The Principles of American Prosperity


The Principles of American Prosperity, by Leighton A. Wilkie and Stanton Rimanoczy, Old Greenwich, Conn.: Winona Press, 1975, 237 pp.,$3.95 (pb).

This book is described as "eclectic" by its authors, and so it is. To explain the underlying cause of American prosperity it attempts to do many things—defining the nature of human beings, explaining the evolution of production from the Stone Age to the present and the evolution of exchange from barter to our current system, and looking at current economic considerations and "unsolved" problems. This is quite an undertaking between any two covers, let alone in the 237 pages, six chapters, and seventy-five "lessons" plus glossary that this book boasts. As one might suspect, the book has a number of shortcomings directly related to its attempt to "simplify" a very complex set of concepts—which is too bad, because a text designed for students and lauding American prosperity would be useful.

"The Nature of Man," chapter 1, would have been better left out. Much of it comes off more like conventional wisdom than like sound principles and could be dismissed readily as mere "opinion." It adds little validity to what follows. What has taken philosophers centuries to discover (and forget) about mankind and its peculiarities cannot usually be summarized in so brief a disclosure without gross distortions being created and misconceptions following.

For example, the authors immediately label man as "the animal least likely to succeed" because man is not automatically programmed as other animals are; yet they recognize the "two exclusive advantages" of man—his prehensile thumb and his brain. The point the authors are trying to make is a good one—that man must discover how best to live. But the point is lost because the biological and philosophical implications are confused. There is not enough in this first chapter to grab hold of and build on, although the authors hint at such promising ideas as the need for "cause and effect" thinking, the importance of private property to man, how man benefits from voluntary cooperation as opposed to coercion, and the importance of criticism and dissent. However, such ideas as "the importance of running scared" and the "need for reasonable insecurity" engender still more confusion.

The real book begins with "The Evolution of Production," chapter 2, and, unfortunately, ends there as well. It is in this chapter that the authors are at their best. They discuss production in the Stone, Bronze, and Iron ages with special attention given to the development of tools. The famous equation is introduced (MMW = NR + HE x T, or Man's Material Welfare equals Natural Resources plus Human Energy times Tools). Each lesson of this chapter is a gem dealing with everything from the history of tools to the factory system, the Industrial Revolution, patents, trademarks, and so on. While the reader may not agree with everything stated, it constitutes a mini-introduction to the whole concept of production for the previously uninitiated.

The next chapter, "The Evolution of Exchange," has problems. It begins with an explanation of the barter system, its shortcomings, and why people had to find other means to deal with each other. It discusses the rise of our banking system, the Federal Reserve, and the loss of the gold standard. There is no discussion, however, of the historical role of government in the debasement of money for its own purposes or how an objective standard makes such activity more difficult. While the authors recognize that backing money with gold or silver "can help engender confidence in a nation's money," they don't recommend a return to an objective standard of value among their "simple" cures for inflation. Rather, they suggest balancing the budget, holding increases in the money supply and in labor compensation to increases in productivity, modernizing tools to increase productivity.

Again the authors falter in "Some Current Economic Considerations," chapter 4. In their attempt to impart an understanding of economics and related subjects in a simple manner, they create more contradictions than they clear up. For example, in the lesson entitled "What Is Economic Freedom?" they state:

Robinson Crusoe, on his fictitious island, had complete economic freedom, but it was not of his own choice, and relatively few men want such freedom.

All men are interdependent. Therefore, to be workable, economic freedom must be voluntarily restricted to insure their cooperation. A free economy is one in which men work for others, so that others will work for them. They give things up in order to get things.

But there are three basic freedoms that do not have to be given up, and in fact, cannot be given up if freedom is to have any meaning.

In using freedom in two (maybe even three) different senses, the authors create a confusion between absolute freedom of the individual in a societal context and the decision-making process in which some choices are made rather than others. There are nevertheless some important points made in this chapter—how wages are determined, where profits go, and so on.

In considering "Unsolved Problems" in chapter 5, the authors fall short again. An instance is a series of lessons on education. Nowhere do the authors question compulsory or public education. Rather, they question the wisdom of some of the tendencies that have developed within public education, calling poor John Dewey to task again. The chapter may have been intended to examine "unsolved" problems, but the authors merely dance around accepted premises and the problems are never really identified.

Wilkie and Rimanoczy, in other words, do a good job of describing how we arrived at our current economic system, and their book may be construed as an apology for it. Like so many others, the authors end up praising and supporting what we have, instead of generating thought about what kind of economic and political situation would allow us to become truly prosperous. In case the authors hadn't noticed, we are losing our claims to prosperity—inch by inch, to be sure, but losing nevertheless. And why? Because of government intervention. To be sure, individuals may or may not prosper with government out of the economic picture, but with its massive economic disruptions the government has rendered this a moot point for the time being. Let us hope that the time will come when we can take it up again.

Susan Love Brown is the editor of World Research Ink.