Let it not be said that libertar­ians—or conservatives, if you prefer the term—are having no effect on the economic dialogue of the moment. For here we have Robert L. Heilbroner, a way-out Keynesian in the past, giving vis­ible if rather grudging ground to Mises, Hayek, and Murray Roth-bard in a lively panorama-cum ­theory called The Making of Economic Society (Prentice-Hall, $4.95).

This is a book which employs all of Mr. Heilbroner’s skills of popularization, which are many. It takes us at a brisk jog trot through a couple of thousand years of history, showing us how economic theory was created by economic fact, and vice versa. It makes good key distinctions be­tween types of economic systems (some economies are run by tradi­tion, some by command, some by the free play of the market). And whenever an individual is men­tioned, such as the wily Dandolo, a thirteenth century Doge of Venice, or the "new men" of the late eighteenth century in Eng­land (John Wilkinson, the iron-master, for example, or Boulton and Watt of steam engine fame), that individual springs immedi­ately to energetic life before the reader’s fascinated eyes.

True enough, the book is marred by Mr. Heilbroner’s refusal to see that there is a moral issue in­volved in using political compul­sion to force economic decisions. Mr. Heilbroner praises the free market for many things, but he is all too complaisant about modern reversions to the "command" phil­osophy. He is a bad pragmatist when he deals with the emergent economies of the underdeveloped nations of the world—bad, be­cause he can’t see that commu­nism in China, for example, hasn’t "worked" at all, or that India‘s mania for "planning" has not suc­ceeded in keeping the economic in­dices ahead of the annual increase in population. But Mr. Heil­broner’s eclecticism has its good side, for it has led him to take a revisionist position on many key points of economic history. Looked at as a "mind in motion," Mr. Heilbroner is moving—though at a rather sluggish pace—toward the libertarian side.

Significant Afterthoughts

The fact that the libertarians have been creeping up on him is revealed in a series of after­thoughts. In his discussion of the emergence of the modern market system from the tradition-bound economy of the Middle Ages, Mr. Heilbroner dutifully trots out the sanctified Weber-Tawney thesis that capitalism got its big boost from the elaboration of the so-called "Protestant ethic." This "ethic" has it that it took John Calvin to establish the idea that thrift was the visible sign of Holy blessing. But then the after­thought smites Mr. Heilbroner: "After all," he says, "there was nothing much that a Calvinist would have been able to teach an Italian Catholic banker about the virtues of a businesslike approach to life."

Mr. Heilbroner hasn’t quite di­gested the Emil Kauder-Murray Rothbard revisionism of Weber­Tawney, a revisionism which in­sists that the medieval "just price" was the market price under conditions that excluded "necessi­tous" bargains. But in recogniz­ing that capitalism is the natural economic expression of free-will Christianity, Mr. Heilbroner is onhis way to a proper understanding of the heritage of the West. In Catholic and Protestant countries alike, capitalism—or the "market"—made quick strides whenever and wherever the siege conditions of medieval times were lifted. Feudalism, caused by the internal collapse of the Roman Empire, persisted as a reflex of the isola­tion of Europe by the Moslems; when the Moslems were pushed back, feudalism lost ground. The "Protestant ethic" had something to do with the encouragement of savings, but it is hardly an ex­planation of the origins of the market system, which sprang to life long before Calvin and Luther appeared on the scene.

Not so long ago Mr. Heilbroner was a vigorous proponent of the idea that the industrial revolution was the cause of much misery in the late eighteenth century and the early years of the nineteenth century. He still believes that capital accumulation for indus­trial purposes in England was taken out of the hides of the workingmen. But here, again, he has his afterthoughts. He notes that the twelve-hour day in Ark­wright’s mills was actually a two-hour improvement over previous Manchester standards. And, hav­ing looked at Hogarth’s early and middle eighteenth century etch­ings, he recognizes that the squalor of "Gin Lane" was a domi­nant feature of life in London long before the industrial revolu­tion reached the banks of the Thames.

In a footnote Mr. Heilbroner re­fers to Hayek’s symposium on Capitalism and the Historians, a book which contains some of T. S. Ashton’s proofs that squalor in Manchester derived less from capitalist rapacity than from the state-enforced restraints on build­ing activity due to the Napoleonic wars. The fact that Heilbroner has deigned even to read Ashton marks a significant break. He has yet to acknowledge that it takes state intervention to create mo­nopoly conditions, or even to per­petuate squalor. But surely he is on his way to the insight that will lead him eventually to such an admission.

The Monopoly Question

When he comes to deal with the Berle and Means thesis (as of the nineteen thirties) that the big are growing bigger by forcing the small to become smaller, Mr. Heil­broner notes that history has not gone the way that the Berle-Means school once predicted after extrapolating their curves. "Giant business," says Mr. Heilbroner, "is not, after all, the only reality of the market structure. There are, today, some 4.6 millionsmaller businesses in the nation as well as 4.5 million farms." And he mentions Professor M. A. Adelman’s conclusion that, since the completion of the merger wave of the nineteen twenties, the level of concentration "has been a static condition, varying slightly from year to year, but increasing, if at all, at the pace of a glacial drift."

Having accepted a revisionist position on the subject of "in­evitable" monopoly, Mr. Heil­broner might have gone on to question the theory of the ad­ministered price. But here he balks. One might suggest to him that published—or so-called "ad­ministered"—prices are seldom actual prices except during pe­riods in which customers are will­ing to pay anything that is asked to get a product. There are a hun­dred ways in which "oligopolistic" companies can—and do—shade their prices to get business away from a competitor. In fact, the hidden competition that goes on in American business whenever a buyers’ market prevails would seem to be known to everybody save Senator Kefauver and the antitrust division of the Depart­ment of Justice.

Mr. Heilbroner might take note. His sense of fact is apparent in such statements as "Even if all steel prices are kept at ‘admin­istered’ levels, steel as a whole must compete with aluminum… aluminum against glass, glass against plastics, plastics against wood, wood against concrete, con­crete against steel." So what does the theory of the administered price amount to? It is an econo­mist’s paper tiger, and Mr. Heil­broner should take the next "re­visionist" step and candidly rec­ognize it as such.

Mr. Heilbroner’s progress toward achieving libertarian in­sights is heartening as far as it goes. He still talks some nonsense about "robber barons," and he still fails to see that the spread of mass purchasing power in Amer­ica has happened in spite of tax policy rather than because of it. It is idiotic to presume that "middle income" spending power is increased by taxing incomes at rates that run from 20 to 91 per cent and by throwing in an annual increment of inflation on top of that. The "middle income" people pay the bulk of the income taxes, and suffer far more than the rich from the inflation.

It is also silly to suppose that "command" economics can bring a richer life to the "underdeveloped" nations. "Command" hasn’t solved Soviet Russia’s food problem, and it has compounded the famine in Red China. When Mr. Heilbroner says that "command" has been "the mechanism for a genuinely startling leap from peasanthood into (or toward) industrializa­tion" in both Russia and China, he is, actually, speaking only for ar­mament industries. The broad consumer market has never been developed by "command," and it never will be.

However, when Castro finishes by ruining Cuba, and starvation has had its way in the "command" nations of Africa and the Orient, Mr. Heilbroner will gracefully ac­cept more "revisionism." Liber­tarians should be prepared to wel­come him as a brand capable of plucking itself from the burning.

FUNDAMENTALS OF VOLUN­TARY HEALTH CARE edited by George B. de Huszar (Caxton Printers, Ltd., Caldwell, Idaho, 1962. 457 pp., $6.00.)

Reviewed by Paul L. Poirot

DURING World War II Dr. Curt P. Richter of Johns Hopkins Univer­sity had occasion to compare thousands of wild Norway rats with those from a colony that had long been under domestication for laboratory work. Extensive ana­tomical, physiological, pharma­cological, and behavioral tests re­vealed a marked superiority in the wild strain and led Dr. Richter to speculate about the effect of "the guaranteed life" on human be­ings. His conclusion, in a fascinat­ing article, "Rats, Man, and the

Welfare State," in the January 1959 issue of The American Psy­chologist: "It is quite possible that in the Roman welfare state, as in the domesticated state of the Nor­way rats, the weaker, less ener­getic individuals survived at an in­creasing rate, finally leaving a mass of individuals that no longer had the strength or the will to fight for their country."

When American citizens, if only a few as yet, can accept the idea of "Better Red than dead," it is high time to further examine the implications of the expanding "welfare" state in our day. And that is essentially the objective in the symposium selected and edited by George B. de Huszar, Funda­mentals of Voluntary Health Care. Let’s have a careful look at the probable consequences before we further charge the govern­ment with cradle-to-grave respon­sibility for our lives.

The first part of the book ex­amines the moral, biological, psy­chological, economic, and political implications of compulsory gov­ernment regulation generally, with essays by two ministers Russell J. Clinchy and Edmund A. Opitz, biochemist Roger J. Williams, so­ciologist Richard La Piere, and free-market exponents F. A. Har­per, Albert J. Nock, Henry Haz­lett, Henry M. Wriston, John Jewkes, and Ludwig von Mises.

The second and more extensive part of the book treats more spe­cifically the issues of health care, the dangers of governmental in­tervention in that field in the United States and in other coun­tries, the extent and nature of voluntary health insurance sys­tems now functioning, and the im­portance of a proper physician-patient relationship.

The opening sentence of the editor’s preface states, "Basically there are two means to achieve satisfactory health care for the American people: voluntary and governmental." By the time he had read final proof on the vol­ume, he must have known that only one way is satisfactory.

If this survey of the funda­mentals of voluntary health care has a major weakness, it would seem to be an over-emphasis on the mechanics and coverage of the various voluntary health insur­ance programs or plans. Volun­tary health care also includes those things one can do for him­self or through direct, person-to­-person cooperation with a physi­cian. Perhaps there should have been a chapter on care of the pa­tient who is simply sick of insur­ance and wants to carry his own risks. But even the man who doesn’t want to participate in a voluntary health plan will find this book well worth reading.

Journey Through the Soviet Union by Vermont Royster (Dow Jones & Co., Inc., 89 pp., $1).

Reviewed by August W. Brustat

The distinguished editor of the Wall Street Journal toured 8,000 miles through the Soviet Union, from Leningrad to Central Asia, with a dozen American editors in the summer of 1962. His careful observations appeared originally in the Wall Street Journal and The National Observer, and are here reprinted.

In eleven fact-filled chapters the author points to the long list of Soviet paradoxes—not the least of which involves the economic sphere. While multiplied billions of rubles are spent on rockets and sputniks, meager kopecks are available to the populace for food and clothing. While the Party elite live in lavish monarchical luxury, the common man generally lives in abject poverty. The primitive merges with the modern; Ziv cars travel on narrow dirt or gravel country roads; modern govern­mental buildings shadow neglected shacks; modernity is fused with antiquity; a small minority of three per cent of the population is communist and holds 200,000,000 Russian citizens in subjection. These are a few of the many in­credible paradoxes of Russia in 1962.

In the chapter entitled "The War Against God" the author re­ports that thousands of churches have been turned into museums, while only a comparative handful of churches are still in use. "The communists have successfully crushed the church; what exists is only a remnant, paying for its existence by total subservience to communism." He reports that the war against religion is not limited to the Russian Orthodox Church, but is leveled against all religions indiscriminately. Priestly func­tions are strictly limited, and none may speak without permission of the Communist Party. The recent admission of the Russian Ortho­dox Church into the World Coun­cil of Churches at New Delhi in 1961 may consequently well have eventual far-reaching religious re­percussions. Schools are totally secularized and atheism is a basic educational subject—at all levels of learning. Lenin is depicted as the "New Christ." Pictorial cari­catures in Soviet publications re­peatedly ridicule everything spir­itual.

This thumbnail sketch of Soviet Russia contains a wealth of valu­able information. It is a big dol­lar’s worth.