Crosscurrents (Vol. 4 No. 3)

Communist Economies Examined

Students of Eastern Bloc economies can now turn to a valuable new source of research and sound economic analysis. The Centre for Research into Communist Economies (‰ 2 Lord North Street, London SW1P 3LB, England) is producing an ongoing series of monographs on socialist economic systems by noted scholars in both the West and the Eastern Bloc. The latest addition to the series, The System versus Progress: Soviet Economic Problems by Gertrude Schroeder of the University of Virginia (1986), provides a wealth of data on Soviet economic performance, as well as a thoughtful look at the “reforms” currently being discussed.

New Directions in Welfare Economics, Game Theory

Welfare economics, the subject of Tyler Cowen’s bibliographical review essay in this issue of Humane Studies Review, has long been in need of serious revamping. Its formulation has been almost solely in static terms, terms incapable of fully comprehending the actual world of processes.

The Economics of Rights, Co-operation, and Welfare (New York: Blackwell, 1986) by Robert Sugden points in the direction of a new welfare economics, one based on spontaneous order theory and a process-based, game-theoretic approach. As Sugden shows, the normal formulation of welfare economics has traditionally taken the form of “questions that would be faced by a benevolent and all-powerful government of the kind that the economist imagines himself to be advising.” In place of such a formulation, Sugden argues that “there is another viewpoint from which an individual can make moral judgements: his own viewpoint. Individuals living together in a state of anarchy . . . tend to evolve conventions or codes of conduct that reduce the extent of interpersonal conflict: this is spontaneous order. A society that conducts its affairs in accordance with such standards of justice may not maximize its welfare in any sense that would be recognized by an impartial observer. To put it the other way around, a benevolent government may find that it cannot maximize social welfare, evaluated from some impartial viewpoint, without violating conventions that its citizens regard as principles of justice.”

Sugden’s work shows how the market can be the source of its own ordering institutions, thus perhaps dispensing with the necessity of an external ordering force. Significantly, The Economics of Rights, Co-operation, and Welfare provides a sound theoretical basis for the legal/historical study of the spontaneous emergence of law, as exemplified by the masterful work of Bruno Leoni (especially his Freedom and the Law [Los Angeles: Nash Publishing, 1972]) and Leon Trakman (especially his The Law Merchant and the Evolution of Common Law [Colorado: Fred B. Rothman, 1983]). Sugden’s book could also be read profitably in conjunction with the path-breaking study by Robert Axelrod, The Evolution of Cooperation (New York: Basic Books, 1984).

Sugden’s work should prove useful to students in philosophy, law, sociology, political science, economics, and social theory.

Phenomenology of Moral Action, History

Practical reason, or phronesis (as it was known to Aristotle), is a central feature of the social theory of such contemporary classical liberals as F. A. Hayek and Michael Polanyi. A new book by a noted scholar working in the phenomenological tradition established by Edmund Husserl seeks to “develop the categorialities proper to practical thinking, the categorialities that make up phronesis.” Moral Action: A Phenomenological Study (Bloomington: Indiana University Press, 1985) by Robert Sokolowski uses the Husserlian idea of the intentionality of consciousness to critically and painstakingly unfold such components of moral action as desire, choice, and deliberation. Of special interest is his examination of the way in which the emergence of the market economy deepens the possibilities of choice:

“The presence of choice is thus sharpened by the possibility of exchanges. What we do can become chosen in view of what we can get for it, and not done for what it is in itself . . . [E]xchange opens up the possibility of a special kind of universal purpose—one that can transform almost any activity from being simply voluntary into being something chosen.”

Students of moral philosophy are likely to find this book a stimulating source of insight into their subject.

Another book from the same publisher, Time, Narrative, and History (1986) by David Carr, examines the structure of historical narrative, grounding it not in the activity of the historian but in the narrative structure of human life itself (what Husserl called “internal time consciousness”).

Scottish Enlightenment Bibliography

Church and University in the Scottish Enlightenment: The Moderate Literati of Edinburgh by Robert B. Sher (Princeton: Princeton University Press, 1985) is a careful and very specialized study of moderate churchmen in the Scottish Enlightenment, including Adam Ferguson and William Robertson. While recommended for specialists in Scottish Enlightenment studies, the more broadly useful feature of the book is a remarkable annotated general bibliography on the Scottish Enlightenment. This bibliographical guide thoroughly reviews the literature on every major subject of interest in the Scottish Enlightenment and will prove useful to students of political philosophy, legal history, American and British political history, social philosophy and history, economic history, and intellectual history.

Resources in Latin American Studies

The recent resurgence of interest in classical liberalism in Latin America offers new resources to students of this region, with new universities and other centers of liberal thought established in many Latin American nations. Among the notable new institutes is the Instituto Libertad Y Democracia (Benavides 881, Casilla Postal 18-1420, Peru), directed by Dr. Hernando de Soto. De Soto is the author of a recently published book that is selling briskly throughout the continent, El Otro Sendero (The Other Path, a play on the name of the brutal Peruvian Marxist group, Sendero Luminoso, or “Shining Path”). The book includes a preface by world-renowned novelist Mario Vargas Llosa (translated into English and published as “In Defense of the Black Market,” New York Times Magazine, February 22, 1987). De Soto’s work is based on extensive studies of Peru’s black markets and of the bureaucracies, rules, and regulations that stifle enterprise, wealth creation, and social mobility.

As Llosa points out, “One of the most widely accepted myths about Latin America is that our backwardness results from the principle of economic laissez-faire adopted in almost all our constitutions when we achieved independence. . . . According to this myth, the opening of our economies to market forces made us easy prey to imperialists, whose voracious business practices brought about the inequities between rich and poor. After their exhaustive study of Peru’s black market, Hernando de Soto and his institute conclude that Peru — as well as other Latin American countries and probably the majority of third-world nations — never had a market economy. The economic freedom guaranteed by our constitution is as much a fiction as political freedom.”

A sampling of similar institutes includes the Centro de Estudios Sobre la Libertad (Paseo Colon 823, Piso 7, 1063 Buenos Aires, Argentina), directed by Dr. Alberto Benegas Lynch (also director of an important university in Buenos Aires, ESEADE); the Centro de Estudios Publicos (Monsenor Sotero Sanz 175, Santiago, Chile), directed by Dr. Arturo Fontaine; the Universidad Francisco Marroquin (6A. Avenida 0-28, Zona 10, Guatemala, Central America; Dr. Manuel F. Ayau, Rector); and the Instituto Liberal (Av Presidente Wilson, 231-27º andar, 20030 Rio de Janeiro), directed by Donald Stewart.

Leggett, Intellectual Journalist, Reexamined

A brilliant example of thoughtful and informed journalism at its best is to be found in William Leggett, editor of the New York Evening Post during the 1830s. As IHS Fellow Lawrence H. White (“William Leggett: Jacksonian Editorialist as Classical Liberal Political Economist,” History of Political Economy, 1986 [18:2]), carefully and systematically demonstrates: “Leggett was not primarily a repackager of others’ ideas. He was instead a creative and systematic thinker who refined and extended the doctrines of classical liberalism in imaginative ways.”

White presents Leggett’s thinking on moral philosophy, monopolies, free banking, the business cycle, slavery and abolitionism, class theory, international trade, and the price system. White’s essay provides a good introduction to Leggett’s thought, as well as a useful bibliography. The essay will be especially helpful to students of journalism, American history, and banking history. (For a good sampling of Leggett’s writings, see the collection edited by White, Democratick Editorials: Essays in Jacksonian Political Economy [Indianapolis: Liberty Press, 1984]).

Eminent Domain Criticized, Right to Property Defended

Property Rights and Eminent Domain by Ellen Paul (New Brunswick, New Jersey: Transaction Books, 1987) reorients the debate over the “takings issue” in terms of the fundamental issues at stake, rather than the peripheral question of “when does a police power regulation become so onerous that its purpose could be constitutionally accomplished only by the exercise of the eminent domain power.” In a careful legal/political/ economic/moral study of the dispute over the right to property vs. government control or confiscation, Paul focuses on the nature of eminent domain and the government’s police powers, seeking to illuminate such matters as their origins, justifications, and limits, as well as the nature of property rights and their interaction with these state powers. Private Property and Eminent Domain joins Richard Epstein’s Takings: Private Property and the Power of Eminent Domain (Cambridge: Harvard University Press, 1985) as an important classical liberal work and can be read profitably in conjunction with Epstein’s book. It is a welcome addition to the debate over property and the limits of government powers, and will prove useful to students of law, political science, resource economics, and political philosophy.

Notes on Constitutional Debate Republished

The bicentennial of the U.S. Constitution has happily led to the republication of James Madison’s reports of the debates at the constitutional convention of 1787 (The Debates in the Federal Convention of 1787 Which Framed the Constitution of the United States of America [Buffalo, New York: Prometheus Books, 1987]). The edition is a reprint of the 1920 version edited by Gaillard Hunt and James Scott Brown, with a new preface by Robert S. Alley of the University of Richmond. Published in two volumes, the work includes prefatory material on the convention (including copies of the Articles of Confederation and other documents, and a list of delegates to the convention), followed by Madison’s unfinished sketch for a preface and his day-by-day notes of the convention. The volume concludes with an appendix containing documents relating to ratification and a useful index. The work is available from Prometheus Books, 700 East Amherst Street, Buffalo, NY 14215 (cloth, $59.95).

Internship Available

The Institute for Humane Studies is offering an internship during the academic year 1987-1988 for qualified students, preferably those who plan to take time off between undergraduate studies and graduate school. The position entails assisting the staff of the Institute in carrying out its mission, working on the publication of Humane Studies Review, and other duties. Some writing (for HSR or for the Institute’s op-ed column program) is involved. Applications will be accepted for the entire school year, the school year plus the following summer, or individual semesters. Send a letter of application plus a transcript, resume, and references to: Internship Director, Institute for Humane Studies, George Mason University, 4400 University Drive, Fairfax, VA 22030.