Freeman

BOOK REVIEW

A Reviewer's Notebook - 1979/1

JANUARY 01, 1979 by JOHN CHAMBERLAIN

States’ rights are usually associated with the name of Thomas Jefferson, who distrusted the centralizing tendencies that eventually put his favored yeoman farmer at the mercy of big cities. But Jefferson himself, when he was entrusted with the presidency of the newly federated republic, did more to hurt his doctrine than he did to help it.

The whole story is encrusted with a tremendous irony—and there were two Virginians of Jefferson’s day who caught the irony even as the drama was being played out. One of the mordantly skeptical Virginians was John Randolph of Roanoke; the other was John Taylor of Caroline. Randolph is the subject of Russell Kirk’s John Randolph of Roanoke: A Study in American Politics, which has just been issued in a new edition with an enlarged appendices collection of letters and speeches. Taylor, a slightly less acidulous figure than Randolph, is treated as "a Virginia Cato" in a short but pertinent biographical introduction provided by M. E. Bradford for a new edition of Taylor’s Arator.

As members of the Tertium Quids, or Old Republicans, both Randolph and Taylor believed that the federal Constitution was "a law to limit law." As the strictest of strict constructionists, they were made uncomfortable by the behavior of the Virginia Dynasty—Jefferson, Madison, Monroe—in the era that included a stupid second war with Great Britain and the beginnings of the opening of the West.

The Louisiana Purchase, which endowed the young American republic with a huge trans-Mississippi area reaching well towards the Pacific Northwest, had no validating warrant in the Constitution, but Jefferson could not resist the opportunity for a glittering deal—and there are probably few today who would condemn him for his subordination of strict constructionist purity to an enlightened expediency. In the only act of his political career that might be termed an inconsistency, John Randolph of Roanoke defended Jefferson’s purchase in the House of Representatives. Later, Randolph admitted the purchase was a severe blow to constitutional precedent. It helped establish the "imperial presidency."

Foreign Entanglements

Kirk is inclined to excuse Randolph for what could be called his one serious departure from principle. Part of Randolph’s program as a Tertium Quid leader was to keep America aloof from foreign quarrels. By getting control of the mouth of the Mississippi through the Louisiana Purchase, Jefferson removed a dangerous foreign neighbor who might otherwise have menaced Kentucky, Tennessee and the territory north of the Ohio. So it could be said that the Purchase was a guarantee that the "good old thirteen United States" (Randolph’s phrase) east of the Appalachians would not have to maintain a big military force to defend Western lands. This would be a plus towards keeping the central government weak and so help the States’ Rights cause.

Whether sophistical or not, the argument did nothing to keep Jefferson and Madison from becoming embroiled in the foreign quarrels of the Napoleonic period. Not content with the new Louisiana territories, the War Hawks of 1812 thought of seizing Canada. Always logical, John Randolph sided with the New England states in opposing both the Jefferson Embargo and the War of 1812 itself. Before the Embargo and the war, maritime Massachusetts and the agricultural south still maintained something of a reciprocal relationship. The farmers could sell abroad and use the money they received to purchase goods brought to America in Massachusetts ships. But with the coming of the war, the fledgling United States felt really impelled to take Alexander Hamilton’s advice and subsidize local manufacturers. The cost of the subsidy, paid for by tariffs, had necessarily to be taken out of the agricultural interest in higher prices.

Agricultural Decline in the Early Nineteenth Century

Even before the triumph of Hamilton both Randolph and Taylor knew what was coming. Taylor’s Arator quotes liberally from an English visitor named Strickland, who noticed as early as 1801 that the plantation system of Virginia was in a visible state of decay. The old houses in the tidewater country were falling apart. "Before the revolution," said Strickland, "the capital of the country was vested in the lands, and the landed proprietors held the first rank in the country for opulence and information, and in general received the best education which America, and not unfrequently, , Europe, could afford them." But by 1801 capital was "flying from the fields, to the legal monopolies, banking and manufacturing . . . bribes offered to . . . deserters have already produced the most ruinous consequences. Avarice everywhere seizes them with avid-ity, and rails at agriculture, as sordid and unpatriotic. . . ." Randolph was inclined to put the blame for agricultural decay on the Jeffersonian repeal of the laws of primogeniture and entail, which had historically kept big plantations under the control of favored eldest sons. Taylor, though he blamed the Hamiltonian spirit for the decline of the planter class, was realistic enough to note the failure of the big planters to restore fertility, by scientific manuring, to lands worn out by excessive reliance on the cash crop of tobacco. Much of his Arator is given over to a learned discussion of proper manuring.

The spirit of the times, of course, was against the Tertium Quid philosophy. The West, with its untried fields, beckoned to both elder and younger sons. With or without the War of 1812, the United States, with its plethora of natural resources, would have become the home of modern industry. The tariff often distorted the pattern of growth—but even without a subsidy the Americans would have built factories to utilize Minnesota iron ore and Pennsylvania coking coal.

Weakening the Constitution

Neither Randolph nor Taylor liked slavery. But they insisted that the Constitution—the "law to limit law"—made a centrally directed emancipation of slaves illegal. The Civil War, which came as firebrands elaborated on the Randolph-Taylor strict construction principles, ended in disaster for everything that Randolph held dear. Emancipation did not result in a bloody uprising, as Randolph and Taylor feared it would. But the decline of States’ rights has had its many deleterious results as Randolph predicted.

The loose construction of the Constitution that was started by Jefferson’s decision to buy the Louisiana territory has extended to the most tortuous twisting of the Commerce and General Welfare clauses to justify practically anything that a centralized Washington government desires to do. If the strict constructionists had been followed, our welfare bureaucracy would never have become entrenched. Nor would our gas deregulators have dared tell Texas and Oklahoma what they must do with gas inside their own borders.

It is sad that the slavery issue distorted everything. For, as Russell Kirk says, quoting Randolph, "change is not reform." Not in all cases anyway.

THE CRITICS OF KEYNESIAN ECONOMICS

by Henry Hazlitt

(Arlington House, New Rochelle, N.Y. 10801)

427 pages

Reviewed by Ronald J. Berkhimer

Keynes wrote The General Theory of Employment, Interest and Money in 1936. It was a difficult book, confusing and even sometimes contradictory, but its central message was clear: The solution to unemployment and depression is increased government spending.

Such a theory is irresistible to most politicians and Keynesianism achieved widespread acceptance, providing a rationale for the New Deal. The Keynesian program failed to solve the United States unemployment problem in the thirties, but the theory was the basis for the Full Employment Act of 1946 and, despite increasing criticism, it still surfaces in efforts like the Humphrey-Hawkins bill.

The ultimate refutation of Keynesianism may be Henry Hazlitt’s The Failure of the New Economics (1959). But, as a byproduct of the research which preceded his writing that book, Hazlitt has come out with some excellent supplementary reading in his companion volume, The Critics of Keynesian Economics. First published in 1960, it has been reprinted with a new preface and made an alternative Conservative Book Club selection.

Hazlitt has collected criticism of Keynesianism by twenty-two writers, including some of the best known free market economists. It is fortunate that their comments are thus saved for current students and for history, because each has something instructive to say about the theories which have created more furor than anything since Marx—to borrow an expression from one of them. There is considerable range in the rigor of these analyses, and both the lay reader and serious student of economics will find articles at their level of understanding.

Contributors to this volume are men like Mises, Hayek, Roepke, Rueff, Knight and Hahn. When they are done, Keynes’ theory is in complete disarray. Even so, Keynes still has his advocates, for as Mises ruefully observes, "There is no use arguing with people who are driven by an almost religious fervor and believe that their master had the Revelation."

But the general public is gradually becoming aware that years of deficit budgets have not created "full employment" and that unemployment, distressing as it is, affects relatively few people, while inflation hurts everyone.

A bill requiring the federal budget to be balanced by the year 1981 was even passed by the Senate this summer. While this may have been temporizing, a similar proposal involving a constitutional amendment has currently been passed by twenty-two state legislatures and needs only twelve more to bypass Congress and the President and bring the amendment back to the legislatures for final approval.

If and when this happens, it will perhaps be the most significant development in political economics since The Wealth of Nations appeared two hundred years ago, and Keynesianism will be officially dead, at least in the United States.

ASSOCIATED ISSUE

January 1979

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