties to (wage decisions) will exercise their powers responsibly.”9 This is much like expecting the flood waters rolling toward a threatened town to stop because an informed public recognizes the tremendous damage that will be done.

If an “intormed public” does recognize that it and the country are being damaged by excessive wage increases, and that these excessive wage increases are the result of union power and legislative enactments, what should it do? The Council proposed no action! It seemes to be sufficient for the Council that the public recognize that the wage increases are excessive and damaging. The President has added that it is his intention to “draw public attention to major actions by either business or labor that flout the public interest in non-inflationary price and wage standards.”

IT IS UP TO THE public, evidently, to figure out what it should do. The Council is not about to tackle this thorny problem. One thing the public might do is to tell the Council to tell the Secretary of Labor to stop raising the minimum wage rates he sets under the powers vested in him by the Walsh-Healy and Davis-Bacon Acts. In 1964, he raised a great many rates. Most of these he raised by much more than 2.5 per cent—usually by 5 per cent or more. Most of these rates were excessive before he raised them. According to the Council’s guide posts, they should not have been raised at all. He raised rates in one case to $6.10 an hour, surely a clear instance in which the advice of the Economic Advisors would have been not to raise such a high minimum wage rate.

Since the Secretary of Labor has surely read the Council’s report, however, I would advise the public to forget about asking the Council to speak to the Secretary of Labor. Instead, the public should speak to its Congressmen about repealing the Walsh-Healy and the Davis-Bacon Acts. These are pernicious Acts which, on the one hand, increase costs to the government and increase our taxes, and, on the other hand, prevent people from getting jobs who would like to have them.

Additional steps I would suggest to make the Council’s advice effective is to reduce the power of labor unions. The public should insist on enforcment of laws during strikes. Assaulting and threatening people on their way to work is against the law in any jurisdiction about which I know.

Still another step I would suggest is the repeal of the increases which have occurred in the minimum wage rate set by the Fair Labor Standards Act. On September 3, 1965, there was an increase in the minimum wage from $1.15 to $1.25 an hour for a large group of employees, in addition to the group whose minimum wage was raised to $1.25 in September 1963. This will be and was an increase of 8.7 per cent in the wage rate of the very groups now suffering the greatest incidence of unemployment. It comes on top of a 15 per cent increase made two years ago. Not only is this a much greater increase than the 3.2 per cent rate of rise suggested by the Council—it is an increase for a group of people who cannot now find jobs. The Council has said “wage rate increases [should] fall short of the general guide rate (in occupations) which cannot provide jobs for their [entire] labor force.”10 The greatest unemployment we have is among the less educated, less skilled, low productivity, low wage groups. Teen-age unemployment amounts to 13 per cent, and Negro unemployment is 9 per cent. The Council’s advice points strongly to the inadvisability of any wage rise in this group, much less an 8.7 per cent increase.

Certainly, this is not a time to enact still higher minimum wage rates. Yet, a bill is now before Congress which would increase rates from $1.25 to $1.60 and extend coverage to seven million additional jobs. When this passes we will doubtless find the number of applicants for the Job Corps skyrocketing.

We have seen the damage done by previous increases in the minimum wage rates. Newspapers a few months ago reported 1,800 women discharged in crab meat packing plants in North Carolina because of the increase in the minimum from $1.15 to $1.25 which went into effect last September. When the rate was increased from 75 cents to $1.00 in 1956, unemployment among workers under nineteen and females over forty-five rose, despite an increase in total employment by 1.8 million in 1956 over the levels prevailing in 1955, and a decline in unemployment in all other groups. Normally, increasing employment decreases unemployment in all groups.11 It failed to do so in 1956 because of the overpricing of less skilled workers.

I remember vividly a dramatic example of the effect of the increase in the 1956 minimum wage. I visited friends in Nashville late in 1956 and remarked on the fact that they had acquired a maid since my previous visit in 1955. They told me that they had hired a Negro girl because the wage rate of maids had dropped, and they had to pay only 50 cents an hour. I expressed my astonishment and asked what had happened. They told me that local textile mills had been hiring girls at 80 cents an hour in 1955. When the minimum wage rate went up to $1.00 an hour in 1956, many of the mills reduced their work force and were no longer hiring Negro girls.12

Similar results occurred in 1950 when the minimum wage rate was raised from 40 cents to 75 cents an hour. Professor John Peterson of the University of Arkansas found, from surveys of large southern pine saw mills before and after the imposition of the 75 cent minimum wage in January 1950, that 17 per cent of the workers in mills whose average wage had been below the minimum lost their jobs.13 Again, when the Fair Labor Standards Act came into operation in October 1938, workers in the seamless hosiery industry in Western Pennsylvania suffered unemployment. The imposition of a minimum wage rate of 25 cents an hour at that time caused layoffs and a drop in employment in Western Pennsylvania at the very time when employment in the United States was rising.

IN ADDITION TO THE actual unemployment caused by increased minimum wage rates, there is also a decrease in the opportunities for youngsters to obtain training which prepares them for productive employment. To put this in terms of a specific example, an automobile parts jobber testified: “We had always had a training program for new employees which in itself is expensive, and when the minimum wage was increased, we had to discontinue this training program and hire only people as we needed them on a productivity basis. In other words, the average number of employees that we now have is about 5 per cent lower than before the minimum wage was increased.”

I could go on giving illustrations of the unemployment caused by minimum wage laws and their effects on freedom of choice among occupations, but this should be sufficient to convey the point. Instead, let me turn to another kind of minimum wage imposition and its effect.

We are very concerned in Chicago about the large number of adolescents who drop out of high school and are unable to find jobs. The problem manifests itself in part in high juvenile delinquency rates. These boys would like to engage in some kind of activity, preferably filling a job. Many of them used to be employed as elevator operators at $1.00 to $1.25 an hour. The elevator operators, union has succeeded in imposing a minimum wage of $2.50 an hour for operators in downtown Chicago buildings. The result is that owners of buildings have found it economical to spend $30,000 per elevator to automate their lifts and make them self-operating. Since the tax, insurance, depreciation, and interest costs of automating an elevator amount to $8,000 per year, it did not pay to automate when two shifts of operators cost only $5,000 per year. The union has succeeded in driving the two-shift cost of operation to over $10,000 per year. The result is elevator automation, no jobs for elevator operators, and a policing problem of unskilled teen-agers which is getting out of hand. I think this example speaks for itself. Thirteen per cent of the teen-agers who would like to have jobs cannot find them because of the minimum wage rates set by the unions, by the Secretary of Labor, and by law.

Perhaps I should quote the words of a U.S. Senate report at this point, “The conditions of insecurity and hopelessness that characterize the lives of many unemployed young people threaten their acceptance of traditional American ideals. What they need and cannot find is jobs. Given jobs, many of them will make a successful transition into the adult world and a useful contribution to the nation’s strength. Without jobs, continuing moral degeneration is inevitable.”

The power of unions to prevent people from taking jobs they would like to have is a major factor in causing some people to suffer the circumstances described in this Senate report. Perhaps it is an anticlimax to add that the power concentration in union hands is also a major factor in causing some wage rates to rise much more rapidly than the Council of Economic Advisors’ guide lines would allow. Yet the Council has made no suggestion for limiting concentrations of power. It simply offers some meaningless rhetoric about the necessity for having an informed public opinion as a way of enforcing its suggestions.

There is quite a list of actions the Council could have suggested which would make its words meaningful. The fact that its words are not is demonstrated by a series of wage rate increases which have occurred since their guide posts were suggested—wage rate increases exceeding 3.2 or even 4 per cent. The New York electricians’ increase is a notorious instance. Typo. graphers on New York newspapers struck for a 26 per cent increase in compensation, surely an amount far in excess of 3.2 per cent. Longshoremen were granted an 8 per cent increase as a result of the pressures exerted by the Federal government during a strike. The Teamsters negotiated a contract providing a 5 per cent annual increase just a year ago. In the first six months of this year, the average wage increase in new settlements amounted to 4 per cent, exclusive of increases in fringe benefits. One-third of the workers covered by new settlements received increases of 5 per cent or more. The agreement negotiated last fall between the Communication Workers and the Michigan Bell Telephone Company provided a 5 per cent increase in wage rates and fringe benefits. The U.A.W. won a 4.9 per cent annual increase for each of three years in 1964. This is 50 per cent higher than the guide line.

THE COUNCIL’S GUIDE lines for wage setting are meaningless in terms of informing the public, providing a guide for employer-union bargaining, or for guiding employers who have no union with which to contend. Certainly, no one has paid much attention to the Council’s guide posts, except where unions have used them as an argument for getting a bigger wage increase than they might otherwise be able to justify. However, they are meaningless for very good reasons other than the fact that no one uses them.

First, the increase in average output per man-hour is highly variable year to year. The overall trend of several past years has no necessary relationship to the change in any one year. If one examines productivity changes from year to year, it is clear that average output per man-hour decreased between 1920 and 1921, increased between 1923 and 1924, decreased between 1926 and 1928, decreased again between 1929 and 1933, etc. This is highly variable behavior. Any constant rate of increase even in real wage rates, much less money wage rates, would result in unemployment in some years, shortages of labor in other years, and allocation of much labor to the wrong places every year.

Aside from the fact that past output-per-hour trends do not provide a guide for real-wage rate changes in a specific year, they are of no help at all in judging proper changes in money wage rates. Money rates fell from 56 cents an hour in 1920 to 52 cents an hour in 1921—a 7 per cent decrease—yet real wage rates went up 4 per cent because of an even greater decline in consumer prices. If money wage rates had been increased 3 per cent between 1920 and 1921, we would have had a 14 per cent rise in real wage rates and 10 million unemployed instead of 5 million in 1921.

The Council pays little attention to the possibility that real wage rates may increase through a declining level of product prices as well as by a rising level of money wage rates. In view of our balance of payments problems at this time, this should be the preferred method of raising real wage rates.

If we are going to engage in the sport of setting guide posts for wage increases, I would like to enter a candidate. I would like to suggest my guide post in the form of an answer to the question, “How can employers recognize the circumstances which dictate a change in the wage level or wage structure?” Of course, any time a company’s profits fall or it incurs a loss, it would like to decrease its wage costs. In some cases, this may be the proper action to take; but, in other cases, a decrease in wage rates may increase costs or may cause the company to lose even more.

On the other hand, when profits increase, as they did for General Motors last year, for example, should wage rates be raised? Again this may or may not be the proper action. It depends upon the circumstances. How can we tell what to do, then, if the proper action is not directly related to profitability?

THE BEST SINGLE guide to the proper action is the relationship of the quit rate of currently employed persons to the rate of receipt of qualified applications for jobs. If the quit rate in a given company exceeds the qualified-applicant rate, the wage rate may be too low. People do not ordinarily quit jobs in appreciable numbers unless alternative jobs are available which are more attractive than those they are leaving. If the quit rate is high, we would probably find that better paying jobs, or jobs more attractive for some other reason, are available. A low qualified-applicant rate also indicates this sort of situation. Retaining a work force, then, may require an increase in the level of wage rates.

Now, one may notice that my suggested guide line is in the form of advice to employers. I am not interested in getting the public into the act, nor in getting government into the act. The only people in the act should be those who are employing men, and the men who would like to have the jobs. This is true for the determination of overtime rates as well as straight time wage rates. We should not impose penalty rates by law on employers for employing men over forty hours a week. If men desire additional income, wish to work more than forty hours per week, and are willing to do so for rates less than those required by the Fair Labor Standards Act, that should be their privilege as free men.

Further, one may notice that my advice to management is hardly necessary. It simply says, pay as much as you must to obtain the labor force you require; but do not pay any more than you must. Any company not trying to do this is not a business—it is a philanthropic operation. How long it can survive depends only on how long it can go on giving money away, or rather, how long the stockholders are willing to hold stock in a company giving away their money. Also, any company paying higher wage rates than it must to attract the work force it wants, and keep turnover rates as low as is profitable, is not serving the public well. It is providing fewer jobs than men would like to have and less product than its customers would like to have. If employers will follow their own interests by raising wage rates only when their quit rates go up (or threaten to do so), they will be serving the economy in general as well as their own interests.

In advising that quit rates should be the primary indicator in determining the appropriateness of a wage change, all I have really said is that wage rates should be set at the levels at which free marekts would set wage rates. Perhaps this might be better said by using a quotation from Henry Simons. He pointed out that

The proper wage in any area or occupational category is....the wage that will permit the maximum transfer of workers from less attractive, less remunerative, less productive employments....We imply that any wage is excessive if more qualified workers are obtainable at that wage than are employed—provided only that the industry is reasonably competitive as among firms. Reduction of rates (in these circumstances) would permit workers to enter who otherwise would be compelled to accept employment less attractive to them and less productive for the community or to accept involuntary unemployment....

The basic principle here is the freedom of entry—freedom of migration, between localities, between industries, between occupational categories. If such freedom is to exist....wages must fall to accommodate new workers in any area to which many qualified persons wish to move. Freedom of migration implies freedom of qualified workers, not merely to seek jobs but to get them; free entry implies full employment for all qualified persons who wish to enter. Whether the wage permits an adequate family scale of living, according to social service workers, is simply irrelevant ....what really matters is the judgment of workers who would be excluded by an excessive wage as to the relative merits of the employment in question and of employment in less attractive alternatives actually open to them. Other things equal, the wage is too high if higher than the wage in actually alternative employments. Ethically, one cannot go beyond the opinion of qualified workers seeking to transfer. If in large numbers they prefer employment here to the alternatives and cannot get it, the wage is excessive.14

I should add that the Council of Economic Advisors itself believes this, although it tries to avoid saying so. The Council does not think much of its own guide posts and prefers the one suggested here, as I will demonstrate shortly.

WHAT IS FRIGHTENING about the Council’s discussion of guide lines for the economy is the implication that they know how to make wage decisions and price decisions which are in the public interest. Some idiot is likely to take this seriously and set up a regulatory agency to set wage rates and prices. It is not a long step from setting guide lines for the economy to guiding the economy. Down that road lies tyranny.

That the possibility is real is evidenced by the appointment two years ago of a member of the Council who believes the government should set up an Industry Economics Agency which would set specific prices and wage rates—not just generalized national guide lines—and which would hold corporations over a certain size and unions to “new standards of public accountability.” The Council has not yet gone this far, but there is talk about a so-called early warning group to watch for price and wage changes which do not conform to the guide lines.

The Council of four years ago did not even take its own rule for wage setting in terms of change in output per man-hour seriously. After offering its general rule it said, “wage rate increases would exceed the general guide rate in an industry which would otherwise be unable to attract sufficient labor.”15 This, of course, is what any employer does when he finds he cannot obtain as many employees as he wishes. He bids a higher wage to attract more people, frequently bidding substantial premiums above even union-set wage rates when he cannot find enough men. Also, the Council said, “wage rate increases would fall short of the general guide rate in an industry which could not provide jobs for its entire labor force.”16 This, of course, usually occurs in markets where there are large numbers of unemployed men—and no legal minima, or union power to prevent this. What the Council has said in these statements is that supply and demand in free markets should determine wage rates.

I am heartily in favor of those measures and those laws which maximize wage income and minimize inequality. If the labor legislation which I have discussed, and the guide lines proposed for determining changes in wage rates were good for labor as a whole, that would be the end of the matter for me. I question the virtue of these measures because they decrease labor income, limit the opportunity to obtain jobs and to engage in meaningful activity, and increase inequality.

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Economic Development and Free Markets1

REED J. IRVINE*

THE IDEA THAT THE wealth of nations can be expanded most rapidly by governmental direction of their economies is not a traditional socialist concept. In the broad sweep of economic thinking Adam Smith pioneered the view that governmental intervention was a hindrance, not an aid to economic development. He examined what was going on around him in England and some parts of Europe, and he came to the conclusion that if men were given a high degree of freedom to produce, trade, and consume, productivity would rise and consumers would be better satisfied.

The socialists, including Karl Marx, did not dispute the contention that economic freedom led to great productivity. They could not, for they had all about them the overwhelming evidence of the Industrial Revolution which showed that this was true. Note this description of the process of economic development under capitalism by Friedrich Engels:

. . .the bourgeoisie shattered the feudal system, and on its ruins established the bourgeois social order, the realm of free competition, freedom of movement, equal rights for commodity owners, and all the other bourgeois glories. The capitalist mode of production could now develop freely. From the time when steam and the new tool-making machinery had begun to transform the former manufacture into large-scale industry, the productive forces evolved under bourgeois direction developed at a pace that was previously unknown and to an unprecedented degree.

What bothered the nineteenth century socialists was not the inability of the capitalistic free market to bring about rapid economic development. On the contrary, many of them were appalled by the extent and pace of the economic change caused by the Industrial Revolution in England. They were all highly critical of what seemed to them to be an unjust distribution of the fruits of production. Marx and Engels shared these views, but they also advanced the idea that this tremendously dynamic productive system would eventually break down because of defects that were inherent in it. They perceived what they thought was a fatal flaw in the constant drive for greater productivity and what they thought was a tendency to minimize the use of labor and the payment of labor. They maintained that this would eventually bring the whole system crashing down and open the way to socialism.

The fact that economic history has failed to bear out the dire predictions of their prophets ought to be a source of profound embarrassment to Marxist theorists. The capitalist states have had their crises, but none of them ever proved fatal, and these economies have not only recovered but have gone on to create and distribute to the workers, as well as to the capitalists and rentiers, wealth on a scale undreamed of in the nineteenth century.

The dogma has had to be adjusted to this stubborn refusal of the facts of history to bear out the Marxian hypothesis. We hear less and less about the increasing misery of the exploited workers in the capitalist economies. Even rarer are the predictions of the eventual collapse of the developed economies of the West.

In lieu of this we have a new dogma—one which Marx would never recognize. One might say that just as Marx turned Hegel upside down, so have the modern Marxists turned Marx upside down. Socialism is no longer the synthesis that is supposed to emerge from the inevitable collapse of the most developed capitalist states. Rather, socialism is now presented as the engine of economic development itself. Capitalism, with its bourgeois emphasis upon free trade and free competition, is now portrayed as a system that is useless if not harmful for any underdeveloped country that hopes to see its wealth increase. While Marx and Engels saw in capitalism an irrepressible drive to expand production and productivity which would inevitably bring about its collapse, the modern socialist sees capitalism as completely lacking in dynamism with a fatal tendency toward total stagnation. Socialism is said to be the energizing medicine which the states stagnating under free market systems need to propel themsleves into the industrial age. This view has been accepted even by some modern-liberals, one of whom has put this new dogma in these words:

Only in Russia and China do they, the submerged masses, find a model of how in backward countries great masses of people can raise themselves quickly by their own bootstraps.

The Communists are expanding in Asia because they are demonstrating a way, at present the only obviously effective way, of raising quickly the power and the standard of living of a backward people.2

THE EMPIRICAL EVIDENCE no more supports this new hypothesis than it does the original theory of Marx. While the world has been awed by Soviet space feats, the people of Eastern Europe have grown increasingly critical of the failure of the communist economic system to provide housing, food, clothing, and other consumer goods in the desired quantities and qualities. While these countries boast of impressive rates of economic growth, their statistics have concealed serious economic failures. This is true not only in agriculture, where the disastrous effects of the communist policies are notorious, but also in industry.

This is why the revolutionary proposal that profit incentives be introduced into the Soviet economic system have made such headway throughout Eastern Europe. The proposal was first made by Professor Y.G. Liberman of the Economic-Engineering Institute of Kharkov in September 1962. Although the Liberman proposals were opposed by communist “conservatives” as being capitalistic, they were introduced in the Soviet Union on an experimental basis in July 1964. More recently, following Khrushchev’s overthrow, the Soviet government announced that it was pleased with the results of the experiment and indicated that it would be extended to other plants. This triggered an announcement by Czechoslovakia that it was completely revamping its economic system to reduce centralized planning and control, and placing greater reliance on profit incentives and the law of supply and demand. A report from Prague summed up the trouble with the old system in these words:

Through centralized planning and control, resources were squandered on almost every imaginable industrial product—from airplanes to xylophones. This over-extension produced intolerably high costs of production, manpower shortages and, above all, a loss of quality in comparison with the products of more-specialized competitors. Prague was forced to sell cheaply abroad and the cost of living here soared. There was no way to reverse the trend because central planning of production could control only quantity, not quality. It could not enforce technological improvement, innovation and refinement, which depend upon the producer’s interest in his goods.3

Hungary has introduced “capitalistic” reforms, and Poland is clearly moving in the same direction.

An economic system which has been exposed as suffering from such serious inherent defects in the countries which have tried the hardest to make it work can hardly be recommended as a model to other countries. Where it has been tried in countries even more dependent upon agriculture than those of Eastern Europe, the results have been even more disastrous. Cuba, once one of the most prosperous countries of Latin America, was impoverished by communism in less than five years. China, within a decade of the communist takeover, was shaken to her foundations by the disastrous consequences of the economic follies of the communists. Economic debacles have struck or are threatened in such countries as Indonesia, Burma, Ceylon, Guinea, Mali, and Algeria as a result of their adoption of the “socialist” approach to economic growth. Retrogression, not progress, has been the hallmark of communist experimentation in the less developed countries.

What of the charge that capitalism is too lacking in dynamism to be useful to developing countries in the modern age? This too is refuted by the evidence.

The striking contrast between the economic restoration of West Germany under free-market capitalism and the painfully halting recovery of East Germany under socialism tells a great deal about the relative dynamism of the two systems. Of course, the socialists did not anticipate this result. Paul Hagen, a German socialist, in his book Germany After Hitler, which was published during the war, said that unless Germany adopted a system of “democratic planning, as against a restoration of profit capitalism” the economic outlook for Germany and Eruope would be a dark one. He thought that restoring the old system would amount to sentencing millions of Germans to death and would endanger European reconstruction.4 Fortunately for Germany, Ludwig Erhard did not share these dogmatic doubts.

Japan, like West Germany, has displayed tremendous economic dynamism in the postwar period, while remaining wedded to free enterprise. In 1945, Japan’s physical destruction was so complete and the demoralization of her people so thorough, that some observers thought it might take a century for her to recover economically from the war. It actually took less than a decade. Manufacturing output exceeded the prewar level in 1953. Six years later it had doubled, and by mid-1964 it had doubled again. Japan is now the third largest producer of steel in the world, ranking behind the U.S. and the U.S.S.R. Japanese consumer goods are not only abundant at home, but they are being sold in great quantities all over the world. Japanese exports, despite discrimination in some markets, more than quadrupled between 1953 and 1963.

It should be noted that this achievement represents a great deal more than merely the recovery from the destruction wreaked by the war. The development of synthetic fibers during the war meant that Japan could not place such heavy reliance on earnings from raw silk exports as she had prewar. Cotton textiles, another prewar pillar of Japan’s foreign trade, also offered diminished prospects as other countries developed their own mills and restricted imports.

The Japanese knew that they would have to trade to survive, but ten years ago no planner could possibly have predicted the course their trade would take. The Honda motorcycle which has since taken a good part of the world by storm was still little more than a gleam in the eye of a struggling young mechanic. Transistor radios were still unheard of, the world was just beginning to hear that the Japanese could make optical goods that rivalled German goods in quality, and the idea that the Japanese might give the Swiss competition in watches would have been considered a joke.

Fortunately, under the free-market system, it was not necessary for any planner to predict or even understand the possibility of these developments. They came about because of the dynamism of the free-market system—that same drive for greater efficiency, greater production and greater sales which had so forcefully impressed Karl Marx. The export of these and thousands of other items in tremendous quantities has earned for Japan the means to pay for the huge amounts of food, fuel, raw materials, machinery, equipment, and consumer goods that she needs to keep her great industrial machine operating and keep her people well-fed and contented. Although Japan has 96 million people crowded into four mountainous islands whose total land area is less than that of Paraguay, they have been able to achieve a reasonably high standard of living. This has been steadily improving in recent years as productivity has gone up. Unemployment is negligible and wage rates are now said to be comparable to those in Southern European countries. The rise in real wages has averaged about 4.5 per cent a year since 1951.

It may be argued that Japan and Germany are exceptional cases, since both had already attained a high degree of industrial development before the Second World War. Recovery and further rapid growth may be easier than starting from scratch—even if it did not so appear to observers at the end of the War.

What about other countries? Are there any which were not already industrialized which have shown signs of development in recent years?

THERE HAS BEEN a striking rise in industrial activity throughout the world in the postwar period, and many of the countries of Asia, Africa, and Latin America have participated in this. One of the most interesting examples is that of Hong Kong—both because its growth has been so rapid and because its economic policies have been in such striking contrast to those prescribed by the communists. Hong Kong is perhaps the closest approximation to nineteenth century laissez faire capitalism that exists in the world today. In the words of a recent publication of the U.S. Department of Commerce:

Hong Kong is unique among the world’s markets in that it presents virtually no artificial barriers to trade. As a free port, the colony has no protective duties or quantitative restrictions on imports; no difficulties are encountered in obtaining import licenses or foreign exchange; no cumbersome procedures or delays hinder the clearing of merchandise through customs; the Hong Kong dollar is stable and freely convertible. . . .Indeed, the concept of free trade and private enterprise is heartily supported and practiced by all segments of the business and official community and has probably been the single most important factor accounting for the phenomenal development of the colony’s commerce and industry over the past decade.5

Before the War Hong Kong had been little more than a bustling entrepot for China. She resumed this role after the war for a few years, but the communist takeover on the mainland forced a dramatic change in her status. Hong Kong could no longer depend on the entrepot trade for survival. Moreover, her population was being heavily swollen by refugees from the mainland. No planner decreed that Hong Kong should emphasize industry, but it soon became apparent to a large number of people that it might be profitable to start manufacturing enterprises there. Labor was abundant and cheap, taxes were low, red tape was virtually nonexistent, raw materials and machinery could be imported freely, and Hong Kong had the whole world for her market.

A start was made in cotton textiles, and by 1957, little Hong Kong was becoming a competitor to be reckoned with in the world’s textile markets. The entrepot trade continued, but as early as 1957, about a third of her exports consisted of goods produced in Hong Kong. This ratio grew to three-fourths by 1961.

Hong Kong does not publish an index of industrial production, but some idea of the rate of increase of manufacturing output can be obtained from the statistics on registered factories and employment. In 1950, there were 1,752 such factories employing 92 thousand workers. By the end of 1963, there were 8,348 thousand factories employing 354 thousand workers. Thus the number of factories had nearly quintupled while factory employment had nearly quadrupled. However, these figures considerably understate industrial employment. According to the 1961 census, 39 per cent of the population was employed, and just over half, or 610 thousand was employed in industry.

Hong Kong’s industrial development has had to overcome the handicaps of a shortage of land and fresh water. Virtually all raw materials have to be imported, including fuels. This means that industry has not had the advantage of cheap electric power.

Nevertheless a most impressive array of manufactured products is now being produced. Cotton textiles are still the most important single product. At the end of 1963, 632 thousand spindles and 19.3 thousand looms were in operation. Over 540 million square yards of cotton cloth were produced, and most of this was exported. Other important industries include plastic products, shipbuilding and shipbreaking, machinery manufacture, cement, aluminum products, clocks and watches, enamelware, electrical equipment and appliances, foodstuffs and beverages, footwear, leather goods, electronic goods, hardware, optical goods, and clothing.

A decade ago Hong Kong was hardly anything more than an insignificant spot on the map as far as most people were concerned. Today, she is one of the major trading countries in Asia—and indeed, in the world. In 1963, only four Latin American countries, Argentina, Brazil, Venezuela, and Mexico, surpassed Hong Kong in the value of exports. This is a remarkable achievement for 3.6 million people crowded into an area of only 391 square miles which is almost completely devoid of natural resources.

As in the case of Japan, this dynamic economic expansion resulted in higher incomes and improved living standards for the working people of Hong Kong. In spite of the influx of refugees from the “workers’ state” on mainland China, which in 1960 and 1961 helped boost the population of Hong Kong by an incredible 7 per cent a year, labor shortages have developed. Wages, while still low by Western standards, have risen sharply in recent years. Since the increase in the cost of living has been one of the lowest in the world, there has been a substantial increase in real wages.6

One indication of the improvement in living standards is the sharp drop in the death rate and the infant mortality rate in the last decade. The crude death rate has fallen to 5.5 per thousand, one of the lowest in the world. The infant mortality rate has been cut by 64 per cent since 1948 to the level of 32.9 per 1000 live births in 1963.7 This is considerably lower than the rate for non-whites in the United States, and it compares with rates in Central America and Mexico which range from 80.2 for Mexico to 91.3 for Guatemala (1962 data).8

HONG KONG’S POSTWAR growth is a striking demonstration of just how dynamic a developing free economy can be. It does not prove that every free economy will necessarily be equally dynamic. The colony has had some advantages and some disadvantages not found in other developing countries. Not every country can duplicate Hong Kong’s accomplishments even if it pursues identical economic policies. Some countries suffer from even more serious economic handicaps than Hong Kong. Some are so isolated geographically that they are at a serious disadvantage in international trade. Many have a large number of inhabitants who do not easily adapt to new and more efficient modes of production. Others are beset by political instability and strife which discourage saving and investment.

When a country which suffers from serious disadvantages such as these does not make rapid economic progress, the communists invariably place the blame on whatever degree of economic freedom the government may permit.

It would be wrong to pretend that there are always easy, quick solutions to many problems such as these. Economic freedom cannot overcome all such handicaps. Some curtailment of freedom is indispensable to the attainment of a reasonable degree of order and security in society, as Thomas Hobbes long ago convincingly argued in the Leviathan.

It would be equally wrong to argue that all of these problems can be solved by abolishing all individual economic freedom, as the communists propose. This is not merely because freedom is itself something which men prize highly, frequently more highly than material progress. It is because freedom, when properly used, can accelerate material progress enormously. To use an analogy, an excess of lubricating oil may cause a motor to malfunction. This does not mean that you try to operate the equipment without any oil at all. The amount of freedom in an economy, like the lubricating oil in a motor, has to be adjusted to the varying conditions that exist.

The communists, by dogmatically propagandizing against this valuable economic “lubricant,” have succeeded in influencing policy in many countries toward minimizing the degree of economic freedom that is permitted. They have systematically labored to magnify the obstacles to economic development in free economies. They have worked to intensify political instability and insecurity, they have done their best to discourage the induction of needed savings from abroad, they have tried to frustrate efforts to increase labor productivity and needed rationalization in the allocation of economic resources. All this has been done to prove that freedom has to be eliminated. The result has been that many economies are functioning at far less than the highest possible level of efficiency either because they have permitted too much liberty to those whose main objective has been to keep the economy from performing satisfactorily, or because they have given in to unreasonable pressure to restrict freedom which might improve the functioning of the economic machine.

The experience of Japan and Hong Kong, where these machinations have had no success, deserves careful study and emulation by the countries of the world which wish to develop economically.

New Individualist Review welcomes contributions for publication from its readers. Essays should not exceed 5,000 words, and should be type-written. All manuscripts will receive careful consideration.

The Sources of Monopoly

SUDHA R. SHENOY*

IN THIS ARTICLE I wish to examine, very briefly, the tacit assumption universally made, even by free-market writers, that monopoly is a natural market phenomenon, arising out of normal market processes. I hope to show that, on the contrary, the conditions of monopoly cannot arise except in connection with government intervention.

The characteristics of monopoly are usually given as follows: (a) exclusive control over the whole—or a very high proportion—of the output of a commodity lacking close substitutes (or control over a group of commodities that are close substitutes to each other); arising out of, and maintained by, (b) barriers to entry that are tacitly assumed to be spontaneously thrown up by normal market forces; or (c) the two together (exclusive control over supply and barriers to entry), enabling the monopolist to restrict output below, and thus raise prices above, the competitive level.

For our purposes the most important assumption to consider is the second, barriers to entry.1 Before going on to examine some of these, I should first like to suggest that exclusive control over the supply of a (physically distinct) commodity does not mean that the “monopolist” is isolated from, or insulated against, the effects of competition—using the term to indicate a dynamic market process. The range of substitution open to the consumer is not something which is fixed once and for all, and which can be ascertained by simple “observation.” We seem to have here a confusion between the economic and the technological notions of substitution. Whether commodities are to be regarded as complementary or as substitutes depends not on their technological characteristics, nor on the opinion of the economist, who is only an observer, but on the real actions of individuals taken in their aspect as consumers. Products may be treated differently by different consumers at different times: a housewife may today treat cornflakes and shredded wheat as perfect (economic) substitutes, while tomorrow she may differentiate sharply between them if in the meantime her family has acquired a taste or a dislike for either. Again, wash-and-wear shirts may be seen as providing substitutes for laundry services; and home canning may similarly provide competition for the large firms producing canned goods. In short, there may be all sorts of unexpected sources of competition on the market.

To return to the notion of bars to entry: It has been argued that costs may form a barrier, in the sense that the optimal size of the plant in a particular field may be “large” compared to the size elsewhere. The necessity of having to raise large amounts of capital, however, cannot be said to prevent entry, since if sufficient profits were anticipated the capital would be forthcoming, either from savings or by withdrawing it from other uses; and if sufficient returns were not anticipated, this would indicate that the existing firm was efficient enough in meeting the demand so that the setting up of another firm would be unprofitable, or at least less profitable than using the resources elsewhere.

Nor can it be said that cut-throat competition can establish a monopoly by driving all firms except one out of business: since whenever the “monopolizing” firm attempted to raise its prices again, it would be inviting other firms to enter the field.2

WHAT ABOUT MONOPOLY arising out of exclusive control over some essential factor of production—e.g., a natural resource or a trade secret? Now here again, a rise in relative prices would render profitable the search for substitutes,3 or the use of techniques or factors that would not otherwise be profitable. Moreover, the possession of a “trade secret” by a firm must be counted as part of the skills forming its owner’s property.

Goodwill, advertising, and product differentiation are said to create monopolistic positions and barriers to entry by, so to speak, “attaching” consumers to a particular supplier, so they do not readily turn to alternative sources of supply. Here, too, the economist cannot decide for the consumer his range of substitution, since this would depend on the latter’s own preferences (including his laziness or other costs involved in acquiring information about possible substitutes). It would always be open to competing firms to try and persuade consumers of the superiority of their own products and services, since presumably the “attachment” of the consumer to a particular firm bears some relation to its performance, or to his beliefs about its performance. Moreover, to speak of such things as advertising and good will as creating monoplistic positions would seem to imply that consumers react like puppets. The function of these two is probably better described as conveying information to consumers. The concept of product differentiation is subject to the same ambiguities as that of the range of substitution: is the product “different” from the viewpoint of the technologist, the engineer, the economist-observer, or the consumer; and whose viewpoint is most relevant?

For these considerations, I will suggest that the sources of monopoly cannot be found in market processes, as their working has usually been interpreted; and I will propose that the chief sources are governmental acts of intervention, for here we have a clearly identifiable and unambiguous class of barriers to entry. We can clearly and unambiguously identify a restriction of market supply below the competitive level, and the corollary of raising prices above the level they might otherwise have attained.

In the case of such interventions as exclusive patents, grants, charters, concessions, permits, licenses, tariffs, and quotas, this restrictive effect is quite plain. All of these reduce the number of sources of market supply—the number of firms that would otherwise be present in the market. Yet we may also perceive this restrictive effect arising out of such interventions as progressive taxation, labor legislation, and the special privileges granted to labor unions. Progressive taxation prevents the accumulation of additional capital, to the comparatively greater detriment of those firms and individuals seeking to establish themselves, and to the advantage of established firms and the already-wealthy. Firms cannot expand except as they save out of their rising incomes or borrow out of the rising incomes of others. Insofar as these incomes are taxed away at progressive rates, new firms and individuals seeking to rise are placed at a comparative disadvantage to those who may fall back on previously accumulated capital. If “large” firms and “wealthy” individuals are prevented from growing larger or wealthier, the comparatively smaller firm and poorer individual are prevented from rising at all.4

The effect of labor legislation is to raise total costs above the level they would have otherwise attained. This in turn implies that fewer firms will be able to continue in, or newly enter, the fields where such legislation is applied. In other words, we have here a formidable cost barrier to entry.5 Labor unions have been granted the special privilege of using private coercion; they may use this power to cartelize an industry, or give de facto monopoly to a single firm, by preventing the entry of firms who would seek to cut costs, or by driving certain firms out of the field. That unions in the United States have used their special privileges to cartelize numerous areas of economic activity seems to be one of the major conclusions emerging from such investigations as those of Senator McClellan and his Committee.6

SO-CALLED “FAIR TRADE” laws, which set minimum prices or purport to set minimum standards, also operate to reduce competition and thereby create semi-monopolistic positions.7 And then there are, of course, the cartels and monopolies, especially in the agricultural sectors of developed economies, that have been deliberately organized by governments.8 For these reasons, we find that, historically, government intervention has almost invariably been connected with the emergence of monopolies. We may examine some specific examples of this:

In the United States, the presence of tariffs on manufactured goods almost certainly facilitated the emergence of monopoly-like situations in the manufacturing sector of the economy in the latter half of the last century by limiting the effectiveness of international competition. The remedy, however, was sought in further intervention, in the form of antitrust legislation. This at least prevented further monopolization, by making cartelizing contracts unenforceable at law, thus permitting domestic competitive forces to operate;9 but legal opinion in the country does not seem certain whether uniform pricing by independent firms should be taken as evidence of competition or collusion, while every attempt at price cutting seems to be taken as evidence of a desire to monopolize.10

In Germany, contracts in restraint of trade were declared enforceable at law by the Supreme Court, thus eliminating the emergence of competition via the activities of “chiselers”; later, the government actively engaged in the formation of cartels, even making cartelization compulsory.11

In South Africa, diamond mining was gradually becoming a more competitive industry when the government, alarmed at the prospective loss of revenue from its share of the profits of one of the companies, decreed that thenceforward mining was to be by license only.12

In Great Britain, monopoly was never a serious problem during the free trade period of the nineteenth century; it became a problem only with the abandonment of free trade in the early twentieth century, and with the acceptance by the courts at about the same time of the enforceability of restrictive contracts, if the restrictions were “reasonable.”13 In Britain, also, the government has engaged actively in the cartelization of the trucking and coal mining industries, as well as of agriculture.14

In India, comprehensive exchange and import controls, together with comprehensive and detailed regulation of every aspect of business life, insure that competition is never allowed to emerge.15

The conclusion to which all these considerations would seem to lead is that monopoly is not, as so many have supposed, a natural, market phenomenon at all; but that, on the contrary, it does not arise except in conjunction with government intervention.

What’s Wrong With Right-to-Work Laws

HIRSCHEL KASPER*

ALTHOUGH THERE IS NO necessary reason why public policy proposals should be consistent with one’s political philosophy, it can be embarrasing for classical liberals to say one thing and lobby for another. The recent debate on the issue of whether to maintain Federal legislation to enable states to pass Right-to-work laws presents just such a striking anomaly. A correct reading of classical liberal philosophy requires disapproval of legislation, Federal or state, which forbids private parties to engage in a mutually beneficial exchange, unless that private contract eliminates liberty or is an element of increased coercion. Given our existing economy. Right-to-work laws should be seen as antithetical to those who prefer more liberty and less governmental coercion.

Since this line of reasoning may not be clear, a brief discussion of the background of Right-to-work legislation may be useful. When there is a federal system of government, legislation on the same matter may arise from both the central Congress and the state legislatures. The Supreme Court has decided that national legislation preempts state legislation in labor-management relations, as well as in many other areas. In this light, Congress wrote into the 1947 Taft-Hartley Act a provision, Section 14(b), which said specifically that the Act should not

. . .be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law.

The effect of such Congressional legislation is to allow states to prohibit union-management contracts which require union membership as a condition of employment. About two-fifths of the states, mostly in the South and West, have taken advantage of Section 14(b) of the Taft-Hartly Act and passed restrictive legislation to outlaw “union shop” agreements. The state laws, referred to as Right-to-work laws, thus derive from the Congressional legislation; and if Congress had repealed Section 14(b), there is no doubt that the state legislation would have been invalidated.

It is not immediately apparent why a classical liberal should favor legislation which forbids unions and firms from signing a contract which requires union membership as a condition of employment. Certainly, there would be opposition to legislation which prohibited contracts from including provisions on hours, grievance procedures, and working conditions. Union security provisions requiring workers to join unions and to pay union dues are as much a legitimate condition of employment as requirements that workers arrive at work on time and perform their jobs satisfactorily. All of these conditions of employment are coercive of the employees who would prefer to work under other arrangements; but there is no especial diminution of liberty, certainly not in modern-day America. The right to work for a particular firm under an employee’s own conditions has not been recognized, and is likely to remain secondary to the right of a firm and a union to establish mutually satisfactory rules for employment.

TO A CLASSICAL LIBERAL, the denial of a union shop, where it is desired both by labor and by management, is a needless and arbitrary reduction in liberty. All workers in each of the nineteen states with Right-to-work laws are denied by statute the opportunity of working in a union shop. Just as an open, competitive society will give birth to firms which can take advantage of the propensity of women to prefer to work from 10:00 A.M. to 3:00 P.M., so it will give birth to firms which hire workers who prefer not to join unions, for whatever reason. This is more than an academic point, since total union membership in the United States is less than one-fourth of the total labor force, and less than one-half of the number of “potential” or “eligible” union members. The open society is far more protective of the liberty of workers to work under conditions which they prefer than a society which prohibits certain working conditions.

In addition, it is not obvious that union shop provisions should be prohibited in order to improve labor-management relations. On the contrary, there is a strong presumption for allowing the parties to the bargain the widest latitude in working out for themselves those conditions of employment which improve the labor-management relations climate. Bargaining practice suggests that union security provisions are obtained by the union only at the cost of foregoing some other demand. Reportedly, management often “sells” a union shop provision for a five-cent per hour wage increase. Since there is so little known about the impact of union security provisions on labor-management relations, there is every reason to suppose that the regulation of union security ought to be left to the parties involved.

Although all unions might prefer stronger union security provisions, companies are of mixed opinion. Some firms believe that the climate of labor-management relations is improved when unions are assured of members without continuing incidents of bickering; others believe just the opposite. In one case, the labor agreement of a large farm implement manufacturer includes the text of a union security provision which it would want but cannot have because such is not “legally possible under Iowa and Federal laws” (according to the agreement). Thus, the existence of a Right-to-work law interferes with the right of private parties to sign agreements and to commit private property in accordance with their preferences. The effect is to coerce the parties to the bargain and, in our society, to increase the liberty of none.

Let me emphasize that the argument here is not one of whether union security provisions are good or bad; the argument is whether there should be legislation which prohibits them.

IT IS DIFFICULT TO shake the suspicion that many people favor Right-to-work laws because of the presumption that such legislation will weaken the political and economic power of unions. Regardless of whether this presumption is correct, and most of the evidence is in the other direction, this kind of legislation is a most obtuse way of accomplishing the goal. If the opposition to unions is to be based on liberal tenets, it should be focused on the nature of unions and collective bargaining per se, and not on those kinds of government interference which on any other grounds would be inherently indefensible.

Although Right-to-work laws interfere with the right of private contract and must be coercive, if they are effective, it does not follow that repeal of such legislation is neutral with respect to private property. The concern here is that some workers, currently employed in Right-to-work states, who would prefer jobs where union membership is not a condition of employment, would suffer a loss of property if their unions obtained union shop contracts. These workers have accumulated rights in the form of pensions, insurance, and, most important, seniority, which they would lose should they have to take another job to avoid union membership. One compromise which would increase freedom, preserve property rights, and minimize coercion might be the repeal of all Right-to-work laws—i.e., repeal of Section 14(b)—but with the provision that all currently employed workers who are not now members of a labor union would not be compelled to join a union as a condition of employment. All new employees in firms which have union shops would be required to join the union as a condition of employment. Such a compromise would ease the transition for workers and unions in states with Right-to-work laws, since job opportunities in those states are increasing at a faster rate than in the economy as a whole.

COMMUNICATION:

“Fragile” Constitutions

W. H. HUTT*

PROF. THOMAS MOLNAR’S courteous criticism of Dr. Denis Cowen’s interesting article on “Prospects for South Africa”1 reminds me of an occasion some years ago when I was addressing a meeting of the South African Institute of Race Relations (from the floor). The question of constitutional protection of minorities had arisen. I put forward the proposition that “the essence of an effective constitution is that it is built on mistrust, not on faith.” I can remember the murmer of disapproval—even seething indignation—which swept over the gathering. Most of the kindly, well-meaning people present—many of them clergy—could simply not contemplate so cynical a view.

Several years before that, at another meeting of the same Institute, I had argued that the prospect of an African majority, through the ultimate extension of the franchise on the basis of “one man, one vote,” created wholly justifiable fears on the part of the Whites. I suggested that, if the sharing of political power with the Africans was ever to be peacefully achieved, it would have to be based on constitutional entrenchment of the rights of the three minorities—the Whites, the Coloureds (i.e., the half-castes), and the Indians. I suggested further that, for the presently-enfranchised Whites to be persuaded to share their virtual monopoly of political power, it would be absolutely essential to renounce the principle of universal suffrage on a common roll and accept some form of weighted franchise.

I was told that the Africans would never agree to any such arrangement; that the very suggestion implied a slight on the majority race and a wish to maintain them in a permanent condition of inferiority and subordinacy; and, much to my regret, my proposal evoked an angry attack in the press from Alan Paton, for whom I have a profound admiration as a genuine humanitarian and one of the greatest novelists of this generation.

Professor Molnar’s position appears to be exactly the opposite to that of the sentimentalists whose opposition I have recorded. He seems to argue categorically that no effective constitutional protection for minorities, such as the Whites in South Africa, is possible, unless the constitution denies all political representation to the majority group. Those who believe, as the Progressive Party in South Africa does, that the solution lies in the direction of limitations on voting rights, he describes as “starry-eyed liberals and misguided intellectuals.” Actually, that Party happens to be the only political party of which I myself have ever been a member, and I hardly deserve to be called “liberal” in the current American sense of the word.

The sole reason why I felt compelled to join the Progressives a few years ago was that they are the only party in my country which has any glimmering of insight into the imperative need to restrain majority power. However wrong they may be on some issues, they do perceive that, if we are to find any democratic solution to the incipient racial conflict which history has bequeathed us, it is the state which we must somehow control.

Yet we are reminded by Prof. Molnar that very few bills of rights and constitutions have “proved more than very fragile paper barriers.” This is undoubtedly true; but his point is, we should notice, not that constitutional entrenchments cannot be effective when they are enforced, but that constitutions will be torn up when they are unpalatable to majorities.

The tearing up of the 1910 constitution of South Africa through the subterfuge of packing the Senate, and the absence of Constitutional restraint to prevent political appointments to the Supreme Court of the United States (which appointments have led to the Court’s functioning on vital issues—as I once heard it put—“like a constitutional convention in permanent session”), ought properly to shake the faith of those who, like myself, believe that minorities can be effectively protected by entrenched constitutional provisions with a rigid separation of powers.

But if a constitution is framed by those who have studied dispassionately the manner in which time-serving politicians have in the past trampled on bills of rights, and who recognize therefore that their task must be carried out in an atmosphere of the utmost distrust of politicians and parliaments, and even of judges, must they necessarily fail? Obviously, a more effective means of ensuring judicial independence and preventing judicial tyranny than has yet been achieved in the United States is needed. Moreover, the question of control of the police and the armed forces is also a vital issue.

I DO NOT THINK THE leaders of the Progressive Party in South Africa have gone nearly far enough in their studies of these and other aspects of the working of constitutions. The complex racial difficulties with which they are faced demand more imagination and inventiveness than they have yet given to their task; but they are pioneers among realistic political thinkers about race relations in South Africa. They deserve every encouragement and the frankest criticism from their friends.

May not the attitude of Prof. Molnar on this issue have been influenced by a belief that a more humane form of apartheid is possible? Does he believe that the “separate development” of Africans in Bantustans like the Transkei, in which they will be permitted local government rights and ultimately perhaps (although this is very unlikely) some measure of political independence, can provide a statesmanlike solution?

The truth is that, in spite of all the efforts to bring about segregation of one of the races in South Africa—the Africans—they seem to be in the process of integration into the White economy at an accelerating pace. As a very wise resolution submitted to a meeting of the Institute of Race Relations recently put it, “Segregation is an ideal. . . . It does not exist in any general or fundamental form in South Africa. The fact of integration and the ideal of segregation are on different planes and do not admit of a middle course between them. . . .” And the resolution suggests that one proper field of activity is, therefore, “demonstration of the fact of integration and exploration of ways to live with it. . . .”

In spite of strenuous, indeed ruthless, governmental attempts to turn back the tide, economic integration is growing. Is it really conceivable, then, that a minority race will be able permanently to deny equality of opportunity to the other races, who constitute an overwhelming majority of the population, and to withhold from Africans the effective right to vote in the areas in which most of them must work? If Prof. Molnar thinks that this is possible, does he not invite the application to himself of his own epithet, “starryeyed”?

When the minorities in my country fear eventual domination by the Africans—possibly imbued with the spirit of African nationalism and thirsting for revenge—these minorities are, of course, fearing what nationalists can achieve through the machinery of the state. The Progressive Party and Dr. Cowen are thinking in terms of preventing the abuse of state power. If Prof. Molnar maintains that they have not yet satisfactorially solved the problem of how to do so, I agree with him. But surely he cannot contend that they are groping for a solution in the wrong direction.

Origins of Apartheid:

In the following excerpts from his book, Economics of the Colour Bar, Prof. Hutt discusses the origins of apartheid. In the opinion of the Editors, an awareness of the history of apartheid is important in light of the preceding discussion.

WE DO NOT . . . find in colour prejudice as such the main origin-nor, perhaps, even the most important cause—of most economic colour bars. The chief source of colour discrimination is, I suggest, to be found in the natural determination to defend economic privilege (the preservation of “customary economic relationships between the races”), non-Whites simply happening to be the essentially underprivileged groups in South Africa. Certainly colour custom and colour prejudice have been persistently exploited in efforts to win electoral support for measures which seek to curb the tendency of the profit system to admit the poorer races to better opportunities; but such casuistic exploitation of custom and prejudice does not make it the prime motive for the exclusion of competition from the despised or feared Coloureds, Asiatics or Africans. . . .1

Because of the shortage of skilled personnel in South Africa at the beginning of the century, artisan immigrants, reared in the traditions of the emergent restrictionist ideologies and British trade unionism, were brought to fill artisan and foreman posts. It is hardly surprising that, after the Boer war (and together with their Afrikaner comrades after 1907), they should have endeavored to enforce a sort of closed shop which denied all opportunities for advancement to their non-White comrades. The political background of the period had produced stereotypes which actively encouraged the formation of labour unions, and the strike power so created seems to have enabled the Whites to perpetuate the ratio of White to non-White wage-rates which had been established by the 1880’s. In this way, the unions managed not only to preserve the remuneration of their members against the competition of their fellow Whites, but later to forbid the training of Africans for employment in responsible, supervisory and skilled occupations.

What was probably at that time the most blatant colour bar of history (although by no means the most burdensome) received the force of law in 1911. The motive was industrial peace; but it was sought via an appeasement of the militant White labour organization, which appeared then to be growing in strike power and political support.

The beginnings of militant unionism date from the 1880’s and 1890’s when branches of British labour unions were opened in South Africa. The leadership was in the hands of typical union officials of the British type-hard, ruthless but scarcely Marxist. Quite early in South African labour history, however, the influence of the extreme Left seems to have been discernable, and resort to violence in support of strike action was not uncommon. This tendency was probably due to infiltration of the class-war idea from foreign countries rather than from the relatively respectable British trade unionism of the day....2

During the First World War, the White miners’ union had succeeded in enforcing wage-rate increases many times larger than those obtained by the unorganized Africans. But the position of the latter had in some respects improved because, through the emergency, they had been permitted to undertake semi-skilled work especially as drill-sharpeners. This opportunity for a small proportion of Africans mitigated the increased costs of mining gold, the price of which rose to a premium after the war for a short period only. When it was obvious that the sterling price of gold would return to its standard level, the mine-owners naturally attempted to retain Africans in semi-skilled tasks and tried further to obtain some relaxation of other wasteful provisions enforced through regulations under the 1911 Colour Bar Act. They asked for a ratio of 10.5 Africans to 1 White; but the labour union demanded 3.5 to 1. A disastrous strike followed in 1922. The miners were supported by a general strike on the Rand, which developed into virtually an armed uprising. Those who revolted were mainly Afrikaners, but as always the extremists of the Left were experts in the art of fishing in troubled waters. W. H. Andrews, who was shortly to become Secretary of the Communist Party in South Africa, played a leading role in this fight for White privilege. The revolt was crushed but powerful publicity had been given to the notion that the Whites were fighting against capitalist exploiters for the preservation of their traditional and rightful economic supremacy. In that sense, the strike, which has been called the “colour bar strike,” was a victory for Andrews and those who called themselves socialists.

At the time of the strike, the overwhelming majority of the white miners (foremen or artisans, as distinct from executives) were Afrikaners from the Transvaal and the Orange Free State, and their anti-colour indoctrination had been fruitfully exploited from the first by the Marxist-indoctrinated inspirers and leaders of the insurrection, such as Andrews. The result was a great boost to the South African Labour Party, which was modelled more or less on its British counterpart and was on the best terms with the British trade-union movement. In 1924, largely through the impact upon White opinion of the 1922 strike, it obtained the chance of sharing in government through a coalition formed with the Nationalist Party, a socialistically-oriented party representing Afrikaners who accepted the principle of White supremacy and non-White subjection. Without this active co-operation of a typically British sort of Socialist party to form a Labour-Nationalist “Pact,” the era which introduced the most serious forms of colour injustice might never have emerged....3

THE “RATE FOR THE JOB” was the vital principle in the most powerful yet most subtle colour bar that has ever operated. Equal pay for equal work (i.e., for identical outputs of a given quality) is a result of the neutrality of the free non-discriminatory market. It is no method of achieving such a market. When the standard wage-rate is forced above the free market level (whether through legal enactment or the strike threat), thereby reducing the output which can be produced profitably, it must have the effect of preventing the entry of subordinate races or classes into the protected field or of actually excluding them from it. This has been by far the most effective method of preserving White privileges, largely because it can be represented as non-discriminatory. Whereas some of the policies of the Labour-Nationalist Pact amounted to blatant discrimination (such as the deliberate dismissal of non-Whites in order to employ Whites in government service), the effects of the “civilized labour” restraints have been far more important. They have rendered much more formidable the restraints imposed by custom and prejudice that have debarred non-Whites from avenues of economic advancement. They have, indeed, had a more unjust impact than “influx control” and “job reservation” under apartheid. . . .4

The initial disadvantages of the non-Whites due to home background and lack of resources for investment in their own education have in themselves been a minor hindrance to their progress. It will generally pay private enterprise to see that education, both general and technical, is made available where openings for the employment of the attributes and skills acquired are not likely to be suppressed. But powerful custom or prejudice, collusive action and legal enactment, by closing potential avenues of employment may destroy the motive for investment in human capital. Indeed, it will be wasteful for the state, for business concerns or for individuals to devote their energies and limited incomes to such purposes. But there would have been an irresistibly strong demand for developing the industrial usefulness of the Coloureds if it had not been for fears that any such move would have encountered other legislative steps to render unusable the skills so developed. The profit motive is powerful; but when it is likely to be overruled by legislation or regulation its power to serve the community is hamstrung. . . .5

I have tried to show that in South Africa it has been to the advantage of investors as a whole that all colour bars should be broken down; and that the managements of commercial and industrial firms (when they have not been intimidated by politicians wielding the planning powers of the state) have striven to find methods of providing more productive and better remunerated opportunities for the non-Whites. . . .6

The virtues of the free market do not depend upon the virtues of the men at the political top but on the dispersed powers of substitution exercised by men in their role as consumers. In that role, a truely competitive market enables them to exert the energy which enforces the neutrality of business decision-making in respect of race, colour, creed, sex, class, accent, school, or income group. The reader will have noticed that at no time have I claimed that the free market which released the “liberating force” has been motivated by altruistic sentiment. . . .7

BOOKS:

Kefauver and Populist Economics

SAM PELTZMAN*

In a Few Hands: Monopoly Power in America by Estes Kefauver, Baltimore: Penguin Books, 1965. 246p. $1.25, paper.

THE LATE SENATOR Estes Kefauver first came into prominence in the early 1950’s as chairman of the Senate crime investigating committee. After he had made two unsuccessful bids for the Democratic Presidential nomination, his name reappeared in the headlines in 1958 when the Senate Subcommittee on Antitrust and Monopoly conducted hearings under his chairmanship on industrial pricing practices. In a Few Hands summarizes some of the more lurid findings which made those hearings newsworthy and serves as a vehicle for the Senator’s random thoughts on the problem of monopoly in American industry.

Since the book is about monopoly, it was to be expected that Senator Kefauver would define the beast. The etymologically correct definition—a market served by one seller—applies to none of the industries discussed in the book (drugs, steel, baking, automobiles). Most of the time Senator Kefauver seems to apply the term to an industry dominated by a few firms, but he never does precisely define it. Sometimes it appears that the word “monopoly” is just longhand for “bad”—since a monopoly, whatever it is, is bad, many, if not all bad things derive from monopolies. This utter failure to make necessary intellectual distinctions is well illustrated by the Senator’s discussion of the drug industry.

Here we have an industry in which Kefauver is able to cite numerous examples (pp. 11-23) of small competitors substantially undercutting their larger rivals in order to win orders, and he suggests that the availability of cut-price drugs is fairly widespread (p. 24). To be sure, price competition doesn’t characterize all drugs; but the Senator makes it quite clear that the most notable exceptions are to be found among patented drugs.1 Now, of course, price competition is absent here because of a legally enforced monopoly and has nothing to do with the particular market structure of the drug industry. Whatever else it may be, it is not the purpose of the patent laws to promote price competition in drugs or any other patented product but to prevent precisely that. If price competition in drugs now protected by patent is deemed desirable, then it is the patent law and not the structure of the drug industry which has to be changed.

If the drug industry, where it is unprotected by law, doesn’t exhibit the evil pricing policies of monopolistic industries, what other evil doings can it be saddled with? In answering this question Senator Kefauver makes much of some of the defective drugs that have been introduced onto the market in recent years, e.g., thalidomide, chloromycetin, MER/29. The tragic consequences of the introduction of these drugs is well-known, and the Senator recounts them for his reader. Yet, again, the connection of all this with the market structure of the drug industry is never made clear. Do such mistakes occur more frequently because the drug industry is dominated by a few large firms, or would such events occur about as frequently if there were ten thousand equal sized drug producers? Surely it would seem that the losses incurred by way of law suits, damaged trade reputation, etc., would weigh as heavily against relatively large as against relatively small firms. Implicitly Senator Kefauver must have believed that these losses were somehow not as great for the relatively large firms, or that such firms derived some special gains from selling bad drugs; if he didn’t believe this, why the association of the practice with “monopoly” and not, say, with stupidity? The reason for this belief is never spelled out, however, and it will remain a mystery to those who do not share the Senator’s animus against the drug industry.

Since Senator Kefauver’s discussion of other industries is no more precise and no less confused than that of the drug industry, it is easy to wonder if he was trying to make any point at all. He was; but it surfaces amidst contradiction, and it turns out to have nothing to do with monopoly at all.

SENATOR KEFAUVER’S central point becomes obvious when one compares his discussions of the steel and baking industries. The steel industry is chided for various monopolistic pricing practices—rigid prices, implicit collusion whereby all firms adopt the prices set by one of them, etc. If this or any industry is to serve the public interest, according to Senator Kefauver, the firms in it really ought to compete against each other in the most vigorous manner:

It is this free spirit of individualistic behavior which gives to the public the benefits of competitive enterprise, namely lower prices and better quality. It is this same spirit which earns the enmity of the monopoly for its unsettling and disturbing impact upon established ways of doing things, not to speak of the disruptive consequences on [sic] monopolistic pricing and profits.2

Now, sometime after World War II some baking companies prospered by acting as the Senator believed steel companies should. They penetrated many markets by offering lower prices than existing bakers. Predictably, this forced some established bakers out of business. Yet this particular disturbance of established ways of doing business is not welcomed by Senator Kefauver. It is, instead, cause for complaint that “small producers, unable to stand up under the pressure directed against them by the giants of the industry, are disappearing from the American scene.”3 All of a sudden the laudable “competitive enterprise” recommended to the steel industry becomes, when practiced by baking companies, evil “competitive warfare.”4 The desideratum is no longer the “free spirit of individualistic behavior” but rather “free and reasonable competition.”5 Why this palpable contradiction, this switch from the ethics of competition to the ethics of the cartel? The answer has already been suggested: The aggressive bakers, because of their success, have become large; they are replacing small bakers. This really is the crux of the matter. Both the aggressive baker and the somnolent steelmaker are bad mainly because they are big. It would do little good to point out that large absolute size has nothing per se to do with monopoly; that, in fact, many of the small bakers replaced by large, nationwide bakers were local monopolies; and that a few large companies competing in several local markets make for a more competitive industry than several local monopolies. Senator Kefauver simply seems to have had a tropistic reaction against big corporations (the TVA excepted) which he embellished with the nostalgia for rural and small town America that comes from his Populist political heritage.6 He tends to identify this advocacy of an economic system composed of many, physically small firms with advocacy of the competitive system and opposition to monopoly. The normal functioning of a competitive system will, of course, comprehend cases where large firms win out over small firms. At no point in his book, however, does the Senator point to any such event as an example of the healthy functioning of a competitive economy. Where such events are alluded to, as with the baking industry, the context is the triumph of evil bigness over the victimized innocence of the small.

Once Senator Kefauver’s basic premise becomes clear, many of the other points he makes become explainable, if not particularly understandable. Take, for example, his discussion of the relationship between monopoly and the development of a community—“monopoly” for these purposes being identified with the dominant importance of large absentee-owned industries in a community’s economic life. To monopoly, or rather to this grotesque A is bad, B is bad, therefore A is B definition of monopoly, Senator Kefauver attempts to attribute, in whole or part, each of the following community ills or presumed ills: shoddily built houses, slums, high bankruptcy rates among small retail stores, high infant mortality rates, lack of popular interest in literature and education, low church membership, a diminution of the spirit of neighborliness and good fellowship, and excessive time spent by youths in pool halls.7 This incredible list could be expanded. Some may be tempted to find in all this a reflection of the type of mentality that moved men to burn witches in former times. To Senator Kefauver, however, it must have appeared the simple truth that where the desirable attributes of the small Tennessee town have vanished, big companies captained from the far-off metropolis are the cause of it all. Anyhow, talking against monopoly is these days more socially respectable than witch burning.

IT IS PERHAPS fortunate that all Senator Kefauver, the co-author of an important antitrust statute, did in his book was to talk against monopoly. He made no important policy recommendation for remedying what he conceived to be the monopoly problem. In fact, he is at his most perceptive where he discusses and rejects certain remedies advanced by others. He rejects general government price regulation, for example, because of a clear recognition that where it already exists—e.g., airlines, railroads, natural gas—such regulation has become little more than a shield for cartelization.8

BOOKS:

Freedom Under Lincoln by Dean Sprague, Boston: Houghton Mifflin Co., 1965. 345 p. $5.95.

THE COMPLETION, a year ago, of the centennial celebration affords an opportunity for a more sober re-evaluation of the Civil War’s continuing influence upon American life and thought. Freedom Under Lincoln is a useful contribution to Civil War history which also offers timely instruction for our own day. In a dramatic and interesting way, it tells the story of the suppression of civil liberties in the United States as the Lincoln Administration struggled to preserve the Union. In the unprecedented experience of trying to cope with the problems of secession and civil war, the North lived in a state of public hysteria. Fearful for the safety of the capital at Washington and of the border slave states of Maryland, Kentucky, and Missouri, the President, without consulting Congress, suspended the writ of habeas corpus and permitted Secretary of State Seward to order the arbitrary martial arrest and imprisonment of hundreds of American citizens.

More than in any other crisis in the nation’s history, the Civil War raised the question of the extent of the individual’s loyalties and responsibilities in relation to his government. Though there was justifiable concern in the North over the presence there of thousands of Southern sympathizers, it was nevertheless tragic that the Lincoln Administration felt forced to abandon traditional American rights and freedoms. In addition to the sudden arrest of citizens whose loyalty was suspect—often on the flimsiest sort of hearsay evidence—newspapers were coerced or suspended, state legislatures dissolved, and free elections corrupted. Soldiers home on leave heightened the intolerant militarist atmosphere in the North while, again and again, as Sprague’s book demonstrates, the doctrine of military necessity was used improperly to justify harsh measures. More often than not, the appeal to national security, in areas far removed from the battlefield, was simply an excuse to cloak the expansion of Federal power over the states and individual citizens. In the author’s words, “the policy of repression did have a tremendous impact on the nation. It fundamentally altered the balance of power between the Federal and state governments, laying the groundwork for such actions as the national draft and the Federal income tax.”

Fortunately, most of those imprisoned were held only for short periods of time—as the protests against the arbitrary arrests grew in volume and intensity. Some of those taken away, such as James Wall of New Jersey who later became a United States Senator, actually derived a certain political benefit from their imprisonment and never stopped talking against the War. After 1861, when the immediate military safety of the North was largely assured, the suppression of dissent was directed mainly against those who advocated the prompt negotiation of a peace settlement with the South; and later, in 1863, when Clement L. Vallandigham was arrested for stating his peace views, the famous midnight knock on the door by agents of Secretary Seward or Stanton had become a rare event. As the brave but scattered voices of dissent were silenced, the growth of national power over the individual become more and more a component part of the preservation of the Union.

ALTHOUGH THE BROAD outlines of the American democratic process were preserved, and although Lincoln himself exercised a mild and humane influence within his Administration, it is clear nevertheless that the Civil War did great violence to the Constitution it sought to safeguard. In the very process of extending freedom to the Negro slaves, countless Americans were temporarily deprived of their civil liberties and personal freedom. That the ultimate legacy of the Civil War was, however, one of hope rather than despair is indicated in the author’s concluding quotation from the Supreme Court’s classic postwar defense of individual rights in the celebrated Milligan case of 1866. In language which has echoed to our own time, the Court held that “the Constitution of the United States is a law for rulers and people, equally in war and in peace, and covers with the shield of its protection all classes of men, at all times, and under all circumstances.”

—ARTHUR A. EKIRCH. JR.1

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ARE Conservatives and Libertarians Natural Allies—OR Polar Opposities?

LEFT AND RIGHT favors freedom and the free market for all: for H. L. Hunt and Ralph Ginzberg; for the businessman and the enslaved draftee.

LEFT AND RIGHT favors peace and opposes the Cold War and U.S. Imperialism.

LEFT AND RIGHT is scholarly but truly radical.

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NEW BOOKS AND ARTICLES

THE FOLLOWING IS A SELECT LIST OF BOOKS AND ARTICLES WHICH, IN THE OPINION OF THE EDITORS, MAY BE OF INTEREST TO OUR READERS.

Robert M. Hurt and Robert M. Schuchman, “The Economic Rationale of Copyright,” American Economic Review, LVI (May 1966), 421-32. The authors, who were both closely associated with New Individualist Review, argue that copyright is not the most suitable way either to protect property rights in publication or to promote publication. “If we believe in the theory that an author is entitled to certain moral rights as an extension of his personality, then traditional tort law protection could satisfy our objectives short of a copyright monopoly grant. If we are attracted by the analysis of the Register of Copyrights, that society has an obligation to support the creators of literary products, our goal could be achieved by other methods of reward than copyright, such as tax exemptions for royalties or payment of cash bounties for literary creation. . . .We can say that the traditional assumption that copyrights enhance the general welfare is at least subject to attack on theoretical grounds; the subject certainly deserves more investigation and less self-rightious defense.”
One of the most interesting and lively publications on the market today is Innovator, devoted to “applications, experiments, and advanced developments of liberty.” In its June issue, several authors provide the reader with information about the origins of the government postal monopoly, and the non-governmental origins of most of the technological advances which the industry has made. An earlier issue (January 1966) carried articles concerned with the question of privately owned roads and highways, as opposed to the present system of government-maintained roads. Published in newsletter format, a year’s subscription is $2.00. Write: Innovator, Box 34718, Los Angeles, Calif. 90034.
Grant McConnell, “P.R. in the Forests,” Sierra Club Bulletin, April 1966. Prof. McConnell, of the Department of Political Science at the University of Chicago, cites evidence in this article to add the United States Forest Service to the list of regulatory agencies taken over and made to serve the interests of those supposedly regulated: “As with other reforming and formally independent agencies, time and exposure took their toll. In order to survive and also maintain its bureaucratic autonomy, the Forest Service had to accomodate itself to the interest groups whose activities it was supposed to regulate. Over time, the service, like such other independent regulatory agencies as the ICC, the CAB and the SEC, acquired as its own constituency a particular industry, in this case lumber. Thus, in symbiotic relationship, there lies behind the Forest Service a strongly organized and determined lumbering industry.” Write: Sierra Club, 220 Bush Street, San Francisco, Calif. 94104. This article is an adaptation of one by the same title which appeared in the Nation, December 27, 1965, and additional material is in Prof. McConnell’s recent book, Private Power and American Democracy (New York: Alfred A. Knopf, 1966), $4.95.
Jora R. Minasian, “Television Pricing and the Theory of Public Goods,” Journal of Law and Economics, VII (October 1964), 71-80. This article, in the form of an analysis of the theory of public goods advanced by Prof. Paul A. Samuelson, is a fine addition to the literature on pay television. Prof. Minasian is chiefly concerned with the additional choices in programming which would be yielded by subscription TV, since, of the two, subscription pricing would be more responsive to minority consumer wants. This article should be read in conjunction with R.H. Coase’s article, “The Federal Communications Commission,” in the second volume of the Journal (1959). For subscriptions or single copies, write: The Journal of Law and Economics, University of Chicago Law School, Chicago, Illinois 60637. Single copies, $2.50; students, $1.00. The Journal is issued annually; subscription prices are multiples of single copy prices.
Two articles in major publications have recently noted a striking comparison between the United States today and the first years of the Roman Empire: Thomas Molnar, “Imperial America: A Look into the Future,” National Review, May 3, 1966, and Hans J. Morgenthau, “The Colossus of Johnson City,” New York Review of Books, March 31, 1966. Although the two authors differ markedly in their political views, both writers recognize that Empire may work unintended effects upon American federal institutions. These articles, and many others offering a more thorough treatment of the subject, ought to be of interest (i) to conservatives who advocate a vigorous foreign policy but limited government at home, and (ii) to social democrats who oppose such a foreign policy but favor a vigorous government at home. Specifically to be recommended is a pamphlet by Garet Garrett, first published in 1952 and reprinted in his book The People’s Pottage (Caldwell, Idaho: Caxton Printers, 1953), entitled “The Rise of Empire.” This short piece is an excellent, perceptive analysis of the degeneration of a republic into an empire through the actions of a strong central executive and an aggressive foreign policy. A condensed reprint of this article appeared in the Winter 1966 issue of Left and Right (Box 395, Cathedral Station, New York NY 10025; 85 cents).
An informative discussion of the recent Supreme Court ruling in the Ginzberg and other pornography cases is provided in the April 11, 1966, issue of The New Leader, by Richard Morgan of Columbia University (“The Court and Obscenity”). Morgan emphasizes the lack of logic and arbitrariness of the Brennan decision against Ginzberg, underwritten by Warren, Fortas, and two other Justices. The issue is dealt with also in an editorial in the April 19, 1966, issue of National Review (“Ginzberg and Pornography”), a contribution to the discussion notable not so much for the light it casts on the problem as for the insight it provides into the thinking of contemporary American conservatives. National Review’s editorial comment exhausts itself in irrelevent sallies against “the hypocrite Ginzberg. . .a pornographer-for-profit,” the foolishness of some of his supporters, etc. The focus is on personalities, and missing entirely is any discussion of the one important question: Should the government be permitted to censor any publication simply on the grounds of obscenity; and if so, Why?
“The Draft is Unfair,” by Jack Raymond. The New York Times Magazine, January 2, 1966. A brief summation of the reasons underlying the frequent charge of unfairness leveled against conscription as it operates in the United States. We will hopefully be excused for considering the most significant part of the article to be the extended comments by Prof. Milton Friedman, who favors an all-volunteer military force except in cases of wars on the scale of World War II (but his position on volunteer forces holds for cases such as Viet Nam). States Friedman: “Conscription is a tax in kind—that is, forced labor imposed on the young men who are drafted or who volunteer to serve because of the threat of the draft. One of the great advances in human freedom was the conversion of taxes in kind to money taxes. A similar advance would be attained now by repealing conscription and using volunteer enlistments to staff our armed forces. In order to do so, we would, of course, have to make military service sufficiently attractive in terms not only of pay but of career opportunities and conditions of service to get the number of men we need. But this is an advantage, not a disadvantage. It would be not only more equitable but also more efficient.” Friedman considers that the estimated increased cost of the volunteer system ($4-6 billion) is somewhat exaggerated, and thinks that the taxpayers would be ready to accept the increased costs in order to abolish a bad institution.
In the second issue of Left and Right, published last Autumn, Murray N. Rothbard has an article of major interest on “Liberty and the New Left.” The author persuasively maintains that the New Left—in contradistinction to the old Left—places a good deal of emphasis on values which the libertarian also shares: decentralization of power, personal autonomy, distrust of government, its bureaucracy and police. Moreover, certain writers closely associated with the New Left, e.g., Paul Goodman, are proving interestingly attracted to the voluntarism of laissez faire capitalism.
Ronald Hamowy, “Left and Right Meet,” The New Republic, March 12, 1966. Ronald Hamowy of Stanford University, discusses the transposition which has taken place between Right and Left: whereas the New Left seems to be libertarian, the Right-wing has become more statist in the last decade. This article appears also in a book Thoughts of the Young Radicals, published by The New Republic, and available from them for 75 cents.
In its April 21 and April 28, 1966, issues, The Village Voice featured a report on Synanon, the radically different and relatively extremely successful method of treating narcotics addicts (“The Synanon Way,” by Ross Wetzteon). “In an area where statistics are more inconclusive than usual, the most conservative estimate is that Synanon has nine times the ‘cure-rate’ of any other method. Other estimates are bolder—no other method works at all.” Especially interesting from the viewpoint of libertarians is the fact that Synanon has been developed and the centers were started for its application completely independent of any governmental agency. New York City recently offered the organization a grant of $328,000, but this was turned down. Marvin Tobman, one of the leaders of the school, explained that if money comes from the government, “no matter how much it is, it’s no good. All the money would mean is that we’d become dependent. Pretty soon they’d be sure to get their hooks into us and before you know it they’d be saying you have to put this bed over there and move that chest of drawers over there. We’d end up just another run-of-the-mill flophouse. This way it’s all ours.” Funds for the organization come from private donations (averaging $25-30), private organizations such as Yale University, and from the proceeds of Synanon Industries, Inc., “the largest distributor of pens on the West Coast.”

WANTED: IDEAS ON LIBERTY

The staff and supporters of The Foundation for Economic Education have been searching diligently for improved understanding, explanation, and practice of the basic principles of private property, individual choice and responsibility, voluntary exchange, limited government—the economic, political, and moral foundations of a free society.

The findings include an impressive shelf of books (many of them by other publishers) and the Foundation’s monthly journal. The Freeman.

We welcome the opportunity to consider your ideas on liberty for publication. Just send them (with return postage, please) to The Freeman, Irvington-on-Hudson, New York.

And, if you’d like sample copies, or care to see The Freeman and other Foundation releases regularly, that, too, can be arranged—at your request. The “subscription fee,” if any, we leave to your discretion.

Foundation for Economic Education, Inc.

Irvington-on-Hudson, New York

AN EXCITING OFFER FOR DISCRIMINATING READERS

Ranging from psychology, myth, law and philosophy to a massive set surveying the world’s major religions, these distinguished reference volumes are indicative of the high quality of selections that are available to members of the Book Find Club. These are books of current interest and lasting value—books that will make precious additions to your home library.

To receive the two sets of your choice for just $4 95, you need only agree to take four more books in the coming year from among the many Selections and Alternates that will be offered to you month by month. In addition to the savings you enjoy on every book offered by the club, you will receive bonus credit for each book or record you purchase after completing the introductory agreement. Whenever you have three such credits, we will mail you a certificate that can be redeemed for a FREE book of your choice from our extensive list of bonus selections.

Take advantage of this unusual opportunity today Simply fill out and return the coupon to us. You can receive as many as 10 volumes with an immediate savings of up to $40 50.

Know Your Enemy!!

The editors of NEW INDIVIDUALIST REVIEW have recently, through their highly placed contacts in the Communist Empire, come into possession of a fantastic and hitherto secret Communist blue-print for world domination. Entitled BLUE-PRINT FOR WORLD DOMINATION, it was composed in the depths of the Kremlin in 1920, by a noted Bolshevik writer, and has been ratified and re-ratified by numerous Communist Congresses and countless Communist deeds. Every patriotic American must familiarize himslef with this shocking and sobering document! Here are the Conclusions, as set forth by its author, the well-known Bolshevik leader, V. I. LENIN.

“In order to conquer the world for our Godless Creed we must employ infinite craftiness and patience. The most difficult nation to vanquish will be the United States, for there the people are basically prosperous, moral, and un-revolutionary, because of the inspiring achievements of free enterprise. After the United States has been initially softened up by the abolition of the gold standard and the introduction of welfare legislation, we will begin this Three-Point Program for victory over America:

“(1) First we will trick them into banning prayer in the public schools. Just as fluoridation of water destroys the body, so the elimination of public-school prayer destroys the spirit.

“(2) Then, in keeping with our almost Oriental immoralism, we will begin the steady introduction of pornographic materials—both those which are rankly so, and those which we will camouflage as “avant-gardism”—into American society. Pornography will be the chief weapon in our campaign to rot out the moral fibre of America, but abstract art and 12-tone music are not to be neglected in this connection.

“(3) Our final take-over will be preceded by an unparalleled crusade to destroy the magazine, NEW INDIVUDUALIST REVIEW. This quarterly journal, because it is so highly informative, entertaining, and intellectual, is perhaps our single most serious problem in the United States, rivalled only by the Strategic Air Command. To destroy NEW INDIVIDUALIST REVIEW is to make America a plum ripe for the picking!”

Block Communist Plans for World Domination Today! Subscribe to NEW INDIVIDUALIST REVIEW!

The Journal of Law and Economics is published annually in October by the University of Chicago Law School. It specializes in the discussion of public policy. The editor of Volumes I to VI was Aaron Director. Subsequent volumes have appeared under the editorship of R. H. Coase.

All volumes of The Journal of Law and Economics may be obtained for the price of $2.50 per volume. However, the Journal is also available at a special student rate of $1.00 per volume. Those students wishing to obtain all volumes of The Journal of Law and Economics issued to date (through Volume VII) should remit $8.00, or, if they wish also to include Volume IX (October 1966), $9.00. Please make all remittances payable to the University of Chicago Law School. Send orders and remittances (and if wishing to pay at student rates, particulars of student status) to:

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THE NATION’S ECONOMIC OBJECTIVES
Edited by EDGAR O. EDWARDS

Contributors. Kenneth E. Boulding, Arthur F. Burns, Lester V. Chandler, Seymour E. Harris, Simon Kuznets, Fritz Machlup, Edward S. Mason, and Jacob Viner. “This book will be a source of pride and pleasure to economists. We can be proud of the demonstration that some economists have something important to say to the public and can say it in an understandable and interesting way.” —HERBERT STEIN, American Economic Review.

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STRATEGIC POWER AND SOVIET FOREIGN POLICY
By ARNOLD L. HORELICK and MYRON RUSH

“. . .a first-rate piece of work—original in presentation and conclusions, sound and often brilliant in its analysis, and extremely well written.” —HANS J. MORGENTHAU.

The authors brilliantly analyze the crucial relationship between strategic military power and Soviet foreign policy, showing how the Soviet leaders have been both attracted by the political potentialities of nuclear weapons and sobered by their dangers. They detail the inner workings of the massive Soviet effort to deceive the West about the USSR’s ICBM superiority and the way in which the Soviet leaders attempted to manipulate Western beliefs about the strategic balance to their advantage in Berlin. The Cuban missile crisis, which resulted from Soviet failure in Berlin and the collapse of the “missile gap” myth, is analyzed as it may have been viewed from Moscow. The book concludes with an examination of future alternative Soviet military-foreign policies likely to be considered by the present Soviet leaders in the light of past failures. A RAND Corporation Research Study.

224 pages, $5.95

THE GARDEN AND THE WILDERNESS
Religion and Government in American Constitutional History By MARK DE WOLFE HOWE

“...a totally absorbing series of lectures on the tradition of church and state relations in the United States....Mr. Howe does not quarrel with the Supreme Court’s conclusions in a notable series of decisions...but he wishes the justices were better historians....an instructive book and a timely one” —MERRILL D. PETERSON, Virginia Quarterly Review.

208 pages, $4.50

UNIVERSITY OF CHICAGO PRESS

Chicago/London

In Canada, University of Toronto Press

VOLUME 4, NUMBER 4, SPRING 1967

SYMPOSIUM ON CONSCRIPTION:

WHY NOT A VOLUNTEER ARMY?

MILTON FRIEDMAN

CONSCRIPTION IN A DEMOCRATIC SOCIETY

RICHARD FLACKS

THE REAL COSTS OF A VOLUNTEER MILITARY

WALTER Y. OI

EMIGRATION AS AN ALTERNATIVE TO THE DRAFT

JOE MICHAEL COBB

A JOURNAL OF CLASSICAL LIBERAL THOUGHT

Spring 1967

$1.00

Vol. 4, No. 4

BOUND VOLUMES OF NEW INDIVIDUALIST REVIEW

The Editors of New Individualist Review are pleased to announce in conjunction with publication of the first number in our fifth volume the issue of a small number of complete, bound sets of the journal which will be available for distribution in December of 1968. These rare and valuable sets will include the three out-of-print issues of New Individualist Review which are not available to the general public, and unavailable in most libraries; issues, we might add, containing articles by F.A. Hayek, Milton Friedman, Murray N. Rothbard, as well as all of the original editors of the journal.

This announcement is being made in the endeavor to supplement our subscription revenues with contributions from readers and supporters who may have been unaware of our need and dependence upon supplemental contributions for continued publication. The number of bound sets of New Individualist Review which will be available is strictly limited by the availability of the out-of-print numbers; it may be impossible to repeat this offer. If you would like to obtain one of these sets and assist N.I.R. in its publication, please send your check in the amount of $100.00 or more to New Individualist Review, Ida Noyes Hall, University of Chicago, Illinois 60637.

NIR Back Issues

Certain back issues of NEW INDIVIDUALIST REVIEW can be purchased for a limited time at the special rate of $1.00 per copy. Among the issues presently available are those containing:

“Sin and the Criminal Law,” by Robert M. Hurt (II/1)

“National Review: Criticism and Reply,” by Ronald Hamowy and William F. Buckley, Jr. (I/3)

“The Fusionists on Liberalism and Tradition,” by Ralph Raico (III/3)

“Civil Liberties in the Welfare State,” by Robert M. Schuchman (II/3)

“The Uneasy Case for State Education,” by E.G. West (IV/2)

“Why Not A Volunteer Army?” by Milton Friedman (IV/4)

A complete set of the available back copies (fourteen issues) may be ordered for $13.00, postpaid. The three out-of-print numbers can be provided by xerographic reproduction at a cost of $4.00 each. Address inquiries to:

NEW INDIVIDUALIST REVIEW

Ida Noyes Hall, University of Chicago

Chicago, Illinois 60637

Why Not a Volunteer Army?
	3	MILTON FRIEDMAN
Conscription in a Democratic Society
	10	RICHARD FLACKS
The Real Costs of a Volunteer Military
	13	WALTER Y. OI
The Politics of Conscription
	17	BRUCE K. CHAPMAN
Emigration as an Alternative to the Draft
	26	JOE MICHAEL COBB
Anti-Militarism and Laissez Faire
	37	JAMES POWELL
THE ANTI-MILITARIST TRADITION:
Robert A. Taft, 1940
	43	Radio Address
Oswald Garrison Villard, 1916
	48	Editorial in the NATION
Daniel Webster, 1814
	51	Speech before Congress
New Books and Articles
	60

NEW INDIVIDUALIST REVIEW is published quarterly by New Individualist Review, Inc., at Ida Noyes Hall, University of Chicago, Chicago, Illinois 60637. Telephone 312/363-8778.

Opinions expressed in signed articles do not necessarily represent the views of the editors. Editorial, advertising, and subscription correspondence and manuscripts should be sent to NEW INDIVIDUALIST REVIEW. Ida Noyes Hall, University of Chicago, Chicago, Illinois 60637. All manuscripts become the property of NEW INDIVIDUALIST REVIEW.

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Second printing revised. Copyright 1968 by New Individualist Review, Inc., Chicago, Illinois. All rights reserved. Republication of less than 200 words may be made without specific permission of the publisher, provided NEW INDIVIDUALIST REVIEW is duly credited and two copies of the publication in which such material appears are forwarded to NEW INDIVIDUALIST REVIEW.

EDITORIAL STAFF

Editor-in-Chief • J. M. Cobb

Associate Editors • David Levy

James M. S. Powell

Editorial Assistant • J. Huston McCulloch

Contributing Editors • Robert L. Cunningham

Bruce Goldberg • Sam Peltzman

Ralph Raico • Robert Schuettinger

EDITORIAL ADVISORS

Yale Brozen • Milton Friedman • George J. Stigler

University of Chicago

F. A. Hayek	Benjamin A. Rogge
University of Freiburg	Wabash College

Why Not a Volunteer Army?

MILTON FRIEDMAN*

OUR MILITARY FORCES currently require the services of only a minority of young men. At most, something like one-third will have seen military service by the time they reach twenty-six. This percentage is scheduled to decline still further as the youngsters born in the postwar baby boom come of age. Some method of “selective service” is inevitable. The present method is inequitable, wasteful, and inconsistent with a free society.

On this point there is wide agreement. Even most supporters of a draft like the present one regard it as at best a necessary evil; and representatives of all parts of the political spectrum have urged that conscription be abolished—including John Kenneth Galbraith and Barry Goldwater; the New Left and the Republican Ripon Society.

The disadvantages of our present system of compulsion and the advantages of a volunteer army are so widely recognized that we can deal with them very briefly. The more puzzling question is why we have continued to use compulsion. The answer is partly inertia—a carryover from a total war situation, when the case for a volunteer army is far weaker. But even more, the answer is the tyranny of the status quo. The natural tendency of an administrator of a large, complex, and ongoing activity is to regard the present method of administering it as the only feasible way to do so and to object strenuously that any proposed alternative is visionary and unfeasible—even though the same man, once the change is made and it becomes the existing method, will argue just as strenuously that it is the only feasible method.

This bureaucratic stand-pattism has been reinforced by a confusion between the apparent and the real cost of manning the armed forces by compulsion. The confusion has made it appear that a volunteer army would be much more expensive to the country and hence might not be feasible for fiscal reasons. In fact, the cost of a volunteer army, properly calculated, would almost surely be less than of a conscripted army. It is entirely feasible to maintain present levels of military power on a strictly volunteer basis.

The other disadvantages that have been attributed to a volunteer army are that it might be racially unbalanced, would not provide sufficient flexibility in size of forces, and would enhance the political danger of undue military influence. While the problems referred to are real, the first and third are in no way connected with the use of voluntary or compulsory means to recruit enlisted men and do not constitute valid arguments against abolishing the draft. The second has more merit but devices exist to provide moderate flexibility under a voluntary as under a compulsory system.

There is no reason why we cannot move to volunteer forces gradually—by making conditions of service more and more attractive until the whip of compulsion fades away. This, in my opinion, is the direction in which we should move, and the sooner the better.

A volunteer army would be manned by people who had chosen a military career rather than, at least partly, by reluctant conscripts anxious only to serve out their term. Aside from the effect on fighting spirit, this would produce a lower turnover in the armed services, saving precious man-hours that are now wasted in training or being trained. Also it would permit intensive training and a higher average level of skill for the men in service; and it would encourage the use of more and better equipment. A smaller, but more highly skilled, technically competent, and better armed force could provide the same or greater military strength.

A volunteer army would preserve the freedom of individuals to serve or not to serve. Or, put the other way, it would avoid the arbitrary power that now resides in draft boards to decide how a young man shall spend several of the most important years of his life—let alone whether his life shall be risked in warfare. An incidental advantage would be to raise the level and tone of political discussion.

A volunteer army would enhance also the freedom of those who now do not serve. Being conscripted has been used as a weapon—or thought by young men to be so used—to discourage freedom of speech, assembly, and protest. The freedom of young men to emigrate or to travel abroad has been limited by the need to get the permission of a draft board if the young man is not to put himself in the position of inadvertantly becoming a law-breaker.

ONE GOOD EXAMPLE of the effect on freedom of a volunteer army is that it would completely eliminate the tormenting and insoluble problem now posed by the conscientious objector—real or pretended.

A by-product of freedom to serve would be avoidance of the present arbitrary discrimination among different groups. A large faction of the poor are rejected on physical or mental grounds. The relatively well-to-do used to be in an especially good position to take advantage of the possibilities of deferment offered by continuing their schooling. Hence the draft bears disproportionately on the upper lower classes and the lower middle classes. The fraction of high-school graduates who serve is vastly higher than of either those who have gone to college or those who dropped out before finishing high school.

A volunteer army would permit young men, both those who serve and those who do not, to plan their schooling, their careers, their marriages, and their families in accordance with their own long-run interests. As it is, the uncertainty about the draft affects every decision they make and often leads them to behave differently than they otherwise would in the correct or mistaken belief that they will thereby reduce the chance of being drafted.

Substitution of a volunteer army (or of a lottery) for the present draft would permit colleges and universities to pursue their proper educational function, freed alike from the incubus of young men—probably numbering in the hundreds of thousands—who would prefer to be at work rather than in school but who now continue their schooling in the hope of avoiding the draft, and from controversy about issues strictly irrelevant to their educational function. We certainly need controversy in the universities—but about intellectual and educational issues, not whether to rank or not to rank students for their draft boards.

Similarly, the community at large would benefit from the reduction of unwise early marriages contracted at least partly under the whip of the draft and from the probably associated reduction in the birth rate. Industry and government would benefit from being able to hire young men on their merits, not their deferments.

So long as compulsion is retained, inequity, waste, and interference with freedom are inevitable. A lottery would only make the arbitrary element in the present system overt. Universal national service would only compound the evil—regimenting all young men, and perhaps women, to camouflage the regimentation of some.

If a very large fraction of the young men of the relevant age groups are required—or will be used whether required or not—in the military services, the advantages of a volunteer army become very small. It would still be technically possible to have a volunteer army, and there would still be some advantages, since it is doubtful that literally 100 per cent of the potential candidates will in fact be drawn into the army; but if nearly everyone who is physically capable will serve anyway, there is little room for free choice, the avoidance of uncertainty, and so on. To rely on volunteers under such conditions would then require very high pay in the armed services, and very high burdens on those who do not serve, in order to attract a sufficient number into the armed forces. This would involve serious political and administrative problems. To put it differently, and in terms that will become fully clear to non-economists only later, it might turn out under these special circumstances that the implicit tax of forced service is less bad than the alternative taxes that would have to be used to finance a volunteer army.

Hence, for a major war, a strong case can be made for compulsory service. And indeed, compulsory service has been introduced in the United States only under such conditions—in the Civil War, World War I, and World War II. It is hardly conceivable that it could have been introduced afresh in, say, 1950, if a system of compulsory service had not so recently been in full swing. As it was, the easiest thing to do when military needs for manpower rose was to reactivate the recent wartime technique.

Under conditions found at present, the number of persons who volunteer for armed service is inadequate to man the armed forces, and even so, many who volunteer do it only because they anticipate being drafted. The number of “true” volunteers is clearly much too small to man armed forces of our present size. This undoubted fact is repeatedly cited as evidence that a volunteer army is unfeasible.

It is evidence of no such thing. It is evidence rather that we are now grossly underpaying our armed forces. The starting pay for young men who enter the armed forces is now about $45 a week—including not only cash pay and allotments but also the value of clothing, food, housing, and other items furnished in kind. When the bulk of young men can command at least twice this sum in civilian jobs, it is little wonder that volunteers are so few. Indeed, it is somewhat surprising that there are as many as there are.

TO MAN THE ARMY with volunteers would require making conditions of service more attractive—not only higher pay but also better housing facilities and improved amenities in other respects. It will be replied that money is not the only factor young men consider in choosing their careers. This is certainly true—and equally certainly irrelevant. Adequate pay alone may not attract, but inadequate pay can certainly deter. Military service has many non-monetary attractions to young men—the chance to serve one’s country, adventure, travel, opportunities for training, and so on. Not the least of the advantages of a volunteer army is that the military would have to improve their personnel policies and pay more attention to meeting the needs of the enlisted men. They now need pay little attention to them, since they can fill their ranks with conscripts serving under compulsion. Indeed, it is a tribute to their humanitarianism—and the effectiveness of indirect pressure via political process—that service in the armed forces is not made even less attractive than it now is.

The personnel policies of the military have been repeatedly criticized, and, with no spur, repeatedly left unreformed. Imaginative policies designed to make the armed forces attractive to the kind of men the armed services would like to have (plus the elimination of compulsion which now makes military service synonomous with enforced incarceration) could change drastically the whole image that the armed services present to young men. The Air Force, because it has relied so heavily on real volunteers, perhaps comes closest to demonstrating what could be done.

The question how much more we would have to pay to attract sufficient volunteers has been analyzed intensively in the Department of Defense study of military recruitment. Based on a variety of evidence collected in that study, Walter Oi estimates in his paper1 that a starting pay (again including pay in kind as well as in cash) of something like $4,000 to $5,500 a year—about $80 to $100 a week—would suffice. This is surely not an unreasonable sum. Oi estimates that the total payroll cost (after allowing for the savings in turnover and men employed in training) would be around $3 billion to $4 billion a year for armed forces equivalent to 2.7 million men under present methods of recruitment, and not more than $8 billion a year for armed forces equivalent to the present higher number of men (around 3.1 or 3.2 million men). Based on the same evidence, the Defense Department has come up with estimates as high as $17.5 billion. Even the highest of these estimates is not in any way unfeasible in the context of total Federal government expenditures of more than $175 billion a year.

Whatever may be the exact figure, it is a highly misleading indication of the cost incurred in shifting from compulsion to a volunteer army. There are net advantages, not disadvantages, in offering volunteers conditions sufficiently attractive to recruit the number of young men required.

This is clearly true on the level of individual equity: the soldier no less than the rest of us is worth his hire. How can we justify paying him less than the amount for which he is willing to serve? How can we justify, that is, involuntary servitude except in times of the greatest national emergency? One of the great gains in the progress of civilization was the elimination of the power of the noble or the sovereign to exact compulsory servitude.

ON THE DIRECT budgetry level, the argument that a volunteer army would cost more simply involves a confusion of apparent with real cost. By this argument, the construction of the Great Pyramid with slave labor was a cheap project. The real cost of conscripting a soldier who would not voluntarily serve on present terms is not his pay and the cost of his keep: it is the amount for which he would be willing to serve. He is paying the difference. This is the extra cost to him and must be added to the cost borne by the rest of us. Compare, for example, the cost to a star professional football player and to an unemployed worker. Both might have the same attitudes toward the army and like—or dislike—a military career equally; but because the one has such better alternatives than the other, it would take a much higher sum to attract him. When he is forced to serve, we are in effect imposing on him a tax in kind equal in value to the difference between what it would take to attract him and the military pay he actually receives This implicit tax in kind should be added to the explicit taxes imposed on the rest of us to get the real cost of our armed forces.

If this is done, it will be seen at once that abandoning the draft would almost surely reduce the real cost—because the armed forces would then be manned by men for whom soldiering was the best available career, and who would hence require the lowest sums of money to induce them to serve. Abandoning the draft might raise the apparent money cost to the government, but only because it would substitute taxes on the general population in money for taxes on certain “selected” young men in kind.

There are also some important offsets even to the increase in apparent money cost. In addition to the lower turnover, already taken into account in the estimates cited, the higher average level of skill would permit further reductions in the size of the army, saving monetary cost to the government. Because manpower is cheap to the military, they now tend to waste it, using enlisted men for tasks that could be performed by civilians or machines, or eliminated entirely. Moreover, better pay at the time to volunteers might lessen the political appeal of veteran’s benefits that we now grant after the event. These now cost us over $6 billion a year, or one-third as much as current annual payroll costs for the active armed forces—and they will doubtless continue to rise under present conditions.

There are still other offsets. Colleges and universities would be saved the cost of housing, seating, and entertaining hundreds of thousands of young men. Total output of the community would be higher both because these men would be at work and because the young men who now go to work could be offered and could accept jobs requiring considerable training instead of having to take stop-gap jobs while awaiting a possible call to the service. Perhaps there are some effects in the opposite direction, but I have not been able to find any.

Whatever happens to the apparent monetary cost, the real cost of a volunteer army would almost surely be less than of the present system and it is not even clear that the apparent monetary cost would be higher—if it is correctly measured for the community as a whole. In any event, there can be little doubt that wholly volunteer forces of roughly the present size are entirely feasible on economic and fiscal grounds.

It has been argued that a military career would be so much more attractive to the poor than to the well-to-do that volunteer armed services would be staffed disproportionately by the poor. Since Negroes constitute a high proportion of the poor, it is further argued that volunteer armed forces would be largely black.

There is first a question of fact. This tendency is present today in exaggerated form—the present levels of pay are comparatively more attractive to blacks than the higher levels of pay in voluntary armed forces would be. Yet the fraction of persons in the armed forces who are black is roughly the same as in the population at large. It has been estimated that even if every qualified Negro who does not now serve were to serve, whites would still constitute a substantial majority of the armed forces. The military services require a wide variety of skills and offer varied opportunities. They have always appealed to people of varied classes and backgrounds and they will continue to do so. Particularly if pay and amenities were made more attractive, there is every reason to expect that they would draw from all segments of the community.

In part, this argument involves an invalid extrapolation from the present conscripted army to a volunteer army. Because we conscript, we pay salaries that are attractive only to the disadvantaged among us.

BEYOND THIS QUESTION of fact, there is the more basic question of principle. Clearly, it is a good thing to offer better alternatives to the currently disadvantaged. The argument to the contrary rests on a political judgment: that a high ratio of Negroes in the armed services would exacerbate racial tensions at home and provide, in the form of ex-soldiers, a militarily trained group to foment violence. Perhaps there is something to this. My own inclination is to regard it as the reddest of red herrings. Our government should discriminate neither in the civil nor in the military services. We must handle our domestic problems as best we can and not use them as an excuse for denying blacks opportunities in the military service.

One of the advantages cited for conscription is that it permits great flexibility in the size of the armed services. Let military needs suddenly increase, and draft calls can be rapidly stepped up, and conversely. This is a real advantage, but can easily be overvalued. Emergencies must be met with forces in being, however they are recruited. Many months now elapse between an increase in draft calls and the availability of additional trained men.

The key question is how much flexibility is required. Recruitment by voluntary means could provide considerable flexibility—at a cost. The way to do so would be to make pay and conditions of service more attractive than is required to recruit the number of men that it is anticipated will be needed. There would then be an excess of volunteers—queues would form. If the number of men required increased, the queues could be shortened, and conversely.

The change in scale involved in a shift from conditions like the present to a total war is a very different matter. If the military judgment is that, in such a contingency, there would be time and reason to expand the armed forces manyfold, either universal military training, to provide a trained reserve force, or stand-by provisions for conscription could be justified. Both are very different from the use of conscription to man the standing army in time of peace or brush-fire wars, or wars like that in Viet Nam which require only a minority of young men.

The flexibility provided by conscription has another side. It means that, at least for a time, the Administration and the military services can proceed fairly arbitrarily in committing U. S. forces. The voluntary method provides a continuing referendum of the public at large. The popularity or unpopularity of the activities for which the armed forces are used will clearly affect the ease of recruiting men. This is a consideration that will be regarded by some as an advantage of conscription, by others as a disadvantage.

THERE IS NO DOUBT that large armed forces plus the industrial complex required to support them constitute an ever-present threat to political freedom. Our free institutions would certainly be safer if the conditions of the world permitted us to maintain smaller armed forces.

This valid fear has been converted into an invalid argument against voluntary armed forces. They would constitute a professional army, it is said, that would lack contact with the populace and become an independent political force, whereas a conscripted army remains basically a citizen army. The fallacy in this argument is that such dangers come primarily from the senior officers, who are now and always have been a professional corps of volunteers. A few examples from history will show that the danger to political stability is largely unrelated to the method of recruiting enlisted men. Napoleon and Franco both rose to power at the head of conscripts. The recent military takeover in Argentina was by armed forces recruiting enlisted men by conscription. Britain and the U. S. have maintained freedom while relying primarily on volunteers, Switzerland and Sweden while using conscription. It is hard to find any relation historically between the method of recruiting enlisted men and the political threat from the armed forces.

However we recruit enlisted men, it is essential that we adopt practices that will guard against the political danger of creating a military corps with loyalties of its own and out of contact with the broader body politic. Fortunately, we have so far largely avoided this danger. The broad basis of recruitment to the military academies, by geography as well as social and economic factors, the ROTC programs in the colleges, the recruitment of officers from enlisted men, and similar measures, have all contributed to this result.

For the future, we need to follow policies that will foster recruitment into the officer corps from civilian activities—rather than primarily promotion from within. The military services no less than the civil service need and will benefit from in-and-outers. For the political gain, we should be willing to bear the higher financial costs involved in fairly high turnover and rather short average terms of service for officers. We should follow personnel policies that will continue to make at least a period of military service as an officer attractive to young men from many walks of life.

There is no way of avoiding the political danger altogether, but it can be minimized as readily with a volunteer as with a conscripted army.

Given the will, there is no reason why the transition to volunter armed forces cannot begin at once and proceed gradually by a process of trial and error. We do not need precise and accurate knowledge of pay and amenities that will be required. We need take no irreversible step.

OUT OF SIMPLE justice, we should raise the pay and improve the living conditions of enlisted men. If it were proposed explicity that a special income tax of 50 per cent be imposed on enlisted men in the armed services, there would be cries of outrage. Yet that is what our present pay scales plus conscription amount to. If we started rectifying this injustice, the number of “real” volunteers would increase, even while conscription continued. Experience would show how responsive the number of volunteers is to the terms offered and how much these terms would have to be improved to attract enough men. As the number of volunteers increased, the lash of compulsion could fade away.

This picture is overdrawn in one important respect. Unless it is clear that conscription is definitely to be abolished in a reasonably short time, the armed services will not have sufficient incentive to improve their recruitment and personnel policies. They will be tempted to procrastinate, relying on the crutch of conscription. The real survival strength of conscription is that it eases the life of the military high command. Hence, it would be highly desirable to have a definite termination date set for conscription.

The case for abolishing conscription and recruiting our armed forces by voluntary methods seems to me overwhelming. One of the greatest advances in human freedom was the commutation of taxes in kind to taxes in money. We have reverted to a barbarous custom. It is past time that we regain our heritage.

Conscription in a Democratic Society

RICHARD FLACKS*

I DO NOT SEE HOW it can be denied that the institution of conscription is by definition alien to a genuinely free society. Therefore, I want to stress at the outset my view that the abolition of this institution ought to be a very high priority for Americans. This goal is, however, utopian so long as the United States continues to follow a policy based on the assumption that the status quo in every part of the world must be maintained by American military power. Thus, the only really worthwhile question to ask about conscription—how we can get rid of it—cannot be answered without debating the whole scope of American foreign policy.

It is, however, not entirely fruitless to raise some questions about the way in which conscription is used by our society, given the assumption that some form of Selective Service is going to be with us for the indefinite future. This may be particularly necessary for those of us who oppose the draft altogether, since much of the present discussion concerns how best to extend the scope of military training institutions, and how better to integrate them into the fabric of American life. My concern here, then, will be not with the many inequities of the present draft system, but with discussing ways of limiting the impact of this alien system and of preventing or diluting some of its more pernicious effects.

In my view, a fundamental flaw in the current draft system is that it reinforces and exacerbates a serious constitutional weakness in American political life, namely, the enormous delegation to the President of power in international commitments, to wage war and mobilize national resources and public consent, which is not substantially checked or limited by private power. The institution of permanent, compulsory military service facilitates the freedom of the President in this regard and enables him to deploy military forces on a very large scale without achieving prior popular consent. Such built-in Presidential irresponsibility is intrinsically repugnant; from a pragmatic point of view, its consequences can be read in Viet Nam.

It is my hope that serious study will be given to ways in which Presidents can be made responsible for their international policies, and to mechanisms by which the Presidential ability to mobilize for war can be balanced and checked. Many of the most important considerations in this regard lie outside the scope of this paper; but, it seems to me, there are ways in which the contribution of the Selective Service System to Presidential irresponsibility can be reduced or reversed.

First, it seems to me inadmissible that those most likely to be compelled to kill and die for often highly questionable policies do not even have the right to vote. If we are going to draft eighteen, nineteen, and twenty-year-old men, then we ought to allow them access to the ballot box. This, I think, would not be merely a formalistic reform, permitting young men to ratify their own induction, although it might turn out to be only that. Rather, it seems plausible that the introduction of large numbers of young people into the political arena would create a substantial new constituency for policies of restraint and internationalism—a constituency which might provide some check on the patriotic hawking of elderly politicians.

Second, it seems to me that we ought to adopt the notion, which prevails in some other countries such as Canada, that conscripts ought not to be used indiscriminately in foreign wars. The only legitimate use for draftees ought to be for the defense of the nation’s most vital interests. Senator Gruening’s proposal to prevent the President from using conscripts involuntarily in combat without specific Congressional mandate seems to me to be a reasonable, if minimal, way to insure some Congressional check on Presidential power. A stronger, and in my view more legitimate, proposal would be to prevent the use of draftees in combat (who do not subsequently volunteer for such duty) without a specific declaration of war. In any case, some mechanism of this sort would be a desirable way of bringing the power of the President to escalate conflicts under some degree of democratic control, while establishing conscription as an institution for national defense rather than an instrument for imperial adventure.

Third, it seems to me necessary to increase the freedom of citizens to resist being mobilized for wars of questionable justification. One way to do this is to broaden the grounds for conscientious objection. Conscientious objection can be founded on philosophical and political grounds as well as religious ones. Moreover, if there is any sense to the distinction between just and unjust wars, then it is improper to deny the possibility of conscientious objection to particular wars. There is, as far as I can tell, no practical difficulty in establishing whether a young man is a sincere objector on non-religious grounds, which is not present under the present definition of conscientious objection. It seems to me inconsistent with our best traditions to compel a young man to fight a war against his conscience, even if his basic values have been shaped by philosophical or political rather than religious influences; and it would seem to me desirable from the point of view of limiting Presidential power, if each inductee had the freedom to test whether his conscience would be violated by serving or fighting in behalf of current policy.

FINALLY, I WOULD argue that the traditional view of the draft as an alien institution must be preserved, and all attempts to make conscription a permanent, integral feature of American society must be firmly resisted. The common goal of liberals and democrats in the coming period ought to be to reduce rather than enhance areas of compulsion in American life. On this view, there is serious danger in some of the proposals now being offered to reduce the inequities of Selective Service. I refer here not only to attempts to revive universal military training, but to well-intentioned suggestions of universal conscription for “national service.” The idea of national service for youth is an exciting one, but the notion that it should be compulsory or tied to conscription is literally totalitarian. Similarly, the proposals to expand the scope of induction to include unqualified youth, so that they may receive the educational benefits of the armed services, is highly reminiscent of the procedures of a garrison state. It is not a matter for pride that the best opportunities of self-improvement for underprivileged youth are offered by the military, or that the only fully integrated educational institution in our society is the army. This situation is a measure of the default of the larger society; the war on poverty is not going to be won by giving the military even more control over the lives of young men.

The only really worthwhile goal of an affluent society as regards its youth is to promote the maximum possible freedom and opportunity for self-development. At present upper status youth have enormous opportunity for years of higher education, and many avenues open for cultural enrichment and personal fulfillment. These opportunities are widely buttressed by public subsidies in the form of free tuition, scholarships, fellowships, loans, etc. In the long run, the only way to reduce the inequities of the draft and to offset present trends toward a quasi-caste system among youth, is to extend these privileges, opportunities, and subsidies (where necessary) to all youth. What appears to be needed is a massive opening-up of the range of choices for youth so that each has a chance to select experiences of service, of education and training, of cultural enhancement and self-realization.

I want to conclude by indicating an important problem posed by these suggestions for limiting the uses of conscription. The present system has the apparent virtue of permitting a partial mobilization for wars as large as Viet Nam, without substantially increasing the militancy of the population, without developing major war fever, and without very widespread suppression of dissent. It may well be that mechanisms such as those proposed here which would limit the Executive’s freedom of action in this regard will “back-fire,” and produce more systematic efforts to engineer full popular support for war efforts. This situation would be dangerous domestically; it could also lead to more rapid escalation of conflicts. Such considerations should be given due weight; but on the other hand, we need to ask whether the costs added by these constraints might not make Presidents more cautious and rational when they make decisions about the deployment of military forces.

At any rate, these proposals to limit the uses of conscription and to resist its integration into American society seem to run counter to the drift of present policy. The likelihood of their adoption by Congress in the near future seems very small. In this situation, it is heartening that a significant number of inductees have decided to risk jail by undertaking legal tests of the current definition of conscientious objection, by refusing induction during a war which they perceive as unjust and illegal, by emigrating to Canada, and by publicly refusing to report for combat duty in such a war. These men may well be speaking for a sizeable portion of their generation in questioning the legitimacy of conscription. They deserve the highest degree of support from those concerned to preserve and extend democratic values.

The Real Costs of a Volunteer Military

WALTER Y. OI*

ONE OF SEVERAL proposed alternatives to the current draft is the establishment of an all-volunteer force. To say that a particular alternative such as an all-volunteer force is preferable to the current draft implies that the cost of this alternative is, in some sense, lower than the cost of procuring military personnel with the current draft system. Yet in his statement before the House Armed Services Subcommittee, T. D. Morris, Assistant Secretary of Defense, indicated that an all-volunteer force of 2.65 million men would increase military payroll budgets by $4 to $17 billion per year.

The budgetry payroll of the Department of Defense is not, however, the economic cost of labor resources allocated to the uniformed services. The presence of a draft has surely affected both the level and structure of military pay; moreover, the men who actually entered active military service were recruited or conscripted through manpower procurement programs which rely in differing degrees on the coercive influence of a draft liability. A change to a purely voluntary force would have to be accompanied by increases in military compensation, and substantial changes in the procurement channels through which men are recruited into the armed forces. The composition and structure of an all-volunteer force would thus differ significantly from that of the present force, which contains many men who were enlisted under the pressure of a draft liability. A third alternative, such as the lottery, would yet produce a different composition of the armed forces; but this article will deal with cost comparisons for only two military manpower procurement arrangements—a purely voluntary one, and the one which has evolved under the current draft law.

There are at least three senses in which the maintenance of a defense establishment entails a financial cost: (1) budgetry cost, (2) cost to the economy, and (3) cost to the individual military service participants. According to the defense budget for fiscal year 1965, the cost for active-duty military personnel was $12.7 billion, while retirement benefits accounted for another $1.4 billion. If the higher levels of military pay which are required to attract sufficient volunteers were applied to the probable age structure of a voluntary force, this writer obtains an estimate of the budgetary cost that is $4 billion greater than that of a mixed conscript and volunteer force.1

The financial cost of military personnel provides a measure for the value of the civilian outputs that could have been produced by the labor which was allocated instead to the armed forces; but this concept of cost completely ignores the welfare loss due to the occupational preferences of the individuals themselves for military versus civilian employments. In a sense, it is just a measure of technical efficiency, indicating the alternative cost in terms of foregone civilian output that was required to achieve given goals of military preparedness. The concept of full economic cost, on the other hand, acknowledges the occupational preferences of prospective recruits. If an individual has an aversion for service life, he could, in principle, be compensated enough to induce him to volunteer. Presently, individuals who would require such compensation are involuntarily inducted, while others reluctantly volunteer before they are drafted. These imputed compensations to overcome aversions for military service would be included in any computation of the full economic cost of acquiring military personnel; but our task here is merely to arrive at an estimate of financial costs. Finally, it must be remembered that the mechanics of the current draft law impose costs in the form of uncertainties on youths in the draftable ages. The incidence of inductions (who will be drafted) and the time of induction are not known in advance.

TO EVALUATE THE comparative costs of an all-volunteer force and of the force which has evolved under current law, this writer first examined the implications of a continued draft which produced a mixed force of conscripts, true volunteers, and draft-motivated, reluctant volunteers. It was assumed for this paper that active duty force strengths in the years ahead (1970-75) would return to their pre-Viet Nam levels of 2.65 million men, in order to utilize available Department of Defense data.

The manpower procurement channels which have evolved under the current draft are reflected in the patterns of active military service which were observed in the six years prior to Viet Nam, 1960-65. An analysis of these patterns indicates the probable characteristics of a mixed force under a continued draft. In order to maintain a force strength of 2.65 million men, annual accessions of 507,700 men must be recruited or conscripted from civilian life. With a smaller male population in the period prior to Viet Nam, roughly 59 per cent of males who were physically and mentally qualified for military service entered the active duty forces. By 1970-75 it is projected that only 38.5 per cent of qualified males of military age will be demanded by the armed services.

To estimate the cost of an entirely voluntary force, it is necessary first to consider the case assuming that the draft would be abolished with no accompanying changes in pay or other recruitment incentives. Under this assumption, the services would obviously lose the draftees who had accounted for 21 per cent of the accessions to enlisted ranks in 1960-65. In addition, a significant fraction of regular enlistees could properly be called reluctant volunteers who enlisted in preference to being drafted. The incidence of reluctant volunteers was inferred from a survey of responses to the question:

If there had been no draft, and you had no military obligation, do you think you would have volunteered for active military service?

If the draft were eliminated, reluctant volunteers would also likely be lost from the armed forces. Voluntary enlistments in all services could be expected to fall by 38.1 percent, and to the regular army alone by 43.2 per cent. Moreover, these surveys indicate that 41.3 per cent of newly commissioned officers were motivated to enter military service because of the threat of being drafted.

The fall in initial accessions due to the loss of conscripts and reluctant volunteers would result in a decline in the sustainable force strength. Since a voluntary force, however, would enjoy a greater rate of re-enlistment, the decline in strength would be smaller than the fall in accessions. The annual turnover rate of Army enlisted men is around 25 per cent when over half of accessions are draftees and reluctant volunteers. If all enlistments were true volunteers, it is estimated that the turnover rate could be lowered to 17 per cent.

The improved retention patterns which can be expected to apply to an all-volunteer force were then used to estimate the gross flow demand for accessions to achieve the assumed strength objective of 2.65 million men. The deficit between requirements (gross flow demand for assumed strengths) and voluntary enlistments could be eliminated by attracting more volunteers with higher military pay. To eliminate a deficit of 1.6 (the ratio of requirements to voluntary enlistments) in the Army, it was estimated that first term military pay would have to be increased by 68 per cent, from $2,500 to $4,200 per year. As a result, the pay of career men in the Army would have to increase by 17 per cent also. In addition to higher levels of military pay, the move to a voluntary force would imply a change in the composition of the armed services—the age structure would move to a larger fraction of older men in the career force. It would also be anticipated that a smaller fraction of officers would be college graduates.

IN BOTH THE MIXED and voluntary type of miltary force, 2.65 million men, it is assumed, would be required to maintain the defense of the nation, and thereby would be kept out of the civilian labor force. The financial cost to the economy can thus be defined as the opportunity cost equal to the value of goods and services that could have been produced by these servicemen. If servicemen were paid the same incomes as civilians of comparable ages and educational attainments, the men in the mixed force would earn $13 billion per year. The corresponding figure for the voluntary force would be $14.2 billion, or some 9.1 per cent higher than the mixed force, reflecting a preservation within the armed forces of the acquired military skills and experience of the older men, while in the mixed force many of the men do not remain in the services beyond their initial term—thus losing this experience. Although the voluntary force has a lower average educational attainment, it also contains older men who usually earn higher salaries than younger men, and on balance the age effect outweighs the smaller average education. To the extent that military service is not a perfect substitute for civilian job experience, the financial cost to the economy of the present type of mixed force contains a downward bias: civilian employment experience provides a man with skills he can take directly to a new job, while military experience is only partially useful in later employment.

The financial cost to individual military service participants is restricted to their monetary losses, suffered by those men who were coerced into active military service by the draft liability. By 1970-75, it is projected that only 55,300 men would need to be involuntarily drafted; but another 153,700 men per year would be expected to volunteer for enlisted ranks because of their draft liabilities. By using data for 1963-64, this writer was able to arrive at estimates of annual civilian and first-term military incomes for these reluctant service participants. The differentials between alternative civilian and military incomes represents an implicit tax that is placed on those who were forced to serve. If each draftee serves 19 years, and each reluctant volunteer for 3.5 years, the aggregate implicit tax which is borne by members in this age group is estimated to be $691 million. To the extent that some officers (notably doctors and dentists) serve an initial tour of active duty because of the draft, the size of this invisible tax is even larger. If reluctant participants were compensated for their aversion to military service life, it is estimated that the military pay budget would have to be increased by $826 million a year. This is the amount of the implicit tax, or cost, that is imposed on men who are coerced into military service by the draft. If the true volunteers were awarded the same pay as the reluctant service participants, the economic cost of the draft then easily exceeds the budgetary cost of moving to an all-volunteer force. It should be noted that these financial costs altogether disregard the welfare loss through the occupational preferences of individuals for military versus civilian jobs.

To sum up, a force strength of 2.65 million men could be achieved on a purely voluntary basis by 1970-75 if the military pay budget were increased by approximately $4 billion. Because of its higher retention rates, only 27.5 per cent of qualified males in each age class would be needed to sustain this voluntary force. On the other hand, if the draft is continued, the higher personnel turnover in a mixed force would mean that 38.5 per cent of all qualified males will have to enter military service each year. Some men will be involuntarily inducted, while others reluctantly volunteer because they might be drafted.

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The Politics of Conscription

BRUCE K. CHAPMAN*

THE BELIEF THAT political arrangements afford an efficient means to resolve problems, and the abstraction from potential special-interest pleadings, inspires much of the reliance upon government action and the distrust of the voluntary sector apparent in public policy today. The examination of the inter-relationship between incompetence and the automatic political stabilizers which preclude any radical elimination of this incompetence is a most underworked field. The operations of the Selective Service System in the United States provide a sterling example of gross bungling by a political agency generating a continued demand for reliance upon that agency.

Illustrative of one aspect of bungling by Selective Service is its handling of the I-A pool of men available for service. At any point in time, the Selective Service System does not know how many men are available to be inducted, how many will be available the following month, how many are needed by the Army, or even where the men are located geographically. This is a serious indictment, and it can be supported by examining the evidence provided by the Selective Service System itself.

In February 1966, General Hershey appeared before the Subcommittee on Education of the House Committee on Education and Labor to explain just how the draft was working and why it was necessary for students to be threatened with induction General Hershey sent the Subcommittee a projected estimate of the draft’s situation during the first half of 1966, containing arithmetic errors which left 100,000 men unaccounted for. It was returned. In the second version, the Selective Service claimed that given the I-A pool at the end of January, the number of new nineteen-year-olds being classified I-A, draft calls of 40,000 men per month, and enlistments of 50,000 per month, the I-A pool of “available” men would be exhausted and actually deficient of 5207 men on June 30, 1966. This alarming prediction convinced many that a draft of students was justified.

But it was not accurate. Monthly draft calls did not reach 40,000 during the whole spring, nor, for that matter, until October. February’s call was 29,400; March, 22,400; April, 21,700; May, 34,600; June, 18,500. Selective Service overestimated its needs by more than a third during the period; indeed, February, March, and April quotas were already known to Hershey when the projections were made. The estimate of enlistments may have been more accurate, but Hershey’s assertion that they represented a drain on the I-A pool was not. According to the Department of Defense, nearly half of the new enlistments (45 per cent in 1965) come from men under nineteen, men who are not yet in the I-A pool, and who, because of their enlistment, never will be. Another part of the 5,000 (for instance, deferred students) is also drawn from outside the I-A pool at the time of their enlistment. Finally, the Selective Service’s estimates neglected to take into account the new manpower acquired by its own reclassification of some I-Y’s (those with temporary mental and physical deferments) or those gained by the Army’s lowering of its mental standards.

Consequently, perhaps much to the surprise of draft officials, there was no manpower crisis at the end of June. No one knows how many young men on the draft’s borderline were reclassified during that period and called up by local boards anxiously anticipating an imminent shortage. How can the draft make such mistakes?

Early in 1966, the author attempted to find out, following up a public remark by General Hershey which described a clogged “pipeline” of paperwork in the draft bureaucracy. Some men’s reclassification and induction papers were—and are—handled more efficiently than others. The ones whose papers were delayed or stalled are said to be in the “pipeline,” and while it is likely that some inefficiency must arise in any system, in January 1966 General Hershey said some 500,000 men out of less than 650,000 in the whole I-A pool were in the pipeline. According to a source at the Labor Department’s Office of Manpower, Automation and Training, the problem has been growing since 1957, when only about 20,000 men were in the pipeline. By 1966 General Hershey could declare, “I’ve never been in a time where the situation was more confusing than it is now, in terms of having numbers of registrants I could really count.”1

WHEN A MAN TURNS eighteen he must register for the draft. If by age nineteen he does not obtain a deferment, he is classified I-A and is subject to induction. There presently are some 500,000 men turning nineteen each month, of whom about 30,000 will be classified I-A, while the others are either temporarily or permanently deferred. Other men come into the I-A pool, for example, when they lose their II-S student deferment upon graduation. Within the I-A pool, however, there are priorities for drafting. All single men aged nineteen to twenty-six, oldest first, are supposed to be called before married men, who also are called oldest first. Therefore, when a man is called up, supposedly all the other men of greater priority have already been drafted. But if in the process of being inducted, some men higher up had their papers delayed, they are “not available” to meet a particular month’s call, and someone further down on the lists—maybe a married man or a student who has to be reclassified for the purpose—is called instead. In January 1966, 522,472 out of 641,958 men in the I-A pool were “not available” to meet monthly quotas.

With local draft boards directed by the Selective Service System, and with the “entrance and examination” (i.e., “induction”) centers directed by the Department of Defense, it is not easy to trace the vagaries of the “pipeline.” The Selective Service System tends to blame the jam-up on the Pentagon, and a spokesman for the Army (which has charge of the induction centers) refers to it as “an internal problem of the Selective Service.” There is reason to think it is the fault of both.

The efficiency of the induction centers in processing the men is a fit subject for debate. When a man takes his mental and physical tests, the Army is required to return the results, in two sets, to the registrant’s local draft board within five days. An Army survey late in 1965 showed the five-day processing going smoothly, with a national backlog of only 6,000 men’s papers at any one time. Yet the Selective Service figures at the beginning of the new year showed 114,062 men whose first set of test results had not been returned to local boards, and another 63,510 whose second set had not been returned. Both sets must be in the draft board’s hands before a man can be ordered to report for induction.

Some men, as a result of the delays, are never drafted at all. A young man of the author’s acquaintance in New York who was graduated from law school one June at age twenty-five was reclassified then, but was not notified to report for an examination until December—on Christmas Eve, in fact. The examination was conducted on New Year’s Eve. The young man passed his twenty-sixth birthday on the 14th of February and, telephoning his draft board, found they were still awaiting receipt of his second set of test results. This is where the pipeline problem begins to develop, according to the Selective Service officials, criticizing the Army. Since the Army runs the induction centers, the Selective Service System feels there is little it can do to speed things up.

At the end of June 1966, the Department of Defense finally owned up, though indirectly, to the induction center delays, now claiming that the previously unacknowledged backlog of incomplete cases had been reduced by 32 per cent; but even on the day the Pentagon statement was released, a Boston registrant the author later interviewed was personally prodding an Army induction center to locate and deliver to the Selective Service the results of a physical examination given in December 1965, more than six months before.

The pipeline jam is even more severe outside the induction centers than within them, Among 522,000 men “not available” in the January 1966 statistics were 225,452 who were ordered for mental and physical examinations but whose papers informing them just where and when to report were delayed, “shuffling back and forth between draft boards and induction centers,” as one draft spokesman put it. There are also pipeline lags for other reasons. Some 82,937 men in January 1966 were ordered for induction, but had to wait for room to open for them in an Army training camp. There must be a twenty-one day wait, by law, so that draftees can straighten out personal affairs. Since the Army can only take about 35,000 men per month, the pipeline bulge is still remarkably large. There are always a few men awaiting hearings or decisions on appeals, and some “delinquents”—including young men ignorant of the requirements to register at eighteen and a few genuine draft-dodgers—who make up the balance in the pipeline.

ONE INTERESTED AND close observer of the draft process is the Labor Department’s Office of Manpower, Automation and Training, which likes to keep track of large movements of people to gauge their effect upon the labor market. An official there told the author in early 1966 that he found the draft’s manpower dilemma hard to understand. “So far as we can judge,” he said, “there should be no problem meeting needs even with increased calls.” He then succinctly summed up much of the pipeline problem—and the inequities it causes—by ascribing it to the inefficiency of the draft’s national operations. “Their bookkeeping is not that exact. They don’t feel secure unless they can see where the next million men are coming from.”2

The Viet Nam war has necessitated the draft’s reaching deeper into its I-A pool and lowering the induction standards. Thus more people than at any time since the Korean War are being directly affected by the Selective Service System’s operations. Draftees stand a better chance of being sent to Viet Nam than regulars, since only 12 per cent of the Armed Forces are draftees, while 33 per cent of the men in Viet Nam are draftees. Consequently, parents and other adults who have tended to shrug off the draft as a necessary annoyance are now becoming alarmed that some men are being taken from civilian life and involuntarily assigned to combat by an inherently inequitable system. The war, which is only tangentially relevant to the draft imbroglio, has made possible the development of the draft as a public issue.

Ironically, the war may also be the most effective instrument for suppressing or at least stalling consideration of draft reform. The argument is made that to debate the draft now will falsely encourage the Communists in Viet Nam and falsely raise the hopes of young men now faced with the draft here at home. Yet the use of the Viet Nam war to inhibit debate on the draft was fortuitously deterred by Secretary McNamara himself, at a speech in Montreal, when he scored the lack of universality in the draft as inequitable and suggested a program of national service; and again by the President in July 1966, when he appointed a commission to study draft operations and in August described the draft’s rules as a “crazy quilt.”

Lacking a spontaneous market process for eliminating mistakes, the viability of political solutions to various problems depends on official willingness to change, to realize and correct mistakes. Indicative of official attitudes within the Selective Service System, General Hershey commented in 1955:

There are many things that we would like to change in our present law. There are many things we would like to change in its operation. The question is whether, if you start changing them, you may not open up many other problems, and if we are going to have a democracy everybody must have their chance for a change. What the thing is going to look like when we get through many times impels us to go ahead with the evils that we face, so we live in some sort of accommodation with them rather than to jump into those we cannot fortell because, smart as we think we are, we haven’t been able to forecast the future so that we could be 100 per cent accurate. . . .3

One would think that such a reactionary attitude would have sent Congress into spasms of indignation. Imagine the Secretary of State or the Secretary of Labor admitting in public that changes in our foreign policy or labor laws might be needed but should be ignored, lest one reform lead to another.

Perhaps because the draft was such a rolling political issue in 1940, it is now a sacrosanct one. General Hershey and a number of other politicians are all eager to keep the quadrennial question of draft extension falling on an odd-numbered year, believing it makes less difference how long the draft is extended than when it expires. He said of the 1966 bill, “Let us hope, pray, or what not that the thing expires on a year that is not divisible by two. There are several reasons that I need not explain to you why this is so.”4 The years “divisible by two” are election years, of course, and Hershey feared the influence of an aroused public. Whenever the draft extension has come up for review since 1951 there have been demands from a handful of Congressmen that it be extended for only one or two years, and a complete examination be made during that time of the whole draft situation. The Congressional Record shows that each time, some of the critics have been persuaded and others simply overwhelmed by spokesmen for the House and Senate Armed Services Committees, who argue that four years is needed to give Congress the time it needs to really investigate the problems of the draft and to devise new legislation. In 1963, Rep. Robert Kastenmeier of Wisconsin pointed out this pattern during House debate, but was himself apparently persuaded, for he joined reluctantly in voting the extension. The House vote that year was 373 to 3; in the Senate the bill passed unanimously after ten minutes of debate.

Later, when criticism arises, Senate and House Armed Services Committees have typically referred newsmen to the Selective Service System, where General Hershey modestly declares that he only administers the laws; if Congress wants to change them, that’s their business. Critics are soon then told that the draft will come up for extension again in another year or two, and the whole matter can be looked into then. A variation of the draft lobby’s runaround technique is shown in the behavior of the House Armed Services Committee and its chairman, L. Mendel Rivers of South Carolina. When criticism of the pipeline and other aspects of the draft mounted in late 1965 and early 1966, Rivers told inquirers that his committe would begin hearings on the draft within a month. Public statements of such a pledge were made in early January 1966 and repeatedly thereafter; brief hearings were held in late June. Yet, then they were limited to testimony from General Hershey, a Defense Department spokesman, and several interested Congressmen. Chairman Rivers set the tone at the outset by declaring that while conscription might be “inimicable [sic] to our basic concept of individual freedom, we as a nation recognize that the alternatives can only result in jeopardizing our national security and then in turn, our precious heritage of freedom.”5 Having thereby opened and closed in the same breath the most important question of the hearings, Rivers, not surprisingly, was as markedly uninterested in exploring the efficiency of the draft as a manpower procurement system, as he is markedly uninterested in permitting other committes of Congress—such as Labor and Education—to hold hearings on the subject. Rivers in the past has been a supporter of higher military pay, but not primarily as a way of reducing the need for a draft, for he clearly isn’t persuaded of any connection; and regrettably his committe, like its Senate counterpart, does not want a wide-ranging investigation.

A somewhat different version of the stall against major draft reform can be seen in the attitude of the White House from 1964 to 1966. President Johnson has said as little as possible on the subject, and whatever his motivations, his actions have seemed more to anticipate and quiet the draft’s critics than to spur reform.

ADLAI STEVENSON was the first major politician after the war to call for abolition of the draft, a 1956 Presidential campaign stand that was roundly attacked as irresponsible. Eight years later, in early 1964, the same proposal—unhappily also presented without the body of supporting research and analysis—was almost unnoticed when made by Senator Barry Goldwater. The Senator and his opponents in both parties apparently thought there were better issues to debate, and the draft question quickly dropped out of sight. It bobbed up again briefly in April 1964, when a group of sixteen Republican Congressmen of various ideological shades let it be known that they had prepared a long series of attacks on the draft and intended to take the House floor to demand a Congressional investigation.

Three days before the Republican floor presentation, President Johnson called a hasty press conference to announce that he had just that day directed the Department of Defense to conduct a full-scale analysis of the draft, to be completed at the cost of one million dollars by June 1965. What the President did not say was that a study ordered by the late President Kennedy was then seven months underway in the Defense Department, and that a concurrent investigation of the matter, underway in the Department of Labor, was being shelved under Pentagon pressure. When the Republican group, led by Congressman Thomas B. Curtis, took the floor three days later, they found that the Johnson statement had stolen their thunder and their press coverage. The Republican draft critics realized they had been outmaneuvered; some were particularly angry and suspicious of the Department of Defense’s assignment to investigate its own operations. Rep. Curtis, one of the earliest and most determined draft critics in the country, told the House,

My experience in Washington leads me to fear that any policy submitted by the Department of Defense, regardless of how much consultation occurs with other affected agencies, will be a policy in which every dispute has been settled in favor of the Department of Defense. This means that the very important considerations bearing on the draft that normally fall within the purview of the Departments of Labor and of Health, Education and Welfare, just to name two, will be downgraded to the Defense Department’s interests. . . . [I also] fear that the Department of Defense will either ignore completely or will refuse to communicate to Congress and the public information that would not redound to the benefit of the Defense Department and its creature, the Selective Service System.

Every man who has ever served in the peacetime army is well aware of the staggering amount of feather-bedding and goldbricking that goes on. It is practically a maxim that if a job can reasonably be done by two men in four hours, it will require six men for eight hours.6

Could the Pentagon be counted upon to expose the military’s own waste of manpower, thereby embarrassing itself and the President? Could the Pentagon be counted upon to hunt down training functions which could better be performed by civilians? Curtis predicted that each branch of the service would resist the proposal of such reforms in a Pentagon study for fear of losing its own relative power and prestige in the notorious inter-service rivalry.

Would the Pentagon expose any abuses of law and regulation by its own staff? Curtis charged that “it has been candidly admitted by Army recruiting sergeants, in private conversation, that beyond a certain point they are quietly advised ‘from above’ . . . not to recruit any more young men . . . because if Army recruiting figures showed how easy it is for the Army to meet its force levels through voluntary enlistments, Congress would review the necessity of the draft.”7 What was needed, Curtis asserted, was to call a number of recruiting sergeants to testify under oath about this alleged practice, and that the Department of Defense was unlikely to do. Nor was it likely to examine the implications of the “evasion mentality” caused by the draft or the socio-economic effects of “channeling” men into jobs and other situations approved by the draft authorities. In short, Curtis expected a whitewash.

Congress as a whole felt that it was best to let the President have his way. In 1959, under a Republican President, Senator Mike Mansfield (D-Montana) argued vehemently against a Presidential commission on the draft, saying, “It is about time that we got away from attempting to meet every problem by the appointment of a commission.” Senator Richard B. Russell (D-Georgia), Chairman of the Senate Armed Services Committee, caustically observed that “Usually we end by getting the same recommendations from the commissions that we have had from the Department of Defense on the same subject. It is really a new way of asking for the views of the Department of Defense.” Senator Lyndon B. Johnson of Texas apparently agreed, and helped defeat the commission proposal in the Senate. By 1964, President Johnson felt differently about Presidential commissions, as did Senators Mansfield and Russell.

A number of Congressmen, however, principally Republicans, were skeptical of the much-touted Defense Department study. Curtis read into the Congressional Record a newspaper column by John McLaughry describing the Johnson device as a “phantom committee” which “in practice . . . does little or nothing. Its main purpose is to quiet the demands of Congress by assuring the public that something is being done.”

IN THE SPRING OF 1965, when the study was due to appear, the only evidence of it was a calculated leak to the press that abandoning conscription would be too costly to consider. Inquirers in June 1965 were told that the study was on the desk of Secretary McNamara, awaiting transmittal to the President. Summer passed, and autumn, and winter. By June 1966, a year after the completion date, the study had yet to be released, and its contents were still a secret even to General Hershey.

When Rep. Rivers held his hearing in the summer of 1966, a statement by Thomas D. Morris, Assistant Secretary of Defense for Manpower, was billed as an unveiling of the Pentagon report. Yet, though the Rivers committee seemed adequately satisfied with it, the statement was nothing more than a report on a report, touching on only a few of the charges leveled against the system, and giving no evidence that the Departmen of Defense had attempted a definitive study.

The twenty-three page, wide-margined, double-spaced Pentagon paper gave away its bias early by describing the growing supply of new manpower in America as “A principal problem affecting the operation of the draft system,” as if abundance were a “problem” and not an opportunity. It noted that the percentage of men age twenty-six (the effective final date of draft vulnerability) with military service had dropped from 70 per cent in 1958 to 46 per cent in 1966 and would drop to 42 per cent in 1974 if the present size of the military were maintained, and to only 34 per cent if it were restored to the levels that preceded the Viet Nam build up.

Nonetheless, the Pentagon said it had concluded that the draft was an essential influence toward supplying the military manpower. “To document this influence,” said Mr. Morris, “a questionnaire survey was made of a representative sample [of military personnel] to determine the extent to which the draft influenced their decision to enter military service.” That “survey” concluded, on the basis of one simple question, “Would you have entered service if there had been no draft?,” that only 41 per cent of regular officers and 38 per cent of enlistees would join without the pressure of the draft. Apparently no deeper probing of motivation was attempted! The Pentagon paper did not explain, for example, why its survey made no distinction between men who said they would have enlisted if there had been alternative influences and those who would not have enlisted under any circumstances. The Army, which has the hardest time getting enlistees, issued a report two years before the Pentagon study based on a more detailed survey which produced quite different results. The Army study is clearly more thorough and convincing than that released by the Pentagon; but the Pentagon apparently ignored it and came to the pessimistic conclusion that without the draft the military could not maintain its force levels.

As if pretending to test the hypothesis that increasing the levels of military pay would provide the necessary additional recruits for an all-volunteer military, the Pentagon reported on a survey that asked boys sixteen to nineteen whether pay alone would induce them to join the military if there were no draft. The findings were (“surprisingly”) that “equal pay with civilian life was considered the most important inducement by less than 4 per cent.” But pay alone is not the “most important inducement” in almost any career, especially in the minds of sixteen- to nineteen-year-olds; and if it were, many would not admit it. Nonetheless, good wages certainly are one important—an essentially important—inducement to almost anyone. The higher re-enlistment rate of blacks, who tend to come from poorer circumstances than whites, shows the importance of pecuniary rewards in the military. Here again, the Pentagon study’s probing of motivation was simplistic, if not simpleminded.

The final estimates of how much pay scales and total outlays would have to be increased to provide an all-volunteer military not only differed by billions of dollars from the estimate leaked to the press the previous year, and with those of Secretary McNamara himself, but were so widely divergent—“pay increases of 110 per cent to 280 per cent” and the total increase in funds “from $6 billion to $17 billion”—as if to indicate that if implemented it would mean a $6300 average raise for every person in the military. Presumably it does not take into account any of the substantial savings from drastically reduced manpower turnover. If the figures did take such savings into account, they are even more outrageous, since the average pay raise implied in them would be higher still. It is useful for perspective to note that the median personal income for employed males in the United States is $5431 (1963 Census sample), much less than the average pay raise implied in the Pentagon scale figures.

The fears of a whitewash expressed by Rep. Curtis and other critics were fully realized in the Pentagon’s statement. Extensive surveys and reams of “raw statistics” were alluded to, but not presented; one could not tell whether they really existed or not; and the all-important matter of just what prejudices and assumptions were programmed into the Pentagon’s computers on this study along with those statistics was anything but clear. What was clear was that the Pentagon was going to placate only the most tepid draft critics. Yet, no sooner had it been unveiled than once again President Johnson attempted to head off the attackers by announcing a blue-ribbon Presidential “National Advisory Commission on Selective Service,” another deus ex machina, or if you will, another machina ex deo, this time operated by Burke Marshall, former Assistant Attorney General.

WHILE THIS COMMISSION was given a supposed full mandate, true friends of draft reform must be forgiven for their skepticism. For one thing, the commission operated for only five months (until January 1, 1967), and Presidential commissions have a way of meeting only occasionally anyway, calling important and busy people to Washington for brief deliberations on the work that the commission staff has undertaken. While outside authorities were consulted, their opinions were weighed entirely in private, and the public has no way of knowing what was or was not going on. What’s more, since most members of such commissions on complex issues—however well intentioned—are handicapped by their relative lack of familiarity with the operations of the governmental departments affected by their study, they tend to be overly deferential to the spokesmen for those departments. There is little likelihood, for example, that the Presidential commission on the draft seriously challenged the validity of the Department of Defense’s manpower statistics, for most potential doubters would founder on their own lack of expertise, the commission’s relative lack of resources, and the critically debilitating lack of time.

But perhaps the draft critics, at last, have caught on. When the commission was announced after the Johnson Pentagon study, Rep. Curtis was only the most vehement on his denunciation of the conveniently timed action. Said the New York Times editorially, “If Mr. Johnson thinks it desirable to call for a fresh study after finding the Pentagon’s work disappointing, Congress appears justified in a study of its own. After all, it has no assurance that the next Presidential study will be any better than the last.”8 Democrats such as Senator Nelson of Wisconsin and Representatives Kastenmeier and Reuss, also of Wisconsin, and Republicans such as Wednesday Group members Morse of Massachusetts, Bell of California, and Reid of New York, as well as Rumsfeld of Illinois, are demanding a disinterested investigation of the draft and its possible alternatives. Most believe a joint special committee of Congress, made up of members of Armed Services, Education and Labor, Appropriations, and other affected committees, should conduct the investigation in full view of the public and with ample resources and time to do the job properly.

It may be futile to expect anyone to live up to their mistakes, unless they are placed in a position where they cannot do otherwise, but the realization of this weakness should encourage the construction of institutions to avoid the temptation. The need is as close as your local draft board.

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Emigration as an Alternative to the Draft

JOE MICHAEL COBB*

An iron despotism can impose no harder servitude upon the citizen, than to force him from his home and occupation, to wage offensive wars, undertaken to gratify the pride or passions of his master.

—The Hartford Convention, 18151

THE PROBLEM OF LOYALTY and patriotism in modern society is one so surrounded with emotional tension that only two approaches to the subject are usually observed. In polite circles it may be unfashionable to discuss the subject at all: the assumption that everyone is adequately patriotic and loyal is almost universal, and insofar as one may rarely consider the question of his own ultimate loyalties, so one will not in general doubt his neighbor’s feelings. The second approach to the problem of loyalty and patriotism may be regarded as gauche, but it is not unknown: whenever it is discovered that a person is openly unpatriotic or suspected of disloyalty, the feelings of fear and animosity dominate one’s reactions. Since the rise of nationalism and the appearance in this century of the phenomenon of total war, there seems to be no middle ground for discussion of this question. The task of this article is to raise the question of loyalty in the context of emigration, and to discuss some of the factors surrounding a decision to reject the government of one’s homeland and seek freedom abroad.

It may be an overstatement to characterize a decision to emigrate with the word oppression, especially in reference to a Western nation such as the United States, but oppression is not a quantifiable, aggregative concept, such as per capita income; nor is it a quality easily isolated and tested by sociologists and political scientists, such as the absence of habeas corpus or the secret ballot. Oppression is necessarily an individual assessment of social well-being. The increasing degree to which the subject of leaving the United States to avoid the draft is considered by young men, and the number of recent magazine and newspaper articles about those who have done so, tend to indicate that impressment is no more acceptable in the service of a democratic government than it was under the repressive, feudal regimes of Europe during the last century.

Of all the demands made upon their subjects by European governments that of compulsory military service has been among the strongest influences causing emigration. . . . This enforced service in the army and navy has been among the causes giving to the United States immigrants from Russia, Germany, Denmark, Austria, and Italy.

Conscription has been more of a factor in Germany, from which country thousands of young Germans have emigrated annually in order to avoid compulsory military service. Evidence of this is found in the official announcements of the penalty and punishment to which they have been sentenced. This has been particularly true since 1866, the right of emigration, which had been regarded as a fundamental one, being limited in that year by the restriction that it could not be permitted by emigration to avoid this duty. It was this compulsory service in the army and navy that caused many young men to whom passports were refused to emigrate across the frontiers. In Austria the law rendering every able-bodied man liable to military duty prompted not a few young men to leave the country before they reached the age of twenty.2

It is evident from discussions of the subject with that one per cent of Americans who are currently serving involuntarily, or who face induction within the next few years, that compulsory military service is regarded widely as a bitter imposition on their lives.3

It is not germane here to analyze whether we, in some detached overview, consider military service a burden or a privilege. It is clearly not a sought-after employment; if it were, there would be no need for conscription. Yet it may be unpleasant without being oppressive, if the draftee is resigned to it and regards it as his duty. The majority of adult, male Americans who have served—especially those who fought the three wars—regard a term of military service as the expected thing for any young man to do, as it was indeed for them. It does not seem possible for resisters to organize any effective movement against conscription in the face of this monolithic attitude towards the military; those who try are scorned, those who are inducted soon learn that any attitude other than docile cooperation can be perilous. The concern in this article is with the obstacles placed in the path of that minority who would rather emigrate than perform military service, by a government determined to shore up an anti-liberal institution with illiberal restrictions on a basic freedom.

The rationale for military impressment is cogently stated in the words of Mr. Chief Justice White, in the decision upholding the constitutionality of the World War I draft:

It may not be doubted that the very conception of a just government and its duty to the citizen includes the reciprocal obligation of the citizen to render military service in case of need and the right to compel it.4

The argument is that of the social contract—those who desire the benefits of a free society must bear the costs of those benefits: everyone pays taxes, everyone refrains from violence, everyone serves two years in the army. Oddly, it is not the case that the contrapositive argument is accepted by the government. On the basis of the social contract rationale, a citizen who is willing to forego the privileges of living in the United States should be allowed to emigrate without any further obligations to the United States. That person would have entered into a new social contract, with his chosen country, to pay its taxes, obey its laws, and serve in its army instead. The government of the United States, however, does not permit the nullification of military obligations by emigration.

Although the United States maintains no general barriers to emigration, it is significant that the Selective Service System has in the past operated to deny the right of emigration, and currently maintains regulations which cast doubt upon the legal status of draft-liable emigrants. Only extreme tyrannies impose repressive general laws. The modern state—“absolute, minute, regular, provident, and mild”—imposes piecemeal restrictions, upon only small minorities at one time: a practice guaranteed to maintain a general opinion of support and loyalty. Yet if oppression is piecemeal, one must examine in each case whether a restriction on emigration exists, because a general freedom of exit is fraudulent if those groups who might seek to claim it are expressly kept in.

IT IS NOT COMMONLY realized that the United States imposes any restrictions upon exit. The actual statutes passed by Congress do not explicitly forbid emigration by men of draft age, and it is usually only Acts of Congress which we consider relevant. Under Title I, Subsection 10(b)(1), of the Universal Military Training and Service Act, however, “The President is authorized to prescribe the necessary rules and regulations to carry out the provisions of this title.”5 The regulations so promulgated stitch together a binding network of law with which, entirely on its own initiative it seems, the Executive branch of government has denied young men of draft age a significant human right.6 A detailed examination of the regulations is necessary to make this denial clear. In an attempt to make the avoidance of military service as difficult as possible, the Selective Service regulations provide:

When it becomes the duty of a registrant or other person to perform an act or furnish information to a local board or other office or agency of the Selective Service System, the duty or obligation shall be a continuing duty or obligation from day to day and the failure to properly perform the act or the supplying of incorrect or false information shall in no way operate as a waiver of that continuing duty.7

It is by virtue of this declaration by the Executive of a perpetual duty, without any provision of machinery or conditions under which it may be cancelled, that all citizens and resident aliens of the United States between ages eighteen and twenty-six are legally obligated to perform military service—expatriation or emigration notwithstanding. The details and severity of this regulation will be made clear in the course of this article.

One further regulation of the Selective Service System bears upon the question of emigration in a direct way. It is important to note the wording of the single condition imposed upon the issuing agencies:

The Director of Selective Service, the State Director of Selective Service, or the local board may issue to a registrant a permit to depart from the continental United States, the State of Alaska, the State of Hawaii, Puerto Rico, the Virgin Islands, Guam, or the Canal Zone to any place which is not within any of those areas whenever the registrant’s absence is not likely to interfere with the performance of his obligations under the Universal Military Training and Service Act, as amended. Such permit shall be issued by completion of a Permit for Registrant to Depart from the United States (SSS Form No. 300).8

One might argue that emigration cancels all such obligations, and therefore the issuance of the permit would not “interfere” with their performance; but it is clear on the basis of its past actions that the Selective Service System does not hold such a position. At the present time, a permit is not actually required for exit, but the Selective Service System has indicated that this permit is the only insurance one would have against being declared delinquent and prosecuted. That the Selective Service authorities regard this discretionary power over travel with satisfaction, and are willing to use it, can be inferred from a close reading of the following quotation from the eighteen volume official history of Selective Service during World War II, discussing emigrant aliens (who could presumably use foreign passports to leave the United States with greater ease than citizens):

Finally, alien registrants who had departed from the United States and were no longer residing here were classified IV-C. Such classification was authorized as a practical solution to an awkward situation. There was some doubt and difference of opinion as to the extent of the liability under the Selective Service law for an alien who had departed from the United States.

As a practical matter, however, the System had no means of enforcing the orders of a local board upon an alien outside of the country. On the other hand, the board had to continue processing and reprocessing such cases, to report them to the United States attorney as delinquents and to make other futile motions of this nature. Consequently, a procedure was adopted whereby such registrants were placed in a class not available for service. Under the revised regulations if an alien so classified returned to the United States, he was subject to prosecution for any penalties he had incurred before departing and any subsequent obligations which had occurred for him under the act.

On the whole, this solution was in the best interests of Selective Service. Aliens liable for training and service could not leave the country without the consent of their local boards. The Immigration and Naturalization Service of the Department of Justice cooperated wholeheartedly in this regard. Thus, the control of the System over the departure of aliens and its inability to enforce orders, after the alien had departed, appeared to justify the adoption of the IV-C classification procedure.9

Here is an excellent example of bureaucratic thoroughness. In spite of “some doubt and difference of opinion as to the extent of the liability . . . for an alien who had departed from the United States,” rather than remove such emigrant alien from the rolls as no longer liable for military service to the United States, the Selective Service authorities decided to keep his dossier for possible use against him if he should ever return, perhaps to visit friends or on vacation. On the other hand, if the person should attempt to obtain permission from the government before departing, the police powers of the Department of Justice would be there to intervene.

ALTHOUGH INVOLVING other factors as well, the treatment of Japanese Americans during the Second World War provides an interesting study of one group of people obviously subject to oppression who were denied the chance to emigrate by Selective Service, and subsequently ordered to report for induction. Again from the official history, the Selective Service authorities obliquely admit this denial of the right of emigration:

The alien problem was one of the first to demonstrate the effectiveness of coordination between local boards and their State Headquarters. On the west coast large numbers of Japanese registrants began asking permission from their local boards to leave the United States. This was a new and troublesome situation and the boards turned to State Headquarters for advice. The pattern was uniform enough from board to board that the State Directors of this part of the country felt the problem must be met directly and promptly. They therefore held meetings with the Japanese leaders of the Pacific Coast States who indicated their disapproval of such action by Japanese registrants. The State Headquarters concerned then recommended that the boards disapprove the requests.10

The decision of the individual concerning his loyalties and attitudes toward various duties was never considered relevant; a group policy was formulated with Procrustean disdain. “Thus, it was that the initial contact of Selective Service with many Japanese American and Negro registrants was not with men who lacked patriotism, but with those who to a considerable extent were just not ‘sold’ on the war.”11

Prior to Pearl Harbor, Japanese Americans were drafted like other ordinary citizens, but from February 1942 they were considered by the War Department as generally unacceptable for service.12 In January 1944, the Selective Service System altered its policies, however, pursuant to a War Department decision of the preceding November. The new approach was to screen every eligible registrant, and to induct those found acceptable.13

The reintroduction of Selective Service for Japanese Americans in January 1944 came without advance notice and apparently as a rather complete surprise to many residents of War Relocation Authority Centers. Almost immediately, the number of requests for repatriation or expatriation showed a marked increase. . . . This was done not only by men disloyal to the United States, but also by those whose interest was solely draft dodging. Some of the latter could not even speak the Japanese language and had no relatives, property or other apparent interest in Japan.

In a War Department memorandum, dated March 30, 1944, it was stated that requests for repatriation or expatriation to Japan made by Japanese American citizens who were liable for military service would be considered an effort to evade such duty if filed after January 21, 1944, or when the registrant’s induction was imminent.14

It is clear that the government maintained an exceedingly hostile attitude toward those who sought to emigrate as a means of cancelling military obligations.

In general, Japanese Americans who made strong enough statements of disloyalty during their individual screenings by Selective Service after January 1944 would have been found unacceptable to the military authorities, thereby avoiding the draft without actually being expatriated. By its own admission, however, the Selective Service System was so inefficient and uncoordinated with the War Department that many clearly disloyal registrants were still classified as acceptable even months after a change in their status or opinions.15 When these registrants were occasionally ordered to report for induction, which they refused to do, the courts consistently upheld the authority of the government to deny the right of emigration, to detain the individual, and to order him into the Army if he should be classified as acceptable. In the case of Hideichi Takeguma et al., defendants were convicted of failing to report for induction even though the government had granted their requests for expatriation, while detaining them in fact for the duration of the war. The court held:

It remains to be considered whether or not the granted expatriation request by the other two appellants, together with the order of exclusion and segregation, are so inconsistent with the order to report for induction as to void the latter order. . . . If, as these two appellants claim, this completed act of expatriation transformed them from United States citizens into subjects of Japan, hence alien enemies, appellants have not gained their goal for the reason that alien enemies who are acceptable to the military authorities (and these appellants were) still may serve in the land and naval forces of the United States.16

The injustice of this practice was remarked by one District Court Judge, who acquitted other defendants on different grounds:17

It is shocking to the conscience that an American citizen be confined on the ground of disloyalty, and then, while so under duress and restraint, be compelled to serve in the armed forces, or be prosecuted for not yielding to such compulsion.18

This case, Kuwabara v. United States, is mentioned here only because it stands in such contrast to the general attitude of the courts, and the Selective Service System, towards the role of citizens in respect to the state. The right of emigration and the social contract rationale for duties to the state both imply a liberal, individualistic orientation: an individual may not transgress the laws of society, but the decision to obey or to emigrate is his own; his loyalty is something he extends to the state, not something the state can demand by reason of an accident of birth.

DURING THE PAST DECADE the Supreme Court has acted to restore to American citizens many rights of foreign travel which formerly had been infringed by the Passport Division of the Department of State, and by Congress.19 Mr. Justice Douglas, delivering the opinion of the Court in Kent v. Dulles, wrote:

The right to travel is a part of the “liberty” of which the citizen cannot be deprived without due process of law under the Fifth Amendment. So much is conceded by the Solicitor General. In Anglo-Saxon law that right was emerging at least as early as the Magna Charta. . . . Freedom of movement across frontiers in either direction, and inside frontiers as well, was a part of our heritage. . . . Freedom of movement is basic in our scheme of values.20

With language this strong, one might speculate that the Supreme Court would guarantee a draft-liable individual the right to emigrate, but the Supreme Court has not yet addressed itself specifically to these questions.21 Given the emotional atmosphere surrounding the issue of compulsory military service—and resistance to it—and considering that the courts have never been very receptive to the pleas of citizens against the Selective Service laws,22 the question is moot. This writer was unable to locate any decisions relating directly to the question of emigration per se, and by the nature of the crime, there are no decisions involving those who fled and have not been brought to court by reason of their permanent residence abroad. Apparently extradition for draft evasion has not been widely used, although several recent indictments may yet alter that; we may soon see more vigorous prosecution of dissenters. Unfortunately for our purposes here, the willingness of the Selective Service System to allow delinquents to avoid criminal prosecution by reporting for immediate induction has probably very much reduced the chances of these points of law being considered by the courts.

The ease with which a person may leave the United States, especially the ease with which Americans can enter Canada or Mexico, is well known. The point of this discussion has not been to assert that a person would be physically prevented from departing if he were liable for conscription. Enforcement is not adequate to check all tourists passing into Canada and Mexico in order to apprehend draft evaders. Our concern, however, is with the absence of any lawful means of cancelling the military obligation through emigration, and the continuing liability and threat of apprehension and prosecution to a draft-liable individual who chooses to emigrate rather than serve. To a classical liberal, the accident of being born in Detroit rather than Windsor, or Seattle rather than Vancouver, for example, ought to have no bearing upon the freedom of that person to renounce loyalty to the United States and seek Canadian citizenship, and to enjoy all privileges thereof—including the treaty rights of traveling and carrying on business in the United States. Under present law, the accident of birth is all-important: the government does not regard citizenship as an accident.

The anti-liberal attitude of the United States government may be merely a reflection of the prevailing majority opinion—that if a man will not loyally serve the country of his birth, he ought to be permanently exiled or imprisoned; but this is hardly an attitude conducive to or compatible with other widely held beliefs in the United States, such as freedom of opinion and speech, the right to travel, etc. It is not the case that a person who emigrates from the United States forfeits all liberty and rights enjoyed by American citizens, for Britons, Canadians, Australians, and many other nations share the liberal heritage with citizens of this country. Americans would be very disturbed if France, for example, were accustomed to detain and conscript United States citizens of French ancestry vacationing in Paris, even if only first-generation immigrants were so liable. The United States government, on the other hand, actively engages in the harassment of expatriates who emigrated in order to avoid military service. The administrative regulations of the Department of State, for example, provide:

Aliens ineligible to citizenship or who departed to avoid service in the Armed Forces. An alien shall be re-refused a nonimmigrant visa under the provisions of section 212(a) (22) of the [Immigration and Nationality Act, as amended] if, having other than nonimmigrant status, he departed from or remained outside of the United States on or after September 8, 1939 to avoid or evade training or service in the United States Armed Forces.23

The purpose of a regulation such as the above can only be to place as large a penalty as possible upon foreign nationals, unfortunate enough to have been born in the United States or to have lived here, who did not make the decision to emigrate until after age eighteen, when it was too late to escape the military obligation lawfully (since the requirement to register and serve commences on that date). In terms of practical enforcement, though, it would seem that Canadians would be less likely to be affected by this hostile attitude because of a loophole arising from cordial United States-Canadian relations:

The provisions of section 212(a) (26) of the [Immigration and Nationality Act, as amended] relating to the requirements of valid passports and visas for nonimmigrants are waived by the Secretary of State and the Attorney General, acting jointly, in pursuance of the authority contained in section 212(d) (4) of the Act under the conditions specified for the following classes:

(a) Canadian nationals, and aliens having a common nationality with nationals of Canada or with British subjects in Bermuda. A visa shall not in any case be required of a Canadian national, and a passport shall not be required of such a national except after a visit outside of the Western Hemisphere. . . .24

Although the probabilities of arrest are smaller for those draft evaders who might become Canadian citizens, the permanent danger of imprisonment still represents a serious threat to all former Americans, especially if the Attorney General were to become more concerned with emigre draft dodgers and were to have such persons placed under surveillance. It is already the case that some draft-liable emigrants to Canada have been arrested at the border upon returning to the United States to visit friends or conduct business.

ALTHOUGH THE PRESENT Selective Service regulations made pursuant to the Universal Military Training and Service Act deny the social contract premise which defends the Act, there are marginal circumstances by which many people desiring to emigrate would be able to avoid the trap which closes on one’s eighteenth birthday. Once a person (whether citizen or alien) has registered with the Selective Service System, his only recourse if he wishes to emigrate is either to violate the law and risk imprisonment, or to fulfill the required term of service beforehand. Even aliens who wish to return to their own countries are no less subject to this unfortunate dilemma than citizens victim of an “accident of birth.” Aliens do, however, have more flexibility with regards the registration requirement, if they know the construction of the regulations.

Certain categories of aliens who can claim a permanent foreign residence can qualify for the status of “non-residents,” and not be required to register. The most likely persons to avoid the military dilemma in this way are students, who as non-residents would not have to register for Selective Service and not be faced with the age-extending problem of the II-S classification. These persons would be expected to leave the United States upon completion of their studies, but would not be barred from returning to or later seeking citizenship in the United States. For a person with dual citizenship—discussed below—it would be necessary to emigrate to his other homeland prior to the age of eighteen, and then apply for a non-resident student visa for college in the United States.

Aliens not qualifying for a non-resident student visa would be required to register with the Selective Service System at age eighteen or within ninety days after entering the United States. The regulations give aliens the option of declaring themselves resident or non-resident, the former being subject to conscription immediately and the latter being allowed one year to finish their business and depart or be registered as resident aliens. Because of the diplomatic problems involved in drafting aliens, however, the government has provided SSS Form No. 130, which allows resident aliens to declare that they do not wish to perform military service, and that they accordingly foreswear the opportunity ever to obtain American citizenship. The execution of this form is irreversible—even if the person decided later to serve in the military, he could never obtain American citizenship; and if he subsequently departed from the United States, he might be denied re-entry under the State Department regulations quoted above, unless he could utilize the Canadian loophole. The existence of the possibility of obtaining such an exempt alien classification, Class IV-C, merely by renouncing future United States citizenship would suggest interesting possibilities for dual citizens and pre-eighteen emigrants; but the liberal ideal is far from being realized when ordinary citizens cannot escape impressment similarly.25

The most interesting category of aliens involves those born with both United States citizenship and some other citizenship. Such persons are typically those born abroad of United States parentage, or born in the United States of foreign parents. Such dual citizens usually must choose between their two “homelands” before age twenty-five, at which time the choice is deemed to have been made for them by virtue of residence. For purposes of qualifying under Selective Service in some non-liable category, the choice for non-United States citizenship would have to be made prior to the eighteenth birthday; but since the person would still be a minor, this would have the beneficial effect of not damaging the possibility of a change of heart later—whereupon the person could regain full, natural-born American citizenship. To avoid as much as possible the appearance of one’s name on government lists, the correct procedure of choosing non-United States citizenship involves obtaining documents from the foreign government, passport, health certificate, drivers license, etc., establishing that citizenship, rather than executing any renunciation of United States citizenship because the latter is automatically terminated when foreign citizenship is obtained. To escape Selective Service, it is only necessary to successfully terminate United States citizenship prior to age eighteen, and, if returning to the United States, then to execute SSS Form No. 130 and obtain a IV-C exempt alien classification.

Because of the many anti-liberal aspects involved in being a citizen of some particular country—passport restrictions, draft liabilities, taxation, and property penalties—it would seem desirable from the standpoint of a classical liberal to allow the individual himself to make the choice of citizenship (natural-born if possible, because naturalized citizens are restricted in many countries in minor ways, as in holding public office or residing abroad for long periods) rather than leaving this highly significant choice up to an accident of birth. For these reasons, it would not be surprising if in the future a large number of Americans were to spend a summer or a year in Canada, coinciding with the birth of a child (the timing of birth could be accurately controlled within a month’s vacation period by birth control measures), especially if conscription is not soon abolished in the United States. Such children could be reared and attend school in the United States, and by qualifying for a non-resident visa even obtain a college degree in this country. Once such children had passed military age (twenty-sixth birthday) they would still be free to return permanently and, if they desired, take out United States citizenship.

THE ONLY LAWFUL WAY in which a United States citizen can avoid military service through emigration is to depart from the country before age eighteen and renounce his citizenship once abroad. Legally, it would be absolutely necessary to renounce United States citizenship, since all citizens, whether at home or abroad, must register at age eighteen—and the goal is not to register. Such a person would become in effect a stateless person for the period of time required for naturalization in his new homeland, and would not qualify for a passport during this period (though limited foreign travel would be possible with documents of identification obtainable from most governments). Persons planning to maximize their freedom and violate the law if necessary in the short run, provided likelihood of arrest is minimal, would probably be able to cut the period of time as a stateless person to two years (under current United States passport regulations) simply by acquiring a new passport immediately before departing and not renouncing citizenship at all, but waiting for it to become forfeit when they acquire their new citizenship after five years (Canada or United Kingdom). This same tactic could be used without violating the law by emigrating prior to age fifteen.

In all of the above examples, the cooperation of the individual’s parents would be absolutely necessary, inasmuch as the person must be a minor to emigrate and avoid military service thereby. In the extreme case, the parents would accompany the child to his adopted country. It might not be unreasonable to expect a family of Quaker or pacifist convictions to take this step with the fate of their minor children in mind, although most parents would consider the suggestion absurd. A more likely case might be the sending of children abroad for school or college with the knowledge that they would initiate foreign naturalization proceedings as soon as possible. Except for Canadian schools, this would mean not seeing one’s children for some time unless the parents themselves went abroad on vacation. If the realization of the full impact of conscription did not occur to the individual until the age of seventeen, even then it would not be too late to decide upon a Canadian or British university, and parents might be much more receptive to that suggestion than to any other. The prestige of study abroad might outweigh any objections they would have to the suggestions of emigration and renunciation of citizenship. The laws of citizenship and nationality are intricate, and it is unlikely that a teenage boy would have the knowledge or sophistication to research the problems adequately. For this reason, the above cases are purely hypothetical; but for purposes of this article, it is useful to set forth the full picture of Selective Service and emigration law, loopholes included. If the fact that United States military obligations commence at age eighteen—and not at birth—were more widely known, it seems likely that fewer draft resisters would attempt conscientious objection status, which requires two years of menial alternative service as objectionable on libertarian grounds as military service, or fall afoul of the law when finally fleeing the United States to avoid impressment. It seems intellectually more honest to confront one’s attitudes toward military service and loyalty to a government which compels it, and to reject the government outright through emigration, rather than to attempt to evade the law—in effect taking the benefits of a country without paying the costs. Most individuals, however, are caught in the Selective Service trap simply because they innocently register at age eighteen without realizing that they could have taken other options.

The decision to renounce United States citizenship is one that few Americans would ever make. Certain metaphysical characteristics attach to the citizenship of one’s native land that tip the scales heavily against giving it up, although one might live abroad for many years. Even in this cosmopolitan age, we see Britons and expatriate Americans living in every major city of the world, with no diminution of loyalty and attachment to their homes. Our purpose in this article has been to discuss the surprising denial of freedom to an oppressed minority who might want to escape through emigration; a minority which does not share the loyalty of most. In the nineteenth century, America welcomed with open arms the Germans and Eastern Europeans who fled military service and burdensome taxation in their homelands. Now that America itself has shouldered the double burden of world empire and domestic dirigisme we ought to be less hostile and intolerant towards those among us who still remember the old American dream and want to follow it to whatever land it has now gone.

The COUNCIL FOR A VOLUNTEER MILITARY is a non-partisan organization aiming to elevate public debate on the merits of voluntarism.

The COUNCIL will be happy to receive, and will attempt to answer any questions concerning the draft in America, and will utilize any information regarding those who wish to abolish it.

The COUNCIL invites interested persons to write for more detailed presentation of its policies and positions, and for membership information.

Anti-Militarism and Laissez Faire

JAMES POWELL*

IN THE NAME OF a pragmatic national defense, the United States since World War II has reversed its traditional presumptions against conscription. In part, of course, this reversal, and the popular acceptance of conscription as a regular feature of American life, has been a product of the major wars with which this country has been involved; peacetime conscription has been heralded from 1945 on as a way of preventing another war. That there is much support, however, for conscription as an instrument of social reform—national service—indicates that conscription is not strictly a military phenomenon, but is a consequence of the general presumptions for state-oriented over citizen-centered policy, which have guided social reform for many decades.

The state-oriented presumption in the case of conscription has been the doctrine of “service obligation.” According to this doctrine, the government defines certain occupations as fulfilling the “national interest,” and is empowered to compel people to follow such occupations. Finally, the government claims that the whole process is an uplifting experience. Thus, Lt. General William Knudsen testified before the House Committee on Military Affairs: “So I can tell you from my own experience that a period of one year in the service of the State or of the Government will have a tendency to make men more democratic. They will all be together. They will learn each other’s ways and learn to look upon the Nation as a whole. They will be more patriotic when they get through with their service, and they will never forget the time that they had working for their country.”1 General Eisenhower has stated his ideals of military service many times, as in this case:

If UMT accomplished nothing more than to produce cleanliness and decent grooming, it might be worth the price tag—and I am not altogether jesting when I say this. To me a sloppy appearance has always indicated sloppy habits of mind.

But above and beyond these advantages of UMT is the matter of attitude toward country. If a UMT system were to become a fixture of our national life, I think that resentment against military obligation would die away, that virtually every young man would take pride and satisfaction in giving a year of his life to the United States of America. After all, the good instincts lie near the surface of the young. Patriotism, a sense of duty, a feeling of obligation to country are still there. They are the noblest and the most necessary qualities of any democratic system, and I am convinced that UMT would help call them to the surface once more.2

Or consider General Hershey’s assessment of the creative potential of the threat of military service: “You are trying to use the deferment on the one hand as the carrot and the induction as the whip if you want to call it that, to keep the person channeled into scientific schools, into engineering schools, into medical schools. . . . The practice is going to be that the rare bird, if you want to call him that, is so useful that we keep the threat of service over him in order to keep him useful.”3 The idealization of compulsion which is implicit in conscription marks it as a paradigm of state-oriented policy.

However sincerely people might believe in the idea of service obligation, it is opposed to the values of a citizen-centered social order which relies upon voluntary social cooperation. That the idea of service obligation masks a policy which, however widely accepted today, is nonetheless just another kind of state-worship, is illustrated well by the following:

The Army trained men for unconditional responsibility at a time when this quality had grown rare and evasion of it was becoming more and more the order of the day. . . . it trained men in personal courage in an age when cowardice threatened to become a raging disease. . . .

The Army trained men in resolution while elsewhere in life indecision and doubt were beginning to determine the actions of men.

The Army trained men in idealism and devotion to the fatherland and its greatness while everywhere else greed and materialism had spread abroad.

The young man who practiced obedience during this time could then learn to command. By his very step you could recognize the soldier who had done his service.4

The similarity between Hitler’s statement and much Congressional testimony, for instance, should appear as no accident, but as an indication of how far state-oriented ideas have been implanted in American thought. In some situations the requirements for national defense might include conscription, but recognition that such unusual situations might occur is not at all equivalent to the general belief that conscription is a good thing.

THERE ARE PROBABLY three elements of the general belief in conscription, or the doctrine of service obligation. First, conscription sanctions Executive prerogative. National defense requires professional expertise of the sort possessed by administrators, not legislators; and the presumption is that whatever aspect of defense policy receives the endorsement of the Executive agencies should be enacted substantially as proposed, particularly in a time of crisis. Each time the draft law has expired, since 1951, there have been perfunctory hearings, and the Congressional committees have reported, and Congress has voted, to extend the draft virtually unmodified. Congress has functioned more to enact than to deliberate upon the recommendations of the Executive. Or, as Garet Garrett described the government of an empire: “The word executive came to have its new connotation. For all the years before when you spoke of the executive power of government you meant only the power to execute and administer the laws. Henceforth it would mean the power to govern.”5 Conscription has illustrated the chief aspect of Executive government—the tendency of the Executive both to gather administrative knowledge and to formulate policy.

Second, arguments for conscription have invariably involved the assumption that voluntary incentives would never attract sufficient military manpower. The Marshall Commission, for instance, innocently reported that “a draft law has been necessary precisely because there have not been enough volunteers to meet military manpower needs.”6 Similarly, General Mark Clark, Chairman of the Civilian Advisory Panel, testified before the Senate Armed Services Committee that “a draft law will be required for national security purposes for the indefinite future.”7 There is no suggestion in the Marshall Commission Report, or in any other testimony on the draft, that incentives affect the number of people who enlist. Nor is there any suggestion that in certain circumstances the draft could—and should—end altogether; a regular feature of testimony on the draft is the supposition that we must rely, indefinitely, on compulsion to sustain our national defense.

Third, conscription has survived at least in part because of the belief that military service exacted through compulsion is more noble and patriotic than those careers people voluntarily pursue. By and large this has been the moral position which the American Legion has always represented to Congress, as in 1963: “Our nation should never be without an obligation for every youth to serve his country in a military capacity and a system for their selection so to serve.”8 Conscription is moral because it is service to the state. This idea, of course, is the first principle of any authoritarian regime, and justifies the ultimate subversion of all civil liberties.

Fortified by the idea of service obligation, lobbyists for conscription seldom have argued that their conclusions are the results of empirical investigation. Certainly no one has testified before Congress to indicate what sorts of evidence would certify those claims as humbug. Does Selective Service intend merely to acquire temporary possession of a specified quantity of people? Is the goal to encourage career enlistments? Or to allocate manpower most effectively? Or to follow those policies most consistent with personal freedom? One consequence of not stating the claims of Selective Service in such a way that the empirical implications are clear, has been to avoid the implication that in certain circumstances Selective Service should end altogether.

Many people have argued that conscription is most objectionable as an aspect of militarism, but the state-oriented ideas which justify conscription apply to non-military policies as well. Last May, Secretary of Defense McNamara offered his well-publicized proposal for universal two-year “service to country.”9 Shortly after McNamara’s speech, Senator Javits joined the crusade: “Secretary McNamara’s proposal was aimed at ‘voluntary’ service by both men and women. It is my feeling that it would be almost impossible to make such a concept work as a practical matter. I propose that universal national service be made compulsory for young men, giving them the option of selecting what form it should take within permissable categories established by the government.”10 President Johnson evidently lent his implicit support to the universal “voluntary” service idea: “The call for public service therefore cannot be met by professionals alone. We must revive the ancient ideal of citizen soldiers who answer their nation’s call in time of peril. We need them on battlefronts where no guns are heard but freedom is no less tested.”11 Again: “We must move toward a standard that no man has truly lived who only served himself. . . . To move in this direction, I am asking every member of my Administration to explore new ways by which our young people can serve their fellow men.”12 Secretary of Labor Wirtz expressed his belief in universal service, last November,13 and more recently Sargent Shriver indicated that universal service should begin at the age of sixteen.14 The popularity of the universal service idea shows how slender is the protection to civil liberties offered by civilian supremacy over the military; both civilian and military regimes have acted in blatant disregard of civil liberties, and universal service merely extends to civilian experience some of the features of state-oriented, military life.

INDEED, THE GROWTH, if it should occur, of non-military, but authoritarian, labor conscription would be the result of the confluence of socialist and pacifist ideas. These ideas have worked not to mitigate the assaults upon civil liberties which conscription entails, but to deflect the assaults from military to non-military pursuits; socialism has preserved the state-oriented—compulsory—aspect of service to a civilian rather than a military state. One of the most influential statements in the history of American pacifism, William James’ “Moral Equivalent of War,” illustrates this kind of socialist-pacifism clearly:

If now—and this is my idea—there were, instead of military conscription a conscription of the whole youthful population to form for a certain number of years a part of the army enlisted against Nature, the injustice would tend to be evened out, and numerous other goods to the commonwealth would follow. The military ideals of hardihood and discipline would be wrought into the growing fibre of the people; no one would remain blind as the luxurious classes now are blind, to man’s real relations to the globe he lives on, and to the permanently sour and hard foundations of his higher life. To coal and iron mines, to freight trains, to fishing fleets in December, to dishwashing, clothes-washing, and window-washing, to road-building and tunnel-making, to foundries and stokeholes, and to the frames of skyscrapers, would our gilded youths be drafted off, according to their choice, to get the childishness knocked out of them, and to come back into society with healthier sympathies and soberer ideas. They would have paid their blood-tax, done their part in the immemorial human warfare against nature, they would tread the earth more proudly, the women would value them more highly, they would be better fathers and teachers of the following generation.15

Many pacifists have accepted James’ idea of national service, and have indicated thereby that however extensively war has figured in the suppression of civil liberties, pacifism as such does not provide a basis for defending civil liberties. In fact, those pacifists who favor compulsory national service as a way of avoiding wartime service promote both the suppression of civil liberties and war against individuals. The suppression of civil liberties is clear enough; war against individuals occurs through the attempts to enforce compliance with national service regulations. When human relations are voluntary, non-compliance with a contract eventually results in termination of the contract; the most effective way to enforce mutual exchange is simply to deny a non-compliant party the benefits of mutual exchange. When, however, a contract is compulsory, enforcement by termination of contract obviously cannot occur; instead, government must administer punishments to enforce compliance. Moreover, such punishments conceivably could occur indefinitely, for non-compliance could occur indefinitely. To enforce national service on everyone, government must extend to civilian experience the discipline of military-type law.

The implication of national service is that the loss of civil liberties and the war against recalcitrant individuals is worthwhile because compulsion is the most effective way of developing and allocating human resources, and thereby of resolving social problems. Of course, nowhere in the national service literature is there a demonstration that this contention is true, and certainly there is never any indication of what sorts of evidence would confirm or invalidate the contentions. By not weighing the claims of national service scientifically, people have opted to bear the costs—or rather shuffle the costs upon others—without securing comparable benefits. The losses, as with military conscription,16 would occur as (1) budgetary costs, (2) welfare costs to the nation as a whole, and (3) the implicit forced labor tax borne by the service-conscripts. As in the case of military conscription, one result of not stating the claims for national service scientifically is avoidance of the implication that in certain circumstances national service should be abolished—if it ever should be established in the first place. Certainly the shoddy, unscientific way in which national service is usually advanced does not separate moral and empirical arguments; and it is never clear whether people favor national service empirically as a method of resolving problems, or whether they favor national service as a matter of principle.17 If the former is true, then the arguments should be regarded as sheer hokum until they are presented scientifically so they can be evaluated. If the latter case is true, then the conflict between libertarian, citizen-centered ideas, and state oriented ones, is abundantly clear; and it is clear that only from libertarian, and not from pacifistic grounds, can one develop principled opposition to oppression.

AS A WAY OF fostering exploration of libertarian ideas, we reprint in this issue three articles by men who have illustrated two aspects of the libertarian tradition. One is that the presumption for voluntarism requires exhaustion of voluntary incentives before adopting conscription. Taft, for instance, conceded that on certain rare occasions the requirements of national defense might include conscription, but he added:

I did oppose the Selective Service Act of 1940, and am still opposed to the compulsory draft of men in time of peace until every voluntary method has been tried to obtain the men necessary for the force required for defense.18

Great Britain followed this presumption and did not resort to compulsion in World War I until mid-way through the hostilities, in 1916. The other point is that for each of these people anti-conscription was but one element of their libertarian points of view; compulsion in the case of conscription was more overt but not much more serious than compulsion in other areas of life. Hopefully, reprinting these articles will illustrate by example that there is indeed a coherent tradition to which people can refer for a principled opposition to conscription.

THE LIBERTARIAN tradition thrived not as antimilitarism, although that was one element of libertarian thought, but as a general presumption for personal rights, civil guaranties, private property, and constitutional, republican government. Militarism and conscription have thrived not so much because these particular ideas are popular, but because state-oriented ideas generally are popular. The most peaceful, non-militaristic century in modern history—the nineteenth—was also the century in which free trade flourished more than it ever had before, or since; in which the rule of law was extended, at least in part, to many European countries and in which libertarian ideas governed the major features of state policy. The British Empire, at the zenith of its influence during the nineteenth century, never employed conscription. And the growth of imperialism toward the end of the nineteenth century was but one part of the movement of ideas that embraced higher trade barriers, the growth of state monopolies, of special labor laws, of compulsory health insurance, and other policies which marked a more vigorous role for government.

Decisive to the continuation of conscription is the general presumption that government is morally and technically qualified to administer the lives of citizens; only by overthrowing this presumption, and reviving libertarian ideas, can conscription be ended. Merely opposing compulsion in the case of conscription promises only a futile, rearguard harassment of government. Non-libertarians who are anti-conscription have reason empirically to doubt the possibilities of ending conscription without wholly reversing the presumption for state-oriented over citizen centered policy.19

THE ANTI-MILITARIST TRADITION:

Robert A. Taft, 1940

Until his death in 1953, Robert A. Taft was an enlightened spokesman for liberal ideas in financial affairs, in foreign policy, and in military policies. He was elected to the United States Senate in 1938, 1944, and 1950, and was the ideal Republican candidate for President in 1952. His speech in opposition to the Burke-Wadsworth bill, which proposed peacetime conscription in America for the first time in history, is a classic and we reprint it here with only a few changes.1

WE FACE TODAY NOT one emergency but two. The first is from abroad; the second is from ourselves. While I do not agree with those who think that Hitler is about to attack the United States, nevertheless we must all recognize that for the next ten years we face a new kind of world. The development of the totalitarian nations, their effective war machines, and their complete lack of regard for international morals have created this new condition. We cannot rely on the sanctity of any treaty or any promise which may be made by the German Government and perhaps by the other governments. I believe that the same condition will exist whether the German attack on England succeeds or fails. England can hardly hope to overwhelm Germany for years to come. There will always be the possibility of the breaking up of the British Empire. We must provide for that possibility. I have voted for all the various appropriations increasing the size of the Navy and of the air forces. We are agreed that we must have a navy able to defend both the Atlantic and Pacific coasts. But surely it is the duty of Congress to consider as respects each measure brought before it the character and extent of the emergency. . . .

For we face another kind of emergency at home. We have steadily drifted toward centralized government. We have given it power to regulate everything and everybody. There is a bill pending in Congress to give the President power to take property of any kind; to fix all prices, to assign every man to a designated position. There is a bill pending providing for a capital levy, taking a large proportion of every man’s property in exchange for one per cent government bonds. In short, proposals made by responsible men, if added together, would create exactly the kind of government in this country which exists today in Germany. There are many who urge with the proponents of the Burke-Wadsworth bill that the emergency requires a complete recasting of American life, a dedication of our entire energies to defense alone, and subordination of every principle on which the American Republic is based.

It is said that in time of war we have not hesitated to establish a dictatorship. I am afraid we would do so again, whether it is necessary or not. But that is a very different thing from establishing a dictatorship in time of peace on the ground that an emergency exists. In wartime it is frankly done for war purposes, and when the war is over the people know it is time to resume their powers. While the power is exercised, most of those exercising it are intensely inspired by patriotic motives, and politics is largely adjourned. But no one knows when a peace emergency is over. We have been enjoying a continuous emergency for the last seven years. The present emergency may well last for ten years without war reaching our shores. Arbitrary powers granted today may never be resumed.

It is just as dangerous to exaggerate the emergency as it is to underestimate the emergency. When an emergency exists it is all the more important that we retain our respect for the principles of constitutional American government, and that we go no further in modifying them than is absolutely essential.

. . . It is not necessary that we set aside the right of free debate, and a free press, and free speech. It is not necessary, to avoid regimentation by Hitler, that we forget all the Bill of Rights and the protection of minorities and authorize some Executive to conscript men and conscript property.

I am convinced that it can be worked out, retaining the principles of individual liberty for which it was founded, if we try. I am convinced that to meet the threat of a totalitarian nation we need not make ourselves totalitarian. I shudder when I hear the words “total defense.” I do not know what “total defense” means, unless it means the subjugation of every other principle of our life to the one subject—military defense. If the words mean anything, they mean that the energies of every individual shall be devoted to defense, and that we shall wipe out from our minds every other goal. That is not true today; I hope it may never be true. At a time like this it is peculiarly necessary that with every measure we take we see that the principles of American freedom are guarded well. Never has the American way of life been in such danger—danger as much from within as from without.

IT IS SAID THAT A compulsory draft is a democratic system. I deny that it has anything to do with democracy. It is far more typical of totalitarian nations than of democratic nations. It is absolutely opposed to the principles of individual liberty, which have always been considered a part of American democracy. Many people came to this country for the single purpose of avoiding the requirements of military service in Europe. This country has always been opposed to a large standing army, and it has been opposed to the use of the draft in time of peace I shrink from the very setting up of thousands of draft boards, with clerks and employees and endless paper work and red tape; from the registration of 12,000,000 men and the prying into every feature of their lives, their physical condition, their religious convictions, their financial status, and even their hobbies.

The draft is said to be democratic because it hits the rich as well as the poor. Since the rich are about 2 per cent of the total, it is still true that 98 per cent of those drafted are going to be the boys without means. It doesn’t make much difference to the poor boy whether the other 2 per cent go or not. To be snatched out of his life work may be a tragedy for a poor boy, but the rich boy will have no trouble finding another job if he is any good at all. As a matter of fact under the volunteer system you would probably get a greater percentage of wealthy boys than under the draft. This is because the wealthier boys all go to college, and the percentage of enlistment from the colleges has always been higher. The need for the defense of this country against nations thousands of miles distant is brought home to those in the colleges more forcibly than it is to the boy who is employed locally, to whom international affairs are a long distance off. Under a volunteer system the poor boys who already had good jobs would not have to go.

It is said that under the draft the slacker will stay at home and leave the burden on the patriots. But in the first place, the number of real slackers is negligible in the whole picture, and under the bill any real slacker has an easy “out.” All he has to do is marry a lady who has no other means of support. The number of marriages in recent weeks has increased by thousands.

THE PRINCIPLE OF A compulsory draft is basically wrong. If we must use compulsion to get an army, why not use compulsion to get men for other essential tasks? We must have men to manufacture munitions, implements of war, and war vessels. Why not draft labor for those occupations at wages lower than the standard? There are many other industries absolutely essential to defense, like the utilities, the railroads, the coal-mining industry. Why not draft men for those industries, also at $21 a month? If we draft soldiers, why not draft policemen and firemen for city and state service? The logical advocates of the draft admit this necessary conclusion. Senator Pepper, of Florida, has said that he believes the President should have power to draft men for munitions plants. Mr. Walter Lippmann says that if the conscription bill is to serve its real purpose it must not be regarded as a mere device for putting one man out of twenty-five into uniform but must be regarded as a method of mobilizing the men of the country for the much larger and more complicated task of industrial preparedness. In short, the logic behind the bill requires a complete regimentation of most labor and the assignment of jobs to every man able to work. This is actually done today in the Communist and Fascist states, which we are now apparently seeking to emulate.

There has been, very properly, a great outcry against the action of the Senate in authorizing the Secretaries of War and Navy to seize any industrial plant needed for the manufacture of munitions. I voted against that amendment because I do not see the necessity for that any more than for the drafting of men and because it gives uncontrolled discretion to the Secretary of War and the Secretary of the Navy. But at least the owners of such plants are to be fully compensated for their property, while men who are drafted may be forced to give up jobs paying $50 a week to receive a soldier’s pay, at most equivalent to $15 a week. Their time is conscripted without compensation.

The argument in favor of conscription proves too much. If the emergency is as great as alleged, then we should adopt a completely socialized state and place ourselves and our property at the disposal of the government. That is fascism. It could only be justified if it were the only possible alternative to the subjugation of the United States by fascism from without.

Is it really necessary to take this long step toward a system in which the state is everything and the individual is nothing? What kind of an army do we want? The developments of the present war have shown that great numbers of men in the trenches are no longer the prime requisite for success. France had universal conscription, but it did them no good against a highly organized, modern, mechanized army. According to all the best military advice, what we need today is an army of experts We have all kinds of estimates of the number needed in the United States, but the best opinion is that an expert army of not more than 750.000 men would serve every purpose of defense. In January the President only requested funds for an army of 227,000 men Even on May 31, after the Germans had broken through in France and France was collapsing, the President was satisfied with an army of 280,000 men, and General Marshall himself estimated on June 4 that an army of 400,000 would avoid the necessity of mobilizing the National Guard and give a reasonable liberty of action up to January. Now the “ante has been boosted” to 1,200,000 men. This bill has put the cart before the horse. It is trying to provide a method of raising men before anyone has decided how many men should be raised. Up to this time the Army has had no authority to recruit men, in excess of 375,000 plus the National Guard of 225,000; has had no authority to invite boys into training camps for military training.

As far as the Regular Army is concerned, conscription is the poorest possible method of getting it. Men are chosen at random from all kinds of occupations, mostly unrelated to the Army. After one year they naturally return to the jobs which they were forced to give up. Someone else equally unwilling and equally inexperienced has to be given a year of partial training. There is only one way to get the kind of Army we need today—that is to make the Army an occupation sufficiently attractive so that men will go to it as a matter of choice. Why should we expect men to accept pay equivalent to approximately $15 a week? Privates in the Army get board, lodging, and clothes, equivalent perhaps to $40 a month, plus $21 in cash, a total of $61 a month. They should certainly get the equivalent of $100 a month. The Army does not want a lot of men who leave at the end of one year or even of three years; they want men who are sufficiently satisfied to stay indefinitely.

It is said that the voluntary-enlistment plan has broken down. Of course that is utterly untrue. In spite of inadequate pay and in spite of three-year enlistments, from which a man cannot escape if a better job is offered, it has been accomplishing everything which had been asked of it. Men are enlisting today at a rapid rate—40,000 enlisted in the month of August. Yet there has been no really serious effort to enlist men, and no call by the President for volunteers. In fact, he has publicly discouraged college boys from enlisting.

Men are looking for jobs with reasonable pay. In New York City this year it was necessary to fill a position as sanitation man at $1,800 a year, which, considering the cost of living in New York City, is not very much more than Army pay plus support. There were 84,000 applications from New York City alone.

Of course the men who enlist in the Army, like the men who get jobs in any industry, are those who at the time are out of work. There are more than 5,000,000 men out of work today, looking for jobs. There are over 1,700,000 on W.P.A. and over 200,000 in the C.C.C. camps. The government is paying these men in a way which makes W.P.A. and C.C.C. more attractive than the Army. We have not the right to require these men, as a condition of government aid, to accept employment in the Army; but surely, if we make the Army only reasonably attractive, many of them will prefer the Army to W.P.A. or C.C.C.

How utterly ridiculous it is to make 700,000 men give up good jobs at a time of life when they are first making real progress, while many millions of men out of work, and 1,200,000 boys coming of age every year, are looking for jobs. The idea that the Army is the most unpleasant occupation in the world, into which men must be forced against their will, is archaic and fallacious. In time of war Army service is dangerous, but if we prepare adequately, we should not be at war, and the Army for the most part is a peacetime, highly specialized occupation with only a chance of danger. Experience shows that men do not avoid an occupation because there is a chance of danger. There are dangerous civilian occupations—work with high-tension wires, work in tunnel construction, work in coal mines; and there is never any difficulty in finding men interested in those occupations.

The Air Corps is the most dangerous part of the Army, but more men want to enlist than can be accepted. The Army has many advantages, a clean and regular life without great responsibility, an attraction in the very discipline and order which appeals to some men and offends others very greatly. The Navy always has a waiting list because they pay their men more adequately to try to make their service attractive. The Army should be just as attractive today. We already have 650,000 men available under existing law. We will have no difficulty in getting 750,000 or 950,000 or 1,200,000 under the volunteer system, if the Army is made as attractive to the average man as many other jobs furnished by industry.

As for the Reserve, we have never tried getting men for military training camps. No such camps are in existence except for Reserve officers. Of the 1,200,000 boys who graduate from high school or college every year, a large proportion could be persuaded to take a year in the military training camps at the government’s expense before starting on their life work. Within a very few years we would build up all the Reserve we could possibly need. An attempt to raise whatever Army is necessary by a volunteer appeal will unquestionably meet with success if that attempt has the wholehearted cooperation of the Administration and of the Army; that it will furnish 400,000 men if that many are needed, before the complicated draft is working.

There are some who have felt that the emergency is so immediate that only the draft will meet it. Obviously that is not today the official view. The President has just transferred fifty destroyers to England in exchange for bases which will not be ready for a year. If Hitler were about to overwhelm England and attack the United States, the President obviously could not weaken our Navy by depriving it of fifty destroyers now in active service. The alleged need immediately for a huge Army is based on the theory that our Navy is inadequate. The President has just determined that the Navy is completely adequate and can even afford to surrender fifty of its fighting craft. What has happened to the emergency supposed to justify this drafting of men, so complete a departure from American tradition and so long a step toward dictatorship? No; we obviously have a reasonable time before Mr. Hitler can possibly organize an attack on the United States. It is no easy task to transport an army across 3,000 miles of water while our Navy is in existence. We have time to do our job in the right way. We have time to get the kind of voluntary expert mechanized Army we really need. We have time to do the job without upsetting and perhaps wrecking hundreds of thousands of lives. We can do it without excitement and hysteria, without breaking down the fundamental principles of the American Republic. We can do it without over-estimating the emergency, and sinking all the principles we love in the slough of total defense.

Free men, free enterprise, free speech are the cornerstones of the American Republic. If the Burke-Wadsworth bill should become law, we will have to accept that limitation of freedom. But we should be all the more vigilant to oppose the further limitations on freedom. The more we yield to the demand for arbitrary power, the more power will be demanded, until freedom will be as nonexistent in America as it is in Germany today. In fact we may even be turning over these destroyers to Germany to be used against us, for the British may have to surrender their fleet, according to the William Allen White Committee. Of course, in case of British defeat any pledge of the present British Government would be worthless, for the Government would not be there. Obviously the President must consider our fleet more than adequate for defense.

THE ANTI-MILITARIST TRADITION:

Oswald Garrison Villard, 1916

Oswald Garrison Villard was a genuine liberal and pacifist throughout most of his life. He was the grandson of William Lloyd Garrison, the great abolitionist and founder of the Liberator. Villard inherited the New York Evening Post from his father, Henry Villard, and edited that until he sold it in 1918. He was editor of the Nation for many years until its sale in 1932, serving thereafter as a contributor until 1940—when the Nation opted both for an interventionist foreign policy and domestic statism (after 1929, even Villard did not escape these latter influences). In 1940 he severed all connections with the journal. We reprint here his editorial from the Nation1as a brisk rebuttal to the widespread notions that conscription and universal military training are democratic and beneficial to society. It is worth noting that this and other of his best statements on conscription appeared during a period in his life when he was most laissez faire in his opinions and furtherest away from socialism.

IN THE YEARS to come none of the many amazing phenomena of 1916 will, we are sure, cause greater wonderment than our recent discovery that universal military service is the cure-all for every one of our American ills. Do we wish to defend our country? We have but to adopt the system of training every boy to be a soldier, and the problem is solved. Do we wish to become industrially efficient? Then let us forget all about vocational training, but give every American a year under arms, and presto! we shall outdo Germany in scientific efficiency and management. Is our youth lawless and undisciplined? Universal compulsory service will end that once and for all. Is our democracy halting? It is the tonic of a democratic army that we need, in which all men shall pay for the privileges of citizenship by a year of preparation for poisonous gas and of learning how to shoot. Our melting-pot is a failure? Then let us pour into it the iron metal of militarism, and it will fuse every element at once. Finally, if we need an American soul—and the war has suddenly taught us that this glorious country lacks a soul—it is the remedy of universal military service that is to supply our spiritual needs and give us the ability to feel as one, to think as one, to steer towards our destiny as of one mind.

It is all so alluring and so entrancingly easy, the wonder is that we have never thought of it before. We saw it going on in France and Germany and Russia, but it seemed altogether repulsive in its forms. Americans to be conscripted? Heaven forbid. There rose before us the unutterable cruelties of non-commissioned officers and some of the officers—visions of the men who have come to our shores with hands mutilated to avoid the barracks, with their open immoralities, their bitter hardships, the loss of three years of so many working lives. The “Red Rosa,” Rosa Luxembourg, with her 10,000 authenticated instances of cruelties to German soldiers, inflicted by their own countrymen behind the screen of official authority, explained to us why so many young Germans emigrated before coming of military age. We saw in universal Russian service a complete reason for the failure of the Russian revolution [1905], for the survival of the corrupt bureaucratic government. We knew of men of noble spirit in every land crushed by the whole system. We saw in the development of the Prussian military clique not merely the fine flower of militarism, but the true fruits of universal service. We recalled, too, James Madison’s belief that “large armies and heavy taxes are the best-known instruments for bringing the many under the domination of the few.”

But it now seems that we were mistaken in all this; that our failure to progress financially, economically, and spiritually as rapidly as we should have done has been due solely to our failure to grasp at the panacea that lay so easily within our reach. Take the education of our boys. The other day at a joint meeting of two schoolmasters’ associations there were divided views on some issues, but none apparently as to the utter lawlessness of our American youth and the complete failure of our private schools to reduce them to subordination by means of mental and moral discipline. And so there were many who grasped with joy at the idea of the universal-military-drill to retrieve for them the ground lost by their own failure to do the fundamental thing they pledged themselves to accomplish. Of course, they knew little or nothing about universal service; perhaps it was the unexplored mystery of it that appealed Many Americans are quite sure that the latest untried remedy, be it some law, or the initiative and referendum, or the recall of judicial decisions, or some other panacea, is, by reason of its very newness, just the medicine for a given ill they have been looking for. So with these school-teachers. Ignoring the fact that our private military schools have been anything but popular, and only in exceptional cases of high standing, they turn to military drill as to a last straw. One can admire their courage while marvelling at their judgment. Fortunately, those particular teachers heard the European system of a nation in arms denounced by one of their number, who had served in Austria both as private and as officer.

WHAT THEY DO not see any more than the Stanwood Menkens who, never having borne arms, yet know that universal service is what we need to make patriots by the million, is that the spirit of compulsory service makes directly against the American ideal, for it inculcates blind obedience to the will of others, subordination to those who are masters not necessarily because of superior wisdom or fitness, but largely because of accident. It often means cringing before men who abuse their powers, particularly over men of finer instincts and antecedents—just as the late Karl Bitter was driven to desert from the Austrian service by intolerable persecutions. It is not without significance that there is a suicide a day among the private soldiers in Germany in time of peace—no record being kept of unsuccessful attempts at self-destruction. Again, as Major-Gen O’Ryan, of the New York National Guard, has put it, the primary thing that military service teaches is that the soldier shall stop thinking and become an automaton—to do only what his officers tell him. And usually there is a steadily widening cleft between him and those officers.

Once we valued American self-assertiveness, independence of thought and action, mental alertness, yes, even the happy-go-lucky Yankee initiative and individuality, as some of our best characteristics. Now we are to prefer men cast in one mold, drilled in one way of thinking, and into obedience to their rulers. Formerly, we deemed it most worth while that all men should have their own opinions, express them freely, and differ with their rulers as they saw fit—since their rulers were but their servants. As for making patriots, universal military service makes Socialists and deserters. There is nothing whatsoever democratic about it, save that it applies to all men alike. Where universal service is most efficient, there is every kind of distinction as to regiments and individuals. The peasant serves three years, the “gentleman” one. The favors shown to the Guard regiments in Germany have led to more than one bitter debate in the Reichstag. What can there be democratic about an army? Its whole fundamental principle is that of a hierarchy in which everybody responds automatically and blindly to the will of a commander-in-chief. What system could be more directly opposed to the democratic theory?

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THE ANTI-MILITARIST TRADITION:

Daniel Webster, 1814

This famous speech, which Webster delivered in the House of Representatives in December 1814, is reprinted here in its entirety.1It is an example of Webster in his prime, when he opposed conscription and favored free trade. It was in large measure Webster’s work which defeated Mr. Madison’s conscription proposal in 1814, and we hope his words may have some influence on today’s Status Quo, which has lined up behind Mr. Johnson’s conscription. It is both amusingly enlightening and sadly regrettable that so many of the concepts of the Federal Republic which Webster defended and relied upon in his lifetime have completely passed away in this century.

MR. CHAIRMAN: AFTER the best reflection which I have been able to bestow on the subject of the bill before you, I am of the opinion that its principles are not warranted by any provision of the Constitution. It appears to me to partake of the nature of those other propositions for military measures which this session, so fertile in inventions, has produced. It is of the same class with the plan of the Secretary of War; with the bill reported to this House by its own Committee for filling the ranks of the regular army, by classifying the free male population of the United States; and with the resolution recently introduced by an honorable gentleman from Pennsylvania (Mr. Ingersoll), and which now lies on your table, carrying the principle of compulsory service in the regular army to its utmost extent.

This bill indeed is less undisguised in its object, and less direct in its means, than some of the measures proposed. It is an attempt to exercise the power of forcing the free men of this country into the ranks of an army, for the general purposes of war, under color of a miltary service. To this end it commences with a classification which is no way connected with the general organization of the militia, nor, to my apprehension, included within any of the powers which Congress possesses over them. All the authority which this government has over the militia, until actually called into the ranks of an army, for the general purposes of war, under color of a mili-power it has exercised. It now possesses the further power of calling into its service any portion of the militia of the States, in the particular exigencies for which the Constitution provides, and of governing them during the continuance of such service. Here its authority ceases. The classification of the whole body of the militia, according to the provisions of this bill, is not a measure which respects either their general organization or their discipline. It is a distinct system, introduced for new purposes, and not connected with any power which the Constitution has conferred on Congress.

But, sir, there is another consideration. The services of the men to be raised under this act are not limited to those cases in which alone this government is entitled to the aid of the militia of the States. These cases are particularly stated in the Constitution, “to repel invasion, suppress insurrection, or execute the laws.” But this bill has no limitation in this respect. The usual mode of legislating on the subject is abandoned. The only section which would have confined the service of the militia, proposed to be raised, within the United States has been stricken out; and if the President should not march them into the Provinces of England at the north, or of Spain at the south, it will not be because he is prohibited by any provision in this act.

This, sir, is a bill for calling out the militia, not according to its existing organization, but by draft from new created classes;—not merely for the purpose of “repelling invasion, suppressing insurrection, or executing the laws,” but for the general objects of war—for defending ourselves, or invading others, as may be thought expedient;—not for a sudden emergency, or for a short time, but for long stated periods; for two years, if the proposition of the Senate should finally prevail; for one year, if the amendment of the House should be adopted. What is this, sir, but raising a standing army out of militia by draft, and to be recruited by draft, in like manner, as often as occasion may require?

This bill, then, is not different in principle from the other bills, plans, and resolutions which I have mentioned. The present discussion is properly and necessarily common to them all. It is a discussion, sir, of the last importance. That measures of this nature should be debated at all, in the councils of a free government, is cause of dismay. The question is nothing less than whether the most essential rights of personal liberty shall be surrendered, and depotism embraced in its worst form.

I HAVE RISEN, ON this occasion, with anxious and painful emotions, to add my admonition to what has been said by others. Admonition and remonstrance, I am aware, are not acceptable strains. They are duties of unpleasant performance. But they are, in my judgment, the duties which the condition of a falling state imposes. They are duties which sink deep in his conscience, who believes it probable that they may be the last services which he may be able to render to the government of his country. On the issue of this discussion, I believe the fate of the government may rest. Its duration is incompatible, in my opinion, with the existence of the measures in contemplation. A crisis has at last arrived, to which the course of things has long tended, and which may be decisive upon the happiness of present and of future generations. If there be anything important in the concerns of men, the considerations which fill the present hour are important, I am anxious, above all things, to stand acquitted before God and my own conscience, and in the public judgment, of all participations in the counsels which have brought us to our present condition and which now threaten the dissolution of the government. When the present generation of men shall be swept away, and that this government ever existed shall be matter of history only, I desire that it may be known that you have not proceeded in your course unadmonished and unforewarned. Let it then be known, that there were those who would have stopped you, in the career of your measures, and held you back, as by the skirts of your garments, from the precipice over which you are plunging and drawing after you the government of your country.

I had hoped, sir, at an early period of the session, to find gentlemen in another temper. I trusted that the existing state of things would have impressed on the minds of those who decide national measures, the necessity of some reform in the administration of affairs. If it was not to have been expected that gentlemen would be convinced by argument, it was still not unreasonable to hope that they would listen to the solemn preaching of events. If no previous reasoning could satisfy them, that the favorite plans of government would fail, they might yet be expected to regard the fact, when it happened, and to yield to the lesson which it taught. Although they had, last year, given no credit to those who predicted the failure of the campaign against Canada, yet they had seen that failure. Although they then treated as idle all doubts of the success of the loan, they had seen the failure of that loan. Although they then held in derision all fears for the public credit, and the national faith, they had yet seen the public credit destroyed, and the national faith violated and disgraced. They had seen much more than was predicted; for no man had foretold that our means of defense would be so far exhausted in foreign invasion, as to leave the place of our own deliberations insecure, and that we should this day be legislating in view of the crumbling monuments of our national disgrace. No one had anticipated that this city would have fallen before a handful of troops, and that British generals and British admirals would have taken their airings along the Pennsylvania Avenue, while the government was in full flight, just awaked perhaps from one of its profound meditations on the plan of a conscription for the conquest of Canada. These events, sir, with the present state of things, and the threatening aspect of what is future, should have brought us to a pause. They might have reasonably been expected to induce Congress to review its own measures, and to exercise its great duty of inquiry relative to the conduct of others. If this was too high a pitch of virtue for the multitude of party men, it was at least to have been expected from gentlemen of influence and character, who ought to be supposed to value something higher than mere party attachment, and to act from motives somewhat nobler than a mere regard to party consistency. All that we have yet suffered will be found light and trifling in comparison with what is before us, if the government shall learn nothing from experience but to despise it, and shall grow more and more desperate in its measures, as it grows more and more desperate in its affairs.

IT IS TIME FOR Congress to examine and decide for itself. It has taken things on trust long enough. It has followed executive recommendation, ’til there remains no hope of finding safety in that path. What is there, sir, that makes it the duty of this people now to grant new confidence to the Administration, and to surrender their most important rights to its discretion? On what merits of its own does it rest this extraordinary claim? When it calls thus loudly for the treasure and the lives of the people, what pledge does it offer that it will not waste all in the same preposterous pursuits which have hitherto engaged it? In the failure of all past promises, do we see any assurance of future performance? Are we to measure out our confidence in proportion to our disgrace and now at last to grant away everything, because all that we have heretofore granted has been wasted or misapplied? What is there in our condition that bespeaks a wise or an able government? What is the evidence that the protection of the country is the object principally regarded? In every quarter that protection has been more or less abandoned to the States. That every town on the coast is not now in possession of the enemy, or in ashes, is owing to the vigilance and exertions of the States themselves, and to no protection granted to them by those on whom the whole duty of their protection rested.

Or shall we look to the acquisition of the professed objects of the war, and there find grounds for approbation and confidence. The professed objects of the war are abandoned in all due form. The contest for sailors’ rights is turned into a negotiation about boundaries and military roads, and the highest hope entertained by any man of the issue, is that we may be able to get out of the war without a cession of territory.

Look, sir, to the finances of the country. What a picture do they exhibit of the wisdom and prudence and foresight of government. “The revenue of a state,” says a profound writer, “is the state.” If we are to judge of the condition of the country by the condition of its revenues, what is the result? A wise government sinks deep the fountain of its revenues—not only ’til it can touch the first springs, and slake the present thirst of the treasury, but ’til lasting sources are opened, too abundant to be exhausted by demands, too deep to be affected by heats and droughts. What, sir, is our present supply, and what our provision for the future resource? I forebear to speak of the present condition of the treasury; and as to public credit, the last reliance of government, I use the language of government itself only, when I say it does not exist. This is a state of things calling for the soberest counsels, and yet it seems to meet only the wildest speculations. Nothing is talked of but banks, and a circulating paper medium, and exchequer notes, and the thousand other contrivances which ingenuity, vexed and goaded by the direst necessity, can devise, with the vain hope of giving value to mere paper. All these things are not revenue, nor do they produce it. They are the effect of a productive commerce, and a well ordered system of finance, and in their operation may be favorable to both, but are not the cause of either. In other times these facilities existed. Bank paper and government paper circulated because both rested on substantial capital or solid credit. Without these they will not circulate, nor is there a device more shallow or more mischievous, than to pour forth new floods of paper without credit as a remedy for the evils which paper without credit has already created. As was intimated the other day by my honorable friend from North Carolina (Mr. Gaston) this is an attempt to act over again the farce of the Assignats of France. Indeed, sir, our politicians appear to have but one school. They learn everything of modern France; with this variety only, that for examples of revenue they go to the Revolution, when her revenue was in the worst state possible, while their model for military force is sought after in her imperial era, when her military was organized on principles the most arbitrary and abominable.

LET US EXAMINE the nature and extent of the power which is assumed by the various military measures before us. In the present want of men and money, the Secretary of War has proposed to Congress a military conscription. For the conquest of Canada, the people will not enlist; and if they would, the treasury is exhausted, and they could not be paid. Conscription is chosen as the most promising instrument, both of overcoming reluctance to the service, and of subduing the difficulties which arise from the deficiencies of the exchequer. The Administration asserts the right to fill the ranks of the regular army by compulsion. It contends that it may now take one out of every twenty-five men, and any part, or the whole of the rest, whenever its occasions require. Persons thus taken by force, and put into an army, may be compelled to serve there during the war, or for life. They may be put on any service, at home or abroad, for defense or for invasion, accordingly to the will and pleasure of the government. This power does not grow out of any invasion of the country, or even out of a state of war. It belongs to government at all times, in peace as well as in war, and it is to be exercised under all circumstances, according to its mere discretion. This sir, is the amount of the principle contended for by the Secretary of War.

Is this, sir, consistent with the character of a free government? Is this civil liberty? Is this the real character of our Constitution? No sir, indeed it is not. The Constitution is libelled, foully libelled. The people of this country have not established for themselves such a fabric of despotism. They have not purchased at a vast expense of their own treasure and their own blood a Magna Charta to be slaves. Where is it written in the Constitution, in what article or section is it contained, that you may take children from their parents, and parents from their children, and compel them to fight the battles of any war in which the folly or the wickedness of government may engage it? Under what concealment has this power lain hidden which now for the first time comes forth, with a tremendous and baleful aspect, to trample down and destroy the dearest rights of personal liberty? Who will show me any Constitutional injunction which makes it the duty of the American people to surrender everything valuable in life, and even life itself, not when the safety of their country and its liberties may demand the sacrifice, but whenever the purposes of an ambitious and mischievous government may require it? Sir, I almost disdain to go to quotations and references to prove that such an abominable doctrine has no foundation in the Constitution of the country. It is enough to know that that instrument was intended as the basis of a free government, and that the power contended for is incompatible with any notion of personal liberty. An attempt to maintain this doctrine upon the provisions of the Constitution is an exercise of perverse ingenuity to extract slavery from the substance of a free government. It is an attempt to show, by proof and argument, that we ourselves are subjects of despotism, and that we have a right to chains and bondage, firmly secured to us and our children by the provisions of our government. It has been the labor of other men, at other times, to mitigate and reform the powers of government by construction; to support the rights of personal security by every species of favorable and benign interpretation, and thus to infuse a free spirit into governments not friendly in their general structure and formation to public liberty.

The supporters of the measures before us act on the opposite principle. It is their task to raise arbitrary powers, by construction, out of a plain written charter of National Liberty. It is their pleasing duty to free us of the delusion, which we have fondly cherished, that we are the subjects of a mild, free, and limited government, and to demonstrate, by a regular chain of premises and conclusions, that government possesses over us a power more tyrannical, more arbitrary, more dangerous, more allied to blood and murder, more full of every form of mischief, more productive of every sort and degree of misery than has been exercised by any civilized government, with a single exception, in modern times.

The Secretary of War has favored us with an argument on the constitutionality of this power. Those who lament that such doctrines should be supported by the opinions of a high officer of government, may a little abate their regret, when they remember that the same officer, in his last letter of instructions to our ministers abroad, maintained the contrary. In that letter he declares, that even the impressment of seamen, for which many more plausible reasons may be given than for the impressment of soldiers, is repugnant to our Constitution. It might therefore be a sufficient answer to his argument, in the present case, to quote against it the sentiments of its own author, and to place the two opinions before the House, in a state of irreconcilable conflict. Further comment on either might then by properly foreborne, until he should be pleased to inform us which he retracted, and to which he adhered. But the importance of the subject may justify a further consideration of the arguments.

CONGRESS HAVING, BY the Constitution, a power to raise armies, the Secretary contends that no restraint is to be imposed on the exercise of this power, except such as is expressly stated in the written letter of the instrument. In other words, that Congress may execute its powers, by any means it chooses, unless such means are particularly prohibited. But the general nature and object of the Constitution impose as rigid a restriction on the means of exercising power as could be done by the most explicit injunctions. It is the first principle applicable to such a case, that no construction shall be admitted which impairs the general nature and character of the instrument. A free constitution of government is to be construed upon free principles, and every branch of its provisions is to receive such an interpretation as is full of its general spirit. No means are to be taken by implication which would strike us absurdly if expressed. And what would have been more absurd than for this Constitution to have said that to secure the great blessings of liberty it gave to government an uncontrolled power of military conscription? Yet such is the absurdity which it is made to exhibit, under the commentary of the Secretary of War.

But it is said that it might happen that an army could not be raised by voluntary enlistment, in which case the power to raise armies would be granted in vain, unless they might be raised by compulsion. If this reasoning could prove anything, it would equally show, that whenever the legitimate power of the Constitution should be so badly administered as to cease to answer the great ends intended by them, such new powers may be assumed or usurped, as any existing Administration may deem expedient. This is the result of his own reasoning, to which the Secretary does not profess to go. But it is a true result. For if it is to be assumed, that all powers were granted, which might by possibility become necessary, and that government itself is the judge of this possible necessity, then the powers of government are precisely what it chooses they should be. Apply the same reasoning to any other power granted to Congress, and test its accuracy by the result. Congress has power to borrow money. How is it to exercise this power? Is it confined to voluntary loans? There is no express limitation to that effect, and, in the language of the secretary, it might happen, indeed it has happened, that persons could not be found willing to lend. Money might be borrowed then in any other mode. In other words. Congress might resort to a forced loan. It might take the money of any man by force, and give him in exchange exchequer notes or certificates of stock. Would this be quite constitutional, sir? It is entirely within the reasoning of the Secretary, and it is a result of his argument, outraging the rights of individuals in a far less degree than the practical consequences which he himself draws from it. A compulsory loan is not to be compared, in point of enormity, with a compulsory military service.

If the Secretary of War has proved the right of Congress to enact a law enforcing a draft of men out of the militia into the regular army, he will at any time be able to prove, quite as clearly, that Congress has power to create a Dictator. The arguments which have helped him in one case, will equally aid him in the other, the same reason of a supposed or possible state necessity, which is urged now, may be repeated then, with equal pertinency and effect.

Sir, in granting Congress the power to raise armies, the people have granted all the means which are ordinary and usual, and which are consistent with the liberties and security of the people themselves, and they have granted no others. To talk about the unlimited power of the government over the means to execute its authority, is to hold a language which is true only in regard to despotism. The tyranny of arbitrary governments consists as much in its means as in its ends; and it would be a ridiculous and absurd constitution which should be less cautious to guard against abuses in the one case than in the other. All the means and instruments which a free government exercises, as well as the ends and objects which it pursues, are to partake of its own essential character, and to be conformed to its genuine spirit. A free government with arbitrary means to administer it is a contradiction; a free government without adequate provisions for personal security is an absurdity, a free government, with an uncontrolled power of military conscription, is a solecism, at once the most ridiculous and abominable that ever entered into the head of man.

SIR, I INVITE THE supporters of the measures before you to look to their actual operation. Let the men who have so often pledged their own fortunes and their own lives to the support of this war, look to the wanton sacrifice which they are about to make of their lives and fortunes. They may talk as they will about substitutes, and compensations, and exemptions. It must come to the draft at last. If the government cannot hire men voluntarily to fight its battles, neither can individuals. If the war should continue, there will be no escape, and every man’s fate and every man’s life will come to depend on the issue of the military draft. Who shall describe to you the horror which your orders of conscription shall create in the once happy villages of this country? Who shall describe the distress and anguish which they will spread over those hills and valleys, where men have heretofore been accustomed to labor, and to rest in security and happiness. Anticipate the scene, sir, when the class shall assemble to stand its draft, and to throw the dice for blood. What a group of wives and mothers and sisters, of helpless age and helpless infancy, shall gather round the theatre of this horrible lottery, as if the stroke of death were to fall from heaven before their eyes on a father, a brother, a son, or a husband. And in a majority of cases, sir, it will be the stroke of death. Under present prospects of the continuance of the war, not one half of them on whom your conscription shall fall will ever return to tell the tale of their sufferings. They will perish of disease and pestilence, or they will leave their bones to whiten in fields beyond the frontier. Does the lot fall on the father of a family? His children, already orphans, shall see his face no more. When they behold him for the last time, they shall see him lashed and fettered, and dragged away from his own threshold, like a felon and an outlaw. Does it fall on a son, the hope and the staff of aged parents? That hope shall fail them. On that staff they shall lean no longer. They shall not enjoy the happiness of dying before their children. They shall totter to their grave, bereft of their offspring and unwept by any who inherit their blood. Does it fall on a husband? The eyes which watch his parting steps may swim in tears forever. She is a wife no longer. There is no relation so tender or so sacred that by these accursed measures you do not propose to violate it. There is no happiness so perfect that you do not propose to destroy it. Into the paradise of domestic life you enter, not indeed by temptations and sorceries, but by open force and violence.

But this father, or this son, or this husband goes to the camp. With whom do you associate him? With those only who are sober and virtuous and respectable like himself? No, sir. But you propose to find him companions in the worst men of the worst sort. Another bill lies on your table offering a bounty to deserters from your enemy. Whatever is most infamous in his ranks you propose to make your own. You address yourselves to those who will hear you and advise them to perjury and treason. All who are ready to set heaven and earth at defiance at the same time, to violate their oaths and run the hazard of capital punishment, and none others, will yield to your solicitations. And these are they whom you are allowing to join ranks, by holding out to them inducements and bounties with one hand, while with the other you are driving thither the honest and worthy members of your own community, under the lash and scourge of conscription. In the line of your army, with the true levelling of despotism, you propose a promiscuous mixture of the worthy and the worthless, the virtuous and the profligate; the husbandman, the merchant, the mechanic of your own country, with the beings whom war selects from the excess of European population, who possess neither interest, feeling, nor character in common with your own people, and who have no other recommendation to your notice than their propensity to crimes.

Nor is it, sir, for the defense of his own house and home, that he who is the subject of military draft is to perform the task allotted to him. You will put him upon a service equally foreign to his interests and abhorrent to his feelings. With his aid you are to push your purposes of conquest. The battles which he is to fight are the battles of invasion—battles which he detests perhaps, and abhors, less from the danger and the death that gather over them, and the blood with which they drench the plain, than from the principles in which they have their origin. Fresh from the peaceful pursuits of life, and yet a soldier but in name, he is to be opposed to veteran troops, hardened under every scene, inured to every privation, and disciplined in every service. If, sir, in this strife he fall—if, while ready to obey every rightful command of government, he is forced from his home against right, not to contend for the defense of his country, but to prosecute a miserable and detestable project of invasion, and in that strife he fall ’tis murder. It may stalk above the cognizance of human law, but in the sight of Heaven it is murder; and though millions of years may roll away, while his ashes and yours lie mingled together in the earth, the day will yet come when his spirit and the spirits of his children must be met at the bar of omnipotent justice. May God, in his compassion, shield me from any participation in the enormity of this guilt.

I WOULD ASK, SIR, whether the supporters of these measures have well weighed the difficulties of their undertaking. Have they considered whether it will be found easy to execute laws which bear such marks of despotism on their front, and which will be so productive of every sort and degree of misery in their execution? For one, sir, I hesitate not to say that they cannot be executed. No law professedly passed for the purpost of compelling a service in the regular army, nor any law which, under color of military draft, shall compel men to serve in the army, not for the emergencies mentioned in the Constitution, but for long periods, and for the general objects of war, can be carried into effect. In my opinion it ought not to be carried into effect. The operation of measures thus unconstitutional and illegal ought to be prevented by a resort to other measures which are both constitutional and legal. It will be the solemn duty of the State governments to protect their own authority over their own militia, and to interpose between their citizens and arbitrary power. These are among the objects for which the State governments exist; and their highest obligations bind them to the preservation of their own rights and the liberties of their people. I express these sentiments here, sir, because I shall express them to my constituents. Both they and myself live under a constitution which teaches us that “the doctrine of non-resistance against arbitrary power and oppression is absurd, slavish, and destructive of the good and happiness of mankind.” [New Hampshire Bill of Rights] With the same earnestness with which I now exhort you to forebear from these measures, I shall exhort them to exercise their unquestionable right of providing for the security of their own liberties.

In my opinion, sir, the sentiments of the free population of this country are greatly mistaken here. The nation is not yet in a temper to submit to conscription. The people have too fresh and strong a feeling of the blessings of civil liberty to be willing thus to surrender it. You may talk to them as much as you please, of the victory and glory to be obtained in the enemy’s provinces; they will hold those objects in light estimation if the means be a forced military service. You may sing to them the song of Canada Conquest in all its variety, but they will not be charmed out of the remembrance of their substantial interests and true happiness. Similar pretences, they know, are the grave in which the liberties of other nations have been buried, and they will take warning.

Laws, sir, of this nature can create nothing but opposition. If you scatter them abroad, like the fabled serpents’ teeth, they will spring up into armed men. A military force cannot be raised in this manner, but by the means of a military force. If the Administration has found that it cannot form an army without conscription, it will find, if it ventures on these experiments, that it cannot enforce conscription without an army. The government was not constituted for such purposes. Framed in the spirit of liberty, and in the love of peace, it has no powers which render it able to enforce such laws. The attempt, if we rashly make it, will fail; and having already thrown away our peace, we may thereby throw away our government.

Allusions have been made, sir, to the state of things in New England, and, as usual, she has been charged with an intention to dissolve the Union. The charge is unfounded. She is much too wise to entertain such purposes. She has had too much experience, and has too strong a recollection of the blessings which the Union is capable of producing under a just administration of government. It is her greatest fear, that the course at present pursued will destroy it, by destroying every principle, every interest, every sentiment, and every feeling which have hitherto contributed to uphold it. Those who cry out that the Union is in danger are themselves the authors of that danger. They put its existence to hazard by measures of violence, which it is not capable of enduring They talk of dangerous designs against government, when they are overthrowing the fabric from its foundations. They alone, sir, are friends to the union of the States, who endeavor to maintain the principles of civil liberty in the country, and to preserve the spirit in which the Union was framed.

NEW BOOKS AND ARTICLES

THE FOLLOWING ARE A SELECTION OF ITEMS AND NOTES WHICH, IN THE OPINION OF THE EDITORS, MAY BE OF INTEREST TO OUR READERS.

Two fine anthologies have appeared in paperback: Arthur A. Ekirch, Voices in Dissent, New York, Citadel, 1966. $2.45. And: Staughton Lynd, Non-Violence in America: A Documentary History, Indianapolis, Bobbs-Merrill, 1966. $3.45. Both anthologies, in particular the one by Ekirch, could use a generous dose of bibliographic citation to indicate where the fervent reader could find more information. The currents of liberty and peace run through both books, and they illustrate well the surviving ideas of natural law: that social organization should be citizen-centered rather than state-oriented and that laws are to be judged by the citizenry, as individuals; laws must be judged according to criteria independent of the state.
Richard Flacks, Florence Howe, and Paul Lauter, “On the Draft,” The New York Review of Books, April 6, 1967. Another example of an interesting article dealing with the draft and American empire, illustrating once again the features of thought shared by the “New Left” and many on the “Old Right.” Consider this comment on national service: “One of the main hand-wringers, Margaret Mead, describes national service at work: ‘Every individual, including the physically handicapped, the mentally defective, the emotionally disturbed, the totally illiterate, would be registered, and every one of these, according to their needs or potentialities, would be assigned to types of rehabilitation, education, and different kinds of service with different sorts of risks, benefits, and requirements.’ Oddly, despite this description, national service advocates persist in calling the system ‘voluntary.’ To deal with at least two million new men annually (to say nothing of women), the system would require an enormous Federal bureaucracy, fantastic expenditures for training and maintenance, and expansion of service opportunities beyond anything now imaginable. Besides, service is probably best rendered by those who freely give it.
“Above all, national service—perhaps servitude is a more appropriate term—would mean an enormous jump in the degree of control by a central authority over the lives of Americans. Assignments to the military, to service, or to rehabilitation would finally be made not according to individual ability or interest, but by a centralized manpower planning commission, according to established definitions on national priorities. In this light, national service can be seen as the present draft writ large: ‘channeling’ no longer applied ‘indirectly’—the ‘American way’—but by compulsion. The system becomes a machine, in which men are considered as a ‘national resource,’ to be developed, channeled, enriched, molded, utilized, exploited, and above all, nationalized—in the public interest, to be sure.”
John M. Swomley, Jr., who has long opposed conscription, recently smoked out national service in “The National Service Proposal,” Christian Century, January 11, 1967. Swomley has some silly (favorable) ideas about a guaranteed annual income, minimum wage laws, and “free” health services, but he does point out that the decisive inequities of conscription do not occur simply because not all people are conscripted: “The real inequity of military conscription lies at this point of pay, not simply in the fact that some young men are drafted and others are not. The real inequity is that we are drafting men when there is no need to do so except to keep down the taxes of the rich whose financial interests are being preserved around the world by the low-paid soldiers. . . . It is one thing to provide voluntary service opportunities; it is quite another to institute a national service program whose pivotal concepts are peace time conscription and service to humanity via the nation.” Donald J. Eberly replied in “National Service: Purpose and Potential,” Christian Century, April 5, 1967. Eberley’s main argument appears to be that life is full of coercion, anyway. Indeed! Barry Goldwater added a final touch to the assault on national service: “These so-called liberals, who want to fasten a domestic fascism on our young people, are simply following the line originally set by Robert McNamara who, months ago, suggested turning the draft system into a social service system in which every young American would be compelled to serve the state.” (Los Angeles Times Syndicate, April 17, 1967) Is Goldwater a party to the New Left?
The February 1967 issue of Moderator, “the national magazine for leading college men,” contains an article on conscription entitled, appropriately enough, “The Problem of Being Patriotic,” written by Moderator’s editor Philip R. Werdell and publisher Sherman B. Chickering. The thrust of the article is in a very non-radical, conservative direction: service to society is good, and the existence of military impressment is alienating an entire generation from all traditional forms of loyalty. The authors have familiarized themselves with the arguments in favor of a volunteer military, and present them cogently in arguing against a national lottery or compulsory service of any kind. The disturbing aspect about the author’s thesis concerns the notion of service to society—they argue for a massive transformation of American motivational incentives to counteract and reverse the trend toward alienation among today’s youth. Their program, although strictly within the framework of liberal principles, choice, voluntarism, etc., includes an appeal to colleges and universities, corporations, and government to give “those who have served” a special, higher status position or preferences in employment. A person of libertarian opinions cannot help but be cautious when approached by such allies, because the conscious erection of social pressures to induce a certain mode of behavior is no more acceptable than the imposition of legal sanctions—in fact social pressures can be more insidious because no libertarian would think of allowing intolerance to become a tort liability (as most modern-liberals would, for example.) There is much to be said in defense of social alienation, but clearly an Establishment publication such as Moderator would not think of this. It is difficult to conceive, for example, the revival of classical liberal opinions toward government without the breeding ground of alienated hostility toward “those in power.” Classical liberalism was born in an era of alienation and hostility toward kings; what choked and almost killed it at the end of the century was an optimistic trust in The People and popular government. This trust in government—“we are the government”—is the foundation of social democratism and the welfare state ideal, and if the Right (or Left, maybe) is ever going to succeed in dismantling the deadening hand of the state it might well be better to encourage social alienation.
We had been hoping that voluntarism would be the irresistible wave of the future, but there are a number of people conspiring against that prospect. Last May, Secretary of Defense McNamara proposed that we adopt some form of compulsory national social service: “It seems to me that we could move toward remedying that inequity [not everyone is drafted] by asking every young person in the United States to give two years of service to his country—whether in one of the military services, in the Peace Corps, or in some voluntary developmental work at home or abroad.” (“Address of Robert S. McNamara before American Society of Newspaper Editors, Montreal, Canada, May 18, 1966,” Office of Assistant Secretary of Defense [Public Affairs], p. 14.)
Last fall, President Johnson suggested the national social service idea: “We must move toward a standard that no man has truly lived who only served himself. . . . To move in this direction, I am asking every member of my Administration to explore new ways by which our young people can serve their fellow men.” (“Remarks of the President at Montgomery County Fair, Dayton, Ohio, September 5, 1966,” Office of the White House Press Secretary, pp. 4-5.)
In November, Secretary of Labor Wirtz called for a stampede to NSS: “First, that it be required that every boy and girl ‘register in’ with the local community when he or she reaches age eighteen. Second, that it be recognized as the community’s obligation to provide every youth with the opportunity to receive at that point two years of further education, occupational training, a chance to participate in a service program, or a job. Third, that it be recognized as the youth’s obligation, in return, to use this opportunity.” After pausing to say that his scheme, ideally, would be voluntary, Wirtz added: “There are strong reasons, at the same time for beginning to think through the possibilities of a firmer, tougher course.” (“Policy for Youth,” Vital Speeches, January 1, 1967, pp. 163, 165.)
More recently still, Poverty Commissar Shriver recommended that compulsory national social service be opened to people at age sixteen: “I favor the registration and testing of all young Americans at age sixteen—females as well as males. The Peace Corps and VISTA and the Job Corps have all proven—once again—that women are just as courageous and patriotic and hard working as men. Thousands, perhaps millions, of young women would like a chance to help their country by performing recognized national service and such service should not be restricted to combatant military service. It’s an archaic sentimentalism which excludes young women from selective service in the generic sense of those words.” (“Statement by Sargent Shriver before the Senate Subcommittee on Employment, Manpower, and Poverty, March 23, 1967,” p. 1.)
Collecting all of these luminous ideas together is Donald J. Eberly, Executive Director of the National Service Secretariat, a recently-formed lobby; Eberly asserts: “In the free market economy the law of supply and demand operates to fill the most essential jobs. But the needs that are met are primarily private or personal—the provision of electric can openers or automatic dishwashers. Some of the more fundamental needs in the area of human and natural resources—concerns very much in the public domain—are left to the agencies of the community, state and Federal governments.” To satisfy basic, human, social, crying needs, Eberly would “establish universal volunteer service as a national goal, and rename the Selective Service System the National Service System and the Selective Service Boards the National Service Boards.” Happily, “a program of national service provides youths not only with an opportunity to serve their country, extend their education and broaden their experience but also offers them increased individual freedom.” A Plan for National Service, Washington, National Service Secretariat, November 1966, pp. 11, 29, 51.
Whether all of these proposals were sparked by the approaching expiration of the current draft law is not clear; but what is clear is the brand of Left-fascism that the proposals represent.
One book, excellent for its polemical approach, which has received little attention is Jean Carper, Bitter Greetings; the Scandal of the Military Draft, New York, Grossman Publishers, 1967. $5.00. The following quotation from the book’s introductory chapter may serve to whet one’s appetite: “Ironically, officials of the Selective Service in some of their press releases pat themselves on the back for never having suffered a scandal. . . . Nevertheless, it would be a joke of the blackest kind for the American people to join in Selective Service’s celebration of itself. For the truth is that the draft enjoys no small scandal. Its very existence, its operation, its Orwellian schemes and powers for controlling the nation’s youth constitute a scandal of monstrous proportions. Contending there is no scandal in the draft is like saying there are no blackheads on that portrait of corruption rotting away in Dorian Gray’s attic. For the draft, like the degenerate Dorian, suffers no small blemishes; it is corrupt of spirit all the way through.”
The December 1967 issue of Ramparts reprinted selections from an official Selective Service document entitled “Channeling” which illustrates the totalitarian philosophy of such a system and its functionaries. “The psychology of granting wide choice under pressure to take action is the American or indirect way of achieving what is done by direction in foreign countries where choice is not permitted. . . . From the individual’s viewpoint, he is standing in a room which has been made uncomfortably warm. Several doors are open, but they all lead to various forms of recognized, patriotic service to the Nation. Some accept the alternatives gladly—some with reluctance. The consequence is approximately the same.” All that is denied is the freedom to choose an “unapproved” course of action which more nearly fulfills the individual’s notion of what his life should be.
Probably the two best books to have appeared on this subject are James C. Miller III, ed., Why the Draft? Baltimore, Penguin Books, 1968. $1.25 And: The Draft? prepared for the Peace Education Division of the American Friends Service Committee. (New York, Hill and Wang, 1968. $1.25.) Both books argue strongly against conscription and in favor of voluntarism, and both are impressive for their scholarship and the careful, scientific treatment of this highly emotional subject. The A.F.S.C. book, The Draft?, takes a completely pacifist point of view, arguing against all military service; and does an excellent job of destroying the case for conscription, as well as the more difficult job of building a case against all militarism. The Miller book, Why the Draft? argues positively for a volunteer army on the grounds of feasibility and optimality, and against conscription because it is simply not the best way of doing the job and has bad side effects as well. Both books were prepared by high-powered research teams, and this division of labor produced two superior books.
The source of most of the technical arguments against procuring military manpower through compulsion which are used by almost every other work on the subject is the economic research of men such as Prof. Walter Y. Oi, who presents his findings in the American Economic Review, LVII (May 1967), 39-62; and also in Sol Tax, ed., The Draft (Chicago: University of Chicago Press, 1967), pp. 221-51. Other technical articles of note are Stuart H. Altman and Alan E. Fechter, “The Supply of Military Personnel in the Absence of a Draft,” American Economic Review, LVII (May 1967), 19-31; and W. Lee Hansen and Burton A. Weisbrod, “Economics of the Military Draft,” Quarterly Journal of Economics, LXXXI (August 1967), 395-421. Additional articles in the Sol Tax book, which is a symposium covering all points of view and not merely the case for a volunteer army, include one by Kenneth Boulding, President of the American Economics Association, questioning the legitimacy of the national state; and several others which appear in revised form in this issue of N.I.R.

LIBERALS OF THE WORLD: UNITE!

Our Hour of Need is upon us. The time is fraught with peril for the most promising development in the non-Western freedom movement—the Arabic Edition of New Individualist Review. Our latest foreign language edition is in grave danger, threatened with extinction by the International Postal Monopoly, the United Nations, and the fine hand of the COMINTERN itself.

To crush the rising tide of revolution which everywhere has followed upon the first publication of our SYMPOSIUM ON CONSCRIPTION, the government of Egypt has launched a drive to deny New Individualist Review’s Arabic edition the free use of international postal services. In the United Nations debate devoted to the issue, the Egyptian Ambassador demanded:

. . . that the United Nations declare the Arabic edition of New Individualist Review to be the greatest threat to peace in the Middle East—stirring discontent among the harmonious Egyptian people and spreading sedition by its challenge of ancient truths. All nations must rise to fight the anarchists, who preach such treason as “Taxes In Money, Not Forced Labor” and “Emigration Before Conscription” and the like. No government is safe; no military force is secure. In Sinai alone, thousands of soldiers left the battlefield with cries of “Freedom Now; Down With Military Servitude!” on the very eve of Israeli attacks. . . .

The United States Ambassador demonstrated the cunning solidarity of all government agents when threatened by the stirrings of liberation. His reply:

We wish to assure the State of Egypt that the Arabic edition of this odious publication—judging by the contents of the English edition—will trouble the peace no longer. The United States government has a great tradition of respect for freedom of speech; as President Johnson once said, “Freedom of Speech is a First Class Freedom.” Of course, this New Individualist Review is mailed third class . .

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“We won’t go!”

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Two Decades of Economic Planning in Yugoslavia
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The Rhodesian Calumny

W. H. HUTT*

I HAVE LIVED FOR thirty-seven years in race-troubled South Africa and during that time I have been observing, thinking about, and occasionally writing about, the superficially intractable problems of color prejudices and racial domination. I have seldom felt that the politicians were leading wisely on the always delicate and sometimes explosive issues of race antagonisms, either in my own country or in adjacent countries. Yet during the 1950’s and early 1960’s, there was one area in which there were hopeful signs of emerging enlightenment. I refer to the now disintegrated Federation of Rhodesia and Nyasaland.

With rare statesmanship, commendable realism, and courage, the Welensky regime had brought about in the Federation an all too brief era of peaceful and prosperous development under the rule of law, independent courts, integrity of administration, and as rapid an orderly modernization as the world had ever witnessed. Nowhere else had Blacks and Whites got on with one another better under the stresses of radical sociological change and economic progress. Order was maintained by a tiny unarmed police force, more than half of which was African. Time-rooted color prejudices were being slowly dissolved whilst, for Southern Rhodesia, the 1961 Constitution had not only laid down a non-racial voting qalification, but, through a Declaration of Rights, provided for the unconstitutionality of legislative discriminations on the grounds of race or color.

Unfortunately the British government, placing the ambitions of a handful of power-hungry African politicians above the interests of the inarticulate African masses, decided to break up this great experiment. Nevertheless, in the present Rhodesia, the 1961 constitution (with minor amendments) has survived: and under it, the most promising deliberate attempt the world has ever seen at creating a wholly democratic, multi-racial society has continued.

But persistent pressures from the new totalitarian and nationalistic African governments, which were understandably hostile to a genuine democracy in their continent, have demanded that it be crushed; and the belief of the White Rhodesians that Britain and the United States were siding with the totalitarians drove Ian Smith’s Government (legally elected under the 1961 Constitution) into a Declaration of Independence in 1965.

The present position is that Britain, the United States, and the United Nations reject the system under which the right to the franchise in Rhodesia is independent of race or color and based on very modest educational and/or property qualifications. They want a system which confers the right to vote unconditionally upon four million tribal Africans. That is what the quarrel is about. Yet Rhodesia was offering, in the middle of Africa, a continuous object lesson in growing racial and color harmony, under classical democracy.1

Ian Smith’s regime, whilst solemnly pledged to “unimpeded progress to majority rule”; and prepared to entrench this objective by any bona fide technical means the world might demand (“by solemn treaty if necessary”); and prepared further to lighten materially the franchise requirements (under adequate safeguards), is nevertheless doggedly resolved to preserve the Western heritage for all races to share, and not to permit its destruction (which nearly all White Rhodesians believe would be the outcome under “one man, one vote”). The only limitations on the franchise are, in fact, of the kind that J. S. Mill advocated in his classic Representative Government (1861).

I allege that Americans have been grievously misled about the facts. The frankness of Ian Smith and his colleagues in expressing their fears of the unconditional enfranchisement of Africans, has been subtly used, by unscrupulous reporters, to create an impression that the Rhodesian government is keeping the Africans in political subjection. That is false.

ADMITTEDLY, THERE are White supremacists in Rhodesia. They support the present Government faute de mieux, because it is at least staving off African uni-racial totalitarian rule. Today they are taking advantage of the backlash caused by anger at the injustice of sanctions and pressing for an apartheid policy. If the supremacists gain power and put back the clock, will it not be the fault of Britain and the United States?

The present situation may easily confuse the superficial observer. Originally the threat, and later the actuality of sanctions, together with unprecedented internal efforts (mainly by non-Rhodesians) at subversion, have forced the Rhodesian government into defensive action. It is easy to represent emergency steps as normal policy. The white leaders of Rhodesia are not Nazis. Some have a proud war record.

The extent to which, through press, radio, television, and pulpit, the American public has been misinformed on this issue is fantastic. I can illustrate by a few out of hundreds of examples. In September 1966, the influential Newsweek (relying upon a reference by Ian Smith to Dr. Verwoerd’s personal kindliness: words of sympathy following the latter’s assassination) remarked that “the Rhodesian leader made it plain that his support for white supremacy was unshaken.” Rep. D. M. Fraser told Congress shortly before that the Rhodesian government “favors rule by a racial minority through policies aimed at excluding virtually all Africans.” Various politicians (mostly ill-informed, but still irresponsible) have referred to “racial and political injustice” in Rhodesia (these are President Johnson’s words), or expressed similar blanket condemnations. Ambassador Goldberg told the world through the United Nations that Rhodesia involved “the seizure of power by a minority bent on subjugating a vast majority on racial grounds.” And a host of other seemingly well-informed and trustworthy authorities have succeeded in slandering the rulers of Rhodesia by deepening the impression that Africans are being denied democratic or human rights by a White minority.

Actually, Rhodesia offers free political institutions, the rule of law, a judiciary with an independence of politics which most Americans would find difficult to believe, a free enterprise economy, and few surviving state-imposed (I stress this qualification) barriers to equality of economic opportunity. It was also a happy and internally peaceful area until recently, order having been maintained since the beginning of the century by a tiny force of unarmed police. That was, of course, before the return of saboteurs trained in China, Algeria, and Tanzania. Otherwise, since World War II, persons of all races had obviously been learning to live with one another under increasing amity.

The greater proportion of the 220,000 Whites (which includes many whose enterprise and industry had created the civilization established in Rhodesia) had undergone an agonizing readjustment of deep-rooted racial attitudes. They had come to accept not only the inevitability of equality of political opportunity, but also the wisdom of a policy aimed at deliberately hastening progress toward the day when the majority of the qualified electorate would be Africans. Moreover, prior to the imposition of sanctions, Rhodesia had been prosperous. Its GNP had almost doubled during one decade, providing more than proportional benefits to the African section of the population and attracting an enormous number of foreign Africans to share in temporary employment opportunities.

The main source of discord was a small group of African leaders, imbued with a faith in their ability to serve their people, but often spurred on chiefly by personal ambition; and sometimes understandably bitter in the light of humiliations and indignities which they may have had to endure. Among this group, the politicians’ ubiquitous hunger for power was whetted by the apparent prospect of early African supremacy. They had just witnessed a succession of capitulations which had conferred sudden status, privilege, and wealth on similarly placed African leaders to the north. They were aware of the dominating population of mainly tribal Rhodesians whose votes could obviously be won by appeals to perfectly natural envy as well as to color resentments, nationalist emotions, and class antagonisms. All this seemed to suggest that, with determination and the right stategy, office and honor were within their grasp. They found they were thwarted by the entrenchment of a non-racial political equality, a reasonably achievable franchise available on equal terms for every literate and responsible Rhodesian, whatever his color.

WHY SHOULD GOVERNMENTS which claim, at least, to be striving for the eradication of color prejudices and racial injustices wish to crush this genuinely democratic society? One reason is, I believe, that American and British politicians tend to think in terms of the aspirations of African politicians. They are not directly concerned with the welfare of the African masses, who, unlike their leaders, are not possible future voters at the United Nations; and sometimes the Western politicians seem to think that it is expedient to retain the friendship of “moderate” leaders in African territories; whilst even the moderate leaders find it desirable, for popularity reasons, to appease the racial emotions and resentments of the black peoples. If they did not, they could not survive, it is felt, against more extreme rivals.

A more difficult question is, why should so many who obviously do sincerely wish to eliminate surviving inequalities of opportunity and respect between Black and White in the world, also wish to destroy the most propitious experiment in non-discriminatory representative government that mankind has known? I can conceive of only one answer: because of culpable news-slanting by reporters, newspaper correspondents, editors, and radio and television staff.

What I cannot explain satisfactorily to myself is why those in control of propaganda resources should have a vested interest in misinforming the world on so vital an issue. Yet the blatant fact remains that the number of people outside Rhodesia who know the facts about that country is almost infinitesimal, and the occasional attempts of these few to correct misrepresentations have had little success. For instance, during the year 1966, I can recall seeing only two really unslanted references in New York newspapers to the policy of the Smith Government. One was in a very well informed letter from John Davenport (of Fortune), and the other a brilliant letter, quoted from the English press, of Elspeth Huxley’s.

Now there are some aspects of the racial situation in Rhodesia which critics abroad might deplore, whilst giving full recognition to the democratic, non-racial objectives of the Smith Government. I shall shortly refer to policy aspects which I myself regard as wrong or ill-conceived; but it has been a tactic of those who are hostile to Rhodesia’s aim of preserving Western civilization for gradual sharing with the Africans, to refer to these aspects and, through references to her friendship with the Republic of South Africa, to imply that Rhodesia is following an apartheid policy.

It is true, of course, that South Africa has tactfully assisted Rhodesia’s resistance to sanctions, yet this is not because there is any basic similarity in objectives. It is due to fear that the overthrow of Smith’s regime would lead to the early establishment of a hostile black nationalist dictatorship on the northern boundary of South Africa. The Rhodesians are genuinely grateful for this support in their hour of need, and official references to the Republic are understandably amicable; but the proclaimed racial policies of the two countries, whatever their merits or demerits, are at present diametrically different.

Let us consider the allegations of racial discrimination in parliamentary representation, with general political bondage for the Africans. In truth, every Rhodesian at the age of twenty-one upwards has the right to qualify for the vote (or to stand for election) on the same terms, irrespective of his race, color, or ancestry. Moreover, the franchise qualifications are surprisingly moderate when one considers the need, in so complex a racial situation, for insuring that voters shall be able to understand something about the issues on which they will be expected to exercise ballot-expressed judgments.

The qualification is based on education or property, or a combination thereof. Thus, on the so-called “A” roll (providing for 50 of the 65 seats in the legislature) completion of primary education plus either an annual income of £528 (say $1300) or property of £1100 is one of the conditions which qualifies a voter.2 But no property or income standard is applied if four years of secondary education have been completed (a provision intended, I understand, to bring as many moderately qualified young Africans, as rapidly as possible, onto the “A” roll). And there are other, alternative conditions for qualification. For the “B” roll (providing for 15 seats only) the requirements are much more lenient. For persons over thirty years of age, income of only £132 plus completion of primary education will qualify, as will completion of two years of secondary education with no age, property, or income requirement. Again, there are other means of qualifying. The “B” roll qualifications were intended to insure immediate representation by African members in Parliament.3

FOLLOWING THE TIGER talks, the Smith regime had been willing to accept even easier franchise qualifications. The Rhodesian government was, indeed, prepared to lean over backward in its efforts to refute the slander that its object was to perpetuate the subordinacy and inferiority of the Africans. Now I submit that, unless by some stratagem Africans are prevented from exercising their rights, even under the present provisions, there is nothing to justify the sanctions through which Britain and the United States have been trying to bring the regime to an end. Let it be clearly understood that there is no parallel in Rhodesia to the subterfuges which have, in the past, denied constitutional rights to Negroes in some parts of the United States. Moreover, there are no grounds whatsoever for the suggestion that educational opportunities are being deliberately withheld from Africans, or not reasonably available. (I shall return to this point.) Nor can the Whites be shown to be using the dominating parliamentary majority power which the franchise conditions at present accord them in order to legislate against equality of opportunity in the economic sphere. Even if they did, the Declaration of Rights, with the Constitutional Council’s power to declare such measures unconstitutional, would stand in their path.

If Rhodesia’s critics had merely demanded even more ironclad constitutional entrenchment to insure that African rights should not be subsequently revoked, there is not the slightest doubt that the Smith Government would have agreed to this, although not in a form which would have given a veto right to the “B” roll voters. The intransigence of the White Rhodesians rests in their determination not to let the future of their land—a progressive country which their courage, industry, and integrity have built up—be determined by a “one man, one vote” referendum in which almost wholly tribal and illiterate Africans were allowed to vote.

The political protection of these presently voteless Africans is secured through the “Declaration of Rights,” which provides for what are termed “fundamental rights and freedoms.” Equality of treatment in all legislation is guaranteed to every Rhodesian “. . . whatever his race, tribe, place of origin, political opinions, color or creed, subject to respect for the rights and freedoms of others.” To pronounce on the constitutionality of proposed legislation (in the light of this “Declaration”) there is a Constitutional Council, of predominantly non-white membership. Its members are nominated and chosen by an electoral college consisting of the existing and any former chairman of the Council, members and former members of the Council, judges and retired judges, and the President of the Council of Chiefs.

THROUGH THE CHANCE of history and tradition, few of the four million Africans were able to play more than a passive role in the development of their country. Hardly any were capable of being more than unskilled collaborators with the hard-earned savings, enterprise, energy, and skill of the White settlers. This was due, as every intelligent Rhodesian knows, not to any innate inferiority of the Black people, but to history and the absence of earlier opportunity. Insofar as there remains any deliberate perpetuation of practices or procedures which deny opportunities to Africans, there is something which any “classical liberal” like myself would never hesitate to censure; and any unintended perpetuation of racial economic inequalities can equally be subjected to exposure and criticism. Yet White property owners, including landowners, have never been responsible for racial discrimination—at least not in that role.

But are the political rights conferred under the sort of franchise conditions I have briefly indicated a mere sham, as is often alleged? Let us consider the educational facilities available for Africans as a path to enfranchisement. Rep. Donald M. Fraser told Congress last year that “the Smith regime refuses to provide education above the primary school level for a meaningful number of Africans,” and Mr. Joseph Palmer, Assistant Secretary of State for African Affairs, recently told the California Institute of Technology that “relatively few Rhodesian Africans are permitted the facilities to complete the highest secondary grade or go to college.” These assertions are false.

What are the facts? To get the matter into perspective we must remember that, although the Whites make up only one-twentieth of the population, they provide 98 per cent of the direct taxes collected. In spite of the fact that 220,000 Whites alone must for some time finance educational development for 4,000,000 Africans, the most impressive achievement of the regime and the most impressive planned achievement is precisely in respect to secondary education. A top priority in the reforms introduced by the Field Government in 1962 was a rapid speeding up in the provision of secondary schools. In the period since then, 45 new secondary schools have been established. The present program aims at offering secondary school education to 50 per cent of those Africans who complete primary school; and for the rest a system of correspondence courses is to be provided.

If the opportunities available in Rhodesia are seized, progress toward the time when responsible Africans will hold the balance of power should not be protracted. A team of three Americans, headed by Rep. John Ashbrook, has recently reported, after a study of the situation at first hand, that there have been “spectacular advances” in education and that “the demand for . . . places in secondary schools has yet to equal the supply.” Far from being excluded from opportunities, Africans are not yet voluntarily taking advantage of the facilities available. In vocational training the same apathy on their part is slowing down the progress hoped for.

Over a decade, enrollment of Africans in primary schools has doubled, enrollment in secondary schools has increased six-fold, and enrollment as a whole has tripled. Ashbrook’s team points out, quite pertinently, that in Britain “only 34 per cent continue to go to school after age 15.” In Rhodesia the target for Africans alone is 50 per cent. Unless sanctions succeed in sabotaging the most rapid advance in educational facilities which any African area has ever experienced, in three years time all Rhodesian children of all races will have an opportunity of achieving a complete primary education. Expenditure on education, which is the biggest item in Rhodesia’s budget, has trebled over the last seven years and has been accelerating. Moreover, as far as university education is concerned, a deliberate policy of discrimination in favor of Africans in respect to scholarships and loans has been followed. In the words of the Ashbrook Committee, the Rhodesians have “struggled valiantly to pull the African into the twentieth century.”

These facts, which can easily be verified, ought to have been known to Rep. Fraser and to Mr. Palmer. If they did not trouble to check their facts but based their allegations upon reports of newspaper correspondents, articles in popular periodicals, and the like, their speeches were recklessly irresponsible. But should the facts as I have stated them be doubted, let one of the large foundations finance a visit to Rhodesia by a small body of disinterested members of the academic profession—chosen for their known independence from affiliation or association with any political party—and let them report, from first hand contact, on what is happening. The overall aim of the program, planned in 1962, may well be over-ambitious, almost naive in its optimism and idealism; but what chance has it when the world tries to destroy the regime which boldly conceived of it?

AT TIMES, I GET the feeling that it is hopeless to try to expose the repeated misrepresentations and false stereotypes that have been created, particularly in the minds of American Negroes. I can illustrate by a typical distortion. On one occasion a reporter told the world that Ian Smith had declared “There will be no black rule in my time.” This alleged assertion made headlines everywhere and it is constantly repeated; but the repeated denials seldom get printed, let alone make headlines. What Smith had actually said, in a CBS telecast, and I quote from Anthony Harrigan’s One Against The Mob, was: “If we had a black nationalist government—a black extremist government in my lifetime, then I believe we would have failed in our policy . . . [which] has always been no discrimination between black or white.”

A report published in the American press on September 18, 1967 said that Prime Minister Wilson was sending aides to Rhodesia to seek “acceptance of eventual African majority rule.” How tendentious and subtly mendacious it all is! There is majority rule under non-discriminatory franchise qualifications, and the whole plan, guaranteed since 1961, contemplates an eventual African majority of votes on both the A and B rolls as soon as the Africans have used the rapidly growing facilities to achieve education or to qualify under the other responsibility tests. Moreover, the hackneyed insistence that “all sections of Rhodesian opinion, black and white, should be consulted” is equally tendentious; for already, under the present constitution, all sections who can be reasonably assumed to be capable of envisaging the issues have equal rights under the franchise provisions. But if “all sections” is a euphemism for Nkomo and the PCC, and Sithole and ZANU, anything short of immediate black supremacy seems certain to be rejected.

How much wiser and commendable is Ian Smith’s attitude towards the whole franchise problem! He has said: “We hope the time will come when we shall have Black and White in Parliament and nobody will start counting heads to decide whether there are more Blacks than Whites.”

Do those Americans or British who applaud the “tough” line taken against Rhodesia know that this is the spirit with which the government of that country has faced its appallingly difficult task? How many who feel indignation at the supposed “oppression” of the Africans in Rhodesia know that, in advising his countrymen about how to act in face of brutal attacks, perfidious misrepresentations, and vindicative sanctions, he urged them all to exercise “courtesy, kindness and understanding towards all peoples, especially those of other racial groups . . . to maintain the highest standards in everything that you do: in your work, in your play, in your thoughts, especially when thinking of other people; in your general demeanour. . . .” Are these the words of a Rhodesian Hitler determined to treat the Africans as the Nazi regime treated the Jews? Yet that is the image which has been created of Ian Smith.

Yet is there political freedom in Rhodesia? Is there not suppression of effective opposition? Again, I have found that most Americans and Britons who have been interested in the subject believe that the expression of anti-government views is somehow restrained. The truth is, I think, that the restrictions imposed have been aimed not at opinion but firstly at incitement to mob violence, terrorism, and intimidation, and secondly at more subtle attempts to destroy morale.

It is possible that, through an element of war hysteria created by world hostility and organized misrepresentation of their aims, the Rhodesian government has gone beyond what has been needed to prevent instigation to disorder; but confronted with sustained cold war aggression, together with the burden of sanctions, it was vital that they should maintain legitimate hopes of success in their struggle to preserve non-racial democracy. Although the newspapers of Salisbury and Buluwayo (which are under a single British ownership) have a justified reputation for responsibility, they have pursued a policy of supporting Britain right or wrong. Their news presentation and comments were obviously felt to be destructive of good racial feelings, and even worse, destructive of faith in the power of Rhodesia to survive the world’s aggression (through sanctions and otherwise).

The Rhodesian government had no journals of their own of similar influence; short of nationalizing the press, they were led to drastic censorship; and the power to censor remains. The Ash-brook Committee reports that it is the Administration’s “earnest hope that the worst rigors of censorship are past. . . . If the editors would only be a little more co-operative, the whole unpleasant business could be brought to an end.”

THE SORT OF PROBLEM which has to be resolved can be illustrated by difficulties encountered at the University College of Rhodesia recently. As in virtually every college or university of the free word, a few Communist sympathizers among staff and students (of course, “they are not Communists,” we are always assured) appear to work for the “other side” in the cold war. They work as unobtrusively as they can, but their task is to spread dissention and inspire “demonstrations.” Now it was the hope of the Smith Government that the College could train a growing number of Africans to take their part among Rhodesia’s future rulers, and that within its walls the old prejudices, antagonisms, and misunderstandings could be eradicated. A minority among the staff, however, (mostly British) seemingly indoctrinated with the notion that the fomentation of race hatred, and the quiet implementation of class and race war are legitimate in the struggle against “capitalist imperialism,” were causing serious friction. They seemed to be inculcating resentments and the spirit of revenge among the African students. The deportation of certain lecturers who were believed to be guilty of this abuse of academic freedom has naturally been represented as, in itself, a denial of that freedom.

A typical misrepresentation can be mentioned. Last year the College entertained the Principal of the University of Cape Town, Dr. J. P. Duminy. At the ceremony, a deplorable demonstration was organized among some of the students on the grounds that the principal of “a segregated university” was being honored. The American journal, Christianity and Crisis, subsequently published an article which sought to justify this insult to an eminent academician, by describing the invitation to Dr. Duminy as “provocative to the African students.” Yet the University of Cape Town is (and will always remain, I hope) open to students of all races. Segregation is imposed by the government of South Africa upon students wishing to attend, not by the University’s own decision or regulations. Moreover, every year after he was appointed, Dr. Duminy, together with the Chancellor of the University, played his role in an annual ceremony and procession of protest at which the “torch of academic freedom” is carried—a torch which was ceremonially and solemnly extinguished when academic apartheid was enacted. The writer must have known these facts. Why did he suppress them?

If, in these circumstances, the Rhodesian government has resorted to press censorship and suspension of the rule of law (and of habeas corpus) in dealing with suspected troublemakers, the criticisms of those far from the scene ought, at any rate, to be guarded. There are no racial riots and no obvious signs of smouldering discontent among the great mass of Rhodesian Africans. From that angle, whatever the demerits of the regime, it has its concomitant virtues. Ash-brook’s Committee reported of the Rhodesian capital: “The only troops in evidence are a handful of smiling Africans. . . . On the streets white and black mingle with one another with every appearance of courtesy and good humor. . . . During the whole of our visit, we never heard a siren; . . . we never noticed so much as a sidearm. . . . The perceptive American knows that racial tensions can be sensed; but he senses none of these tensions here.” We must remember that, due to the infiltration of saboteurs trained abroad, Africans who wished to co-operate in the democratic order, by enrolling as voters or by actually voting, were for some time in danger of being murdered, tortured or having their houses and crops destroyed and their cattle maimed. After Rhodesia’s independence, the Zambia Broadcasting Corporation, with the collaboration of the BBC, explicity exhorted participation in sabotage and murder. This seemed incredible to me when I first heard of it; but it is true. Tape recordings exist and the text has been published. Both the PCC4 (formerly ZAPU) under Nkomo, and ZANU5 under Sithole, are supported by the two great Communist powers. Captured bombs, grenades, and machineguns together with sabotage instruction manuals from various places beyond the Iron Curtain have been produced in the courts.

The first big campaign for lawlessness and disorder was rapidly suppressed by the loyal and efficient Defence and Police Forces.6 Internal peace then ruled for some time; and a second large-scale effort launched from Zambia recently appears also to have been effectively suppressed. Those who forecast wide-spread bloodshed following the Declaration of Independence have been proved wrong, although many Africans lost their lives and their property at first.

IN DEFENDING THE Rhodesian regime from contemporary misrepresentations, I must not leave the impression that, in my judgment, the Africans have no legitimate grievances. There are surviving discriminations. How rapidly the causes of the discrimination can be removed will depend upon the wisdom of those elected as the weight of the African vote gradually increases. Moreover, as I have already insisted, there are supremacists in Smith’s Rhodesian Party. But the Prime Minister himself vehemently and indignantly denies that his policy is moving towards apartheid. He maintains—and with patent sincerity, I believe—that his government stands for non-discrimination and the right of all to progress on merit.

U.S. Representative J. D. Waggoner claimed recently that “Segregation is unknown in Rhodesia. It is forbidden by law. Public facilities, hotels, bars, buses and the like are open to one race as well as another.” That is broadly the position; but a cultured African is, I understand, still subject to indignities and affronts, mainly from Whites of a lower social class; and exclusions by subterfuge occur here in other spheres,7 fortunately not in the University College, or in public transport, or in public buildings. In housing, de facto segregation persists fairly widely, but only in the sense in which this assertion is still equally true of the United States, and it is basically an income segregation. (The most stupid follies of apartheid are not found in Rhodesia).

The remaining major discrimination imposed by law against Africans is, in my opinion, that due to segregation maintained under the Land Apportionment Act. There is, I believe, almost universal agreement that this Act must eventually be drastically amended; but the case against precipitate action is strong. What were the objects of the Land Apportionment Act? The British Parliament passed it with two aims in mind:

The first aim was to attract settlers with enterprise and know-how capable of developing the flow of real income for the benefit of all races (which aim has been realized). The Act was in the nature of a contract with the settlers who responded. If there was any element of privilege conferred by the contract, it resembles the monopoly promised to prospectors everywhere—to induce them to risk capital in searching for the earth’s hidden wealth.

The second aim was to protect land allocated to African ownership from purchase by Whites. There is, I understand, no legal restraint on the sale of agricultural land in White ownership to Africans: the chief protection the Act provides is for Blacks, not Whites.

Mr. Palmer told his audience that “the acreage reserved for the white minority consists of the best land.” That is not true. In a reply to Mr. Palmer, the Rhodesian Ministry of Information has pointed out that “there was a slightly higher percentage of higher fertility soils in the African area than in the white area, nearly twice the percentage of medium fertility soils and, while only 37 per cent of Rhodesia has a rainfall above 20 inches, half the African areas fall within this zone.”

Now it is complained also that the area of land per head possessed by Whites is incomparably greater than that possessed by Africans per head. Of course, but should that be a grievance? The Whites equally remain in possession of a proportionally greater capital per head in other forms; but it was the capital which their enterprise, stubborness, expertness, and energy could alone have created. What is now their land was hardly capital when they took it over. It was virtually valueless—almost wholly unproductive scrub. Many of the critics of Rhodesia seem to be arguing that the Whites should be dispossessed of that property simply because they are Whites. But the principle of non-discrimination condemns privilege, not property. Privilege may become property—e.g., import licenses may become assets—but property is not privilege. It cannot be held that the Whites exploited the Africans they employed.

THE CHIEF OBSTACLE to a more rapid achievement of equality of economic opportunity on the part of Rhodesian Africans is to be found, however, in the labor market. This is an aspect of the problem, however, which Rhodesia’s critics all pass over. Just as in the Republic of South Africa, the most powerful color bars in Rhodesia do not arise from quite honest exclusions in “job reservation” form, or from the indirect but still obvious exclusions via “group areas” and “labor allocation” forms. It is the simple insistence on “the rate for the job” which creates the really vicious color injustices. The principle of “equal pay for equal work” prevents the African from discounting his initial inferior training for many types of work required in modern society, the extra costs of employing him (including the unrest which labor union leaders can initiate by playing on the color prejudices of the Whites). It confines him on the whole, therefore, to occupations of relatively low productivity and value, and it destroys the business incentive to invest in the inculcation of industrial skills. Where the Rhodesian Africans are progressing economically is in the spheres where the standard rate cannot be enforced and labor union power cannot be exerted—in the white collar occupations, journalism, and the civil service. In the professions and in business, the qualified Africans encounter merely the kind of obstacles (not imposed by law) which similarly qualified Negroes encounter in the United States. But it is through restraints in the labor market, of a kind which are defended by practically all Rhodesia’s critics, that the key injustices can be discerned.8 Whether African leaders wise enough to perceive this reality are likely to emerge in the near future is very doubtful. But as the political progress of Africans under the present constitution will be to some extent dependent upon economic progress, their leaders will have every incentive to rescue their people from the tyranny of “the standard wage-rate.”

Of course the constitution withholds present majority power from the Africans, but the purpose is to insure their eventual sharing in the heritage of the West by preventing their destruction of it; and the planned gradualness is surely to be welcomed. Blacks as well as Whites are stupidly emotional on the skin color issue in all areas of contact all over the world. The problem is aggravated when color prejudice is merged, as it usually is, with class prejudice. With gradualness and steadfast policy, these prejudices can be dissolved; but demagogues demanding haste can sabotage the process.

Those who, like myself, regard color prejudice as the worst social evil of the contemporary era must strive for the removal of the sanctions which were imposed against Rhodesia after she was condemned, unheard and unrepresented, by the United Nations. If we want the most hopeful planned attempt the world has ever experienced to achieve a free multi-racial society to be allowed to demonstrate its potentialities—for the benefit of all—we must, indeed, go even further. Rhodesia deserves generous compensation for the harm already caused, mainly to innocent Africans, from past efforts to compel her to capitulate to the prospect of black totalitarian racism; and in the United States, if the Negroes were rationally and disinterestedly led, we should find them fighting for the right of the Rhodesian Africans to qualify for a democratic and prosperous future; and that means their protection from the “one man, one vote” tyranny which capitulation to the PCC and ZANU would surely impose upon them.

Community, Leadership and Progress

SVETOZAR PEJOVICH*

LET US BEGIN OUR discussion with a few observations of basic characteristics in every human community. First, the members of a community are unequal with respect to both the distribution of their abilities as well as the hierarchy of their wants and aspirations. Secondly, we can distinguish between two forms of social life in every community: the communitarian forms of life and the contractual forms of life. The former we define as the accepted principles of behavior, such as justice, truthfulness, and love, which each member of the community is expected to observe. The latter serves the purpose of harmonizing, or equilibrating, different interests of the community members through exchange. Thirdly, the relationship between the two forms of life is one of mutual interdependence. The communitarian forms of life determine the quality and content of contractual agreements; that is, the quality of contractual agreements is constrained in a specific way by the prevailing communitarian forms of life. At the same time, any deviation of contractual agreements from the principles of behavior would, if that deviation is accepted by the community, force the communitarian forms of life to adjust in order to embrace the novelty. Consider for example the history of the institution of marriage in a number of European communities. For some time the communitarian forms of life had prescribed that a mature girl must show an unquestionable obedience to her father including, of course, the acceptance of the man whom he selected to be her husband. When in the course of time young people had begun to choose their own partners, the quality of contractual agreement with respect to the institution of marriage changed and its acceptance—notwithstanding the resistance of the prevailing communitarian forms of life—brought about changes in the accepted principles of behavior. It became possible for a girl to reject her father’s choice of mate without fear that it could result in her eventual alienation from the community.

Finally, the interaction between the communitarian and contractual forms of life in a community leads to the emergence of a number of social institutions. Some of those institutions are impartial, that is, they serve the purpose of reducing social conflict created by the confrontation of all the different interests and aspirations of the community members (e.g., open-market competition, democratic elections), while some others are founded with the explicit purpose of promoting the self-interest of specific groups in the community (e.g., trade unions, government-sheltered monopolies).

Consider a community as it moves along through time. If there were no changes in the quality of contractual agreements the community life would flow through time undisturbed. The role of its rulers would be limited to the supervision of contractual agreements and to keeping them in agreement with the prevailing principles of behavior. A number of communities in Africa and Asia, where life has not changed for centuries, offer a good example of this type of communitarian life.

It is true, of course, that the years of accumulated experience must contribute to some improvements in the execution of contractual agreements. Those improvements, however, would only introduce changes in the data of the system but not add new phenomena. In other words, only some quantitative changes could be expected to take place within the firmly established framework of a “routine” life community. The meaning of time in a “routine” life community, as it emerges from our discussion, is an objective one: the sequence of events is independent of the action of the actor; man’s activity can be predicted, i.e., it is given to him objectively from without. Life in a community of this type is unimaginative and uninspiring.

IT WAS SAID THAT the contractual forms of life serve the purpose of satisfying human wants through exchange. We must now make a clear-cut distinction between the “existing” or “known” wants and “newly created” wants. The former are wants which have been accepted by the community for some time and whose satisfaction can be attained through the prevailing contractual forms of life. The latter are wants—let us call them potential wants—which someone would like the community to become aware of, try them out, accept, and thus include in the sphere of “existing” wants. For example, the concept of equality before the law had not belonged to the sphere of “existing” wants in medieval Europe, but its later acceptance by the majority of European communities indicates that it was a definite potential want.

The introduction of potential wants calls for a change in the quality of contractual agreements; but the acceptance of a change in the contractual forms of life must lead, as we have seen, to a re-adjustment in the communitarian forms of life. It follows that the actualization of potential wants, i.e., the injection of a novelty into the community’s life is an act of social-reorganization. This kind of social change we shall call progress, because the community’s voluntary acceptance of new wants and, consequently, of new forms of life indicates that it considers them superior to the old ones. We conclude that progress involves a double variation: the quantitative changes, i.e., more of the same, and the qualitative changes, i.e., successful actualization of potential wants.

It appears that human progress is triggered by a group of men whose vision is not constrained by the prevailing forms of life, and who are capable of overcoming the inevitable resistance of the prevailing social institutions. The fact that the action of these men—let us call them free agents—means an injection of something new into the community’s life implies that the outcome of their action can only be anticipated, not predicted. The free agent, therefore, must knowingly and willingly accept the risk of seeing his ideas and, consequently, himself rejected by the community.

While wear and tear of time and the passivity of matter naturally dissipate the things of this world and the energy of history, the creative forces which are characteristic of the spirit and freedom and are also their witness and which normally find their point of application in the effort of the few—thereby destined to sacrifice—constantly revitalize the quality of this energy. Thus, the life of human societies advances and progresses at the price of many losses.1

Thus, in a “progressive” community a new meaning for time emerges: the sequence of events becomes dependent on the action of the free agent. In Western Europe free agents emerged from the ranks of small traders, bankers, artisans, and craftsmen, i.e., from the ranks of the rising middle class. The middle class wanted to distinguish itself from the lower classes of wage and farm labor, while at the same time it was envious of all the honors, privileges, and status enjoyed by the nobility. The members of this class turned their attention to commercial activity and the accumulation of wealth, and in doing so they re-organized the social structure of the West.

SO FAR WE HAVE discussed two types of communities: the “routine” life community and the “progressive” community. The former is leaderless, that is, there exists no man in that community capable of disrupting the circular flow of life by offering something new to its members, something which they have not known or tried before. A “routine” life community has its own elite and rulers, to be sure, but those people are not its leaders; their job is to preserve peace and order within the existing social framework. The “progressive” community has its true leader: the free agent. He is the man who injects into the community’s life, usually at a great risk to himself, something essentially new, something which is not an outgrowth of the past. He provides his community with an energy capable of disrupting its routine life and with a choice between new and old forms of life.

If our concept of progress—social changes voluntarily accepted by the community—is a sound one, then we can conclude that human progress depends on the rate at which free agents are able and willing to suggest changes; and the number of suggestions must, obviously, depend on the number of the people who are given freedom to make them. It follows that the central problem of human progress is to find the social organization, or environment, most conducive for carrying out innovating actions. I submit that the environment in which each and every man is allowed to be his own exclusive agent, in which each and every man enjoys freedom from organized groups, and in which no social institutions serving some specific group interests are sheltered by the community rulers, will make each and every man a potential leader (free agent).

The presence of the class of free agents in a community is likely to mean the difference between degeneration and creation, mechanical life and inspiring life. In a “routine” life community the leaderless man adjusts himself to the world. In a “progressive” community, thanks to the presence of free agents, man constantly improves the world.

In addition to the two types of communities discussed above there exists a third type which we may call the “changing” community. Consider for example what is happening today in a number of emerging countries in Africa and Asia. The idea of progress had hit the elite rulers of those communities from without long before the class of free agents emerged, thus forcing the respective elite governments to assume the role of sole innovator and to “legislate” progress by compelling the people to accept new forms and ways of life.

The trouble is, of course, that in the absence of impartial social institutions such as open-market competition and democratic elections it becomes quite difficult if not impossible to ascertain whether social changes imposed by the government have been voluntarily accepted and, thus, considered superior to the old forms of life by the community at large. Since the acceptance of social changes instituted by the government is coercive rather than voluntary it may well be that the government sponsored changes do not mean the actualization of people’s potential wants and, hence, progress. While it is often argued that an important advantage of the “changing” community is that it helps its members to break away from the old forms of life, the fact remains that this type of community is promoting change rather than progress. Consequently, there is no reason to believe that social changes which people are compelled to accept represent the pattern of social development preferred by them.

The conclusion of this paper, of course, is that progress cannot be legislated from without, or suppressed altogether from within, although it can be impeded. It depends on the presence of free agents, a group of people not constrained in a specific way by prevailing forms of life and who are willing to accept the risks of carrying out their vision; it accelerates when the right of each to act as his own exclusive agent is protected; it grows in the absence of social institutions promoting some specific interests; and because it depends on the community’s freedom to accept or reject proposed social changes, it depends on the existence of impartial social institutions. Only those social changes which the community voluntarily accepts can be properly called progressive, and social restrictions on the non-conforming lifestyle of free agents represents as mistaken an approach to society’s optimal welfare as forced adoption of changes from outside.

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The Political Thought of Michael Oakeshott

JAY A. SIGLER*

PROF. MICHAEL OAKESHOTT, of the London School of Economics, is widely regarded as the most articulate and influential conservative political theorist in England today. A successor to the chair of Harold J. Laski, eminent Marxist theorist, Prof. Oakeshott has dealt extensively with refining a conception of conservatism within the tradition of Edmund Burke and St. Thomas Aquinas. While resisting the creation of an orthodox conservative ideology to counteract the dominant liberal ideology, Oakeshott has sought to provide a philosophical basis for criticism of liberalism. As founder of the Cambridge Journal, Oakeshott sought to provide an outlet for English conservative thought. Since Prof. Oakeshott is a philosopher, historian, and critic of some note we find in his writings possibly the epitome of the best in conservative thought.

The importance of the conservatism of Prof. Oakeshott is due to his philosophical rigor and consistency. The philosophical basis for Oakeshott’s conservatism is to be found in his first book, Experience and its Modes, written in 1933, when Oakeshott was thirty-two years old. In an effort to identify the basis of all knowledge as the totality of empirical experience taken as a coherent whole, Oakeshott insisted that only in the coherence of experience could truth be found.1 From this standpoint, a slice of experience, which Oakeshott calls “a mode of experience,” may be considered an abstraction from reality, not reality itself.2 The tendency to confuse the abstraction of ideology with the concrete world of experience was a fundamental error which Oakeshott sought constantly to avoid, as his later work indicates. This awareness generates his philosophic suspicion of all ideological generalizations.

Even history can provide no sure guide to political activities:

Both the active politician and the writer on politics, both the reformer and the conservator invoke the oracle of history and interpret its answer according to their predisposition, giving out their conclusions as the lessons of history. But history itself has neither the ideas nor the language wherewith to teach practical conclusions.3

History itself is experience, just like the experience of the contemporary environment.4 Abstractions drawn from it, since they describe only a portion of reality, cannot be wholly “true.” Patriotism, a love of the past, is often based on a fancied past, or a remembered past, rather than the historical past. It is this part, which is known as our past, which forms each nation’s private view of history.5 It is in that “political past” rather than the actual, historical past that Oakeshott finds the source of a nation’s traditions and customs. It may not be “truth” but it may provide the best guide to future action.

Many political beliefs which appear to be coherent doctrines turn out on examination to be less than that. It may be that “the social and political beliefs of representative democracy are more in the nature of a tradition and a tendency than a well-knit doctrine.”6 Most competing contemporary ideologies are superficial and non-philosophical, enjoying in this respect no superiority over contemporary democracy. Among contemporary social theories “the Catholic social and political doctrine stands far above any of the others, for it at least has the help of a profound thinker, St. Thomas Aquinas, and is not dependent for its philosophy on some vague leaning towards a half understood and wholly confused pragmatism.”7 Oakeshott finds many of the principles of conservatism in Catholic philosophy.8 Certainly, he feels we have much to learn from the coherence and consistency of that system.

In traditional political philosophy the search for an entire and coherent understanding of political life as an aspect of total civilization engaged the greatest thinkers. In high political philosophy mere reflection on political life is replaced by “the intellectual restoration of a unity damaged and impaired by the normal negligence of human partiality.”9 Such classical political philosophies are not now being written. Political ideology is a pale shadow of a political philosophy, an abstraction of an abstraction. In any event, the great political philosophies did not believe, as do contemporary ideologists, that political activity is a good in itself, but believed, instead, that politics “is contributory to an end which it cannot itself bring about.”10 With the disappearance of the belief in high moral ends, the scope of activity of the political thinker is diminished. Oakeshott himself plays the role of critic of ideology rather than builder of a massive system of political philosophy.

IN OUR LIFETIME the attempts to construct metaphysical systems of thought have been replaced by the construction of scientific theories. Oakeshott, although respectful of the achievements of modern science, is suspicious of attempts to transfer the methods of science to the arena of politics.11 Yet the belief “that politics, at their best, are the science of the arrangement and improvement of human societies in accordance with certain abstract ideals” has been the main “inspiration of political activity in Western Europe for the last two hundred years.”12 Fascism, rather than being a reaction to the rational ideas of contemporary liberalism, is seen by Oakeshott as a rejection instead of far older traditional ideas of representative government, ideas which liberalism, with its project of a science of politics, also rejects.13 This is what makes scientific politics a dangerous conception. The academic study called “political science” is also condemned by Oakeshott as unsuitable even for university undergraduates, because no such scientific understanding as yet exists.14

This is an age in which Oakeshott sees an almost universal speculative interest in morals and politics; but Oakeshott feels that undue interest in morals and politics is a sign of an unhealthy society It is an age when the coherence of a universal philosophical scheme is impossible.15 The alleged stability of earlier ages is largely exaggerated. It may be true that other ages “possessed more reliable habits of behaviour, but a clear view of the ends of human existence has never been enjoyed except by a few rare individuals.”16

In a scientific age such as our own, Oakeshott reminds us that the methods of science depend upon the faithfulness of the scientist “to the traditions of scientific inquiry.”17 Politics itself is a “second-rate form of human activity, neither an art nor a science.”18 The study of politics “should be an oecological study of a tradition of behaviour,”19 not a pursuit for false hopes of human engineering or a rashly optimistic science of politics. We must be humble in the face of human variety and the fallibility of human “rationality.” No political theory or ideology can grasp the whole of experience. There is no chart of politically rational theory.

In political activity, then, men set sail on a boundless and bottomless sea; there is neither harbour for shelter nor floor for anchorage, neither starting-place nor appointed destination.20

The concept of tradition is central to Oakeshott’s approach. A “tradition of behaviour” is “a principle of continuity” which is derived from the past and extends into the future. It is not learned as an abstract idea, but is a “concrete, coherent manner of living in all its intricateness.”21 The coherence of human activity, what gives life its pattern, is inherent in the activity of living. The elements of the pattern are called “customs, traditions, laws.”22 Oakeshott goes so far as to say that “in general, constitutional tradition is a good substitute for philosophy.”23 In simpler terms, a “tradition of behaviour” is a better guide to political conduct than any theory or ideology because it is based upon the whole of life, rather than upon some abstraction derived from life. Experience is a more trustworthy guide than any book, but “even in the most favourable circumstances,” it may take “two or three generations to acquire” the political traditions of a society.24

AN IDEOLOGY, FOR Oakeshott, is an abridgement of a tradition. The conversion of a “habit of behaviour” into a comparatively rigid system of abstract ideas creates a “politics of destruction and creation” as a substitute for “the politics of repair.”25 It is of the essential character of an ideology that it presents itself as knowledge. However, ideology “by itself is always an insufficient guide” because political fact, actual experience, must always precede political activity.26 Ideology, then, is always false knowledge because it is an abstraction of reality, even at its best. Oakeshott finds himself opposed to ideology in any form, including conservative ideology. It is the distinguishing feature of Oakeshott’s variety of conservatism that he sees the opposition of conservatism and liberalism as one of contrary claims to knowledge. This peculiar feature of Oakeshott’s conservatism is that it attempts to make the lack of a specific program or doctrine a merit rather than a shortcoming. The conservative is one who is sceptical “about the possibility of . . . perfection,” one who is determined “not to allow human life to be perverted by the tyranny of a person or fixed by the tyranny of an idea.”27

Oakeshott identifies the source of ideological infection as the development of what he calls “modern Rationalism.” The rationalist stands for independence of mind on all subjects at all times, irrespective of tradition or authority. Confident of his capacity for “reason” the rationalist “has no sense of the cumulation of experience”28 and optimistically pursues the “politics of perfection” heedless of the limits of unaided reason and regardless of the disturbances and injuries he may cause. The philosophy of John Locke, of Bentham, and Godwin encouraged this faith which has resulted in the mixed blessings represented by the ideas of “open diplomacy, the planned society, federalism, nationalism, votes for women, the world state and the destruction of the Austro-Hungarian Empire.”29 The flaw in the rationalist theory is the assumption of the existence of a mistake-proof apparatus called a “mind” which is an independent instrument made capable of dealing with experience by means of externally imposed educational training.30 Brushing aside accumulated customs and habits, the rationalist romantically assumes that each generation begins with a fresh political and social slate. The existence of a mentally discoverable “natural law” is a typical rationalist error, and is rejected by Oakeshott.”31

Against the charge that the rejection of rationalism creates an irrational position, Oakeshott replies that rationalism itself is not a “rational” doctrine and that the definition of “rational” behavior includes more than the rationalists admit. Oakeshott defines “rational” conduct as “faithfulness to the knowledge we have of how to conduct the specific activity we are engaged in,” and “acting in such a way that the coherence of the idiom of activity to which the conduct belongs is preserved and possibly enhanced.”32 Scientific activity is “rational” to the extent to which it follows its own traditions of procedure. Political activity is “rational” to the extent that the politician proceeds in accordance with the customs and traditions of the nation.

Nations are “hereditary, co-operative groups, many of them of ancient lineage” which enjoy a past, a present and a future.33 Democracy and other ideologies are not subject to export because they are not formal belief systems but are contained within the tradition of a nation. Politics, then, becomes a “pursuit of intimations,”34 a present conversation with the past on behalf of the future.

THE BUSINESS OF THE politician is to prevent the concentration of power in a society and to break up all concentrations of power which have the appearance of becoming dangerous.35 Thus Oakeshott is strongly in favor of anti-monopoly legislation, although also a friend of the institution of private property. He defends private property as the surest bulwark for personal liberty; but the maximum diffusion of the power which springs from ownership is the proven source of liberty. Massive corporate businesses or massive labor organizations both threaten liberty by imposing limitations upon the prerogatives of individual behavior. The possession of private property permits a man to choose among groups and to move freely within society; and a freely competing economic system is the essence of personal freedom.36

Collectivism is the enemy of freedom, but it may be found in many guises. Collectivism and freedom are the real alternatives. The collectivist rejects the idea of the diffusion of power and insists upon the necessity of central direction. The creation of great unified power is necessary to this end and ultimately a collectivist government must enforce its imposed order at the price of liberty.37 The collectivist fails to understand the “poetic character of all human activity” and the ultimate result of such a society is that “everybody (with the partial exception of the planners themselves) is deprived of so much freedom that the regime would at once be recognized as a tyranny” if we were not deluded into thinking that we had exchanged a new freedom for our lost freedom.38

The word “conservative” itself is really a description of an emotional disposition more than a creed or doctrine. It signifies a preference for the familiar to the unknown, experience to the experimental, an acceptance of the need of change within the framework of accepted rules and practices. The conservative, who is a reluctant innovator, believes that the role of government is limited to keeping the peace, rather than including the power to impose choices. He believes this because he is suspicious of any claims to political expertise, and aware of the essentially selfish pursuit of happiness. Yet a man could be radical in all other respects while being conservative in his politics. The conservative accepts the world and people as they are, with all their flaws and imperfections.39 Ultimately, Oakeshott is in agreement with Hobbes, whom he greatly admires, in that:

Here in civil society is neither fulfillment nor wisdom to discern fulfillment, but peace . . . the only thing in human life, on Hobbes’s theory, that can be permanently established.40

SOME HAVE SAID OF Oakeshott that his ideas are unoriginal, but it may be, as Bernard Crick suggests, that Oakeshott has written “two or three of the subtlest political essays of the century.”41 Another critic claims that Oakeshott has assumed the posture of anti-politics, of one who is bored with politics and politicians.42 Regardless of the final appraisal, it still seems true, as Russell Kirk insists, that Oakeshott’s essays reveal the low estate of American conservatism.43 It is this author’s contention that a thorough reading of Oakeshott’s writings reveals a consistent philosophical approach to modern conservatism, a consistency lacking in American conservatism, as it is in most contemporary political thought.

If Oakeshott is extremely historical, this is not inappropriate for a conservative.44 If Oakeshott is deeply concerned with the dangers of planning, this too, is consistent with the mainstream of modern conservatism.45 It is true, as Peter Viereck insists, that American conservatism lacks a long tradition rooted in feudalism;46 but that does not necessarily disprove Oakeshott’s contention that all societies have traditions which are guides to present action. Neither is it a fair criticism to suggest that a conservative position need be doctrinaire, or contain particular programs or actions.47

The achievement of Prof. Oakeshott has been to provide a contemporary restatement of the essence of conservatism, based on a consistently maintained philosophical position. In doing so, Oakeshott borrows from many preceding conservative thinkers, composing an amalgam of his own. Although rejecting, with Burke, Hobbes’s attempt to create a scientific politics,48 Prof. Oakeshott is close to accepting Hobbes’s view of human nature. Although discarding the idea of natural rights, Oakeshott retains a deep admiration for Aquinas, from whom Oakeshott draws some of his own views regarding the proper role of government.49 Oakeshott admittedly builds on the work of Henry Simons in his essay on private property,50 but he goes beyond Simons to provide a logical defense of private property as a necessary part of individual freedom. Oakeshott is not merely echoing Burke’s famous statement: “The individual is foolish . . . but the species is wise,”51 when he rests his case against rationalism by citing the “tradition of behavior.” He is trying, instead, to counteract the abstractions of rationalist innovators with the concrete facts of everyday and historical experience. It is Oakeshott’s aim to indicate the method of political knowledge and by his success in achieving that goal he must be judged.

Two Decades of Economic Planning in Yugoslavia

LJUBO SIRC*

DURING THE SECOND World War, the Yugoslav Communists were so certain of being in possession of the absolute truth that they did not hesitate to jockey for power from the very beginning of the struggle against the occupying German and Italian armies. Thus in Slovenia, they issued a decree, at the end of 1941, to the effect that anybody fighting the enemy outside the Communist dominated Liberation Front would be considered a traitor and liquidated. Many a non-Communist resistant was driven into collaboration by the resulting pressure.

Simultaneously the Communists, whose number was twelve thousand at the beginning of hostilities, persistently denied any intention of introducing “social changes” after the war and kept promising free elections and everything that goes with them. Yugoslavia being a country of small landowners, the main field for recruitment of the partisan detachments was the peasantry, which made it expedient for the Communists to underline the advantages individual peasants would obtain should the Communist rule be established. They promised the peasants more land, although nobody knew where more land was to come from, as the entire arable area was under cultivation and the share of big estates was negligible. The Communist flirtation with the peasants led some foreign observers into believing that they were agrarian revolutionaries.

In order to obtain Allied recognition, Tito, who had emerged as the leader of the National Liberation movement, concluded an agreement with the exiled Yugoslav government in London after repeated interventions by the leading Allied personalities on both sides. This agreement guaranteed all sorts of democratic liberties for the population, politicians, and the democratic parties. Yet when the war was over, Yugoslavia found itself firmly under the control of the Liberation Army, officered mainly by Communists, and of the political police, an exclusively Communist domain. The letter of the agreement with the London Government may have been sometimes abided by, but the spirit certainly never was.

During 1945 and 1946 hardly any reforms were introduced; the time was spent on tracking down “collaborators” and bringing them to justice, but the definition of “collaboration” was so wide that practically anybody, patriot or no patriot, whom the Communists did not like could be fitted in. If somebody could not, there was always the possibility of trumped up charges.

In addition, many people were killed without any trial at all. Although the Nazi rule in Yugoslavia was extremely ruthless, the Germans are quite right in pointing out that a large part of the over 1.5 million Yugoslav war victims were due to internal strife; and a substantial number of these were liquidated by the Communists, sometimes for good reason, sometimes only in preparation for the final take-over. The massacre continued after the war when some 300,000 people were done away with; the prisons overflowed and many people, mainly members of the German minority in Yugoslavia, were driven over the border to Austria. There was sufficient horror around to terrorize the population into silent submission.

A person must be utterly convinced of the correctness of his cause to take upon himself this destruction of human life and this infliction of suffering to establish himself firmly in the saddle. Even if one accepts the possibility of such firm conviction—and many Communists must have been convinced that they were up to something remarkable—there is still something pathological about it.

In the eyes of the Yugoslav Communists, Stalin was the depository of all wisdom and knowledge of how to abolish all evils and human failings. They had some difficulties with him, but this was because the Yugoslavs were too zealous to tolerate Stalin’s cautiousness. His aim was to make the Western Allies believe that he had turned into a Russian nationalist, and then to take them by surprise when they least expected it. Stalin was afraid that the Yugoslavs would spoil his game by their zeal and even advised them to pose as monarchists.

The obvious thing for the Yugoslav admirers of Stalin to do was to take a leaf out of the Soviet book, which they did. In the spring of 1947, they produced a Five Year Plan which was closely modeled on the Soviet plan, although the two countries could hardly be more different than they are. The Soviet Union possesses a vast territory and has a population at least ten times larger than Yugoslavia. The traditional economic freedom of peasants in Yugoslavia goes partly back to the Austrian Emperor Joseph II in the second half of the eighteenth century, and in other parts to the liberation from the Turks, while in Russia the feudal relations lingered almost into the twentieth century. The individual character of Yugoslav agriculture was further strengthened by a land reform after the first World War.

In spite of these substantial differences between the two countries, the Yugoslav Communists applied the Soviet methods of economic development, possibly pushing them to the extreme, so that the French Professor Marczewski went on record as remarking on the planned rate of growth of the Yugoslav national income:

In fact, in the long term the average rate of growth proposed for the national income seems impossible to achieve. Until now the highest rates of growth in the economic history of the world have never surpassed 8 per cent. . . . It is impossible to explain these figures except by the complete lack of experience of the Yugoslav planners who appear to have copied Soviet rates without understanding what they really meant.1

THE SYSTEM TAKEN over from the Soviets tended to rigidity and uniformity because it did not know any of the economic and accounting calculations which help the enterpreneur at least approximately adjust to circumstances and thus contribute to the maximization of welfare. Yugoslav planning was based on a few very simple tenets.

The central principle was, naturally, the abolition of private property, from which according to Marx every evil stems. His reason for this is the theory of surplus value, the part of the product allotted to capital owners. Following the labor theory of value, all charges for the use of producer goods were disregarded except for a purely nominal interest rate on short-term bank credits.

The only criterion used for the allocation of capital and other resources was the teaching of Marxist dialectical materialism that the means of production determine productive relations, which means the social system. Their conclusion was that the most modern equipment should be used, because this would help the introduction of “socialism” as a stage on the way to full “communism.” The choice of technique was not adapted to circumstances, and, as in the Soviet Union, it was thought and planned that manufacturing had to prevail over other branches of the economy, particularly agriculture; within manufacturing industry by far the greatest stress had to be on the production of producer goods and power; and within this framework the leading link was machine building. Even the disparaged market indicators were harnessed in the interest of this policy. The fixed prices of raw materials and capital goods were kept very low, and the prices of consumer goods very high. Yet since no distortion of prices could make possible a shift in the direction of the economy exactly as desired by the Communists, the market forces were considered as “anarchy” fed by “spontaneity,” and soon completely disregarded and replaced by planning—the “conscious direction of extended reproduction.” At the same time, the fact that people value present things more than future things, that food today is more important than a television set ten years hence, was neglected, which led to the adoption of a practically unlimited planning horizon, to the idea that even the most important present needs can be sacrificed to the “luminous future.”

The collective satisfaction of needs was considered much preferable to individual consumption, so that most “distribution” tended to be organized by the state. Distribution, however, was considered “non-productive” anyway and neglected, so that often even available goods did not reach the public.

Before this system copied from the Soviet Union could get underway, Stalin found that Tito had become too big for his shoes and decided to cut him down to size. In a way, the Yugoslav Communists were more Stalinist than Stalin and several times tried to jump the gun, act in advance of the time table carefully worked out by Stalin to take the West by surprise and gain full control of Eastern Europe. Stalin thought that this would not do and was in addition jealous of Tito, who succeeded in making a name for himself in Yugoslavia and in the world, so he did not entirely depend on Stalin’s reflected glory. Soon there was a complete rift with which ideology had very little if anything to do.

One of the proofs for this explanation is that the first reaction of the Yugoslavs was an attempt to prove that they were good Communists. They clamped down on their bourgeoisie and dragged more people to prison and administrative forced labor camps. A fully fledged collectivization campaign was started and agriculture utterly disrupted. When it proved that it was impossible to fulfill the Five Year Plan of 1947, the priorities provided for in this Plan were brought into play, carrying further the initial lopsidedness. Inessential investment, i.e., investment in consumer goods production was dropped, and the concentration on heavy industry stepped up. To make things worse, even depreciation was not used for the replacement of worn-out equipment, but was channelled into new industries, so that many branches, especially agriculture, textiles, and housing, suffered from disinvestment. In other words, the branches most essential for supplying the population with necessities were run down in order to provide means for the completion of the Giants of the Five Year Plan. Table I shows the intended and the actual structure of “productive” investment.

Thus many more resources were concentrated on manufacturing industry in the period 1950-56 than originally planned, although the first Five Year Plan was underfulfilled in all other respects. In fact, it had to be extended for another year, to 1952, and from then economic activity was carried on until the end of 1956 on the basis of provisional one-year plans—due to the fact that the entire basis of planning began to be questioned. Nevertheless, the belief that the concentration on “key projects” would solve all problems persisted in spite of all the other changes described below. From 1947 until 1956, the investment in “basic” industries (iron and nonferrous metallurgy, machine tools, ship-building, electrical appliances, and construction materials) amounted to 51.2 per cent of industrial investment and reached its peak in 1952 with 57.3 per cent. To this 31 per cent invested in power production has to be added.

A change came about only in 1957, when the second Five Year Plan was introduced with the aim of “eliminating the disproportions [shortages and bottlenecks] arising from the policy of industrialization and forced expansion of heavy industry.”2 In this period the concentration of investment in industry was reduced to just over 40 per cent, of which only 31 per cent went into “basic” branches.

TABLE 1 ALLOCATION OF TOTAL INVESTMENT
Period	Industry	Agriculture	Forrestry	Construction	Transport	Trade
1947/49	50.3	8.4	3.2	3.7	28.9	4.9
1950/52	64.3	5.6	1.2	3.7	22.4	2.4
1953/56	58.7	6.4	1.7	3.3	23.7	4.9
1957/59	43.3	17.3	1.7	3.6	26.1	8.5
1960/62	50.9	14.3	1.8	3.3	21.2	8.7
1963/65	54.4	12.6	1.9	3.5	17.6	9.0
Plan for 1947/51	51.8	8.6	1.6	1.6	31.0	3.5

WHEN THE YUGOSLAV Communists finally admitted in 1950 that Stalin was directly involved here, and not some obscure Soviet officials who misinformed Stalin about the real state of affairs in Yugoslavia, they also embarked on the first deviation from the Soviet orthodoxy. They abandoned—at least in theory—the principle of “odinanachalie,” of the absolute control by the government appointed factory manager, and introduced workers’ councils.

Yet they also began to realize that the running of factories according to physical targets, laid down in detail by the centralized plan, led to a much worse confusion and anarchy than had ever been seen under the working of spontaneous market forces. The search started for simplified indicators which would make the functioning of the factories coherent and would also give some scope for the workers’ administration. Marxism, however, proved a tremendous stumbling block in this respect. The wish was to introduce some kind of “automatism,” or invisible hand, by which well managed factories would be rewarded and badly managed works punished. It became obvious that it did matter how much capital was used by an enterprise and that therefore there had to be some kind of charge on the use of capital; but this could not be the interest rate, because it was deemed to be un-Marxist.

Ten years later, the same problem arose in the Soviet Union, when Liberman’s proposals to introduce a profit rate were aired. From many quarters they were assailed and it was claimed3 that in a Marxist country there could be no serious consideration of using a percentage charge on capital—profit rate—but that a percentage charge on wages fund—a “surplus” rate—was the only possible solution. Such a surplus rate was introduced in Yugoslavia in 1952 under the name of “the rate of accumulation.” This rate not surprisingly proved to be unworkable and was replaced after a year of confusion, in 1954, by the interest rate. Thus the first of the basic Marxist principles which should have brought Yugoslavia unprecedented prosperity went overboard, under the impact of the requirements of economic efficiency. Of course, the interest rate did not and still does not work properly in Yugoslavia, but the need for a scarcity charge on capital was at least recognized.

The introduction of the “automatism” also called for commodity prices based on supply and demand, but those in charge still believed that manipulated prices could influence actual economic relations in desired directions, and therefore decided to keep the prices of raw materials and agricultural goods down. In fact the agricultural prices were so low that they depressed the real earnings of peasants from sales of their produce in 1952 on average to 42 per cent of their pre-war earnings. On top of this, there came very high direct taxes.

The passive resistance of the peasants, however, forced the Communists to stop their campaign for agricultural collectivization by direct and indirect pressure, initiated in 1948, and to allow them to pull out of government-sponsored cooperatives, which they almost all did. For a few years the peasants were left alone, which led to a considerable improvement in agricultural production as compared with the disastrous year 1952, when agricultural production was lower by about one-third than in the late 1930’s.

After the introduction of interest rates, the intention was to allocate the capital to those offering the highest return at capital auctions, but this soon proved unacceptable. The expected return on capital invested in heavy industries was so low that investment into these branches would remain well under that desired by the government. Therefore, auctions between industries were abandoned and limited to auctions within the same branch, while the allocation between branches was according to the provisional yearly plans, and later to the Five Year 1957-61 Plan which however provided, as mentioned, for a much more sensible distribution between consumer goods and producer goods and thus led to a considerable increase in consumption from the very low level of 1952, when consumption, total and per capita, might have been down by as much as one-third of the pre-war consumption. In fact, during this relaxation in 1957-58, total consumption probably caught up with what it was before the war.

But while consumption improved, the key projects worked at low capacities, which made the Communists think that there must be something wrong even with the very halfhearted application of market indicators. Since they could no longer make up their minds to scrap the market altogether, they found the ingenious solution that the market was all right for day to day decisions, but “the fundamental economic development could not be spontaneous, but had to be based on the conscious social process of reproduction by planned direction.” And the third Five Year Plan of 1961-65 was designed for “further accelerated economic expansion on the basis of a more balanced growth.”

As a result fixed investment in basic industries, which was reduced to 13 per cent of “productive investment” in 1958 from 37 per cent in 1952, went up again to 29 per cent in 1961-62. Total fixed industrial investment jumped from 42 in 1959 to 52 in 1961 at the expense of agricultural investment, down from 21 per cent in 1959 to 15 per cent in 1961, and investment in transport, down from 24 per cent in 1959 (28 in 1957) to 16 per cent in 1962 (17 in 1963).

THIS REVERSAL TO Marxist-Leninist investment policy resulted in the economic crises of 1962 and 1965, marked by stepped up production of unsaleable goods, increase in foreign debt, and inflation. One is entitled to wonder how it was possible to revert to the old pattern of investment in spite of the fact that market forces had made themselves increasingly felt since 1952. The answer is that investment allocation remained concentrated in the hands of various federal and other investment funds (in 1964, 68 per cent of total fixed investment) which obeyed Plans and political criteria instead of economic indicators, and that the rest was mainly re-investment. In addition, old habits were at work—anything metallic was still considered to bring prestige—and the interest rates were still pegged too low, particularly in view of the inflation, to force investors to be selective and choose the most efficient projects.

The result of these attempts in the 1960’s for achieving accelerated growth by renewed concentration on equipment production led to more increases in inventories (see Table 2) and to the establishment of more capacities never to be used.

TABLE 2 INVENTORY INCREASES AND RATES OF GROWTH
Year	Inventory Increases (percentage of national income)	Annual rates of growth
Year	Inventory Increases (percentage of national income)	Industrial Production	Capital Goods Production
1958	9.0	11.0	13.0
1959	11.1	13.0	17.0
1960	11.0	15.0	20.0
1961	8.8	7.0	4.0
1962	6.3	7.0	1.0
1963	8.9	16.0	15.0
1964	13.0	16.0	19.0
1965	14.6	8.0	N.A.

The figures on inventory increases in Table 2 are from the OECD report on Yugoslavia in 1965, with the exception of the figures for 1964 and 1965 which come from official Yugoslav abstracts which in 1964 admitted, for the first time, a substantial “difference” defined as “a result of opposite fluctuations [including changes in prices, customs duties, inventories, period delimitations, statistical coverage, etc.].” Clearly, “inventories” tucked away amongst other items account for the predominant part of this “difference.” There are no corresponding figures for new capacities established but never used, but it is allowable to estimate that in the years of higher growth of industrial production about one-third of this production will never satisfy any human needs at all. (In 1965 “increases in stocks” was finally introduced as a separate item in the national income accounts.)

Such wasteful factories would have to go out of business if their inventory keeping were not financed by a constant flow of bank credit. This credit cannot be repaid, of course, because the inventories are never sold, which all leads to inflation (taking the form of considerable increases in money supply if not always of rising prices, since these are largely controlled and were completely frozen in the spring of 1965). From 1956 to 1964, the volume of production (including waste) rose 2.2 times and the money supply 4.7 times, from 553 billion to 2,577 billion dinars, to which another 1344 billion dinars have to be added, although the enterprises, public bodies, and individuals holding them are restricted in their use. As a consequence, the purchasing power of the dinar in terms of living costs was reduced to 3.8 per cent of its pre-war purchasing power, although the normal pre-war circulation of banknotes (6 billion dinars) was restored in 1945.

The OECD report of 1965 advocated an incomes policy for Yugoslavia because the OECD experts believed they had traced the origin of Yugoslav inflation primarily to incomes and not to the financing of increasing stocks of unusable products. Yet, in spite of more freedom for profit distribution, if any is made, within the enterprise it is hard to believe that the Communist League had so lost its grip over the workers administration that they could not stop any unwarranted increase in incomes. On the other hand, there would often be no money to distribute, were the banks not prepared to finance increasing stocks of inventories. The OECD also stressed that there was no deficit budgeting on current account; but deficit budgeting on capital account is no better, especially in Yugoslavia where investment frequently produces no fruit at all.

As a result of this strange kind of economic development, Yugoslavia kept sucking in large quantities of foreign resources, which had to tide her over bottlenecks in the heavy industries, production of primary goods, and food production. From 1952 to 1962 it had been receiving American aid to the tune of about $100 million a year. Besides, it contracted foreign debts amounting to $800 to $1000 million by 1962 and to $1400 million by 1965. For obvious reasons this could not continue forever. For this reason, the dinar was devalued from 50 to 300 dinars to the dollar in 1952, to 750 in 1962, and to 1250 in 1965. Because of various duties and subsidies and of tying imports to exports, these moves in the exchange rate do not influence foreign trade directly; but they are a reflection of the dinar’s loss of purchasing power.

Another lapse back from the more liberal policies of the mid-1950’s was an attempt to win the fight against private peasants by starving them of any investment, which began to be concentrated on the 15 per cent of the agricultural area owned by “social estates.” The only result here was that the law of diminishing returns set in, and the products of the “estates” cost twice as much as the products of private peasants. Furthermore, the “estates” worked at losses in spite of various bonuses paid to them.

THE CRISIS INTO which the Yugoslav economy ran in 1962 and again in 1965 posed once more the classic question of the proper economic role of planning and the market. The crisis of 1962 was so clearly engineered by the Plan providing for high investment in “basic” industries that President Tito called for “better planning.” There was even talk about scrapping the Plan altogether, which did not happen, but the confidence in the Plan fell so much that it was no longer considered a particularly useful guide for anybody.

Waterston described the equivocal situation in 1962:

. . . the federal plan no longer lays down production quotas for enterprises. This does not mean, however, contend the planners that the federal plan has become only a hypothesis of the future development of the economy, for the overall targets of the economy as shown in the federal plan, are still legally binding. Nevertheless, the practical significance of this position is hard to understand, since no person or enterprise is held legally accountable for fulfilling any target of the federal plans.4

The reforms as envisaged after the 1962 crisis were not carried through because the Communists shrank back from laying large portions of industry idle and relaxing more controls. The result was another crisis in 1965, which shook the planning even further.

The European Economic Commission Report on Planning published in 1965 says—obviously on the basis of a Yugoslav official submission—that, in Yugoslavia, the enterprises enjoy:

complete independence of action [and that they] use plans as indications of expected changes in demand . . . in so far as they prove to be correct forecasts of the market situation—though they can follow their own market research if they consider that to be more accurate.”5

This is apparently the end of all claims that plans possess extraordinary virtues. It is intended now to drop annual plans altogether and to decentralize investment in the hands of enterprises. A new mid-term plan is being worked out, but there are already voices which warn against “planning burdened with high growth rates.”6 In 1962 an official spokesman thought that it was better “doing less but doing it better.”

One of the goals the Communists set out to accomplish was the equalization of the economic development of various Yugoslav regions, which were and continue to be very differently developed. Slovenia has almost three times the national income per capita of Macedonia, Bosnia, or Montenegro (see Table 3).

TABLE 3 NATIONAL INCOME BY REGION
Region	Nat’l Income per capita	Average Wages
Serbia	90	93
Croatia	120	104
Slovenia	195	130
Bosnia-Herz	71	94
Macedonia	69	86
Montenegro	73	91
(Average wage-level nationwide = 100)

The equalization should have been brought about by considerable transfers of accumulated capital from some regions to others. Table 4 is an indication of what was happening.

The table shows that in spite of the substantial shifts of capital from more developed regions to less developed, there was hardly any change in the shares of various regions in the social product. This is understandable, since production does not depend only—or even foremostly—on the availability of capital. Substantial parts of the national income of Slovenia and of the more developed parts of Croatia and Serbia were withdrawn and allotted to less developed Southeastern regions. There was hardly any proportionate economic progress in the subsidized regions, however, which increased the resentment in the parts of the country which had to supply the subsidies. There is talk now of reducing the transfers to only 2 or 3 per cent of the national income.7

Such large-scale transfers of resources are possible only under a regime which controls—through various budgets and funds—about one half of the national income. Under normal circumstances there would be transfers from region to region—although much smaller—in the form of private investment which would remain the property of people from the transfering region and would be more properly managed.

The yearly rate of growth of the total Yugoslav national income from 1947 to 1962 was 6.6 per cent, and of the national income per capita 5.4 per cent. This is less than in the cases of Greece, Italy, and Western Germany, but the picture becomes worse if it is taken into account that in these countries personal consumption rose in step with the national income, while in Yugoslavia it was badly lagging behind. Before the war, in Yugoslavia at least 75 per cent of the national income was consumed; after the war the personal consumption (including social insurance benefits) fell to 50 per cent of the national income: from 1947 to 1962 total output increased by 132 per cent over the pre-war level, but consumption by only about 66 per cent. This gives a compound annual rate of the growth in total consumption of 3.4 per cent and of the consumption per capita of 2.2 per cent.

This is particularly bad in view of the enormous efforts: Investment regularly amounted to about 30 per cent of the national income. However, the capital-output ratio was very bad for a country at the Yugoslav stage of development, amounting to 6.5/1 for the period 1948-1964. In 1948-1952 it was 10/1, then it fell to 3/1 in the comparatively relaxed period from 1956-1960, but again climbed to 8/1 in the subsequent period up to 1964, when a new Marxist-Leninist investment drive was started. The Communists themselves admit this to be very bad and discuss the possibility of a capital-output ratio of 2.5/1 in the future.

The welfare of the Yugoslav population was sacrificed to investment and to government expenditure which very often did not contribute to welfare at all, but was used for public ostentation. The investment was in branches of industry for which the Yugoslav market is too small, for which there are not enough raw materials and other cooperating factors, and which produce at cost far above the world market price.8 Thus many of the new industries work at low capacities (e.g., machine tools at below 60 per cent) although they turn out unsaleable goods (according to the Vice-Chairman of the central government, Gligorov, the value of inventories in 1967 was about 80 per cent of the national income, while 20 to 30 per cent is more consistent with experience in market economies. It cannot even be hoped that these new branches will contribute to the welfare of the population later on. They are obsolete and badly organized.

WHAT WAS WRONG? The Communist economic ideology, as explained at the beginning of this article, led the Yugoslav government to embark on large-scale investment in branches of industry for which there was not sufficient management talent or technical skill. The Yugoslav technicians managed to produce complicated machinery, but not at a cost comparable with costs in other countries.

TABLE 4 REGIONAL PRODUCTION AND CAPITAL TRANSFERS
Region	Percentage of Fixed Capital		Percentage of Nat’l Income
Region	1947	1960	1947	1960
Serbia	31.5	36.3	42.8	38.0
Croatia	(58.2)	(41.7)	26.0	26.0
Slovenia	(58.2)	(41.7)	14.2	15.7
Bosnia-Herz	6.1	15.8	11.5	13.4
Macedonia	3.4	4.1	5.0	5.0
Montenegro	0.8	2.1	1.2	1.4

The production of some kinds of machines was pushed at full speed, while other machines needed in conjunction with them or raw materials and intermediate products were disregarded because they were technically less glamorous. Large numbers of unskilled workers were available, but the investment was not adapted to them. When streamlining began, numerous workers had to be dismissed. About 10 per cent of the industrial labor force was unemployed, and about as many had to leave to work abroad. This latter development was particularly grave for Communists who had always represented migration as a consequence of capitalist incompetence.

The most advanced and capital-intensive techniques were used, while there was a shortage of capital and highly skilled labor and unskilled labor was available in abundance. Thus the equipment produced is even today so expensive that it is often cheaper to do things by hand, not to speak of the cheapness of imported equipment.

There is such a discrepancy between supply and demand, particularly of producer goods, that the economy can only run at tolerable utilization of capacity if large-scale investment continues to be carried through, to the obvious danger of more capacity being created which it will be difficult to utilize. This circular investment has been indulged in until now; but at present the futility of this practice seems to be fully realized, because it has become clear that the capital structure of productive capacity is completely divorced from both the derived demand for producer goods and the final demand for consumer goods. Very large quantities of resources are used, but this results in very little welfare.

In many ways it is much easier to start from scratch than to put right a structure completely distorted by investment which bears no relation to actual demand. To make matters worse, the system has for such a long time favored passive obedience that it is now very difficult to change the attitudes of the population and prod people into being resourceful and prepared to take responsibility. The will of the Yugoslav population to work and to show initiative was also shattered by the fact that personal incomes and personal consumption were exceedingly low when compared with the efforts which were demanded from them, particularly when the resulting public and investment funds seemed clearly to be largely wasted.

The Communist government has come to realize this and now says that increased personal incomes and personal consumption are a sine qua non for further increases in production; but this is very difficult to achieve when the economy is as distorted as all Communist economies are. When Malenkov tried to step up consumer goods production in the Soviet Union in 1954, this proved impossible because of the lack of raw materials and appropriate machinery.9 There, as in Yugoslavia, the development of heavy industry proved to bear no relation to the actual needs of the country and to be largely “l’art pour l’art.”

THE YUGOSLAV REFORM in 1965 should have remedied this situation by substantially cutting down on investment and by sharply reducing government expenditure. This was easier said than done, because it meant a further reduction in the already low utilization of heavy industry capacities, the laying idle of many prestige works, and the dismissal of large numbers of workers. These workers should in fact have been made available for the production of badly needed consumer goods, but who was to organize their production and where were the equipment and raw materials to come from? The planners had not kept in mind in the previous decades that machine tool manufacture has ultimately to provide specific machines for specific purposes and not just large numbers of machines. When the Yugoslav government decreed that henceforward investment would have to be “profitable” and not “political” it meant precisely that it had to result in equipment needed for the production of consumer goods which are in demand and should not merely swell production by whatever it happened to turn out.

Even if the Yugoslav heavy industry today produces the right type of equipment, it is still often not at the right price or of the right quality. This could be corrected by opening the borders and exposing Yugoslav producers to the competition of foreign products; but since the Yugoslav productivity in the prestige industries preferred by the Communist planners is so low that they had no hope of competing at the previous exchange rate, this was changed by 66 per cent to protect domestic producers from the same competition Yugoslavia invited. Since there was also a shortage of raw materials, it was decided to increase their prices to make their production more attractive and force enterprises to use them with greater care and economy. The agrarian prices were raised by 32 per cent, coal prices by 36 per cent, etc. This has led to major price adjustments: the cost of living rose by 30 to 50 per cent, according to region, and even by 70 per cent in some cities. All this has led to a new inflationary round, by which, it is considered, the devaluation of 1965 has been rendered useless.

This is not the main problem at the moment, however. While cuts in investment, reductions in government expenditure, opening of the borders, and readjustment of prices were certainly moves in the right direction, the question remains: Who is going to run the Yugoslav economy, who is going to be the moving spirit behind it? Up until now the Communists have relied on the central planners, but now it turns out that they are unable to coordinate and control the economy. The present answer seems to be decentralization of investment and current decision-making in the hands of workers’ councils. Is this going to work? For at least a decade, Yugoslav authors have been stressing that economic responsibility has to be reintroduced if the economy is to start working properly again. Lack of responsibility was one of the main criticisms against central planning. What is the likelihood that this criticism will be met by the new decentralized system?

It would seem that the link between a worker and his enterprise is insufficient to expect any responsibility. The worst that can happen to an irresponsible worker is that the factory might close down and the worker have to find a new post, where he would obtain the same guaranteed income as before. On the other hand, if the enterprise worked particularly well, workers would be paid higher wages out of profits. However, substantial disparities between wages of equally skilled workers were normally felt to be an injustice, so that in Yugoslavia constant attempts had to be made at “equalizing the business conditions,” that is eliminating the influences of market changes and technological choices on profit. What then becomes of enterpreneurial functions? Further, workers feel that they cannot be responsible for the original decision of founding an enterprise (which cannot be made by the workers’ council) that does not possess any potential for profitability, or for the current decisions which they cannot understand. There must be many of such latter decisions, because of those employed in the economy 7.1 per cent have no education at all and about 50 per cent have only four or fewer years of school.

In view of this still troubled situation, there are voices that it would be better to revert to “enlightened state-appointed management” than to rely entirely on workers’ councils. It is unlikely that this would take the country very far, because the men who are presently called managers are appointed on the basis of political instead of economic criteria, and their education is bad—25 per cent have only a primary school education.

It is hard to imagine how any progress can be achieved in the market economy without falling back on private initiative—enterprises directed by those who can make them work at a profit—at least in agriculture and small-scale industrial and artisan establishments. Something on these lines seems to be happening in Yugoslavia, although very slowly and tentatively. The larger enterprises can hardly be saved without large-scale technical, commercial, and financial cooperation from abroad.

In 1967, investment in fixed capital has been reduced and national income and industrial production have been stagnating. Stocks of finished goods keep increasing, but, because of a credit squeeze, they have to be financed from capital accumulations intended for new fixed investment. The impression is that, without solving the question of economic responsibility and initiative, necessary structural changes will not take place.

After twenty years, it has become abundantly clear that the economic principles introduced by the Yugoslav Communists in the late 1940’s did not lead to unprecedented growth but to utter confusion and waste. One is told that the advantages of “private ownership of the means of production” are being widely discussed in the Yugoslav Communist circles. This amazing development amounts to a complete reversal of the original Marxist teaching, in the name of which the Communists felt entitled to impose suffering on the population and suppress all liberties.

After a full circle has been thus concluded, disillusionment and disgust prevail in Yugoslavia among the youth, as exemplified in a letter addressed “To you, our fathers” and published in the students’ weekly of Ljubljana:

I believed in what we then called “our glorious past.” I believed in what we called “searching” or “the present” and what we called “our future” Today, I no longer believe in all this. I do not believe in the society which by force we want to call socialist. I do not demand answers to my questions, but I do demand the right to find them myself and to be allowed to stick to them. This is all.10

It turned out that freedom of thought and freedom of speech are not an impediment to economic progress, but rather a necessity if economic policy reminiscent more of black magic than of a rational approach is to be prevented.

Marxism and Alienation

DAVID LEVY*

NOT TOO MANY YEARS ago there was no Marxist challenge to the rationale for a market system which deserved to be taken seriously; Mises and friends did their work so well that advanced Western socialists adopted the market as their own, and even communists learned the glories of directing resource allocation by an Invisible Hand. Much has changed; a streamlined form of Marxism has returned to present the market with a most formidable challenge. The thesis, which we shall call the alienation argument, that the market’s operation systematically forces workers to participate in a psychologically damaging method of production, is widely pressed by a number of well known social thinkers,1 a surprisingly large number to judge their influence from the almost nonexistent counter attacks. The major deterrent to hostile examination of this challenge must be the patent absurdity to which the conclusions can be pushed. That the subject matter of the challenges seems to fall within disciplines which are not overly concerned with a study of the workings of the market system has also not helped stimulate debate.

Interest in alienation arose with the discovery and gradual translation of an earlier and previously unknown body of Marx’s writings which can justify the creation of a greatly different Marxism: both more liberal and not chargeable for unfulfilled predictions and internal contradictions. The tale of this growing discussion and the application of his ideas has been told many times in readily available form.2

The proponents of the alienation argument contend that a market system with an advanced form of the division of labor wreaks psychological havoc on workers. Although the philosophy of alienation can be linked with the theory that man is alienated whenever he works for income rather than for the sake of the work itself,3 we shall only deal with a more relevant version which contends that the division of labor by its infinite specialization imposes costs on the workers. Or, as Marx writes in Capital:

manufacture . . . seizes labour-power by its very roots. It converts the labourer into a crippled monstrosity, by forcing his detail dexterity at the expense of a world of productive capabilities and instincts. . . .4

Or, from a non-Marxist vantage, Daniel Bell argues:

The most characteristic fact about the American factory worker today—and probably the worker in factories in other countries as well—is his lack of interest in work. Few individuals think of “the job” as a place to seek any fulfilment. There is quite often the camaraderie of the shop, the joking, gossip, and politicking of group life. But work itself, the daily tasks which the individual is called upon to perform, lacks any real challenge, and is seen only as an irksome chore to be shirked, or to be finished as fast as possible.5

Our analysis will proceed by a roundabout historical method: we will examine the alienation argument as it was developed in Capital to clear up some muddled interpretations of Marx’s ideas and then we will give some examples of a related discussion in classical economic literature. By reformulating the alienation argument to meet one of the few detailed criticisms, we can easily see a failure which is so fundamental that no reformulation can make it stand as a viable non-ascetic criticism of a functioning market system. Those interested neither in an examination of the later Marxian system nor a glance at a bit of economic intellectual history are invited or warned to skip the next two sections.

WE WILL NOT GO INTO a detailed examination of the early body of Marx’s thought, for there are no conflicting interpretations in which we will be interested. There are, however, two dominant interpretations of Marx’s thoughts on alienation in Capital. Eric Fromm and others6 argue against the older “exploitation” reading, according to which Marx’s denunciation of capitalism depends on his theory that the worker is paid less than his value; they stress that alienation is the dominant idea in Marx’s published economic writings as well as in the earlier unpublished ones. Bell and others7 defend the classical view and argue that in Capital problems of alienation are forgotten, or as Bell says, relegated to literary references and treated only as a problem of technology to be solved by automation.

The critical point to remember while reading Marx is the importance of technology in his system. It is changing technology which brings about changes in the social order, the division of labor, and through its influence on the division of labor, to alienation in capitalism

The first conception of the division of labor which Marx considers is co-operation, where work differs from a purely atomistic variety largely in that workers are side by side. Although this form of organization requires a mass of capital, the lack of highly developed tools or machines implies that individuals do not specialize in production:

Simple co-operation is always the prevailing form, in those branches of production in which capital operates on a large scale, and division of labour and machinery play but a subordinate part.8

Co-operation does not present psychological problems of alienation:

mere social contact begest in most industries an emulation and a stimulation of the animal spirits that heighten the efficiency of each individual workman.9

When the labourer co-operates systematically with others, he strips off the fetters of his individuality, and develops the capabilities of his species.10

The next form of the division of labor, manufacturing, arises

from the union of various independent handicrafts, which become stripped of their independence and specialised to such an extent as to be reduced to mere supplementary partial processes in the production of one particular commodity.11

Or, alternatively

from the co-operation of artificers of one handicraft; it splits up the particular handicraft into its various detail operations, isolating, and making these operations independent of one another up to the point where each becomes the exclusive function of a particular labourer.12

Here the influence of technology is clearly emphasized.

Manufacture is characterised by the differentiation of the instruments of labour—a differentiation whereby implements of a given sort acquire fixed shapes, adapted to each particular application. . . . The manufacturing period simplifies, improves, and multiplies the implements of labour, by adapting them to the exclusively special functions of each detail labourer. It thus creates at the same time one of the material conditions for the existence of machinery . . .13

The result is a “productive mechanism whose parts are human beings.”14

Here the adverse effects of the division of labor make their unwelcome appearance: “The one-sidedness and the deficiencies of the detail labourer become perfections when he is a part of the collective labourer.”15 Yet this leads to the further development of a class of the unskilled which

develops a one-sided speciality into a perfection, at the expense of the whole of a man’s working capacity, it also begins to make a speciality of the absence of all development.16

Marx compares the difference between co-operation and manufacture in a passage which we have partially quoted before:

While simple co-operation leaves the mode of working by the individual for the most part unchanged, manufacture thoroughly revolutionises it, and seizes labour-power by its very roots. It converts the labourer into a crippled monstrosity, by forcing his detail dexterity at the expense of a world of productive capabilities and instincts. . . .17

There is yet a final stage in the development of the division of labor, however, as modern industry destroys the technical foundations of the older division of labor:

Modern Industry never looks upon and treats the existing form of a process as final. The technical basis of that industry is therefore revolutionary, while all earlier modes of production were essentially conservative. . . . it is continually causing changes not only in the technical basis of production, but also in the functions of the labourer, and in the social combinations of the labour-process.18

With the need for mobility caused by modern industry’s creation of an industrial reserve army (in conjunction with the falling rate of profit and the class polarization), the bondage of man to detail work is swept away. Modern industry should

replace [the] detail-worker of to-day, crippled by life-long repetition of one and the same trivial operation, and thus reduced to the mere fragment of a man, by the fully developed individual, fit for a variety of labours, ready to face any change of production.19

We see therefore that alienation cannot be Capital’s chief criticism of capitalism, because in fully developed capitalism, alienation is no longer a problem.

Fromm’s reading of Marx is singularly unfortunate; he has ignored the crucial changes in technology. Further, if it were true that Marx is seriously concerned with alienation in Capital we would expect the same picture of the ideal state which we find in his earlier writings to emerge. Instead of the utopian version in German Ideology:

In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd or critic.20

we find in Capital:

when the working-class comes into power, as inevitably it must, technical instruction, both theoretical and practical, will take its proper place in the working-class schools.21

Bell’s reading of Marx is closer but he fails to see Marx’s detailed treatment of the progress of the division of labor and alienation. Further, alienation does not disappear with automation, but with the creation of interindustry mobility brought about by the industrial reserve army.

A REFINED VERSION of the alienation argument goes back to Adam Smith:22

In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging; and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, . . . . His dexterity at his own particular trade seems, in this manner, to be acquired at the expence of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.23

This is not an isolated point in the Wealth of Nations for Smith argues at length that barbaric societies and agricultural occupations are intellectually stimulating and in a similar vein “people of some rank and fortune” don’t have the problem of the laboring poor.24

This argument clearly differs from Marx’s in important respects; Smith ignores any implications for the welfare of the workers and worries only about the effect of the division of labor on the worker’s ability to be a good citizen. Nonetheless Smith and Marx agree on the central thesis that productive activity is the dominant force shaping the worker’s mental state; although Smith is optimistic enough to think that education can remedy the problem.25

Smith’s argument is reproduced by J. B. Say:

A man, whose whole life is devoted to the execution of a single operation, will most assuredly acquire the faculty of executing it better and quicker than others; but he will, at the same time, be rendered less fit for every other occupation, corporeal or intellectual; his other faculties will be gradually blunted or extinguished; and the man, as an individual will degenerate in consequence.26

Say’s American editor disagrees, and cites Dugald Stewart’s argument:

The extensive propagation of light and refinement arising from the influence of the press, aided by the spirit of commerce, seems to be the remedy to be provided by nature against the fatal effects which would otherwise be produced, by the subdivision of labour accompanying the progress of the mechanical arts: nor is any thing wanting to make the remedy effectual, but wise institutions to facilitate general instruction, and to adapt the education of individuals to the stations they are to occupy.27

An interesting critical literature arose in the notes of various editions of the Wealth of Nations. McCulloch strongly dissents from Smith’s argument in his edition.

As well as asserting that the evidence contradicts the proposition that manufacturing laborers make bad soldiers,28 he argues:

The weaver, and other mechanics of Glasgow, Manchester, Birmingham, etc. possess far more general and useful information than is possessed by the agricultural labourers of any part of the empire. And this is really what a more unprejudiced inquiry into the subject would lead to anticipate. The various occupations in which the husbandman successively engages, their constant liability to be affected by so variable a power as the weather, and the perpetual change in the appearance of the objects which daily meet his eyes, and with which he is conversant, occupy his attention, and render him a stranger to that ennui and desire for adventitious excitement which must ever be felt by those who are constantly engaged in burnishing the point of a pin, or in performing the same endless routine of precisely similar operations. This want of excitement cannot, however, be so cheaply or effectually gratified in any way as it may be by stimulating, that is, by cultivating the mental powers. Most workmen have no time for dissipation; and though they had, the wages of labour in old settled and densely peopled countries are too low, and the propensity to save and accumulate too powerful, to permit their generally seeking to divert themselves by indulging in riot and excess. They are thus driven to seek for recreation in mental excitement; and the circumstances under which they are placed afford them every possible facility for gratifying themselves in this manner. By working together in considerable numbers they have what the agriculturists generally want, constant opportunities of discussing every topic of interest or importance; they are thus gradually trained to habits of thinking and reflection; their intellects are sharpened by the collision of conflicting opinions; and a small contribution from each individual enables them to obtain supplies of newspapers and of the cheaper class of periodical publications.29

Thus the worker’s job influences his intelligence but in exactly the opposite manner that Smith argues. Further and more importantly, intelligence is stimulated by social contact and discussion, a point Smith did not make.

Rogers, while not necessarily contradicting Smith’s analysis, argues that the evils which Smith denounces are no longer relevant:

The experience of modern society affords a corrective to this sweeping charge. The manufacturing populations of many large towns, among whom the division of labour is carried to the farthest limit conceivable, are honourably distinguished by the energy with which they have furthered the means of local education through the maintenance of mechanics’ institutes, libraries, and schools. This machinery of adult education has been generally adopted in many towns, especially in Lancashire and Yorkshire, and there are no persons more alive to the benefits of education than the factory hands of the north-west counties of England. There were other reasons which made such people indifferent to public questions in Smith’s days, and in particular the exclusion of the mass of artisans from all political power.30

The Garnier edition defends Smith from McCulloch:

This passage on the moral superiority of the agricultural population relative to the urban working class is one which best illustrates the sincerity and genius of the founder of political economy. . . . McCulloch asserts, in a note, if the agricultural population had ever been intellectually and morally superior to the industrial population, it is not today; he maintains that today the English industrial workers are more intelligent than the farming peasantry. . . . McCulloch is completely refuted by the recent inquiries into the condition of the handloom weavers. The commissioners state that the weavers were formerly an intelligent and moral class, but from poverty they have become brutalized and morally degraded, falling into the condition of the lowest class of the English nation. . . . Therefore Adam Smith is still right today; agricultural work is more favorable to morality, human understanding, and health than modern industrial work, especially as it is found in England today.31

Marshall devotes a considerable discussion to the related problem of industrial boredom: he is interested in the worker’s quality of life, and if a more tedious but less tiring work allows pursuit of intellectually stimulating interests outside the job, then there is no social problem, only cause for rejoicing.32 Thus the type of work in which a man is engaged forms only a slight influence in the stimulation of intelligence. Marshall also observes that any truly tedious job will be the easiest to mechanize and hence will most likely disappear.33

Undoubtedly there is a much greater literature on the subject than I have indicated, both in the studies of the conditions of the poor and perhaps in the theoretical literature of the eighteenth and nineteenth centuries.34 However, one bit of information exists which should settle any interest in priorities. In the introduction to the new edition of Rae’s Life of Adam Smith, Jacob Viner writes:

There is one issue on which Smith and Ferguson cover common ground, as also John Millar, Robert Wallace, and later, after the publication of The Wealth of Nations, a host of writers including notably Karl Marx, and that is the proposition that division of labor tends to degrade labor, the “Entfremdung” or “alienation” issue. Here Adam Smith has clear claims to priority as far as British writers are concerned, although according to Marx, who was not acquainted with Smith’s contributions to the Edinburgh Review in 1755, it was Smith who was taught by Ferguson, rather than the other way around. But all of these, except perhaps Marx, were started on this line of thought by a “French author,” or at least an author writing in French, Jean Jacques Rousseau, and none of them made a secret of his indebtedness. . . .35

IN THE ONE elaborate attack on the alienation argument I know, Nathaniel Branden makes two objections to the theory of alienation which are relevant for our purposes: (i) the division of labor and specialization produces material well-being on which our lives and happiness depend, and (ii) the wages paid to a man are objectively determined by market forces, “the only rational and just principles of exchange.”36

These criticisms, however, do not seem to come to grips with at least some of the proponents of the alienation argument. Consider Bell’s point:

For the unions to challenge the work process [to help rid the economy of alienation] would require a radical challenge to society as a whole: . . . it is to question the logic of a consumption economy whose prime consideration is lower costs and increasing output. Moreover, how could any single enterprise, in a competitive situation, increase its costs by reorganizing the flow of work, without falling behind its competitors? But this is not only a failing of “capitalist” society. In the socialist societies, sadly, there have been almost no imaginative attempts to think through the meaning of the work process. . . .

For underdeveloped countries, where living standards are pitifully low, it is difficult to talk of sacrificing production in order to make work more meaningful to the worker. Yet these are not, nor should they be, put in either/or terms. Engineers have learned that if efficiency considerations are pushed too far—if work is broken down into the most minute parts and made completely monotonous—they become self-defeating. The question is always one of “how much.” But the question must be stated and placed in the forefront of considerations.37

This argument surely does not involve a denial of the need for a division of labor or indeed of a market process.

To meet Branden’s criticisms formally we can reformulate the alienation argument as follows: workers have preferences for material wage income, income in the form of leisure, and in addition, income in the form of the type of productive activity in which they are engaged. Hence, they are willing to exchange a certain amount of wage goods for an amount of leisure or employment in a more desirable productive activity. Yet, the argument goes, the capitalistic system is rigid and run by those interested in producing material goods, the worker has no choice; he is denied the ability to choose between the forms of income, he is forced to take material goods and forego employment in desirable productive processes. Thus because wages and productive activities are joint operations it is impossible for a worker to obtain an optimal allocation of income. In a word, he is alienated. The solution presumably is some form of economic system in which a more optimal form of the division of labor can emerge.

This formulation meets Branden’s objections: the question is not whether income is desirable (his first point) or whether a functioning competitive labor market produces an optimum in terms of material income (his second) but whether the market correctly allocates intrapersonal distribution of income, broadly defined.

Once the problem is so stated the solution is trivial. Take the case: How does the market allocate income between material income and leisure? If there are workers who would like to exchange wage goods for more leisure, then there exists a wage such that it will be to the advantage of the employer to adjust the terms of employment to the workers’ desires. This is not to say the employer is necessarily indifferent between employees working any hours at a given wage rate; but that it is possible to adjust production to different hours desired, if workers are willing to pay for more leisure by accepting lower wages. This argument is valid under the condition that production functions are uniform throughout the economy. On a more reasonable assumption of different production processes, workers can allocate themselves among employers with different desires for hours to be worked and hence receive a more constant wage rate. (Significantly Marx could not see how the market would operate in this case—in his system, hours of employment are determined by political power).38

The problem of the exchange of wage goods for employment in different production processes is completely analogous: the employer would be willing to make the trade if it meant that he could produce with less cost. This would be the case if his laborers accept a real wage sufficiently low to compensate for the employer’s loss in adopting a different process of production. Again the argument is correct even in the case where all industry production functions are the same, and of course the effect becomes stronger when we recognize the existence of a myriad of production processes.

The implication of this argument is that alienation in a functioning market economy is simply an aspect of scarcity. Income in any form is rarely a free good and we should expect workers to be dissatisfied about their productive activity, in the sense that they would be rather doing something else, if their material income were not changed, just as we should expect that they do not have enough material goods to satisfy all of their needs. Industrial alienation is thus no viable criticism of the market any more than scarcity would be.

If the concept of alienation or worker dissatisfaction is to have any use, another major problem must be cleared up: how is on the job income shared among the family? Income and leisure can be shared, but it is not at all obvious that income from employment in a more desirable production process can be similarly distributed. A serious study of worker “dissatisfaction” would have to investigate this relationship.

The Economic and Social Impact of Free Tuition

ARMEN A. ALCHIAN*

RARELY DO educational issues provoke as much passion as the proposal to raise tuition fees in California colleges. Unfortunately, the passion has not been matched by reason—it is hard to find a clear statement of the consequences of or reasons for a zero tuition or a high tuition fee. It is hard to determine from the public comments whether the antagonists differ about what the consequences of alternative tuition arrangements would be or have different preferences with respect to well perceived consequences. Some defenders of zero tuition have asserted that zero tuition is necessary for aid to poorer students, for the maintenance of our great system of higher education, for the preservation of free and prosperous society, for achievement of great social benefits, for educational opportunity for all, is a hallowed century-old tradition, and that tuition is a tax on education. Some proponents of tuition fees have argued, for example, that the university and colleges are harboring delinquents who would not be there with full tuition, the poor are aiding the rich, students should pay tuition in order to appreciate their education, taxes are excessive, and low tuition requires exploitation of an underpaid faculty, to cite a few. Most of these arguments are so patently fallacious or nonsensical or irrelevant that they do disservice to the more intelligent arguments. But there are some propositions that merit closer examination. To evaluate them it is first necessary to identify at some length the issues that are involved in analyzing and thereby choosing among the alternatives—and in the process make clear my own preferences. If I overlook significant objectives or consequences, perhaps others will be stimulated to fill the gaps.

The issues represent a classic topic for applied economics—the effects of different means of allocating scarce resources among competing claimants. A rational analysis of the consequences of tuition systems requires separation of two questions: (1) Who should bear the costs of education? (2) If someone other than the student should pay for his education, in what form should the aid be given?

Unless the distinction between these two issues is grasped, confusion is inevitable. The case for zero tuition is not established by demonstrating that aid to students is desirable. Full tuition may still be desirable, with the desired aid taking the form of explicit grants-in-aid or scholarships from which the student pays the tuition fee of his chosen school.

The issue of the most desirable form of aid should be separated from still another closely related question: What is the desired method of financing and controlling colleges—as distinct from financing students? For example, aid to students in the form of zero tuition means also that the state finances the colleges’ activities directly by legislative appropriations with the students and their parents having less influence on financing and controlling the activities of colleges. Where student aid is in the form of grants-in-aid or scholarships, students and parents paying full tuition to their chosen colleges have a greater role in determining which colleges shall be financed and rewarded for superior performances. Recognition of these differences in effect explains why some people have asserted the administrators and members of state universities and colleges, which are currently financed by direct legislative appropriation, have sought from self-interest, rather than educational interest, to maintain the impression that zero tuition is the only feasible or sensible means of aid to students—in order to repress student influence and control over the colleges while retaining the influence of politicians.

ADVOCATES OF subsidization of college students (regardless of the method) assume that if each student bore the full cost there would be too little college education as well as a decrease of educational opportunity. What makes it desirable to have more education than if students pay full costs? Several arguments are advanced. Let us discuss these in ascending order of sophistication.

(1) “Although the costs of education are less than the gains to the students themselves, some are unable to finance their education now. A subsidy would provide educational opportunity to the poor.” (2) “Cultural education, though not profitable in market earnings, and hence not capable of being paid for out of enhanced earnings, is nevertheless desirable.” (3) “Even if every student acquires as much education as is worthwhile to him, he would take too little, because the individual ignores the beneficial social gains indirectly conferred on other members of society—giving what some people call ‘external social effects.’ Therefore, society at large should induce students to take more education than indicated by their private interests.”

The argument that the poor can not afford to pay for a profitable college education is deceptive. What is meant by a “poor” person. Is he a college calibre student? All college calibre students are rich in both a monetary and non-monetary sense. Their inherited superior mental talent—human capital—is great wealth. For example, the college calibre student is worth on the average about $200,000, and on the average, approximately $20,000-$50,000 of that has been estimated as the enhanced value derived from college training, depending upon his major field and profession.

Failure to perceive this inherent wealth of college calibre students reflects ignorance of two economic facts. One is the enormous human wealth in our society. Every good educator recognizes that inanimate capital goods are not the only forms of wealth. The second fact is the difference between current earnings and wealth. For example, a man with a million dollars worth of growing trees, or untapped oil is a rich man—though he is not now marketing any of his wealth or services. So it is with the college calibre student. Though his current market earnings are small, his wealth—the present wealth value of his future earnings—is larger than for the average person. This is true no matter what the current earnings or wealth of his parents. It is wealth, not current earnings nor parent’s wealth, that is the measure of a student’s richness. College calibre students with low current earnings are not poor. Subsidized higher education, whether by zero tuition, scholarships, or zero interest loans, grants the college student a second windfall—a subsidy to exploit his initial windfall inheritance of talent. This is equivalent to subsidizing drilling costs for owners of oil-bearing lands in Texas.

There remains an even more seriously deceptive ambiguity—that between the subsidization of college education and provision of educational opportunity. Educational opportunity is provided if any person who can benefit from attending college is enabled to do so despite smallness of current earnings. Nothing in the provision of full educational opportunity implies that students who are financed during college should not later repay out of their enhanced earnings those who financed that education. Not to ask for repayment is to grant students a gift of wealth at the expense of those who do not attend college or who attend tuition colleges and pay for themselves. This is true because, for one reason, our tax bills do not distinguish between those directly benefitted by having obtained a zero tuition educational subsidy and those not so benefitted. Alumni with higher incomes pay more taxes, but they do not pay more than people with equal incomes who financed their own education or never went to college.

MANY DISCUSSIONS about educational opportunity refer to proportions of students from poorer and richer families at tuition free colleges. However strong the emotional appeal, the proportion of rich and poor family students is relevant only to the separate issue of wealth redistribution, per se, consequent to state operated zero tuition education. It has nothing to do with the extent of educational opportunity. Though data for California colleges and taxes suggest that lower income groups provide a smaller proportion of students than of taxes to support education, such comparisons are irrelevant, so far as provision of educational opportunity is concerned. These data tell how much wealth redistribution there is among the less educated, the poor, the educated, and the rich. That wealth redistribution is good or bad depending upon whether one believes the educational system should be used as a device to redistribute wealth as well as to enhance wealth, knowledge, and educational opportunity. No matter how zero tuition in tax supported schools may redistribute wealth, the provision of full educational opportunity does not require redistributions of wealth. Yet, it seems to me, many people confuse these two entirely separate issues or think the latter is necessary for the former. To think that college calibre students should be given zero tuition is to think that smart people should be given wealth at the expense of the less smart.

When some zero tuition university alumni say that without zero tuition they could not have attended college, they should have a modest concern for the implications of that statement. One poor, “uneducated” resident of Watts, upon hearing Ralph Bunche say that he could not have had a college education unless tuition were free, opined, “Perhaps it’s time he repay out of his higher income for that privilege granted him by taxes on us Negroes who never went to college.” That reply spots the difference between educational opportunity and a redistribution of wealth.

Full educational opportunity would be provided if college calibre students could borrow against their future enhanced earnings. Students could repay out of their enhanced future earnings. Although, currently, loans are available from private lenders and also from publicly supported loans, a subsidy could provide a state guarantee of repayment of educational loans exactly as housing loans are guaranteed for veterans. Students could select among optional repayment methods. Some could contract to repay in full with interest; others could opt for a sort of insurance system, whereby the amount repaid was related to their income, with upper and lower limits to amounts repaid being specified. A host of possibilities are available. In fact today with income taxes, the college alumni are repaying part of the educational costs via taxes (but so are others who did not attend college).

Some people are impressed by the size of the debt that a college graduate would have to repay, but they should be impressed with the fact that the debt is less than the enhanced earnings he has thereby obtained and is an indication of the wealth bonanza given the student who is subsidized by society.

There remains one more facet of the educational opportunity argument. Even if a college education may be a very profitable investment for some person, he may, because of inexperience or lack of confidence, not appreciate his situation or be willing to borrow at available rates of interest. This presumably is an argument for subsidizing those students who lack confidence or understanding of their possibilities, and it may be a meaningful argument on its own ground, but it is not an argument for subsidizing “poor” students.

Pleas are made for subsidizing cultural education which, though it may add nothing to the student’s future market earnings, will enhance his general welfare. But a person’s welfare is increased if he gets more food, housing, recreation, beer drinking, and fancier cars. It would seem therefore that the relevant argument for helping students is one of helping them regardless of whether they wish their welfare increased via cultural education or better food. A grant of money to be spent as the recipient deems appropriate is an efficient form of aid—as judged by the recipient. Subsidized cultural education rather than money gifts could be justified if the giver knows better than the recipient what is good for the recipient. I cannot make that leap of faith for the collegiate student, although other people do it easily and confidently.

A case can be made for subsidizing the poor and the rich to take more education—more than a person would take when motivated by his own interests alone. It is often said there are privately unheeded, net social benefits, so each person will under-invest in education from the social point of view, regardless of whether he is rich or poor; but we must separate the illusory from the real external available gains.

EDUCATION MAKES A person more productive, as a doctor, lawyer, merchant, or engineer. Other people benefit from his greater productivity, because more engineers enable lower costs of engineering services for the rest of society. Engineers, looking only to their private gain would, it is said, undervalue the total benefit of having more engineers; too few people would seek sufficient engineering education. If this sounds persuasive, economics can teach you something. The increased supply of engineers reduces the prices of engineering services—even if by only a trivial amount—and thereby reduces the income of other engineers. Their income loss is the gain to the rest of society. This is a transfer of income from existing engineers to non-engineers; it is not a net social gain. The benefitted parties gain at the expense of existing members of the engineering profession, who lose some of their scarcity value as more educated people are created. This is a transfer from the more educated to the less educated. A striking awareness of this effect is evident in the advocacy by labor groups of immigration restriction. Restricting the inflow of laborers of particular skills prevents reductions in wages of incumbent workers with similar skills and prevents a transfer of wealth from them to the rest of American society. An immigrant or a more educated person would have provided an increased product and he would have obtained that value by the sale of his services, but the lower wages to that type of services would have transferred some of the incomes of similar workers to the rest of society. This external transfer effect is not a net contribution to social output. It is not a reason for subsidizing education.

For external effects to serve as a valid basis for more education two conditions must be satisfied: (1) There must be a net social gain (not transfer) unheeded by the student. The ability to read reduces dangers and inconvenience to other people; ability to be sanitary enhances health of other people, or economic education may—but probably will not—prevent passage of socially detrimental, special interest legislation. These are examples of education with external social gains, which we shall assume are not heeded by the student in his private actions because they do not affect the marketable value of his services. Professional education of doctors, engineers, lawyers, economists, mathematicians, etc., has not been shown to fit in that category. Perhaps education at the undergraduate collegiate level in the elements of law, psychology, political science, mathematics, economics may make for better non-market decisions or actions.

I confess to a strong suspicion that such education is most significant at the grade school level, diminishes at higher levels, and disappears for professional or cultural, artistic, personal satisfaction courses, and is possibly reversed at graduate levels (by overtraining and insistence on excessively high standards of training for granting of licenses to practice in some professions—though this is a point the validity of which is not crucial to the main issue here).

(2) The second condition is that there must be further external gains unheeded by students at the college level. The fact of having achieved net external gains is not sufficient to warrant subsidization. The crucial condition is the failure to achieve still further available incremental net social gain from further education. Before concluding that they exist because of a tendency for people to ignore them, we should note that people attend college for reasons other than financial marketable gain. College attendance for personal reasons includes cultural, artistic education, and attendance to find mates. All these tend to extend education beyond maximizing one’s market wealth and possibly even beyond that yielding unheeded social gains. But the facts are not conclusive in either direction.

Incidentally, an especially common but erroneous contention, presumably relying on the external effect, is that the growth, prosperity, and unusual position of California depend upon the free tuition, higher education system. What does this mean? If this means that free tuition has contributed to higher wealth for the educated then this is no argument for either free tuition or more education. If it means the prosperity and growth of aircraft, electronics, motion picture, or agricultural industries in California are dependent upon free tuition, the contention remains unsupported by any analytic or factual evidence, and in fact can be falsified by comparisons with other states. Even if it could be demonstrated that subsidized higher education was responsible, the issue of free tuition would still not be touched. If this means that free tuition did attract some people to seek their education in California, they proceeded to reap the gain in their own higher income. If they provided a real net social benefit, it should have exceeded the extent of their subsidization to be justifiable. The same proposition holds for residents of California. If this argument is accepted, it is difficult to justify charging newcomers a full tuition while permitting existing residents a “free tuition.” Yet, we have seen no proponent of zero tuition advocate zero tuition for all newcomers from all other states. If this means that the higher incomes for more people increase tax receipts, then the relevance of that completely escapes me. If this means California has a larger population, then this means higher land prices. But in so far as benefits to “California” have any relevance, I believe they should be viewed as benefits to people in California rather than as benefits to owners of a geographically identified piece of land, unless by “California” one means “land owners or politicians,” who indeed do prefer larger populations as a source of political power and higher land values.

To induce students to take more education than is privately worth their while—in order to obtain the otherwise unheeded external gains—does call for payments to students. If a student were paid for doing what he would have done anyway, or if his education were subsidized to increase his wealth, he would be receiving a gift. But a payment (whether as zero tuition or a money payment) to the student to extend his education, for the sake of achieving real, external benefits that he otherwise would have not produced, is a payment for services, much as if he were to build houses, for the benefit of the rest of society. Such payments may well be independent of the income or future income of the student as well as of his parents. Though there is nothing that says the rich would provide less real external effects from more education, my conjecture is that the rich would in any event take more education than the poor for cultural reasons and would therefore require a smaller inducement to take the “optimal” extra amount of education for external social benefits. This can form a basis for advocating more educational inducements to the poor than to the rich, but not necessarily by a zero tuition inducement to rich and poor alike.

It should be noted however that there is already subsidization of higher education by private philanthropy on a scale that staggers the imagination. The endowment funds of colleges and philanthropic foundations aiding education runs into the scores of billions. Even if only half that were used to subsidize education (and the rest for research), the amount can not be regarded as minor, on any standard.

NO MATTER WHAT your beliefs about the validity or relevance of the preceding consideration, let us accept them, for the sake of analysis of alternative means of providing aid, for full educational opportunity, cultural aid, or extra inducements to education. (Of course, those who think the preceding arguments are too weak to warrant taxpayers’ giving aid to college students can ignore all that follows, for to them there is no case for any state action, nor of zero tuition). The rest will want to ask, “What is the best form of aid or inducement?”

We can enable or induce students to take more education with the following offer: “On the condition that you take certain kinds of education, we shall bear enough of the costs to induce you to do so.” The costs he would have borne are the income foresaken and the tuition costs. (Food and living costs can be ignored for he would be incurring them no matter what he did). Which of the following is the preferred way of extending that aid to potential students? (1) We pay directly the costs of extra education by operating the school to provide the extra education; this is the zero tuition system. (2) We pay him an equal amount on the condition he take the additional, specified type of education, but he decides which school to attend and he pays the tuition to the school. This is an educational voucher or G.I. type educational bill-of-rights (used after World War II for veterans).

The first requires also that the state directly finance and operate the school providing the education; the second permits the student to choose from competing schools and direct payment to the school he chooses. These two alternatives are sufficient to illustrate the major implications of zero versus high tuition modes of subsidy. The wealth effect for the student is superficially the same in either case, and the financial cost to the subscriber can be the same in each case, once it is decided how much education to subsidize for whom. The costs to the subscriber may be the same, but the results are not.

In the California state system of higher education, the tuition fee is zero for all state schools and for all kinds of training, regardless of whether it contributes to a net social gain or not, and regardless of how rich the student is.

Zero tuition implies that the appropriate aid or subsidy for every student of a state school is exactly equal to the tuition cost no matter what subject he takes. No basis for zero tuitions as being the proper amount has ever been presented; maybe the aid should be even larger, to compensate for foresaken earnings.

Because low or zero-tuition schools are believed to have a larger proportion of less wealthy students than high tuition colleges, zero tuition schools are believed to do a better job of providing educational opportunity for less wealthy students. But this entails the earlier confusion between provision of opportunity and provision of a wealth bonanza; zero tuition schools give bigger wealth gifts to the mentally able students than do the high tuition schools.

Of course, higher tuition will, other things left unchanged, reduce the number of financially insecure students attending tuition colleges. The case for raising tuition is not that aid should be denied but instead that “zero tuition” is a less desirable means of providing aid to students; it entails undersirable controls and political interference with education and lowers the quality of education. Yet there is another method of providing full educational opportunity and at the same time improving the quality and quantity of education and reducing political controls. That alternative is a system of full tuition supplemented by grants-in-aid to those who qualify as financially insecure and deserving students.

It is important to note that the financing of colleges to provide education is different from subsidizing students. The zero tuition is a subsidy to the college as well as to the student. Subsidies to students alone can be provided with a full tuition system; in fact they are now being so provided by many private schools that do charge full tuition.

The alternative to the zero tuition method of providing educational opportunity or giving aid is tuition, with loans or with grants of money. The critical difference, in my opinion, between no tuition and tuition, under these circumstances, is that the former lets the state politician and college administrator and faculty directly exert more control over education whereas the latter enables the student to exercise more power by his choice of college.

Subsidies to whatever extent desired could be provided by a system of grants-in-aid via scholarships. That would appear to be more expensive administratively (but only administratively) than zero tuition, precisely because an effort is made to eliminate the haphazard bonanzas in the zero tuition system. The presumption is that the cost of selecting the students to be subsidized is less than the savings from the avoidance of subsidies to all students.

Tuition with grants-in-aid to students is not visionary. It is proven, practical, economical and currently used. New York State already has a large system of Regents scholarships. California has a smaller scale system with about 2,000 scholarships. After World War II, the Federal government granted millions of veterans educational vouchers for tuition, books, and incidental expenses under an enormously successful act known as the G.I. Bill. All these granted aid regardless of the student’s current financial status. In California the university and state colleges now receive about $500 million annually directly from the legislature. That would finance 250,000 scholarships of $2000 each. The university’s budget would finance 125,000 students, more than the number now attending.

At present many arrangements exist whereby private colleges take into account the financial status of students in deciding how much tuition to charge each student. Even more efficient would be a system of loans with interest to be repaid after graduation out of the student’s enhanced earnings. Under a loan system, the problem of filtering rich students from the financially distressed would be reduced to trivial dimensions, since the rich would have little, if anything, to gain by borrowing. This would provide full educational opportunity with little need for a means test.

Full tuition does not in any way restrict the achievability of full education opportunity. That can be achieved explicitly and openly by the scope of grants and subsidized loans. Just as social security and welfare payments are made in money with the recipient choosing his purchases from competing producers, so a full tuition system with grants-in-aid or loans would enable separation of the issue of the amount, if any, of the subsidy from that of the best means of providing and controlling education.

Under a system of full tuition fees, with whatever loans and scholarship voucher grants are deemed desirable, students could choose their education from the whole world. Any accredited college or educational institution whether it be for barbers, television technicians, beauty operators, mechanics, butchers, doctors, lawyers, or historians could serve. Ours would then really be the best educational system in the world; no longer would Californians be confined to California state operated schools. Whatever one’s beliefs about the desirable degree of subsidy for more education, and whatever his beliefs about who should get it, the full tuition voucher coupled with scholarships and loans would magically open a new, larger world of choice.

An alternative form of aid to students is a tax-credit allowance whereby parents, or students, could later receive a tax offset to their payments for tuition. This would put private college students on a more equal basis with low tuition public colleges. In my opinion, this would be equality at the wrong level of equality. Rather than give tax credits as a means of maintaining zero tuition. I would prefer placing a tax liability on students attending public colleges with low or zero tuition. Whereas the tax credit provides subsidies and aid to all students at the expense of non-students, the tax-liability assessment places the costs of providing the education more squarely on those who benefit from the education. A tax credit gives equal treatment to private and public college students—at the expense of non-students. A tax-liability gives equality to private and public college students and to college and non-college people, with each bearing only the costs of service provided for their benefit. If tax-liability assessments are out of the question politically, the tax credit would be the next best; but it would not achieve one of the major purposes of a full tuition system.

WITH FULL COST tuition, competition among California colleges, and even among academic departments would change. Instead of competition for funds being negotiated among university committees, deans, regents, state college boards, and legislators, competition would rely more on classroom behavior of instructors who would be more dependent on student attendance vis-a-vis other departments and other colleges. This would enormously enhance the power of the student in the former zero tuition colleges. Giving students more attention and influence in the university would indeed occur, exactly as the customer exercises more power at the grocery—by his purchases and choice among competing products and stores, but not by leaping over the counter and insisting on power to run the store, as occurs with current protest. Currently at the grade school level many parents are turning to private schools precisely because the parents can choose more fully the kind of education given their children—via the power of the purse. The poorer people do not have that option—but they would with a tuition-grant system.

Since the producer usually knows more about what he is producing than does the consumer, the producer illogically tends to conclude that he is a better judge about the appropriate quality and quantity for the consumer. This tendency is especially rewarding if the producer can thereby obtain a sheltered competitive position in the production of the good. He would tend to produce a quality and quantity in a style related more to that which enhances his welfare and less to what students and parents prefer.

It is easy to see that with zero tuition the university faculty benefits from research and graduate activity that builds an impressive publication record and research status, with the currently less rewarding teaching of undergraduates being relegated to the less “distinguished,” lower-ranking faculty or graduate students. The “publish or perish” rule would be less powerful under full tuition, because teaching would become a more important source of student directed funds. Survival of the better teachers who are weak in publication would be enhanced. It is interesting and amusing to note, incidentally, that students at the University of California are now attempting to protect some members of the faculty from being dropped because of inadequate research and publication. The protection comes by the students “donating” funds to hire the man to give classes; this is a voluntary, spontaneous full tuition system. If allowed to expand, students would determine who was on the staff and who got the bigger incomes, just as they now decide which restaurants shall survive and prosper.

This is a simple application of the old, powerful, fundamental principle of behavior. The lower the price at which goods are distributed, relative to the market value, the greater the degree of discrimination and arbitrary criteria that the “seller” will display. Its corollary is that the lower the seller’s right to the monetary proceeds, the greater his gain from underpricing the goods. The gains to the university administration and faculty from low tuition are classic examples, first expounded in Adam Smith’s The Wealth of Nations. The greater the portion of a college’s funds coming from tuition fees, the greater the power of the students and the greater the role teaching will play in the survival and prosperity of the members of the faculty. The less will the faculty choose which students shall attend, how they shall behave, etc. The lower is the ratio of tuition payments, the greater the power of the faculty over the students because the students are less able to exert significant effects on the financing of schools or departments as a reward for “good” performance—as they can with restaurants. The faculty says “education is different” and students are poor judges of good education; students are swayed by popular, theatrical teachers and do not appreciate the more valuable scholarly teachers. One wonders how students happen to go to the better and possibly tougher schools in the first place. The faculty of any college prefers lower tuition—until the budget expenditures can not be met from non-tuition sources. And even then there is conflict of interest within the college between those who are threatened by the budget cut and those with tenure who are not. If the cut, or loss of income, would mean merely fewer undergraduates and fewer new teachers, clearly the least difficult resolution from the current faculty’s interest is the reduction in new students, rather than an increase in tuition.

WITH ZERO TUITION the state schools have expanded relative to higher tuition private colleges, and the state university with its higher salaried teachers and more expensive education is more attractive to students than the state colleges and junior colleges. The ex-president and the administrators of zero tuition institutions correctly insist that zero tuition is the great principle underlying the growth of the university; but it is not a source of better education for California students. We should not confuse the amount of money with the way the money is obtained. More and better education, as judged by students, could be obtained at the same, or less, cost with the full tuition control of colleges coupled to loans and whatever grants-in-aid are desirable.

With full cost tuition, the less expensive junior colleges would attract students and income from the university and colleges. Predictably, the few administrative voices heard in favor of higher tuition seem, from my observation, to come from junior college administrators—who believe they would out-perform the university if put on a quality-cost basis of competition for students.

A counter argument to the preceding propositions is that junior college education is “inferior” to university education. Although the quality of the university as a research institution is high, not as much can be established for its quality as a teaching institution to educate college students. The move to junior colleges with full tuition would occur if the more expensive university education were not matched by the higher quality as judged by students and parents. The university would have to improve its teaching to hold students at its higher costs. If it could not, the results would constitute evidence that the high cost and high quality combination was not a superior combination of quality, cost, and quantity. A Rolls-Royce gives higher quality transportation than a Ford, but it does not follow that more Rolls should be produced than Fords. Education must be judged by the quality, quantity, and costs, rather than in terms of only those who are educated at the highest, most expensive levels.

Yet, despite this patent fact of life, when faced with a budget cut the administrators of the state university plump four square for “quality at all costs”—for maintenance of quality education for a selected few regardless of how many must be turned away and given instead an “inferior” education. On what criterion is it established that it is better to maintain the level of quality of education for fewer students at the cost of sacrificing education for others? Would one argue that in the event of a social security reduction, we should reduce the number of recipients in order to maintain the quality of those lucky enough to keep getting social security payments? But analogies aside, the elite, authoritarian arguments by university administrators and faculty for a given level of quality, regardless of the sacrifices imposed on excluded students or on tax payers is sobering evidence of the seductiveness of self-interest pleading.

THE FACULTY AND administration of higher education in California has evolved in the zero tuition environment, with appropriately adapted behavioral traits. They have learned to use that political structure; they have learned how to appeal to the political processes and to legislators and governors for more financing. They have been almost exclusively reliant on the political process. They praise politicians for statesmanlike, responsible behavior when the university budget is increased; but if it is decreased, they cry of political interference. Having accepted almost exclusive dependence on financing directly from the political and legislative processes, they should not complain of “political interference” when that same political process examines more intently the budget and the operations of the university. Are they really surprised that the venerable law “He who pays, controls” still is effective?

Legislators generally tend to favor direct state legislative financing of education coupled with no tuition, rather than full tuition with grants-in-aid. The closer the tuition approaches full cost, the less the power of the legislators over the educational institutions. It is not entirely accidental that Congress used a grant-in-aid system for veterans; there was no Federal college system.

We must constantly remember the difference between paternalism and independence. Independence from the competition of political processes and politicians’ interests can be enhanced by full tuition, but it will bring greater dependence on competition among educators in satisfying students’ whims and interest. Either the students pay and control, or the political processes and politicians do. Yet some of the faculty seem to think they can avoid both. For educators there is no free lunch nor “free” tuition.

The situation reminds one of the Russian plight. Dissatisfaction with the quality of goods produced by Russian firms is sparking attempts to restore market prices as reflections of consumers’ interests. While the Russian economists and consumers advocate more control via the market, producers and politicians show far less interest in weakening their power by moving away from Socialism.

There remains a subtle, but effective means whereby full tuition would lead to more education than if directly provided by government at zero tuition. As matters stand now, an education at a tuition school may be worth $2000, or say, $500 more than the education at zero tuition state schools. For that superior education worth $500 more, the student would have to pay the full tuition cost of $2000. He gets no relief for not using state schools. If education were on a full tuition basis, this obstacle to more and higher quality education would be removed. We should not assume that spending more by government for direct provision of education necessarily yields more education. This phenomenon, I conjecture, is powerful at all levels of education.

A PREFERENCE FOR full tuition implies nothing whatsoever about the desirable extent of aid or subsidy to students. Unfortunately much of the debate has erroneously assumed that zero tuition is a necessary or a preferred method of aid while full tuition is a device to avoid aid to students. No matter how much aid, if any, should be given to students, the case for full tuition does not rest on a denial of aid. It rests on the premise that, whether or not aid is given to students, the financing of schools should be controlled more directly by students and their parents because the kind of education thereby made available is deemed to be better—by those who advocate full tuition.

Full tuition, plus grants-in-aid to whatever extent one believes is justified, directs educational activities more to the interest of students and less to that of the university staff. And after all, is it not the students whose interests are fundamental rather than the university’s, as an institution? Is it the students’ interests as reckoned by students and parents rather than the convenience to the educators that is a better guide? My choice of answers is obvious. I suspect that these are the crucial issues on which advocates of zero tuition will differ with me.

My opposition to zero tuition arises because I do not like the way it redistributes wealth, nor do I like the totality of the effects of the kinds of competition it induces relative to that which would prevail under full tuition, supplemented by grants and loans. The latter yields more variety of educational opportunities and just as much educational opportunity and presumptively, greater detectability and survival of superior education. It reduces the producers’ control over the products that the customers can have. The influence of selecting their colleges and controlling payments is a trait with high survival in the world outside of academia and which should be cultivated. The decreased role of the state and political activity in administering education is also a consequence I find congenial. Higher tuition would improve the quality of education rather than reduce it. The quantity would be affected not by either a zero or high tuition, but by how much is spent for education. Zero tuition does not mean more is spent for education, nor that more poor people can attend. To believe it does is to think zero tuition is the only or best way to subsidize or aid students—and that contention begs the fundamental question of what is the best way.

All these consequences seem to work against my interests as a member of a zero tuition college. If I thought this one exposition of economic analysis and one man’s preferences really were capable of converting our system of educational subsidies from the zero tuition to a full tuition system with scholarships, loans, and vouchers, I might be less willing to expose it, for the price may be high enough to make me join with those who, whatever may be their reason, prefer the Holy Zero, (excuse me, the free) tuition system.

Books

Friedrich Engels: His Contributions to Political Theory, by Fritz Nova. New York, Philosophical Library, 1967. 115p. $4.50.

The German Revolutions; The Peasant War, and Revolution and Counter Revolution, by Friedrich Engels. Edited and with an Introduction by Leonard Krieger. Chicago, University of Chicago Press, 1967. 246p. $2.45.

ENGELS HAS NEVER emerged from Marx’s shadow. He was generally self-effacing and, as the man who systematized dialectical materialism, is generally shunned by those who study Marx as a philosopher of alienation and emphasize the humanist aspects of Marxism. Neither of the recent biographies is much good. Yelena Stepanova paints Engels as a revolutionary saint, and her solid research has been translated into muddled English; Grace Carlton shows him as a good-natured man somehow led astray by Marx, without whose maleficent influence Engels would have lived happily and dully ever after; the Carlton book is interrupted by tirades against Marx and Engels for their failure to appreciate the perfection of English institutions and empiricism, and it ends up even more dogmatic than the Stepanova work, which at least has some reading behind it.

Both biographies are essentially personal in emphasis, presenting Engels as hero or victim, and Gustav Mayer’s impressive work, which assessed Engels and his ideas, is out of print both in the original and in the one-volume English abridgment. Therefore, Fritz Nova’s book, which purports to discuss some of Engels’ ideas, ought to be a good thing.

Unfortunately, it turns out to be not so much written as simply sorted into chapters, presenting quotations and paraphrases without any comment. The first chapter, “Social Theory: To Condemn or Condone?” is characteristic. The gist of the assembled statements (which Nova does not sum up) is that Engels thought political theory was well enough so long as it did not insulate the theorist from all contact with the real world, and so long as the theory was not wrong.

The ten-page chapter on Reformism and Revolution provides no hint of what Engels meant by revolution; there is no differentiation between statements made in 1844 and those made thirty-odd years later, as if Engels’ opinions necessarily formed an unchanging whole; and there is no mention, much less analysis, of those references to the possibility of a peaceful transfer of power that give Marxist revisionism some claim to canonical authority. Not only is there no analysis, but the selection of quotations is erratic.

Nova’s conclusion is that he has “not found any justification for reducing Engels to not much more than an accessory of Marx,” but he makes no effort to prove that Engels was significant in himself. Engels was surely no appendage of Marx, but neither did he work in a vacuum. Nor should he be written about in a vacuum. Anyone who sets out to discuss Engels’ ideas, even if he restricts himself to one of those fields such as natural or military science on which Marx rarely trespassed, ought to make some attempt to define the relation of his topic to Marxism in general. To list Engels’ statements on politics or any other subject, without putting them into any context, can prove nothing more than what Nova has proven: that Engels wrote some things himself. And this could be ascertained by glancing at the index to the Marx-Engels Werke. Why is Engels important? Nova invokes Karl Kautsky, who is “generally regarded the most important successor to Marx and Engels,” who said that Engels was an influence on him.

Certainly more than this can be said about Engels. In 1844 when Marx was still largely immersed in the study of Hegel, Engels had decided that the advance of industrialism in England was the most important thing going on in the world and that the accompanying ideology of classical liberalism was correspondingly important; and he had begun the Marxist critique of liberalism as fundamentally a species of hypocrisy. After that he watched, advised, and criticized the world revolutionary movement for fifty years. In the course of this involvement, he wrote a great many books and articles, most of which are significant in one context or another, and which must be analyzed, discussed, and thought about.

Engels is not likely to be ignored altogether. International Publishers keeps some of his works available in paperback (including the “Outline of a Critique of Political Economy,” in Marx’s Economic and Philosophical Manuscripts of 1844), the University of Manchester Press has a recent translation of The Condition of the English Working Class in 1844, and now we have a new edition of Revolution and Counter-Revolution. The Peasant War was already available but fits in well here, and Revolution and Counter-Revolution, a series of articles that Engels wrote for the New York Tribune in 1851-52, shows him as an effective English stylist. He has plenty of opportunity to be scathing as he discusses the ineptitude and half-heartedness of the German middle-class revolutionaries of 1848-49. The book is a useful treatment of that particular revolution, and considered as a Marxist document it, like the Peasant War, illuminates some fundamental propositions of the Marxist attitude toward revolution: that bourgeois progressives are exceedingly unreliable allies, and that revolutions are matters of classes and epochs, not of conspiratorial or military expertise.

Leonard Krieger’s introduction discusses sensibly the relationship between Marx and Engels (though “Engels’ addiction to Germany in contrast to Marx’s propensity for France” greatly overstates this point of difference) and analyzes the importance of Engels’ two histories both in relation to their subjects and in relation to Marxism. They are made to illuminate major problems of Marxist thought, such as the relationship of history and philosophy and the relationship of free-will and determinism, and they gain in intelligibility and interest by being put in context. The analysis is on a very high level, but it is perhaps even more important that—in contrast to Nova—Krieger recognizes the necessity to ask questions.

—MARTIN BERGER1

James Mill: Selected Economic Writings, edited by Donald Winch. Chicago, University of Chicago Press, 1966. 452p. $12.50.

IT SHOULD COME AS no surprise to libertarians accustomed to meeting their ideas presented by others in surrealistic form that an inordinate number of efforts in the field of economic intellectual history are grotesquely inadequate. Prof. G. J. Stigler has gone to great lengths to show the casualness of scholarship in even such simple tasks as quoting accurately and naming theorems in such a way that they bear some non-random relation to the names of the theorems’ initial propounders.1 Still no amount of secondary cynicism can quite cushion the shock of, say, reading Max Lerner’s “Introduction” to the Wealth of Nations.

Perhaps naively, we can hope that more readily available works can help reduce some of the heinous crimes committed in the name of intellectual history—if their presence will not necessarily inspire more careful scholarship, at least reviewers will have to search less for the material to point out inadequacies. The great new editions of Ricardo, Bentham (economic writings), J. S. Mill (about one third has been published) and the forthcoming volumes of the bicentennial edition of Adam Smith may generate a more precise reading. Thus we should welcome the University of Chicago’s present and promised publication of the Scottish Economic Society’s Scottish Economic Classics. Concentrating on those whose theories are comparatively unknown even inside academic economic circles: McCulloch, Steuart, Lauderdale, and Anderson, these new and forthcoming editions should make economic intellectual history less a game for antiquarians and entice more research in primary sources.

In the first volume of Scottish Economic Classics, Dr. Winch has compiled three of James Mill’s most important economic pieces: An Essay on the Impolicy of a Bounty on the Exportation of Grain (which is so rare that J. A. Schumpter did not know it),2Commerce Defended, and Elements of Political Economy, along with “Smith on Money and Exchange,” “Whether Political Economy is Useful,” selections from History of British India, and “Extracts from Oral Evidence on the affairs of the East India Company.” In addition Winch provides a biographical sketch, commentary on Mill’s early economics, and an informal bibliography, not to mention an index.

I will not commend the editor for all his obvious hard work: virtue and book sales, after all, are their own reward; but I would examine one rather interesting point Dr. Winch raises which enters into serious interpretative problems with implications outside economics.

Winch asserts that Mill draws from Ricardo’s economics the thesis that rent, being a residual, is the optimal subject for taxation because there are no effects on resource allocation:

Mill went a good deal further than either Ricardo or McCulloch were willing to go. . . . Mill attempted to implement the radical conclusions which he drew from Ricardo’s interpretation of the rent doctrine. Though this is seldom realised, Mill’s influence on the Indian land revenue system represents perhaps the single most important application of Ricardian economics in practice.3

Ricardo himself did not support such a program:

It would be difficult to separate pure rent from profit on capital invested by the land-owner, and therefore a tax on contractual rents might inhibit the improving landlord. But, as always, Ricardo was willing to face the logical consequences of his doctrines, and does not seem to have been afraid of considering the possibility of complete land nationalisation.4

But Mill’s conclusions are readily deducible from Ricardo’s theories:

In upholding the principle of taxing rent Mill was merely taking to its logical political conclusion, Ricardo’s argument that there was an inherent conflict between the interests of land-owners and rest of the community.5

This is a profoundly misleading reading of Ricardo. Winch correctly describes the allocation aspects of Ricardo’s theory but ignores the political constraint of equal treatment under law which Ricardo always imposed on his policy proposals.

It is true that Ricardo believed that neutrality in taxation is an important goal:

The duty which I have here proposed, is the only legitimate countervailing duty, which neither offers inducements to capital to quit a trade, in which for us it is the most beneficially employed, nor holds out any temptations to employ an undue proportion of capital in a trade to which it would not otherwise have been destined. The course of trade would be left precisely on the same footing as if we were wholly an untaxed country, and every person was at liberty to employ his capital and skill in the way he should think most beneficial to himself. . . . we should offer no temptations to capitalists, to employ their funds and their skill in any other way than they would have employed them, if we had had the good fortune to be untaxed, and had been permitted to give the greatest development to our talents and industry.6

Further there is no doubt taxes on rent would be neutral,7 but Ricardo refuses to recommend such taxation, on grounds of isonomy:

It must be admitted that the effects of these taxes would be such as Adam Smith has described [neutral]; but it would surely be very unjust, to tax exclusively the revenue of any particular class. . . .8

This concern with equal treatment is not an isolated instance in Ricardo. He opposes inflation, in spite of the fact that it might benefit the more productive classes, because it implies unequal treatment by government action;9 he opposes repudiation of the national debt in spite of distributional advantages on the same ground;10 he even supports tariffs to equalize the tax burden between landowners and the rest of society.11

THUS RICARDO’S opposition to taxes on rent and Mill’s support are indications of a rather deep split in political philosophy, not as Winch implies, a difference on the feasibility of measuring rent. The harmony/disharmony of interest interpretation of Ricardo and classical economics has blighted the profession since at least Halevy’s monumental Growth of Philosophical Radicalism but is useless as a rationalization for Ricardo’s policy proposals.12 As a student of Jacob Viner, Winch of course does not subscribe to the silly harmony theory: but it is a shame he still finds the disharmony part of Halevy’s theory at all useful to explain Ricardo’s policy. Ricardo did not favor class legislation against anyone, regardless of whether their interests were harmonious with the rest of society; and indeed as mentioned above is willing to put tariffs on corn to reduce the inequality of the tax burden on landlords. Nor does a harmony reading help understand any other part of Ricardo’s theory of policy: what is at question is whether a competitive price system produces some sort of an optimum, which Ricardo usually argues that it does, and importantly how do we go about getting out of the messes the government got us into. Ricardo develops and widely applies a theory of compensation to solve the problem that even the best reforms will hurt someone. This cannot be explained by a harmony/disharmony approach.

But enough carping. This new edition of James Mill gives complete (or nearly so) versions of important economic works and selections of minor pieces, in addition to interesting commentary. It is most valuable, but, unfortunately if quotations must be critical, one must compare them to the original. This writer found seven minor errors in the first eighteen pages (including table of contents and introduction) of the Elements.

—DAVID LEVY

NEW BOOKS AND ARTICLES

THE FOLLOWING ARE A SELECTION OF ITEMS AND NOTES WHICH, IN THE OPINION OF THE EDITORS, MAY BE OF INTEREST TO OUR READERS.

John Kenneth Galbraith, whose recent book The New Industrial State (Boston: Houghton Mifflin, 1967) should escape public notice, has just written an important tract on the Viet Nam war; important because of Galbraith’s prominent position among the anti-war faction of the Establishment. How To Get Out of Vietnam (New York: Signet Books, 1967. 47p. 35 cents.) sets down in cogent form the most important assumptions usually made by opponents of the Viet Nam involvement, and after thoroughly illustrating if not documenting those assumptions, draws the necessary conclusions: “. . . it is now a war that we cannot win, should not wish to win, are not winning, and which our people do not support. . . .” (p. 32) Galbraith’s thoughts raise an important issue in the minds of certain observers of the pro- and anti-Viet Nam debates, the fact that both positions make unproven, and at worst undemonstrated, assumptions about the nature of “the enemy.” Galbraith rather carefully demolishes, for example, the usual anti-Communist approach to foreign involvement (he concludes: “The enemy coalition—the empire—against which our operation was launched turned out not to exist. This cannot have happened very often in history. . . .” [p. 15]); but to do so he relies in turn upon his own assumptions as to the nature of the Communist governments, assumptions which those who disagree with him cannot accept because he dismisses any “world-wide coordination” aspect of Communism and styles it all as Titoist nationalism. It would seem that any useful discussion of American foreign policy must grapple with the empirical documentation of assumptions such as these; but such documentation would seem to be either unobtainable in a scientifically acceptable form, or, if available, much too dispersed and unorganized to be usefully marshaled. A third possibility is also plausible, given the political Left-Right polarization of foreign policy discussions: the factual evidence which may be in the possession of known anti-Communists is suspect by men such as Galbraith because a mutual trust in the others’ integrity is lacking—those in possession of facts damaging to the position of their opponents are considered capable of fraud to defend their own position. Likewise, those who fear the less than pleasant prospect of a global American Empire policing the free world at enormous cost in lives, money, and domestic liberty are seen as dangerously blind and naive, and dismissed with vague references to Munich and America First. It becomes, on the one hand an act of faith that “international Communism” is a terrible menace to free men everywhere, and on the other that “Cold War paranoia” is regimenting free men at home and extinguishing rational foreign policy abroad.
The editors of New Individualist Review have been divided for some time as to what editorial position to adopt on this question, and have sidestepped the issue in favor of omitting articles devoted to foreign policy. In the future, we would like to consider for publication well written and thoroughly documented articles on these general questions. We invite our readers to assist us in this endeavor.
Dan Cordtz, “Social Security: Drifting Off Course,” Fortune, December 1967, pp. 104-7ff. The Social Security System, which for three decades has been the holiest of sacred cows in the American political barn, has come under increasing investigation in the past three years, possibly as a result of the surprising reaction Sen. Goldwater’s campaign encountered in 1964—surprising to the campaigners, although not to their opponents. It is a tribute to the extent that conventional wisdom can be subverted by scholarly investigation and exposure that the number of articles critical of Social Security has expanded, and that a few books have appeared reopening the question. Diligent effort by Right-wing scholars has forced even non-political studies to examine Social Security with critical questions in mind. It can be hoped that election campaigns in 1968 or 1972 may see the Social Security System dismantled entirely.
Prof. Harry Kalven, Jr., of the University of Chicago Law School, examines the applicability of the Constitutional guarantees of freedom of the press to the radio and TV broadcasting industries in the October 1967 issue of The Journal of Law and Economics (“Broadcasting, Public Policy and the First Amendment”). He argues that the United States wrongly has two traditions in freedom of expression, one relating to the press and the other to broadcasting. He then goes on to show that precedents exist in other fields for application of the First Amendment (for example, motion pictures and second class mailing rights) which could easily be extended to radio and TV in the event of a legal showdown before the Supreme Court. The entire Volume X (207 pp.) is available for $2.50 ($1.00 for students) from the Journal; see their ad in this issue. Additional articles of interest in that volume include Milton Friedman on “The Monetary Theory and Policy of Henry Simons,” and articles by James Buchanan, Paul Samuelson, and Jora Minasian on the question of public goods, which was initiated in the Journal of Law and Economics, Volume VII (1964). Libertarian theorists ought to pay greater attention to the theory of public goods, inasmuch as these discussions of the marginal cases for private property bring into greater clarity and even question some of the fundamental arguments for laissez faire.
An old controversy on the Right has reappeared, which our readers may be interested in following more closely as it develops. In the January 1968 issue of The New Guard, official magazine of Young Americans for Freedom, is reprinted Frank S. Meyer’s famous article “The Twisted Tree of Liberty,” which was originally composed in reflection on the debate between New Individualist Review editor Ronald Hamowy and William F. Buckley, Jr. in the November 1961 issue of N.I.R. It is pure speculation to comment upon what might have encouraged The New Guard to pick up the article for reprinting from National Review (Jan. 16, 1962), but the recent review of Meyer’s Moulding of Communists in Murray N. Rothbard’s journal of libertarian thought, Left and Right, might have had something to do with it. Taking Meyer (and by implication, Burnham and the rest of the Right-wing ex-Communists) to task for singlemindedly directing American conservatism toward hard-nosed foreign policy objectives, Rothbard analyzes Meyer’s description of the typical Communist trainee (and later cadre) and points out, interestingly enough, that exactly the same moral condemnations can be made against any secretive organization man—including most especially FBI and CIA agents, who exhibit most of the traits Meyer identifies with Communism. The reader may be interested in examining Rothbard’s discussion of Meyer, inasmuch as Meyer is widely read on the Right, and Rothbard has a number of interesting things to say, but not the audience. The review appears in the Spring-Summer 1967 (Vol. 3, No. 2) issue of Left and Right, and would be available for 85 cents from them at Box 395, Cathedral Station, New York, N. Y. 10025.
An attack on Establishment “liberalism” from a radical point of view is presented in The Great Society Reader: The Failure of American Liberalism, by Marvin E. Gettleman and David Mermelstein (Vintage Books; #2.45, paper), a reader containing speeches, essays, etc., by Lyndon B. Johnson, Sargent Shriver, and Arthur Schlesinger, as well as Paul Goodman, Tom Hayden, Hans Morgenthau, and other critics of the current spirit of the times as manifested in Washington.
Most interesting to N.I.R. readers would probably be the contribution of Murray N. Rothbard, libertarian economist and editor of Left and Right. In an essay entitled “The Great Society: A Libertarian Critique,” Prof. Rothbard stresses the congruence of the Johnsonian program with the corporate state trend of American politics during most of the twentieth century. Of particular interest is his assertion that: “The cruelest myth fostered by the liberals is that the Great Society functions as a great boon and benefit to the poor; in reality, when we cut through the frothy appearances to the cold reality underneath, the poor are the major victims of the welfare state”; and Rothbard goes on to cite more than a dozen major elements of the welfare state—from minimum wages and urban renewal to inflation and the farm subsidy program—which penalize the relatively poor to the advantage of the relatively rich.
Harry G. Johnson, Economic Policies Toward Less Developed Countries. Washington, Brookings Institution, 1967. $6.95. In the discussion of economic assistance and trade between the industrialized nations and the underdeveloped world, much attention has been given to governmental structuring and planning, which involves almost necessarily restrictions on free market activity. Johnson’s survey brings out with great clarity and insight the essential features and interrelations among the leading proposals for improving international economic relations. The book is particularly noteworthy for its exposure of the economic fallacies in arguments for various forms of interference. Protectionist approaches by both rich and poor countries are contrasted unfavorably with an optimal system which would combine free trade, realistic exchange rates, and the provision of aid on the basis of net resource requirements.
A number of other Conservative publications are beginning to notice a controversy which N.I.R. joined in its November 1961 issue: Ayn Rand and her philosophy of Objectivism have been the object of a recent article by M. Stanton Evans in National Review (October 3, 1967), and the Objectivist leaders (i.e., official spokesmen of the Nathaniel Branden Institute) have come under sharp attack by a disenchanted “student of Objectivism,” Jarret B. Wollstein, in the New Guard (October 1967). Evans addresses himself to what he sees as the twin failure of Miss Rand logically to construct an ethical system which can support the kinds of behavior she favors, and her neglect of the need for a spiritual, particularly Christian, underpinning for society. The points directed by Evans to the first issue seem well taken, although he pauses to puzzle that N.I.R. saw fit to criticize Rand in spite of the seeming agreement in practical matters; the puzzle is solved by reading Prof. Goldberg’s article in the November 1961 issue more closely. His second point is weaker; consider the assertion: “The ancients could conceive of no authority higher than the polis; they believed the state had a total lien on man’s energies and affections.” Socrates’ argument in the Apology seems to invalidate such a generalization.
On a more personal level, Wollstein gives a detailed account of the troubles he encountered when he attempted to propagate the virtues of Objectivism. His report contains a truly amazing chain of events, with the Objectivist establishment performing some rather non-voluntaristic acts—including at one point the threat of force. What makes this report particularly interesting is the direct manner in which it supports Whittaker Chambers’ savage attack on the Randians in National Review (December 1957). Chambers accused Miss Rand of being a fascist. In spite of some rather ill-mannered letters from Objectivists, this charge has often seemed curious. How, after all, can one detect authoritarianism in any form in Ayn Rand’s highly voluntaristic philosophy? Indeed, Evans takes Chambers to task for the self-evident contradiction in the charge.
One line of analysis which has not been followed by any of those interested in the subject is the relation, long stressed by many inside of the classical liberal tradition, between toleration of opposing views and the fundamental rationalist recognition that it is possible to be in error. Prof. Karl Popper has warned that the great danger of irrationalist philosophy comes from its ability to dismiss any and all criticisms without considering the validity of the criticism. Hence, it is possible for some Marxists to reject logical arguments on the basis of the class interests of potential propounders. An indirect test for the tolerance of a philosophy may consist of an examination of the type of arguments which if accepted would prove the philosophy fundamentally in error. In the case of Objectivism, this examination ought to be facilitated because it goes to great lengths to stress the axiomatic and definitional bases of its arguments. In Miss Rand’s recent Introduction to Objectivist Epistemology (New York: The Objectivist, Inc., 1967. 77 pp. $1.95.) she develops her theories of axioms and definitions and defends them as being of the greatest importance: “Do you want to assess the rationality of a person, a theory or a philosophical system? Do not inquire about his or its stand on the validity of reason. Look for the stand on axiomatic concepts. It will tell the whole story.” (p. 56). “The truth or falsehood of all of man’s conclusions, inferences, thought and knowledge rests on the truth or falsehood of his definitions.” (p. 47). Axioms in her system are self-evident, their denial will lead to contradictions; an axiomatic concept “is implicit in all facts and in all knowledge. It is fundamentally given and directly perceived or experienced, which requires no proof or explanation, but on which all proofs and explanations rest.” (p. 52). Definitions represent the identification of the nature of the things defined. Although it is obvious that Miss Rand has not followed the mathematical discussions of axiomatic systems, she does profess a high regard for higher mathematics. The fundamental theorem of G�

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