Book Reviews

debt, as admitted by Congress and Jerry Ford, before the year has ended. The Uneconomists There is a lot more to Mr. Schiff's book than a recital of our overwhelming debt problems. Hav ing coined the term unmoney, Mr. Schiff goes on to speak of our un economists. (The Keynesians, of course.) We do have a few legitimate economists - Mr. Schiff is high in his praise for Henry Haz Htt, Hayek, the late Ludwig von Mises, and he voices a limited ap proval of Milton Friedman and the Chicago School. The discussion of the uneconomists is hilarious. There is a Schiff Index of Infla tionary Generators, SIIG-l, SIIG-2 and so on to SIIG-17. Mr. Schiff got tired of the uneconomists' penchant for redundancy, for there is actually no difference between SIIG-l ("ease credit") and SIIG-4 ("expand credit") or even SIIG-6 ("ease monetary controls"). He recommends SIIGomastics as a game for the whole family (just tune in on Heller and Galbraith, or read the latest financial story in the news weeklies).

Especially brilliant is Mr. Schiff's demolition of GNP, or the Gross National Product, which can \vith equal logic be called Gross National Cost. Mr. Schiff finds it ridiculous that all dollar payment figures to individuals and corpor ations should be accepted withou t question as "wealth." Suppose, he says, a tidal wave were to demolish the Florida coast from Miami to Boca Raton. Let's say the cost of the destruction comes to $2 billion. It should be subtracted from the GNP, but it isn't. On the other hand, the cost of cleaning up the debris - say it's $300 million would be added into GNP. Does it 314 THE FREEMAN Ma.y make sense that disasters such as tidal waves can be figured as wealth-creating when people step in to sort out useless junk, at the taxpayers' expense? The stupidities of GNP are end less. A healthy person adds noth ing to GNP, but sick people do. The sicker the population is, the greater will be the percentage of GNP spent on medical treatment.

The GNP of wheat at $2 a bushel can be less than the GNP at $3 a bushel. The more wheat we have, the poorer in GNP terms we are likely to be. Since food is real wealth, this makes no sense. Abundance has the tendency, says Mr. Schiff, to develop lower GNP figures than scarcity. The unions and the politicians, with their insistence on a mini mum wage law, have created a ghetto problem and a teenage problem. Blacks without skills can't get jobs, for if employers were to pay them the official hourly minimum marginal companies would soon go broke. The mini mum wage makes it impossible for the U.S. to have a good apprentice system. We will pay dearly for this one fine day when we wake up to the fact that we have no young tool and die workers. Citizens Under Compulsion I would like, since I can't phrase it better, to quote the penultimate paragraph of my introduction to Mr. Schiff's "blockbuster" of a book. "In a grand peroration," I wrote, "Mr. Schiff accuses our Federal government of compelling citizens to participate in a chain letter (social security) ; of illegally shifting wealth through inflation; of hiding the" true extent of the National Debt; of saddling a lower standard of living on people by the destructive burdens it imposes; and of using the Federal Reserve to force what amounts to counter feit money on the banks. The citi zen is required to swear to things on his tax return that no two peo ple can interpret the same way.

We are, so Mr. Schiff suggests, contributing to our own destruc tion by paying taxes to a govern ment that engages in so many un lawful and criminal activities that it makes the Mafia look lily-white by comparison. This poses a nice question for the taxpayer: if you cooperate with a thief, doesn't that make yourself the perpetra tor of an unlawful act?" Strangely enough, Mr. Schiff remains an optimist. Does he really believe we will change our Social Security law to put it on a welfare test basis when Ronald Reagan can't even talk about providing for alternative voluntary old-age in surance? As Milt Gross used to say, "Dun't esk."

1976 OTHER BOOKS 315 ~ AMERICA'S EMERGING F AS CIST ECONOMY by Charlotte Twight. (New Rochelle, N. Y.: Ar lington House, 1975), 314 pages, $12.95. Reviewed by Hans Sennholz TOTALITARIAN REGIMES, whether they are fascist or communist, en tail an extreme centralization of power from which no individual can hide. Private property in pro duction, which is the characteristic ofa capitalist order, is replaced by public property that is man aged by an 'omnipotent, omnipres ent state. Communism and' fas cism are sister systems that spring from identical intellectual 3J}d moral roots, and apply similar methods and policies to achieve their objectives. And yet, in spite of their closely related basic natures, the cham pions of both endeavor to empha size the differences. "Weare dia metrically opposed to fascism" say the communists, and "We a~e the bulwark against communism" proclaim the fascists. In reality, ~s twins, they are jealous rivals who at every opportunity confront each other. Their wars are fratricidal wars waged without mercy or com passion.

Although in philosophy, moral ity, and in objectives they are identical twins, they differ in two characteristics that make them distinguishable. Communism seeks to poison the hearts and minds of an peoples and races. It aims to conquer the world with its poison ous potion. Fascism is a national disease that tends to infect na tional states. Italian Fascism was singularly Italian, German Nazism was basically German, as Ameri can Fascism is contagious to Americans only. This limitation in the base of fascism tends to make communism the more dangerous disease to which all of mankind may succumb. The two als'o differ in the legal form in which they exert central control over the means of prod uc tion. The communists assume out right ownership through law or constitution. The fascists content themselves with governmnt con trols over productive property. They do not legally expropriate the individual owners, believing that government controls are m'ore ef ficient than direct bureaucratic management. Capitalism, the an tithesis of both, is the private property order in which individ ual owners have the sole power to use their economic goods.

Charlotte Twight's Am,er'ica's Emerging Fa,sci'st Economy is a brilliant analysis of the economic policies that are turning the U.S. into a fascist state. As an attorney and a member of the Washington State Bar Ass'ociation, Mrs.

316 THE FREEMAN May Twight presents a formidable in dictment against numerous U.S. statutes and judicial decisions that are building a fascist foundation for the modern American system. Her analysis of government con-: trol over money and banking,· for instance, is incisive and C'onvinc ing as she reveals the objectives of such control as well as its many ominous consequences. The same can be said about her discussion of the American cartels, govern ment control over product quality, the growth of the President's eco nomic power, government domin ion over labor, agriculture, for eign trade, and the government takeover of the energy industry and many American railroads. And. yet, her admirable work is seriously flawed by her economic limitations that involve her in had ambiguities and awkward conclu sions. Her inability to distinguish between the' economic and juristic C'oncepts of property leads her to associate fascism and capitalism.

She actually concludes that collec tivism "may adopt socialism, com munism, or capitalism as its nomi nal economic form." (p. 15) Ac cording to Twight, "Fascism is unique among C'ollectivist systems in selecting capitalism as its nomi nal economic mate, but capitalism is turned inside out in this un likely union." (p. 16) Or, "fascism espouses capitalism except where its totalitarian political hierarchy dictates otherwise." (p. 17) And although she concludes that fas cism embraces "a bogus capital ism" she defines, in a large-print section heading, fascism's philo sophic core as capitalistic collec tivism. Her eyes are glued on the legal concept of property and the legal title to property, which is totally irrelevant for the economic point of view. It matters only who has the power to use an economic good - the government or the individ ual. Fascism, like communism, gives government total control over the means of production. The fact that some people may hold on to a legal document, a deed, while they are hurrying to obey govern ment owners, may be interesting psychologically, but does not change the economic consequences of government control.

Charlotte Twight's "capitalistic collecti vism" can be likened to such illogical concepts as "religious atheism," "evil morality," or "pa ternal motherhood." But while she succumbs to such ambiguities she does great harm to capitalism, her very own system. Today capital ism is accused of nearly every vice of which the human heart is cap able - to exploit and gouge, rob and steal, impoverish and starve, deceive and prostitute, and on and on. And now comes Mrs. Twight 1976 OTHER BOOKS 317 telling us that capitalism can be mated to fascism. As attorney for the defense of capitalism, she is losing her case. ~ ONE NATION UNDER GOD by Rus Walton (Third Century Pub lishers, Washington, D.C., 1975) 311 pp., $3.95 Reviewed by Robert Wren IN A COMPILATION of facts, figures, quotes and succinct statements, journalist Rus Walton has pre sented us with an excellent ac count of the religious dimension of the American Republic. He dis cusses such subje'cts as limitation of government, freedom, taxes, the familY,education, abortion, the "Equal Rights" Amendment, eco nomics, charity and inflation.

Mr. Walton argues that the United States was founded as a Republic, not a Democracy. He points out that if we would retain the freedom responsible for our great prosperity, we must return to the limited government philos ophy of our Founders. And he adds, "Freedom is not simply a matter of rights, it is also a mat ter of responsibilities." Mr. Walton correctly defines in flation as an increase in the sup ply of money and sets forth the correctives: limit government, cut spending, balance the budget. Opposing the common human istic thinking of today, Mr. Wal ton convincingly redirects us to Biblical and God-oriented solutions for today's problems. He confronts us with a choice: "One nation un der God or one supers,tate under Caesar." An excellent source of ammunition against Socialism~ Communism, atheism and the Wel fare State! ~ THE NEW AMERICAN IDEOL OGY by George C. Lodge (New York City: Alfred A. Knopf, 1975) 350 pp., $12.50.

Reviewed by Melvin D. Barger MANY LIBERTARIANS insist that America's "mixed economy" is an unstable hodgepodge, a sort of halfway house on the road to the Total State and the extinction of personal liberty. A number of pol iticians and corporate executives disagree, believing that the mix ture of government intervention and private business brings the best of both worlds and provides immunity from further socialism. Unfortunately for proponents of the latter viewpoint, the mixed economy has tilted increasingly to ward more government interven tion, inviting the question: "Where 318 THE FREEMAN May win it all end and what's in store for us 1" In this disturbing new book, Harvard Business School profes sor George C. Lodge obligingly supplies an answer, but libertari answon't like it. He outlines an "ideology" for the brave new world that America is in the process of becoming. Although he carefully avoids categorizing the new sys tem, it obviously has a thick clus ter of socialist roots·and borrows freely from collectivist thinkers, including sociologist Karl Mann heim. The form of the tit'le and the tone of the book also recall Galbraith's T·he New Industrial State, although the author parts company with Galbraith's social ism on certain points.

Lodge,a member of the distin guished Boston family, argues that we are in a painful transition phase in our. social, political, and economic relationships. .We are abandoning the traditional Ameri can ideology associated with John Locke, and developing a new one that has already taken root: in dividualism is giving way to a system ca'lled communitarianism; property rights are yielding to rights of community membership; competition to satisfy consumer desires is losing ground to "plan~ ning for community needs"; the idea of the limited state is being replaced by the state as the planner; and scientific specialization must be succeeded by a holistic organization of knowledge. Lodge apparently believes that the Lockean notion of individual ism was a wrong path even for eighteenth century America, let alone the present modern state. He calls it an aberration on at least two occasions and also a "blip."

He is clearly more sympathetic to ward Rousseau's communitarian idea of the General Will, which would be accomplished by "bring ing all particular wills into con formity with it" and with virtue being defined as "nothing more than this C'onformity of the par ticular wills with the General Will." Lodge defines individualism as the atomistic notion that a com munity is no more than the sum of the individuals in it, with fulfill ment an essentially lonely struggle in what amounts to a wilderness where the fit survive - and where, if you do not survive, you are somehow unfit. Individualism is related to equality, or "equal op portunity," and the idea of con tract that ties individuals together as buyers and sellers. Individual ism, he explains, has evolved into interest group pluralism as the preferred means of directing soci ety (unions, trade associations, special interest groups, etc.) .

Communitarianism, on the other 1976 OTHER BOOKS 319 hand, is a system that makes the community more than the sum of its individuals. People get their fulfillment through participating in communitarian activities, through identifying with their community; consensus, rather than contract, is the unifying element. Lodge claims that both corporations and unions have eroded the old idea of indi vidualism and induced the new communitarianism though still clinging to the Lockean ideology. Lodge's best example of a com munitarian society is Japan; he carefully avoids comment on Great Britain. But what if individuals do not want to find fulfillment in this com munitarian wave of the future? Lodge's answer seems to be that "we have to re-educate American youth to the fact that individual fulfillment comes about as the re sult of participating in an organic social process." Opponents, of course, would call this blatant in doctrina tion and would also note that there are vast differences be tween voluntary and compulsory communitarianism. Lodge evident ly likes the compulsory kind,be cause he intends to have the com munitarian way imp'osed on us by closing off other options. For ex ample, community needs should take precedence over consumers' desires as a means of alloca ti'ng goods and services, property rights are to be further diluted in favor of group membership rights (and virtually eliminated in the case of the corporation), and the state is to become the national planner; in deed, the international planner if all goes well.

Why are we having such diffi culty reaching Lodge's earthly mil lennium? The hang-up, for Lodge, is John Locke and his archaic ide ology. Almost everybody who is involved in American business and government suffers to some degree from the old Lockean ideas about individualism, property rights, the Protestant ethic, the danger of Big Government, and so on. Lodge believes that even uni on leaders and liberal politicians such as Sen ator George McGovern are handi capped by this "ideological schizo phrenia." The book is obviously addressed, however, to the executives and managers of America's troubled corporations. Acting both as re porter and advocate, Lodge is tell ing them that the old order of their cherished beliefs is dying, and they can help bury it. The corporation, deriving its authority and legitimacy from the old Lock ean ideology, is in limbo and now needs a new basis for its legiti macy. The message is clear; In order to 'make the transition to the new system as painless as possible, corporations should seek legi ti320 THE FREEMAN Mwy macy in the new ideology by be coming willing handmaidens of the state, with the latter always as the senior partner. There is an implicit warning that terms for the corporation may become less favorable if it delays in seeking this new legitimation. Nor is there any way to avoid these conditions, since the new ideology is already in motion and cannot be reversed.

The corporation can save itself and some of its managers can save their jobs and salaries - by inden turing the organization to the new system and to the state as planner. To his" credit, Lodge describes with great accuracy the present difficulties of the large C'orpora tion and its pow,erlessness in cop ing with the pressures around it. It's to his discredit, however, that he fails to identify the "mixed economy" syndrome as a likely cause of the corporation's, and the nation's woes. In addition, he com pletely ignores the role of the Lockean idea in advancing human freedom, human dignity, and, yes, human rights. Far from repudiat ing Locke, as he does, we should be studying our abandoned road and discovering where we took a wrong turning. We should also give the profes sor a failing grade for his hope less naivete in believing that his total state will not develop into the totali tarian state. Here and there, he admits of such dangers, but nowhere does he offer mechanisms and ideas that can effectively keep the state from becoming an op pressor. Least of all does he ex plain who the planners will be or say whose plans will prevail in the new super-state. If experience is any guide, the coercive power of the state will almost certainly be used arbitrarily once it has been consolidated by the new American ideology.

The book is reviewed for liber tarian readers because it is, in effect, a statist manifesto that is likely to have considerable influ ence in the business community. Its appearance at this troubled time is another reminder, if we needed it, that the world is full of well-meaning and sometimes gift ed individuals who always seem to know the best way to manage and control other people. I) tile Freeman VOL. 26, NO.6· JUNE 1976 Why "TeacherPower" Ha.d to Happen Melvin D. Barger 323 It was built into a system of compulsory education, and must fall of its own excesses. ANew Message II. On Human Rights and Government Ja·ckson Pemberton 332 Words of courage and counsel from the hearts of the Founding Fathers to their children in a troubled nation. There Ought Not to bea·Law Clarence B. Carson 340 The more government attempts to reform us the more it spreads injustices inherent in the exercise of force .