Can Freedom Flourish?

Bound to Be Free, by Richard McKenzie, Stanford, Calif: Hoover Institution Press, 1982, 201 pp., $15.95.

In exploring the economic dilemmas of our democratic political order, Richard McKenzie mentions a number of political devices that he seems to believe will restrict or control the ability of factious interest groups to enrich themselves at our expense through government power. Economic freedom might be written into the First Amendment and thereby acquire equal constitutional status with freedom of speech. Government taxes or expenditures (including those indirectly imposed by regulation) might be tied to a specific percentage of national income; and perhaps a balanced budget might also be mandated. We might limit the growth of the money supply or even introduce competition in monies. Deregulation of many or even all industries could be accomplished in one bold stroke. Finally, the majority necessary to pass federal legislation might be raised to 70 percent.

I say "seems to believe," because Professor McKenzie devotes barely 10 pages of an already slim volume to presenting very far-reaching and controversial constitutional and legislative proposals. There is no discussion in depth of any one of them. Perhaps this rather cursory treatment of the "constitutional principles that must undergird a free economy" stems from McKenzie's belief that "in the final analysis the strength of a constitution will lie not so much in the words that are written as in the value that people place on freedom as a basic value." After all, no matter what the words, the constitution "will continually be subject to reinterpretation and, on occasion, misinterpretation."

Readers of McKenzie's widely used economics textbook or his excellent, powerful analysis of current "reindustrialization" proposals know of his understanding and commitment to the free market. And if education in freedom, rather than espousal of particular reform proposals, is his chief purpose here, the reader will find commendable, persuasive discussions of the intimate connection between free markets and free social life in general.

Nevertheless, the framework of Bound to Be Free is troublesome. The "case for the free market," McKenzie writes, "is not a case for 'no government intervention,'" since "freedoms and rights often collide and trade-offs are required"; it is "an argument for a predisposition, or social proclivity toward freedom and against control; for extraordinary caution in shaping government policy; and for the use of principles in the conduct of public policy." The foremost principle he would instill among citizens and policymakers alike is that "the power of government to do good through force has limits."

The concept of conflicting rights and freedoms is a most unfortunate approach indeed to fundamental political principles. What one usually confronts are all sorts of conflicting claims; the principles of individual rights are, to my way of thinking, the devices one uses to determine which claims ought to be satisfied. Moreover, the concept that the power of government to do good is limited, while helpful so far as it goes, does not go far enough. After all, the social and constitutional predisposition that "freedom is the rule, restraint the exception" existed for the first century and a half of our history. But it didn't suffice to limit the state in the last few generations.

Perhaps a more radical intellectual approach is necessary for an effective social transformation. If so, we may have a long row to hoe. McKenzie sadly reports on the basis of his own experience and others' research that George Stigler's dismal hypothesis is probably correct: five years after they graduate, college students who studied economics are no more literate than those who did not!

Perhaps we must await strong, articulate leaders who will, like the Founding Fathers, raise a standard to which the wise and honest may repair. McKenzie emphasizes the necessity of leadership but is skeptical about how true, consistent defenders of freedom may rise and flourish in present-day society. So am I.

In sum, McKenzie seems to be saying that the constitutional and legislative changes we may need to restore and preserve our freedom are rather far on the horizon; education is a grindingly slow process; and the emergence of enlightened political leadership an imponderable. It will surely amaze you, as it did me, that this thought-provoking, but ultimately disappointing, book ends by telling us that "now is the time for optimism!"

William Hammett is president of the Manhattan Institute for Policy Research.