All Commentary
Saturday, January 1, 1972

A Reviewer’s Notebook – 1972/1


We, in the West, are supposed to hang our heads in shame these days. The bill of complaints brought against us is long. We are “imperialists.” We are “materialists.” We have used the “Third World” as a quarrying ground for raw materials without giving adequate compensation for what we have taken. We indulge ourselves in race prejudice. We are enemies of freedom, and we oppose the revolution of the masses. Our sons and daughters, listening to the vindictive chorus, begin to go over to the side of our detractors. Susan Sontag, a young literary critic, even goes so far as to say that the white race (meaning the nations of the West) is the cancer of humanity.

The whole bill of alleged particulars is, of course, the sheerest moonshine. So it is good to come upon Louis Rougier’s The Genius of the West (Nash, $8.50), with its discerning introduction by F. A. Hayek. As one in a series of publications issued by the Principles of Freedom Committee this book turns to the historic record of three millennia to prove that Western civilization, alone among twenty-two distinctive civilizations recognized by Arnold Toynbee, has managed to avoid the quagmires of fatalism. It is the only civilization that has been moved by a belief that man can improve his condition by understanding and mastering the forces of nature. And, far from “oppressing” the “Third World” and the “colored races” by its “imperialistic” urges, it is the West that has brought the hope of progress to many a land that now joins in thoughtless excoriation of the very spirit that has created all the things that are now claimed as a universal birthright.

Lucky Accidents

In one sense the “West” is the result of a happy concatenation. It could have gone down the drain at numerous points if lucky accident had not intervened. The Greeks, who demythologized nature and demonstrated the logical necessity of abstract relationships, thus giving substance to “reason,” gave us the beginnings of theoretical science. With the rise of the citystate, they developed the idea of the rule of law as something better than capricious government by men. Greek rationalism created free men, and free men, using geometric hypotheses, physical instruments and mathematical devices, learned how to conquer space and time. Their maps made them better voyagers, better traders. And, with a mastery of the sea extending their reaches all over the Mediterranean, they hit upon the virtues of money and the market economy.

Rome superimposed order on Greek liberty without killing it. But Rome, with its conquests, took more slaves than the Greeks had ever taken. In Louis Rougier’s opinion it was the institution of slavery that brought about the collapse of the ancient world. With slaves to do the work, the inventions of Archimedes — the lever, the wedge, the pulley, the worm screw, the winch — were regarded not as laborsaving necessities but as mere intellectual playthings. The prejudice against any practical application of the mechanical arts was so strong that Archimedes, so Plutarch tells us, never bothered to leave any written treatise on his accomplishments. And when Heron invented a device involving the principle of the steam engine in ancient Alexandria, it was used only for childish amusements such as making marionettes dance and toy trumpets blow. It apparently never occurred to Heron that he might have lightened that most exhausting task of women, the grinding of grain.

With more and more slaves at their disposal, the Romans had even less reason to develop the “mechanic arts” than the Greeks. Conquest after conquest brought more captives to till the extensive acreage of the Roman latifundia. The small peasant landholder, unable to meet slave competition, drifted into Rome to join the plebs who clamored for bread and circuses and got what they wanted from corrupt politicians. Thus Rome decayed, and 40,000 slaves eventually joined Alaric in the sack of the city that liked to think of itself as eternal.

The Christian Contribution

The Christian church, which rose on the ruins of the ancient world, had no particular interest in the things of this world. But it condemned the enslavement of prisoners as an infringement of God given human dignity. And, since Jesus had been a carpenter and St. Paul a tentmaker and St. Peter a fisherman, it saw no reason to object when the monks in the first monasteries made a virtue of work. In time the Middle Ages developed an entirely different attitude toward laborsaving devices than was prevalent in Greek and Roman times. Louis Rougier makes a fascinating story of the linkage between the “social revolution of Christianity” and the development of the water mill, the wind mill, the hydraulic hammer, and the various lifting tools that were needed to cover Europe “with a white robe of cathedrals.” Without intending it as such, the church unleashed something of a medieval technological revolution. Slaves became serfs, cities grew, and the stage was set for the “new humanism” of the Renaissance.

The Christian attitude toward work was the first lucky break of the West in the time of Rome’s collapse. But work, with its premium on practical inventions such as the lifting jack, would not have flowered in a scientific revival if the church itself had not changed sufficiently to permit a secularization of life during much of the working week. By a second lucky accident the elders of the City of Florence happened to entertain a Byzantine scholar, Manuel Chrysoloras, who was traveling in Italy on a diplomatic mission. The Florentine elite flocked to hear Chrysoloras tell about Homer, Plato, Thucydides, and Xenophon, and soon there was a horde of Florentines descending on Byzantium, buying forgotten Greek texts. If it hadn’t been for the rediscovery of the Greek and Latin writers whose works had somehow survived the great burning of pagan documents that marked the advent of Christianity, the modern scientific, economic, and political revolutions would never have come to pass.

Inquiry Halted in Orient

During the so called Dark Ages, Arab civilization seemed to promise much more than anything that was happening in western Europe. And the Chinese were way ahead of the West is such things as the use of coal, gunpowder, and printing with movable letters. But the Turks, as Louis Rougier puts it, “imposed their heavy yoke on Islam; and Islam, returning to its sources, paralyzed inquiry with a formula which brooked no answer: Allah aalam, God knows best what is.” As for the Chinese, instead of trying to dominate nature they sought an adjustment that stressed finding contentment in the midst of poverty and adversity. The Hindus, with their caste system, permitted no invigorating circulation of elites. So it was the West, with its legend of Prometheus, who stole fire from the gods, that was left to push the idea of progress.

Now, even as they revile us, the Islamic, Confucian and Hindu worlds are clamoring for all the benefits that the West has developed through three millennia of the activist attitude. We need not begrudge them their desires. But the notion that the West need apologize for its history is too ridiculous for words.

 

POLITICALLY IMPOSSIBLE…? by W. H. Hutt (London: The Institute of Economic Affairs, 1971), 100 pp. ($1.80). Reviewed by Henry Hazlitt

W. H. Hutt is one of the outstanding economists of our age. Born in London, professor and later dean of the Faculty of Commerce at the University of Cape Town, and recently visiting professor at a number of American universities, he has published half-a-dozen books of which the two most influential have been his short Theory of Collective Bargaining in 1930 and the 446-page Keynesianism — Retrospect and Prospect in 1963.

His work has been distinguished not only for remarkable acumen but for no less remarkable independence and courage. The present paperback is devoted to trying to instill some of his own candor and courage into his professional colleagues.

For what Professor Hutt finds is that most of these colleagues, particularly in the last forty years, have become increasingly poor economists in the effort to become “realistic” politicians. Whenever an honest economist has come up with a recommendation, based on principle, for the outright repeal of some entrenched bad law or discontinuance of some other disruptive government policy, not only the political demagogues but his own colleagues have dismissed his recommendation as “politically impossible.” As a result, more and more economists have abandoned candor, refrained from even suggesting the “politically impossible” proposal, and instead have put forward compromise proposals that they think have a political chance of being adopted. Or they have sought a reputation for influence by recommending what they thought was going to be done anyway. Or they have resorted to outright demagogy in calling for some new form of inflation, control, socialism, or seizure. The result has been a deplorable degeneration in economic thought.

Hutt illustrates his thesis in four separate fields — monetary policy, income transfers, Keynesianism, and the strike threat system. His comments on particular economists are candid and sometimes unsparing.

Keynes, for example, he points out, gained his great reputation among his colleagues as well as with the general public by pretending that he had found an easy way out of unemployment and depression. This consisted of cheap money, government deficits, and inflation. The word “inflation” itself was suspect. “But an inspired insight enabled the Keynesians to perceive that, if called something else, ‘the maintenance of effective demand,’ for instance, it can become respectable.”

Under no conditions did Keynes want to risk offending the unions by suggesting that they were even partly responsible for creating the mass unemployment of the 1930′s by pushing up and keeping up wage rates to unworkable levels. So he invented the untenable “unemployment equilibrium” theory:

“Keynes, perceiving that it would be politically suicidal to mention the unmentionable, saw a way out through the most successful conjuring trick in history which, deceiving an audience that wished to be deceived, led to its being hailed as a great discovery, as revolutionary and important as Einstein’s theory of relativity. I am not accusing Keynes of intellectual dishonesty. He deceived himself with his ‘conjuring trick.’ That is how I have come to regard his ‘unemployment equilibrium’ notion, together with the subsidiary theories with which it was bolstered.”

What is now commonly dismissed as “politically impossible” usually turns out on closer examination to be merely the politically difficult or politically unlikely. It is only made more difficult and more unlikely when economists lose the courage even to propose it. Hutt’s book is essentially a plea to his professional colleagues for more honesty and candor:

“No policy which is for the advantage of the people is incapable of being effectively explained to them. It will of course take time and persistence to convince a majority. In the meantime compromise will be needed whenever urgent steps are required. But compromise, while it is the politician’s privilege and necessity, is the scholar’s deadly sin — unless it is presented clearly and unmistakably as compromise and is always accompanied (a) by the noncom promising proposal and (b) an explicit explanation of the vote procurement reasons for the compromising proposal.”

This “dual form of exposition,” as Hutt calls it, would certainly be a great advance compared with the present typical ambiguity and disingenuousness. Yet, while there is only one ideal course, there are usually an indefinite number of possible compromises. If each economist plumps for one of these, in accordance with his own amateur notions of its political feasibility, the conflict among their recommendations may only end by confusing public opinion. In the long run it seems better for the economist to point to the path of principle, and leave the compromises to the politicians.

 

FINANCIAL POLICY IN A CHANGING ECONOMY by Enders M. Voorhees (Lebanon, Penna.: Sowers Printing Company, 1970), 232 pp., $5.00 (Plus tax, where applicable.) Reviewed by Melvin D. Barger

By present standards, the economic changes of the 1943-1955 period appear to have been modest. Inflation was in motion, but not galloping. There was social upheaval, but not open rebellion. Business was under attack, but the attacks were not wildly out of control.

The stage was being set for further trouble, however, and many thoughtful persons knew it. One astute business executive who smelled the future was Enders M. Voorhees, chief financial officer as well as articulate spokesman for U.S. Steel Corporation until his retirement several years ago. Mr. Voorhees’ speeches and writings during that 12-year period have been preserved in book form in Financial Policy in a Changing Economy, a privately published volume which should serve as a valuable source book for business historians and economists.

Mr. Voorhees’ views are important for several reasons. One, he was in a key position as the chief financial officer of the steel company long known as the industry “pacesetter.” Secondly, he is a vigorous champion of the free market, and uses a substantial stock of facts to document many of his arguments. Third, he was a tough fighter who took his arguments to Congressional committees and other influential groups in an effort to steer a safe financial course for his company under greatly changing conditions.

You catch the tone of Mr. Voorhees’ thinking in the very first chapter, a commencement address entitled “The Uncommon Man.” This is a term which harks back to other libertarian thinkers, and Mr. Voorhees leaves little doubt that he favors giving the individual considerable elbowroom for creative accomplishment. He is also suspicious of special interest groups. He remarks, “Fancied wrongs seem real if you talk only to those of a similar fancy and soon you are likely to find yourselves organized into monopolies or pressure groups to get something for nothing from the other fellow who is assumed to be getting too much for too little.” Prophetic words, particularly for a 1948 speech.

His other chapters tend to become more specific, but he frequently returns to this question of establishing genuine equity in business and economic relationships. In a brilliant chapter on specialized occupations (actually, a 1943 speech), he warns that the process of specialization may have “built up opposing rather than complementing groups whose strife for exploitative power can break up and disintegrate us, even as happened in France before the invasion.” He warned of revolutionary theories that “boil down not only to eliminating the tithe of the miller but insisting that he furnish flour without wheat being brought to him.” Now that such theories seem to be popping out of the very woodwork, it is interesting to note that Mr. Voorhees made this comment 28 years ago.

Since most of his speeches focused on corporate financial problems, Mr. Voorhees’ book is another reminder of the delicate balancing act that financial officers must perform to keep a large scale enterprise alive and functioning. Many critics, in the 1940′s and 1950′s, saw U.S. Steel as the dominant partner in an “oligopoly” that could administer prices at will and manipulate its business environment as it pleased. But it didn’t look that way to Mr. Voorhees. He saw U.S. Steel as an extremely vulnerable organization that could virtually be wiped out by a few years of unfair taxation practices or shortsighted financial controls. His frequent warnings against the dangers of insufficient depreciation charges and exorbitant wage settlement seem more timely today, with American steel companies steadily losing ground to more efficient foreign competitors. At the same time, the recent Penn Central and Lockheed crises are grim proof that even giant corporations do not have unlimited resources and must work under the iron disciplines of the market if they are to survive.

Many of Mr. Voorhees’ talks before Congressional committees came when historic issues were being fought out in labor management relations and other areas. In some cases, of course, the battle was lost and the struggle has moved on to new fronts. As a rule, however, the present troubles involve principles that do not grow obsolete and cannot be repealed by compulsions and legislation. Currently, for example, reformers warn that business must solve society’s many problems “or else” the government will step in and do it for them. “The ‘or else’ connotes that the perfect state lies ready and willing to take over,” Mr. Voorhees said in 1943. “If that were the case and if only the cupidity of private owners stood between us and perfect material happiness, I am sure we should all stampede to the arms of the perfect state.” There are many other such gems in Mr. Voorhees’ writings. “If we want ample tools of production and the jobs their presence creates, we had best set up in America a social atmosphere endorsing rather than condemning ample dividends and the profits which make them possible,” he said in 1949. And in an earlier talk: “We shall not forget that at the end of every tax plan is a human being. And I need not remind you that human beings are not abstractions.” And, “Management has no weapon to point at customers’ heads to match the strike weapon that labor leaders flourish.”

But if there’s any chapter in the book that should be carved on stone tablets for all time, it’s probably one entitled, “Needed — Dependable Dollars.” Written 21 years ago (when inflation was supposedly mild), it deals with the endless problems that arise simply because the currency is being manipulated and diluted. “Almost every business calculation and estimate is bedeviled by the absence of dollar dependability,” Mr. Voorhees said to students at Dartmouth College. Perhaps thinking of the West Germans who had only recently put their currency on a new basis, he added, “It seems to be those people who have had bitter personal experience of living under bad currencies who most appreciate good currencies and are willing to make some sacrifices to secure and maintain them.”

His rundown of the problems caused by inflated currency almost appears to be a synopsis of the next 20 years’ troubles: overstated profits, concealed confiscation of savings and other assets, increased labor management conflicts, accounting problems, increased demands for subsidies, and wage and price fixing. It is as if Mr. Voorhees had been able to review the chaos of 1971 while preparing this 1950 speech.

Though written by a businessman of great distinction in his own industry, this book is not likely to be widely circulated or quoted. Some of it is hard reading, challenging the reader to sort through charts, tables, and other lists of figures. There is also the fact that financial matters and terms can often be dry as dust. But the most likely reason it would be ignored is that the world still hotly pursues the disastrous policies that Mr. Voorhees deplored during the seemingly calm period of 19431955. That’s all the more reason why it’s well that his insights have been published in book form. It may turn out to be useful medicine when the popular nostrums have failed.

 

THE LITTLE HOUSE BOOKS —A PIONEER CHRONICLE by Laura Ingalls Wilder (New York: Harper & Row Trophy Books, 8 Vols. 95¢ each)

Reviewed by Robert M. Thornton

These books were first published nearly forty years ago when Laura Ingalls Wilder was in her sixties. The eighteenth printing in cloth was run in 1970, and now we have the first paperback edition. Laura (I just can’t bring myself to call her Mrs. Wilder) wrote the first book in the series without any plans to continue, but the enthusiastic response of young readers prompted her to keep going until the stories reached the time of her marriage to Almanzo Wilder on August 23, 1885 — eight volumes from a woman who as a young girl told her Pa that she could never write a book!

Laura was born in 1867, and lived for ninety years, most of that time with her husband on their farm near Mansfield, Missouri. Their daughter, Rose Wilder Lane, who died in 1968, is well known to libertarians as the author of The Discovery of Freedom, a book which inspired Henry Grady Weaver’s The Mainspring of Human Progress. Rose displayed her sturdy pioneer stock when at the age of 78 she was sent to Vietnam as a correspondent!

What is so fine and enjoyable about these “Little House” books? First, they take the reader out of his own world and into different places and earlier times, into the lives of the pioneers on the prairie in the 1870′s and 1880′s. What thrill is there reading about the milkman or the neighborhood grocer? Second, they make the reflective reader thankful for all the blessings we enjoy in the United States today. Laura writes of the fun she had as a girl on the prairie and the happy times with her family, but she does not romanticize her experiences. Life was hard in those days in an untamed land.

There were empty stomachs when crops were destroyed by fire, drought, locusts or storm. Sickness might mean death because doctors and medicine were scarce on the frontier. Everyone except the very old and very young had to work. The pleasures were simple — no radios, automobiles, televisions and the like. There was little money on hand, so Christmas presents for the children might be a penny and a stick of candy! There were happy times and terrible times, each a part of living.

Third, and most important, these books can help us recapture the spirit of the pilgrims, patriots, and pioneers who founded this nation and made it great. Part of that spirit is the taste for independence and a sense of individual responsibility. Laura’s family didn’t expect anyone else to take care of them. They took care of themselves and recognized that having freedom means the freedom to fail as well as to succeed. Another part of this great spirit is not to bemoan one’s fate or complain about not getting one’s “fair share” of the world’s goods. Another, is a sense of community where so much is accomplished on a voluntary basis, everyone pitching in to contribute whatever he can in time, talent and money.

In answer to inquiries about herself and her books Laura wrote:

“The Little House Books are stories of long ago. Today our way of living and our schools are much different; so many things have made living and learning easier. But the real things haven’t changed. It is still best to be honest and truthful; to make the most of what we have; to be happy with simple pleasures and to be cheerful and have courage when things go wrong. Great improvements in living have been made because every American has always been free to pursue his happiness, and so long as Americans are free they will continue to make our country ever more wonderful.”

It is no easy matter for today’s children to learn these truths, but so long as these books are read the lessons will not be lost. 


  • John Chamberlain (1903-1995) was an American journalist, business and economic historian, and author of number of works including The Roots of Capitalism (1959). Chamberlain also served as a founding editor of The Freeman magazine.