

===== PAGE 1 =====

THE

[eCllld

MARCH 1957

IDEAS ON LIBERTY

Compulsory Insurance vs. Liberty

and Security . . . . . . . . . Richard C. Boker 1
Million Dollar Dream . . Cee. 8
The Camel's Nose under the School Tent . Roger A. Freeman 10
Why the President SaidNo . . . . . Grover Cleveland 15
The Most Dreaded Enemy of Liberty . . . James Madison 16
Law of the Land in England . .. . . . Edgar Bissantz 17
Breaths of Freedom . . . . 23
Management Shakeup in the Satellites . . 26
Help Wanted . . . . . « « + F. A. Harper 33
The Welfare State and Honesty . « + « Trygve J. B. Hoff 37
Satan in Politics . . . . « +. . . Hans F. Sennholz 39
The Key Word Is Voluntary « «+ « + + Alfred P. Haake 41
We Forget What Makes America Great. . Richard L. Fruin 43
Formula for Discovery . . . . . . . ChorlesF. Kettering 48
How Are You Doing—Paywise? . . . . F. A Harper 50
Crowing forthe Sun To Rise . . . . . John C. Sparks 54
Well Worth Reading . . . . . . . 57
Reviewer's Notebook . . . . . . . John Chamberlain 59

OtherBooks . . . . . . . . . . 63

THE FOUNDATION
FOR ECONOMIC EDUCATION, INC.

Irvington-on-Hudson, New York



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THE UNSEEN PE. ¥
TO PARCEL POST

~~ “Pp, 5.” STANDS FOR PUBLIC SUBSIDY

The average thoughtful tax- sidy—at your expense.

payer knows that many of the We don’t say that the Post
U.S. Government departments ~~ Office Department should give
operate at a substantial loss. up 4th Class Mail. We do main-
Sometimes this is a necessary tain—along with the Hoover
part of good government. Commission, the Chamber of
Sometimes it isn’t. As tax- Commerceofthe United States,
payers, we often wonder what the Transportation Associa-
can be done to cut down un- tion, and others—that the
necessary government ex- Parcel Post system should not
penses. We wonder why operate at a loss.

so-called incoine producing Operating at a loss, the Par-
departments can’t be self- cel Post system is a burden on
sustaining. the taxpayer. It brings the

One case is clear—that of Parcel Post system into even
the. Parcel Post system. This more unfair competition with
systemoperatesatasubstantial private enterprise, engaged in
annual loss which you as a the transportation of property.
taxpayer must make good. The As a taxpayer you should
facts show that commercial know the whole story. Write
users of Parcel Post are getting today for your free copy of “The
what amounts to a public sub- Truth About Parcel Post.”

The Public Relations Division,

RAILWAY EXPRESS AGENCY, INC,

219 East 42nd Street, New York 17, New York

A PRIVATE ENTERPRISE IN THE PUBLIC SERVICE


===== PAGE 3 =====

“of

OR generations vehicle drivers

in this country have been re-

¢. quired to account financially for
07 ovy their negligence upon the high-
ways. They invariably have an-

Yi ~ swered for their lapses out of
naiurarece their own private resources or
those of an insurance company.
Which of these they should use

has been left for them to de-
termine.

In 1927, Massachusetts took
"this discretion from its citizens

VERSUS

and forced them to rely primarily
on the latter means. It continued
AND : to be the only state to have this
+ requirement until January 1,
' 1957, when it was joined by New
- York. New York, however, has
© long been considered the bell-
wether of the insurance trade, and
it is not unlikely that many of the
remaining states soon may follow
its example.
All motor vehicle operators
living in Massachusetts and others
driving within its borders more
' than thirty days in any one year
must furnish evidence of their fi-
nancial ability to satisfy certain
negligence damages. The law per-
mits motorists to provide their se-
. curity in the form of privately
i owned bonds or bank deposits, but
© the vast majority of them are

compelled by the relatively high

RICHARD C. BAKER

Is full insurance coverage
worth the risk of putting
the government in charge?

Dr. Baker is Professor of Political Science,
School of American Studies, Harding College,
Searcy, Arkansas.

1


===== PAGE 4 =====

2 THE FREEMAN March

protection demanded to resort to carry. Regardless of his motoring
insurance. The minimum amounts habits or personal temperament,
of protection allowed are $5,000 he must take the limits set forth
for bodily injuries to one person by law. Nor does he or his insurer
and $10,000 for all of those sus- have any part in deciding how
tained in a single accident. The much his coverage shall cost; an
required coverage does not extend outside agency takes care of this
to property damages, or to in- matter.
juries of either guests riding with When fixing the insurance
a motorist responsible for an ac- rates, the commissioner is likely
cident or of victims of out-of-state to be influenced primarily by the
or off-highway mishaps. These pressures of public opinion rather
types of coverage are encouraged than by the loss experiences of
but not commanded. the insurance companies. Each
year he is besieged by numerous
groups demanding low rates for
Those motorists whom the in- their respective localities, and
surance companies regard as poor more often than not they succeed
insurable material but whom the in obtaining them. They were so
law considers entitled to protec- successful in their efforts in 1952
tion are insured under an assigned that the premium charges for the
risk plan. Each company doing entire state were increased in gen-
business in the state must take eral only 9.7 per cent, when actu-
its share of undesirable clients on arially they should have increased
an allotment basis. The premium 22.5 per cent, which was the aver-
rates charged by the underwriters age for the rest of the country.
are fixed by the state commis-
sioner of motor vehicles. Failure
to have the prescribed coverage Failure of the commissioner to
entails fines and jail terms. consult the loss records has cost
It is quite obvious that under the insurance companies in Mas-
the Massachusetts plan the time- sachusetts dearly. Since 1927, they
honored right of liberty of con- have sustained a $40,000,000 def-
tract as applied to automobile lia- icit from writing automobile lia-
bility coverage has pretty well bility coverage. Yet the under-
gone by the board. The motorist writers have little choice but to
there no longer can determine submit and try to absorb the
whether he shall be covered or shortage. If they refuse to sell
what minimum protection he shall automobile insurance, they not

Poor Risks Allocated

Unrealistic Rates


===== PAGE 5 =====

1957 COMPULSORY INSURANCE 3

only will lose their Bay State cus- hermit living in the heart of the
tomers for other types of insur- Adirondack Mountains and driv-
ance, but also will find a state fund ing a Ford of the 1922 vintage.
emerging to handle motor vehicle The Massachusetts man also may
coverage. It is feared that once a elect whether to have the guest,
fund for this particular kind of property, out-of-state, and off-
insurance is provided, demands highway coverage. But not so with
will arise for similar agencies for the New Yorker; he must have
other forms. all of these.

The underwriters in New York,
to be sure, may fix initially the

The underwriter, in one respect, rates they charge. But these can-
is in an even less enviable position not become effective until ap-
than his insured. The insured, proved by the superintendent of
with few minor exceptions, may insurance. Moreover, it is doubt-
determine who his insurer shall ful whether the insurers will be
be, but the latter may not always allowed this limited privilege very
choose his customers. As indicated long. For soon after people com-
above, not infrequently the car- mence buying compulsory cover-
rier has thrust upon him certain age, they in all likelihood will re-
dubious risks regardless of his fuse to permit private groups such
wishes. Such a procedure, of as insurance companies to deter-
course, undermines the very cor- mine, even in part, how much they
nerstone of the insurance profes- shall pay for it. They probably
sion, for in this business as in will insist that the state intervene
others where the personal element and establish “reasonable rates,”
is involved, freedom to judge in- as reputedly has been done in
dividual fitness is of prime im- neighboring Massachusetts. This
portance. is almost certain to occur if the

Unpromising as the status of premium charges continue to soar
the Massachusetts motorist may as they have in the past few years
appear, his nevertheless is prefer- as a result of heavy accident losses
able to that of his New York and extravagant jury verdicts.
cousin. In Massachusetts one may . .
limit his coverage to the “five Careful Driver Penalized
and ten” variety, whereas the New A criticism frequently made of
Yorker must carry the “ten and compulsory insurance is that it
twenty” sort. The latter must do works an injustice on the innocent
this even though he may be a and prudent driver. It penalizes

Insurers Have No Choice


===== PAGE 6 =====

4 THE FREEMAN March

him by forcing him to buy insur- compelled to have insurance,
ance on account of other people’s though only a small portion of
mistakes. According to statistics, their number was accident-prone.
approximately ten careful motor- The premiums which these young
ists in New York are now being men, the prudent as well as the
disciplined because of the mis- heedless, paid were unusually
deeds of one heedless operator. high. They averaged $200 per
Prior to January 1, 1957, there youth and amounted to as much
were 600,000 uninsured drivers in as $300 in some sections of the
that state, 544,000 of whom, ex- state. These excessive rates un-
perience showed, were of a cir- questionably resulted from the rel-
cumspect nature, free of accidents. atively heavy negligence losses
Only 56,000 became involved in caused by the offenders in this age
accidents, and even many of these group.

either were without fault or had
had only minor mishaps.

Another example of the unfair- A factor generally overlooked
ness wrought by this kind of com- in all discussions of compulsory
pulsion is found in the case of the motor vehicle coverage is that,
unmarried male driver under 25 for a comparatively small sum, the
years of age in New York. Even prospective accident-victim can
before the compulsory law went provide his own protection against
into effect, all such drivers were the negligence of the uninsured

“Uninsured Motorist Coverage’’

emma “bm mre “em Vompanem et aA be mt So smd i i Sin nin, nie Sam Ahn arn am PIR Ao A A Sa a AAA a ARR ot Ri ah gt a Sn A om rah tama Nr Sn ar mt

MARCH 1957 + Vol. 7, No. 3

THE
Additional copies, postpaid, to the Satellites,” “Satan in Poli.
Teena * one address: Single copy 50c; 3 tics, ka “The Key Word Is

for $1.00; 25 or more, 20c each. oluntary.’ . ]
Permission is hereby granted to Available in reprint form is ‘Why
i the President Said No,” “The Most
anyone to reprint any article in . " and
: id Dreaded -Enemy of Liberty,” an
whole or in part (providing cus: .,y “of the Land in England.”
A MONTHLY JOURNAL tomary credit is given), except Any other article will be supplied
OF IDEAS ON LIBERTY ‘Million Dollar Dream,” “The in reprint form if there are enough
Camel's Nose under the School inquiries to justify the cost of

Tent,” ‘‘Management Shakeup in printing. ;

4 The Freeman is published monthly by the Foundation for Economic Education, Inc., irvington-on-
i Hudson, N.Y. Anyone may receive the journal regularly upon written request; an annual subscription.
} donation of $5.00 or more is a suggestion—not a requirement. ]
Accepted as controlled circulation publication at Irvington, N. Y, with additional entry at New
York, N. Y. Copyright 1957, The Foundation for Economic Education, Inc. Printed in U. S. A.


===== PAGE 7 =====

1957 COMPULSORY INSURANCE 5

motorist. Quite recently, insur- posed. However, these 2,600,000
ance companies have pointed the persons might have become
way by offering their patrons a covered either through the pur-
special service known as uninsured chase of car insurance by the
motorist coverage. Under this owners, as just explained, or by
plan — available in about forty the procuring of individual acci-
states in late 1956 — the insured dent policies. In other words,
driver may receive the coverage nearly every inhabitant of the
involved for a payment ranging Empire State might have become
from three to ten dollars in ad- secured against the mischances in
dition to his regular premium. For question by individual action, and
this amount, he himself, his probably for much less cost than
spouse, and those relatives living a single installment on a cheap
with him will be protected, while television set. Such an arrange-
riding in his car, for injuries ment, of course, did not release
sustained from the uninsured the motorist causing the accident
motorist anywhere in the United from his liabilities; the insurance
States and Canada. They will be company compensating the victim
safeguarded also from the care- became subrogated to his rights
lessness of the hit-and-run driver, against the the wrongdoer from
the out-of-state motorist, and the whom it could collect its payments.
operator of either a stolen car or Insuring - oneself against the
one used without permission of the negligence of other people is not
owner. They will be shielded like- -uncommon in the United States.
wise as pedestrians from most Many life insurance policyholders
of these misadventures. The bene- carry double indemnity provi-
fits allowed fall into the $5,000~ sions, one purpose of which is to
$20,000 brackets. insure themselves or their benefi-
ciaries against the lapses of the
irresponsible motorist. Also,
Before the advent of the com- thousands of air and rail travelers
pulsory law in New York, the each day buy accident protection
3,700,000 insured car owners and against the inadvertences of their
their approximately 9,500,000 rel- common carriers.
atives were. receiving these pro- Compelling everyone to be in-
tections, and they probably still sured against the hazards of the
do. This left the 600,000 unin- road is but another example of
sured motorists, already referred the creeping governmental pater-
to, and their 2,000,000 kinfolk ex- nalism which seems gradually to

Insurance by Choice


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6 THE FREEMAN March

be engulfing the nation. In this This form of compulsory cover-
matter as in others, officialdlom age is not only a factor in promot-
has taken to ordering and direct- ing paternalism and socialism, but
ing the people to do things which no doubt will play a major role
they can handle very well by them- in foisting “compensation without
selves. Certain self-appointed fault” upon the country, if and
guardians of the public weal, who when that practice comes to it.
have a contempt for the ability of Under this scheme of things, the
the people to solve their problems motorist must help compensate
by either individual or free co- even the wrongdoer for the in-
operative action, are forever in- juries incurred as a result of his
sisting, and often successfully so, own negligence. Already many
that the state command the public people here are being sold the idea
by legislative fiat how to conduct that automobile mishaps are the
itself. creations of society, for which
society is wholly to blame. Dove-
tail this notion with a plan where-
Compulsory liability insurance in the wrongdoer is compelled to
may also be regarded as a form contribute to the general insur-
of socialism. It really constitutes ance funds, and it will then seem
the socialization of a segment of reasonable to most persons that
the underwriting industry. As this fellow, too, should be requited
previously pointed out, the large for the damages he has suffered.
majority of motorists are so
limited financially that they must False Security
resort to insurance rather than A common boast of the com-
to private resources for their pulsory advocates is that their
coverage. This inability to choose plan tends to bring greater se-
methods of protection, coupled curity to victims of highway ca-
with the compulsory requirement, tastrophes. This claim, however,
forces each driver, whether he is only partially true, and some-
wants to or not, to assist with what illusory. In the first place,
guaranteeing payment for the not all accident victims are en-
misadventures of the other opera- titled to compensatory damages.
tors insured by his particular car- With few exceptions, only those
rier. In short, a situation is may recover who are involved in
created thus by legislative decree. mishaps where the motorist re-
wherein the road misfortunes of sponsible for the damage has been
one are made the burden of all. negligent and the injured party

A Form of Socialism


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1957 COMPULSORY INSURANCE 7

entirely free from blame. In the of them being the freedom of the
second place, the amounts re- individual to choose alternatives
coverable in many cases in both in an area long reserved to him
Massachusetts and New York are by tradition, practice, and good
by present-day inflationary stand- sense. Moreover, it fosters pater-
ards only slightly “better than nalism in government, and also
nothing.” In the third place, if promotes a species of socialism
the Massachusetts experience is with all of its attendant regiment-
any guide, the minimum limits of ing effects. At the same time, it
protection required will be made penalizes the innocent and holds
in most instances the maximum, out hope for compensating the
and the over-all insurance cover- guilty. Lastly, it lulls all into a
age will be much less than it would false sense of security by offering
under a free insurance system. a palliative instead of a cure.
Surrendering our freedom in
this particular respect is but one
A fourth answer to this claim of many similar occurrences which
is that compulsory insurance at recently have been taking place
best is only a palliative and never without the American people real-
a cure —not even a preventive. izing their full significance. Yield-
This type of insurance will not ing our liberties one by one tends
save a single life or limb; on the to conceal their cumulative effect,
contrary, it will probably aggra- which may be total regimentation
vate the losses of both. For many of our society. As one observes
a reckless motorist, if without this process in development, he is
coverage, will pause in his mad reminded of the admonition of a
rush on the highway when con- wise and astute jurist. In warn-
fronted with the specter of a ing his countrymen against sacri-
heavy court judgment against ficing their liberties piecemeal
him. The same person, if shielded upon the altars of expediency and
by an insurance policy, may throw the easy way, the late Justice
discretion to the wind. George Sutherland had this to
An evaluation of compulsory say: “A little water trickling here
automobile insurance leads inevit- and there through a dam is a small
ably to the conclusion that this matter in itself ; but it may become
form of liability coverage pro- a sinister menace to the security
duces more harm than good. For of the dam, which those living in
one thing, it violates some of our the valley below will do well to
most highly-prized liberties, one heed.” eo

More Harm than Good


===== PAGE 10 =====

/WNillion SD sll ar Svea

| dreamed | had a million dollars and need never work again.

« | thought of all the things | could now do because | had a
million bucks. | would have the fanciest food money could buy.

| would buy a fine house. Only the sportiest and most expensive
automobile would suit me from now on. Clothing? Only the richest
and finest would ever cover me again. Oh, | was in clover

all right. My fondest wishes had come true.

4 In my dream | dressed and, being hungry, went to breakfast.
There wasn’t any. My wife was in tears. The food she had ordered
the day before hadn't been delivered. Not even a bottle of milk

or the morning newspaper greeted me when | opened the door.

| tried to telephone the grocery but the line. was dead. | said,

“Oh, well, I'll take a walk and bring back something for breakfast.”

« The street was deserted. Not a bus, street car, or cab was in
sight. | walked on and on. Nothing in sight. Thinking something
had happened only to my neighborhood, | went to another.


===== PAGE 11 =====

Not even a train was moving. Then people began to appear

on the street — first, only a few, then many, then hundreds.

| joined them and began asking questions: “What has happened?
Where can | buy food?” Then | got the jolt. Somebody said,

“Don’t you know? Everybody has a million dollars and

nobody has to work anymore.”

a At first | was stunned. | thought that somehow a mistake,

a ghastly mistake had been made — but there was no mistake.

It was really true. Everybody had a million dollars and thought
that work was over for him.

4 Then it dawned on me as never before that all of us are
dependent upon all of the rest of us; that to a small extent at least
my labor had a place, a part, in the total welfare of mankind.

With an angry shout | tossed to the winds even the thought

of a million dollars.

« Then | woke up. My dream was over. The sun was shining,

the birds singing, my wife rattling the breakfast things.

| looked out the window and saw a world of people moving about
their tasks, each contributing a little to my life and living,

just as | contribute to theirs. | called to my wife, “Hurry up with

that breakfast, sweetheart, | want to get to work.”

Ep1Tor’s NOTE: This fable, reproduced by permission of The Employers’
Association of Chicago, illustrates that money is not wealth. Nor has it ex-
change value except as the owners and producers of goods and services find
that it facilitates their trading with one another.

A society of nothing but consumers is indeed a dream that no amount of
money can bring to realization. Anyone who attempts to issue money with
no provision for its redemption in goods or services is due the same rude
awakening that is in store for every dreamer of something for nothing.


===== PAGE 12 =====

A look at what lies behind pro-
posals of federal aid to education.

Jhe Camels Nose

UNDER THE SCHOOL TENT

ROGER A. FREEMAN

HE CRISIS in educational ac- U.S. News and World Report re-

complishments in the United lates: “Many students [in Euro-
States has been observed by many pean countries, including Russia]
persons. President Harold W. at 16 have acquired an education
Dodds of Princeton University, for that compares with that of an:
instance, has said: “High school American college graduate of 20 or
graduates no longer have as firm 22 years.”

a grasp on the basic ‘three R’s’ — The Educational Testing Service
with all that they imply — as they at Princeton found that 71 per
had a quarter century ago.” cent of a group of prospective

Three out of every four fresh- teachers of elementary arithmetic
men entering the University of have a long-standing hatred of the
Nebraska in the fall of 1955 were subject. They drop it in high school
not prepared for regular college as soon as allowed, avoid it in

English courses. college, and return to teach an-
Rudolph Flesch’s Why Johnny other generation to detest it.

Can’t Read remained on the best- In the past five years, engineer-

seller list for 37 weeks. ing degrees fell to less than half

History has become a thing of in the United States while the
the past in many public schools; Soviet Union was doubling its out-
geography, an unknown and unin- put of engineers.
habited territory. Many see this crisis as due only
Mr. Freeman, formerly Research Director of the Education Committee of the U.S. Commission
on Intergovernmental Relations, was one of the Committee of Four assigned by the Commit-
tee for the White House Conference on Education to prepare an advance factual report on school

finance and federal aid. This article is condensed from an address before The Civic Federation,
Chicago, October 31, 1956.

10


===== PAGE 13 =====

1957 THE CAMEL’S NOSE UNDER THE SCHOOL TENT 11

to a lack of funds. And they feel more money but also a larger share
that this can be cured by federal of the national income on educa-

aid. tion than any other country of
} } record, according to the World Sur-

Five Fallacies vey of Education by the United
The case for more finances for Nations.

the public schools is commonly 3. “The shortages of teachers

based on five beliefs: and classrooms are getting worse
1. “The schools are being dis- and the schools are falling behind.”

criminated against in the alloca- The fact is that the number of

tion of public funds.” teachers in the public schools has

The fact is that education has consistently risen faster than the
for many years been the largest number of pupils. The teacher-
item of public expenditure in the pupil ratio has been:

United States, next to national de- 1: 36.7 in 1900
fense. Comprising about one-third 1 : 30.1 in 1930
of all state and local government 1: 26.9 in 1955
expenditures, it is gaining on the Much of the teacher shortage

other public services. Between 1900 is due to inefficient use of the avail-
and 1955 public school enrollment able teachers. We have tended to
doubled, but school costs in price- limit rather than extend the serv-
adjusted dollars increased more ices of good teachers, in contrast
than twelve times. The plain fact to other professions. Despite the
is that school funds have consist-
ently risen faster than enrollment
and are continuing to do so. The
schools are not being discriminated
against.

2. “The schools are now receiv-
ing a smaller share of the national
income than they used to.”

The fact is that expenditures for
public education in 1955 were 3.8
per cent of the national income —
4.6 per cent, if we leave out war-
connected expenditures — as com-
pared with 1.5 per cent in 1900.
The United States spends not only



===== PAGE 14 =====

12 THE FREEMAN March

declining financial rewards of a to tax themselves more heavily for
college education as compared with what today’s schools are giving
the manual trades over recent dec- their children, yet nonpublic
ades, teaching has been doing schools — despite their tuition
better than other professions in charges — have been expanding
attracting candidates; and last three times faster than public
year only 1.2 per cent of teachers school enrollment.
in public schools left to accept
other employment.

As to classrooms, there are many

5. “The states and communities
lack the fiscal capacity to take care

) of the school needs. Federal aid is
serious shortages all over the na- necessary to provide adequate

tion, but they can and will be met support.”
if we will avoid waiting for Santa The fact is that there is no fed-

Claus or Uncle Sam to provide eral aid except that taken from

them. within the borders of the 48 states.
4. “The schools are being man- The Education Committee of the
aged efficiently and are giving the President’s Commission on Inter-

most education for every dollar — governmental Relations found no
but they are not getting enough state economically unable to sup-
dollars.” port an adequate school system,

Since we are investing more and concluded that “federal aid is
.money in education than in any not necessary either for current
other public undertaking except operating expenses for public
national defense, we should seek schools or for capital expenditures
the cause of unfavorable results for new school facilities.” At the
in how the money is being spent White House Conference on Edu-
rather than in the amount we are cation, the advance factual report
spending. Dr. Clarence H. Faust, of the Committee of Four on school
president of the Fund for the Ad- finance and federal aid was altered
vancement of Education, recently before it was laid before the par-
said that, as compared to the need ticipants, with some of the ques-
for buildings and teachers and tions changed in such a manner as
money for expenses, our school sys- to make it difficult to vote against
tem “needs even more to find ways federal aid. Yet the 1,800 Confer-
of making better and more effec- ence participants found that “no
tive use of its resources for the state represented has a demon-
major purposes of education.” strated financial incapacity to build
Many communities are not willing the schools it will need during the


===== PAGE 15 =====

1957 THE CAMEL’S NOSE UNDER THE SCHOOL TENT 13

next five years.” Though the citi- Supreme Court, in 1942, pro-
zens of even the low income states claimed:
are not anxious to receive federal It is hardly lack of due process for
school aid, the Governor of Pros- {po government to regulate that
perous New York pronounced in  yyich it subsidizes.
favor of federal aid.

It appears that the sponsors of A Fateful Step
federal aid have far more in mind Federal aid in even small
than the $400-million-a-year initial amounts, then, is but the first and
program proposed. Their real pur- fateful step in the nationalization
pose is to get a foot in the door, to ©0f the public schools. And the
get the principle of federal respon- dominant philosophy among these
sibility for the schools established, school administrators is just the
and then prove in subsequent years opposite of improvement in educa-
that the amounts were far too tional standards and a restoration
small. Beardsley Ruml has already of learning in the schools. Instead,
proposed that the federal govern- it is less emphasis on teaching the
ment contribute $3% billion or basic skills and more hours de-
more a year to the schools. voted to the social graces.

E. Smythe Gambrell, as presi-
dent of the American Bar Associa-

It would be naive to assume that {jon last year declared his belief
the federal government would that federal aid to the public
spend several billion dollars a year  gchools could ultimately bring the
for any purpose and have nothing destruction of freedom in this
to say on how the money is to be country; that it would be nothing
spent. Sooner or later federal ad- ghort of a national calamity for
ministrators would suggest that {pe public schools to become de-
schools conform to their ideas of pendent upon federal aid.
how they should be organized and President Eisenhower, while the
administered. This is what has ead of Columbia University, once
happened in all other major fed- said about the proposal for federal
eral grant-in-aid programs, as the ,iq for schools: “Unless we are
amounts increased. History teaches careful, even the great and neces-
that political power inevitably fol- sary educational processes in our

lows the power over the purse. country will become yet another
Judicial opinion has already —
. - 1 3 .
been expressed on this point, as a United States Supreme Court. Wickard

hy v. Filburn, 317 U.S. 111, p. 131, October
matter of fact. The United States 1942.

Regulation Accompanies Subsidy


===== PAGE 16 =====

14 THE FREEMAN March

vehicle by which the believers in cogent argument for the defeat of
paternalism, if not outright social- the proposal.”

ism, will gain still additional pow- Again, in 1956, President Eisen-
er for the central government.... hower warned of “the growth of a
Very frankly, I firmly believe that swollen bureaucratic monster gov-
the army of persons who urge ernment in Washington, in whose
greater and greater centralization shadow our state and local govern-
of authority and greater and ments will ultimately wither and
greater dependence upon the fed- die.”

eral Treasury are really more dan- So while we hasten to attempt
gerous to our form of government to cure the educational plight we
than any external threat that can are now in, we must not in our
possibly be arrayed against us. I concern about a competitive race
realize that many of the people with Russia take steps making
urging such practices attempt to tragic prophecy of Abraham Lin-
surround their particular proposal coln’s warning that “if this coun-
with fancied safeguards to protect try is ever destroyed, it will be
the future freedom of the individ- from within.” What we must guard
ual. My own conviction is that the against is perhaps not so much the
very fact that they feel the need Soviets as our own tendency to
to surround their proposal with yield to expediency instead of fac-
legal safeguards is in itself a ing up to problems. o oo

Education and the State

ONCE THE STATE has accepted full responsibility for the educa-
tion of the whole youth of the nation, it is obliged to extend its
control further and further into new fields: to the physical
welfare of its pupils, to their feeding and medical care, to their
amusements and the use of their spare time and, finally, to their
moral welfare and their psychological guidance. Thus universal
education involves the creation of an immense machinery of or-
ganization and control which must go on growing in power and
influence until it covers the whole field of education and embraces
every form of educational institution from the nursery school

to the university.
CHRISTOPHER DAWSON in The Commonweal, January 25, 1957


===== PAGE 17 =====

Why the President said 14

RETURN without my approval

House bill No. 10203, entitled
“An act to enable the Commis-
sioner of Agriculture to make a
special distribution of seeds in the
drought-stricken counties of
Texas, and making an appropria-
tion [of $10,000] therefor.”

It is represented that a long-
continued and extensive drought
has existed in certain portions of
the State of Texas, resulting in a

failure of crops and consequent GROVER CLEVELAND

distress and destitution. February 16, 1887
Though there has been some dif-

ference in statements concerning I can find no warrant for such an

the extent of the people’s needs in appropriation in the Constitution,
the localities thus affected, there and I do not believe that the power
seems to be no doubt that there has and duty of the General Govern-
existed a condition calling for re- ment ought to be extended to the
lief; and I am willing to believe relief of individual suffering which
that, notwithstanding the aid al- is in no manner properly related to
ready furnished, a donation of the public service or benefit. A
seed grain to the farmers located prevalenttendency to disregard the
in this region, to enable them to limited mission of this power and
put in new crops, would serve to duty should, I think, be steadfastly
avert a continuance or return of resisted, to the end that the lesson
an unfortunate blight. should be constantly enforced that
And yet I feel obliged to with- though the people support the Gov-
hold my approval of the plan, as ernment the Government should
proposed by this bill, to indulge a not support the people. [ Emphasis
benevolent and charitable senti- added.)
ment through the appropriation of The friendliness and charity of
public funds for that purpose. our countrymen can always be re-

15


===== PAGE 18 =====

16 THE FREEMAN March

lied upon to relieve their fellow- sturdiness of our national char-
citizens in misfortune. This has acter, while it prevents the indul-
been repeatedly and quite lately gence among our people of that
+ demonstrated. Federal aid in such kindly sentiment and conduct
cases encourages the expectation which strengthens the bonds of a
of paternal care on the part of the common brotherhood.

Government and weakens the Reprints available, 1 cent each.

The Most Dreaded Enemy

OF LIBERTY

JAMES MADISON

F ALL the enemies to public liberty, war is, perhaps, the most to

be dreaded, because it comprises and develops the germ of every

other. War is the parent of armies; from these proceed debts and taxes;

and armies, and debts, and taxes are the known instruments for bring-
ing the many under the domination of the few....

The Constitution expressly and exclusively vests in the Legislature
the power of declaring a state of war... the power of raising armies
...the power of creating offices....

A delegation of such powers [to the President] would have struck,
not only at the fabric of our Constitution, but at the foundation of
all well organized and well checked governments.

The separation of the power of declaring war from that of con-
ducting it, is wisely contrived to exclude the danger of its being declared
for the sake of its being conducted.

The separation of the power of raising armies from the power of
commanding them, is intended to prevent the raising of armies for
the sake of commanding them.

The separation of the power of creating offices from that of filling
them, is an essential guard against the temptation to create offices
for the sake of gratifying favourites or multiplying dependents.

From “Political Observations,” 1795.
Reprints available, 1 cent each.


===== PAGE 19 =====

may be frail, its roof may shake; the wind may blow through it; the storms may
enter, — the rain may enter, — but the King of England cannot enter; all his forces
dare not cross the threshold of the ruined tenement.

WILLIAM PITT (Earl of Chatham): Speech in the House of Commons, 1760

EDGAR BISSANTZ

OR THE FARMERS of England — and, ultimately, the extension of
both .owners and tenants — the the dangerous precedent to the
proud old boast that an English- control of every kind of business.
man’s home is his castle is as dead It should have been repealed long
as Old Parr. It was killed by the ago.
drastic Agriculture Act of 1947. By putting the English farmer
In return for the beguiling in humiliating subjection to arbi-
promise of “guaranteed prices and trary controls from which there is
assured markets” for farm prod- no appeal to courts of British
ucts through price fixing, grants, justice or to judge and jury, the
and subsidies, the Act saddled Act created opportunities for cor-
English and Welsh farmers with ruption, favoritism, and tyranny.
government authority to pry into It has produced an unhealthy
and direct every detail of their ac- climate of fear and suspicion that
tivities — all in the name of “good is making docile peasants of the
estate management and good hus- farmers and bullying cads of men
bandry.” Its enactment was, of in government. Year by year the
course, a long step toward the farmers become more dependent
socialist dream of nationalized upon the paternalistic State and
land and regimented farming; less disposed to stand up for their
Mr. Bissantz is a retired architect, bound by reason of his Midwestern farm background to

investigate and report the shocking consequences of the controlled agriculture he found during
a recent visit in England.

17


===== PAGE 20 =====

18 THE FREEMAN . March

inherent rights as free men. The obey his orders are “liable on sum-
spirit of healthy independence, mary conviction” to imprison-
high ambitions, faith in oneself ment, a fine, or both.
declines. Discouraged farmers 3. The Minister of Agriculture
leave the land and the number of is empowered to order “schemes
small holdings and farm workers for adjusting farm boundaries or
decreases. amalgamating farms.” In the
Buried within the Act’s 118 name of “efficiency” he can add a
pages of complex provisions are small farm to a large one; or he
inordinate powers to control, di- can create a large farm by order-
rect, disgrace, and evict the Eng- ing the “amalgamation” of two or
lish farmer, putting him effec- three smaller ones. He has the
tively under the thumb of the power to do this by “compulsory
Minister of Agriculture and his purchase orders”; and “the Min-
executive agents. The Ministry of ister may disregard any objection
Agriculture, with 10,000 em- to the compulsory purchase order
ployees spending ten million if he is satisfied that the objection
pounds annually, is considered to is made on the ground that the
be one of the most inefficient purchase is unnecessary or inex-
bureaus in Britain. A former Min- pedient.”

ister resigned after the disclo- 4. “The Minister may manage,
sures of the scandalous Crichel farm, sell, let, or otherwise deal
Down land case. with or dispose of land acquired

by him in such manner as appears
Provisions of the Law to him expedient for the purpose

Stripped of much official verbi- for which the land was acquired;
age, here are some of the appall- or if he is satisfied that the land
ing provisions which now are the ought to be devoted to some other
law of the land in England: purpose, in such manner as ap-

1. The Act gives the Minister pears to him expedient therefor.”
of Agriculture broad authority 5. If the Minister of Agricul-
over all agricultural land, includ- ture believes that the farmer is
ing any land “which in the opinion not farming “in accordance with
of the Minister ought to be the rules of good husbandry”
brought into use for agriculture.” (whatever that means), he can

2. The Minister of Agriculture ‘place the owner under the Min-
is given “the power of direction ister’s supervision so far as re-
and dispossession’”’ of farm owners lates to the management of the
and tenants. Farmers who fail to land.” In addition, the Act re-


===== PAGE 21 =====

1957 LAW OF THE LAND IN ENGLAND 19

quires the humiliating ‘“supervi- can have the work done “and the
sion order” to be made known reasonable cost of carrying out
locally by recording it. work ...shall be recoverable by
6. Having issued a “supervision the Minister from the person to
order,” the Minister of Agricul- whom the direction is given.”
ture is empowered to give the
farmer “such directions as the Farmer Has No Defense
Minister is satisfied are required.” Regardless of the intent of
He can “impose requirements, re- those who conceived such controls,
strictions, or prohibitions as to the the effect is to break the English
carrying out of work, and as to farmers’ will to manage their own
the purpose for which and the affairs, and gradually to tighten a
manner in which land is to be used noose around them until one
for agricultural production”; and, “planned” collective farming oper-
if his agents disapprove of a ation under a government Werk-
tenant farmer, the Minister can bund is achieved.
“require that the management... Against these absolute powers
shall be entrusted to a person ap- — which should never be given to
pointed by the owner...and ap- any man — the small farmer has
proved by the Minister.” If he no defense. Under the dictatorial
certifies that the management of provisions of the Act, the farmer's
the land while under “supervi- only “rights” are the right “to
sion” has not improved to his make representations to the Min-
satisfaction, “the effect of such a ister,” and the right to have his
certificate is to enable the Min- case “referred to the Agricultural
ister to purchase the land com- Land Tribunal” comprised of three
pulsorily.” A farmer “put off his government appointees closely tied
land” under this Act may sell or to the Ministry of Agriculture.

lease his property only to the Min- Few small farmers have the
ister, or to a buyer or tenant “ap- knowledge or enough capital to de-
proved by the Minister.” fend their farms properly against

7. Under a “supervision order,” a bureaucratic runaround. Others
agents of the Minister have the are unwilling to endure the indig-
power to “enter upon the land to nity of going before any smug
which the order relates for the “tribunal” humbly to beg for the
purpose of inspecting the way in right to occupy their own prop-
which it is being farmed.” erty. So, in its dealings with

8. If a farmer fails to comply them, the Ministry of Agriculture
with a “direction,” the Minister is virtually invulnerable.


===== PAGE 22 =====

20 THE FREEMAN March

In practice, the Minister of Today the Ministry still holds
Agriculture delegates many of about 230,000 acres in England
these extraordinary powers to 61 and Wales. Since the war, over
County Agricultural Executive 4,000 farmers have been placed
Committees set up under the Act. under “supervision,” and 376 have
But this only gives the arrange- been evicted!
ment a false semblance of “self- There is no way of knowing how
discipline of the farmers by their many others have been threatened,
peers,” for the members of these intimidated, or otherwise pushed
committees are not elected by the around by arrogant agents, nor
farmers concerned. All committee- how much the Act has been used
men are appointed, and may be re- to accomplish ends other than the
moved. at will, by the Minister — pretext of “good husbandry.” Of
and their chairmen are designated this Lord Linlithgow observed:

by him. In the words of Lord Jus- “One of the most informative crit-
tice Parker, the committees are icisms I have heard is this. Be-
“the alter ego of the Minister.” fore a man is dispossessed, he

The arbitrary procedures fol- must be guilty of two things.
lowed by the committees are re- First, he must be guilty of bad
vealed by these official statements: farming, and secondly, he must
“hearings are held in private”; be guilty of a lack of friends in the
“there is no swearing in of wit- district.” It takes little imagina-
nesses”; “there is no cross-exami- tion to see the countless ways in
nation”; “there is no power to which the absolute power of the
award costs”; “the decisions or County Agricultural Committees
recommendations which the Ex- may be used for favoritism, spite,
ecutive Committees or their Sub- or personal gain.

Committees reach are sometimes Having no hope of aid, the vic-
given without reasons and are not tims simply fade away in a shroud
always in writing...” of official silence. Sympathetic

neighbors who would like to help
How Power Is Used them are afraid to express their

The autocratic powers in the indignation, for fear of attracting
Act are real, and they are used. the ill will of a powerful Commit-
During wartime the Ministry, tee, which could retaliate with
through its county committees, ruinous *“supervision” of their
evicted more than 10,000 farmers; own farms. A number of the un-
it took over 6,684 farms; it held fortunate farmers, broken by
not less than 354,609 acres of land. ‘‘supervision” and ejection from


===== PAGE 23 =====

1957 LAW OF THE LAND IN ENGLAND 21

their homes, have committed sui- weapon which should never have
cide; others were thrown into pris- been placed at their disposal.”
on for daring to refuse ‘“direc- “Representatives of Southern
tion”; farmer George Walden of Farmer,” wrote the editor,
Hichen Stoke, Hampshire, was ‘visited the farm on the day be-
gassed and shot to death by the fore it was taken over and found,
police when he resisted eviction. all things considered, a standard
of husbandry which would be re-

Lady Garbett's Case garded as fair to moderate in most

Quite different from the usual parts of the country. All the live-
quiet eviction was the much-pub- stock were in excellent condition
licized ejection, in June 1956, of ...We found that the cultivations
Lady Marjorie Garbett and her had been carried out in a satisfac-
daughter from their 157-acre tory manner.”
farm at Horeham, Sussex — where =~ When questioned about the Gar-
they had lived since buying the bett eviction before the House of
place in 1949. Here the promi- Commons, the Minister of Agri-
nence of the victim — she had re- culture pleaded in his defense that
turned to spend the rest of her ‘the land was foul; and the farm
life in her beloved England after was understocked.” Are independ-
long years abroad, where her hus- ent farmers, who are the best
band served his country as Finan- judges of when their herds should
cial Commissioner in the Punjab be built up or sold off, to live
— brought forth a storm of protest under the constant threat of ejec-
that will not die down. tion from their property whenever

“The whole right of the owner- some government “expert” decrees
ship of private property is in- that their farms are under-
volved in the principle raised by stocked? Apparently so, for on
Lady Garbett’s case,” stormed the January 30, 1957, a Queen’s Bench
Daily Telegraph. “Conservatives Divisional Court upheld the evie-
and those who are liberal-minded tion of “this lady [who] has been
should be prepared to defend the given more rope than a good many
principle.” other farmers.”

“This Intolerable Injustice!”
was the heading of a blast by the An Entrenched Bureaucracy
Southern Farmer, which criticized An objective investigation of
the Ministry of Agriculture for the farm situation seems to be
“their sadistic unwisdom...to virtually impossible in England
make use of the disgusting where the status quo is so strongly


===== PAGE 24 =====

22 THE FREEMAN March

guarded by existing law and cus- almost beyond hope of revocation.
tom. The set-up of such investiga- England has an enormous job
tions as have been made from time to do in agriculture. It needs to
to time always made certain that scrap its tyrannous Agriculture.
nothing more than superficial sug- Act; it needs to clean out a miser-
gestions for patching up existing able swarm of socialist-minded
government procedures might be people who run government bu-
offered. Furthermore, acceptance reaus with Conservative fronts for
of any recommendations is left to their collectivist schemes; it needs
the discretion of the Minister of to get rid of costly committees and
Agriculture: proposals for re- ubiquitous “experts” now pla-
forms which do not suit the Min- guing the independent farmers; it
istry simply are ignored. Any needs to revive faith in the power
chance that “the power of direction of persuasion, not compulsion; it
and dispossession” of farmers by needs to restore the rights and
the Minister of Agriculture might property of those who have suf-
be called into question is ruled fered dispossession under the
out in advance by directives given Agriculture Act; it needs to real-
to the investigating committees. ize that free farmers and the free
One might imagine some wild- operation of the law of demand
eyed Marxian to be the Big and supply can regulate its agri-
Brother who wields the whip of cultural production better and
dispossession over the farmers of cheaper than “the man from
England. On the contrary, the Whitehall”; and it needs to under-
present Minister of Agriculture is stand that there can be no refuge
Mr. D. Heathcote Amory, a prod- -of freedom for any of its people
uct of Eton and Oxford, and form- if the property rights of individ-
erly a Conservative M. P. Evi- uals are not respected.
dently he shares the common be- Above all, England needs to re-
lief that it is somehow better for vive the ability to see clear and
the “right” people to take respon- present danger in small encroach-
sible positions and administer the ments upon individual freedom.
socialists’ program for them, than “Liberty is never safe except
to let the socialists do it them- where the average man feels re-
selves. Thus English Conserva- sentment toward every oppressive
tives frequently lend their pres- act of government, whether it af-
tige to bureaucratic controls of fects him or not.”
which they really disapprove, Reprints available: 10 for $1.00; 100 for
thereby helping establish them $6.00 .

[3


===== PAGE 25 =====

\) RBeealls of Sweedom

IN A WORLD CHOKED BY COERCIVE INFLUENCES

Ww National Federation of Independent Farm Organizations

Organized in the Midwest last fall, NFIFO is composed of farmers
who simply want the federal government to let them alone. The mem-
bership pledge reads in part:

... believing that all government subsidies and controls on agriculture
or any other business are unconstitutional and socialistic, hence, un-
American,

I do hereby promise not to apply for nor accept any kind of subsidies or
direction from the government in my farm program and will... make
every effort to prevent Agricultural Stabilization Committee represent-
atives from entering my property for any purpose.

Mr. John G. Woods, Rural Route No. 1, Lucas, Ohio, is the president
of this group organized in protest of the fact that last year 14,000
farmers were fined $8,500,000 for refusing to let the federal govern-
ment dictate and subsidize their farming operations.

Yc Business Brings Unity in Europe

A British visitor, driving through several European countries last sum-
mer, reports a growing homogeneity — evidence of a single economy —
that reminded him of driving across the United States. He found a
uniformity of traffic signs for the convenience of travelers. The same
brands of gasoline, with attendants in uniform, were seen as “big
business’ inevitable contribution to making the continent one.”

“While the Council of Europe meets in Strasbourg and the High
Authority pursues its laborious task in Luxembourg and statesmen
come together to discuss Euratom and the Common Market, the inte-
gration of Europe is proceeding apace, naturally, inevitably.” And he

23


===== PAGE 26 =====

24 THE FREEMAN March

concludes that “one day the politicians will wake up and discover that
their job has been done for them.”

% A Courageous Step

“BE IT RESOLVED,” the Directors of the Madison County (Ohio) Unit of
"The American Guard unanimously concluded, “that Anderson’s civic

and governmental leaders be encouraged to formulate and execute plans:

for financing an adequate municipal airport with local funds and re-
ject the proffered federal grant.”

The list of conditions leading up to this resolution fully recognized
Anderson’s need for adequate aviation facilities and the temptation of
a federal grant of $162,500 to cover half the cost of the proposed proj-
ect, but added:

WHEREAS a study of the federal grants-in-aid program reveals that
many communities could have built adequate aviation facilities for
less than their half-shares of the federal-aid projects, and

WHEREAS the federal government is obliged to collect money by various |

forms of taxation before it can grant money to a community or state,
and

WHEREAS the federal government’s indebtedness currently approaches
the $280 billion mark, and

WHEREAS the federal government cannot be expected to ease its burden-
some taxation of the American people if communities and states con-
tinue to make demands upon the federal treasury, and

WHEREAS the continued reliance of states and communities upon the
federal government for assistance in financing various projects will

hasten the centralization of absolute governmental power in the

nation’s capital, and

WHEREAS the perpetuation of the federal government's grants-in-aid
programs can work only to the detriment of the United States as a
whole, and

WHEREAS the cost of a municipal airport to the people of Anderson will
be inconsequential when compared with the economic and moral bene-
fits which will be realized by all residents of the community. ...

A group.so enlightened as to see the need for this first courageous
step away from government control — the rejection of federal aid —
should find it comparatively easy to take the remaining steps. A pri-
vately owned and operated airport, like any other business venture,
requires no coercion at all.


===== PAGE 27 =====

1957 BREATHS OF FREEDOM 25

w A Man of Convictions
John H. Cooke, candidate for re-election to the Senate of New York
State from the 57th District, campaigned last fall in these words:

I believe in the principles on which this country is based — free enter-
prise, individual decision, individual effort, rather than reliance on gov-
ernment. I am firmly opposed to the welfare state.

I am a politician. and I would like your votes. But I have these convie-
tions and I am sticking by them. I am not going to change in order to
be re-elected. If you don’t believe in my convictions, don’t vote for me.

Senator Cooke was returned to office by an overwhelming majority.

vc Against Textbook “Nationalization” in India

India, too, has problems of textbook control — plus the voice of editor
and journalist, K. R. Malkani, to speak in protest. In a recent issue of
Swatantra, published in Madras, he says:

We have been so long subjected to servitude that we hardly feel it
when encroachments are made on our liberties. Any person from a demo-
cratic country will be appalled by some of the things happening in this
country. But all the time we are so inured to subordination that we see
no abrogation of our liberties. The British quit on August 15, 1947. The
country became free. But the citizenry did not get any more freedom
than it enjoyed before. The new government assumed more powers
than the British government itself.

Several provinces in India already have adopted “nationalized” text-
books prepared by “government servants who will write to order.”
The alleged excuse has been ‘‘the incompetence of textbook writers and
publishers, the poor quality of books produced, and underhand means
to influence textbook selection agencies.” But Mr. Malkani charges that
these vices are due to government interference, and sees no merit in
further control. Then he adds:

Textbooks are the most influential literature in our country. Can we
afford to consign this great instrument for molding the popular mind to
the hands of politicians who will exploit it for party purposes?

Textbooks must be written by free men... and they must be selected
freely in open competition. No attempt should be made to condition the
national mind or to propagandize in favor of the party in power. The
stakes involved are the minds of children, and the only ultimate safe-
guard of integrity is the widest freedom of choice for the school, the
teacher, and the parent.


===== PAGE 28 =====

Changing managers may help the victims of commu-
nism discover that their system is the real problem.

n the Satellites

I’ IS FAR from clear that the he hardly would have been able to
American press and even the stay in power. Nonetheless, Tito
American State Department have continued to operate a communis-
correctly interpreted the up- tic economy whatever his ap-
heavals among the Russian satel- parent attitude toward the former
lite nations, Poland, Hungary, and Russian managers of Yugoslavia Cy
East Germany, or the seething in- and toward the Russian govern-
side Russia itself. ment in Moscow. The hold of com-

For instance, too many. spokes- munism upon that country never
men and writers seem to imagine weakened one iota; the thing
that a stepped-up program for which did weaken was Russian
American economic aid will soon management of state socialism
bring about the final defeat of the and state capitalism, to be replaced
communists. We doubt that; it by local management headed by c
could be more probable that such Tito.
aid actually may prolong the life In this instance, our press and
of the communist experiment. our government officials initially

This is precisely what has al- jumped to the same conclusion as
ready happened in the case of Tito they appear to have done cur-
and Yugoslavia. We supplied aid rently in the case of Poland and
in substantial amount when it first Hungary and East Germany. They
appeared that Tito had turned supplied economic aid with the
anticommunist. That aid has made result that Tito was made to look
Tito appear “good” within Yugo- highly effective to his people and
slavia for some years; without it a veritable champion of anticom-

Condensed from a booklet editorial of the Wonalancet Company, Nashua, New Hampshire,
November 1956.

26


===== PAGE 29 =====

1957 MANAGEMENT SHAKEUP IN THE SATELLITES 27

munists. As it now turns out, he
was nothing of the sort. He was
and he still is a socialistic dictator
along strictly communist lines, re-
gardless of any nationalistic free-
dom of action he may have
achieved vis-a-vis Russia.

American Aid Conceals Failure

Now here we go again if the
American pseudoliberals have
their way. Economic aid is their
watchword, their cure-all for the
communist cancer, and their one
way to restoration of economic
freedom and private enterprise.
We think they are lacking in dis-
cernment; they fail to grasp the
fact that it is satellite loss of con-
fidence in Russian economic man-
agement, not loss of confidence in
state socialism, which has oc-
curred abroad.

In brief, the Russians who have
been in charge of economic affairs
in the satellite countries have
made a mess of things. And the
struggle now going on is simply
the result of an attempt to replace
the Russian managers with local
planners who think they can run
a socialistic state better. The more
economic aid we supply, the more
it can be made to look as if they
are right, that a communistic state
capitalism is a good system pro-
viding you know how to operate
it. “The Russians don’t; we do.”

For us, a good five-year plan

would be to let them try it for that
long without any American eco-
nomic and military aid whatsoever.
That ought to settle the matter of
which system is best for them,
state socialism or private, com-
petitive enterprise. If they suc-
ceed, they will not need our eco-
nomic aid; if they fail, then the
reason will be clear everywhere,
here included.

The Management Problem

Of course, some will say, as
they have declared for years, that
communism — state capitalism —
needs only such a chance to dem-
onstrate its superiority over pri-
vate, competitive capitalism; and
that a real success would mean
communism all over the world
with the downfall of the American
system.

These people can have precious
little understanding of what
makes the American economy
“tick” and even less understanding
of the problems that face the eco-
nomic planners and “managing
bureaucrats” of a communistic
system, Russian or Polish or Hun-
garian or other. These problems
are extremely simple ones, ex-
tremely real and extremely ur-
gent. And for a state capitalism,
there is no ducking them.

What must a state-management
do to take care of an additional
twenty-five to thirty million more


===== PAGE 30 =====

28 THE FREEMAN March

bodies to feed, clothe, and house
every ten years?

This is an inescapable problem
of the Russian managers of a
communistic economy. The popula-
tion of Russia and. its Eastern
European satellites is growing at
a rate of 1.5 per cent to 2 per
cent a year, compounded, and the
managers cannot stop it.

So, immediately and continu-
ously the management is con-

fronted with the imperative neces- .

sity to lift food production and
distribution, clothing production,
housing construction, and all the
rest by at least the same yearly
rate. Otherwise, the already low
per capita average level of living
will decline. There is plenty of
evidence, direct and circumstan-
tial, to disclose that the Russian
managers have not been able to do
enough to keep up with population
growth. An ironically humorous
story, said to be common in East-
ern Europe, runs somewhat as
follows:

“Well, Comrade, what do you
think of the appointment of Com-
rade Bungleovitch as commissar
of war?”

“I think that we are sure to
have peace; there will be no war.”
“How do you figure that?” .

“Because last year, Comrade
Bungleovitch was commissar of
food and we had no food.”

Even the Russians admit that

they have notably failed to meet
the problem of food production
and distribution. What our own
planners seem never to realize is
that this problem, because of
rapid population growth, becomes
ever more serious and will one day
result in a political revolt against
Russian economic management of
satellite countries.

People Expect Progress

Nor is that all by any means.
What makes so many Americans
imagine that Russians and satel-
lite peoples will be satisfied with
just a static level of living? It is
more realistic to expect Russians,
Poles, Hungarians, and other
peoples to want to have ever more
of the good things of life, begin-
ning with a Sunday suit and a
second shirt and going on up from
there. Iron Curtain or not, the
peoples of Eastern Europe are per-
fectly aware that in the Western
World there is more to life than
black bread, and they want more.

What with radio and moving
pictures, the stories of travelers,
and the seeping inside of informa-
tion in all the ways that humans
know how to spread news, people
behind the Iron Curtain know the
score.

So the state capitalism man-
agers have to cope with increas-
ing population, and just as serious
or more so to them, the increasing

7


===== PAGE 31 =====

1957 MANAGEMENT SHAKEUP IN THE SATELLITES : 29

desire of people to have more per
capita. Some authorities on the
subject say that governments are
invariably unstable and threat-
ened with loss of power if the per
capita level of living cannot rise
an average minimum of 5 to 10
per cent every decade. To us, ac-
customed to a decennial increase
of 25 per cent to 30 per cent, that
minimum seems impossibly low.
But, nonetheless, it is high enough
to create a chronic headache for
the economic managers of state
capitalism when magnified by the
12 to 15 per cent decennial rise in
population itself.

With more people to feed, house,
and clothe, and those people want-
ing more every year, the required
yearly increase in production can-
not be much less than 2.5 per cent,
compounded. In short, the fate of
the communistic system probably
hangs on its ability to at least
double its output of consumer
goods once every generation. It is
that “or else” for the manage-
ment. The “else” is revolt against
the managers along nationalistic
lines as in Poland, Hungary, and

East Germany.

The failures of the system will
be charged, certainly at first, not
to the system but to the commis-
sars managing the system. Even-
tually, if we let them alone, the
truth will come to the surface;
the system itself will be discred-

ited. Economic aid to socialistic
governments will simply postpone

“that disclosure. And, meanwhile,

it wins us no friends as we have
already seen.

The Top-Heavy Overhead

As every business manager
knows, the first requirement of a
going business is to replace its
worn-out equipment, or that lost
by fire, flood, and through obsoles-
cence. That can scarcely run much
less than 5 per cent yearly regard-
less of whether the facilities are
located in the United States or in
Russia. Depreciation and its coun-
terpart, replacement, is an in-
herent overhead of any industrial
system, private or state owned.

The replacement of facilities is
a net deduction from production
available for current use, in
Russia and its satellites just as
it is here.

An expanding business,
whether a single plant or an entire
national economy, needs even more
than replacement of capital. It
needs new capital facilities at a
rate not less than the product of
a) the population growth rate and
b) the rate of per capita increase
in the level of living. And that
also will be true of the Russian-
controlled economies of Eastern
Europe just as it is everywhere
else,

The expansion of capital facili-


===== PAGE 32 =====

30 THE FREEMAN March

ties in any country is likewise a
net deduction from production
available for current use of con-
sumers in that country.

Between replacement and expan-
sion needs, the Russian managers
of a communistic system will have
to plow back scarcely less than
10 per cent, and probably more,
of every year’s total output.
Otherwise, they have no chance
whatsoever of eventually raising
production to keep pace with the
growth of population and de-
manded living standards always
confronting them. In short, the
communistic system must show a
profit and a net profit, or it will
become bankrupt economically and
ideologically in the end.

The communistic system of
state capitalism must show a
profit or it will die, whether the
managers in the satellites are
Russian or Polish or Hungarian
communists. Why help com-
munists show a profit?

The top-heavy part of the over-
head in a communist economy
must eventually crush it, gradu-
ally but surely, and the continuous
change of managers and leaders
reveals that this process has well
started. We should do nothing to
prevent it from accelerating. The
top-heavy part of the overhead is;
of course, the horde of bureau-
crats in the cumbersome Russian
planning system. The Czars had it

before the communists and the
latter have never been able to rid
themselves of it. It is inherent in
statism.

The Cost of Policing

Along with the cumbersome
bureaucracy of a highly central-
ized economy is the unavoidable
police and prison system essential
to enforce regulation and disci-
pline dissenters. And to back up
all of that, there is the added
overhead of a huge standing army
with all of its equipment, which
neither can be enjoyed directly by
consumers nor used to produce
anything which they can enjoy.
That equipment, like productive
equipment, depreciates, is de-
stroyed, or becomes obsolescent,
and must be replaced and modern-
ized.

According to experienced and
firsthand observers, the commu-
nistic system requires an over-
head personnel of one bureaucrat
for every four producers. This
means that overhead absorbs
something like 25 per cent of the
gross national product, not count-
ing the probable 12 to 15 per cent
required for replacement and ex-
pansion of productive facilities.

Taken as a total, these deduc-
tions range somewhere between 35
and 40 per cent of the total output
of the communist countries. Or, to
put it another way, the people


===== PAGE 33 =====

1957 MANAGEMENT SHAKEUP IN THE SATELLITES 31

have left for immediate consump- against the managers of the sys-
tion only about 60 to 65 per cent tem, not against the system itself.
of their yearly output. Small won- The collectivists are still in
der that the satellites are protest- charge; they simply are different
ing to the point of revolt against and are local fellows instead of
the managers. Let them alone and the discredited Russian managers.
they will in time get around to But as long as they cleave to the
revolt against a system that no system, they are collectivists. To
amount of managerial ability and supply economic aid of the con-
compulsion can make efficient. ventional kind is simply to help
these socialists make good where
their Russian counterparts failed

It seems to us that the events and thereby make the communist
of these times merely represent system look as if it could succeed,
a revolt of satellite nations, and as in the case of Tito and Yugo-
likewise the Russians themselves, slavia. What's the point of that?

Proposed Economic Aid

Preserve Our Freedom

CERTAINLY we have an interest and a stake in the well-being of
the rest of the world. But America will perform its role in world
affairs better if, instead of being a Santa Claus to all nations, it
first of all protects the rights and liberties of its own citizens,
conserves its own economy and its own strength, and encourages
other nations to stand on their own feet.

In all the world, we are the last hope and last stronghold of
individual liberty. When the great problem of world peace is
examined from all sides, the necessity for preserving America’s
identity, integrity, and strength becomes more and more ap-
parent. And one is impelled to the conclusion that a strong,
independent, and free America is not only best for its own citi-
zens but is also the best guarantee of world peace and world
order.

FRANK E. HOLMAN, Dangers of Treaty Law


===== PAGE 34 =====

i

The machine illustrated here is
ten stories high. The platform
where the man is standing is in-
stalled at the ground level. In terms of phys-
ical size and cost, this is said to be the
largest machine ever built. The machine it-
self is operated by only one man. The weekly
pay stated in the advertisement is, roughly,
the weekly cost of ownership of such a ma-
chine, plus the weekly wage of its operator.


===== PAGE 35 =====

HELP WANTED

IMAGINE reading an advertisement like this in the
evening paper, and you with a role in this hypo-
thetical drama.
“Belinda,” you say to Mrs. You, “listen to this!”
F. A. HARPER And then you read her the ad.
You await the morrow impatiently, when you
] can apply for this wonderful opportunity. You sleep fitfully amid

dreams of avarice.

In the morning you are quite ready to take the day off from your
old — almost obsolete — job. A ’phone call; an appointment; a wait in
line for the interview.

Why, you wonder, do all these people leaving their interviews seem
so dejected? Finally it is your turn.

“Good mening, Sir,” you begin. “A press machine.”
“I come to — “No. But I guess I could pick
“Let’s not waste words on the one up on my way home. I go right
weather,” he interrupts. “How by Sears —”

many years have you been work- “In case you don’t know, this
ing?” machine weighs 10,605 tons. And
“Twenty-seven.” furthermore, you would be lucky
“Have a job now?” to be able to get one within a year
“Yes.” after you placed your order. Also,
\ “A good one?” can you operate one? Have you
] “Yes, pretty good. But I guess ever even seen one? And finally,
y I'll change now.” the machine costs several million
“Do you own a machine?” he dollars. You don’t appear able to
asks. buy hardly a wheelbarrow. Next
“Well, I have a 1936 Ford. And applicant.”
a—" Belinda beholds her beaten be-

“Do you have the machine re- loved coming dejectedly up the
quired for this job?” he asks path.
sharply. “I almost got the job,” you ex-
“Which is what?” plain. “All I lacked was a machine

Dr. Harper is a member of the staff of the Foundation for Economic Education.

33


===== PAGE 36 =====

34 THE FREEMAN March

costing several million dollars and for the tools he wants to use him-
knowledge of how to operate it. = self. That is the only way he can
But if I only owned one, I'll bet get his savings back — by selling
I could learn how to operate it in the combined product of his own
a few days.” tools and his own work. Everybody

“But why couldn’t the boss pro- in our nation, you will notice, is
vide the machine and just let you doing the same thing. If we want
operate it?” she asks. any tools to help us in our work,

“Because,” you explain, “our we have to provide them for our-
nation is completely socialized, selves. That's why he had no ma-

you know.” chine for me to operate, and adver-
This explanation is clear enough tised: Bring your own machine.” *
to you, but not to Belinda. “The selfish old tightwad,” Be-

“So what?” she objects. “From linda accuses. “Has he no spirit of
the cradle to the grave we have charity? Isn't he willing to help
been taught that socialism means us poor souls in need ? Why doesn’t
opportunity for the common man. he save tools for someone else to
And you surely qualify for that. use? Where is his spirit of broth-
You are about as common as any- erly love?”
one could ask for. So I still say, so “I wondered, too,” you confess.
what 7” “So I quizzed around a bit before

“The so what, my dear, is that I charged him with having a heart
socialism will not- tolerate a profit. of stone. I found that he is, in
Our socialism decrees that all the fact, a highly charitable man to
product has to go to the man who those he believes most deserving.
operates the machine. For anyone Since he can’t help many persons,
else to benefit out of the proceeds he helps those who have first
is theft —a social and economic oo
boss had saved over the years and trol of the means of production, but
provided such a tool for people like allows any individual to acquire what-
would probably be all worn out, the product, but he cannot collect any
and he would have been prohibited profit from letting others use them.
from getting back what he had there is also a 100 per cent inheritance
saved and put into the machine in The government cannot provide any
the first place, to replace it with tools from its own means, because it is
a new one. So what has he done without independent means. What the

government has to spend must first be
over the years? He has saved only taken away from those who work.



===== PAGE 37 =====

1957 HELP WANTED 35

helped themselves. If a man has It takes years of strict thrift
done his part and sacrificed the for anyone to accumulate such
joys of today in order to save and amounts of savings. It would take
invest in tools for tomorrow’s even longer if you had to start at
work, and if such a person then the bottom of the ladder with
finds himself in sudden need be- hardly any tools, climbing round
cause of something clearly beyond by round only as you could save
reasonable foresight, that is the from your meager production.
sort of person he helps.” Under this socialistic program,

“I guess we don’t qualify,” Be- you would be an old man before
linda bemoans. “We’ve ratherover- you had many tools to work with
invested in fun all our lives. And - unless you were to steal them.
our savings show it.” Strange, isn’t it, that so many

“We've always lived as father people accept without question or
did,” you confess. “He always said doubt the socialists’ claim that
there’s no use saving tools forone’s their scheme gives equal oppor-
children because the inheritance tunity to all; that it gives oppor-
tax will take it all. Our socialist tunity to the young and the infirm,
idea, you know, is that everyone in contrast to the neglect and
must start equally — at zero. Pov- cruelties of free enterprise?

erty for everyone is better than The facts, as illustrated here,
envy for some. So father just lived are just the reverse. The young
his up, as we have been doing.” and the infirm are just the persons

who would find the going toughest
under pure socialism.

Even in a prosperous United Under free enterprise, the
States, how many people have you young man doesn’t have to bring
known who could afford a machine his own tools. He can team up with
of this sort, in order to be able to others who have saved and in-
apply for a job like the one adver- vested in tools, but who either
tised? cannot or do not want to operate

How many persons do you know these tools themselves. A fair
who could take a job requiring trade is then arranged between
that they bring even half the value owners and users. Both benefit.
of this tool? Or $100,000? Or The young man benefits especially
$25,000? In many industries today because it enables him to find a
the average tools per worker for good job at once.
an entire industry cost $15,000, or With the tools he now has avail-
more. able for use, the average worker

* * * *


===== PAGE 38 =====

36 THE FREEMAN March

in the United States can produce users of the tools. They get this
in one year what it would take him even though they have saved noth-
twenty years to produce without ing, have risked nothing in the
the aid of these tools — almost half investment, and work no harder
a working generation. than before.
Tools are costly, to be sure. When a bargain like this under
They come from prior sacrifice in private capitalism is available to
“the form of savings. But if the the tool user, how foolish for him
average worker would set aside to refuse to operate the tools un-
all of the added productivity which less he gets, in addition, some of
tools now make possible and put the $70.00 required to induce sav-
it into a capital fund for a period ers to save. For when the tool user
of three years, this fund would thus forces the tools to stand idle,
more than equal the full amount he is throwing an economic boom-
invested in all our present stock erang which returns to harm him
of tools. The full productive re- in two ways:

turn amounts to something like 40 1. The goods not produced while
per cent yearly on the investment, he refuses to use the tools will
as compared with what could be not be available for him to en-
produced without the tools to aid joy.
his efforts. A handsome return, 2. Saving will be discouraged,
indeed! from which more and more
Or put it this way: A fund of tools could have been created
$1,000, invested wisely in tools and from which he would also
like those now in use, seems to . gain the major part of later
have increased the output of the benefits. He is killing the
user of those tools by as much as goose that would lay more and
$350 to $400, yearly. Under our more golden eggs — mostly for
private capitalism, however, per- him. 3 ,
sons other than the users have The capitalistic method offers a

saved and invested, by and large, grand opportunity to this young
in these tools. Others have made man and others who can’t provide
the tools possible. They have been their own tools. Under the seem-
willing to do this for a return of, ing miracle of capitalism, savers
say, $70.00 a year on this $1,000 and inventors and tool users all
investment. If we subtract this team up for an extremely fruitful
$70.00 from the total increase in joint. endeavor. All benefit from
output, it leaves a net gain of the rewards of progress.

$300 — plus or minus — for the Under socialism, by contrast,


===== PAGE 39 =====

1957 HELP WANTED 37

this young man could not even chines would be available for use.
hope for such a job until late in Under free enterprise, where
life — and probably not then. Ac- others have saved to provide the
tually, under socialism no such capital, an advertisement might
jobs ever become available to any- read:

one because parasitism kills off
progress. It saps the seeds of prog- WANTED: Experienced tool operator.
ress and prohibits advancement to Bring your talents. We provide the tools.
an economy wherein such ma-

THE WELFARE STATE AND HONENTY

TRYGVE J. B. HOFF

In the Norwegian weekly, FARMAND, Editor Hoff commends to his
countrymen a kind of self-examination that might well be practiced
by all of us.

EFORE the war honesty was are honest?” The answer, given
taken as a matter of course in unhesitatingly, was: “No, not
Norway, and locking of doors was since the war.”
deemed quite unnecessary. We would stress this point about
Things seem to have changed. a change having taken place. The
Some time ago a foreign business- war, of course, was an extenuating
man expressed his disappointment circumstance. In the Resistance it
with Norwegian honesty. He is of was necessary to cheat and lie and
Norwegian descent and has con- even worse; but not everyone was
nections in Norway so he has a a member of the Resistance, so
certain right to express himself. that is not a completely valid ex-
To sound out public opinion we cuse.
staged a small-scale Gallup poll of Others point out that it was diffi-
our own. It was amazing how cult to obtain food during the war,
unanimous the replies were. Our and that in consequence it was to
question was simply: “Have you be expected that people would steal
the .impression that Norwegians bags and rucksacks on blacked-out


===== PAGE 40 =====

38 THE FREEMAN March

trains when such luggage looked as When it is clear that the rich are
though it were full of meat and the ones who are to be fleeced,
butter from the country. That is there seems comparatively little
an even poorer excuse: The ur- wrong int helping the process on
gency of the need is not usually its way.
accepted as a ground for acquittal. Behind this severe taxation lies
In reality the causes are more the policy of “equalization.” Gen-
deep-seated. One of them is the eral acceptance of the principle of
drift away from Christianity and equal shares for all means a weak-
loss of respect for the Ten Com- ening of the moral basis on which
mandments. Standards have been to condemn people who indulge pri-
lowered in both Christian and non- vately in this equalizing process.
Christian homes. The young people When official “robbery” in the
of today do not know what they form of crippling taxes is legalized,
should fear and what they may or private robbery appears a less
may not do. Modern methods of serious offense.
bringing up children also must The Price Directorate’s unfair
bear their share of the blame. treatment of certain groups, such
And then there are the conse- as traders and house-owners, cou-
quences of the Welfare State. Once pled with its other ridiculous regu-
it is accepted as a matter of course . lations, has done much to under-
that everyone will share in the mine the Norwegian people’s re-
good things of life, irrespective of spect for the law. When things
having done anything to deserve reach such a pitch that even local
them, it is but a short step to the authorities find themselves com-
attitude that one is entitled to help pelled to contravene the price reg-

himself to what he wants.. ulations, there is no longer any
This view has been strengthened serious stigma attached to being
by the confiscatory taxation policy. a lawbreaker. ooo

| wBine om GgEnwy | Man Overboard!

A MAN who argues a question of hon-
esty with himself is not skating on

thin ice — he is already overboard.
DAVID JAMES MC KENNA, Random Thoughts


===== PAGE 41 =====

neighborly relationship is still
more frequent than a malicious
one. In all our social contacts, be
S AT A N they in our economic associations
or any other casual acquaintance,
rt we basically respect our fellow
® P / By man’s rights and liberty.
in 0 ll ICS But we are different men as
soon as we take part in the body
politic. Here there is no room for
the law of neighborly love. Acting
in political concert we act in a way
HE CHRISTIAN law of neigh- no conscientious man would dream
borly love is an unbending rule of acting in direct interhuman re-
of individual conduct, a rule with- lations. We leave no room for God
out flexibility or loopholes for per- in our political lives.
verting interpretation. It is a Take the following examples:
‘basic maxim for all social coopera- As individuals we do not think
tion and peaceful human coexist- of exacting, through violence or
ence. Indeed, it is an indispensable threat of violence, any part of our
cornerstone of every civilization. neighbor's wealth or income; but
And yet we have been unwit- in our political lives we feel free
tingly and gradually chiseling to exact most of his income
away its shape and strength until through heavy tax levies and con-
it has become a small stump that trol his wealth through a multi-
no longer is capable of supporting plicity of economic regulations.
social life and interhuman rela- As parents we do not think of
tions. coercing our neighbor to contrib-
The law of love still underlies ute funds to the education of our
most of our direct man-to-man re- children; as members of the body
lations. In our family lives we politic we resort to taxation in
practice, or at least endeavor to order to coerce him to contribute
practice, this commandment. In to our children’s education so that
our direct relations with our they may have “free public educa-
neighbor we inflict no harm, or at tion” and we be “freed” from all
least endeavor to inflict no harm, or part of our own obligations.
on him and his family. A friendly ‘ We do not think of envying and

HANS F. SENNHOLZ

Dr. Sennholz, author of How Can Europe Survive?, is Professor of Economica at Grove City
College, Pennsylvania.

39


===== PAGE 42 =====

40 THE FREEMAN March

pilfering our neighbor of his sav- come or ‘“control” his wealth for
ings, his pension, and income from our own selfish ends, we would
a life insurance policy; but as po- condemn him and our wrath and
litical beings we shatter their revenge would thrust him into
values through government poli- penitentiaries or death chambers.
cies of inflation and monetary de- We measure our deeds and ac-
preciation. tions with two different yard-
We do not think of begrudging sticks of morality. We are quick
his widow and orphans their in- and severe in the condemnation of
heritance and do not coerce them the misdeeds our neighbor com-
to institute us as their coheirs; mits. But we fail to judge at all
as members of the body politic we or at least with the same severity
may force them to turn over half. our own actions through the body
or more of their inheritance to us. politic.
We condemn a neighbor for de-
Two Different Yardsticks ceit, theft, robbery, and other
As individuals we do not think crimes against his fellow men;
of coercing our fellow men in but we fail to judge ourselves for
other parts of the Union to help confiscatory taxation, nationaliza-
us in our local economic en- tion, and seizures of private in-
deavors; as political beings we dustries by government, our polit-
coerce them to assist us in our ical instrument.
own selfish ends through federal
aid and other government contri- Two Souls in Our Breasts
butions. We condemn a man for his dis-
If evil men were to encroach regard of promises, contracts, and
upon our neighbor and extort all agreements and endeavor to hold
or part of his property or income, him to his contractual obligations
or in any other way oppress him, through court action and other
.we courageously may come to his legal means at our disposal. But
assistance. If he should hurt or we readily acquiesce in govern-
even kill one of his transgressors, ment policies that disregard
we may acquit him from criminal promises, tear up official charters
guilt for having acted in self- and international agreements. We
defense. may even sympathize with gov-
If he should hurt or kill our ernments conducting such lawless
own “duly authorized representa- policies and condemn those who
tive” who was empowered to ex- are hurt and finally act in self-
act a part of our neighbor’s in- defense.


===== PAGE 43 =====

1957 SATAN IN POLITICS 41

Indeed there are two souls in Christian law of neighborly love
our breasts, one that seeks and in the ever-expanding sphere of
fears God, the other that denies political action. The price is paid
the very presence of God. Man has in the shape of slavery, war, and
paid and is still paying a tremen- disaster. ¢ °c
dous price for his rejection of the From Christian Economics, Dec. 11, 1956

THE(KEY) WORD IS Uoluntary

ALFRED P. HAAKE

Only when labor and management volun-
tarily seek what’s best for both will endur-
mg peace and prosperity come to industry.

| HE MOST significant evidence of man’s unreadiness for free-
dom and its responsibilities is his reliance on force to make his will
prevail. That is the story that runs through all history. And to the
extent that he indulges in the use of force to make his will prevail,
man postpones further and further the day when he is truly ready and
fit for freedom.

There is a counter considera- interest of the dictator has coin-
tion. For men to live together cided with the interest of the
there must be law and order, dis- people. But the time soon comes
cipline. There must be agreement when the dictator devotes himself
on common purpose. In order to exclusively to doing what is neces-
effect this agreement, men have sary to retain his power, and man-
found that a single will, strong kind has always paid dearly for
enough to bend the rest to itself, the temporary advantages of dic-
is the easiest and quickest answer tatorship in ultimate loss of free-
to their need for discipline. It is dom.
thus. that the dictator has arisen Men have improved the ways in
in times of stress and disaster. which force has been used,

This has worked so long as the wrapped velvet around the steel

Dr. Haake, noted economist, author, and lecturer, is Associate Editor of Partners. This article
first appeared in the October 1956 issue.


===== PAGE 44 =====

42 THE FREEMAN March

claws. From sheer physical force quence of voluntary initiative, can
they have passed to threat, to do much more. The difference lies
cajoling, to economic and political in the quality as well as quantity
persuasion. But it is still force. It of work done, and in the effect on
is still “involuntary.” That is the the individual doing it.

key to the meaning of force—the Whatever the reason, the truth
word “involuntary,” in describing is that man does his best work
the response to force. when he does it voluntarily, when

In human relations, in factory, he wants to do it. The boy who
office, and elsewhere, we have de- practices violin four hours a day
veloped what comes to be known under the whiplash of fear of his
as the science of “human engi- parents, will work his fingers and
neering,” the use of devices of learn to play, but he is missing
various kinds to control and utilize the most important ingredient
the activities of others. Training that goes into the making of musi-
and rules to this end loom large cal genius. The boy who plays out
in departments of personnel rela- of love for music and out of a de-
tions. sire to reach people who also love

But there is another word which it, will practice his four hours a
is the real key word to freedom day and meanwhile pour his heart
and all the blessings that can come as well as the strength of his fin-
from freedom. It is the word gers into his violin. And to him
“voluntary.” will come the reward we call

In factory and office our real ob- “genius.” He works voluntarily
jective is to secure the kind of because he truly wants to achieve
cooperation, the kind of individual a high purpose.
and team work that will result in
the most economical and effective And right there is the key to
production, with the greatest de- successful human relations — in
velopment of the individual him- industry, in the professions, in all
self on his job. fields of human endeavor. It is

The road to that result is to get also the key to harmonious inter-
men to want to do what they ought national relations.
to do. It is voluntary. Of course, understanding is nec-

Power from the outside, force, essary in order that men may
can actually make men fear and know what it is that ought to be
get them to do work, much work, done. But understanding comes
even though it is involuntary. with time and discovery, patience,
Power from the inside, the conse- and love for our fellows. * oo


===== PAGE 45 =====

Can government teach the self-reliance necessary to the release of
creative human effort?

WE FORGET... Whol Mokes
OST of us consider ourselves Anouen Groat!

so unique that comparison of

America and Americans with RICHARD L. FRUIN, M.D.
other nations and people is quite
impossible. When anyone attempts Are we different biologically

such comparison, we tend to feel from other peoples? Genetically
that he must have questionable and biologically we are predomi-
motives. We speak of the Ameri- nantly European in physical herit-
can way of life, American know- age. We have huge doses of Eng-
how, American sportsmanship, lish, German, Irish, Italian,
American ideals, American hu- Polish, and other European genes
mor, and Americanism. A man in our make-up. Ten per cent of
from Mars coming to Earth and us are of African heritage — and
reading of Americans in our liter- Africa is more of a hodgepodge of
ature would undoubtedly feel that nations and people than is Europe.
here must be a race apart, people We have a dash of seasoning from
ten feet tall physically, and of like Oriental genetic qualities — from
proportions mentally; they must the American Indian — from the
all be handsome, brave, good, effi- Philippino and allied races. One
cient, practical, and possessed of could say that every biological
all the virtues that are desirable fraction of the human race has a
while having none of the unde- representation in America. The
sirable traits such as meanness, answer must be: We Americans
selfishness, uncharitableness, or are not unique from any biological
slave-like submission to authority. or genetic standpoint.

But are Americans really dif- Are we unique because of our
ferent from other peoples and na- religion or our freedom of con-
tions? science? This cannot be the case.

* Dr. Fruin is a physician and surgeon in the Armed Forces.

43


===== PAGE 46 =====

44 THE FREEMAN March

Our religions come from our fore- ligions, hopes, aspirations, philos-
fathers and are common to many ophies, or anything of that sort.
nations. Several nations have reli- They are well-satisfied with their
gious freedom. own, and they feel that we have
Are we different from a tech- nothing to offer them in these
nological standpoint —the so- fields. They may say otherwise,
called American know-how? Tech- but what they really want from us
nological knowledge rapidly be- is capital, a part of our wealth,
comes universal —like a cooking and they envy our level of living.
recipe. Everybody has access to it
as it develops. .
Is it our excellent farm land Few Anmniericans are fully aware
that puts us in a class by our- of the fact that our country en-
selves? No, various other coun- joys the highest level of living in
tries also are relatively well-situ- the world and for all recorded
ated in this regard. The same ages. The way of life of the aver-
holds true for natural resources. age American appears fabulous
Is it our large population? and out of reach to the immense
China, India, and Russia all have majority of people inhabiting non-
more people. Many lands are more capitalistic countries. We take our
densely populated. level of living for granted. We en-
Is it our industrial arts, free- joy amenities which were denied
dom of speech, freedom of the to even the most prosperous people
press, our free elections, educa- of earlier generations and are still
tional institutions, our customs denied to most non-Americans.
and traditions, our military serv- Qur level of living is directly
ices, our Spartan way of life, or based upon our accumulated
our willingness to work that ren- wealth, our capital —an invest-
ders us unique? These excellent ment averaging about $15,000 per
characteristics, too, are common working man in the United States.
to many nations and in some we This capital investment largely
are distinctly inferior to other constitutes the difference between
people. an American and a Chinese, or
Perhaps we may discover how between an American and a Rus-
or why we are unique by looking sian. A Chinese laborer works
at ourselves from the standpoint long and hard, and is conscien-
of a foreigner. Foreigners are not tious, quick to learn, able to
really and vitally interested in our handle delicate, complicated ma-
customs, traditions, cultures, re- chinery. What he lacks is tools,

Tools for Better Living


===== PAGE 47 =====

1957 WE FORGET WHAT MAKES AMERICA GREAT 45

invested capital. There is only one Founded on Natural Law
way to raise a level of living, ex- Consider our national origin.
cept by working longer and harder Qur Founding Fathers were
with what we have, and that is steeped in Common Law. They be-
by more capital accumulation, sav- lieved that natural law was im-
ings, which result in more and mytable and that human govern-
better tools, to make all of us more ment was limited by the law of
productive. As our population God. This was made crystal clear
grows, there will need to be ap- jn our Declaration of Independ-
proximately $15,000 invested for ence, our Bill of Rights, and in
every one of the new workers able oyr Constitution. The constitu-
and willing to work to keep our tional system put together by our
level of living constant. forefathers was devised to keep
the governmental servant in its
place and on. the job, and its job
Now, I know it has been said wag to “secure the rights” of
that the love of money is the root ay. They knew that the basic
of all evil, but I would reply that ;j;herent right, the right from
money also is the root of much which all other “human rights”
good. It builds or buys churches, are derived was the God-given
hospitals, schools, the homes We Light to our property, that is,
live in, the cars we drive, the capital. The right. to property is
clothes on our back, the food that spelled out in the Fifth Amend-
sustains us. Capital is our servant. ment to the Constitution in which

Our capital accumulation enables the right to life, liberty, and prop-
us to implement our fond hopes .
erty occurs in the same phrase

and aspirations for our children | basis. I tat
and grandchildren. It is responsi- °F 30 equal basis. In many s ale
ble for and nurtures technological constitutions, it was written in-
advances. It is the veritable foun- these words: “Man cannot by any
compact deprive or divest their

dation of civilization as we know : -
it. posterity of the means of acquir-

Our capital, then, is the immedi- ing and possessing property.” Put
ate thing which renders us unique in slightly different words, our
of all the nations of the world. Founding Fathers’ unique contri-
And the question that remains is bution was the establishment of a
why this vital accumulation oc- legal framework that protected
curred in this comparatively more securely than any previous
youthful nation. governmental system the private

Capital Is Our Servant


===== PAGE 48 =====

46 THE FREEMAN March

citizen’s possessions against con- This story has been and is the
fiscation on the part of anyone essence of American greatness.
under whatever guise. Today, a nation is the more
This idea worked; there was in prosperous the less it has tried
this country a greater release of to put obstacles in the way of the
human energy and a wider accept- spirit of free enterprise and pri-
ance of personal responsibility vate initiative. The people of the
than had ever been known before. - United States are more prosper-
These twin aspects of freedom — ous than the inhabitants of all
self-reliance and released energy— other countries because our gov-
account for the American miracle. ernment embarked later than the
A man stood solidly upon his own governments in other parts of the
two feet secure in the knowledge world upon the policy of obstruct-
that what he made or had honestly ing business.
acquired was his and his alone —
to have and to hold — he could Surrendering Our Principles
do what he wished with it, spend What about America today?
it, reinvest it, give it away, or Our Founding Fathers would have
pass it on to his descendants un- great difficulty in understanding
diminished. why we have departed so far from
There wasn’t much statism, gov- early principles. We delude our-
ernment, in this arrangement. selves, in our complacency and
Government’s business was to pro- laziness, that life has become so
tect us from predators and ma- complex that we must surrender
rauders, both external and inter- our God-given rights to someone
nal. Other than that, government who glibly says he knows better
let our ancestors be — on their own than we do what to do with our
initiative and responsibility. own property. In spite of the H-
bomb, speed of 2,000 miles an
Absence of Obstacles hour, and the fact that over two
Again, our fathers under this billion humans inhabit this earth,
system built a great nation, and it is questionable whether life to-
more good came to more people day is more complex, uncertain,
than had ever heen known be- or difficult to understand than it
fore; so that now it appears to has been in many periods in the
some that we can support the past. We cannot so easily salve our
whole world. The world had never conscience for surrendering our
seen a stronger, sturdier, more in- responsibilities.
dependent and God-fearing people. Statism, in whatever guise it is


===== PAGE 49 =====

1957 WE FORGET WHAT MAKES AMERICA GREAT 47

offered, is the enemy; and it ap- of Americans believe themselves
pears when a government leavesoff opposed to socialism, statism, col-
protecting and begins taking one’s lectivism — that is, public owner-
income for others. How is this ship of the means of production
done in America? There are count- by whatever name it is called.
less ways, and you know them as Yet the great majority of these
well as I. Government now spends same Americans favor govern-
one-third of the national income. mental actions falling within their
Perhaps this is one measure of own definitions of socialism.
how we have lost control of our One question we have forgotten
own property. to ask ourselves as we turn more
and more functions over to gov-
ernment: What would happen if
True, the majority voted for it! my worst enemy had this power
But our forefathers didn’t make over me or in later decades over
any exception in the right to prop- mine? In our own time, millions
erty; minorities had it, too. One of Ukrainians, Germans, and
man could stand alone against all others have paid with their lives
others and against his own gov- for ignoring this question.
ernment in any attempt to deprive It is only as individuals that we
him of his property. Our Found- can combat this tendency to the
ing Fathers would have been alleged all wise, all powerful,
aghast that 51 per cent of the everywhere present State where
people could vote for social wel- there is BIG GOVERNMENT and
fare schemes and then proceed to little people. As individuals we can
divest property from themselves study our heritage, understand
and the other 49 per cent. And the proper functicn of govern-
then, to have the presumption to ment, and do that which lies within
make this ruling apply to pos- our own capacity to bring about
terity forever would have been a rebirth of freedom in America.
quite unthinkable to these men We owe at least this to our chil-
who laid our sturdy foundation. dren — that they be left no less
A study shows that 75 per cent free than we were. * oo

The Majority Can Be Wrong

| tonne @® wea | Governments and Men

GOVERNMENTS, like clocks, go from the motion men give them;
and as governments are made and moved by men, so by them
they are ruined, too. WILLIAM PENN


===== PAGE 50 =====

HE fundamental thing that we,

think we have developed in re-
search is simply to run errands for
an idea.

So our industry has grown up on
the principle of letting the job be
the boss, and I still think that is a
good thing to do, because you can’t
expect material to do something
just because you think it should.

We have had a lot of jobs like
that. Take the extreme pressure lu-
bricants. Lubricating oils are very
old, and some time ago at Cornell
University there was developed a
lubricating testing machine based
on a railroad journal. Many tests
had been run, a lot of tables plotted
out, and 6,000 pounds per square
inch of projected area of the bear-
ing was the highest that they could -
go with the best lubricating oils We all thought about it, and
then available. We had built a small
testing machine at our laboratories
and our figures checked very well
with this.

Now what more could you ask?

So I said, “Well, let's just try an
experiment. Let’s suppose that the
lubricating oil testing machine is a
dangerous weapon. It belongs to

finally picked a material called
monochlormethyl ether, which is
practically the same as is used to J
put you to sleep when you are go-
ing to have a surgical operation. It
is so thin it has no viscosity at all.
You can pour it on your hand and
blow on it and it is all gone. You
) couldn’t pour it in a warm machine
your worst enemy, and he can kill as a liquid. It would evaporate at
you and your family with it. But ~~  .. go we took the cap off the
you can pick the lubricant for it. ether can, soldered a tube on it, ran
What would you recommend if you the tube over to the bearing ma-
were picking the poorest thing in chine, and sealed it into the oil hole.
the world to lubricate it with? Then we put 2a warm towel around
What would you specify?” the can and the vapors went

48


===== PAGE 51 =====

of the best oil.

We brought the oil engineers in
and showed it to them. They said,
“The only thing that makes us sore
is that we didn’t do it. This is our
business, not yours.”

“But,” I said, “you couldn’t have
done it. You have graded oils for
so long on their viscosity that you
would have fired anybody who pro-
posed using something like this
that didn’t have any viscosity feel
to it.”

Well, that was the beginning of
the so-called extreme pressure lu-
brication which came just about
the time we were developing the
hypoid gears, and you couldn't
have run hypoid gears if it hadn’t
been for these lubricants. There
are many things that you couldn’t

through the tube to the bearing. do today if it weren’t for these
Since there was no liquid in the lubricants.
bearing, it must run absolutely dry. Now what did we do? All that
We had made bets on how long had been done in lubricating oils
" it would last — how much pressure before that was to test the affinity
it would take. One man had nerve of one molecule of oil for another.
enough to guess 150 pounds. That This is called viscosity. When you
was the highest. We started to load put pressure on them, you found
up the machine very gently and that you pushed them apart and
carefully, and to make a long story you had no lubrication. But the oils
short, we ran out of weights at with no viscosity at all formed a
30,000 pounds. Everybody was chemical bond more like the nap on
amazed; they said, “It can’t be.” plush, and this took much more
But we tried it over and over again, pressure to break through than
and we got some more weights. I did the viscosity film. It completely
think it stuck up around 36,000 changed the concept of what you
pounds — five or six times the load could do with lubricating oils. eee

49


===== PAGE 52 =====

| ( F. A. HARPER

ACH OF US is interested in Year Country Yearly pay

the pay he receives for his 1 U.S.A. 5,000 dollars
work. Not only are we interested 92 Mexico 50,000 pesos
in what we get this week, but 3 England 2,000 pounds
also how we are doing as the years 4 Chile 2,500,000 pesos
go by. 5 Turkey 50,000 lira

Experience should add to one’s
worth at his work. If your pay is How have you been doing, over
not increasing over the years, the years?
either your pay is not following And suppose that next year’s
the upward trend of your work or post would be in France where you
your work output is not increas- would be paid 2,000,000 francs.
ing as.it should. In either event, How good an offer is that com-
one should probably change jobs pared with what you have been
to where he can get the pay due getting? Will you accept that of-
him and find a new stimulus that fer or not?
will increase his output.

It seems a simple matter to tell
how you are doing paywise over These questions cannot be an-
the years, doesn’t it? Simply com- swered from the evidence given.
pare the dollars of pay year by Every man knows that. He can
year. But is it that simple? know nothing about how well he

Suppose your job has been one is doing until after he first con-
that has moved you from country verts these rates of pay in dif-
to country, year by year. And sup- ferent currencies into some com-
pose that your pay, in the cur- mon denominator. He must first
rency of each country, has been find, as best he can, some way to
as follows: express them all in terms of com-

Need for Common Denominator

Dr. Harper is a member of the staff of the Foundation for Economic Education.

50


===== PAGE 53 =====

1957 HOW ARE YOU DOING—PAYWISE? 51

parable things he wants that can crease in welfare over the years.
be bought with each year’s pay. But have you? Actually, it may
If he shuns the task of making be that you can tell no more about
such a comparison because of the it than if the amounts year by
difficulties it entails, he will never year had been in terms of different
be able to know how well he is currencies, as in the previous il-
doing as the years go by. Unless lustration.
he does this, he will never find Suppose, for instance, that there
answers to such questions. And if had been a steady inflation of 5
he fails to answer them because a * per cent each year. In that event,
common denominator seems to your pay would have been declin-
him imperfect, he will continue to ing steadily in “real” terms, after
live in economic blindness, sub- making the dollars comparable in
jecting himself to serious mis- buying power.
takes as a consequence. Although your pay has been in
dollars each year, dollars change
oo in value. They may be as different,
All this is quite clear when the year from another, as the peso
problem is one of pay comparisons of Mexico is from the peso of
in lira, dollars, and pounds ster- chjle, or the franc from the dollar.
ling, which we are never tempted There is no easy way to tell how
to try to compare directly. But you are doing year by year under
when our pay over the years is all an unstable money system and
in dollars, we compare it directly changing tax rates. In fact, you
and thereby suffer a serious illu- 5104 tell anything about it until
sion about how well we are doing. and unless you first make an ad-
Suppose you had worked at j,stment for changes in the worth
these rates of pay in the United  ¢ your units of money remain-

The Changing Dollar

States over a period of years: ing after taxes, with passing time.
Year Yearly pay in dollars
1 5,000 Income after Taxes
2 5,200 The chart and tabulation show
3 5,400 "a comparison of 1956 pay dollars
4 5,600 and 1940 pay dollars for a mar-
5 5,800 ried person with two dependents.

Since all are expressed in dol- For other years and other tax de-
lars, it seems valid to compare pendencies the comparison would
them directly. It appears clear be different, of course.
that you have had a steady in- To illustrate how the chart can


===== PAGE 54 =====

52 THE FREEMAN . March

INCOME COMPARISONS
EQUALIZED AFTER TAXES*

1955 PAY, DOLLARS
60,000 TS
SpE Er pH A
hr 1 TOTTI [may
CL HET zd

50,000 |- LO I AT

ft i L : .
i : 1 I (IEE EY «I
JR SU SN A 4 [RUNS SI JE. wd } fp i =] [JE SU SES RE LS
40,000 [- + i+ TITITEEY MERE R ERNE ny IE
8 117 PETE TEL

HAA ee eliined

PR SE) Fa) i

ht “4-4 3 An —— 4 1 CUT Steg i ~~ In iL

30,000 [j= =~ i~i=i= Rin at at at aling >> Salata ahs

:
L pe ’ [a PL FH § [ET] i
— —— Ea Ho EEE LE TEE a de hh a did to
3 © 3 FN H

PD FE AS SI Sp Sp Foes AP SpE GPL

i 3 I: § J : Y
BBR IR CUETO gF NCE SO TE AEA JJ UTS I.
ERED REN (Tm
M M H : N < $ 13
20,000 =i Ai ATT se Te er rr oe er eer

! + N H Poy F : - i ERE
5 Js », ‘ H - —— H - . 3 3 hI — -

i
Ra a Lon ~~ Loan L boo I ER SSR HR TLC JUST N DUN
Cort hrRi ATR rE gies CLA SRE ST AI SA
10,000 | 3 Lo dd Lahn dL hd Ld Sg oe etd fe ft
JES Jr SS VIO PUR JO SO HJ WW 0 AS
TE NEY J a a =
ee —tt a _— - [ET ed orm - Sa oy
0 1 1 4 1 2 It POR SE NR NT JH ST SE SY SE ONY SORE | 1 i 1 §
0 5,000 10,000 15,000 20,000
1940 PAY, DOLLARS *INCLUDING INFLATION TAX

SOURCE: Basic information from issues of .the Statistical Abstract of the United
States and National Income Supplements to the Survey of Current Business, United
States Department of Commerce. The tax burden on income at each income level
was determined by adding the personal income tax at that level to the proportional
share of expenditures of government not covered by the personal income tax. This
amounts to assuming that, aside from personal income taxes, the process of bar-
gaining for goods and services in our economy throws the other costs of govern-
ment on all income levels in proportion to their incomes remaining after the per-
sonal income tax. Although any such assumption is unprovable, this one seems as
reasonable as any other would be.

be used, assume that you are such increases averaging about 6 per
a person and that in 1940 your in- cent each year over the previous
come was $10,000 (base line). year would have been necessary, if
Your income in 1956 would have you were merely to hold your eco-
had to be about $24,000 if its buy- nomic position — merely to hold
ing power after taxes were to be your own in the worth of your pay
as much as in 1940. after taxes, over the sixteen-year
Or to state it another way, pay period.


===== PAGE 55 =====

1957 HOW ARE YOU DOING-—PAYWISE? 53

The $14,000 additional required Laborious? To be sure. But that is
in 1956, in order to maintain your another price to be paid for infla-
buying power, was needed to meet tion and increasing taxes, before
the increase in taxes — if inflation we can know how well we are do-
is considered as a form of tax, as ing paywise. We can’t eliminate
seems proper.* What we commonly the question by failing to answer
call taxes, both direct and indirect, it.

absorbed some of the increase, but INCOME COMPARISONS
most of it was due to the inflation 1956 AND 1940
tax. . ] Earned 1940 1956 after
If you are interested in a 1956 net after taxes, in 1940
comparison with other than a income taxes buying power
$10,000 income in 1940, it can be $ 600 $ 467 $ 241
derived in like manner from this 1,000 778 401
same chart. But if you want a 2,000 1,556 802
comparison for some other years, 3,000 2,335 1,155
.or for other than a married person 5,000 4,001 1,797
with two dependents, you will have 8,000 6,034 2,747
to prepare another similar chart 13,000 7,440 3,373
: 25,000 16,676 7,514
*See “The Hiddenest Tax.” The Free- 100,000 44,398 19,290
man. October 1954. p. 138. 500,000 132,576 39,129

| docas ©: Lp007Y| They Planned It That Way!

WITH INDUSTRY AND SCIENCE pushing forward with new and better ideas, and
with cheaper and faster production working toward a higher standard of liv-
ing, our tax system is like a treadmill requiring ever greater effort to progress
at all, and ultimately dragging us back.

The fact that America has continued to grow and prosper during the past 15
years is no proof that our tax system is not destructive. We have gone forward
in spite of it but at the expense of a good share of the progress we could and
should have made. For millions of people in America, many businessmen
among them, this crisis in capital may be hard to understand. But for the
advocates of the all-powerful State, the crisis is simply the logical conclusion

of their schemes and their labors. They planned it that way.

ERNEST G. SWIGERT, President
The Hyster Company, Portland, Oregon


===== PAGE 56 =====

CROWING FOR THE
SUN TO RISE

JOHN C. SPARKS

EDITOR'S NOTE: These friendly suggestions from a businessman in Canton,
Ohio, were addressed to a student who was leaving for his native India upon
completion of studies at the University of Michigan and a year in the chem-
ical laboratory of Republic Steel Company. Mr. Sparks has permitted us to
make it an open letter to all students of liberty — young and old, in our land
and everywhere.

HAT will you think of our the past five years, would receive
country, our people, our high certain impressions and draw cer-
level of living, our philosophy of tain conclusions concerning the
freedom, and the like? What im- level of living in the United
pressions, what thoughts will you States. But various’ misleading
carry back to India with you? factors could easily yield wrong
Knowing your sincerity and conclusions as to how this high
keen intellect, IT am certain you level of living was achieved.
want to do what you can to im- The level of living in this coun-
prove living conditions in India try is at least twice as high as in
and aid in its development. Your the next most advanced country in
success in this endeavor vitally de- the world, and it might be twenty
pends on your ability to learn and or more times as high as in some
convey to your countrymen the countries, including parts of Asia.
formula that has brought to A visitor from abroad undoubt-
America certain accomplishments edly would be impressed with the
you would like to see attained in number of automobiles, tele-
India. phones, electric refrigerators, -
Have you discovered this magic washers, radios, television sets,
formula, or will you return de- medical achievements, and the
ceived by a false concoction? like, together with the realization
It is likely that a temporary that most of us consider these
resident, as you have been during items as necessities rather than

54


===== PAGE 57 =====

1957 CROWING FOR THE SUN TO RISE 55.

the luxuries they would appear compulsory social security, com-
to be in other countries. He would pulsory unemployment insurance,
also see the large factories and public housing, rent control, price
costly machines required in pro- control, farm price support, and
duction. From the standpoint of subsidies in various other forms
what he could see, his impressions — TVA, RFC, federal aid to edu-
might well be more accurate and cation, federal aid to build hospi-
better appreciated than these tals, to name but a few. It would
things are in the minds of people be easy for one to conclude that
who have lived in this country our high level of living is a re-
their entire lives and have grown sult of these governmental meas-
used to them. In other words, the ures which, according to the prop-
testimony of the high level of aganda, protect the people and
living in this country would be provide them with welfare and
clearly visible to the temporary security. One is reminded of the
resident. There is little chance of rooster who noticed that every
any false impression from this morning when he crowed, the sun
standpoint. arose in the east. Before long, he

However, there are several rea- concluded that the sun arose be-
sons why he is likely to receive cause he crowed.

an incorrect impression as to how It is no reflection on the intelli-
this high level of living came gence of the temporary resident
about. if he draws such false conclusions

inasmuch as a great number of
Wrong Reasons our own citizens also appear to

During recent years our leaders have accepted them. He would
of government have been bent have the company, too, of people
toward collectivist ideas. By col- back through history from the
lectivism, I mean those philoso- great civilizations of the past, who
phies which are frequently identi- witnessed the relatively high
fied as socialism, communism, amount of individual freedom
fascism, the Welfare State, and change to restriction, thus begin-
other forms of planned society, ning the decline of their civili-
each of which is totalitarian in zations.
principle, involving government
control over the lives and actions
of individual persons living under Republic Steel Company started
that government. Much propa- from the ideas and hard work of
ganda has extolled the wonders of individual men, each of whom was

Progress Springs from Freedom


===== PAGE 58 =====

56 THE FREEMAN March

farsighted enough to risk his One of the greatest dangers
limited wealth in order to develop facing the United States is that
what he thought was a good idea. this fallacy might prevail here,
The success of this method of com- displacing the very principles
petition — rising or falling on which brought us success with
one’s own accomplishments or fail- schemes which have failed when-
ures — brought about this great ever and wherever they have been
company that you have seen, Re- tried.
public Steel. This feat has been Our government leaders have
repeated untold thousands of encouraged ‘‘underprivileged”
times by American enterprisers, countries to look to the United
many successfully and many un- States government for assistance
successfully, but the latter with through ECA, Point 4, and other
the opportunity to try again. The aid programs, none of which can
high productivity you have seen is provide the magic formula. At
the result of this formula of indi- best, they can only distribute a
vidual liberty. Freedom to act, part of the goods we have obtained
with the government strictly under the formula; and the goods
limited to the protection of the without the formula will soon be
life, liberty, and property of each consumed or lost.
person, has provided the atmos- }
phere within which the American What if the United States did
level of living could develop. The not exist? What if there were
formula of individual liberty is nothing but ocean from the west-
not reserved exclusively to the ern shores of Europe to the east--
mainland of North America but ern shores of China? Would India
can be used with equal success then have no hope?
anywhere in the world — even in You have within your reach the
India. magic formula of individual
liberty. Seek nothing and take
nothing from your government
What has been achieved here save the protection of life, liberty,
can be duplicated elsewhere in the and property. If you can convey
world — if the same formula is this formula to your countrymen,
used. On the other hand, an at- you will have given India the
tempt to “raise the sun by having greatest possible gift — the seeds
the rooster crow in the morning” of freedom for everyone — out of
is bound to fail regardless of which will grow progress and
where it is tried. - prosperity. . eo ee

No Secret Formula


===== PAGE 59 =====

Students of Liberty, several thousand
strong in colleges all over the coun-
try, request and receive libertarian
literature in regular mailings from
the Intercollegiate Society of Individ-
ualists. The ISI has also initiated
its own scholarly pamphlet series
of which three have so far appeared:
Education for What? by C. W.
Coulter and R. S. Rimanoczy, The
Sociological Perspective by A. H.
Hobbs, and Religion and the Social
Problem by E. A. Opitz. Copies of
these booklets may be had by writing
the ISI, 407 Lafayette Building,
Philadelphia 6, Pennsylvania, enclos-
ing 20 cents for the first listing, a
dime each for the other two.

“We Hold These Truths . . .” is an
excellent statement of the basic prin-
ciples of the original American ex-
periment in government. Prepared
for the Department of Defense, it is
available for 10 cents from the
Superintendent of Documents, U. S.
Government Printing Office, Wash-
ington 25, D. C,

Science in Industry is only a facet of
our total involvement in science,
but it is by no means the least im-

portant. Part of this fascinating
story is told in a handsomely illus-
trated booklet, Science in Industry,
available on request from the Pub-
lic Relations Department of E. I
DuPont DeNemours, Wilmington 98,
Delaware. A companion booklet is
also well worth having, The Story
of Business: Large and Small.

The Social Gospel is a label applied
to political Christianity. “The Gos-
pel is always social,” argues J. C.
Ingebretsen in a recent Human
Events paper, but not political; to
politicalize it is to caricature it.
For an excellent discussion of these
issues, send 20 cents in coin to Hu-
man Events, 1835 K. Street, N. W,,
Washington 6, D.C, for “Road’s End
for the Social Gospel.”

Tools Make the Man: prosperous,
that is. $12,500 is the average value
of the tools private enterprise puts
at the disposal of the American
working man. That is why he is so
productive. The average working
man is now twice as productive as
was his like number a generation
ago, and this fellow, in turn, was
twice as productive as his father.

57


===== PAGE 60 =====

58 : THE FREEMAN March

The secret? There is no secret. Prentice-Hall, Inc., Specialties Divis-
Rapidly rising production is the re- ion, 70 Fifth Avenue, New York 11,
sult of putting more and better N.Y.

equipment into the hands of people
who are just about as people always
have been. All this is common eco-
nomic understanding, but the facts
are vividly brought home with words
and charts in Trends in Equipping
the American Worker, a recent pub-
lication of the Council for Tech-
nological Advancement, 1200 Eight-

eenth Street, N. W., Washington 6 These in turn provide the answers to
D. C. Sin gle c opies on request ’ such vital questions as who will pro-

} duce what and in what quantities,
That Tax! Several booklets are avail-  gj;05 styles, colors, and so on. As a
able to guide the citizen through the buyer, he sets the prices at which
maze of his Income Tax form. But goods and services exchange. In the
Prentice-Hall's Employee’s Income fina] analysis, it is the customer who
Taz Guidebook (revised annually) is directs the capitalist in the use of
unique in that it incorporates the pis capital, hires mental and mus-
highlights of the Hoover Commission cular energy, and pays wages. A
reports. Thus, at the very moment , ...fy) fellow, the customer, but
the taxpayer eels most keenly the you can control him and so can I.
burden of supporting excessive gov-
ernment, he is confronted by the rea-
sons for this situation. Government

is doing what government should the power we wield as customers. A
not do; and in consequence its nec- step toward better understanding is

essary functions are being done L- E.Judd’s pamphlet, What Makes
badly, wastefully, and inefficiently. Your Job at Goodyear, available on
This is a useful book for company request from the Public Relations
reading racks. In quantities up to 100 Department, Goodyear Tire & Rub-
the price is 25 cents each, from ber Company, Akron 6, Ohio.

The Customer Is King. The customer,
contrary to the popular saying, may
not always be right. He is, after all,
only a fallible human being. But it
is hardly possible to dispute the fact
that, right or wrong, the customer is
always boss. His tastes in consump-
tion determine his buying habits.

Each of us can control this giant
in only one way—by understanding

Libertarian businessmen all over America found an answer to
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===== PAGE 61 =====

E have had many voices cry-

ing that recent alterations in
the American constitutional sys-
tem foreshadow the growth of
Caesarism and the end of individ-
ual liberty. From Isabel Paterson’s
The God of the Machine to John T.
Flynn’s The Decline of the Amer-
itan Republic, the warnings have
been impressive. But one man
caught the hint of impending dis-
solution as far back as 1923, in the
flush heyday of Harding and Cool-
idge. He was Professor John W.
Burgess, then retiring after a long
career in constitutional law at
Columbia University. The little
book he wrote at the time, Recent
Changes wn American Constitu-
tional Theory, now reissued by FEE
(Irvington-on-Hudson, New York,
$1.00), is almost startling in its
prophetic quality.

To be sure, William Graham
Sumner had had flashes of the
same premonitory wisdom even be-
fore the turn of the century. In
The Conquest of the United States
by Spain Sumner shrewdly guessed
that the rise of the imperialistic

A REVIEWER'S NOTEBOOK =

John Chamberlain

spirit in America would produce
a carelessness about republican in-
stitutions that would have its
effect on fundamental law. But
Sumner died before the visible
hacking at republican principles
had really begun.

Spanish War a Turning Point

Like Sumner, Professor Burgess
regarded the Spanish War as a
watershed event. Up to 1898, as he
says, the movement of American
history “had been an almost un-
broken march in the direction of a
more and more perfect individual
liberty and immunity against the
powers of government, and a more
and more complete and efficient
organization and operation of the
sovereignty back of both govern-
ment and liberty, limiting the pow-
ers of government and defining
and guaranteeing individual lib-
erty.” But from 1898 on, the ret-
rogression came thick and fast.

As Burgess says, our constitu-
tional law in 1898, both as set
forth in the plain words of the
founders and in the interpretations

59


===== PAGE 62 =====

60 THE FREEMAN March

of the Supreme Court, contained a The effect of the Spanish-Amer-
“broad realm” of individual im- ican War, as Sumner had foreseen,
munity against government power was to foster an impatience with
of all kinds, whether federal, state, the law as protector of the indi-
or local. People were secure both vidual in the exercise of his in-
in their property and in the enjoy- alienable rights. Impregnated by
ment of its income, including the the doctrines of what Professor
income of those who, so to speak, Burgess calls “democratic Caesar-
rented tools from others. Nobody ism,” the government of Theodore
could be convicted of treason save Roosevelt “took” the band of terri-
by the testimony of at least two tory needed for the Panama Canal.
witnesses to an overt act. The By bringing about the Peace of
truth was not considered as re- Portsmouth through intermedia-
vealed in Judgment Day finality to tion between Russia and Japan, we
any man, and since everybody was put our seal on Japan’s presump-
presumed to be a seeker and a col- tion to a footing on the Asiatic
laborator in the endless quest fora continent. Professor Burgess calls
refinement of valid principle, the the overseas policy of the U. S.
right to speech, even wrong speech, after 1898 a diplomatic application
was considered immutable. of “Roughriderism.” This beyond-
Furthermore, there were no “ifs” the-waters-edge Roughriderism
and “buts” about constitutional soon had its internal effect; as
principle. The Constitution allowed Professor Burgess points out, it
habeas corpus to be suspended helped promote “disrespect for
legally “when in cases of rebellion regular constitutional and legal
or invasion the public safety may Processes and developments.”
require it,” but this was taken to the progressive Income Tax
mean (see the case of Ex Parte The first great blow to the indi-
Milligan, 1866) that habeas corpus iq)’ right to control the appli-
was any man’s right save in ex- ation of his own energy and -
treme instances when the civil jjoenuity came with the progres-
courts had actually been closed give income tax. With the passage
during a foreign invasion or in 8 of the income tax amendment,
zone disrupted by intramural there was nothing left in law to
strife. Finally, the “residuary” prevent the government from tak-
powers of government were deemed ing the entire product of all prop-
to belong to the states, counties, erty and all labor if it so chose.
and towns of a decentralized land. In 1923, when Professor Burgess


===== PAGE 63 =====

1957 A REVIEWER'S NOTEBOOK 61

was writing his book, individual
income taxes were far from oner-
ous. But Burgess feared the worst.
He argued that the effect of the
progressive income tax would be
to substitute “compulsory” for
“voluntary” socialism in “all the
finer institutions of our social
civilization, our churches, our uni-
versities and colleges, our schools
of art....”

These, he said, had been created
and sustained on the principle of
voluntary socialism —i.e., by the
free gifts of money and labor and
the cooperation of uncoerced indi-
viduals. But once the State had
begun to take ‘“half of their in-
comes” from people, government
would itself be compelled to sup-
port the “finer institutions....It
would result,” so Burgess said in
1923, “in governmental control
of religion, philosophy, science,
thought, and artistic feeling, the
very spheres in which the highest
results can never be attained ex-
cept through complete individual
liberty, modified only by voluntary
association.”

Federal Aid to Education

Thus spoke a responsible and
truth-loving Cassandra some thirty
years before the clamor for “fed-
eral aid to education” began
swamping the public prints. There
isn’t a college or university presi-
dent today who doesn’t lament the

unwillingness — or the incapacity
— of private donors under modern
tax conditions to keep higher edu-
cation abreast of our needs as a
civilized nation. Most of the col-
lege and university presidents fear
that the long arm of government
control would follow any major
federal assumption of the financial
burdens of higher education. Yet
the economics texts used in the
colleges and universities presided
over by these fearful ones take the
progressive income tax for granted
— and you will look in vain through
their indexes for the name of Pro-
fessor John W. Burgess!

Burgess wrote his book just
after the Great War of 1914-18,
and the horrors of the Espionage
Act were still fresh in his mind.
The Espionage Act effectively re-
defined treason to mean almost
anything which anybody in power
happened to dislike. It made “abu-
sive” language about the “form of
government of the United States”
punishable by a fine of not more
than $10,000 or imprisonment for
not more than twenty years or both.
As Professor Burgess remarked,
such a provision could have been
used to jail a man for agitating for
a Congress of one House, or a cabi-
net responsible to Congress, or an
Executive for a life term, or for
any other reform looking to a
change in government structure.


===== PAGE 64 =====

62 THE FREEMAN March

Indeed, the words in the Espionage chaos to Middle and Eastern Eu-
Act forbidding the publication of rope if race and language, rather
any language calculated to bring than such natural boundaries as
the Constitution of the United the Carpathian Mountains, the
States into “disrepute” could be Pripet marshes, and the Balkan
construed to forbid proposals for highlands, were to continue as the
amending that Constitution. The factors making for nationhood. To
Espionage Act clearly made the a contemporary Hungarian free-
First Amendment to the Constitu- dom-fighter, Burgess’ words about
tion “practically worthless.” True, the “seeds of constant war” being
it was a wartime act, but Professor sown by breaking “the old Austro-
Burgess argues that basic rights Hungarian Empire into four in-
which can be suspended whenever dependent states” must seem like
the State presumes to declare an sober truth at last. It is singularly
“emergency” are, in actuality, no late in the day, however, to be
rights at all. catching up with what a perceptive
mind first set down when the mid-
dle-aged rulers of the contempo-
rary world were still undergradu-
ates in college.

Of course, when the contempo-
rary rulers were in college the
Burgesses were already in eclipse
as teachers. The Burgesses of 1923
left no successors; as someone put
it the other day, “We are all Wil-
sonians now.” But as the bank-
ruptcy of the Wilsonian world,

The Seeds of Constant War
Professor Burgess would not
have been surprised, though he
would have been horrified, by the
renewed onslaught on the Consti-
tution that occurred after his
death. As for the course of events
in Europe, his prophecy of what
would come out of the Versailles-
dictated fragmentation of a con-
tinent has proved accurate to the
last comma. In 1923 Professor EE TYR
Burgess quoted Abraham Lincoln with its progressive income tax, its
against Woodrow Wilson. “In Lin- increase of “compulsory socialism,”
coln’s political philosophy,” said its expanded definition of treason-
Burgess, “the self:determination able utterance and its atomizing
of peoples unsupported by the con- view of nationality, becomes more
ditions of natural physical bound- and more and more obvious, it may
ary is secession pure and simple, be that books like Professor Bur-
no matter with what rhetoric it gess’ Recent Changes in American
may be presented.” Constitutional Theory will finally
Burgess predicted the return of come into their own. oo 0


===== PAGE 65 =====

1957 OTHER BOOKS 63

=) The Rape of the Mind
By Dr. J. A. M. Meerloo.

Cleveland: World Publishing Co.

$5.00.

This important book is written by
a psychiatrist who experienced
Nazi sadism at first hand in a
concentration camp. After the
usual nightmare adventures he
reached this country and here has
been used as an expert witness in
the cases of American soldiers who
collapsed under “brainwashing.”
He has gone on record that every
normal man whose mind has yet
to be profoundly trained can be
broken under the present skilled
pressures. He is rightfully con-
temptuous of “truth drugs” and
shows the shallowness of Russian
“Pavlovism.” But his advice on
preventive training sounds vague
and conventional, coming from
this tried and gallant defender of
liberty and the soul’s integrity.
We are told, for instance, that
rats kept in luxury are soft, and so
are men; that the advisory com-
mittee that drafted the code “to
Govern the Conduct of American
Fighting Men” was divided be-
tween the “hard Spartan view”
and the more lenient. Dr. Meerloo
appears to regard these as the only
alternatives and to incline toward
the former. But before we attempt
to assess these alternatives, it is
important for us to know that

young Spartans were trained to be
tough and violent by butchering
their helots, and that almost every
Spartan, given a position abroad
where he could betray his hated
country for money, did so.

Nonviolent Methods

This book contains no reference
to nonviolent techniques of psy-
chological training, such as the
spiritual exercises of the Jesuits
or the Buddhists. There is one ref-
erence to such new aids to concen-
tration and character implementa-
tion as mescalin and lysurgic acid,
but unfortunately it is quite un-
informed. Although work in this
field is still in the opening phases,
those who have examined the re-
sults so far obtained believe that
it holds remarkable promise for
the education of the emotions so
that they may cooperate with and
actualize the directives of the rea-
son and the conscience.

The general public has been in-
formed about these experiments
largely through a little book by
Aldous Huxley, describing what
happened to him. Meerloo can dis-
miss Huxley’s account as not being
a scientific paper, but his refer-
ence to his own negative experi-
ence twenty-five years ago is no
more scientific.

These new medicaments do not
“sell artificial heavens” or for that
matter “artificial hells.” They teach


===== PAGE 66 =====

64 THE FREEMAN March

the subject swiftly and deeply to ¢5\ Conquest of the American
confront his true self. This knowl- Mind
edge may be painful or it may be ]
a great relief. It can always be By Felix Waittmer. Boston: Meador.
profitable. Of course, it should be 352 pp. $5.00.
given only by a medical psychia- This book is a veritable encyclo-
trist skilled in the use of this aid pedia of leftwing organizations,
as a producer of profound atten- publications, and people. It has
tion. Huxley helped to further that two long indices, one of people
research by acting as a subject for and the other of subjects. Sup-
one of the most able of the medi- pose you are curious about a text-
cal pioneers in this vital field. book in your local school, or a
pamphlet being urged for study
To Train the Mind by your men’s club. Chances are
Drill, discipline, esprit de corps, that you will find helpful refer-
these are all rudimentary ways of ences to it in Wittmer’s book. Or,
mind-training. Auto-suggestion, if you want to know how Readers’
meditation, contemplation, often Guide operates, or how the Best
accompanied by severe austerities Seller lists are put together, this
were the ways the ascetic saints book will tell you. Plus hundreds
made themselves invulnerable; the of other important items of infor-
intense ecstatic group field of the mation, all carefully indexed for
agape was what raised Christian quick and easy reference.
martyrs above their anguish. What Dr. Wittmer must have gone
we are now waiting for, Arthur through mountains of material
Koestler has said, is a truly con- and millions of words as back-
temporary psychophysical tech- ground for this book. The schol-
nique and training manual. What- arly apparatus does not encumber
ever national community gets this the book, however, which is writ-
first will have the initiative. This ten with considerable verve.
research is but a few years old, EDMUND A. OPITZ
but its promise is great. Increas-
ingly the answer to the challenge

i rfare seems to
of psychological wa oye Any book reviewed in this Book Section (or
lie here, in the ‘power to mobilize any other current book) supplied by return
our only true defense, the inner mail. You pay only the bookstore price. We
ee ye . ! puy the postage anywhere in the world.
discipline for which Dr. Meerloo Catalogue on request.
pleads so convincingly. THE BOOKMAILER, Box 101; New York 16
GERALD HEARD



===== PAGE 67 =====

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===== PAGE 68 =====

FROM A LIBERTARIAN’S LIBRARY

Te MARKET does not directly prevent anybody from arbitrarily
inflicting harm on his fellow citizens; it only puts a penalty
upon such conduct. The shopkeeper is free to be rude to his cus-
tomers provided he is ready to bear the consequences. The con-
sumers are free to boycott a purveyor provided they are ready to
pay the costs. What impels every man to the utmost exertion in
the service of his fellow men and curbs innate tendencies toward
arbitrariness and malice is, in the market, not compulsion and
coercion on the part of gendarmes, hangmen, and penal courts;
it is self-interest. The member of a contractual society is free be-
cause he serves others only in serving himself. What restrains him
is only the inevitable natural phenomenon of scarcity. For the
rest he is free in the range of the market.

A selection from Human Action by Ludwig von Mises.
Yale University Press, New Haven. 889 pp. $10.00