In past book issues, REASON has asked people to recommend edifying books—books that are significant because of the good they can help accomplish. But a well-rounded person should be familiar with pernicious books as well. So this year we asked each contributor to suggest a book published in the last 50 years that is significant because it has helped promote wrongheaded ideas with serious consequences. We suggested that the contributors might want to recommend antidote books as well. Here are their responses.
In the 19th century, liberals worked to limit the role of government in economic matters, under the banner of free trade, laissez-faire, and the rights of property and contract. But around the turn of the century, in England and America, liberalism changed its course. As against the classical liberals, modem liberals wanted to expand government's power to regulate private economic activity and transfer wealth among its citizens.
Liberalism as a doctrine may be out of favor, but we still live in a liberal regime, with all the programs that liberals argued and lobbied for successfully: regulation of the economy as a whole through fiscal and monetary policy; regulation of individual sectors through regulatory agencies; welfare programs for the poor; and "social insurance" programs—unemployment benefits, Medicare, Social Security—for the entire population. Even conservative politicians now take these programs for granted.
It is therefore useful to know the arguments, the political philosophy, that made modem liberalism so successful. The best guide to this philosophy is L.T. Hobhouse's little book Liberalism (Oxford University Press, 1964). During his career, Hobhouse taught at Oxford and the University of London, was a journalist at the Manchester Guardian and other papers, and lectured widely in England and America. Liberalism is his attempt to justify the growth of the state by appealing to the individualist ideals of classical liberalism. Though the book was first published in 1911, it might have been written yesterday by the editorialists of The New York Times, if they took the time (and had the ability) to formulate the principles behind their positions.
Hobhouse thought that the ultimate good is the self-realization of the individual: "the development of will, of personality, of self control, or whatever we please to call that central harmonizing power which makes us capable of directing our own lives." Self-realization is the product of the individual's own voluntary initiative and choice; it cannot be compelled. But he claimed that the individual is not fully autonomous. His nature is shaped by society, and his exercise of choice depends on certain conditions that society must provide, including the provision of goods like education as well as the exercise of coercion by the state to regulate economic production and exchange.
Liberalism discusses the standard programs liberals sought, the standard rationales for them, and—most importantly—the redefinitions of classical-liberal concepts (freedom, rights, and equality, among others) that made the rationales seem plausible. The writings of later liberals, from John Dewey to John Rawls, contain little that one cannot find in Hobhouse, usually stated more clearly and economically.
As a counterpart to Liberalism, I would recommend the writings of Ayn Rand, especially her essay "What is Capitalism?" in Capitalism: The Unknown Ideal. Point for point—on human nature, on coercion and rights, on wealth and equality—Rand engages the issues on the same philosophical level as Hobhouse. Because she defends laissez-faire capitalism on moral grounds, she comes to grip with Hobhouse's arguments in a much fuller way than a purely economic critique could do.
David Kelley is executive director of the Institute for Objectivist Studies.
Peter W Huber
Published in early 1949, George Orwell's 1984 is the most important piece of political satire of our times. To this day, Orwell's one truly great book impels us to launch giant antitrust suits against companies like AT&T and IBM. Big Brother. The Thought Police. Newspeak. Doublethink. These are all Orwell's words, Orwell's ideas. In fact Orwell has added his own name to the English language: OrweIlian—the word is filled with chilling power.
The future that Orwell describes in 1984 is a future of an evil machine controlled by an evil ministry. Orwell calls the machine "the telescreen"—a sort of two-way television set. Telescreens are bolted to every wall, they hang on every street comer, and in every living room, even in the toilets. There is no way to shut them off. The telescreen connects to a huge Ministry that towers over central London. The machine is evil because it serves as the eye and ear of the Ministry. And the Ministry is powerful because it is master of the machine. Indeed, Big Brother, the omniscient, omnipotent leader of the state, has never been seen in the flesh. He is nothing more than a face and a voice on the telescreen. And every minute of the day and night, Big Brother is watching…you.
Technology has taught us otherwise. If you want to transmit large amounts of information, to and from large numbers of people, efficiently, flexibly, and reliably, you must use many switches, many points of interconnection. Unless you disperse the power, the system just won't perform. Thus, the centralized mainframe computer is being broken apart and spread out into hundreds of desktop machines. The large, central telephone exchange is being replaced by distributed switches with multiple levels of interconnection among them. We are building networks of networks—one for conventional telephone, several for cellular telephone, several for data transport, several for video transport, all interlinked and interconnected like the ribs and spines of a geodesic dome.
In a world of really advanced communication—the world now unfolding before us—people will be able to form communities, collaborations, alliances, almost at will, over any distance, from San Francisco to Singapore. The telescreen gives a man eyes and ears that can see and hear at any distance, and a tongue that can speak to anyone on the planet. The telescreen frees a man's senses, and his voice, and thus frees his intellect and his conscious mind. The telescreen gives man the power to hear, see, and speak, to be heard and seen, in the company of his own choosing, wherever it may be found. With the telescreen, men can create new cities whenever they need them, in the capacious light beams of the network and the airwaves of the stratosphere. For the first time in history, it is becoming possible to have brotherhood without Big Brother.
Orwell imagined the world of Stalin filled with Apple computers and concluded that it would be more horrible than any world ever seen before. Orwell was wrong. As Ithiel de Sola Pool would explain in his landmark 1983 book by that title, telescreens are, in fact, Technologies of Freedom.
Peter W. Huber is a senior fellow at the Manhattan Institute and a columnist at Forbes.
William A. Niskanen
My candidate for one of the most wrongheaded books of the last 50 years is the 1982 book by Ira Magaziner and Robert Reich, Minding America's Businesses. I chose this book not because the authors are evil or the book is awful but because the book promotes the profoundly pernicious view that the government can and should have a "rational" industrial policy to guide the allocation of labor and capital. Moreover, the authors are now in positions of substantial responsibility, Magaziner as the major architect of the Clinton health plan and Reich as secretary of labor, so there is reason for concern that they may have maintained this perspective.
As I mentioned, this book is wrongheaded but not awful. The authors were careful about the facts. The analysis was plausible to most people other than economists; the authors, for example, do not understand comparative advantage or the causes of inflation, but neither do most people. And the book provides a useful summary of our government's messy de facto industrial policy.
The conceptual case for industrial policy is that the returns to some investments are higher than the returns to the investor. The primary weakness of this case is that the government does not have either the information or the incentive to support these investments. The information necessary to identify a promising technology, product, or firm is decentralized and often contrary to the conventional wisdom. The characteristic incentives of government are to support old technologies, failing firms, and technological fads. Magaziner and Reich have a perception that is either naive or arrogant—that appointing the right people to high office is sufficient for a rational industrial policy. The Clinton administration promises to be an interesting if costly test of this perspective.
The most effective early responses to this book were an article by Charles Schultze in the Fall 1983 Brookings Review and Chapter 3 of the 1984 Economic Report to the President. More interesting, perhaps, the 1990 book by Robert Reich, The Work of Nations, makes the case that government's primary focus should be on improving the skills of the labor force, not on the allocation of investment.
One's ability to identify great heroes and villains is much enhanced by the telescope of time. My pantheon of heroes probably includes many of the same men and women that most REASON readers honor. And our lists of great villains probably also share such names as Rousseau, Marx, Nietzsche, and Freud. Proximity, in contrast, clouds the analytic senses. Greatness, for either good or ill, is difficult to discern among people one has met or seen on television. My tentative judgment is that Magaziner and Reich have done only little harm as authors but that they have the potential for great mischief as government officials.
William A. Niskanen is chairman of the Cato Institute.
For a while during the late 1960s and early '70s, it was a rhetorical fashion to say, "Any nation that can land a man on the moon can [fill in the blank]." My own contribution to this cliche was, "Any nation that can land a man on the moon can abolish the income tax." But mostly this nostrum was deployed by Sens. Humphrey and McGovern or the editorial writers of The New York Times in relation to poverty or some other intractable social problem.
Because Marxist-inspired class warfare has never resonated very well in American politics (as President Clinton found out to his surprise in the tax bill fight), establishing and enlarging the redistributionist state required a more nuanced justification rooted in the nation's middle-class "can-do" spirit, which was best exemplified in the moon-landing crusade. The breakthrough book that provided this rationale was Michael Harrington's The Other America, published in 1963. Together with J.K. Galbraith's The Affluent Society, Harrington's book supplied the intellectual basis for the Great Society's vast expansion of the welfare state beyond its previous New Deal borders. President Kennedy read The Other America shortly before his death and is said to have been moved by it to order his New Frontiersmen to begin drawing up policy blueprints based on the book.
Harrington contended that the number of Americans living in poverty was much larger than the usual statistics showed. But the most important part of his argument was a new conception of the nature of poverty. Harrington attempted to debunk the common view that poverty was chiefly the result of defects in character and initiative among poor people, arguing instead that the poor were victims, trapped in a culture that was structurally sealed off from economic progress and expanding prosperity. A rising tide wouldn't lift boats with holes in their hulls.
Appealing to the American can-do spirit, Harrington argued that an institutional attack on poverty could help produce the moral regeneration necessary to end poverty. "There is only one institution in the society capable of acting to end poverty," Harrington concluded. "That is the Federal Government." The War on Poverty was declared.
The obvious antidote book is Charles Murray's Losing Ground: American Social Policy, 1950-1980 (though one should not overlook the early challenge to the poverty warriors from Edward Banfield's 1969 book, The Unheavenly City). Murray copiously documents the perverse results of this misbegotten crusade so effectively that today's poverty warriors either accept or must take account of his arguments and evidence. For example, Mickey Kaus's recent tract, The End of Equality, which rehearses many of Harrington's old themes about the structural nature of poverty, contains several discussions of Murray but not a single reference to Harrington. And central to Kaus's book is the admission that big-spending "money liberalism" won't work.
The War on Poverty is destined to continue for a long while yet, but thanks to Murray and the growing recognition that social problems aren't engineering tasks to be tackled like moon landings, we can hope that perhaps it won't end up being a fruitless Hundred Years' War.
Contributing Editor Steven Hayward is research and editorial director for the Pacific Research Institute in San Francisco.
Gary S. Becker
In 1942 Joseph Schumpeter, the outstanding Austrian economist, published Capitalism, Socialism, and Democracy, a collection of loosely connected essays. The book is justifiably considered a classic. His analysis of political democracy in terms of competition for political leadership was profound, and it influenced my approach and that of many others to this important subject. The book also contains many other insights.
But two major themes not only have turned out to be wrong but have had a pernicious influence on subsequent discussions of capitalism. The more important is Schumpeter's claim that capitalism was doomed—not by its failures, as in Marxian analysis, but by its successes. For according to Schumpeter, capitalism alienated intellectuals, who were unhappy because they are not important players in a decentralized free-market system. Moreover, intellectuals do not like the profit motive that drives this system. But Schumpeter greatly exaggerated the long-run influence of intellectuals on public policy.
Schumpeter joined his pessimism about the future of capitalism with unwarranted optimism about the economic potential of socialist and communist economic systems. That a great economist believed socialism might work successfully gave much reassurance to the many intellectuals attracted to socialism during the middle of this century.
He apparently believed that weak individual incentives under socialism would be compensated for by stronger group incentives: "The socialist order presumably will command that moral allegiance which is being increasingly refused to capitalism"; "there might be more self-discipline and more group discipline in socialist society, hence less need for authoritarian discipline than there is in a society of fettered capitalism"; "the vested interest in social unrest may be expected to disappear in part"; and "socialism might be the only means of restoring social discipline" (italics in original). He even claimed that "intellectuals as a group will no longer be hostile" and that trade unions will develop "into exponents of the social interest and into tools of discipline and performance, acquiring an attitude so completely different from that which is associated with trade unions in capitalist countries." These comments on socialism now seem quaint and naive, although, in Schumpeter's defense, he wrote before most of the evidence about socialism and communism was readily available.
Fortunately, Schumpeter's forecast of capitalism's future was dead wrong. Capitalism has especially thrived in the 1980s and '90s because public opinion has been far more impressed by the success of the Asian Tigers and other free-market economies, and the economic failure of socialist and communist countries, than by theories about capitalism's performance, including Schumpeter's sophisticated form of negativism.
Capitalism, Socialism, and Democracy was both a great book and a dangerous one. The danger came from the support his subtle but flawed analysis of the future of capitalism and socialism gave to intellectuals who did not need further reasons to dislike a decentralized, free-market, profit-oriented system.
Gary S. Becker, a winner of the Nobel Memorial Prize in Economic Science, is University Professor of Economics and Sociology at the University of Chicago.
No book since The Feminine Mystique has had a greater impact on contemporary American feminism than Carol Gilligan's In a Different Voice: Psychological Theory and Women's Development (Harvard University Press, 1982). A Harvard psychology professor, Gilligan challenges the "masculine bias" of theories that stress the development of an autonomous self as a prerequisite to mature intimacy.
Psychologists such as Erik Erickson, Gilligan complains, acknowledged that psychological development was different for the young woman (who must "attract the man…by whose status she will be defined" and for whom, therefore, self is defined through relationships) yet canonized the "male" process of individuation as the norm, disregarding values rooted in female experience. Through interviews with male and female children and young adults, she seeks to demonstrate that whereas men base their moral judgments on individual rights and abstract principles of right and wrong, women's moral understanding is "contextual," emphasizing human needs, empathy, and interdependence.
Many feminists were disturbed by Gilligan's apparent validation of sex stereotypes and traditional feminine virtues, yet she was championed by such prominent female commentators as Ellen Goodman, and Ms. put her on the cover as Woman of the Year in January 1984. Although, in contrast to legal scholar Catharine MacKinnon, Gilligan sees women as moral agents rather than passive victims of patriarchy, her brand of feminism opens the way to fresh charges of male oppression: Institutions are sexist not only if they exclude women but if they include them on "male" terms (expecting them to be as competitive and individualistic as men) and fail to incorporate "female" values. In the past decade, Gilligan's influence has surfaced in educational theories that call for more cooperative, intuitive learning styles attuned to "women's ways of knowing," in claims of women's distinct "caring" political agenda (more social programs), and in feminist jurisprudence, which derides individual rights and objective rules as male fixations.
To a degree, Gilligan corrects the oversights of earlier feminists who seemed to think that liberated women would just assume male roles and life would go on as if the traditionally female nurturing tasks weren't even needed. Yet she is especially irked by the view (espoused by some of the male psychologists she takes on) that "female" moral judgments are appropriate primarily in the personal sphere. While In a Different Voice steers clear of explicit politics, Gilligan's assertion that "male" ethics are based on the obligation not to hurt others and "female" ethics on the obligation to help others ("a morality of rights and non-interference may appear frightening to women in its potential justification of indifference and unconcern") engenders a nagging suspicion that "female values" may be a code word for socialism.
Gilligan's methods and conclusions have been challenged by a number of social scientists and writers, including feminists Susan Faludi and Katha Pollitt. The most thoughtful critiques can be found in A Fearful Freedom: Women's Flight From Equality, by Wendy Kaminer (Addison-Wesley, 1990), which shows the dangers of constructing legal norms based on the presumption that women are more nurturing and "connected" than men, and The Mismeasure of Woman, by Carol Tavris (Simon & Schuster, 1992). Tavris argues that Gilligan tends to absolutize often small statistical differences between the sexes, minimizing the female desire for autonomy and the male desire for intimacy.
Indeed, reading In a Different Voice, one often feels that Gilligan is arbitrarily interpreting the subjects' statements to fit her theory of sex differences. Responding to the hypothetical dilemma of Heinz, whose dying wife needs a drug that he can't afford and for which the druggist won't reduce the price, a male subject says Heinz is justified in stealing the drug because "human life is worth more than money," while a female subject says he should steal the drug because his wife "is another human being who needs help." In Gilligan's view, the male response appeals to an abstract hierarchy of priorities and the female response to an actual person's needs; yet aren't both really saying the same thing?
Recent studies have offered at best slim support for Gilligan's findings, showing that male and female college students, at least, are much more alike than they are different in balancing intimacy and autonomy. In politics, Bill Clinton is far closer to Gilligan's "female" model than is Margaret Thatcher. Generally, Tavris's conclusion that both men and women sometimes act in "feminine" ways (when caring for a sick relative) and sometimes in "masculine" ways (when competing for a promotion) seems to be solidly grounded in common sense. Yet, at least in academic feminism, the Gilligan model—often framed in terms of much more absolute gender division that Gilligan herself proposed—reigns supreme.
In the 1950s, women with overly individualistic personal values were often stigmatized as masculine. In the '90s, women with overly individualistic political values are often stigmatized as "male-identified." Have we really come a long way?
Contributing Editor Cathy Young is a writer in Middletown, New Jersey.
Bruce N. Ames & Thomas Jukes
Rachel Carson's Silent Spring (1962) became the inspiration for the environmental movement. Its elegant prose expressed passionate outrage at the ravaging of beautiful, unspoiled nature by man. Its frightening message was that we are all being injured by deadly poisons (DDT and other pesticides) put out by a callous chemical industry. This message was snapped up by intellectuals, and the book sold over a million copies. Many organizations have sprung up to spread Carson's message.
Rachel Carson set the style for environmentalism. Exaggeration and omission of pertinent contradictory evidence are acceptable for the holy cause.
The book starts with a romanticized vision of a world in harmony, followed by a horror story of an "evil spell that settled on the community: mysterious maladies swept the flocks of chickens; the cattle and sheep sickened and died….Children…would be stricken and die within a few hours….The few birds seen anywhere were moribund…and could not fly…a white granular powder…had fallen like snow upon the roofs and the lawns, the fields and the streams."
The powder was DDT, which actually saved tens of millions of lives, more than any substance in history, with the possible exception of antibiotics. The benefits of DDT were omitted from the book. Silent Spring said the American robin was "on the verge of extinction," yet Roger Tory Peterson (the dean of American ornithologists) said it was the most numerous bird on the continent. DDT was highly toxic to mosquitoes but of very low toxicity to honey bees and higher animals. In the Third World, DDT saved the lives of millions of children who otherwise would have been exposed to malaria and other insect-borne diseases.
DDT displaced the more toxic and persistent lead arsenate. DDT was the first of a series of synthetic agricultural chemicals that have advanced public health by increasing the supply and reducing the price of fruits and vegetables. People who eat few fruits and vegetables, compared to those who eat about four or five portions a day, have about double the cancer rate for most types of cancer and run an increased risk of heart disease and cataracts as well. Thus, pesticides lead to lower cancer rates and improved health. Life expectancy has steadily increased in our era of pesticides. Pesticide residues in food are trivial in terms of cancer causation or toxicity. There has never been any convincing evidence that DDT (or pesticide residues in food) has ever caused cancer in man or that DDT had a significant impact on the population of our eagles or other birds.
Carson's fundamental misconception was: "For the first time in the history of the world, every human being is now subjected to contact with dangerous chemicals, from the moment of conception until death." This is nonsense: Every chemical is dangerous if the concentration is too high. Moreover, 99.9 percent of the chemicals humans ingest are natural. For example, 99.99 percent of the pesticides humans eat are natural pesticides produced by plants to kill off predators. About half of all natural chemicals tested at high dose, including natural pesticides, cause cancer in rodents. People determined to rid the world of synthetic chemicals refuse to face these facts. Risk assessment methods build in huge safety factors for synthetic chemicals, while natural chemicals are ignored. Current policy diverts enormous resources from important to unimportant risks.
Bruce N. Ames is a professor of biochemistry and molecular biology and Thomas Jukes is a professor of biophysics at the University of California, Berkeley.
Fred L. Smith Jr.
Ralph Nader's Unsafe At Any Speed: The Designed-in Dangers of the American Automobile, a blistering attack on the Chevrolet Corvair and the whole American auto industry, was the first assault of the consumerist movement. Published in 1965, this book had an immediate impact on the American political scene. General Motors was immediately placed in the spotlight, and within a year Congress enacted the Motor Vehicle Safety Act. Spurred on by his victory, Nader redoubled his assaults against America's producers and innovators, pushing a spate of regulatory initiatives. Congress, in turn, passed the Wholesome Meat Act, the Comprehensive Occupational Health and Safety Act, the National Gas Pipeline Act, the Radiation Control for Health and Safety Act, and more. For the next three decades, American automobiles, as well as other consumer products, would increasingly be designed by politicians rather than corporate engineers.
The significance of Nader's book goes beyond its direct political ramifications. Nader's work profoundly changed the way risk and safety were viewed in the American polity. Regulators and consumer activists were immediately cast as noble crusaders who sought a safe, clean, healthy world—thwarted by those willing to place a price tag on a human life, to assign a dollar value to a clean environment. Health, safety, and environmental risks, Americans came to believe, could only be addressed by pervasive political controls. Laws mandating "safety" at any cost have accounted for much of the growth in government for the last three decades.
Aaron Wildavsky in Searching for Safety sought to reframe this debate—to reexamine the argument that the choice was one of safety vs. profits. A safer world, he noted, often reflects the adoption of "unsafe" products that are safer than the products they displace. Fire was—and remains—a highly risky technology, but a fireless world faces even greater risks. Society must create institutions that balance risks against risks—the risks of allowing a certain product or technology to be used versus the risks of banning that product.
Wildavsky pointed out that societies cannot anticipate all the possible risks that an uncertain world entails, and rather should strive to increase wealth and knowledge so as to become more resilient, more able to overcome dangers of whatever sort. Wealthier societies, Wildavsky also noted, are safer (and healthier and cleaner) societies. Political regulators aren't engaged in easy morality plays but rather complex risk-balancing tasks in which the risks reduced by their regulations must be contrasted with the direct and wealth-reduction risks stemming from their actions. This is a fact that Nader and his followers have yet to learn.
Unlike Nader's book, Wildavsky's writings have not yet led to massive changes in the political landscape, but his work provides the intellectual basis for current risk reform efforts. Sadly, Aaron died earlier this year at the age of 63. His Searching for Safety is one of the most important, and tragically under-read, books of the post-war period.
Fred L. Smith Jr. is the founder and president of the Competitive Enterprise Institute in Washington, D.C.
My candidate is The Crimes of Punishment, by Karl Menninger (Viking, 1968). The gist of Menninger's message is illustrated by the following excerpt: "The word justice irritates scientists. No surgeon expects to be asked if an operation for cancer is just or not….Behavioral scientists regard it as equally absurd to invoke the question of justice in deciding what to do with a woman who cannot resist her propensity to shoplift, or with a man who cannot repress an impulse to assault somebody." Heaping praise on the book, the reviewer for The New York Times wrote: "As Dr. Menninger proves so searingly, criminals are surely ill, not evil." The book made the Times bestseller list.
If crime is sickness and punishment is crime, then punishment too is a sickness. The self-contradictory character of Menninger's thesis did not diminish its appeal to the liberal-psychiatric mind set, determined to replace penal sanctions with involuntary psychiatric "treatments." Indifference to fundamental rights to liberty and property, rejection of personal responsibility, and a pervasive erosion of justice and order are just some of the obvious consequences of this wrongheaded view.
Actually, in The Crime of Punishment Menninger systematically articulated a set of ideas and policies that had long been integral to psychiatric doctrine, namely the proposition that crime is a mental illness that should be controlled by means of coercive psychiatric interventions ("hospitalization" and "treatment"), rather than penal sanctions. Menninger himself had advanced these ideas in his earlier writings.
I hope it does not violate the canons of modesty appropriate for this occasion to suggest that the best "antidotes" against The Crime of Punishment are my own writings, in which I defend the case for treating so-called mental patients as moral agents, entitled to liberty if they obey the law and deserving of punishment if they violate it. The books in which I present this view most fully are Law, Liberty, and Psychiatry (1963), Ideology and Insanity (1970), and Insanity: The Idea and Its Consequences (1987).
Contributing Editor Thomas Szasz is professor of psychiatry emeritus at the SUNY Health Science Center in Syracuse.
Like most graduate students in economics during the last 40 years, I spent many painful hours plowing through Paul Samuelson's Foundations of Economic Analysis (Harvard University Press, 1947). From that sacred text we novices learned how to prove many specific theorems. Far more important, we learned how neoclassical economics—"modem economic science"—was supposed to be done.
We built mathematically specified "models," sets of equations describing the relations of selected economic variables. Model in hand, we proved that it had a stable equilibrium, then characterized the relations of the variables in that blessed state. Altering the "data" or the "parameters" of the model, we ascertained how a new equilibrium differed from an initial one. In its advanced form this protocol rendered most older economists instantly obsolete, but for young math wizards like Samuelson it opened up the prospect of "new realms of aesthetic delight." Eventually most economists entered those realms. Playing increasingly clever mathematical tricks with the models constituted "scientific progress."
Samuelson fashioned his models, which set the standard, after 19th-century physics. Functions were assumed to be smooth and continuous. Economics was reduced to various types of the same calculus problem: finding a constrained extremum. The economist's job was to state the objective function and the constraints, then grind out the solutions. This required considerable mathematical ability and stomach for tedium but little imagination and no familiarity with economic reality.
By the 1960s, if not earlier, academic economists who quarreled with this way of doing the job were, as Roy Weintraub put it, "regarded by mainstream neoclassical economists as defenders of lost causes or as kooks, misguided critics, and anti-scientific oddballs." By aping 19th-century physicists, neoclassical economists convinced themselves and others that they were doing science, but the effort was basically misguided, not so much scientific as, in F. A. Hayek's term, "scientistic." Human beings, purposeful and creative, are not like atoms; nor is a market analogous to a physical or chemical system. In the view of Hayek and his teacher Ludwig von Mises, neoclassical economics is, in critical respects, pseudo-science.
James Buchanan's What Should Economists Do? (Liberty Press, 1979) presents a telling critique of mainstream economics. "Its flaw lies in its conversion of individual choice behavior from a social-institutional context to a physical-computational one," he writes. Further, the obsession with equilibrium gives rise to "the most sophisticated fallacy in economic theory, the notion that because certain relationships hold in equilibrium the forced interferences designed to implement these relationships will, in fact, be desirable." Mainstream economists cannot move the earth with a mathematical lever, because they have no place to stand—no "given" information about property rights, consumer preferences, resource availabilities, and technical possibilities. What neoclassical economics takes as given is, in reality, revealed only by competitive processes. "Most modern economists," Buchanan aptly concludes, "are simply doing what other economists are doing while living off a form of dole that will simply not stand critical scrutiny."
Robert Higgs is a visiting professor of economics at Seattle University.
Donald N. McCloskey
The brothers Polanyi, Karl (1886-1964) and Michael (1891-1976), raised in the sunset of the Austro-Hungarian Empire, cover the range of reasonable responses to the 20th century. One response is to think of the market as the problem and the government—reinvented, of course—as the solution. Thus Karl's book published in 1944 about the rise and decline of modem capitalism, The Great Transformation.
People love it. Though hardly beach reading, it's well written, a piece of higher journalism. The theme is that the market was a recent invention, a mere novelty that has spoiled life. "The origins of the cataclysm lay in the utopian endeavor of economic liberalism to set up a self-regulating market system….Leaving the fate of soil and people to the market would be tantamount to annihilating them." That theme is an old one, of course, echoed by greens and reds down the decades since 1848. But Polanyi put it well, giving three generations of English-speaking intellectuals a story to warrant the welfare state.
In other words, you have to give the book its intellectual due. Most fields of history have gone through a (Karl) Polanyi Period, in which the master's notion that the market is new and nasty has been applied afresh. Someone in African history or Mesopotamian history or American colonial history or (I am not making this up) Viking history runs across Polanyi's book, from which he discovers that he does not have to learn economics to sneer at markets. Eventually a reaction sets in, when the historians realize that the market is forever. The cycle takes about 20 years. New fields keep falling into it, 50 years on.
The book has never gone out of print. Professors still assign it. Intellectuals who want to learn about economics, but are afraid to ask, still pick it up and devour it. No book on the half century past has had more influence on social thinking.
The antidote? Any of the books by Karl's smarter brother, Michael. Michael was a famous chemist before turning to philosophy and public policy and therefore knew that proving something about the world is tough. He was not a consistent libertarian and even on occasion sounds like Congressman Kelly of Florida: "The free enterprise system is absolutely too important to be left to the voluntary action of the marketplace." But by the standard of the time, and certainly by the standard of the Polanyi family, he was a veritable Hayek.
Like his brother, he wrote well in his adopted language. Find his book Personal Knowledge (1958), an exploration of how, really, we know. Or, directly after sipping Karl's book, take a long drink from Michael's The Logic of Liberty (1951). In The Logic he argues, for example, "there exists no fundamental alternative to the system of money-making and profit-seeking" and "the social management of polycentric tasks requires a set of free institutions." Michael's response to the 20th century was to think of government as the problem and the market as the solution. Neither brother so much as mentions the other in his writings. It's no wonder. Karl was the poison and Michael the cure.
Donald N. McCloskey teaches economics and history at the University of Iowa. His latest book is Knowledge and Persuasion in Economics (Cambridge University Press).
William H. Mellor III
John Wesley Powell's exploration of the Grand Canyon in 1869 required mental and physical heroism of Randian proportions. The one-armed Civil War veteran led expeditions down the uncharted Green and Colorado rivers, overcoming torrential rapids, near starvation, and hostile Indians. In the process, he mapped thousands of miles of unexplored territory and gained dramatic insights into the challenges confronting the Western United States, challenges that remain today. Sadly, one of the best American writers of this century, Wallace Stegner, uses Powell's exploits as the foil to showcase his radiant defense of Progressive Era policies as the way to meet these challenges.
The first half of Beyond the Hundredth Meridian: John Wesley Powell and the Second Opening of the West (Penguin, 1954) is devoted to the gripping account of Powell's two trips through the beautiful canyon country. Stegner chronicles the action and natural grandeur to potent effect. The excitement builds as one appreciates how the explorers confront disaster and death countless times. Yet Powell, with his quiet resolution to advance scientific understanding of the West, never wavers in the face of staggering adversity.
As a result, one begins the second half of the book with great admiration for Powell and his vision of the West. Stegner carefully plays on this to draw the reader into sympathetic agreement with Powell as he turns his vast energy into forming one of our first Progressive Era bureaucracies, the U.S. Geological Survey. Powell envisioned an agency run by well-informed, scientifically trained elites who would ensure that the fragile ecology of the West would be managed to provide the greatest public good for his and future generations. The USGS served as the model for many later government agencies and the training ground for countless bureaucrats who staffed these new agencies. Powell, "both the bureaucrat and the idealist knew that private interests, whether they dealt in cattle or sheep, oil, mineral, coal, timber, water, or land itself, could not be trusted or expected to take care of the land or conserve its resources for the use of future generations. They could be trusted or expected to protect neither the monetary nor the nonmonetary values of the land."
This book should be read by anyone concerned with liberty or the American West. Stegner writes with authority and sensitivity about real problems that to this day plague the West: water allocation, political control over resources that leads to exploitation or misuse, and the myths and realities of economic existence in this arid region. Though the book was written in 1954, it offers a persuasive case for why Powell's vision should still be pursued. Stegner subtly validates the basic premises of enlightened rule by scientific experts, premises all too popular in Washington today.
This book is an excellent example of how the case for activist government can be successfully advanced using romance, history, adventure, and human interest. Until classical liberals are able to bring similar forces to bear in support of our arguments, we will lose more often than we will win. With respect to the West, a good start has been made in Free Market Environmentalism, by Terry Anderson and Don Leal, and Visions upon the Land, by Karl Hess Jr. But the ultimate refutation of Stegner is yet to be written.
William H. Mellor III is president and general counsel of the Institute for Justice in Washington, D.C.