All Commentary
Wednesday, April 1, 1981

Reviewers Notebook: Wealth of Nations in Crisis

Tn its reiteration of home truths, Ronald C. Nairn’s Wealth of Nations in Crisis (Bayland Publishing, P.O. Box 25386, Houston, Texas 77005, 288 pp., $12.95) is a simple book. The title harks back to Adam Smith; the “lesson” is that State incursions into the economic process work only toward the impoverishment of people. But simplicity is not enough in a world that has succumbed to illusions. So, as a means to establishing his basic point that the individual must be allowed to make his own decisions if human productivity is to be revived, Mr. Nairn has been at back-breaking pains to illustrate what has been happening all over the world to inhibit the three- billion-strong peasant populations whose farming activities keep a billion city dwellers alive.

The virtue of Mr. Nairn’s book resides in its incredibly learned detail. Nairn’s own experience in life has given him a unique perspective. He was born in Ireland, and raised on a cattle and sheep ranch in New Zealand. In World War II he enlisted as an RAF fighter pilot, and after the war he gravitated to Asian countries where he became fascinated by the ways which peasant societies adopted to cope with the problems of monsoons, drought, and the knowledge that bureaucratic governments dominated by city-bred mandarinates could be more terrible than ti gers. In between his Asiatic assignments he took degrees at Yale University, and he established himself as an expert in agricultural management in Arizona.

In his own way Mr. Nairn is an intellectual cousin to the French physiocrats. He believes that the abolition of poverty begins with a proper individual respect for the soil which, in conjunction with the sun and water, is the source of human energy. Technology is important, money-or credit—is important, but the human being, faced with the need to outwit the caprices of nature on the land, is, as Nairn puts it, “the alpha and omega of all that happens to this planet.”

Where tradition has been supportive of free farming, whether by individuals or family units, the land has always yielded plenty. Land doesn’t even have to be good to keep people alive if they make the right choices and are willing to work. Nairn, as befits someone who was born in Ireland, knows about the Aran islanders, who have literally created their own soil by mixing kelp and sand and using it to raise calorie-rich potatoes.

Freedom and Abundance

In America, where the government desisted from the temptation to impose continuing bureaucratic conditions on individuals who took advantage of the Homestead Act, enough people have made wise decisions to create an agricultural abundance capable of feeding the world. But where ideologues have held sway, peasant populations have been unable to use native common sense to the end of keeping both themselves and their dependent city cousins alive.

It is the human being as a power seeker that prevents the creation of an agricultural plenty sufficient to sustain even the wildest sort of population explosion. Wars, provoked by politicians, are the cause of continuing instability—and farming can’t “take off” when the rules of land tenure are in continual jeopardy. The other big “inhibitors” in the agricultural equation are ideology, politics and bureaucracy. Culture itself can be an inhibitor, but it is not necessarily so where family tradition does not frown on individual experiment.

The ideologue, supported by politicians and bureaucrats, thinks that mankind can be made over. But the peasant, who has to outguess the heavens and deal with nature’s recalcitrance, knows better. Mr. Nairn has been a fascinated watcher of events in the two Chinas, the one that is limited to the small island of Taiwan and the bigger mainland territory that was conquered by Mao Tse-tung’s Marxist-derived ideology. The Taiwanese Chinese, rejecting ideology, solved their productive problems by deciding to refrain from creating continuing economic bur eaucracies. They used government in the first instance to finance the purchase of land from big landlords, selling it in turn to individual farming families. The landlords were paid off in industrial securities, which satisfied their capitalistic instincts. Thus the problem of setting up a nation of free farmers was solved without the class warfare that has wrecked the polity of the mainland Chinese.

The ironical thing is that the mainland Chinese are now coming to recognize the superior wisdom of the Taiwanese. After all the debilitating spasms of the Cultural Revolution and the Great Leap Forward, which produced only a misery that killed millions, the ideologues in Peking have been forced to rehabilitate the primacy of the family on the soil. Family teams have been constituted as social and marketing units, and some seven per cent of the farmed land has been allocated to individual families for private gardens.

Smothering Productivity

In Soviet Russia, Stalin and his successors were forced to permit some private gardening and the peasant retention of a few cows, pigs and chickens in order to put food on the tables of Communist Party functionaries in the cities. But the persistence of ideology in Soviet Russia leads to chronic grain shortages and deficient meat supplies. The low productivity of the state farms keeps half the Soviet population chained to the countryside.

In the western world it is the growth of bureaucracy that threatens to inhibit the agricultural producer. In 1975, so Nairn tells us, more than 8,000 new regulations were added to the U.S. regulatory lexicon. Simple arithmetic shows that no human being can keep up with this output. A dairy cattle feed additive was approved by one agency, but milk drawn from the cattle was condemned by other regulations. Milk was poured down the drains for almost a year until the conflict was resolved in favor of the additive.

Luckily, says Nairn, a “benign neglect” of the law has kept American agriculture from coming to a halt. But much damage has been done by the regulators. The development of natural biological pesticides (insect-attacking bacteria and hormones) was halted by stupid rules—and so we have had to go back to using chemicals that do have undesirable side effects.

Nobel Prize-winner Friedrich Hayek has been quoted as saying that Nairn’s book is one of the most important economic treatises of recent years. It raises a host of fascinating questions, such as why is only 22 per cent of Africa’s arable land farmed? The answers are political, not economic.

  • 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.