A Reviewer's Notebook - 1976/1

THE LOVE OF LIBERTY 

Reviewed by Allan C. Brownfeld

Going around Israel on an archaeological junket, I encountered the word “hitnadvut.” It means voluntarism as opposed to coercion, and it connotes social power as opposed to State power. I happened during the same trip to be reading Leonard Read’s new book, The Love of Liberty (The Foundation for Economic Education). What Leonard Read is all about is “hitnadvut.”

Israel, of course, is surrounded by enemies, and in retaining a war footing it does not quibble about subordinating social power to State power when it is a matter of taxing and drafting to keep its army in readiness. Since the nation was formed in good part by Marxist ideologues who had grown up in eastern Europe during the period of pre-Bolshevik revolutionary ferment, “hitnadvut” has had a pernicious tradition to overcome. But it is interesting to note that the Israeli Founding Fathers who came trickling into late nineteenth and early twentieth century Palestine from the Jewish Pale of Settlement in Czarist Russia had to jettison all their ideas about an orthodox socialist economy in order to get Galilee swampland to produce. Even though they were committed ideologically to socialism, the Israeli pioneers had to find a form of economic organization that would be compatible with “hitnadvut.”

The result was the kibbutz, or voluntary collective. I don’t suppose Leonard Read would fully approve of it. The kibbutz does not reward the gifted individual by paying him more than the yeoman laborer. But it conforms to the Read idea of “anything that’s peaceful.” Nobody is compelled either to join or to remain in a kibbutz. The kibbutz buys its land in the open market — its purchase of fallow acres, open to all corners under the prevailing Turkish law, were made in pure capitalistic and “hitnadvut” fashion. The rules of the kibbutz are made by democratic vote. Besides farming, the kibbutz engages in everything from manufacturing to inn-keeping. It lives by competition with individual enterprise. It has even begun to hire labor from the outside. In short, it functions very much like an employee-owned corporation. It does not even ask the State to help provide Welfare for its elders. They simply go on working after age 65 at jobs they are still able to do. So there is kibbutz social security without bringing in the strong-arm tactics of the State.

So this is Israeli “socialism.” I don’t want to sound lyrical about it; I would not like to live on a kibbutz. But it was interesting to see that where Leonard Read’s principles of voluntarism and “anything that’s peaceful” are followed, even a nominally collective way of life can flourish.

Declining Self-Reliance

It was good to be reading Leonard Read while going about in a strange country. The various essays The Love of Liberty took on added freshness simply because their principles could be tested by observation of new things. Israel, beginning in Marxist dogma, strains toward “hitnadvut” self-reliance. This is a quality that is on the rise both inside the kibbutz and outside, where individuals start factories to make all sorts of useful objects out of olive wood. In writing about America, which once produced so many Thomas Edisons and Samuel Morses, Leonard Read has been forced to speak of the fall of self-reliance. It does not strike Mr. Read as mere happenstance that the figures for those receiving food stamps almost exactly balance the number of “keepers” who work for federal, state and local governments. The total — it is 16,000,000 in either case, or a whopping 32,000,000 in all — live off the rest of us. Mr. Read notes that there are no more Edisons or Morses among the keepers than among the kept. And 32,000,000 non-producers are giving the U.S. more and more the flavor of the drone society.

If Mr. Read were prone to pessimism, his essay on  What We Can Learn from a Communist would have him permanently in the dumps. Quoting Earl Browder, who headed the American Communist Party for years, he mentions twenty-two specific examples of the development of socialism in the U.S. They range from government debt financing to price controls, and from the Employment Act of 1946 to government housing. Mr. Browder wrote that the single feature that the twenty-two items had in common was that they “express the growth of State capitalism.” In substance if not in form, said Browder, State capitalism has progressed further in America than in Great Britain. As the Marxists define it, State capitalism is just another phrase for socialism.

The revealing word in many of Browder’s twenty-two items is “guaranteed.” Who, asks Leonard Read, is the guarantor? It is the government, which backs its guarantees with “coercively collectivized collateral.”   Instead of panicking at Browder’s list, Leonard Read thanks God for the “mess that we are in.” The “mess” is the evidence that we have been doing things wrong.   It sends up signals that are loud and clear. Sooner or later there will be action on these signals.

Who Will Lead?

Who will lead the way to necessary change? Mr. Read thinks that appealing to the masses defeats itself. The masses fall easy prey to dictators. Name-calling doesn’t help. It can be exhilarating to the pejorative verbalizer, but name-calling only serves to get peoples’ backs up. As the backs rise, the ears close.

Heightened consciousness, says Leonard Read, can’t be sold. The way to convince others is, first, to perfect one’s own understanding, to become a member of Albert Nock’s — and Isaiah’s — saving Remnant. It is only when individuals become advanced in self-reliance and personal creativity that they project a contagious image. “Exemplarity,” Mr. Read calls it. He quotes Albert Schweitzer : “Example is not the main thing in influencing others; it is the only thing.”

Exemplarity, of course, works in bad ways as well as in good. Consider the present day rash of teachers’ strikes in communities that have anti-strike laws for public employees. The exemplarity here does not encourage students to believe in law and order, or “anything that’s peaceful.” The bad example, however, adds to the “mess” that is the evidence that we are doing things wrong. If the teachers strike long enough, it will promote a grand efflorescence of private schools — “exemplarity” of the good sort.

Leonard Read says that “the abundance we still enjoy is exclusively the result of a leakage of free human energy.” It was interesting to me that the Israelis have a word for such leakage. It is “le’histader,” meaning “working around the rules.” You can’t beat Leonard Read : he applies anywhere.

RENT CONTROL: A POPULAR PARADOX (The Fraser Institute, Vancouver, B.C., Canada, 1975) 212 pp.

Reviewed by Bettina Bien Greaves

People generally will buy more of a thing at a lower price than at a higher price. At the same time, owners will be less eager to sell at a lower price than at a higher price. Thus, a gap will always appear between the quantity of a thing people want to buy and the quantity its owners are willing to sell, if government uses force to keep the price down. This theme is applied to housing in Rent Control: A Popular Paradox.

The authors in this anthology describe the gap in the number of rental units sought and the number that appeared on the market when governments imposed ceil­ings on rents :

•        In Vienna, Austria in the 1920′s (1974 Nobel Economics prize win­ner F. A. Hayek)

•        In Paris, France (French journalist Bertrand de Jouvenel)

•        In the U. S. during World War II (Chicago professors Milton Friedman and George J. Stigler)

•        In the United Kingdom (British professors F. W. Paish and F. G. Pennance)

•        In New York City (Virginia professor E. 0. Olsen)

•        In Sweden (Swedish lecturer in economics Sven Rydenfelt)

•        The Institute’s Chief Economist, Michael A. Walker, also contributes a couple of chapters about the situation in Canada. In each case, would be tenants wanted to rent more space at bargain prices than owners of real estate offered on the market.

Because of the nature of rental housing — it usually deteriorates gradually — there is generally some lag in the appearance of a housing shortage when government controls rents. Yet rent controls are bound to have significant side effects in time — over and above a gap between supply and demand. Savers look for more lucrative investments than rent-controlled housing; builders hesitate, or refuse, to start new construction; tenants fortunate enough to be living in bargain priced housing units spread out to occupy more space than they otherwise would and refuse to move, even if new and/or better jobs open up elsewhere ; and additional housing units cannot be produced overnight precisely where and when they are needed. Thus, rent controls aggravate and prolong economic rigidities and distortions.

There may be widespread agreement among economists as to the inevitability of a housing shortage under rent controls. Yet many politicians still expect that rent con­trols will gain them votes and help them stay in office if the number of happy tenants who enjoy rental bargains outnumber the disgruntled landlords and dissatisfied would-be tenants for whom suitable housing is not available.

Apparently there is renewed political pressure now for rent controls in Canada (two Canadian provinces have already enacted them in some form). It was this agitation that induced The Fraser Institute to publish this worth while book on the subject. One need not endorse the Institute’s scheme for income supplementation in hardship cases during decontrol to find the book helpful.

The material should be useful to anyone trying to combat political control of rents as well as to students looking for examples of government intervention. The book illustrates with historical evidence and statistics one of the economic truths stressed by the late Professor Ludwig von Mises, namely that government imposed price ceilings, of which rent controls are one example, produce effects which, from the point of view of the very persons who advocated them, are even worse than the state of affairs they were trying to remedy.

Whenever enacted and enforced, rent controls have always exaggerated the shortage of rental housing — and they always will.

CLEAR AND PRESENT DANGERS by M. Stanton Evans (New York: Harcourt Brace Jovanovich, 1975) 445 pp., $4.95.

Reviewed by William H. Peterson

Mr. Evans, nationally syndicated columnist, chairman of the American Conservative Union and former editor of the Indianapolis News, here attacks liberalism with a vengeance. He charges that liberalism has matters backward in its basic approaches, and because of this initial error it also reverses the fundamental facts of our economic and political life. Hence, our country, under liberal guidance ever since the Great Depression, has been reeling from one catastrophe to another. Liberal answers to questions of poverty, pollution control, urban transit, public education, health care, oil profits, national defense, and the like are counter-productive, or to put it less mildly, frequently outright disasters.

Evans’ research on liberalism is alone worth the price of admission. He notes, for example, the definition of “liberal” as propounded by former Senator Joseph Clark of Pennsylvania in 1953. “A Liberal is here defined as one who believes in using the full force of government for the advancement of social, political and economic justice at the municipal, state, national and international levels.” Evans also quotes liberal economist Robert Theobald (an early champion of guaranteed annual income) who says, “we must recognize the fact that the society’s needs may be more important than those of a single person” and “a strict insistence on existing rights would lead to an intolerable situation for all.”

Mr. Evans derives his conservative stance from what he calls “the American design,” from the first principles as laid down by the Founding Fathers. He stresses the idea of having a written instrument of authorization — a Constitution. He stresses, too, the Founders’ concept of, to use the Evans word, “antimajoritarianism.” The Messrs. Washington, Jefferson, Madison, Franklin, et al believed in the ultimate authority of the people but they also believed in limits to what a majority in the legislature should be able to do. Such a majority could be hostile to sound government and the rights of the individual. So Mr. Evans hails the Constitutional design of checks and balances, of the separation and subdivision of power so that no single branch of government could exercise despotic authority. 

Unfortunately, such authority has reared its ugly head time and time again. Mr. Evans notes, for example, how the Federal Com­munications Commission has especially subjected broadcasters such as Dean Clarence Manion and Rev. Carl McIntire, both spokesmen for the political right, to harsh “balancing” viewpoint requirements —which has had the effect of causing some radio stations to drop the Manion and McIntire broadcasts. Ironically, the requirements were promulgated under the name of the “Fairness Doctrine.”

Similarly Mr. Evans takes the Interstate Commerce Commission to task for requiring railroads to acquire a certificate of convenience and necessity to build new track or otherwise enlarge services. The Civil Aeronautics Board is like­wise criticized for all but wiping out real competition in air transportation.

Thus does Mr. Evans tear into liberal programs and notions, spelling out facts and cases in a goldmine of a paperback. He concludes :

“There is little likelihood that America can regain its vigor as a free so­ciety, cure its economic ills, or correct its political disorders, if it continues to drift in metaphysical confusion. We therefore end as we began, in the awareness that our political troubles arise from the deeper realms of ethics and religion.”

THE INCREDIBLE BREAD MACHINE FILM (World Research, Inc., Campus Studies Institute Di­vision, 11722 Sorrento Valley Road, San Diego, California 92121, 1975) 32 minutes, color, 16 mm.

Reviewed by Brian Summers

The Campus Studies Institute has a best-selling libertarian paper­back (100.000 the first year) in The Incredible Bread Machine. Now they have made a movie based on the book.

The results are devastating.   Here is a documented, fast-paced, all-out assault on statism. Scene : the state seizes an Amish farmer’s horses for refusing to pay Social Security taxes. Scene: The state lays siege to the home of a man who, rifle in hand, refuses to yield to eminent domain. Scene: The parking lot where the home once stood. Scene: Narcotics agents break into a home, terrorize the occupants, smash the furniture, and discover they are in the wrong house. Scene: Economist Murray Rothbard speaks of the wonders of government housing while seated before scenes of the government blowing up its own housing projects. And on and on.

The film makes effective use of dialogue. No one preaches to the audience. Instead, young adults rap about freedom, rights, social­ism, and the market. The overall effect is to engender an interest in the freedom philosophy.

The film is being distributed by the Campus Studies Institute. For classroom use, study guides are available.