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The Mises Review

Fall 1998

A Quarterly Review of Books, by David Gordon

The Capitalist Muse
Tyler Cowen
Harvard University Press, 1998, xi + 278 pgs.

Is It Really Rothbard?
Kevin Dowd and Richard H. Timberlake, Jr., Editors
Transaction Publishers, 1998, viii + 453 pgs.

Foreign Policy as Pseudo- Science
Fareed Zakaria
Princeton University Press, 1998, x + 199 pgs.

The Politics of Custom
Donald W. Livingston
University of Chicago Press, 1998, xix + 433 pgs.

Socialism of the Heart
Edward S. Shapiro, Ed.
M.E. Sharpe, 1995, xviii + 397 pgs.

Only If It's Peaceful
Ralph Raico, Ed.
Journal of Libertarian Studies 13, no. 2 (Summer 1998)

The Capitalist Muse
Tyler Cowen
Harvard University Press, 1998, xi + 278 pgs.

Cultural pessimists such as John Ruskin claim that capitalism leads to a decline in literature, painting, and music. The market panders to the debased tastes of the masses and strikes a mortal blow at "high" art. Another Victorian, Matthew Arnold, in his classic Culture and Anarchy, indicted "our Liberal friends," including John Bright, for their "mechanical" adherence to laissez faire. Their single-minded devotion to the market put culture at risk. (Oddly, Cowen's erudite book mentions neither Ruskin nor Arnold.)

How might a defender of capitalism respond? One way is to admit the crime but exonerate the suspect. Culture is indeed in a bad way today, but the market is not to blame. It isn't the fault of the free market that no composer today can match Mozart or Beethoven: to replace the market will not make artistic genius appear.

Tyler Cowen in this ambitious book replies to the anti-capitalist argument on entirely different lines. Culture in the present, far from being in decline, is in great shape. "The cultural optimist position does not seek to make the achievements of modern creators commensurable with the achievements of the past, just as we cannot... ascertain whether five or ten Beatles songs might add up in value to one Haydn string quartet. It can be said, however, that modern creators have offered the world a large variety of deep and lasting creations that are universal in their scope and significant in their import" (p. 9).

Many of us, I dare say, will find it quite easy to judge Haydn superior to the Beatles. But our author has much more in store for us than a gush over a rather tame group by present-day standards. Rap music, it seems, is also part of the cultural renaissance that capitalism has created. "Rap music has received special opprobrium, and is commonly associated with riots, murder, and obnoxious boom boxes. But approached from another context and freed from its sometimes threatening tone, rap is a startling musical achievement. Rap interweaves advances in musical technology with the cultural clothing of modern urban black America" (p. 173).

I suppose we should at least be grateful that Mr. Cowen's praise extends only to rap music "freed from its sometimes threatening tone." But I speak too soon: the concession has been made only to be at once withdrawn. Cowen cannot contain himself where speaking of "hard" rap: "Hard rap forces us to encounter contemporary music and poetry at their most barbaric. It uses violence in the artistic tradition of Shakespeare, Bosch, and Verdi to create an entrancing fervor" (p. 175).

Readers may well wonder: how low can he go? (Not me, of course: I mean Professor Cowen's taste for barbarism.) I fear that we have not yet reached bottom. Opponents of government funding for the arts have often held up to ridicule the photographs of Robert Mapplethorpe and the sculpture of Andrés Serrano. Defenders of the NEA counter that the grants to these purveyors of vice were aberrations: should we not be willing to tolerate a few rotten apples in return for the government's promotion of good art?

Cowen's slant on the issue differs from both positions just sketched out. He does not favor government funding of the arts, but he thinks that Mapplethorpe and Serrano are successes of the National Endowment. "The result is an agency whose best and most innovative actions--such as funding exhibits of Robert Mapplethorpe and Andrés Serrano--are precisely those that offend its taxpaying supporters" (p. 38).

Our author later uses his admiration for these artists to take a swipe at those libertarians not so culturally enlightened as he. "Despite their protests, many libertarians are glad to hear that the NEA sometimes funds dubious art. They would rather have their negative view of government confirmed than enjoy a great public mural. Since Mapplethorpe's photos and Serrano's Piss Christ give them marketable fodder for attack, they assume that these artists must be degenerate and low quality" (pp. 199-200).

One might at this point raise an objection to the line of criticism of Cowen implicit in my foregoing remarks. I have suggested that his defense of markets is in one respect worse than useless. He merely holds up to praise exactly the sort of trash that critics of the market adduce as their prime cases of cultural decline. What good is this?

But, you may object, my criticism is fatally flawed. I have suggested, in my usual sneering tones, that rap music, Mapplethorpe, and Serrano are not ornaments of modern culture. But am I not just opposing my preferences to Cowen's? I have expressed disgust for what he admires: that is no argument.

And may we not go further? Cowen knows vastly more about rap music and similar wonders than I. He speaks learnedly of Schoolly-D, NWA, the Geto Boys, Public Enemy, and the Wu-Tang Clan, of whom I know nothing. (I had thought the NWA a professional wrestling association of some years ago.) Given this disparity in knowledge, is not Professor Cowen's judgment likely to be sounder than mine?

The first objection rests on an aesthetic philosophy that I reject. It reduces disputes about art to differences in taste not subject to rational resolution. As the nineteenth-century novelist Mrs. Margaret Hungerford famously expressed this view, "beauty is in the eye of the beholder." I should contend, contrary to our author and Arthur Danto, that it is objectively true that Andy Warhol's Brillo Boxes are not significant works of art (p. 28). To think otherwise, as Danto does, is ridiculously to inflate the importance of "self-referential" art.

But, you may continue, this is mere assertion on my part. Surely defenders of degenerate art like Cowen will not grant me an entire aesthetic philosophy as a premise. The point is well taken, and the task of elaborating objective principles of art far exceeds my powers. (In literature, Irving Babbitt and Yvor Winters have, I think, at least made a good beginning.)

But the objection does not much help Cowen. Since he defends the art that critics damn as degenerate, it is up to him to make a case for his aesthetics. I can assume my comfortable and usual role as critic, and attempt to knock down the arguments he advances. Unless he justifies his aesthetics, his case for contemporary culture is of mere biographical interest.

As to the second objection, a simple observation suffices to dispatch it. It is not always the case that more knowledge of a subject better equips one to judge it. No doubt astrologers are much better acquainted with their pseudo-science than are critics; but is it not the latter who manifest better judgment?

In the space remaining, then, let us address Cowen's arguments in defense of present-day art. For one thing, he claims that his beloved modern music is as complex as the great music of the past: "The premise that the creations of twentieth-century music are less complex than the classics is dubious.... The songs of Jerome Kern, Duke Ellington, Thelonious Monk, or the Beatles are arguably no less compositionally complex (and perhaps more complex) than the Lieder of Schubert. Schubert wrote about 700 songs, most of which no one ever listens to or analyzes. Many of these songs are technically and compositionally undistinguished" (p. 180).

Let us grant Cowen his claim about complexity; why does the fact that a song is more complex than a Schubert composition qualify it as a better work of art? Why is complexity a criterion of aesthetic merit? I suspect Cowen has mistaken complexity for the familiar principle of organic unity, which celebrates unity-in-variety. The entire point of this latter principle is to identify a criterion of beauty, a word that seems absent from Professor Cowen's vocabulary. Would he really want to say that the Beatles' music is as beautiful as Schubert's? Would readers?

But what of Cowen's point that not all the Lieder of Schubert are great? Perhaps so: once more I bow to his superior learning. But a supporter of the cultural decline view may argue that this does not refute him. Should not the state of culture be judged by its supreme products, rather than its average ones? And if the best of Schubert surpasses the best of the Beatles, he may say, we have an instance of cultural decline.

Too often Cowen assumes that in art, more is better. Thus, he argues that art progresses because new works provide us with additional ways of interpreting old works. "Art creates an interdependent language whose whole exceeds the sum of the parts. Masterpieces therefore provide more satisfaction and insight as we accumulate artistic experiences.... The more music we know, the more we can hear in the compositions of Bach and Beethoven" (pp. 27-28).

Cowen's point, taken as he acknowledges from T.S. Eliot, is a good one; but it does not prove what he wants it to. From the fact that new works give us new interpretations, it does not follow that our new view is better than our old. Perhaps previous interpretations have been forgotten; and even if not, once again it does not follow that the more interpretations, the better. Why is an abundance of interpretations to be preferred to a more detailed exploration of a lesser number?

A similar fallacy infects Cowen's account of one of his best points. Cowen rightly notes that under capitalism, the masses have access to a vast number of the great masterpieces of the past. Those who do not share Cowen's preference for the Beatles over Schubert can have all the Lieder they want. It is also true, as Cowen says, that "forms of professional cultural criticism, all relatively new professions, owe their [existence? D.G.] thanks to capitalist wealth" (p. 27-28). Do we not live in the best of times, so far as art is concerned?

A proponent of the cultural decline thesis need not agree; and as usual, Cowen bypasses his concerns. Once more, what of those who think that the state of art in a period should be judged by its supreme masterworks, rather than by the spread and variety of the art available in it? And what of the argument, advanced among others by Eliot, that the height of culture is characterized by a unity of artistic production, based on a shared tradition? Eliot's thesis of a dissociation of sensibility, which began in English literature in the seventeenth century, is not refuted by ignoring it.

Further, Cowen's excellent point that the capitalist market makes art available to the masses was advanced long before him by Ludwig von Mises, in The Anti-Capitalistic Mentality and by Edward Banfield, in The Democratic Muse. Our author finds neither of these works worthy of mention: no doubt Mises and Banfield lack the openness to new trends of Alvin Toffler, whom Cowen does cite.

I have no doubt been unfair to this book, of course by design. It includes much valuable discussion of the way in which changes in technology affect art. But it is not clear how this material speaks to the book's ostensible subject, the question of cultural decline under capitalism. How does the vast profusion of facts in this book fit into a coherent thesis? Timur Kuran, in a blurb, refers to the book's "delightfully parsimonious arguments." I wonder whether this is altogether a compliment?

Is It Really Rothbard?
Kevin Dowd and Richard H. Timberlake, Jr., Editors
Transaction Publishers, 1998, viii + 453 pgs.

When I received this book, I turned first to the contribution of Murray N. Rothbard, "The Gold Exchange Standard in the Interwar Years" (pp. 105-65). It is a characteristically brilliant piece, showing in detail how Benjamin Strong and Montagu Norman used the gold exchange standard to further their schemes of monetary manipulation.

But as I read the essay, several passages startled me. They did not seem genuinely Rothbardian; the Murray I knew would not have written them.

As I read the passages that aroused these misgivings, a remark that Murray made in conversation several years ago came back to me. He complained that he had been asked by the editors of this volume to make a number of changes in his essay. He was not disposed to accede to this request: if the editors insisted, he intended to withdraw his essay from the collection. I understand that he made similar statements to others.

Now, after his death, the essay has appeared; and it includes the "un-Rothbardian" passages. What was I to do? With typical timidity, I decided to ignore the matter: after all, suspicion is not proof.

Meanwhile, I have obtained a copy of Murray's original manuscript for his article. When I compared it with the version in this book, I was shocked. The distortions far exceed what I had feared. I do not know who is responsible for them, so I shall refer in the following to the "editors" or "redactors," meaning by these terms whoever has made the changes about which I complain. These terms do not refer to Professors Dowd and Timberlake, whose role, if any, in the distortions I do not know.

Let us begin, appropriately for this topsy-turvy product, at the end. The essay, in its present rendition, finishes in this way: "Although it is unlikely in the near future that the world will return to gold, its history and the history of its decline remains [sic] instructive for all of us" (p. 156).

The mood here is elegiac: as we contemplate the failure of past politicians to restrain through "discipline" their "human weakness," we shake our heads in dismay and move on. This, I suggest, is un-Rothbardian: our author did not at all regard the imminent return of gold as a futile dream. We must do more than regret past mistakes, in his view. We must restore the correct monetary system as soon as possible, and this may be very soon indeed.

You may reply that I have read too much into this sentence: it need not be taken as meaning that success in the fight for gold is at best far away. True enough. But it can be read this way and Rothbard would not have so expressed himself. In fact, he did not: his manuscript concludes with an ac-count of the New Deal. The sentence I have quoted does not occur in it, nor does anything else remotely like it.

To grasp the next point at issue, some background must be sketched. Contemporary Austrian economists differ sharply about banking. Some do not object to fractional-reserve banking, so long as it is private banks that engage in this practice. Competition among banks, so it is claimed, prevents inflation: if one bank overexpands, other banks and their customers will demand redemption, and so bring the reckless bank back into line. Kevin Dowd, an editor of this volume, and Lawrence White, one of the contributors, support this view.

Rothbard thought otherwise. He regarded fractional-reserve banking as fraudulent, and he dismissed out of hand the alleged need for the quantity of money to rise as production ex-pands. I do not wish here to assess the competing positions: I want only to call attention to Rothbard's opposition to "free" fractional-reserve banking.

Several passages that in Rothbard's manuscript manifested his position have in the editors' rendition been altered to disguise this. Rothbard's manuscript stresses the widespread use, under the classical gold standard, of gold in ordinary transactions and the pressure exerted on financial policy by the prospect of an immediate demand for redemption: "[G]old coin was used in everyday transactions by the general public...governments or central banks were, on the gold standard, restricted in their issue of paper or bank deposits by the iron necessity of immediate redemption in gold, and particularly in gold coin on demand" (Rothbard ms., pp. 3-4, emphasis added).

Wide use of gold coin and immediate redemption are not what we want in "free" fractional-reserve banking, are they? Accordingly, the passage I have quoted is amended: "[G]old coin could be used in everyday transactions by the general public.... But governments, central banks, and private issuers on the gold standard were constrained in their issue of paper or bank deposits by the ultimate necessity of redemption in gold coin" (p. 107, emphasis added). Rothbard's comment has been weakened, and a reference to "private issuers" not in the original has been inserted.

Again, Rothbard claims that "in fractional-reserve banking, paper and bank notes pyramid as a multiple of gold reserves" (Rothbard ms., p. 4). In the book, it is only in "government fractional-reserve central banking" that notes pyramid (p. 107). And a paragraph in which Rothbard claims that "central banking and fractional-reserve banking allowed play for a boom-bust cycle" has been excised altogether (ms., p. 5). Rothbard's argument in the missing paragraph is that the classical gold standard limits the instability caused by fractional-reserve banking.

As readers of Rothbard's delightful The Case Against the Fed will recall, Rothbard believed that the Federal Reserve System was conceived in sin. It was, from the start, a conspiracy aimed at financial manipulation. Accordingly, he states in his manuscript: "The purpose of the Federal Reserve was to cartelize the nation's banking system, and to enable the banks to inflate together" (ms., p. 18).

Our redactors did not find this to their liking. They changed Rothbard's sentence to this: "Whatever the publicly stated purposes were for the [Federal Reserve] system, the result was the cartelization of the nation's banking system" (pp. 115-16, emphasis ad-ded). What right have they to weaken Rothbard's assertion in this way?

Readers familiar with Rothbard's views on praxeology will be startled to encounter the following: "Those who have looked to politically controlled money as some sort of panacea, placing in the bargain their faith in those institutions to do solely what is good for the public as a whole, have been too often rewarded with consequences as bad--and often worse--than the financial situations such institutions were designed ostensibly to correct. While disagreements over the gold standard and historical and theoretical effects of private banking will undoubtedly continue, the empirical record of government manipulations of credit and currency is not contestable" (p. 128).

The contrast between debatable theory and "the empirical record," that cannot be denied is thoroughly unpraxeological. And would Roth-bard, even ironically, say that governmentally controlled money was "as bad--and often worse" than the previous states of affairs? Surely he would write more emphatically.

Has Rothbard converted to empiricism and modified his temperament to boot? Otherwise, how can we account for this aberrant paragraph? I am happy to assure readers that they need not revise their picture of Rothbard. The explanation for the "changes" lies in a more predictable quarter. This paragraph corresponds to nothing in Rothbard's manuscript.

And now we touch bottom. The paragraph I have just quoted begins as follows: "In his own way, Keynes, as he so often did, saw to the heart of things. The issue of the 'trust' that can be placed in governmentally controlled financial institutions is precisely the crucial issue" (p. 128).

The view of Keynes as an insightful, if skewed, thinker, is not without a certain interest. But it is the very midsummer of madness to impute the notion to Rothbard. Need I say that the sentences cited are not to be found in Rothbard's manuscript?

In the section of the original manuscript which immediately precedes the inserted encomium to Keynes, Rothbard's tone is mocking: "Keynes managed to bully it [the Royal Commission on Indian Finance] into including his appendix.... In addition, in his work on the Commission, Keynes managed to enchant his doting mentor, Alfred Marshall" (ms., p. 39).

What to do? Would not readers, having encountered such disparagement, be jarred at finding Keynes praised for his insight? The solution is obvious--eliminate Rothbard's words that interfere with the message the higher authorities wish to convey. Keynes now "manages to convince" the commission to include his book's appendix in their report, and the sentence on Marshall goes out altogether (p. 128).

The artful way the editors substitute their view of Keynes for Roth-bard's displays some ingenuity; and, like an artist hiding away his initials on his canvas, they leave a mark by which their presence may be identified and credit duly assigned. On the preceding page, they refer to the "then India-posted John Maynard Keynes...when finally leaving the Indian [sic] office for Cambridge" (p. 127).

Whoever concocted this evidently thought that the India Office was located in India. But of course the India Office was in London; and it was there, not in India, that Keynes worked on Indian finance. Rothbard correctly has: "Keynes, then in his first economic post at the India Office" (ms., p. 38), and does not move Keynes to India. Since the author of the line in the book pla-ces Keynes there, I conclude that Rothbard did not write the offending passage.

This, by the way, is not the only mistake introduced into Rothbard's text. Rothbard states that the Fed "obligingly doubled" the money supply in the spring of 1917 (ms., p. 21). This becomes in the book the nonsensical "the Fed doubled the money supply by 50 percent" (p. 117).

However critical I have been of the editors' manipulations of the text, I must acknowledge their achievement in one matter. For all too many, scholarly notes are dull, dreary matters. Not to our boys. For them, Rothbard's notes provide unlimited space for creative activity.

A long note distinguishes between older and newer uses of the word "inflation." In the older use, inflation meant an increase in the supply of money: in the newer it means an increase in the price-level. Although "I personally prefer the older approach," the newer, the note states, is adopted in the article. "In this article, the term used to denote an increase in the quantity of money is 'expansion.' Inflation is used solely to indicate an increase in the level of some price index" (p. 156). The note concludes by pointing out, regretfully, that the "direct definitional causal link" between an increase in the quantity of money and a rise in price is cut by the new definition. "Perhaps this is progress; perhaps not." (All quotations are from pp. 156-57, n. 3.)

Rothbard did indeed prefer the older usage, but this note is not to be found in his manuscript. The mildly ironic "perhaps this is progress, perhaps not" gives the game away: this is not Rothbard's tone of voice.

But am I not here grasping at straws? Why object to a mere clarification of terms, even if, ideally, the editors should have signaled that the note has been added by them? My objection is precisely to the note. In the first place, the note introduces a mistake. To characterize inflation as an increase in the supply of money does not create "a direct definitional causal link" between inflation and a subsequent price rise. It says nothing at all about a rise in prices. Use of the older definition does indeed make the analysis of price rises easier, but this is not a "definitional causal link." And whoever added the note has not bothered to coordinate his handiwork with the text. In the article, inflation is sometimes used in the older usage that the note claims to have abandoned. For example: "Meanwhile, despite the great inflation of money and credit in the United States, the massive increase in the supply of goods in the United States continued to create relative retail price stability" (p. 149).

If the editors had to substitute their own usage of "inflation" for Rothbard's, you would think they could have done a consistent job of it. And for the editors to state "I will adhere," as if it were Rothbard who spoke in the note they have themselves added, is chutzpah indeed.

I pass over a few oddities, e.g., the nonsensical "average level of existing relative prices" in the editorially in-vented note 33 (p. 160) and the citation of a "classic article" not to be found in the manuscript (p. 157, n. 11), to arrive at the piece de resistance.

Let us consider the following note: "Far from showing that moneys of account can be imaginary in relation to media of exchange, the historical research of Luigi Einaudi on 'imaginary' money in the Middle Ages reveals various countries experiences with various relationships between gold and silver, both commodity moneys (Einaudi 1953; Timberlake 1991)" (p. 157, n. 6).

Would not readers of this note assume that "Timberlake 1991" was one of Rothbard's sources for his claim about money in the Middle Ages? The manuscript tells a different story. The corresponding note begins: "Professor Timberlake misconstrues the historical researches of Luigi Einaudi on 'imaginary' money in the Middle Ages" (ms., p. 88, n. 4, emphasis added). By omitting a crucial sentence, Professor Timberlake has been transformed from the note's target to one of its sources. One wonders whether it is altogether a coincidence that Professor Timberlake is an editor of the volume.

Perhaps it may be claimed that the change avoids acrimony among the contributors and was for that reason acceptable. But this argument at most supports omission of the note entirely, rather than the distortion here perpetrated. And if controversy among contributors was to be concealed, why is Timberlake in his article allowed to criticize Rothbard (p. 189, n. 6)? Dr. Bowdler would have been very proud of this job.

Foreign Policy as Pseudo- Science
Fareed Zakaria
Princeton University Press, 1998, x + 199 pgs.

Mr. Zakaria finds a paradox at the heart of American foreign policy in the latter part of the nineteenth century. The United States at that period was rapidly becoming an economic giant. Yet its role in the international system did not exceed that of far weaker nations. Why did economic strength in this instance go together with diplomatic weakness?

In the decades after the Civil War, our author notes, "economic growth reach[ed] a truly stunning pace. By one calculation, the United States grew at an average rate of 5 percent per year between 1873 and 1913. This extraordinary rise manifested itself in almost every sector of the economy.... In fact, its meteoric rise was even more staggering in relative terms.... Great Britain was averaging growth of only 1.6 percent. By 1885 the United States had surpassed Britain, gaining the single largest share of world manufacturing output" (pp. 45-46).

America's military and diplomatic power by no means matched Britain's. "Between 1865 and 1890, the United States acquired forsaken Alaska and the tiny Midway Islands and gained basing rights in Samoa. During the same period, Britain and France each acquired over three million square miles of new colonies" (p. 47). Around 1890, the American army ranked fourteenth in the world, be- hind Bulgaria; and the laughable United States Navy was inferior in strength to the Italian navy.

These facts are not in dispute; but why does Zakaria think he has found a paradox that demands resolution? In his view, America's behavior violated a traditional rule of European statecraft: nations increase their power to the extent their resources permit. "So common was this pattern that European statesmen viewed the state that did not turn its wealth into political influence as an anomaly" (p. 4). Because the Netherlands did not in the eighteenth century expand to the extent its vast economic capacity allowed, statesmen of the time referred to the "Dutch disease." In sum, "[a]s European statesmen raised under the great-power system understood so clearly, capabilities shape intentions" (p. 5).

Here then is the paradox that confronts Zakaria. The United States suffered from the Dutch disease. If capabilities shape intentions, why did the United States during the relevant period shun expansion?

Zakaria's question is a good one, but only by accident: he lacks an adequate rationale within which to consider the issue. As he sees it, the fact that many European states pursued an expansionist policy somehow establishes a "law" that this is standard behavior.

Given this law, the task of the political scientist is clear. Aping the procedure of "hard" scientists, he must formulate a hypothesis designed to explain the supposed law. The hypothesis must then be tested: if verified, the law is confirmed.

Students of Mises will at once spot the flaw that undermines Zakaria's procedure. The fact that states during a certain period have expanded in proportion to wealth does not give us the material for a law, in the style of the physical sciences. In human affairs, we are not given precisely defined variables that can be measured: to talk of verifying a hypothesis, as if some law of science were at stake, leads nowhere. Introducing pseudo-scientific jargon, with accompanying charts, will not convert history into a science.

Zakaria of course would regard these Misesian strictures as nonsense. Given his "law" of state expansion, he considers two hypotheses to account for it. The first, classical realism, with which Zakaria sympathizes, holds that states expand to the extent of their capacity. As you will recall (since I mentioned it only a few paragraphs ago), this is the traditional European view of state behavior.

Against this stands another theory, championed by Walter Lippmann and George Kennan, which our author terms "defensive realism." It holds that states expand in response to perceived threats: "nations expand their political interests when they become increasingly insecure" (p. 21, emphasis removed).

Zakaria does not like defensive realism at all. He directs two criticisms against it, one good and one bad. He rightly points out that many politicians justify expansion by self-serving statements. Thus, Stalin took over Eastern Poland not of course as an expression of Soviet imperialism, but in response to fears of "Western aggression." Or so he told us.

Zakaria's point is excellent, but once more pseudo-science rears its ugly head. Security, it seems, "is a malleable concept that is more difficult to operationalize than most terms in political science" (p. 26). From it we cannot generate testable predictions. Zakaria evidently imagines himself in a 1930s logical positivist's model of a physics laboratory.

But if Zakaria rejects defensive realism, it is not entirely to defend its classical realists rival. Rather, he modifies classical realism in a crucial respect; and his modification leads him, I fear unintentionally, to a most valuable line of inquiry. He suggests that classical realists err in assuming that statesmen have automatic access to the full extent of their nation's wealth. This need not be so: and what determines a political actor's grasp for power is the resources that he can command. In Zakaria's state-centered realism, "[s]tatesmen, not nations, confront the international system, and they have access to only that fraction of national power that the state apparatus can extract for its purpose" (p. 35).

Here, at last, Zakaria strikes paydirt. The framers of the United States Constitution were not pseudo-scientists. But they were disturbed by the dangers of an expansionist state: they believed that a strictly limited government, devoted to peace, was essential to a good society.

Accordingly, they made it very difficult for the national government to expand territorially or to engage in war. Power-seeking presidents cannot acquire territory by themselves, nor can they commit our country to war without the consent of an often difficult to manage Congress. And, owing to limited taxation, the federal government usually could not fund expansionist schemes.

Centralizers have from its inception disliked our constitutional endeavor to contain overeager presidents. Thus, Alexander Hamilton "argued during the constitutional debates in Philadelphia for both a more powerful central government and a more powerful president. In Hamilton's opinion, if America were to achieve the economic prosperity of Europe, greater responsibilities and power would have to be placed in the hands of the national government and, in particular the presidency" (p. 97).

Fortunately for Americans' well-being, the American system during the latter part of the nineteenth century worked much as the framers had intended. Thus, after the Civil War, Secretary of State William Seward was anxious to add Cuba to America's possessions. He was unable to do so: "when, late in his term, Seward espied an opening, he decided that congressional obstinacy made pursuing such a path futile" (p. 97). Not even the much more energetic efforts of President Grant to secure the island were sufficient to turn the trick. How-ever much statists might balk, the national government had been de-signed to be inefficient in imperialism.

Of course, such is not the case today, much to our loss and Zakaria's satisfaction. Our author ably traces the undermining of the American system of restraint. The Civil War dealt a severe blow to limited government, and Lincoln's usurpations of power in that conflict set a precedent for his successors. But, once more, nothing could be done until the central government commanded more resources. Increased federal revenues, the development of a professional civil service system, and the expansion of government regulation of business strengthened the state's hand.

But of course trends do not act by themselves: they require actors to set them in motion. Zakaria ascribes much of the credit, as he sees it, for the overthrow of restraint, to two presidents. One of these I am sure readers will be able to guess--Theodore Roosevelt.

The other culprit is a president often portrayed as weak and vacillating: William McKinley. Our author, by contrast, views him as bold and aggressive. "Under William McKinley's leadership, America undertook the most dramatic extension of its interests abroad since the annexation of Texas. McKinley also so brazenly expanded presidential power that some have called him the first modern president.... McKinley took advantage of his executive power to enlarge the presidency still further: he dispatched troops to China to help put down the Boxers without consulting Congress. Never before had a president used force against a recognized government without obtaining a declaration of war" (pp. 163-64).

Zakaria's able historical narrative breaks the bounds of his allegiance to pseudo-science and offers a much-needed lesson to those who lack his devotion to the expansionist state. Unfortunately, he never quite shakes loose from what P.A. Sorokin termed "quantophrenia."

One illustration must here suffice. A table purports to demonstrate the superiority of state-centered realism to defensive realism. In it, twenty-two opportunities for American expansion in the period 1865-1889 are considered. The number of validations for state-centered realism far exceeds that for its rival, and Zakaria waxes triumphant. But since he counts both a decision to expand and a decision not to expand as confirmations of his favored theory, his table is worthless. His theory will always come out right, just by the way he has set up the test. Such are the ways of pseudo-science.

The Politics of Custom
Donald W. Livingston
University of Chicago Press, 1998, xix + 433 pgs.

Donald Livingston's brilliant Philosophical Melancholy ranks as the most unusual philosophy book I have ever read. What starts as an analysis of David Hume's conception of philosophy ends in a discussion of the Civil War and secession. Has Livingston simply put together essays on disparate themes and called the result a book? Quite the contrary, he proves to the hilt that seemingly recondite philosophical questions have the utmost practical relevance.

Readers who remember Hume only as a name from a Western Civ course taken long ago probably have a picture of him something like this. Hume denied that we perceive ordinary physical objects. Instead, we have access only to impressions and ideas that copy them. The law of cause and effect has no rational basis: all that we have given to us are constant conjunctions of ideas. Inductive inference yields us no knowledge. Similarly, morality rests on irrational sentiments--"ought" cannot be derived from "is"--and religion is nothing but superstition. Although Hume's own politics were rather moderate, surely his skepticism inevitably leads to utter nihilism.

According to Professor Livingston, who is probably the world's leading authority on Hume, the picture just given misrepresents the facts in every regard. (Those in the grip of the Western Civ picture should not feel too bad, though; at least they have heard of Hume. In more "progressive" colleges, they would no doubt have learned instead about the African origins of civilization or the millennia- long conspiracy of men against women.) Following, and to some extent correcting, the work of the great philosophical scholar Norman Kemp Smith, our author portrays Hume as a sturdy champion of common sense.

Livingston maintains that to view Hume as a radical empiricist is to begin from a mistaken assumption. Hume did not think that the theory of knowledge is a foundational discipline in the style of René Descartes. Instead, philosophy must begin from the customs and traditions of a society, which can be examined but not completely overthrown. As Livingston states this fundamental point: "Philosophical reflection may criticize any prejudice of common life by comparison with other prejudices and in the light of abstract principles, ideals, and models.... But these critical principles, ideals, and models must themselves be thought of as reflections, abridgments, or stylizations of particular domains of custom. What we cannot do is form critical principles from some Archi-medean point...which throws into question the order of custom as a whole" (p. 2).

Unfortunately, most philosophers have not grasped that their thought must be grounded in the "common life." Instead they follow the principles of ultimacy, autonomy, and dominion. They attempt to arrive at the truth of things without presuppositions. In doing so, they recognize no loyalty to antecedent custom. Even worse, they think the principles they have established enable them to overthrow existing society and to refound it on principles they falsely suppose rational.

You probably think that you know what is coming next. Philosophers should not attempt to enact what Thomas Nagel calls the "view from nowhere." Instead, they should stick to common sense. If you thought that, you are not altogether wrong; but you have missed the chief innovation in Livingston's interpretation.

Unlike Kemp Smith, who just did regard Hume as a devotee of common sense, Livingston's Hume does not suggest that philosophers abandon their usual approach. They should continue to seek ultimate principles, but apply their search to philosophy itself. By criticizing all sorts of philosophical systems, Hume tried to show, we can demonstrate the futility of the pursuit of knowledge apart from custom and tradition. How does Hume show this? He attempts to prove that philosophy pursued apart from tradition leads to skepticism. It is not Hume who rejected causation and induction, as our survivor of Western Civ imagines. Rather, this is what Hume thinks you get if you try to philosophize apart from tradition. But, once more, only by trying, and failing, to spin a rational universe out of thin air can a philosopher grasp why he should abandon the attempt and return to the common life.

I found Livingston's interpretation especially valuable in understanding Hume's view of religion. Hume's dialogues are usually taken to be a key document in the war of the Enlightenment with religion. But, according to Livingston, this position misses the subtlety of Hume's argument. His target was not all religion: it was, as we might by now expect, the endeavor to show that particular religious doctrines about God could not be established by pure reason apart from custom.

Hume by no means rejects "philosophical theism"; in fact, Livingston maintains, he held it superior to atheism. Philosophical theism holds that the world is guided by a rational plan. But this plan cannot be fully grasped by philosophers. It is a speculative ideal that guides future inquiry.

Most radically, Livingston states: "Hume appears to be saying that religion, viewed as sacred story and tradition, is acceptable to a true philo-sopher as long as it is disentangled from its speculative philosophical content. If so, this suggests that Hume could accept a Biblical form of Christianity purged of its claim to philosophical legitimacy" (p. 116).

By now, I fear readers may be asking: why is this book being reviewed in The Mises Review? However fascinating the reviewer may find Hume scholarship, why is it relevant to the political and economic areas that ostensibly form the subject matter of this journal?

Fortunately for me, the objection may readily be answered. As reference to the principle of dominion has already suggested, philosophers who ignore the limits of their subject do not confine themselves to what F.H. Bradley termed "an unearthly ballet of bloodless categories." Instead, to a large extent motivated by resentment against the world of ordinary life, they devise schemes to overthrow the foundations of society. Jean-Jacques Rousseau, once Hume's friend but later his bitter enemy, ranks as Livingston's chief villain in this regard.

Hume by no means confined himself purely to negative criticism of Rousseau and other purveyors of imaginary social worlds. In addition, he tried to elaborate a better alternative, one that did not flout the common life. In his view, the best form of government was a small republic that adhered to the principle of free trade. Such a republic, of course, rested on custom, preferably stemming from a homogeneous population.

Very fine, one might say, but are not small republics subject to invasion by more powerful states? Hume was not to be denied. A federal system might enable a small republic to survive. "It would appear...that the best regime would be an extensive republic with equal rights for the provinces" (p. 210).

A system of commonwealths united in a federal system has an unmistakable resonance to students of American history. It precisely describes the American constitutional system before the Civil War. Our author thus asks the provocative question: was Hume a founding father? The union of sovereign states before 1860 rested on custom, not abstract ideology, just as Hume mandated.

Of course not all customs are good, and Livingston is no friend of slavery. But the centralism and militarism of Abraham Lincoln and his cohorts were hardly the ideal response to slavery. Rather, Lincoln's policies virtually ended the American republic as it had been founded, and his barbarous methods of warfare led to loss of life unparalleled in our history. A free society, Livingston holds, must accept the right of secession. (Inci-dentally, Livingston is a contributor to an excellent recent volume devoted to this theme: Secession, State, and Liberty [New Brunswick, N.J.: Transaction, 1998].)

Livingston's masterly analysis seems open to objection on one point. He has very convincingly shown that Hume believed that speculative philosophy apart from custom leads to intolerable paradox and skepticism. But it does not follow from this that Hume was right; and only if he is do Livingston's conclusions about the proper political order follow. But Livingston does not here show that Hume's arguments are correct. This is not to say that Livingston is wrong, merely that his provocative argument is incomplete. (In fairness, Livingston has attempted some, though not all of this Herculean task in his earlier book, Hume's Philosophy of Common Life.)

I shall conclude by giving in to temptation and quarreling with a detail. John Rawls does not deduce liberty in "from a theorem game theory" (p. 175), although a game-theoretical argument plays a part in his argument for the difference principle. But even someone as picky and unfair as I can find little to dispute. Livingston has written a truly outstanding book.

Socialism of the Heart
Edward S. Shapiro, Ed.
M.E. Sharpe, 1995, xviii + 397 pgs.

To neoconservatives and even to some libertarians, Sidney Hook is a hero. As a young man, he achieved fame as the leading American expert on the philosophy of Karl Marx. But he soon broke with the Communists and devoted the remainder of his life to warning of the menace posed by their brand of totalitarianism.

True, he remained a collectivist, but he was a "democratic" socialist. Can we not forgive him his failure to embrace the free market, given his sterling fight against the Reds? An adulatory interview of Hook that appeared in Reason some years ago shows that this train of thought appeals to at least a few classical liberals.

Hook is indeed a person of real achievements, and his long-time anti-Communism merits praise. But the present comprehensive collection of Hook's letters demonstrates that there is very definitely a less than admirable side to Hook. I venture to suggest that classical liberals have no need to add Hook to their Pantheon.

Let us begin with Hook's strongest suit, his anti-Communism. For one thing, it was rather a long time in coming. At the age of twenty-six, he was still wildly enthusiastic about the Reds. In a letter to his parents dated June 24, 1929, written from Moscow, he states: "Just mingling with the people has enabled me to tap veins of enthusiasm that run deep under the surface of things. And just think of it! A country in which the red flag is the national banner and the 'Internation-al' the national anthem" (p. 20).

At the time Hook wrote this, the manifold atrocities of Lenin and Stalin were already widely known. And accounts of these were by no means confined to the capitalist press, which of course a distinguished progressive philosopher like Hook could not be expected to take seriously. The Social Revolutionary historian S.P. Melgounov published a detailed description of Bolshevik barbarism, The Red Terror (London: J.M. Dent, 1926), which Hook could readily have obtained had he cared enough to look at it. Instead, he preferred vapid expressions of enthusiasm for The Workers' Paradise.

In 1932, he supported the Communist Party candidate William Z. Foster for president. But disillusion did indeed soon set in. Why? Because Soviet Communism was not sufficiently revolutionary. Hook, we learn in a letter of 1934, attacked Stalin for failing to support a Communist revolution in Germany in 1923 (p. 35). The trouble with Stalin was that he overemphasized "the immediate needs of the Russian state."

Given Hook's commitment to international working class revolution, one naturally asks: what did Hook think so desirable about a socialist economic system? How did he respond to the criticisms of socialism raised by Mises and other economists?

His answer hardly strikes one as adequate. In a letter to Will Herberg dated May 29, 1932, he asks: "How do you imagine the soundness of the Marxian analysis will be demonstrated? It seems to me only by the revolutionary overthrow of capitalism and the development of a socialist commonwealth. Why? Because social action is not a controlled experiment but an irreversible activity on the basis of class need and choice" (p. 27). Away with argument about the merits of socialism! Act!

When Hook finally realized that Stalin was not Robin Hood reincarnate, what form did his anti-Communist efforts take? He devoted the bulk of his attention to organizing a Commission of Inquiry, headed by his mentor John Dewey, which aimed to discredit the allegations against Leon Trotsky raised at the Moscow Trials.

One must grant that Hook was correct. The Trials were farcical: Trotsky was not in league with Hitler to bring down Stalin. But what was the point of so elaborate a defense of Trotsky, himself an advocate of mass murder and totalitarian terror? Imagine a supposed anti-Nazi who devoted his principal attention to defending Gregor Strasser, a dissident Nazi murdered in the Night of the Long Knives in 1934. Would we not doubt the completeness of his conversion? Surely there were better things for Hook to do than beat the drums for Trotsky.

Hook in all fairness did turn later to a comprehensive attack on Stalinist murders, slave labor, and state-created famine. Given this, one would naturally expect Hook always to oppose Stalin root and branch. On the whole he did, but not when doing so would interfere with a sacred cause--America's participation in World War II. In a letter of February 21, 1984, he writes: "As almost a life-long opponent of communism [sic], when Hitler invaded the Soviet Union I advocated support of Stalin against him...even though Stalin had slaughtered far more people than Hitler at the time, because Hitler's victory would be more prejudicial to the survival of the free society at that time than Stalin's triumph" (p. 341). Stalin has killed more people than Hitler. Therefore, let's get into the war on his side lest something worse ensue. Never mind why this will happen. Not exactly a paradigm of logic, is it?

Once Hitler had departed the scene, Hook was quick to enlist in the Cold War. In reply to Albert Einstein, who claimed that American policy under Truman was aggressive, Hook in a letter of April 17, 1948, came up with this retort: "In 1940 American isolationists used to ask us whether America under Roosevelt had not been guilty of more hostile acts against Hitler's Germany than vice-versa. You will recall how we answered that" (p. 117). Never mind that the isolationist claim was true--we needed to enter the war in order to promote freedom. This is worthy of the Ministry of Propaganda in Orwell's Nineteen Eighty-Four.

One might object to my argument in this way. True enough, Hook needed more time than he ideally should have taken to arrive at a true picture of Communism. But, unlike most New York intellectuals during the 1930s, he did wake up. And if Hook failed to grasp the imperative need of a non-interventionist foreign policy to preserve a free society, was this not a failing shared by many? The first point merely shows him the best of a bad lot, and the second is an excuse, not a justification. Hook is no hero. w

Only If It's Peaceful
Ralph Raico, Ed.
Journal of Libertarian Studies 13, no. 2 (Summer 1998)

Most libertarians have in recent years favored "open borders," but this indispensable collection of articles throws that view into serious question. Some of the contributors, e.g., Walter Block, defend free immigration, to one extent or another; but the opponents of this position are well represented and raise vital points.

The dean of libertarian philosophers, John Hospers, raises a key issue in his excellent "A Libertarian Argument Against Open Borders." He states: "When one questioner asks, 'Isn't there a danger that immigrants will enter the country to receive the benefits of the welfare state? Jacob Hornberger responds, 'Then get rid of the welfare state!' The response, of course, provides no answer to the question asked. What are we supposed to do in the meantime?" (p. 158).

Given the attractions posed by the United States welfare state, open borders spell sure disaster. Further, as Ralph Raico intimates in his incisive introduction, civil rights laws and "affirmative action" may have considerable bearing on the justice of immigration. Immigrants who are members of favored minority groups may qualify for immediate benefits denied to citizens not included in ethnic groups the state chooses to privilege (p. 136).

But, one may object: an issue of principles is involved. The welfare state and affirmative action may pose severe practical problems; but libertarians have no choice but to accept whatever may be the consequence of free immigration. Are we not committed to voluntary action as our guiding social policy? How can state restrictions of the free movements of immigrants be supported by any self-respecting classical liberal?

The thought behind this objection appears to be: "Although open borders are a recipe for disaster, let us embrace this policy and go forward to chaos." Whether this is the height of wisdom in political philosophy is perhaps open to doubt. But still, the question remains: what is a libertarian to do?

Hans Hoppe, in "The Case for Free Trade and Restricted Immigration" finds an escape from our dilemma. Libertarians, he argues, are not even in pure theory required to accept open borders. True enough, libertarians must accept "capitalist acts between consenting adults"; but this does not entail that people have an unrestricted right to move wherever they please.

Far from it. A free society is not at all committed to "free" immigration: "free in conjunction with immigration does not mean immigration by invitation of individual households and firms, but unwanted invitation or forced integration; and restricted immigration actually means, or at least can mean, the protection of private households and firms from unwanted invasion and forced integration" (pp. 226-27).

Given the problems, both practical and theoretical, posed by open borders, even those reluctant to impose restrictions speak with caution. The late Julian Simon, the most noted of immigration advocates, stops short of support of a natural right to enter a country. A given population has a "property right in their social and economic organization" (p. 152). This permits them to regulate the number of immigrants, but this is a right that Simon thinks must be exercised with great caution.

Tibor Machan, a long-time defender of a Randian rendition of libertarianism, maintains that prospective immigrants must demonstrate that they have the economic means for self-sufficiency in order to be granted the right to settle in a country.

"The general precondition, then, of immigration into a free society is self-sufficiency and voluntary relationship with those who are already there" (p. 200).

In this suggestion, Machan is seconded by Jesús Huerta de Soto. But this eminent Spanish economist goes further. He holds that "under no circumstances should the political vote be granted to immigrants quickly" (p. 195).

Only Walter Block, with characteristic verve, defends the open borders position. Whether he responds adequately to the welfarist concerns of Hospers and others must be left for readers to judge.

Future discussion of immigration by libertarians will, it is safe to say, have to take this fundamental symposium into account.