Adam Smith Goes to Moscow.

In 1964, a friend of mine enrolled in Walter Adams's class on free enterprise. The opening lecture was something of a surprise. Walter began by explaining how kindhearted and well intentioned Socialist planners were. They were not devils; rather, they were just like us with families and friends. This went on for 15 minutes. He finished by pointing out that these planners were trying to make the world a better place. Suddenly, he slammed his hand down on the desk and roared, "But dammit, it doesn't work!" Then he launched into a heartfelt pitch for free enterprise and the virtues of the competitive market. Thirty years later, he still holds these views, as readers of The Bigness Complex and Dangerous Pursuits (coauthored with James Brock) are well aware.

Adams and Brock know where they want the former Soviet bloc economies to go, but they are unsure of just how those countries should get there. While central planning has caused severe distortions and inefficiencies, converting to a market system is no trivial matter. Their stated purpose in writing the book was "to highlight the economic issues and political complexities of transforming a totalitarian command-and-control system into a free market democracy." They have succeeded admirably in an extremely interesting as well as entertaining book.

Adams and Brock present a dialogue between the Prime Minister of a former Soviet bloc country and the Advisor, an American expert on free enterprise. The book's format is ideal for presenting the pros and cons of a sudden shift from central planning to free enterprise. The Advisor advocates a rapid change minimizing the transitional difficulties while the Prime Minister prefers gradualism hoping to ease past the transitional problems.

In the opening chapter, the Advisor provides a standard blueprint for converting a centrally planned economy to one relying upon free enterprise. First, resource allocation must be driven entirely by market forces. There must be no vestiges of central planning. Second, all resources must be put in private hands. Third, there must be tight fiscal and monetary policies to prevent hyperinflation. Finally, the role of government should be severely limited to establishing the legal foundation for the market system. The subsequent chapters develop these ideas in turn. The Advisor presents the argument for doctrinaire economic policy positions in an unyielding fashion while the Prime Minister points out the inconsistencies of the U. S. practices, the empirical realities, and the political difficulties inherent in the Advisor's recommendations.

Adams and Brock raise many vexing questions in this complicated problem of economic and political change. We know that things will be better after the change, but the transition involves upheaval of gigantic proportions: dislocations due to sudden market correction of the distortions created by central planners, sudden changes in income distribution, sudden changes in the distribution of wealth as state owned assets are surrendered to private ownerships, and so on. The chapter on monopoly is particularly strong (as one would expect). Issues of structural reorganization, price fixing, monopoly, merger policy, and the like are debated in an interesting way.

The book's dialogue format is ideal for presenting the problems faced by countries that are trying to convert to political democracy and free enterprise at the same time. Provided that the reader is prepared for more questions than answers, this is a wonderful overview of the transitional complexities. I recommend the book enthusiastically.

Roger D. Blair University of Florida