A Reviewer’s Notebook – 1977/7

Branch Rickey, the old baseball im­presario, had a funny story about a truck driver who, as he approached each turn on a mountain road, mur­mured to himself, “Trouble ahead, trouble ahead.” Whereupon the driver would make the turn only to discover that the road stretched fair and free.

For the past decade we have been like the truck driver. We were threatened with the “population bomb” in the lugubrious works of Paul R. Ehrlich. DDT and other insecticides would kill all the birds, giving us a “silent spring” (Rachel Carson). Our oil leakages and spills in the Santa Barbara Channel and off the coast of Cornwall, when added to all the smaller accidents to tankers and barges, were sounding the death knell for marine life (Jacques Cousteau). The world was running out of raw materials, mean­ing there were natural limits to growth (the Club of Rome). Oil was only the most conspicuous of the earth’s wasting assets (see almost any commentator since the late Harold Ickes, as Secretary of the Interior, started to push the scarci­ty thesis). As for nuclear power, its alleged dangers have pushed Ralph Nader into invoking “higher law” to justify destroying atomic energy plants in “projective self-defense.” “If they don’t close those reactors down,” said Nader the other day, “we’ll have a civil war within five years.”

To cap it all, the world’s supply of food was supposed to be at the mer­cy of coming drought and cold cycles, and even the productive acreage would be ruined by liberal applications of commercial fer­tilizers that break down the soil structure.

Adding all the dire prophecies together, the “zero growth” move­ment has taken on a frightening momentum. It takes a bold man to buck the prevalent tide of opinion. Fortunately, for our sanity, we have such a bold man in Herman Kahn, who runs the Hudson Institute. With his associates William Brown and Leon Martel, Kahn has just issued a heartening book called The Next Two Hundred Years: A Scen­ario for America and the World (William Morrow & Co., Inc., 105 Madison Ave., New York, N.Y. 10016, $8.95 cloth, $2.95 paper­back). Kahn not only has the boldness to say that the “no growth” movement has no basis in common sense, he proves it by carefully controlled extrapolations from information that is available to any research organization that is willing to do a little patient scratch­ing.

Population and Energy

First, there are the population statistics. In the Nineteen Sixties, when the overpopulation theory was riding high, the rate of repro­duction was definitely slowing down in fifteen developing coun­tries and there was a “probable” decline for eight more. In pre­industrial lands, where children are potential farm hands, couples will have seven or eight babies in order to achieve a primitive level of old-age security. But in industrial societies the reproductive “norm” recedes to 2.2 or 2.4 per family. The irony is that the “planned parent­hood” movement reached its crest when it was no longer needed. Her­man Kahn expects most of the world will repeat the experience of Western Europe and the United States as industrial development spreads.

A stabilized population will still need lots of energy if it is to grow in ways necessary to expanding the good life. Kahn’s section on energy is subtitled: “Exhaustible to inex­haustible.” Contrary to most com­mentators, Kahn thinks the “his­torical” trend of energy costs will continue downward, even though the present price of oil will go on fluctuating. As long as oil sold for less than $5 a barrel, it was bound to displace coal. But now that OPEC oil is selling for twice the old price and more, coal is bound to come back. There is plenty of coal to last for a couple of centuries. And when the cost justifies it, we will be getting oil from shale and from tar sands.

Looking ahead to the twenty-second century, Kahn is optimistic for all sorts of supposedly far-out energy sources, from ocean thermal power to windmills, and from solar energy panels to nuclear fusion. The 200-mile electric car battery is already in existence; it has only to be made smaller for introduction into compact car models.

Pollution in Control

Kahn and his associates do not scoff at the current demands for cleaner water and air. But they do not like fanatics who are unwilling to make temporary trade-offs when they are economically necessary. We are already meeting most of the sensible standards throughout the U.S. Automotive pollutants such as carbon monoxide and hydrocarbons have been reduced substantially. A real beginning has been made in cleaning up the rivers, streams and lakes of the nation. We will make progress in the treatment of sewage and waste in general when technol­ogy makes it possible to recycle everything from sludge to alumi­num cans at a profit.

The main problem, at this mo­ment, is to persuade people that they are being scared by bogeymen. “Indeed,” says Kahn and his associates, “it is the limits to­ growth position which creates low morale, destroys assurance, under­mines the legitimacy of government everywhere, erodes personal and group commitment to constructive activities and encourages obstruc­tiveness to reasonable policies and hopes.”

If Kahn can’t get this message across to a majority, we will perish through a self-fulfilling prophecy. But Kahn, no pessimist even for a short run, is sure that he is going to be heard.

 

PLAYING THE PRICE CONTROLS GAME

By Mark Skousen

(Arlington House, New Rochelle, New York 10801, 1977)

254 pages

Reviewed by Robert P. Vichas

Even among those who have sur­vived them, surprisingly few in­dividuals really understand the in­sidious nature and disastrous ef­fects of price and wage controls. Witness the fact that most con­sumers favor them at one time or another. Many businessmen accept them. Utility and regulated com­panies prefer them. Black marke­teers love them. Political types praise them. And too many econo­mists worship them.

Milton Friedman has observed that “If the U.S. ever succumbs to collectivism, to government control over every facet of our lives, it will not be because socialists win any arguments. It will be through the indirect route of wage and price con­trols.” There has long been a need for a popular book on the subject, and now economist Mark Skousen fills that gap. He has assembled an abundance of evidence, case histor­ies, and examples to convince any interested reader that price controls are a disaster.

For the theoretically minded, there are the traditional economic diagrams; for others, the message is expressed in plain enough terms. Price controls cause shortages, and shortages occur because businesses reduce production of high-volume, low-profit-margin “necessities” and expand output of low-volume, higher profit-margin “luxuries.”

A survey at the end of Phase IV of the Nixon freeze revealed the reduction or elimination of 240 pro­duct lines including paper, steel, animal feed, and mayonnaise. Near­ly every business experienced dif­ficulties in obtaining adequate sup­plies, as suppliers ceased manufac­turing certain vital replacements to concentrate on higher profit-margin components.

Efforts to control the cost of housing offer a prime example of an exercise in futility. Paul Samuel-son’s popular textbook clearly describes the long run harm of rent controls in France. “France had practically no residential construc­tion from 1941 to 1948, because of rent controls.”

Students of price control econom­ics know that shortages, malinvest­ment, and black markets result when an attempt occurs to subvert basic economic laws. An economy survives these shocks mainly because alternative zones of supply (a substitute term for black markets offered by Gary North in the book’s Foreword) keep the system operative—at least for a time.

The last half of the book focuses on these alternatives. The situa­tions discussed by Skousen provide numerous case histories for lec­turers, teachers, expert witnesses, and skeptics, demonstrating how creative free market forces emerge even against formidable odds. For the practical minded, the last half of the book contains sound advice for businessmen and consumers who confront present or future price con­trols.

For over 2000 years societies have experimented with price and wage controls. They have never worked. This book explains why.

 

JAMES J. HILL AND THE OPEN­ING OF THE NORTHWEST

by Albro Martin

(Oxford University Press, New York, 1976)

676 pages

Reviewed by Clarence B. Carson

St. Paul, Minnesota was little more than a frontier village serving as a shipping point on the Mississippi when James J. Hill arrived there in 1856 from his native Canada. St. Paul, and the surrounding country, had, as we would be likely to say today, two big problems: an energy shortage and need for year-round transportation. The trouble was caused mainly by the winter weather which was, then as now, cold. The river was apt to be frozen over more than half the year making it useless for transportation. People had to devise some means of keeping warm, too, and firewood was in great demand. There was a vast and fertile area west and north of St. Paul for the growing of grain; immigrants were flowing into the area in ever-increasing numbers, but most transport either for them or their produce was rudimentary and unsatisfactory.

To us they might be problems; to James J. Hill they were op­portunities. He was not long in go­ing into the energy and transporta­tion business. His first venture in the energy business was the buying and storing of firewood against the winter. He went into transportation at its core, warehousing. With the river closed so much of the year, it was vital to have large storage facilities. As soon as he could com­mand the resources, he went into the river boat business on the Red River as it makes its way into Canada. Here, too, he was con­fronted with an energy shortage, for that river usually gets very low on water just at the peak of the season.

The future of St. Paul, the Northwest, and James J. Hill lay with railroading, of course. It can­not be said that Hill was the first to grasp the idea that the railroads could do so much toward solving the energy and transportation pro­blems of a vast region. He was, however, a man of vision; he could see possibilities of development amidst what were then only prob­lems and potentialities. But he was hardly the first to turn to railroad­ing. Others built the most vital links between Chicago and St. Paul. Both the Northern Pacific and Canadian Pacific preceded him by years into the Pacific Northwest.

Hill rarely sought to be first, but he always sought to be the most thorough and best. If Hill had lived by a copybook maxim, it would surely have been: “Anything worth doing at all is worth doing well.”

Not just well, either, but superbly. He always insisted that his railroads be built solidly the first time. He paid infinite attention to the details of whatever he was doing. He was, indeed, a master builder and an exemplary en­trepreneur.

Albro Martin has told, in this large and impressively printed book, not only the remarkable story of Jim Hill but of his times and of his place in American history. In order to tell the story well Professor Martin had to work on a large can­vas, so to speak. The story entails the upper Midwest of the United States, the Mountain states, the Pacific Northwest, and much of Canada as well. It involves the piec­ing together and building of the Great Northern, the acquisition of the Northern Pacific and the Chicago Burlington and Quincy—a vast railroad network—by Hill and associates.

But the story was hardly confined to this region, for Hill was depen­dent, too, upon the Eastern United States—Chicago, the Great Lakes, Buffalo, and New York City—and beyond that to Europe and especial­ly London. Once Hill’s Great North­ern had reached the Pacific North­west his concerns reached all the way to the Orient. Martin has used his considerable writing skill to put together mainly from primary sources the portrait of James J. Hill against a backdrop of international finance, rampant railroad building, and the ever-present political shenanigans.

There are so many fascinating tales within this vast story that a reader must long for more detail on many of them. The acquisition by Hill and associates of the St. Paul and Pacific Railroad, which did not make it to the Canadian border much less the Pacific, is a tale worth telling on its own. They got a pro­perty worth about $20,000,000 by advancing only a few hundred thou­sand dollars, some rusty rails, they said, and from this small beginning fashioned a railroad empire. The saga of the building of the Great Northern from Montana to the Pacific should rank with the best of western stories. Then there were the clashes between Hill and other great railroad titans—Jay Gould, E.H. Harriman, Van Horne, and many, many others. The Northern Securities Case, which resulted from efforts of Hill, Morgan, and Harriman to keep firm control over the Great Northern, Northern Pacific, and Chicago Burlington and Quincy, is a story of a head-on collision between these business leaders and Theodore Roosevelt.

James J. Hill emerges from Pro­fessor Martin’s account as an ex­emplar of free enterprise at its best. Literally, Hill rose from poverty to riches. He had only a few years of schooling, but he gained such knowledge as he needed and was believed to be wise by those who knew him in his later years. In a day when land grants and subsidies were virtually considered a require­ment for building transcontinen­tals, Hill built his Great Northern without subsidy or grant. He built well, too, for when roads around him were bankrupting and going in­to receivership he was prospering.

Hill lived to witness the railroads beginning to become the plaything of politicians and the bete noire of muckrakers. It saddened him, for he had seen with his own eyes the miracle wrought in the land by dependable and cheap transporta­tion. He contributed much to this development, and was ever sur­prised if anyone thought that he had sought anything but the good of his fellow man—as well as his own good.

Hill’s charitable contributions were legion, but he gave as much care in selecting those to whom he would give as to the routes over which his rails would pass. (He at­tempted to improve the breeding of cattle in his region by raising and giving away bulls to farmers but stopped doing so when he could perceive no good results.)

The story of James J. Hill is in­spiration and confirmation for those who believe that the way to solve problems is to allow freedom for men of vision and energy to work on them. A wide reading of this book should increase their tribe.

 

THE SUPERFLUOUS MEN: CON­SERVATIVE CRITICS OF AMERI­CAN CULTURE, 1900-1945

Edited by Robert M. Crunden

(The University of Texas Press, Austin, Texas 78712, 1977)

289 pages

Reviewed by Allan C. Brownfeld

A society afflicted with contem­poraneity faces the danger of a com­plete loss of the past and all of its lessons. In our own country, even the events of the earlier part of the current century have largely been lost, as have the thoughtful analyses of those who attempted to understand those events and make sense of them.

Professor Robert M. Crunden of the University of Texas has, in this volume, brought together a repre­sentative sample of conservative thinking during the first half of the twentieth century. Among those whose work is included are Ralph Adams Cram, Albert Jay Nock, Walter Lippmann, Irving Babbitt, Allen Tate and H.L. Mencken. Needless to say, there is hardly any uniformity of opinion to be found in this group.

What is to be found, according to Professor Crunden, is the assump­tion that the worthwhile things in life cannot be obtained by political means. Conservatives have tradi­tionally opposed governmental in­terference in society, he concludes, because it impedes the enjoyment of more important concerns.

In an essay entitled “Anarchist’s Progress,” Albert Jay Nock, discus­sing the tendency of government power to grow and individual free­dom to diminish, writes that, “The general upshot of my observations, however, was to show me that whether in the hands of Liberal or Conservative, Republican or Demo­crat, and whether under nominal constitutionalism, republicanism or autocracy, the mechanism of the State would work freely and natur­ally in but one direction, namely: against the welfare of the people.” This was written in 1928.

Walter Lippmann, in The Good Society, notes that socialism, collec­tivism, and all forms of government intervention in the market place lead away from freedom and pros­perity: “When the collectivist abolishes the market place, all he really does is to locate it in the brains of the planning board. Some­how or other these officials are sup­posed to know… what everyone can do and how willing he is to do it and how well he is able to do it and, also, what everyone needs and how he will prefer to satisfy his needs…. If a planning board an­nounced that, henceforth, machines in factories would be run not by electrical power generated in dynamos but by decrees issued by public officials, it would sound ab­surd. Yet the pretension to regulate the division of labor by abolishing the market and substituting au­thoritative planners is an idea of the same order.”

In an essay originally published in Harper’s in 1929, John Crowe Ransom, one of the leading Southern agrarian writers, might have been speaking to some of our current educators who think that students rather than teachers should select the curriculum on the basis of “relevance” or convenience. He states that, “The admission that one study is as important as another is a plea in spiritual bank­ruptcy, and it invites and produces just that ceaseless dissipation of human energies which now defines our intellectual Americanism—it pictures man as a creature without a center, without a substantial core of interests, and unable to give his destiny any direction. In a true society there are historical and philosophical principles which com­pose the staple of an educational re­quirement.”

Discussing the merits of individualism and the strength of this trait in the American character, George Santayana, in an essay writ­ten in 1920, observed that, “Individualism, roughness, and self-trust are supposed to go with selfishness and a cold heart; but I suspect that is a prejudice. It is rather dependence, insecurity, and mutual jostling that poison our placid gregarious brotherhood; and fanciful passionate demands upon people’s affections, when they are disappointed, as they soon must be, breed ill will and a final meanness… In his affections the American is seldom passionate, often deep, and always kindly… But as the American is an individualist his goodwill is not officious. His in­stinct is to think well of everybody, and to wish everybody well, but in a spirit of rough comradeship, expect­ing every man to stand on his own legs and to be helpful in his turn. When he has given his neighbour a chance he thinks he has done enough for him… It will take some hammering to drive a coddling socialism into America.”

H.L. Mencken might have been writing of our current crop of politi­cians when he discussed the role of politicians in a democratic society in his 1926 book, Notes on Democracy. Professor Crunden excerpts an essay on this subject which includes this thought: “The politician… is the courtier of democracy… For it was of the essence of the courtier’s art and mystery that he flattered his employer in order to victimize him, yielded to him in order to rule him. The politician under democracy does precisely the same thing. His business is never what it pretends to be. Ostensibly he is an altruist… Actually he is a sturdy rogue whose principal, and often sole aim in life is to butter his parsnips.”

Somehow the current generation of college students and teachers seems to be under the impression that the American intellectual tradition is one which has been supportive of government, optimistic about the good politicians can do, and suspicious of freedom, either in the market place or in other areas of life. A careful reading of this volume will quickly disabuse them of this notion. Professor Crunden has done us all a significant service in collecting these essays and mak­ing them available for a society which desperately needs to redis­cover its own past.