All Commentary
Saturday, December 1, 1973

A Reviewer’s Notebook – 1973/12


“In 1976, which is practically upon us, we’ll be listening to all those bicentennial orations about the founding of our Glorious Republic. The whole business promises to be an orgy of hypocrisy. The politicians making some of the speeches will be fresh from legislative halls where the debates concern such things as price controls, land use acts, the dangers of sticking with a voluntary army, the need for more inflationary spending, the iniquity of capital gains even when reckoned in inflationary dollars, the necessity of taking money from the states before giving it back as revenue sharing, and the granting of power to quite unscientific men to tell us how many units of Vitamin A and Vitamin D we may swallow at breakfast.

There is a distinct possibility that the situation will call for a wake more than for a celebration. But there are some people around who still know what our forebears fought for in 1776, and what they intended when they wrote the Constitution and the Bill of Rights. One of these people is Clarence B. Carson, whose The Rebirth of Liberty: the Founding of the American Republic 1760-1800 (Arlington House, $8.95) reminds us in quiet accents that it was the idea of limited government, not abstract democracy, that moved our ancestors to take the field against King George III and to write a basic document designed to keep unchecked majority rule from overriding inalienable individual rights.

Dr. Carson’s book, which will be familiar to readers who have followed some of its separate sections in The Freeman, differs somewhat from such well-known works as John Fiske’s The Critical Period of American History and Clinton Rossiter’s Seedtime of the Republic. Where Fiske was mainly concerned with how the idea of a federal republic took hold of the minds of men during the “anarchy” of the Articles of Confederation years, and where Rossiter sought to explain the development of certain pre-Revolutionary War thought-processes that tried to combine pragmatism with idealism, morality, individualism and conservatism (they don’t always go together), Carson takes a wider cut.

An Epic Span

He sees the period extending from 1760 to 1800 as an epic span. Before 1760 the separate American colonies had little to do with each other. Internal travel was difficult save by water, and the rivers, other than the Delaware, did not connect one important center with another.

The traditions were different: some colonies were proprietary, some had charters. Massachusetts leaned toward theocratic government, Virginia was Church of England, the Pennsylvanians, many of whom were Quakers who followed the Inner Light, were hospitable to various sects, Maryland was a haven for Catholics. New York, of course, was Dutch, and it was the Swedes who brought the log cabin to Delaware.

The trade routes ran across the Atlantic, not from colony to colony, and the trade itself was shaped to suit the ends of British mercantile philosophy. Dr. Carson makes the point that it was not mercantilism itself, hateful though it was, that roused the Americans; it was the idea of taxing them to support Crown monopolies and favored industries that were in trouble because mercantilism resulted in wars that had devastating commercial results. It was not until the British Parliament abandoned its old precedent and began to tax the colonists without consulting them that America started on the road to rebellion.

Dr. Carson is careful to describe the American Revolution as something quite different from the type of overturn that came in with the storming of the Bastille in Paris. Most Americans had always thought of themselves as Englishmen, and therefore entitled to all the immemorial rights stemming from Magna Carta and the development of the English common law. They read Coke and Black‑stone and philosopher John Locke and considered themselves coequals with all those Englishmen who had stayed at home. They had had their own experience of local government. Their allegiance was to the British King, not to the House of Commons, which, after all, was merely the local government of a distant island.

When King George III let them down by permitting his Parliament to impose taxes on them without representation, it was a sign that the British Crown had itself become revolutionary. So, as Peter Drucker observed some twenty-five years ago, 1776 signalled, not revolution, but a counterrevolution seeking a return to a conservative (or classically liberal) tradition. It was only after King George III and his ministers turned the “lobster backs” on the good people of Boston that American patriots began thinking of complete independence. Even then the idea of cutting the old ties came hard.

Unexpected Help

The colonists did not win their war unaided. They tried to finance it in the worst possible way, by printing scads of paper currency that gave rise to the saying “it’s not worth a Continental.” The terrain itself saved General Washington’s ragged musketeers: British armies couldn’t round up the necessary transport to meet the Americans in the farming back country. The Americans won by hanging on until the French entered the war and sent a fleet to help bottle up Lord Cornwallis’s troops in Yorktown. Britain had to sue for peace in order to free herself to confront European realities: it was becoming too costly to take on France and Spain as well as the rebellious colonists.

Then the strangest thing happened: after fighting a war that could have been ended several years earlier if the horrifying inflation hadn’t prevented General Washington from mobilizing the resources of the continent, the Americans proceeded to win a big victory at the peace table. Neither France nor Spain wished to see the British keep the territory that stretched from the Alleghenies to the Mississippi. Nor did the British wish to concede the so-called Northwest Territory to any continental European power. So, by adroit maneuvering, the American plenipotentiaries, Ben Franklin, John Jay and John Adams, managed to keep what is now our Middle West (along with Mississippi, Tennessee and western Kentucky) for the young nation.

Discounting what happened after the Spanish-American War, and the land-grabbing that gavels California, New Mexico and Arizona, the performance of Franklin, Jay and Adams is just about the only instance of successful post-war statesmanship in our history. If we had only had Franklin and his mates at Versailles and Yalta, the Twentieth Century would surely have been different.

Limited Government

After the peace of 1783 came the great weakness. The Founders remedied that by making an assiduous study of history and arriving at the conclusion that limited government, not raw majority rule, was needed to put free men to work establishing businesses, hacking farms out of the wilderness, sending traders to India and the China Sea, and putting steamboats on the Hudson and the Delaware. The American Dream was made possible because a few good and capable men had clung to the idea of liberty for the individual through a long period of trial.

Two centuries later we seem ready to throw it all away. Instead of limited government, we have centralized all sorts of power in Washington, D.C. Maybe Dr. Carson’s book will help our modern Jamie Madisons and John Adamses stem the tide by abolishing “controls” and stopping inflationary government spending by 1976. But don’t bet on it. What we need is to get Dr. Carson’s thinking into our schools, and with “public education” being financed from Washington how are we to bring any such thing about?

 

A THEORY OF JUSTICE by John Rawls (Cambridge, Mass.: Harvard University Press, 1971) 607 pp., $15.00.

Reviewed by John Hospers

It is not often that a book of abstract philosophy is reviewed at length by virtually every philosophical journal in the English-speaking world, not to mention journals in sociology and political science as well as the popular press. A Theory of Justice by Professor John Rawls, chairman of Harvard’s Philosophy Department, has received more pages of reviews, probably, than any book of philosophy since Wittgenstein’s Philosophical Investigations in 1952. Though it is 600 pages long and far from a model of style or clarity, it has been heaped with praises from fellow philosophers and social scientists, and bids fair to represent “the wave of the future” in the area of political philosophy. The criticisms that have been made of it have been largely such as only fellow-philosophers can understand; for example, points in logic having to do with his mode of reasoning. But the premises from which he reasons have been much less questioned, and the consequences of Rawls’ ideal of the just society if it were put into practice have been hardly considered at all. In these remarks I wish to emphasize these aspects of Rawls’ theory.

What, according to Rawls, are the features of a just society? How will it be set up, and what factors will determine the distribution of the various goods that people desire? Rawls’ answer is that right choices on all these issues are the choices a person would make if he were impartial; and the test of impartiality is what he would choose if he were shielded behind “the veil of ignorance” of his future situation in that society.

The Veil of Ignorance

Imagine a group of people newly landed on an island and about to frame a constitution and other rules regulating their behavior in relation to one another. Those who are engineers, let us say, would want to have high pay for engineers, and farmers would agitate for legislation to aid farmers; people of talent and imagination would wish a society that rewarded the talented and the imaginative, while those without talent would want to make sure that they could live off welfare checks paid for by people more talented than themselves. But now suppose, Rawls suggests, that no one knows what his role will be in the new society; he doesn’t know whether he will be a farmer, a shopkeeper, or a scientist; he doesn’t know whether he will be an employer or an employee, and so on; so he won’t vote for conditions which favor one group against another, for fear that he would turn out to belong to one of the unfavored groups.

 “But suppose he is a creative person, surely he’ll favor the creative people more than the rest.”

To circumvent such objections, Rawls makes his hypothetical individuals ignorant, not only of their particular role in society, but of their temperament, their age, their sex, even of the era in history in which they will live (else they might favor one era against another). If you don’t know whether you will be male or female, you will not favor discrimination against women on the one hand or special favors for women on the other. If you don’t know whether you will be black or white, you will not favor any kind of racism, lest you turn out to be among the persecuted group. Making your choices from behind the veil of ignorance, before you know any of the relevant facts about your own future situation, will ensure that you will not vote for favoritism to, nor discrimination against, any of these various groups. The “veil of ignorance” is a device intended to ensure impartiality of judgment in planning a political-social order.

A Mild Form of Socialism

Assuming everyone to be impartial along the lines just described, what kind of a society would each citizen, possessed of rationality and a knowledge of all the alternatives, but ignorant of all the particular facts about himself and his situation, choose as the just society? Roughly speaking, Rawls’ just society turns out to conform to the ideals of a moderately left-leaning member of the Democratic Party.

Thus, there are certain “primary social goods” that every human being should have and no one should be deprived of: “rights and liberties, opportunities and powers, income and wealth”  (p. 92). That these various factors could work heavily against one another is a problem not squarely faced in the book; for example, if everyone is to receive a basic income from the state, aren’t the liberties and opportunities of those who have to support them severely curtailed? Indeed, it would seem that the “rights and liberties”  are to be very restricted indeed, so much so that some of them, which many Americans believe to be of paramount importance in the life of our republic, will be virtually eroded away. For example, Rawls favors government ownership of some (but not all) of the means of production: the free market, he believes, is not just, and requires intervention by the state to correct it. Nor is he opposed to heavy taxation to support the indigent, and a large government bureaucracy over whose decisions one has no control.

But what does this do to the freedom to make one’s own choices (and undergo the consequences thereof), and the right to retain the fruits of one’s labor? If the state can expropriate the fruits of one’s labor, for example, to the extent of 80 per cent tax on income, and use it for its own purposes which may be opposed to the purposes of those who have earned the money, one is in bondage to the state as truly, though not quite as totally, as the ancient slave was to his master. A state that preserves your life but makes you work for it nine months out of every twelve is one that has deprived you of the rights to determine by your own choices the greater part of the course of your life. Rawls is not a complete egalitarian, but he sets alarmingly few limits to the expropriative power of the state — with consequences for human liberty that lead us straight into 1984.

Welfarism

Rawls would have “the least advantaged” in a society receive a basic stipend from the state. Though it is barely mentioned, it is clear from whence this money is to come: the unproductive are to be supported at the expense of the productive, which inevitably means that there will be more and more unproductive, increasing in proportion to the degree that parasitism is made more attractive than productivity. In other words, we have Peter being robbed to pay Paul, via the political authority — and again the disturbing question arises as to what this does to the rights of the workers and producers.

In any case, the obvious question one wants to raise in this connection, in order to make a moral assessment of the situation, and which Rawls nowhere raises, is: Why are they unproductive, that is, in need of support by others? Here is a man who is sick and cannot work; here is a man who refuses to work although suitable jobs are available. They are both economically “disadvantaged,” one through no fault of his own and the other because of his own conscious choice. Are they both to be treated alike, that is, supported by the state via taxation? Presumably Rawls’ answer is yes, since they both lack income, though for different reasons. On this point the political theorists of the twentieth century have not taken Herbert Spencer’s advice to heart, assuming as they do… that Government should step in whenever anything is not going right. It takes for granted, first that all suffering ought to be prevented, which is not true; much of the suffering is curative, and prevention of it is prevention of a remedy.

In the second place, it takes for granted that every evil can be removed; the truth being that, with the existing defects of human nature, many evils can only be thrust out of one place or form into another place or form — often being increased by the change.

The exclamation also implies the unhesitating belief… that evils of all kinds should be dealt with by the State. There does not occur the inquiry whether there are at work other agencies capable of dealing with evils, and whether the evils in question may not be among those which are best dealt with by other agencies. And obviously, the more numerous governmental interventions become, the more confirmed does this habit of thought grow, and the more loud and perpetual the demands for intervention. (The Man versus the State, 1884; reprinted Caxton Printers, 1940, pp. 34-35.)

If one is to discuss justice, one should surely take into consideration such observations and distinctions as Spencer makes. But Rawls, like most writers on political philosophy in our own century, fails to do so.

Inequalities Justified

Rawls is not an egalitarian; he holds that inequalities in income are justified as long as they increase (or do not decrease) the economic benefits to “the least advantaged” (disadvantaged for whatever reason). Suppose that the distribution of goods in a society (which for the sake of simplicity we shall take to consist of five persons only) is 6-6-4-4-4. Now an invention comes along which will enormously increase the standard of living, so that the resulting distribution becomes 50-50-40-40-3. Would it be justified?

No, presumably the invention would have to be suppressed in spite of the great rise in the standard of living of almost everyone, because one person in the society is slightly worse off because of it.

For example, the automobile is invented, thousands of people are employed in the new industry, the public is happy to have rapid and inexpensive transportation via Model T Fords, and everyone is benefited except the manufacturer of buggy-whips, who once did a land-office business but is now out of work because of the new invention. Perhaps Rawls would say that the innovation is all right provided that the former buggy whip-maker is supported on public relief. But even very handsome relief payments are not likely to equal the amount of money he was formerly making in manufacturing and selling buggy-whips. So he is genuinely a loser by the new technology. But even if his income is now 3 instead of his former 4 or 6, it would seem that Rawls would prohibit the new technological advance on the ground that at least one person, the buggy whip-maker, was worse off than before the innovation occurred. I submit that if this is really his requirement, no major innovation would ever have occurred, from the dawn of history to the present, no matter how great its benefit to mankind, since there is always someone somewhere who is worse off because of it.

The Problem of Production

In general, Rawls — along with most other political philosophers of the twentieth century (e.g. Professor Nicholas Rescher in his two recent books, Distributive Justice and Welfare)—says a great deal about the distribution of goods and very little about how these goods are to get produced. The more you penalize productive people for their productivity, the less motivated they will be to produce, and the lower the standard of living is likely to become; why produce if one will only be taxed to death for conferring productive benefits upon the rest of society? This tendency to seize the goods of some in order to provide unearned goods for others (usually in order to buy votes), a tendency which grows with each election year, until (as its final outcome) everyone is in a state of splendidly equalized destitution, has been a main source of the decay of many past civilizations, and as far as I can see it would kill Rawls’ civilization too; at least he takes no great precaution against it. [Cf., Isabel Paterson, The God of the Machine (New York: Putnam,1943), the chapter entitled “The Humanitarian with the Guillotine” ; F. A. Hayek, The Constitution of Liberty (University of Chicago Press, 1960), esp. Chapters 10-13; John Hospers, Libertarianism (Los Angeles: Nash Publishing Co., 1971), esp. Chapters 6 and 7; Murray Rothbard, For a New Liberty (New York, Macmillan, 1973), Chapter 8.]

Schemes of Redistribution

The complex schemes of distribution one finds in Rawls, Rescher, and others would be appropriate in only one context — that of a man who has earned his own money and is trying to decide how he shall apportion it, for example, in his will: shall he give it to all his children equally, or more to this one because he is more deserving and less to that one because he is a spendthrift, and more perhaps to this son who although not more deserving is paralyzed and can’t fend for himself? Such a man might profit from reading Rawls and Rescher on how he could most justly dispense his bounty to others. But in the usual Rescherian context, that of the bureaucrat employed by the state, who sits in the Department of Health, Education and Welfare deciding how he shall spend money which has been taken (via the coercive machinery of the state) from some, in order to be allotted to others in accordance with his whims or the latest directive from his superiors, the thing becomes an Orwellian nightmare. The only advice to such a person would be: “Stop the robbery — the money isn’t yours to spend in the first place. Give it back to the people from whom it has been stolen!”

Justice Between Generations

According to Rawls, there should also be “justice between generations” (pp. 293-98); no one generation should be preferred to any other. For example, the people in one generation should not use up all the sources of energy if this means that subsequent generations will have to do with less. Admittedly this is very difficult to determine: we may save on some resource now, only to find that the sacrifice was useless —because in the next generation some new source of energy is found which was not even thought of now. Rawls’ “equality between generations” thesis prompts me to make a suggestion consequent upon the above: if, in the present generation, you take away from class A and give it to class B, the incentive of class A will be reduced, their morale will deteriorate and the productivity of class A will be hampered; and there will be nothing left to A to give to the members of class B — with the result that “splendidly equalized destitution” will already have been achieved by the next generation! Now, since justice, Rawls insists, is neutral as between generations, what about that next generation? Is it justly deprived and rendered poverty-stricken because of the lack of productivity bequeathed it by the present generation? It would seem that the features of Rawls’ semi-statist political system, which is supposed to protect the next generation against the depredations of the present one, are more likely to ensure instead the deterioration of living standards via the gradual Sovietization of society by the time the next generation arrives.

Affluence Needed

The state-supported schemes of distribution of wealth, designed to make Rawls’ society approach (though not reach) a state of complete economic equality are, as Rawls himself admits, possible only in a fairly affluent society. In a society in which no one can exist much above starvation level, even by grubbing for a living fifteen hours a day (as among some African tribes), no such system of publicly-sustained beneficence would be possible, since such beneficence can come only from a surplus of production, and when there is no surplus there is nothing to be beneficent with. Indeed, it seems clear to more than one observer of history that civilization has risen to its present level of affluence only by ignoring many of Rawls’ requirements for a just society.

But what is one to say of a plan for society that may work (temporarily — until its built-in sops to egalitarianism kill it), once one has climbed up to the roof, so to speak, but cannot be used as a ladder for getting up to the roof, for the excellent reason that then one would never get there? The society Rawls envisions, so liberally sprinkled with the seeds of totalitarianism, so careless of the right to the fruits of one’s labor that these fruits would be seized from him and left to the wasteful distribution schemes of power-hungry bureaucrats, is not one that a person, who wants to ensure his own long-term survival as a human being enjoying the continued benefits of civilization, would ever choose “from behind the veil of ignorance.”

Professor Hospers of the University of Southern California School of Philosophy, is the author of Libertarianism: a Political Philosophy for Tomorrow, reviewed in the March 1972 FREEMAN.

 

THE STRIKE-THREAT SYSTEM: THE ECONOMIC CONSEQUENCES OF COLLECTIVE BARGAINING by W. H. Hutt

(New Rochelle, N. Y.: Arlington House, 1973, 290 pp.) $11.95

Reviewed by Robert G. Anderson

Another economic fallacy has been effectively refuted by the scholarly analysis of W. H. Hutt in his most recent book. The false belief that unions exercising the threat of strikes upon employers improve the welfare of labor is analyzed thoroughly and the conclusion is obvious:

the effect of wage rates determined under labor union pressure is to distort society’s production structure, while it causes no redistribution whatsoever in favor of the poorer classes as such…. the system has all along been reducing the flow of real wages and the average of real wage rates. (pp. 6-7)

While the book primarily concerns itself with the economic consequences of the strike-threat in our labor market, it presents an equally devastating argument for the superiority of the free market in the determination of the wage rates of labor.

The book shows:

that what we call “the market”  provides the only conceivable means of achieving either orderliness and the elimination of coercive action in the process of human cooperation, or results which are regarded intuitively as “just”  by the overwhelming consensus among free peoples. (p. 13)

At first this may all seem to be simply a restatement of free market arguments. However, Hutt’s thesis does not concede the “right to strike,”  a matter on which most free market proponents are willing to yield.

Hutt argues:

To forbid strikes and boycotts would not be to restrain any basic human right. Every person would remain free to refuse to sell his assets, his products, and his services, when the refusal is not a breach of contract. That is, a person would retain his unrestrained right to prefer (a) to be employed by another, (b) to work on his own account, or (c) to enjoy leisure instead of pecuniary remuneration. But this right cannot be appealed to as justification for the concerted or the simultaneous refusal of a group of persons to continue to work in an industry, in a firm, or in a key position in an industry or firm. (p. 53)

The Hutt argument against the mass withdrawal of all workers is convincing. However, while he clearly demonstrates that such action can result only in a loss of welfare to the members of society, the dilemma arises in matters of implementation. Any “anti-strike” laws would be contrary to the tenets of the free market philosophy unless a clear breach of contract can be demonstrated.

In refuting John Stuart Mill’s argument about the futility of striking, Hutt argues that strikes often do pay. But they “pay,” I would argue, because laws protecting property are not enforced. The growth of the strike-threat system has come about because laws favoring unions have been implemented, and laws protecting persons and property have not been enforced.

The strike-threat is clearly the product of a collectivist mentality and in all probability would be non-existent in an ideal free society. However, if individuals wish to pursue an action detrimental to their welfare (the concerted or the simultaneous refusal of a group of persons to continue to work in an industry), their freedom in pursuing such folly must be defended. Professor Hutt argues otherwise, and after a thorough reading of The Strike-Threat System, the reader should draw his own conclusions.

The analyses of labor’s past and labor’s share are extensively dealt with by Hutt. He lays to rest the popular notion that unions were once beneficial, showing that unions have always inflicted injustices and disrupted production. His chapters on the impact of unions on the total labor market are invaluable to the critic of union history.

One thing for certain, this book most certainly will become a classic for students of the free market philosophy examining the labor market. At long last a satisfactory volume exists for teaching the free market theory of labor economics. We all owe Professor Hutt our gratitude for filling this void in economic literature. 


  • 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.