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IDEAS ON LIBERTY

DECEMBER 1957

The Christmas Message. . . . . . . Edmund A. Opitz 3
Jim Leadbetter's Discovery . . . . . Robert LeFevre 9

How To Stop Competition and

Raise Prices . . . . . . . . . Frederic Bastiat 18
Foreign Aid that Really Aids. . . . . Frank Chodorov 21
Bolivia: A Case History in Foreign Aid . . Roger A. Freeman 32
Farfrom Free. . . . . . . . . . Alberto Benegas Lynch 38
Dollars Down the Drain . . . . . . F. A. Harper 41
Do Unions Cause Automation? . . . . Hans F. Sennholz 46
What Are We Guaranteed? . . . . . Grey leslie 52
A Reviewer's Notebook . . . . . . John Chamberlain 53
Index . . . . . . . . . . .. 57

THE FOUNDATION
FOR ECONOMIC EDUCATION, INC.’

Irvington-on-Hudson, New York


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LU) }
SODAS - CANDY / \

The case of | the
Unsuccessful Iceman ~

An iceman who took the long way around
delivering a cake of ice on a hot day would
find that he didn’t have much ice left to be
delivered. It’s the same with the tax dollars
we send to Washington earmarked for
“local improvements”. A lot of the money
melts away in Washington before it ever
gets back home. It pays the cost of admin-
istering the huge local aid progfam, for
bureaucrats’ offices, typewriters, salaries
and the inevitable red tape.

Doesn’t it make more sense to let Wash-
ington handle national affairs such as
defense and postal service, and let local
communities handle their own local im-
provements? That way communities will
gain the most from their local improve-
ment tax dollars. And we could get rid of
some costly, tax-consuming federal agen-
cies. If that makes good sense to you, why
not write your Congressman about it?

The Timken Roller Bearing Company
Canton 6, Ohio


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by Ernest
Swigert

President of National Association
of Manufacturers

Free enterprise, simply defined,
is nothing more nor less than eco-
nomic freedom. It is a freedom
within the American concept of
liberty, and just as important to done two things that to some
our way of life as political or extent destroy the essence of

religious freedom. individual liberty for every single
Economic Freedom means the American.
right to compete on a fair basis How? Those who are favored

in selling our products or services, Jose their freedom, because no
the right to follow the pursuit person who is partly subsidized
of our choice in earning a liveli- can be wholly free. Those who
hood, and the right to work com-  arediscriminated against lose part
pletely unfettered by arbitrary of their freedom because, in prac-
restrictions. tice, they are paying tribute for

When we support any measure the benefit of those favored. And
which favors us over others, these simple facts are nonetheless
which grants us a “hand-out’” at true because those favored may
the expense of others, we have be in the majority.

The above comments are condensed from an article by Ernest Swigert.
A copy of the complete article may be obtained by writing to:

Ab LW The Public Relations Division

SMe) RAILWAY EXPRESS AGENCY, INC.
JGENCY :

A PRIVATE ENTERPRISE IN THE PUBLIC SERVICE


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l Would you
call this
fair play?

Referee gives “Visitors” a
boost—“Home” team has to
score on its own. What kind of
a game would that be?

Ridiculous—yet you and
most people face that same
kind of unfairness all the time
with some of your taxes. These
are the taxes you pay in your
electric bills.

About 23 cents out of every
dollar you pay for electricity

. goes for taxes. But a strange
twist in federfl law exempts
several million families and
businesses from paying all the
taxes in their electric bills that
you pay in yours. These are
people whose electricity comes
from federal government elec-
tric systems. You have to help

" make up the taxes these people
don’t pay. :

Most Americans feel that
everyone should pay. his fair
share of taxes. Don’t you agree
that this special tax favoritism
should be made more widely
known and given critical study?

America’s Independent Electric Light and Power Companies*

*Company, names on request through this magazine


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EDMUND A. OPITZ

ANY TRAVELERS who have taken the trouble to
get acquainted with the people of distant lands
have returned to speak of the reservoir of good
will possessed by America. We have drawn pretty
heavily on this reservoir in recent years, but what-
ever is left represents the accumulation of good
deeds, honorable dealings, and kindnesses-by gen-
erations of Americans to men of other countries.
There is something in the universe decides merely to go through the
equivalent to this reservoir of good motions demanded by convention,
will, something out there which is he finds that the motions curiously
credited to the account of human- generate the spirit.
ity. On occasion men draw upon Such is the secret of the hold
this account, and such is its nature which ritual and ceremony have
that the more it is drawn upon the on mankind; they give “a local
more it grows. habitation and name” to what
Chief among the occasions when otherwise might remain vague
men tap this source is Christmas. and general. The Christmas spirit
The amount of good will actually and the things we associate with
at work in the world receives a it tap that reservoir of good will
sudden augmentation at this time and attach it to the things of
of year. Without defining it, we every day — and by a simple act
all know what the Christmas spirit we may build a bridge between
is, and we like it. However heavily two realms.
it may be overlaid with commer- It is a commonplace observation
cialism and perfunctoriness, it is that the things of every day have
solid at the -core and a genuine attachments which on occasion
thing.- It is contagious, and one may lift them out of the mundane
can hardly go through this season plane of existence onto a plane
without catching it. Even if one where they reveal something of

The Reverend Mr. Opitz is a member of the staff of the Foundation for Economic Education.

3


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4 THE FREEMAN December

eternal significance which ordi- ness, reveling in a mountain top
narily they conceal. The artist, for view — who has not on some such
example, is always uncovering occasion felt the scales drop from
eternal things of beauty in tem- his eyes, enabling him to see with
poral things which are plain or a new awareness, to recognize
even ugly. Someone remarked that significances where he didn’t per-
nobody ever noticed sunsets until ceive them before? “Make human
Turner began to paint them; we life as trivial as you please; there
look at a ballet dancer differently remains the simple, positive fact
because ‘of Degas; and after . among other facts — the eating
Corot, a clump of willows is more and drinking, walking and talking
than just a clump of willows. A — that we are taking part in cos-
great artist opens windows for us mic affairs of a magnitude beyond
from which we can look out onto all imagination. to compass or
a realm different from the world language. to express. All finite
of every day. The poets, too, have things have their roots in the in-
called our attention to this’ aspect finite, and if you wish to under-
of our life, how ordinary things stand life at all, you cannot tear
may possess extraordinary signif- it out of its context.” (W. M.
icance. “To see the world in a Dixon) This is something we all
grain of sand, And a heaven in a know perfectly well, and it is
wild flower; Hold infinity in the something that we all need to be
palm of your hand, And eternity reminded of continuously.

in an hour.” In the little book, Mrs. Miniver
] by Jan Struther, there is a sketch
Look Up, and Live of the household on Christmas

Our life is not a flat two-dimen- morning. After describing how
sional affair like the images on a the three children came down to
movie screen; we live in another explore their stockings and then
dimension also, the vertical. It is were absorbed in their gifts, Mrs.
not only the artist and the poet Miniver, picturing the scene as
who are aware of this, even the it was in her memory, wrote: “The
plain man is exposed to the dark sky had already paled a little
strange peril of discovering it.. in its frame of cherry pink chintz.
Reading a poem, looking at a pic- Eternity framed in domesticity.
ture, listening to music, hearing Never mind. One had to frame it
a birdsong at dusk, looking into in something to see it at all.” In
the face of a child who trusts us, the simplest things of life are its
performing a simple act of kind- deepest mysteries revealed; it is


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1957 THE CHRISTMAS MESSAGE .5

only a question of our seeing them. If we were true to our own ex-
Eternity in domesticity. One had perience, there would be no dif-
to frame it in something to see ficulty. But if we put an excessive
it at all. It is the commonplace valuation on words and exact for-
which holds the significant — mulation, we may come to deny the
which is to say that nothing is facts of our direct experience. You
quite commonplace because every- cannot pin the facts of the uni-
thing has attachments which re- verse down like so many insects
late it to an infinity of background. on a board. Life is more elusive
Life is shot through with eternity; than that, and in our wiser

earth is crammed with heaven. moments we know it. But that
doesn’t prevent a fad from catch-
Wordless Wonders ing hold of us which causes us to

It is impossible to find the exact deny what we really know. We
words to describe our relation continually experience things
to the wider universe even though which possess the quality of
men have been trying for thou- being timeless; for example, our
sands of years. But despite the in- contacts with the things of beauty,
adequacy of words, we do have the things of goodness, the things
direct experiences of the reality of truth. Through the medium of
—we are continually frar:ing such things we are in touch with
eternity in domesticity. The view things of permanent validity. But
of life which includes this is the if we try to put our relation to
essence of the religious outlook. these realities into a formula, we

THE

DECEMBER 1957 «+ Vol. 7, No. 12

idl
( , Additional copies, postpaid to tomary credit is given), except

one address: Single copy, 50c; 3 ‘'Bolivia: A Case History in
for $1.00; 25 or more, 20c each. Foreign Aid." Any article will
Permission is hereby granted to be supplied in reprint form if
iA MONTHLY JOURNAL anyone to reprint any article in there are enough inquiries to
OF IDEAS ON LIBERTY whole or in part (providing cus- justify the cost of printing.

The Freeman is published monthly by the Foundation for Economic Education, Inc., Irvington-on-
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.


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6 } THE FREEMAN December

cannot do it. Because this relation A character in one of Ibsen’s
is a living thing, dependent on ex- plays cries, “Without a fixed point
perience, and cannot be embalmed outside of myself I cannot exist!”
in words, our age has tended to The task of religion is to delineate
deny its reality. the fixed points which act as
Our age has tended to concen- guideposts and provide clues to
trate on the shifting and the im- the successful negotiation of life.
permanent aspect of things and
thus to lose sight of those fixed, Lack of Guideposts -
points around which things Our age has lost touch with
change. It is as if in our time a these guideposts and as a conse-
high tide has come up to efface old quence it has developed certain
landmarks. The blind denial that symptoms. Chief among these
things have an aspect which is symptoms ‘is the personal inse-
permanent and eternal, and the curity that characterizes our time.
effort to make our way as best we The principal dangers that man
can amidst things which are con- has encountered and overcome dur-
tinuously changing and over ing his curious and checkered
ground which is constantly shift- career upon this planet are no
ing are the besetting errors of our longer with us. We don’t live in
age. It is in this sense that our fear of onslaughts from savage
age is nonreligious, in its denial beasts; we don’t live on the edge
of the reality of fixed points. of starvation to perish when a
In Walter Lippmann’s earliest crop fails; we aren't prey to the
book, Preface to Politics, he crit- hazard of the weather but can
icized the churches because, he protect ourselves against the
said, they continue to harp on the perils of the storm. Nevertheless,
eternal verities and the change- it is the testimony of experts that
less truths, when what our age no people have ever been so af-
needs to know is the meaning and flicted with nervous troubles as
direction of change. One need we are. We overcome Nature and
“only point out that we can better Nature strikes back by giving us
discern the meaning and direc- the jitters. The reasons do not
tion of change from the vantage lie outside ourselves; the reasons
"point of several fixed guideposts lie: within and they refer to our
which do not change. As if we willful blindness toward our ex-
could better cruise through dan- perience with the things of per-
gerous waters when the channel manent validity.
buoys themselves are adrift! Dr. C. J. Jung, one of the most


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1957 THE CHRISTMAS MESSAGE 7

renowned of modern psycholo- of the diseased mind and soul.

gists, has written: “Among all my The individual is the unit of so-
patients over thirty-five, there has ciety; if the unit is weak, the
not been one whose problem in structure cannot be strong. In our
the last resort was not that of generation the disintegrative
finding a religious outlook on life. forces have us in their grip, and
It is safe to say that every one of we cannot seem to hold our socie-
them fell ill because he had lost ties together. We witness the
. it, and none of them has been widespread defection of individ-
really healed who did not regain uals from every social system, to
it.” Obviously, Jung does not mean a new allegiance pathetically in-
the mere recitation of a creed or adequate when viewed objectively.
formal adherence to some religious Time’s reviewer of Rebecca
body when he speaks of finding a West's book, The Meaning of
religious outlook on life. By a re- Treason, says that when General
ligious outlook he means a per- Mola in 1936 gave us the phrase
ception which includes in its pur- the fifth column, ‘the world
view the permanent as well as pounced on the phrase with the
the passing. If we consider our eagerness of a man who has been
life as a two-dimensional affair groping for an important word.
like the action on a movie screen, For what Mola had done was to
continuously changing, possessing indicate the dimension of treason
no depth, there is not enough in our time....In the twentieth
solidity in it to construct the century, for the first time, men
foundation upon which personal banded together by millions in

security is based. movements like fascism and com-
munism, dedicated to the purpose

Insecurity Breeds Aggression of betraying the institutions they
If personal insecurity were but lived under.... And yet, though

an individual peculiarity, the the new ideas had been violently
matter wouldn't be of so much avowed, and the hallmark of their
consequence. But personal inse- advocates was a fanaticism un-
curity turns upon itself and comes known since the first flush of
out as aggression. In bitterness Islam, wherever the fanatics were
over his own frustration the indi- brought to trial they failed to de-
vidual tries to wreak revenge on fend their ideas.” 1 see underly-
society. Dictatorship is not only a ing this mass aggression against
political and economic problem; our institutions a basic personal
it is perhaps primarily a problem insecurity acting as both cause


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8 ’ THE FREEMAN ‘December

and impetus, and back of the in- When People Are Happy Together
security of our time, the lack of I am sure of one thing, that
a genuine religious outlook. some of those possibilities are re-
The individual, stripped of his leased at this season of the year.
vertical relations, torn from his It is an ancient festival that we
context, can find no foundation celebrate at Christmas time, rich
upon which he can feel secure. in memory and association. It has
Nor can he discover a principle long been the happiest festival of
around which he can organize the the Christian year, and “when
life of his societies. Lack of a guid- people are happy together,” says
ing principle prevents us from so John Masefield, “they build up
organizing our society that a man something eternal which weakens
could be ensured of a sufficiency the power of all evil things.” At
and still have the leisure to develop no other time of the year are the
the latent skills in hands and brain, eternal values so close to the ordi-
to get to know his family, to dig in nary and the commonplace. At no
the earth, to go down to the sea in other time of the year are we as
ships, or to loaf and invite his soul. close to the basic realities upon
In one of Isak Dineson’s Gothic which the kind of life we want for
Tales there is a little story of an mankind is founded.
Armenian organ grinder in the Those basic realities are much
city of Paris. The organ grinder of the time ignored or shouldered
had a monkey which could per- aside in the practices of our com-
form a variety of tricks on a word mon life. But at this season, not
from his master. The Armenian only do we glimpse them, not only
died, and no one knew the tongue do we experience them, but for a
in which he had given the monkey time we actually put them into
his commands. All attempts to operation. “The ideal life for man
make the monkey perform failed is but his normal life as it shall
for want of a proper cue. The gsome day come to be lived,” wrote
potentialities were still within George Sand. For a brief spell we
him, but locked up. There is quite live that ideal life — and then we
a parable in this little story. For slump back into our former atti-.
man, too, is a creature of tremen- tudes. The lesson for us is plain.
dous possibilities, but he is not al- The glimpses we get at Christmas
ways aware of the cues that will time must become part of our per-
release those possibilities. manent vision. eo oo


===== PAGE 11 =====

JIM
LEADBETTER'S
DISCOVERY

ROBERT LEFEVRE

IM LEADBETTER stepped out Jim turned up his collar and

from under the metal canopy walked along the avenue. The re-
and sniffed the night air. Cold and maining lights in the factory were
damp. It had been raining gently, going out. That would be where
and the pavement glistened in the old Pete, the janitor, was clean-
late fall twilight reflecting back ing up after the day’s efforts and
myriads of crystals from the plunging the plant into blackness
twinkling street lights. Just the as he finished.
night for a brisk walk home. His Jim was at peace with the
big black Cadillac was around in world. Ever so briefly he permitted
the factory's parking lot. And himself the luxury of thinking
home was eight blocks away. Ac- about his struggles during the
tually, eight and a half blocks, previous twenty years and the suc-
thought Jim. He must teach him- cess those efforts of his had finally
self always to be accurate in his achieved. It hadn’t been easy. But,
thinking and speaking. some way, tonight he wanted to

Jim smiled inwardly, his face walk home, to take his time by
giving no indication of his himself. Not to solve problems,
thoughts. That was a good little this time, but simply to fill his
talk he’d made today at that ex- lungs with the autumn humidity
ecutive meeting. Good. Yes, it had and expand his soul. That was it.
been real good. But better not get Many times in the rush and press
smug, old boy, he admonished him- of business a person sort of for-
self. Wipe that smug smile off got about himself. But the one
your mind. It can be a neat smile, thing that brought that good feel-
but not smug. ing of well-being was a sense of

Mr. LeFevre, President of The Freedom School, Inc., also writes the editorials for the
Colorado Springs Gazette Telegraph.

9


===== PAGE 12 =====

10 THE FREEMAN December

moral rightness. And if there was handy and it was a matter of time
one thing that Jim had always in- and convenience.
sisted on during all his years, “Then, too, what about station-
© that one thing was integrity. The ery? Better than a ream of com-
business had been built on in- pany letterheads was taken in this
tegrity. same fashion, not to mention en-
velopes. The cost couldn’t have
THAT THOUGHT brought back the been large. Perhaps $3.50 would
memory again of his little talk cover the whole thing. Yet, there
with the various executives of the had been that basic dishonesty
plant. “It’s honesty, even in the within so many persons which per-
little things, that counts!” Jim mitted them to pick up and appro-
had said. “And one of the things priate items which weren’t theirs,
all of us have to watch out for is simply because it was the easiest
that little trait of larceny deep thing to do.
within each of us. “There were other places, too,
“Take this plant as an example. where this petty larceny appeared.
We've got as fine a lot of em- There were occasional phone calls
ployees as can be found within a to out-of-town places. Actually,
given industry. Of that I'm cer- this was the most expensive item
tain. Yet, how many of our em- of the lot. The company had tried
ployees, how many of us as their to keep tab on its phone bills, but
immediate superiors, are com- ‘there were always those long dis-
pletely above reproach on little tance charges that simply couldn’t
things? be traced to business. The loss to
“Take stamps as an example. the company had been $287.13
Did you know that last year this during a twelve-month period.”
firm spent $46.33 to replace stamps But Jim had wound up his pero-
which were stolen by our help? ration with this thought. “It isn't
Well, we did. It wasn’t that-any- the amount of money. Quite
body set out deliberately to steal frankly, the firm could absorb a
stamps. It was just that when loss of this kind without even
Mary, the stenographer, or Bob, feeling it. But there is a loss, just
the warehouseman, dashed off a the same. A loss in trust and in
little personal letter to a friend confidence which takes its toll of
or relative the stamps were avail- the morale of the team. And in
able and they were taken. No one the final analysis, it’s the team
even thought for a minute that spirit that spells the difference be-
this was stealing. The stamps were tween lasting success and just


===== PAGE 13 =====

1957 JIM LEADBETTER’S DISCOVERY 11

making our way. We should do all Then there was the old story
we can to instill in the minds of about Abe Lincoln walking three
our help the most scrupulous miles to return a single penny to
honesty and integrity. We can af- an old widow whom he had over-
ford to lose the money. But no one charged in making change. Jim
individual can afford the slightest didn’t believe that story, either.
hint of dishonesty. The command- If the event had actually occurred,
ments are pretty strict about this which was doubtful, it was prob-
business,” Jim remembered he had ably traceable to the fact that old
said. “ “Thou shalt not steal’ means Abe was a canny boy and knew the
just that. It doesn’t excuse small value of advertising. It would be
and unthinking acts of theft. good for the future business of
‘Thou shalt not bear false witness.” both himself and his store partner
That is another. You have to tell if the reputation for honesty got
the truth all the time. Not just noised about. In a sense it was a
when it is profitable to you. A per- cheap ad, thought Jim. And per-
son, to be a person of real in- haps the motives, if it had oc-
tegrity, has to place honesty at the curred at all, were dishonest.
top of the scale.”

Jim filled his lungs with the THAT CAUSED Jim to probe within
cool damp air. There were other himself fairly deeply. He'd always
things he could have said but stuck with this idea of integrity
didn’t. For example, he might have because he’d felt it to be the only
mentioned that old story about good policy on which to build a
George Washington and the business. But maybe his motives
cherry tree. Not that he believed had been dishonest. Perhaps he'd
the yarn. But it was still a good stuck to the idea simply because,
one. Let’s see, it was the historical like old Abe, he felt it was good
idol worshipper Weems who had for business.
thought that one up. Still, it But that argument didn’t quite
served to illustrate a point. Young ring true within Jim’s mind. No,
George might have saved himself that wasn’t quite right. Truth-
a whipping had he told a little fib. fully, a man had to side with
And a person has a right to defend truth and with honesty, not be-
himself. Always. Always? George cause it paid off, but because he
had no right to destroy property, owed that much to himself. You
his father’s property. So, really, had to tell the truth; you had to
George had to tell the truth, even refrain from stealing even little
though it meant punishment. things because if you didn’t, you


===== PAGE 14 =====

12 THE FREEMAN December

hurt yourself. Way down deep in- Internal Revenue Department.
side yourself you did something Something about your income
to your soul if you played around taxes. Don’t be long.”
with dishonest things whether Jim nodded, slid out of his coat,
large or tiny. That was it. It and hung up coat and hat in the
wasn’t a monetary thing at all. hall closet. Grace motioned to the
It was a spiritual thing. Dis- library and with a nod Jim turned
honesty was like a slow poison. It and entered the big book-lined
did things to your insides. It rot- room.
ted away your fibers, your moral A man in a gray tweed whom
fibers. A man couldn't be too Jim had never seen before, still
honest. Even defensively. And wearing his top coat, struggled
Lord knows there were plenty of up out of one of the deep leather
things a man had to defend him- chairs. “I'm Sharpley,” he said.
self from today . . . like the arbi- ‘There’s just one small matter in
trary highhandedness of the labor connection with your 1957 tax
bosses. And the even worse though form. Thought I'd drop out to see
more. insidious wiles of a govern- you personally rather than mail-
ment gone completely hog-wild. ing it back to you. Only take a
Jim put these thoughts out of minute.” )
his mind. His porch light was on. He delved into an inner coat
In the house his wife, Grace, pocket and came out with an en-
would be waiting for him. Dinner velope from which he extracted
would be ready, or nearly so. He the familiar tax forms.
might have time to slip quietly Jim felt his blood begin to boil.
into his den and read the evening He always felt that way about the
paper. income tax. Hang the government,
} anyway. They sat around like vul-
AS HE FITTED his key into the tures watching you work, watch-
lock, Grace opened the door. There ing you create wealth and meet
was a sweet maternity about her payrolls and handle problems and
face that was somewhat offset by fight your competition; and when
a look in her eyes in which she you were all through for the year,
demanded his full attention. they swooped down on you, as
“You have company, Jim,” she though you were a carcass, and
said. “I’ve delayed dinner so you tore off strips of your income like
can talk with him first. It’s . . .” a carrion bird would tear off strips
she produced a card, “it’s Brian E. of still living flesh. They acted as
Sharpley,” reading it, “from the though. they had a right. They


===== PAGE 15 =====

1957 JIM LEADBETTER’S DISCOVERY 13

don’t have any right to this, just a paid mercenary trying to
thought Jim viciously. They’re do his job. But he couldn’t remain
thieves, taking plunder from me silent.
at the point of a gun. I have topre- “What’s the matter? Doesn't
tend to be tractable and go along the Bureau have any confidence
but I hate the whole phony busi- in me? Don’t they know that I
ness. It’s bad enough that they conduct all my affairs with scrupu-
rip so much out of the plant itself. lous honesty? Not that I think the
But when they’re all through with government has this coming at
that, and they get that in advance, all. They don’t. They're just a
yes, in advance, the greedy hogs, bunch of ....” Jim checked him-
then they come around to me per- self. He managed a wan smile.
sonally and peek and pry just to “But I'm sure you aren’t inter-
make certain I haven't welshed on ested in my opinions on the in-
a single buck. come tax. Let me look it over care-
Jim forced the frown off his fully.”
brow and with effort relaxed the
grim lines which were beginning FROM LONG HABIT Jim never
to etch his lips. He held out his signed anything until he had
hand. “Let me see.” looked it over carefully. Even his
Sharpley unfolded the form and own documents which he had pre-
indicated the bottom of the first pared personally. He hitched up a
page. “You didn’t sign it,” he said chair and sat at the broad library
reproachfully. “And the depart- table, and Sharpley stood just be-
ment insists on the signature. You hind him.

see, it’s kind of an oath that you Yes, there was his salary star-
take that you've reported every- ing up at him mutely. Reported
thing.” right to the last dollar. And there

Jim read the hateful words: “I was his income from stocks. It was
declare under the penalties of per- right; he knew it was right. Down
jury that this return (including to the penny. And the computation
any accompanying schedules and had been accurate, he knew. Only
statements) has been examined by himself and Grace now, since the
me and to the best of my knowl-" children were on their own.
edge and belief is a true, correct, Miserly small deductions, but no
and complete return.” more than the law allowed. And

This gray tweed man is just a his expenses. Correct, of course.
flunky, thought Jim. No point in Then what was that roaring sound
hitting the ceiling with him. He’s like a thousand Niagaras pounding


===== PAGE 16 =====

14 "THE FREEMAN December

at his ears? Why was his temple had that day, as Grace and he to-
beating with a sudden rush of gether had managed to parlay a
blood? Why did his throat sud- couple of small bets into something
denly feel dry? He took a firm grip better than $1,000, just in the one
on. himself and permitted his mind afternoon.
to dwell briefly on the events of Grace had been so excited. It
the past year. had been lots of fun. But — he
“It’s honesty, even in the little hadn’t included that among his
things, that counts,” he heard him- earned items. And there might be
self saying. What about those ex- other things, too, if he cared to
penses? The Bureau would never remember them. Other expenses
discover that they had been pad- not strictly business. Maybe other
ded. There was that trip he and money he had picked up one way
Grace had made to the branch or another.
plant in San Francisco last year.
It had been their vacation. But FOR JUST a moment there seemed
the cost of the trip had been in- to be an awful stillness in the
cluded among the expense items. room. Sharpley still stood behind
It had been a business expense, he him, and for one dreadful moment
told himself savagely. Hadn’t he Jim was certain that the man had
visited the .plant and hadn't he been conscious of his inner tur-
had some business conferences moil, had seen the flaws in the re-
with the branch manager? That port, and was standing there like
made it business, didn’t it? But of an avenging angel.
course the expenses had included Then that passed. The govern-
Grace’s plane fare as well as his ment hadn’t a prayer. They’d never
own, and the hotel costs, and a know about any of these items. It's
few other items he now remem- like the stamps, he thought, as he
bered guiltily. reached for his fountain pen. But
Then there was that speech he he didn’t take it out. He just re-
had made at the Commonwealth mained staring down at the gov-
Club. They had slipped him $500 ernment Form 1040.
for the talk and they all said it It isn’t fair to me, to Grace, to
was good. But he remembered now the company, to anyone or any-
that it wasn’t included among his thing for me to be placed in this
listing of income from all other position, he thought. What would
sources. And there was the trip to George have done, his conscience
the race track at Tanforan and the mocked him? George? George
astounding good fortune he had Washington? What the dickens!


===== PAGE 17 =====

1957 JIM LEADBETTER’S DISCOVERY 15

George had no problem like this. ment has no right to any of your
George had destroyed someone money. But what about you? Are
else’s property. Here was the gov- you just a hypocrite? Does the
ernment out to destroy or at least commandment say you are not sup-
to confiscate some of my property. posed to lie except to the govern-
George had had it coming. I don’t ment, or to a thief ? The command-
have it coming. Do I have to tell ment wasn’t concerned about the
the truth to a thief? Why should money, either. It was concerned
I? The government has no right to with you. It said for you not to lie.
my money and I have a right to But that was because it was con-
defend myself and take advantage cerned with your immortality, not
of every loophole. with your bank account.

Do you? sang his conscience.
Weren't you the one who this very BUT THE WHOLE thing is wrong,
day told the people at the plant persisted Jim to himself. If I give
that it wasn’t the amount of the more than 1 actually have to give
theft that mattered? It wasn’t the to the government, I will be grant-
money. It was what dishonesty did ing the government even more
to you inside. It rotted your guts. power to do all the bad things it is

Sure, sure, but that was differ- now doing. I owe it to myself, to
ent. The people in the plant were my kids, to my wife, to my com-
inconsiderate with the property pany, to keep the government as
belonging to the plant. They were small as possible. Any dime I can
taking something that belongs to get away with, I'm going to get
the firm. They should be jacked up. away with.
But what about this? The money Then maybe you’d better stop
I've kept for myself without re- posing as a great moralist, he
porting and the added expenses thought. You're a fine one to go
* I've listed as business expenses, spouting off about absolute strict
were all my own money. It would honesty with yourself and every-
be the same if the employees came one else if you can’t even tell on
to me and demanded that I fur- yourself. Sure, the law is wrong.
nish them stamps and long dis- But your job is first and foremost
tance money. with yourself. If you sign that

No, it wouldn’t, persisted his paper, you will be taking an oath
conscience. Remember, it isn’t the that will be false. The government
money; it’s the principle. Sure, will never know. Grace will never
you don’t give a rip about the gov- know. But—you’ll know. And what
ernment. And sure, the govern- will that do to you? Never mind


===== PAGE 18 =====

16 THE FREEMAN December

the government. You have to live want to investigate! Gosh, I'm
with yourself. sorry!”

The problem dissolved in Jim’s “Don’t be sorry.” To his amaze-
mind. I get it, he said to himself. ment, Jim found that he was smil-
The whole income tax thing is ing broadly with a profound sense
turning even honest men into of relief filling his being. “You
crooks and liars. But just because had nothing to do with it. And as
everyone else does it, doesn’t give for an investigation, tell the Bu-
me an excuse. I'll prove that I'm reau to come ahead and investi-
bigger than the government. Let gate.”
them be small and mean and He picked up Sharpley’s hat
sneaky and groveling around after where it had reposed on the table
every penny. I don’t have to stoop and handed it to him. “I’ve got
to their level. They can have the nothing to hide. And that’s really
money. I'll never let them get me true, now.”
in this fix again. In some confusion and embar-

rassment Sharpley got out of the
WITH A TREMENDOUS effort Jim house. As he crossed the street and
slowly stood. “I'm not going to got into his car, he thought: This

sign that.” is one lousy job. You know, that
“No? Why not?” Sharpley was fellow Leadbetter is quite a man.
clearly nonplused. Has a pretty fine house, too. I don’t

“There may have been one or think I’ll say anything about this
two items I have overlooked,” be- to the higher-ups. They might get
gan Jim. Not even the complete him into a lot of trouble, and 1
truth now, ragged his inner mind. don’t think he deserves it. That’s

“All right,” said Jim. “There’s strange, too, that he should con-
no ‘may have been’ about it. There fess to some irregularities in his
are some specific things wrong form. None of us would ever have
with this report. I know they are known. Can’t figure out these free
wrong. I deliberately made them enterprisers at all. They'll fight
wrong. It'll take me the better part you all night for a nickel and then:
of tomorrow to check my records turn around and hand you a cen-
and get them correct. Then I'll tury note. Crazy. But pretty fine,
mail it back to you with my check for all that. I wonder if I could
to cover the difference.” get a job at the Leadbetter plant.

“My gosh, Mr. Leadbetter,” said It’d be a lot better than this cruddy
Sharpley, his eyes wide. “I'll have government job. Those crooks I
to ‘report that. The Bureau may work for....


===== PAGE 19 =====

1957 JIM LEADBETTER’S DISCOVERY 17

But his thoughts trailed off as think I made an important dis-
he shifted into gear and headed covery.”
for home. “Did you? What was it?”
“It'll sound kind of corny. But
INSIDE, Jim sat down to a lovely I think that truth is even more
hot dinner over which Grace pre- important than money or in fool-

sided with beaming countenance. ing your enemies.”
“What happened at the office And try as she would, Grace
today, Jim?’ she asked. could never get more than that for
“Well, Grace,” he responded, “I an answer. ® oo

- 1
| 19Eas B® LIBERTY | Free To Discriminate

IF MAN IS TO CONTINUE his self-improvement, he must be free to
exercise the powers of choice with which he has been endowed.
When discrimination is not allowed according to one’s wisdom
and conscience, both discrimination and conscience will atrophy
in the same manner as an unused muscle. Since man was given
these faculties, it necessarily follows that he should use them and
be personally responsible for the consequences of his choices. This
means that he must be free to either enjoy or endure the conse-
quences of each decision, because the lesson it teaches is the sole
purpose of experience — the best of all teachers.

When one’s fellow men interpose force and compulsions be-
tween him and the Source of his being — whether by the device
of government or otherwise —it amounts to interrupting his
self-improvement, in conflict with what seems to be the Divine
design. Man must be left free to discriminate and to exercise his
freedom of choice. This freedom is a virtue and not a vice. And
freedom of choice sows the seeds of peace rather than of conflict.

F. A. HARPER, Blessings of Discrimination
A copy of this pamphlet is available on
request from The Foundation for Economic
Education, Irvington-on-Hudson, N. Y.


===== PAGE 20 =====

How to | STOP BONPETITION

FREDERIC BASTIAT (1801-1850)

HIS IS THE STORY of the owner But, unfortunately, there was
of an iron mine in France [in the possibility that those buyers
1847], and his reaction to competi- of Belgian iron might object to
tion from the owners of iron mines being killed, and kill him instead.
in Belgium. The Belgians were Moreover, he knew that he would
able to produce and ship iron into have to hire men to guard the en-
France at less cost than the French = tire frontier to make his plan ef-
owners could produce it and sell it fective. That would cost more
at home. This fact was reflected money than he had. So our hero
in the comparatively low price of was about to resign himself to
Belgian iron in the French mar- freedom when suddenly he had a
kets. brilliant idea. He remembered that
Naturally the French people at Paris there was a large factory
bought most of their iron from engaged in producing laws.
Belgian producers instead of from He knew that everyone in
their own . domestic producers. . France was forced to obey these
This displeased the French mine- laws, even the bad ones. So all he
owners exceedingly, and the one needed from the Parisian law-
we are here discussing decided to factory was just one small law:
do something about it. “Belgian iron is prohibited.”

At first he considered the possi- Then, instead of having to guard
bility of personally stopping this the frontier with his own few em-
undesirable trade. He thought that ployees, the government would
he might take his gun and sally send 20,000 guards — chosen from
forth to the frontier and kill the the sons of the very locksmiths
nailmakers, locksmiths, and other and engine makers who were car-
users of iron who crossed the bor- rying on this undesirable trade
der to patronize his competitors. with the Belgians. Better still, the
That would teach them a lesson! domestic mineowner himself

18


===== PAGE 21 =====

1957 HOW TO STOP COMPETITION 19

wouldn’t even have to pay the ders to their suppliers all over
wages of these guards. That France. Those suppliers, in turn,
money would be taken from the will also expand their businesses
French people in general, much of and hire more workers. Thus em-
it from the selfsame buyers of ployment and prosperity will in-
Belgian iron. Qur hero could then crease throughout France. All this

sell his iron at his own price. will result from that extra five
- francs that your law will permit

The Producers of Laws : me to charge.”
With this ingenious plan, our The producers of the laws in the

French mineowner proceeded to law-factory were charmed indeed
the law-factory in Paris. At some by the logic of our hero. They
other time, I may tell you of his rushed to produce the requested
underhanded methods, but here I law with this observation: “Why
wish to speak only of what was talk of hard work and economy?
divulged to the public. Why use an unpleasant way to in-
He urged the authorities of the crease the wealth of our nation
law-factory to consider the follow- when a single law can do the same
ing argument: “Belgian iron sells thing?”
in France for ten francs per hun-
dred pounds. That forces me to The Unseen Consequences
sell my iron at the same low price. Now, in all fairness, we must do
But I prefer to sell it for fifteen justice to the arguments of this
francs. Now if you will only pro- mineowner who wanted a tariff to
duce a law that says, ‘Belgian iron increase domestic employment. His
shall no longer enter France,” the reasoning was not entirely false,
following wonderful results will but rather incomplete. In asking
occur: the government for a privilege, he
“For each hundred pounds of had correctly pointed out certain
iron that I sell to the public, I results that can be seen. But he
shall receive fifteen francs instead completely ignored certain. other
of ten francs. As a result, I can effects that cannot be seen.
expand my business and employ True enough, the five-franc piece
more workers. My workers and I thus directed by law into the cash-
will have more money to spend. box of the domestic producer does
This will help all the tradesmen in serve to stimulate the economy
our community. The tradesmen, in along the lines he predicted. That
turn, will then also buy more can easily be seen. But what is not
goods. That will mean larger or- seen is this: That five-franc piece


===== PAGE 22 =====

20 THE FREEMAN December

comes, not from the moon, but ernment, and must therefore do
from the pocket of some French without the article or service he
citizen who must now pay fifteen would have bought with it. One
francs for the same thing that cost segment of the economy has prof-
him only ten francs in a free econ- ited at the expense of many others.
omy. And while the protected in- True enough, because of the arti-
dustrialist may well use the five ficial price increase, new jobs have
francs to encourage national in- been created in the protected in-
dustry, the French citizen himself dustry. But what is not seen is the
would also have used it for the fact that the extra money now
same purpose, if he had been left spent for iron must necessarily
free to do so. He would have used result in reduced spending for
his five francs to buy a book, or other products and services, and
shoes, or some other article he thus fewer jobs in those indus-
wanted. In either case, national tries. And probably worst of all,
industry as a whole would be stim- the people have been encouraged to
ulated by the same amount. think that robbery is moral if it is
Thus the new tariff law has re- legal. CIC I
sulted in this: The protected in-
dustry now makes a high profitto —
which it is not justly entitled. The Translated and condensed by Dean Rus-
average French citizen has been sell from Selected Works of Frederic

. . Bastiat. Paris: Guillaumin, 1863. Volume
duped out of five francs by his gov- 2 pp. 363-368.

NNN Ard - . .
z Fase ‘a Aas a CR Interfering with Production

20
ar

IF WE PROTECT INDUSTRIES where our productivity does not much
exceed foreign productivity, what we do, in essence, is to prevent
the movement of manpower and capital out of uses where they add
less to our economic well-being into the uses where they would add
more. What we really do in protecting any industry is to shield it
against the competition of our more productive industries in ob-
taining labor and capital. To say that we are protecting it against
the competition of the foreign branch of the industry fails to
recognize that the proper objective of our economic policy is to

allocate resources to their most productive uses.
YALE BROZEN, Competition from Cheap Foreign Labor


===== PAGE 23 =====

HATEVER IS CLAIMED for our ment offhand simply because it is

foreign aid policy, popular conjecture and cannot be proven
support for it rests on the as- one way or another until the antic-
sumption that the money so dis- ipated war actually arrives; only
tributed helps to improve eco- then will we know whether our
nomic conditions in what are investment in the ally-buying
called underdeveloped countries. business has paid off. If it is true,
The policy rides on this humani- as John Jay said, that “nations
tarian purpose. Sometimes the in general will go to war when-
argument is garnished with an ever there is a prospect of getting
appeal to self-interest: since our anything by it.” then we can pre-
economy is tied in with the econ- dict that our allies, if any, will
omy of other peoples, we cannot be those nations which expect to
help benefiting from a world-wide profit by joining our side, not
improvement in living standards. necessarily those upon whom we
More often the Christian doctrine have lavished gifts. Gain, not
that it is more blessed to give gratitude, will determine the
than to receive is tacitly invoked. alignment of nations.

Lately, the political advantage However, there is an element of
of giving away our substance has soundness in the economic argu-
been stressed; for example, when ment for foreign aid, that our
the President, pleading with an economy is affected by the econ-
economy-minded Congress bent on omy of foreign nations; we must
cutting appropriations for foreign have good customers if we are
aid, predicted dire results from to keep our industrial machinery
such penny-pinching. His argu- going at full-blast. A good cus-
ment, in a nutshell, was that in tomer is, of course, one able to
view of the strained international pay his bills; he must have some-
relations, we cannot afford to thing we want, to exchange for
alienate friends and possible what we send him. The profes-
allies. We can dismiss this argu- sional foreign-aidists maintain

21


===== PAGE 24 =====

22 THE FREEMAN December

that if we send these underde- “countries must be accounted the
veloped countries —or, rather, great humanitarian; he has done
their governments — some of our more for these countries than have
capital, they will put ‘it to good all the grants made by our gov-
use in building up their produc- ernment to their governments.
tive machinery and thus will be- This should not be surprising.
come good customers. When it is In our own country, whenever a
pointed out that, as in the case of village, town, or state feels that
India, our grants to these govern- it is underdeveloped, that it is
ments have not improved the econ- possessed of unexploited economic
omies of their countries, that the potential, its management invites
people seem to remain as poor as capital to look over the profit pos-
ever, the stock answer is that it sibilities in its-area. As a side
takes a long time and a lot of issue, but related to his profit
capital to build up a national econ- motive, the capitalist may con-
“omy. Common sense asks, “How sider the better living conditions"
long is a long time, and how much for his employees, or the educa-
is needed?” There is no answer. tional facilities the place provides,
. or the ways by which he can make
The Great Humanitarian his venture acceptable to the
Now, along comes the evidence mores of the community. But,
of another kind of “foreign aid” what must be uppermost in his
— one that costs the American tax- mind are the conditions conducive
payer nothing, and that shows to a profit on his investment: the
almost immediate improvement in available labor supply, transporta-
the economies of those countries tion facilities, nearness to market,
inviting it. It is not foreign aid and so on. These are the things
at all; it is private investment the local chamber of commerce
from which a profit is expected. stresses. The home town folks are,
The capitalists who go in for this like the capitalist, thinking of
sort: of thing haven't a humani- profit. The merchants, hotel
tarian phrase in their prospectuses people, moving picture operators,
and probably do not have a hu- and professionals all have in mind
manitarian bone in their bodies; the improvement in business
yet, if the humanitarianism of which must follow from the pay-
foreign aid is the improvement of roll of the prospective new plant.
the economic conditions of under- It is out of this mutualized
developed countries, then. the profit motive that has come the
American investor in foreign great improvement in the Ameri-


===== PAGE 25 =====

1957 FOREIGN AID THAT REALLY AIDS 23

can economy, and that is how the private investor had to consider
American industrial and commer- the chances of having his capital
cial machine has expanded to all confiscated. By 1956 this urgency
parts of the country. It has had somewhat abated, and during
worked here; why cannot the prin- that year some five billion Ameri-
ciple be applied to the underde- can dollars went looking for jobs
veloped countries of the world? abroad. The figure is taken from

It can, and it has been. Ever a report issued by the U.S. De-
since there has been anything in partment of Commerce, dated
the way of capital accumulations, August, 1957. The net figure re-
the tendency among owners has ported is only $3.6 billion, which
been to look for opportunities for is about twice the amount of our
investment; and since capital flows foreign aid. But, it is not the
naturally to where the returns are whole story of foreign invest-
greatest, the direction has been ment; it represents merely the
toward places where there is the amount of direct investment in
greatest need for capital — includ- capital equipment, plus reinvest-
ing underdeveloped areas. For ment of earnings. It does not in-
that reason, since World War II, clude the amount written off for
or since the burgeoning of our one reason or another, like re-
foreign aid policy, much private placement costs, depletion allow-
capital has left the United States ances, or exploration and develop-
for foreign parts, much more than ment costs from which no profits
the public realizes. The results are were realizable. Nor does it in-
only beginning to be publicized; clude over three quarters of a bil-
they speak loudly for the humani- lion in portfolio investments. The
tarianism of foreign capital in- over-all figure is about $5 billion.

vestment. The book value of American
} foreign investments at the end of
Private Investment Abroad 1956 is $22 billion. Book value is

In 1946, a year after World War a rock bottom figure, far below
II, nearly a billion American dol- market value; nor does it include
lars went looking for foreign op- investment losses consequent upon
portunities. The flow was rather a risky business. Hence, in mak-
hesitant, for the governments of ing comparison with the $55 bil-
the devastated countries were lion of foreign aid since the war
leaning most perceptibly to na- — most of which must be written
tionalization of industry as the off as sheer waste — private capi-
cure-all for their economic ills; the tal investment shows up quite


===== PAGE 26 =====

24 THE FREEMAN December

favorably. But, it is not in the turn helped him to build an econ-
amount of money sent abroad that omy where four years ago there
comparison should be made; it is was none. “In an area where
in the comparative improvement people never tasted wheat bread,”
of the economies of the nations as wheat flour appeared. Towns, with
between foreign aid grants and homes, theatres, post offices,
private investments. That is the churches, and all the appurten-
standard of measurement which ances of an integrated economy,
foreign-aidists themselves have sprang up out of the erstwhile
set up for the evaluation of their jungle. A city is now in prospect.

program. Let us look at what a All this may have crowned
few entrepreneurs have done Johnson with a halo, but that was
along these lines. not what he was looking for when

he started. Undoubtedly, the spirit
Frontiersman of adventure was in him, but the

A modern American frontiers- primary motive: power was the
man by the name of Clarence E. prospect of profit. Certainly the
Johnson, reports Newsweek (Sep- investors who helped him carry
tember 30), picked for his story- out his project were attracted by
book venture some 600,000 acres an expected return, a good return,
of jungle in Paraguay. He and those who invested both their
dreamed of hacking his way labor and their capital expected
through this wild, uninhabited both wages and interest from
land and putting it to productive their investment, in addition to
use, the hilly parts in coffee, the whatever intangibles they hoped
flat areas in wheat, cotton, or for. Meanwhile, the Paraguayans
whatever else was growable. Four are better off for this increase of
years ago he organized the Ameri- productive activity made possible
can Economic Development Com- by private capital investment.
pany, got the blessing of the local
government, interested both Wall
Street and prospective settlers in
his scheme. He set men and ma-
chetes to work on the jungle,
brought in modern machinery,
built roads, sold acreage to indi-
vidualists like himself from the
United States, Europe, China, *The Case Study of the Creole Petrolum Cor-

v . poration in Venezuela, published by the Na-
Japan, South America, who In tional Planning Board, Washington, D. C.

Oil Company

A less romantic but more far-
reaching example is that of the
Creole Petroleum Company of
Venezuela, a subsidiary of the
Standard Oil Company of New
Jersey. * .


===== PAGE 27 =====

1987 FOREIGN AID THAT REALLY AIDS 25

Before further examining this economy of the country that was
amazing story of economy-build- - notoriously poor before it got
ing, paralleled in some degree by there? To begin with, it employs
similar ventures in other under- some 14,000 workers. About 90
developed countries, we might per cent of this force are natives,
consider the charge made by pro- not because Creole is partial to
fessional foreign-aidists that pri- natives but because it is more eco-
vate investment in the extractive nomical to employ people on the
industries leaves nothing to the spot than to import them from
host countries but a ‘hole in the abroad. But, the natives it found
ground.” That is true, but only when operations started did not
when drilling (or mining) results know the difference between a
in “dry” holes, which can happen shovel and a drill, besides being
in Texas as well as in Venezuela; deficient in other knowledge neces-
also, one can argue that in the sary to the oil business; and
distant future Venezuelan wells Creole could hardly put them to
may run dry, even as did the gold productive use until this deficiency
on our West Coast — and the forty- was overcome. That called for the
‘niners left nothing in their wake establishment of schools and
but the State of California. It is training programs, which in turn
an economic truism that produc- called for the employment of
tion in one form stimulates pro- teachers. When it came to filling
duction in other forms, provided jobs requiring scientific and ex-
the market is allowed to operate; ecutive knowledge, the schooling
and if the locale has any other na- program had to be extended to
tural advantages, the economy the university level, so that Creole
which originally rested on a spe- found it profitable to contribute
cial advantage can continue on its toward the building up of the en-
own momentum long after that tire educational plant of Vene-
special advantage is gone. In our zuela; scholarships in American
own country we have seen how universities were provided for
mining towns often turn into agri- those chosen to further their edu-
cultural centers, commercial bee- cation in engineering, chemistry,
hives, or manufacturing communi- and what not. That some of these

ties. students might become teachers
} of natives who would never work
Native Help Is Best for Creole, or might turn to

What is Creole doing, what has spreading knowledge completely
it done, toward building up the unrelated to the oil business, was


===== PAGE 28 =====

26 THE FREEMAN December

a chance Creole had to take. At all this work not only earned a
any rate, since the economy of a living at it but also acquired
country is directly related to the knowledge and skills that coyld
knowledge of the people, what- be put to good use in other lines,
ever Creole did to improve that such as building skyscrapers in
knowledge — in its own interests, ‘Caracas, highways to the interior,
to be sure — could not help im- and homes for themselves. Vene-

proving Venezuela's economy. zuela now has much more than a
“hole in the ground.”
Transportation Facilities Creole workers had to live in

Oil is where you find it. Very houses where there were none, so
often it is found in quite inacces- Creole went into the real estate
sible places. In that case the oil business; it built communities in
capitalist has to go into operations the wilderness. Incidentally, the
in which he has no interest but company is now trying to get out ~
which are necessary to his main of this ancillary business, offering
purpose. Creole had to build roads, to sell the houses to their occu-
dredge a canal, lay pipe lines, con- pants or raising their wages so
struct a harbor, and do other that they can become independent
things that would facilitate the paying tenants; it has been hard
bringing of their saleable product put to teach these employees the
to the sea. The workers who did disadvantages of being wards, the
The case of the Creole Petroleum Corporation of Venezuela illustrates
vividly how private investment can build up the economy of a country.

Some 90 per cent of its employees are Creole-trained Venezuelans,

like these geologists studying microorganisms in drilling-mud samples.

Creole Petroleum Corporation



===== PAGE 29 =====

1957 FOREIGN AID THAT REALLY AIDS 27

virtues of self-reliance. Healthy The list of activities Creole was
workers make better workers (the forced into by the necessities of
profit motive), so Creole had to its business pretty nearly covers
import doctors, build hospitals, the gamut of an economy. Since
teach sanitation. It is now trying workers have to eat, agriculture
to divest itself of these collateral had to be stimulated in areas
enterprises by turning them over where nothing had been grown.
to the Venezuelan government (a The company had to set up supply
strange form of self-reliance!) stations, which are now gradually
It should be mentioned that being replaced by independent re-
Creole contributes to the govern- tail establishments. These outlets
ment nearly a quarter of a billion for merchandise induced others to
dollars a year — about half the go into the supply business, so
taxes paid by the entire oil indus- that the Venezuela manufacturing
try — a good deal of which goes to industries which in 1938 employed
the building up of that “social only 175,000 employed 400,000 in
capital’ the sociologists like to talk 1948.
about: that is, schools, roads, hos- Oil started everything in the
pitals, sanitation, and various country, but now four American
socialistic enterprises that bu- companies are manufacturing rub-
reaucrats the world over enjoy ber products there; two others are
tinkering with. producing soaps and detergents;

Creole’s influence in education is felt throughout the country. Benefits

extend to many not directly connected with the Pp School,
on Creole property, is among the enterprises started by the company
and turned over to local management for alt families of the community.



===== PAGE 30 =====

28 THE FREEMAN December

iron ore deposits have been found patient; they cannot wait on the
and are being developed by other slow processes of nature. So, they
capitalists. The annual production invent “crash” programs, which
of sugar has zoomed in twenty are designed to build an economy
years from 17,000 to nearly from the top down, in a hurry.
100,000 tons; rice, practically un- They assume, for instance, that a
known a generation ago, is now lot of electricity, by way of a mon-
produced at the rate of 40,000 strous hydroelectric plant, will sud-
tons a year. “Over-all, there are denly create a mass demand for
now 50 per cent more Venezuelans electric toasters among people who
gainfully at work than there were do not know how to stick a plug into
twenty years ago, and what they an outlet and whose present desire
gain from their labors makes it is for bread, not toast.

possible for each of them to live Some wag described the
better than twice as well.” “crash” program, or the planned

’ economy, as an attempt to impose
The Spiral of Progress the twentieth century on the tenth.

Summing up, Creole, seeking It can’t be done. Putting aside
profit on its investment, helped the political reasons why foreign
to build an economy. This was in- aid fails to improve the economy
cidental to its main purpose, but of underdeveloped countries, it is
-it was also inevitable, simply be- this effort to telescope time that
cause activity in one field stimu- makes foreign aid fatuous. On the
lates activity in others. Wages — other hand, the private capitalist,
any income earned — has an in-_ building on what he finds and not
built propulsion to be spent on the on what he would like to find, is
satisfaction of desires, some of equipped to do the job; his profit
- which the worker never dreamed motive is a surer guide to eco-
of until the purchasing power was nomic development than the poetic
in his pocket. Other workers, blueprint of the reformer.
sensing the presence of effective
demand, set about producing and Retailer in Mexico
distributing the things the worker One more example of how pri-
wants. One activity follows an- vate capital helps to build up the
other, and the sum-total of pro- economy of an underdeveloped
ductive activities is called an country is worthy of mention, sim-
economy. co ply because it is in a field furthest

But, this process takes time. away from the extractive indus-
And the foreign-aidists are im- tries, the retail store business.


===== PAGE 31 =====

1957 FOREIGN AID THAT REALLY AIDS 29

“On February 27, 1947, Sears, some of the handcraftsmen were
Roebuck de Mexico, S.A. opened sent to the States for advanced
the doors of its first store. Six study and observation; capital had
years later Sears was operating to be supplied. It was a long, slow
seven stores in Mexico. Its gross process, but it paid off eventually;
sales had passed $15 million a today 91 per cent of the merchan-
year, making Sears one of the dise on Sears’ shelves is produced
largest retail merchants in Mexico in Mexico. Sears did all this in the
and one of the dozen largest pri- interests of its stockholders, but
vate corporations in the country a tangential result was the estab-
— in gross business, in net profits, lishment of an industrial plant in
and in taxes paid.”’* a country where the custom cob-
The inventory of the first store bler still does a thriving business
consisted mostly of imported mer- in work shoes.
chandise. Pretty soon Sears found Besides turning to domestic
out that a lot of this merchandise suppliers, Sears found that domes- °
did not mesh with the Mexican tic employees were better fitted
way of life — it offered a large as- than imported workers -for its
sortment of tires, a staple in its purposes. But, how can you run
United States stores, to a populace a large retail shop with clerks who
that had few cars — and that be- never saw a cash register? For
cause of transportation costs, to three months before it opened its
say nothing of tariffs, was too first store it ran classes in clerk-
costly for the mass trade it hoped ing and other rudimentary store
to attract. The solution of that jobs. Since then the educational
problem lay in domestic suppliers, program has been expanded so
if they could be found. that now it includes courses in ad-
But, most of the manufacturing vertising, show card making, ac-
in Mexico was in the hands of countancy, management; out of
handcraftsmen, operating on the 3,500 employees in the Mexican
small-sales-large-profits formula, corporation only 18 are U.S. citi-
and Sears was confronted with the zens.
task of educating these suppliers Of course, this investment in
in the philosophy of mass produc- education has paid off in company
tion. Technicians had to be im- dividends, but the Mexican econ-
ported to furnish this education, omy has not suffered from it. Be-
A case study in the series, United States sides, the investment 18 consider-
Business Performance Abroad, published by able, one that Sears is not anxious
the National Planning Board, Washington,
D. C. to lose, and therefore the corpora-


===== PAGE 32 =====

30 - THE FREEMAN December

tion has taken steps to protect it; erty; they reserve the privilege to
first by paying higher than the confiscate property, either by na-
prevailing wage rate (made possi- tionalization or taxation, when-
ble by the sales volume produced ever it occurs to them that such
by an intelligent and satisfied confiscation is “in the public in-
sales force); by providing medi- terest.” It is this threat that de-
cal help for workers (a chiropodist ters private capital from going
makes standing .on one’s feet more into a country where the socialis-
comfortable); by enabling em- tic mind is in control, for profits
ployees to acquire a vested in- are hardly alluring when the pros-
terest in the business via a retire- pect is that they will be appropri-
ment fund. Thus, Sears has pros- ated along with the capital invest-
pered, and its prosperity has been ment.

reflected in an improvement in the Most of the countries that need
‘Mexican economy as a whole. or say they need investment capi-

tal have regulations and laws hos-
The Handicap tile to private enterprise. Most of

The proven way, then, of up- them have monetary regulations
lifting the economy of an under- (inconvertibility - of currencies)
developed country is to let private which make repatriation of either
capital do it. That being so, what capital or profits difficult or im-
prevents private capital from un- possible. Many levy discrimina-
‘dertaking the job on dn even tory taxes on foreign-owned in-
vaster scale than it is now doing? dustries. Some require that domes-
The answer, in a word, is: Poli- tic investors have voting control
ties. of corporations. Such regulations,

There is hardly a country in the plus the hostile attitude of offi-
world where the notion that polit- cials, call for ingenuity in making
ical power is capable of making adjustments or sagacity in devis-
more and ‘better bread does not ing circumventions. The net profit
‘prevail; everywhere it is assumed must be large enough to compen-
or explicitly stated that socialism -sate for these annoyances, and it
has merit. The basic tenet of so- must be large enough to make up
cialism is that private property is for losses incident to the political
sinful, that capitalism is a thiev- instability of these countries.
ing institution. As a consequence, ' While the American govern-
rulers everywhere find easy justi- ment gives lip-service aplenty to
fication for their natural inclina- foreign investment, its practices
tion to lay hands on private prop- and attitudes are frequently at


===== PAGE 33 =====

1957 FOREIGN AID THAT REALLY AIDS 31

variance with its professions. In roadblocks to private investment.
the matter of taxation, for in- It has been demonstrated that
stance, it demands its full share the American bureaucracy, which
of the profits earned in underde- is socialistic by the nature of its
veloped countries by private business, if not ideologically, has
American investors. It makes no shown no inclination to favor for-
allowance for the risks involved. eign ventures of American capital.
It is quite willing to give the Recently, the outgoing head of
American taxpayer’s money to the International Cooperation Ad-
these countries, but is not willing ministration issued the following
to encourage private investment directive: “The United States is
by compensatory tax relief. convinced that private ownership

In its treaty agreements with and operation of industrial and ex-
underdeveloped countries the tractive enterprise contribute
American government makes no more effectively than public
effort to influence the attitude of ownership to the general improve-
their officials toward private en- ment of the economy of a country

terprise. In fact, their hostility ... therefore... I.C.A. will nor-
to private enterprise is encour- mally not be prepared to finance
aged by our official foreign aid publicly owned . . . enterprises.”

program. In a study made for a Immediately the State Depart-
Senate committee investigating ment repudiated this policy state-
our foreign aid program, this sig- ment; it was not going to “offend”
nificant sentence appears: “Hopes India, an admittedly socialistic
of receiving large-scale grant aid country, which was at that very
tend to induce foreign govern- moment asking for another “loan”
ments to be less receptive to pri- of $500 million; nor did it have
vate capital, which does not and any intention of interfering with
cannot work on a gift principle.”* the spread of socialism abroad.

Which means that if there were Nevertheless, the record shows
no prospect of getting handouts that those underdeveloped coun-
from the American government tries which have given American
these governments of underde- enterprise a chance to operate
veloped countries would be in- profitably within their borders
clined to remove some of their have done well; while those which
*American Private Enterprise, Foreign Eco- made such operations impossible,
nomic Development, and the Aid Programs. A depending instead on our hand-

study made by the American Enterprise As- ir
sociation, Washington, D. C. outs, are suffering. oo 0


===== PAGE 34 =====

TT
i 3 758
So Fa

ROGER A. FREEMAN

OLIVIA rates as the South from which it will be long recover-

American country receiving ing. The new government nation-
economic aid from the United alized the mines, expropriated the
States. The program was started farm owners, sent a large seg-
in 1953 to tide the country over a ment of its educated class into
“temporary emergency.” But for exile, and drove private industry
the past three years the United and commerce toward bankruptey.
States has been contributing twice . Within a year Bolivia’s people
as much for public purposes in were starving and the govern-
Bolivia as the Bolivian taxpayer. ment was in trouble up to its
This has neither restored the eco- neck.*
nomic balance nor assured stabil- It is quite likely that another
ity in Bolivia. Plans to taper off revolution would have driven the
U. S. aid are being shelved each government out no later than 1954
year and appear dimmer now than if U. S. aid had not come to its
ever. : rescue.

Bolivian aid is listed in the Most of the U.S. aid was used
U. S. Budget as “defense support” not to strengthen local productive
although it would require a great capacity but to boost imports and
deal of imagination to visualize support consumption. This dis-
what bearing this country in the couraged local production and en-
center of South America, without abled the country to live beyond
an army or a seacoast, has upon its means. The government kept
the defense of the United States. printing banknotes at a rapid

Bolivia’s trouble stems from ————

a bloody revolution in 1952 Which dent this party had mut nie shes wee hanced

3 : from a lamppost in front of his palace in
threw the country into a turmoil 35%

Mr. Freeman is Vice-president of the Institute for Social Science Research in Washington,
D. C. He served as fiscal adviser to the Bolivian government in 1956-57 on a mission of the
U. S. State and Treasury Departments and the International Cooperation Administration.

32


===== PAGE 35 =====

1957 BOLIVIA : A CASE STUDY 33

pace and the exchange rate of the burden of 25 per cent of the gross
peso boliviano dropped precipi- national product in the United
tously. A few years ago a dollar States.

was worth 190 pesos; in the fall Income tax collections dropped
of 1956 it took 13, 700 pesos to buy from an average of $3.5 million
_ one dollar in the free market. between 1948 and 1952 to $0.5 mil-

In December 1956 an attempt lion by 1956. Property taxes
was made to stabilize the currency shrank from $0.5 million to
at a rate of 7,500 to the dollar $124,000. Mine royalties used to
with the help of a $25 million fund be a mainstay of the Bolivian
from the United States and the In- budget. But the government cor-
ternational Monetary Fund. The poration which took over the
present official rate which is set mines in 1952 paid none. Royalties
according to free market supply were re-established in December
and demand, is 8,500, and there is 1956 by supreme decree as part of
no indication that it could be the stabilization plan. But so far
maintained without the stabiliza- none have been paid.
tion fund and without continued The tin and tungsten mines are
U. S. aid. The greater part of Bolivia's only
U. S. aid still is used to supply source of foreign
over half the regular Bolivian bud- exchange besides
get. The large government enter- U. S. aid. They
prises, the mines and the petro-
leum monopoly, are operating
deeply in the red and cover their
deficits through cen-
tral bank credits.

The government
so far has shown no
inclination to cut its
expenditures to a
level which Bolivian
taxpayers are willing
and able to support.
Bolivia’s tax load is
low. At 5 to 7 per
cent of gross na-
tional product it
compares with a tax

Philip Gendreau, N. Y.


===== PAGE 36 =====

34 THE FREEMAN December

used to be profitable. But soon
after nationalization, the ‘mine
payroll swelled from 26,000 to
almost 40,000, and production de-
clined. The mines showed vast
deficits which the government
covered by printing more bank-
notes. ’

A Mining Survey Mission, paid
for by the International Coopera-
tion Administration, and staffed
by the New York engineering firm,
Ford, Bacon & Davis, reported
in December 1956 that there is
no technical reason why the mines
could not be operated economically.
But the management would have
to be turned over to technically
qualified personnel and control
wrested from the politicians and
union leaders who are running
the mines as their private pre-
serve.

Much of the mine equipment is
worn out or obsolete. The mines’
foreign exchange earnings were
used to Import automobiles
(rather than trucks which the
country needs desperately) and
other consumption goods includ-
ing food. In the average of the
past three years Bolivia imported
$25 million annually in food and
$7 million in machinery. Prudent
economic policy would have Tre-
versed those figures.

Bolivia does not need to import
food. A U. S. State Department
Survey Mission concluded in 1941-

42: “Bolivia could produce prac-
tically all agricultural products
in unlimited quantities.” These
findings were subsequently con-
firmed by a United Nations Mis-
sion in 1950 and by the Joint
Agricultural Service (Servicio
Agricola Interamericano).

Serious Questions

Why did Bolivia face starvation
in 19537?

Why does it still import a large
part of its food and fiber?

One obvious reason is that most
of Bolivia’s good soils are in the
humid lowlands while most of its
people live in the dry and rocky
High Andes. The U. S. Mission in
1941-42 recommended building a
road from Santa Cruz to Cocha-
bamba, to connect the tropics with
the mountains. The road was built
with a $44 million loan from the
Import-Export Bank of Washing-
ton, completed two years ago. This
year, the service on the loan was
suspended. This is not unusual.

.Bolivia has been in default on its
- foreign debts since 1932 — the

only country this side of the iron
curtain which made no payments
at all to its creditors over such
a long period.

The so-called agricultural re-
form four years ago dealt food
production a blow from which it
seems unable to recover. Instead
of channeling the landless Indians


===== PAGE 37 =====

1957 BOLIVIA: A CASE STUDY 35

toward the noncultivated areas in auditors to Bolivia to find out
the lowlands, they were given the about the “end use” of U. S. aid
freedom to take and divide the goods. They found themselves up
haciendas which had been supply- against a stone wall and had to
ing the cities with food. About be satisfied with setting up pro-
half a million people took over land cedures to provide better control
without much if any plan or pro- in the future.-
cedure. Property rights remained While the Chilean and Peruvian
uncertain, and in the first three ports of Antofagasta, Arica, and
years only 7,621 titles were Mollendo were choked with ten
granted. Most of the new owners thousands of tons of U. S. aid
grow food only for themselves. goods beyond the capacity of the
Cooperatives do little better. railroads, and merchandise had to
President Paz Estenssoro com- be stored in the open for many
plained in the summer of 1956 months, the International Cooper-
that cooperatives “have paid more ation Administration kept sending
attention to supplying their mem- additional shiploads which only
bers than to production itself.” added to the confusion and pro-
vided better opportunities for pil-
Fed by Uncle Sam ferage and contraband. This was
When the Bolivian farmers done right up to 1957.
would not supply the cities, the The U. S. aid program discour-
United States stepped in the aged local food production by un-
breach. In each of the past four derbidding Bolivian production
fiscal years, we have provided an costs. The government set maxi-
average of over $25 million in mum prices at which it would buy
money, goods, and services. What agricultural products so low that
has this accomplished? U. S. food -farmers reduced their output or
was priced at fractions — 10 to 20 smuggled livestock, corn, rice, and
per cent of cost. At least one-third the like. to Brazil, Argentina, or
of it was immediately smuggled Peru where they brought higher
to neighboring countries to be sold returns. Meanwhile the United
at market prices. Much of the rest States was feeding Bolivia’s cities.
went into the Bolivian black mar-
kets. Some people grew rich on More Freedom Needed
this traffic. Little reached con- There has been some improve-
sumers at official prices. ment. In December 1956 the prices
The International Cooperation of U. S. supplied food were raised
Administration last year sent to market levels, and price con-


===== PAGE 38 =====

36 THE FREEMAN December

trols were abolished. That has had All over the country one can see
some beneficial effect in encour- the terraces on the steep hillsides
aging local production. But not which tell a story of past cultiva-
enough. Livestock, corn, wheat, tion. Those terraced lands and ir-
sugar, and other items are now rigation channels were producing
brought in from the surrounding food in Inca days and often until
countries at prices below Bolivian quite recently. At this time only
" production costs. A country which small parts of the terraces are
is desperately in need of dollars still being worked.

to pay for machines and other in-

dustrial goods should not be Petroleum Monopoly

spending scarce foreign exchange Bolivia has rich oil lands. The
on food it can grow at home. fields were explored and produc-

Hundreds of thousands or mil- tion started in the 1920’s by the
lions of additional people could Standard Oil Company of New
grow food and fiber for them- jersey. Their property was confis-
selves, for the cities, and for ex- (ated years ago without compen-
port on Bolivia’s soil. But, the gation. Petroleum is now being
rural Indians are streaming into produced by a government mo-
the cities and into the mines where nopoly corporation (YPFB). Out-
living conditions and wages are put has increased in recent years.
better. In fact one-fourth of it is being
The average mine worker now exported to Brazil and Argentina

earns almost as much as a cabi- which built railroads from the
net minister. That still is little by border to the production centers
U. S. standards. But it is a great (at their own expense). This year
deal by Bolivian standards — more YPFB expects to sell $14 million
than twice what a teacher makes. worth in petroleum products lo-
It is only a fraction of the earn- cally, $5 million abroad.

ings of a miner in the U. S., but a Petroleum products are almost
U. S. miner’s output is ten times tax free. The YPFB budget in-
that of a Bolivian. cludes an item of $130,000 for

Without U. 8. aid, Bolivia’s al- taxes, about 0.7 per cent of its
ternatives would have been to gross volume. I recommended the
work the land and grow more food imposition of adequate gasoline
or starve. Our program “saved” taxes to finance the building of
the Bolivians from both. It also roads which Bolivia needs des-
saved the government from the perately. The government finally
consequences of its policies. boosted the gasoline tax from 0.4


===== PAGE 39 =====

1957 BOLIVIA: A CASE STUDY 37

cents to 0.75 cents per gallon. whether there is work for them,
Diesel and fuel oil still are left whether they are competent,
tax free. whether they work, or whether
YPFB has been pricing its they are caught stealing. There
products far below cost. The gov- are always several strikes going
ernment covered the deficits with on. This is small wonder —
the printing press. In December workers get paid while they are
1956 gasoline was raised from 7 on strike.
cents a gallon to 25 and 27 cents. Wages and incomes are low, but
This is almost twice what gasoline in terms of output they are higher
would cost in the United States than in the United States. Thus
if there were no taxes. But YPFB, it is cheaper to import goods, agri-
which pays almost no taxes, is cultural or manufactured, than to
still operating in the red at the produce them locally. The imports

new price, despite low wages. are paid for partly through high
taxation in the United States
Unproductive Labor while Bolivians are living in what

The low productivity of labor may comparatively be called a tax
is the main reason for the high paradise. Bolivia is being taught
costs of production in the mines, to depend increasingly on U.S. aid,
in petroleum, in agriculture, for and its incentives for helping it-
the excessively large staffs of the self are being reduced.
ministries and the high cost of Should U.S. aid to Bolivia be
government. abolished ?

At many jobs there are twice or The program was adopted four
three times as many people as are years ago to assist in a temporary
needed. To watch them “at work” emergency. The United States
is a frustrating experience to never intended to pay a regular
Americans. and continuing subsidy to Bolivia.

Productivity in private indus- The International Cooperation Ad-
trial firms is no better. Companies ministration asserted repeatedly
were forced by the government to at congressional hearings its in-
place additional people on their tention to taper off and end the
payroll and are not permitted to program. It is about time that this
dismiss employees regardless of be done. eo 0


===== PAGE 40 =====

FROM

FR EE

~

The most encouraging development ment intervention in the economy.
in Argentina, second only to the re- But intervention still exists on a
moval of the Péron forces, is a large scale.
thoughtful attention to the real Let no one be deceived; we are
meaning of freedom. The following living in an economy that is semi-
message by ALBERTO BENEGAS socialized and very far from being
LYNCH, President of the Chamber free.
of Commerce of Argentina — trans- It is well-known that during the
lated and condensed from a letter 12 years of the Péron regime,
to the Minister of Commerce and private property gave way to gov-.
Industry, September 20, 1957 — de- ernmental control of such things
serves serious consideration in the . as railways, telephones, gas, and
United States as well as in Argen- foreign trade. These enterprises
tina. particularly, and the economy in
general, were at the mercy of the
will and caprice of government
T SHOULD BE clearly established officials, with the well-known dis-
that a free economy does not astrous consequences.
exist in Argentina. The rough Since September 1955, an at-
policy of intervention in economic mosphere of decency and honesty
matters, as practiced by the over- has prevailed in the country in
thrown tyranny, left the nation the management of public prop-
without resources, poor, and ripe erty. But, insofar as most eco-
for socialism. Since the Liberat- nomic-financial affairs are con-
ing Revolution, with all its healthy cerned, there has-been relatively
effects on the morality of political little correction of past abuses;
administration, some steps have we have not made much progress
been taken to diminish govern- toward a free economy.

38


===== PAGE 41 =====

1957 FAR FROM FREE 39

Most of the state monopolies free economy at this time when it
recommended by socialists are still is so notably absent from our Re-
in effect. The State continues to public, yet so sorely needed to
control prices of many goods and give the country the impelling
services. Subsidies, multiple ex- force for its effective recovery.
change rates, and monopoly con- Improvement of the general eco-
trol of the banking system are still nomic-financial situation in Ar-
in effect. The situation is becom- gentina, in our opinion, depends
ing worse as inflation continues; on two things: (1) encouraging
and this is the responsibility of investment of private capital in
the government that creates the all kinds of economic activities,
money and credit. We know that particularly oil production and
general salary increases, out of electric and hydroelectric energy,
proportion to production, come and (2) establishing free market
with each new boost in the money prices. In other words, stop infla-
supply and further aggravate the tion, reduce public expenditures
inflationary situation. But this in proportion to the real resources,
would not happen if the companies and take away all subsidies from
which grant such increases were all government enterprises and
held responsible for the conse- any other privileged group.

quences instead of being bailed Furthermore, it is important to
out by monetary expansion. create in the country the proper

atmosphere for lawful profits ac-
Creating a False Impression quired by those who devote their

We repeat how important it is talents and efforts to creative pur-
to avoid the mistake of believing poses. It is important to combat
that a free economy exists here. the communistic propaganda that
According to news reports, a high profit is something obtained at the
government official has urged expense of the consumer or the
businessmen to “look upon the in- worker. Profits are essential to the
terests of the nation as a whole effective economic progress of the
and bear in mind that at the pres- Republic. When profits are high,
ent time free economy is in they assure future increase of
action.” Such a suggestion, that production brought about by the
the country is at present enjoying double action of reinvestment and
a free economy, is wholly incor- the attraction of new capital.
rect. Profits are most important to the

It would be unfair thus to en- formation of the capital needed
danger the good reputation of the for economic development.


===== PAGE 42 =====

40 THE FREEMAN December

If the policy we have suggested favoring a free economy, we would
is followed, the abundance of for- be defending the interests of one
eign private capital that would single class, that of the employer
thus be attracted to Argentina group. The free economy, fully
would contribute to speedy eco- extended, is beneficial to the gen-
nomic recovery and, therefore, eral interests of society and not
strengthen our position in world merely to the interests of one
trade. special class. Those who have the

Finally we favor a free economy most to gain are the lower income
because we are convinced that this groups; and they will not pros-
is the highest form of production per until a firm and open direction
and distribution of wealth, af- is given to the country through
fording the highest level of living full protection of private property
for all persons. It would be a and assurance of a free economy.
great mistake to believe that by ooo

| 060s © toBEETY Up Through the Ranks

THERE is not of necessity any such thing as the free hired laborer

- being fixed to that condition for life. Many independent men
everywhere in these States a few years back in their lives were
hired laborers. The prudent, penniless beginner in the world
labors for wages awhile, saves a surplus with which to buy tools
or land for himself, then labors on his own account another
while, and at length hires another new beginner to help him.
This is the just and generous and prosperous system which
opens the way to all, gives hope to all, and consequent energy
and progress and improvement of condition to all. No men
living are more worthy to be trusted than those who toil up
from poverty; none less inclined to take or touch aught which
they have not honestly earned. Let them beware of surrendering
a political power which they already possess, and which if
surrendered will surely be used to close the door of advancement
against such as they and fix new disabilities and burdens upon
them till all of liberty shall be lost.

ABRAHAM LINCOLN, Message to Congress, 1861


===== PAGE 43 =====

F. A. HARPER

HE STORY which follows could near the fringe of possible com-
be told for practically any com- mutation to New York. It is a
munity in the United States, in pleasant little community, full of
type if not in degree and form. It good country air and airy resi-
could be your own community. dences filled with kindly and pleas-
Westchester County, north of ant people.
the City of New York, is said to But in this rarefied rural at-
be the wealthiest residential mosphere a sewage disposal “eri-
county in the United States. Not sis” has descended upon the good
every resident there is a million- people who live there. The County
aire, of course. But the area, over- Health Department has pro-
all, is one outstandingly wealthy claimed that a serious pollution
in the United States; fabulously problem exists.
wealthy for the world as a whole. A disposal system to take care
It has been said that everyone of the problem has been estimated
who works in the City of New to cost $3,400 per family. Though
York wants his bedroom to be as this is only one-tenth to one-sixth
far from his place of work as he of the value of a common new resi-
can afford. Far to the north in dence in the area, and no more
Westchester County lies a typical than the cost of a new car such as
village community among those the residents frequently buy, the

Dr. Harper is a member of the staff of the Foundation for Economic Education.

41


===== PAGE 44 =====

42 THE FREEMAN December

cost has been semiofficially de- The procedure for federal aid
clared to be unbearable —“ex- is simple. The gravy train is al-
cessive.” ready loaded, ready, and waiting.

All the villagers have to do is to
Aid as the Solution ask in the proper way, and it shall

Now what is to be done when be given. If half or more of the
an irresistible economic force residents want to set up the dis-
meéts a near-empty pocketbook? trict and appeal for alms — about
Either the person must adjust his $100,000 in this instance — Uncle
appraisal of what are necessities Sam is ready, willing, and waiting.
in his life, releasing funds to pay Congress this year has already. ap-
the cost of this particular “neces- propriated $45 million for aid in
sity,” or he must find ways of re- such projects, and a bounteous
ducing its cost to fit his budget $234 million of it has been allo-
without foregoing other ‘“necessi- cated to New York.
ties.”

The first solution — doing with- Source of Aid
out other things —is the more Since Heaven does not send
painful process of the two and is showers of blessings in just this
usually avoided or ignored if pos- form, any thoughtful and curious
sible. The alternative, then, is citizen may ask: From whence
either to find someone who will do cometh all these federal alms? He
the job more cheaply or do the knows that Uncle Sam’s pockets

~ work for oneself. are notoriously full of holes and
But the ingenious residents of empty.
this particular community, like These alms come from taxes,

their counterparts in untold others of course, which may be thought
in the United States, have discov- of as just an indirect way by
ered yet another way to cut the which people pay their bills. There
costs: by obtaining federal aid. By is no source of such governmental
taking the necessary steps to funds other than taxes. These are
qualify, about one-third of the collected from the same villagers
cost, or $1,133 per family, can be and their counterparts throughout
obtained from Uncle Sam. And the land. In the main, these taxes
then the remaining cost of pro- have to come from persons far less
viding this necessity, it is hoped, able to pay for such “necessities”
will be within the reach of these than are these particular villagers.
residents whose needs exceed their They come in part from some poor
means. Negro widow in Little Rock, Ar-


===== PAGE 45 =====

1957 DOLLARS DOWN THE DRAIN 43

kansas; from some poor orphan in Each little piece added to our tax
Wyoming; from some young bill seems too small to be worthy
couple in Woodbine, Iowa, who are of concern. And though it is said
trying to save enough money to to be done democratically, about
buy a small house of their own. the only people who concern them-
People of such circumstances will selves with it are the direct bene-
find in their tax bills an amount ficiaries who vote on whether or
sufficient to allow Uncle Sam to be not they will, in effect, pick the
generous and send the $100,000 to pockets of every citizen of the

these folk. United States. If over half of the
. ‘ pickers approve, the picking be-
The Service Charge comes legalized and the policeman

But it’s even worse than that, is assigned to protect the picker
because while the tax money is rather than the victim.
traveling from all these places to
Washington and back again, much Drops Make a River
of it disappears as service fees Yet we go on and on with proj-
under one name or another. Not ects of this sort. Just as drops of
too high a proportion ever gets - water make a Niagara, it is these
back to these communities at all. little bits of tax added to other

To call this process “aid” is-a little bits which together comprise
careless use of language, indeed. the terrific tax burden we are now
When a banker takes a far smaller being forced to bear. In the current
fee for handling our money and year, for instance, these federal
settling payments from one per- grants to the states alone will
son to another, some are tempted amount to about $80 per family
to use harsh words about the — an increase from only about $30
banker and his fees. But when the per family ten years ago. And for
government handles transfers of next year the Administration has
our money at a much higher fee, programs of this sort which will
we accept it in common parlance cost the average family perhaps
as ‘“‘aid,” even commending the $110. Every family, in other
government officials for their words, will have to pay the seem-
“goodwill and charity.” ingly trivial separate costs of the

It may seem that this one little equivalent of 55,000 such projects
project is a trivial matter, costing all over the United States — must,
the average family in the United in other words, pay for about 200
States only one-fifth of a cent. But of them out of his income every
precisely therein lies the danger. working day.


===== PAGE 46 =====

44 ] THE FREEMAN December

The Losing Gamble cent in favor of the project, the
Some persons understand the rest of the citizens deny him these
process well, however. Not every- acquisitive rights; they do not
one is fooled into thinking that he even allow him one single vote in
can win in this gamble at the the matter.
roulette wheel of federal “aid.” In Shouldn’t we use the same con-
one other Westchester community cept in connection with federal
the question recently. arose as to aid? Why not in like manner put
whether the school board should all such proposals, like aiding this
endorse an increase in government community in their sewage dis-
“aid” for the schools. The issue posal project, to the vote of all the
was acute in this community be- citizens who will have to pdy the
cause, like so many others, it had bill? ‘Why not disfranchise the
foolishly overextended the citi- pocket pickers, so far as voting on
zens’ pocketbooks in building some this matter is concerned? Why
fancy new schools. The head of a give the takers of the money all
well-known women’s organization the seats in the court of justice?
asserted that it was merely a )
question of whether “we in this Freedom Lost
community” will get more in state Highly important in this proc-
aid than we have to pay in taxes. ess is the loss of freedom involved.
In the gamble of government aid, The citizens of these communities
of course, one community cannot who by majority vote have thrown
possibly win except as another everyone's pocketbook into the
loses, even aside from the “house- gamble of federal aid may not
take.” The lady did not bother to realize the loss of freedom till it
consider the moral issue involved - is too late. If you go into a gam-
in forcing minority objectors to bling casino with a few dollars
play a losing game which the ma- and later depart with empty pock-
jority decides they shall play —a ets, you still have your shirt and
losing gamble called government your trousers and your freedom.
“aid.” You are free to decide that you
Our moral code in this respect will never be a player in this los-
is not very consistent. When Jesse ing game again. But how about
James robbed a bank for the ne- federal aid? The law of the land,
cessities he couldn't afford, we as laid down by the Supreme
took quite a different view of the Court, has decreed that you shall
matter. Even though a Jesse, the lose an important part of your
aggressor, votes a full 100 per freedom as well. Even the minority


===== PAGE 47 =====

1957 DOLLARS DOWN THE DRAIN 45

who objected but are forced to has in recent years, the time is
play the game lose their freedom fast approaching when we shall
along with the others. For the all be largely enslaved to the gov-
Court has said: ernment. And slaves down through
It is hardly lack of due process nistory have always suffered
for the Government to regulate troubles which make our worst
that which it subsidizes.* sewage problems trivial by com-
parison.

Would you, for instance, know-
ingly smell a large degree of your
freedom for a few dollars of “aid”?
Suppose the offer were made
clearly and in the open in terms
of its reality; would you buy it?
Would you buy the loss of free-
dom knowing that even on a purely
cost basis the house-take is heavy
and you are sure to lose? If we
wouldn’t buy enslavement as a to-
tal package, we shouldn’t buy it in

enticing little pieces under subter-

*Wickard v Filburn, 317. U. S. 111, October
term, 1942. fuge. eo oo

This means that if federal aid
is given for any such concern of
your life, the government is there--
by empowered to control that part
of your life.

In the light of all this, one won-
ders if a sewage disposal problem
is really the evil most to be feared.
Perhaps we should fear most the
disposal of our money and our
freedom through federal aid. For
if this process of federal aid con-
tinues to progress as rapidly as it

Private Property Preferred

PROPERTY should be in a certain sense common, but, as a general
rule, private; for, when every one has a distinct interest, men will
not complain of one another, and they will make more progress,
because every one will be attending to his own business. ... And
further, there is the greatest pleasure in doing a kindness or serv-
ice to friends or guests or companions, which can only be rendered
when a man has private property. ... No one, when men have all
things in common, will any longer set an example of liberality or
do any liberal action; for liberality consists in the use which is
made of property.

ARISTOTLE, Politics


===== PAGE 48 =====

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HE POPULAR ASSUMPTION that dustrial “automation.” They argue
labor unions can raise the as follows: the unions demand
wages of the working population higher wages. The employers,
has been exploded repeatedly. squeezed by higher labor costs,
F. A. Harper, in a FREEMAN series seek refuge in automation to re-
on “Why Wages Rise,” expertly duce the costs. Automation then
demonstrated that unions merely brings about higher productivity
impede productivity and therefore which in turn encourages the
generally retard real wages. This unions to demand still higher
is not to deny that unions may wages. In other words, the union
temporarily raise the wages of a bosses are in the driver's seat in
restricted number of members the industrial surge toward un-
through strikes and other coercive foreseeable productivity.
practices. But this inevitably leads Oh, lucky land of labor unions!
to unemployment in the unionized The economist is reminded of the
industries. Consequently, labor fable of Aladdin's lamp whose
tends to shift to nonunionized in- owner merely rubs the lamp to
dustries and thus depresses their evoke the friendly genie. Coura-
wages. We can presently observe geous union bosses clamor for
these effects in the form of unem- more and more, and frightened
ployment in the rigidly unionized businessmen realize the dream of
building industries and the ab- higher and higher standards of
sorption of additional workers in living!
many white-collar occupations. What is “automation”? It is an
There are other popular notions ill-chosen name for production
on the beneficial effects of labor with more capital equipment. It
unions. Many people even outside carries the connotation of an au-
the union camp give credit to the tomatism of production that cre-
union bosses for the American ates mass unemployment. The age-
‘trend toward more and more in- old question of whether machines

Dr. Sennholz is Professor of Economics at Grove City College, Pennsylvania.

46


===== PAGE 49 =====

CAUSE AUTOMATION?

HANS F. SENNHOLZ

create unemployment needs no tion did not complain, for it was
further discussion at this place. It progress.
is continuously revived by union There were no labor unions, or
leaders in desperate need of an at least their power was insignifi-
explanation for the chronic unem- cant. And yet, there was “automa-
ployment caused by their own ac- tion.” Why? The investment capi-
tivity. tal that was necessary for produc-
Production with more capital tion and installation became avail-
equipment necessitates industrial able at a price that was lower than
adjustment. In a capitalist econ- the cost of delivery by the water
omy an adjustment to changed carriers. At first, when the price
consumers’ demand, improved pro- of the piping systems was very
duction techniques, and changing high and the required capital out-
capital markets is continuously lay very great, only wealthy fami-

taking place. lies could afford the improvements.

When the price declined and hence
“Automation” Since the also the capital outlay, the savings
Beginning of Capitalism in cost by the piping system in-

It is no new phenomenon. When creased, which consequently led to
the water-piping system was first more installation in the homes of
invented and became accessible to all strata of population.
the population through capitalist
mass production, adjustments had
to be made. In the big cities of The fundamental prerequisite
Europe, thousands of water car- for production with more capital
riers, who sold their water by the equipment is the existence of new
bucket, were set free by this new capital. If no new capital is ac-
“automation.” But it also gave em- cumulated either through entre-
ployment to thousands of workers preneurial profits or savings, no
in factories producing the pipes improvement through additional
and brought forth a new craft, capital outlay is feasible. If, some
plumbing, which gave employment hundred years ago, no new capital
through selling and servicing the had been available for the water-
piping systems. The people who piping system, it simply could not
were affected by this new automa- have been introduced.

Capital Must First Be Accumulated

47


===== PAGE 50 =====

48 THE FREEMAN December

This prerequisite of new capital neither earning profits nor suffer-
accumulation for production im- ing losses. Let us assume that the
provements refutes the notion that interest rate it would have to pay
labor unions stimulate capital out- for investment capital stands at
lays. Unions are the implacable 6 per cent. It clings to an old phys-
foes of profits and savings. How ically inferior production method
can they claim credit for the bene- because.it requires less capital and
ficial effects of capital accumula- lower interest charges on the capi-
tion? tal invested than the new method.

New capital must be available at Its costs per unit of production are
a price that constitutes a saving lower than they would be with the
in cost. In other words, if a busi- new method.
nessman is to replace an old pro- Now the rate of interest declines
duction method with a new method because of additional capital sup-
that is physically more productive, ply. Let us assume that at 4 per
it must be profitable for him to do cent it becomes profitable to bor-
so. The cost of the larger capital row the capital required for the
required for the innovation plus retooling. At this point the unit
other production costs must be costs of the new method, which is
smaller than the combined costs physically superior but requires

of the old process. larger capital investments, falls

below the unit costs of the old
Interest Rate Gives Signal method due to the decline in in-
for Conversion terest charges. The alert business-

The cost of capital is determined man at once embarks upon the
by the market rate of interest conversion.
which in turn is determined by Producing at lower unit costs,
the state of the capital market. In this businessman now reaps a
a capitalist economy without con- profit. He expands and increases
fiscatory taxation and controls, production. The price of the prod-
capital accumulation takes place uct declines, which in turn leads
continuously. The interest rate de- to losses by the less capable busi-
clines and gives the businessman nessman who clings to older pro-
his signal for conversion from old duction methods.
production methods to new meth-
ods requiring larger capital out- Inferior Production Methods
lays. Lead to Losses

I should like to illustrate this. Let us assume that our mar-
Let us take a marginal enterprise ginal enterprise clings to old pro-


===== PAGE 51 =====

1957 i DO UNIONS CAUSE AUTOMATION ? 49

duction methods. Then it faces a capital outlay. Only under these
loss, not only because of the de- special assumptions can our busi-
clining prices of its product, but nessman hope to compete again
also because of rising labor costs. with his alert competitors. Most
Competing modernized enter- likely he will have lost irrevocably
prises, earning profits and ex- his position as a marginal enter-
panding production, bid up the prise. He will have to cease pro-
price of labor. They work with duction or switch to other fields
higher labor productivity. Also, of enterprise.
the machine tool industries ex- So far, our analysis has dealt
pand and attract additional labor. with the effects of capital accumu-
In order to hold its work force, lation on the introduction of new
our enterprise must raise wages production methods requiring
and thus bear higher labor costs. more capital. We assumed an un-
Comparison of costs may now hampered market with capital ac-
lead to the following conclusions: cumulation and declining interest
With the interest rate at 6 per rates. Let us now introduce the
cent it was definitely profitable to case of rising labor costs as a
continue production with the old result of union coercion.
method requiring less capital and
carrying lower interest charges. A Labor Union Coerces
With the interest rate at 4 per © Single Enterprise
cent, product prices and labor Our marginal enterprise is
costs being the same, it was prof- threatened by a strike. Invest-
itable to resort to the physically ment capital is available at the
superior method requiring larger rate of 6 per cent. At this rate
capital outlay. But with product and with unchanged labor costs
prices declining and labor costs it would be profitable to continue
rising on account of the expand- to produce with the old production
ing production by modernized method. Now union pressure in-
competitors, the 4 per cent rate creases labor costs. Is it now prof-
of interest no longer warrants the itable to embark upon the expen-
retooling. Our marginal enter- sive retooling entailing a saving
prise will have to wait until the in labor costs, or is it wiser to
rate declines even further, let cling to the old method burdened
us say to 3 per cent, or until a by much larger labor costs?
production method becomes avail- The answer to this question ob-
able that yields even greater phys- viously depends on the extent of
ical productivity with the same the wage increase enforced by the


===== PAGE 52 =====

50 THE FREEMAN December

labor union. It may be that the prise, the given alternatives are
physically more productive meth- the following: increased costs
od requiring larger capital outlay through higher union wages or in-
with some savings in labor costs creased costs through larger capi-
is less costly than the old method tal outlay with some savings in
burdened by the new labor costs. wages. Again the question of which
Or it may be that the old method one of the evils is the smaller de-
is still less costly than the new pends on the specific case. But no
method. But either answer is ut- enterprise can be expected to em-
terly insignificant for our enter- bark upon expensive retooling
prise, for each alternative entails merely to suffer the smaller loss.
higher production costs which However, this case of an in-
cannot be passed on in the form dustry whose labor costs are in-
of higher product prices. Both creased by an industry-wide union
methods, therefore, lead to losses organization differs from that of
for our marginal enterprise and a single enterprise in an impor-
its ultimate bankruptcy. tant respect. The higher produc-
This conclusion clearly demon- tion costs lead to industry-wide
strates that the union clamor for losses which in turn force a re-
higher labor costs does not lead striction of production. The cur-
to “automation,” but merely con- tailment in product supply then
fronts the entrepreneur with the leads to higher product prices.
choice of two losses: through the The higher product prices grow-
old method burdened with higher ing out of production restrictions
union wages, or through the new may in fact permit the surviving
method burdened with higher cap- producers to choose one of the two

ital costs. costly alternatives. It is conceiv-
able that expensive retooling with
A Whole Industry Is Coerced higher capital costs may be the

In the foregoing case, our enter- less costly alternative and may
prise suffered losses on account of even be profitable on account of
union coercion; there is no refuge the higher product prices.
in automation. Let us now assume There is still another factor
that, instead of our marginal en- ‘standing in the way of conversion
terprise being threatened by a to production methods requiring
local union, the whole industry more capital. The surviving enter-
suffers from the grip of a nation- prises that prefer the expensive
wide labor organization. In this retooling exert an influence on the
case, as in that of a single enter- capital market. The rate of inter-


===== PAGE 53 =====

1957 DO UNIONS CAUSE AUTOMATION ? 51

est tends to rise. In other words, have been achieved in some way.
investment capital may no longer In other words, the “automa-
be available at 6 per cent, but may tion” brought about by union co-
rise to, let us say, 7 per cent. This ercion constitutes a maladjust-
would reduce the likelihood of ment of “automation,” that is, a
large capital expenditures for re- diversion of funds from more pro-
tooling. ductive to less productive employ-
ments. On balance, it constitutes
a decrease in productivity, lower
But, in some cases, the unions wages, and lower standards of liv-
may indeed force the surviving ing.
producers to undertake the con-
version. The conditions are the Higher Productivity through
following: industry-wide union co- ‘’Shortening Inventions’
ercion, restriction of production, Production ‘improvements in
higher product prices, and the bar- general require larger capital out-
ring of all union-free newcomers lays. Capital must be available at
to the field. It is conceivable, for j rate of interest that permits the
instance, that General Motors, introduction of methods of pro-
Chrysler, and Ford have been duction requiring additional capi-
forced by the coercion of the auto- tal. This condition stresses the im-
mobile workers unions to resort to portance of capital accumulation
some “automation” that otherwise through profits and savings. It
might not have been undertaken. also points at the disastrous effects
This is by no means a laudable of confiscatory taxation and waste-
“achievement. The capital needed yl union practices.
for the costly retooling is with- I used the words “in general”
drawn from other more productive pecause there is an important ex-
uses. Other industries that profit- ception to the rule. Once in a great
ably converted to production meth- hile creative human genius
ods requiring more capital now prings forth what Bshm-Bawerk
find themselves short of capital. (311d “shortening inventions.”!
They have to be content with old They are inventions that are phys-
inferior methods and must wait jcally more productive without re-
until additional capital is accumu- quiring additional capital outlays.
lated through profits and savings.

: 1. Eugen von Béhm-Bawerk, Further
In the meantime, consumers must Essays on Capital and Interest, in

pay higher prices than they would process of publication by Libertarian
have paid. if the retooling could Press, South Holland, Illinois.

Automation’ as Maladjustment


===== PAGE 54 =====

52 THE FREEMAN December

For instance, a machine is in- capital for various other purposes.
vented that is more productive al- As we cannot depend on creative
though it is no more expensive, or genius continuously to improve
even less expensive, than the old our production methods through
machine in use. Or, a new material - “shortening inventions,” we seem
is invented with comparable quali- bound to rely on the slow and pain-
ties but cheaper than the material ful process of saving. For this
in use. In this case, all producers reason we must defend the free
in the field will immediately em- enterprise system from all inter-
ploy the invention without having ventionist attacks on savings and,
to wait for new capital to be ac- especially, from attempts at capital
cumulated. It even may free some consumption by the labor unions.

THERE IS NOT a single word in our
revered Constitution, nor a word

WH AT ARE WE in our immortal Declaration of In-

: dependence that guarantees any
CG timp antbed? man or any group any results.

° These great instruments of gov-
ernment speak entirely in terms
of opportunity.

GREY LESLIE

The job of organized government is to keep the road open and the
ladder up and steady.

It is our job, as individuals and citizens, to take that road and to
climb that ladder.

No government, however beneficent its edicts may appear, can pro-
vide a substitute for individual effort and application.

We need to be reminded, again and again, that we cannot legislate
ourselves into the millennium.

"We cannot organize into utopia.

Mr. Leslie is a free-lance reviewer and journalist from Washington, D. C.


===== PAGE 55 =====

A REVIEWER'S NOTEBOOK
John Chamberlain

y. YN RAND’S Atlas Shrugged

(Random House, 1,168 pp.
$6.95) is bound to be a best seller,
not because it is Tolstoyan fiction
in the round (it isn’t), but be-
cause it deals with the most vital theirs; I do not sacrifice my in-
philosophical and economic issues terests to them nor do they sacri-
of our times in the form of a fice theirs to me; we deal as equals
wildly exciting parable. Here is by mutual consent to mutual ad-
the work of a supreme teacher. vantage — and I am proud of every

From the point of view of eco- penny that I have earned in this
nomics the book is magnificent. manner....I have made my money
Passage after passage cries aloud by my own effort, in free exchange
for inclusion in an anthology of and through the voluntary con-
libertarian economic readings. sent of every man I dealt with —
There is steel man Hank Rearden’s the voluntary consent of those who
justification for his own life as employed me when I started, the
a maker of high-grade alloys, for voluntary consent of those who
instance. It comes as a dramatic work for me now, the voluntary
outburst in a courtroom scene when consent of those who buy my prod-
the government cracks down on uct....Do I wish to pay my
Rearden for disobeying a high- workers more than their services
handed “directive,” but quite apart are worth to me? I do not. Do I
from the novel’s plot requirements wish to sell my product for less
it stands as a proud statement of than my customers are willing to
the enterpriser’s place in a society pay me? I do not....I am earning
which works by the Golden Rule. my own living as every honest

“I work for nothing but my own man must. I refuse to accept as
profit,” says Mr. Rearden, “... guilt the fact of my own existence
which I make by selling a product and the fact that I must work in
they need to men who are able and order to support it. I refuse to
willing to buy it. I do not produce accept as guilt the fact that I am
it for their benefit at the expense able to do it and to do it well. I
of mine, and they do not buy it for refuse to accept as guilt the fact
my benefit at the expense of that I am able to do it better than

53


===== PAGE 56 =====

54 THE FREEMAN ] December

most people — the fact that my will exchange it for the product
work is of greater value than the of the effort of others.... Your
work of my neighbors and that wallet is your statement of hope
more men are willing to pay me. that somewhere in the world
I. refuse to apologize for my around you there are men who
ability — I refuse to apologize for will not default on the moral prin-
my success — I refuse to apologize ciple which is the root of money.
for my money....I could say to Is this what you consider evil?
you that. ... when you violate the “....Wealth is the product of
rights of one man you have vio- man’s capacity to think. Then is
lated the rights of all, and a public money made by the man who in-
of rightless creatures is doomed vents a motor at the expense of
to destruction....” those who did not invent it? Is

Or take the long speech on money made by the intelligent at
money, by Francisco d’Anconia, the expense of the fools? By the
a talented copper magnate, for able at the expense of the incom-
another example: petent? By the ambitious at the

“So you think money is the root expense of the lazy? Money is
of all evil?” asks d’Anconia of a made — before it can be looted or
group of skeptics on a ballroom mooched — made by the effort of
floor. “Have you ever asked what every honest man, each to'the ex-
is the root of money? Money is a tent of his ability. ... Money rests
tool of exchange, which can’t exist on the axiom that every man is
unless there are goods produced the owner of his mind and his
and men able to produce them. effort.... Money demands that
Money is the material .shape of you S$ell, not your weakness to
the principle that men who wish men’s stupidity, but your talent to
to deal with one another must deal their reason; it demands that you
by trade and give value for value. buy, not the shoddiest they offer,
Money is not the tool of the but the best that your money can
moochers who claim your product find. And when men live by trade
by tears, or of the looters, who — with reason, not force as their
take it from you by force. Money final arbiter — it is the best prod-
is made possible only by the men uct that wins, the best perform-
who produce. Is this what you con- ance, the man of best judgment
sider evil? and highest ability .... This is the

“When you accept money in pay- code of existence whose tool and
ment for your effort, you do so symbol is money. Is this what you
only on the conviction that you consider evil?”


===== PAGE 57 =====

1957 A REVIEWER'S NOTEBOOK 5b

Francisco d’Anconia has a lot takes a chance that the man, even
more to say on the subject of if he seems a practically hopeless
money, of the gold standard versus case, can be redeemed. The test
the gun standard, and of the evil which Mr. Galt should have ap-
that eats into society when money plied is quite another than the one
is no longer respected. All of it he advocates; it should have been
should be included in our hypo- stated: “It is wrong to help a
thetical anthology. And there are man on the ground of his suffer-
literally hundreds of other pas- ing as such, to accept his faults,
sages in Miss Rand’s novel that his need, as a claim, if the aid is
make far better economics than to be paid by force out of other
the stuff that is handed to students opeople’s money.” Government is
in the average textbook. the wrong organ in which to vest

If Miss Rand’s novel offers a the practice of charity for the
first-rate quarrying ground for simple reason that a government
economic wisdom, however, it does must seize someone’s substance —
not follow that it will be as effec- i.e. steal it — before it can have
tive as it might have been if the anything to give away. Pleas that
author had made voluntarism, and government charity can be justi-
not an enlightened selfishness, her fied by the general welfare clause
political and philosophical touch- of the Constitution involve a logi-
stone. A good Christian, or even cal non sequitur. For charity al-
a pagan who is well-endowed with ways goes to particular persons,
the gift of sympathy, must be re- not to the generality.
pelled a bit by Miss Rand’s dog- Miss Rand believes in the crea-
matic ethical hardness. When her tive intelligence — and the passion
John Galt — an inventor who per- with which she defends it might
suades the creative men of his era be taken to be her religion. I have
to go on strike against govern- nothing against this attitude, for
mental looters and pressure-group it leaves the way open to specula-
moochers.— argues that it is tion on what may exist behind,
wrong to help a man on the ground beyond, or ahead of purely human
of his suffering as such, he pre-. intelligence. If everyone lived by
sumes too much. How is Mr. Galt Miss Rand’s principles, the world
to know that virtue doesn’t lie would be a far better — and a far
buried, perhaps fathoms deep, un- kinder — place than it is today.
der the surface of a stricken But principles must be stated
human being’s suffering? In help- fairly if one is to have any hope
ing the sufferer, the Christian of making them prevail.


===== PAGE 58 =====

No

56 THE FREEMAN December

Miss Rand does not always al- self Burbank Mulligan. But simply
low her characters to state their because he refuses to fight a false
working rules fairly. There is her image of himself, the looters are
banker, Midas Mulligan, for ex- able to play upon the misguided
ample. Midas has a sound —and emotions of the moochers to do
a human — view of his calling: it Mulligan in.
is to give blood transfusions to Ayn Rand is eternally right in
plants which are capable of surviv- arguing the indissoluble connec-
al and growth. In Mulligan’s very tions between capitalism and free-
intelligent opinion, to give money dom in general. But capitalism
for a blood transfusion to an or- still has a job to do to persuade
ganism that is incapable of ab- people that it is the only economic
sorbing it is to steal the life from system which can keep the world
a plant which might have made from becoming the grisly play-
good use of it. thing of thugs. Men who accept

Now, that is a rationale for such nicknames as Midas without
sound moneylending that is as protest can hardly be good agents
humane as it is just, as kindly as of persuasion. Mulligan, of course,
it is pragmatically hardheaded. adopts the name of Midas in a
But. Mulligan deliberately ob- spirit of sardonic irony. But
scures his own tender concern for irony, as every editor must know,
living protoplasm by accepting the hits only about one target in ten.
nickname of Midas as a defiant Despite its pedagogical lapses,
plume to wear in a contemptuously however, Atlas Shrugged should
tilted cap. The nickname is, of make converts to the cause of
course, grotesquely inappropriate. freedom by the score. The novel
When King Midas of old touched is so deftly plotted, so excitingly
anything, it turned to unsentient paced, and so universal in its hero-
metal. Mulligan, .on the -other villain intensity, that it will carry
hand, has a faculty for changing its message to thousands who
unsentient metal into glorious would never be caught dead read-
growth. He should have called him- ing a fextbook — or even a diffi-

cult article — on economics. Even

oo libertarians who ordinarily de-

mail. You poy only the bookstore price. We Atlas Shrugged for the insights
Eeratogue on erony where in the world. | tat tumble out of the mouths of
THE BOOKMAILER, Box 101, New York 15 | its dramatis personae on virtually
every page. so



===== PAGE 59 =====

9 n dex THE FREEMAN, Volume 7,January-December,1957

(Titles and authors of articles and books reviewed)

Prepared by VERNELIA A. CRAWFORD of the Foundation staff

Note: In page references, the number preceding the colon designates the
month; the number following the colon refers to pages.

A Bien, B. (cont.)
: , — . Review:
Achilles’ Heel of Socialism and Communism, Theory and History: An Interpretation of
The. By G. Small, 5:44 Social and Ecomomic Evolution. By L.
Administrative Law in Great Britain. By G. Mises, 11:59
Winder, 8:42 Bissantz, Edgar
Adventure Eternal — An Easter Sermon. By Law of the Land in England, 3:17
E. Opitz, 4:3 Blind Spots in the New Socialism. By R. Jebb,
Agriculture with a Future. By C. Shuman, 5:32 5:51
Aid for Uncle Willie. By H. King, 2:40 Bolivia: A Case Study in Foreign Aid. By R.
Alexander Hamilton in the American Tradi- Freeman, 12:32
tion. By L. Hacker. Reviewed by J. Cham- Box Factory Failure, The. By H. Green, 6:8
berlain, 8:59 Bradford, Ralph )
American Faith. By J. Bates. Reviewed by J. Inner Sovereignty, The, 4:11
Chamberlain, 11:58 Scholarship and Intelligence, 2:26
Atlas Shrugged. By A. Rand. Reviewed by J. Thing We Call Time, The, 5:38
Chamberlain, 12:53 Who Are We Kidding? 6:35

Bradley, Philip D. oo
Involuntary Participation in Unionism.

B Reviewed by P. Poirot, 2:61
Baker, Richard C. Branch, Harllee, Jr.
Compulsory Insurance vs. Liberty and Se- Let's Face It, 10:34
curity, 3:1 Breakdown of Nations, The. By L. Kohr.
Barnes, Harry Elmer Reviewed by J. Chamberlain, 11:55
Review: Bridgman, P. W.
Passing of American Neutrality, 1937-1941, Security at the Expense of Freedom;
The. By D. Drummond, 1:59 quote, 7:34
Basis of Economic Growth, The. By R. Husted, Broehl, Wayne G., Jr.
4:40 Ethics and the Executive, 8:54
Bastiat, Frederic ) Brogan, Colm
Argument Against Progress, An; Manpower Migration, 8:49
quote, 9:59 Rent Controlled Slums, 5:12
How To Stop Competition and Raise Prices, Buckingham, Walter S., Jr.
12:18 Capital and Initiative: quote, 7:28
More Frenchmen to Algeria? 11:28 “Built-in Maid Service.” By H. DeGraff, 8:32
Bates, John Sutherland Burgess, Duke
American Faith. Reviewed by E. Opitz, One-Man Pressure Group, 4:27
11:58 . Burgess, John W.
Battle for the Mind. By W. Sargant. Re- Recent Changes in American Constitutional
viewed by G. Heard, 10:60 Theory. Reviewed by J. Chamberlain, 3:59
Belden, Henry E. : 3 . Cooley,
Mathematical Manpower Shortage, The, Business of Education, The. By O v
1:42
Beston, Henry
Nature's Spoiled Child; quote, 5:16 c
Bestor, Arthur E., Jr. Camel's Nose under the School Tent, The.
Responsibility of Education, The; quote, By R. Freeman, 3:10
1:47 Carnival of Buncombe, A. By H. Mencken.
Bien, Bettina Edited by M. Moos. Reviewed by E. Opitz,
Today's School Problem, 9:30 1:60

57


===== PAGE 60 =====

Castle, Eugene W. Criminality of Rulers. By P. Sorokin, 4:9
Great Giveaway, The. Reviewed by F. Crowing for the Sun To Rise. By J. Sparks,

Chodorov, 8:62 3:54
Chamberlain, John, editor ’
National. Review Reader. Reviewed by E. D
Opitz, 5:62
Reviews: Declaration of Independence, A. By E. Smith,
Alexander Hamilton in the American 9:19
Tradition. By L. Hacker, 8:59 Decreasing Value of the Dollar. By L. Kep-
Atlas Shrugged. By A. Rand, 12:53 linger, 8:58
Breakdown of Nations, The. By L. Kohr, DeGraff, Herrell
11:55 “Built-in Maid Service,” 8:32
Crack in the Picture Window, The. By J. Social Discipline, 11:16
Keats, 4:60 de Riencourt, Amaury
Development of Constitutional Guarantees Coming Caesars, The. Reviewed by R.
of Liberty, The. By R. Pound, 5:56 Weaver, 10:61
Labor Union Monopoly: A Clear and Pres- Development of Constitutional Guarantees of
ent Danger. By D. Richberg, 9:60 Liberty. By R. Pound. Reviewed by J.
My Forty Years with Ford. By C. Soren- Chamberlain, 5:56
sen, 1:55 Diogenes
Oriental Despotism: A ‘Comparative Study World Invisible, 1:31
of Total Power. By K. Wittfogel, 10:56 Do Antitrust Laws Preserve Competition?
Professional Amateur. By C. Kettering, By S. Petro, 10:12
6:59 Do Unions Cause Automation? By H. Senn-
Recent Changes in American Constitutional holz, 12:46
Theory. By J. Burgess, 3:59 Do Wage Hikes Cause Inflation? By W.
Sovereign States: Notes of a Citizen of Mullendore, 6:43
Virginia, The. By J. Kilpatrick, 7:55 Dollars Down the Drain. By F. Harper,
Why Wages Rise. By F. Harper, 2:58 12:41
Chamberlin, William Henry Dorf, Philip
Morality of Capitalism, The, 1:24 Liberty Hyde Bailey: An Informal Biog-
Three Great Deceptions, 6:24 raphy. Reviewed by F. Harper, 1:58
UN-Competent Only for Mischief, 7:37 Dos Passos, John
Chodorov, Frank ’ Men Who Made the Nation, The. Re-
Foreign Aid That Really Aids, 12:21 viewed by F. Chodorov, 5:59 :
Liberalism Takes Stock 10:3 Dreier, Thomas
Reviews: ) . Liberal Arts, The; quote, 2:29
Great Giveaway, The. By KE. Castle, 8:62 Drummond, Donald F.
Men Who Made the Nation, The. By J. Passing of American Neutrality, 1937-
Dos Passos, 5:59 1941, The. Reviewed by H, Barnes, 1:59
Christmas Message, The. By E. Opitz, 12:3 Du Pont Stockholder (Winter 1956-1957)
Christmas Presents. By A. Navarro V., 4:58 Going into Business, 4:30
Clergyman’s Security, A. By F. Mahaffy, Dykes, E. W.
2:35 Federal Raid on Liberty, The, 6:13
Cleveland, Grover If We Create a Monster, 2:39
Why the President Said No, 3:15
Clinchy, Russell J. - . E

Personal Responsibility, A; quote, 2:41
Coming Caesars, The. By A. de Riencourt. [Education Is a Private Responsibility. By

Reviewed by R. Weaver, 10:61 T. Ingram, 11:37
Competitive System Is Humane, The. By V. Educational Challenge, An. By C. Steiner,
Tripp, 11:32 4:34
Compulsory Insurance vs. Liberty and Engineer's Obligation, The. By B. Moreell,
Security. By R. Baker, 3:1 1:11 .
Conquest of the American Mind. By F. Enter into Life. By S. Pettengill, 10:25
Wittmer. Reviewed by E. Opitz, 3:64 Equality Ke-examined. By R. Jebb, 1:39
Cooley Oscar W. Ethics and the Executive. By W. Broehl, Jr.
Business of Education, The, 8:51 8:54
Cost of Depreciating Money, The. From Evans, Medford
First National City Bank (Dec. 1956), 2:22 What Is the National Debt? 10:37

Crack in the Picture Window, The. By J. Everyman's Dossier. By F. Walker, 9:26
Keats. Reviewed by J. Chamberlain, 4:60 Exception Makers, The. By L. Read, 8:10

58


===== PAGE 61 =====

F Harper, F. A.
Dollars Down the Drain, 12:41

Faddis, Charles I. Help Wanted, 3:33
Palaces for “Protectors,” 9:2 How Are You Doing—Paywise? 3:50
Right To Work, The, 7:47 Of Ants and Men; quote, 6:12
Far from Free. By A. Lynch, 12:38 Philosophy through the Bars, 2:14
Federal Raid on Liberty, The. By E. Dykes, Shall the Needy Inherit Our Colleges? 7:29
6:13 Simply Speaking, 6:55
Ferdinand de Lesseps and the Suez Canal To Shoot a Myth, 11:2
By G. Winder, 9:6 Your Tax Burden: 1. Fruits of Intolerance,
First National City Bank (Dec. 1956) 4:48; 2. Limits of Tolerance, 5:17
Cost of Depreciating Money, The, 2:22 Well, I'll Be Switched, 1:48
Foreign Aid That Really Aids. By F. Chod- Why Wages Rise: 11. Pricing an Hour of
orov, 12:21 Work 1:13; 12. Riding the Waves of
Formula for Discovery. By C. Kettering, 3:48 Business, 2:48
Fountain of Justice: A Study in the Natural Why Wages Rise. Reviewed by J. Cham-
Law. By J. Wu. Reviewed by E. Opitz, berlain, 2:58
1:63 Reviews:
Free Enterprise. By C. Kemp, 2:25 Liberty Hyde Bailey: An Informal Biog-
Free Market, The. Quote from Facts (Octo- raphy. By P. Dorf, 1:58
ber-November 1956), 4:45 Nowhere Was Somewhere. By A. Morgan,
Freedom and Security in Ur of the Chaldees. 7:61
By R. Rushdoony, 7:44 Hauraki Plains Gazette (New Zealand, Feb.
Freedom Manifesto. By W. Kemp, 7:12 1, 1957) Survival of Ideas, The; quote,
Freeman, Roger A. 10:21
Bolivia: A Case Study in Foreign Aid, Hazlitt, Henry
12:32 Great Swindle, The, 10:22
Camel’s Nose under the School Tent, The, Two Kinds of Inflation, 2:20
3:10 He Who Would Bear Witness. By L. Read,
Freier, Ludwig W, 6:31
High Cost of Unionism, The, 5:25 Heard, Gerald
Fruin, Richard L. Reviews:
We Forget What Makes America Great, Battle for the Mind. By W. Sargant, 10:60
3:43 Myth and Guilt. By T. Reik, 10:60
Rape of the Mind, The. By J. Meerloo,
G ~ 3:63
Help Wanted. By F. Harper, 3:33
God, Gold and Government. By H. Kershner. High Cost of Unionism, The. By L. Freier,
Reviewed by E. Opitz, 5:63 5:25 ’
Going into Business. From Du Pont Stock- Hoff, Trygve, J. B.
holder (Winter 1966-1957), 4:30 Welfare State and Honesty, The 3:37
Governed by God. By J. Pew, 7:9 Holman, Frank E.
Government and Business. By E. Schmidt, Preserve Our Freedom; quote, 3:31
8:4 Hoover, Glenn E.
Grave Matter, A. By R. Needles, 6:47 Our Free Economy: Reality or Cliché, 9:53
Great Giveaway, The. By E. Castle. Re- How Are You Doing—Paywise? By F. Harper,
viewed by F. Chodorov, 8:62 3:50
Great Swindle, The. By H. Hazlitt, 10:22 How Poor the Farmer? By H. Schaller, 1:22
Green, Harry W. How To Stop Competition and Raise Prices.
Box Factory Failure, The, 6:8 By F. Bastiat, 12:18
Greenfield, Edward W. How’s Your Thinking? By D. Murphey,
Sleeping Cat, The (A Sermon), 9:42 11:8
Gumption Island. By F. Morley. Reviewed Husted, Ralph
by S. Pettengill, 5:61 Basis of Economic Growth, The, 4:40
Moral Law, The, 9:38
H Hutton, E. F.
What Brandeis Said about Contempt for
Haake, Alfred P. Law, 4:20
Kev Word Is Voluntary, The, 3:41
Hacker, Louis M. I
Alexander Hamilton in the American “If We Behave Wisely.” By W. Mullendore
Tradition. Reviewed by J. Chamberlain, 1:4
8:59 If We Create a Monster. By E. Dykes, 2:39

59


===== PAGE 62 =====

Importance of Awe, The. By L. Read, 11:11 L

Indianapolis Star, The Labor Policy of the Free Society, The. By S.
Plague We Spread, The, 2:46 Petro. Reviewed by L. Wolman, 10:11
Rich but Restless, 10:30 Labor Union Monopoly: A Clear and Present

India’s Road Ahead. By E. Wilson, 6:21 Danger. By D. Richberg. Reviewed by J.

Ingram, T. Robert Chamberlain 9:60
Education Is a Private Responsibility, Langenberg, H. F.

11:37 Let’s “Do It Ourselves,” 9:52

Law of the Land in England. By E. Bissantz,
3:17

LeFevre, Robert
Jim Leadbetter's Discovery, 12:9

Inner Sovereignty, The. By R. Bradford, 4:11
Intelligent Woman's Guide to Conservatism,
The. By R. Kirk. Reviewed by E. Opitz,

7:59
Involuntary Participation in Unionism. By Straight Line, The, 9:17
P. Bradley. Reviewed by P. Poirot, 2:61 esize, rey
' b 7? H
Irrational Foundation of Statism, The. By Let Anyone bhp By IL ead, 1:2
H. Sennholz, 8:14 Let's “Do It Ourselves.” By H. Langenberg,
9:52
J Let's Face It. By H. Branch, Jr., 10:34
Jebb, Reginald Liberalism Takes Stock. By F. Chodorov,
Blind Spots in the N iali : ;
Equality Re-examined ev Socialism, 5:51 Liberty Hyde Bailey: An Informal Biography.
Jim Leadbetter's Discovery. By R. LeFevre, Ly Dorf: Reviewed by F. Harper, 1:58
12: ’
Sora N n O. B Up Through the Ranks; quote, 12:40
nnsen, ©. 2 Lindbergh, Charles A.
Those Tricky Gadgets, 10:24 Our Mechanistic Age, 2:11
Lynch, Alberto Benegas
K - Far from Free, 12:38
Keats, John
Crack in the Picture Window, The. Re- M
viewed by J. Chamberlain, 4:60 MacArthur, Douglas
Kemp, C. D. Risk Within, The, 1:2

Madison, James

Most Dreaded Enemy of Liberty, The, 3:16
Mahaffy, Francis E.

Clergyman’s Security, A., 2:35

Free Enterprise, 2:25
Kemp, Walter H.
Freedom Manifesto, 7:12

Keplinger, Livingston h : .
: . Management Shakeup in the Satellites. Edi-
oeoreasing Value of the Dollar, 8:58 torial of the Wonalancet Company, 3:26
. Manpower Migration. By C. Brogan, 8:49
God, Gold and Government. Reviewed by Markley, Herbert E.
E. Opitz, 5:63 Positive Employee Relations, 8:19
Kettering, Charles F. Mathematical Manpower Shortage, The. By
Formula for Discovery, 3:48 H. Belden, 1:42
Professional Amateur. Reviewed by J. Meerloo, J. A. M.
Chamberlain, 6:59 Rape of the Mind, The. Reviewed by G.
Key Word Is Voluntary, The. By A. Haake, Heard, 3:63
3:41 Men Who Made the Nation, The. By J. Dos
Kilpatrick, James Jackson Passos. Reviewed by F. Chodorov, 5:59
Sovereign States: Notes of a Citizen of Mencken, H. L.
Virginia. Reviewed by J. Chamberlain, Carnival of Buncombe, A. Edited by M.
7:55 : Moos. Reviewed by E. Opitz, 1:60
King, Hugh P. Million Dollar Dream (A fable), 3:8
Aid for Uncle Willie, 2:40 Mises, Ludwig
Kirk, Russell Theory and History: An Interpretation of
Intelligent Woman's Guide to Conserva- Social and Economic Evolution. Re-
tism, The. Reviewed by E. Opitz, 7:59 viewed by B. Bien, 11:59
Kleiser, Grenville . Moors’ Proverb, The. By J. Murray, 8:39
Dignity of Man, The; quote, 9:41 Moos, Malcolm, editor
Kohr, Leopold Carnival of Buncombe, A. By H. Mencken.
Breakdown of Nations, The. Reviewed by Reviewed by E. Opitz, 1:60
J. Chamberlain, 11:55 Moral Law, The. By R. Husted, 9:38

60


===== PAGE 63 =====

Morality of Capitalism, The. By W. Cham- Opitz, E. A., Reviews (cont.)

berlain, 1:24 Intelligent Woman's Guide to Conserva-
More Frenchmen to Algeria? By F. Bastiat, tism, The. By R. Kirk, 7:59
11:28 National Review Reader. Edited by J.
Moreell, Ben . Chamberlain, 5:62
Communism Is an Idea; quote, 8:41 Oriental Despotism: A Comparative Study of
Concealing the Coercion; quote, 9:51 Total Power. By K. Wittfogel. Reviewed
Engineer's Obligation, The, 1:11 by J. Chamberlain, 10:56
Morgan, Arthur E. Qur Four Great Faiths. By W. Vollmer, 1:34
Nowhere Was Somewhere. Reviewed by F. Qur Free Economy: Reality or Cliché. By G.
Harper, 7:61 Hoover, 9:53
Morley, Felix Our Mechanistic Age. By C. Lindbergh, 2:11
Gumption Island. Reviewed by S. Petten-
gill, 5:61 P
Most Dreaded Enemy of Liberty, The. By Palaces for “Protectors,” By C. Faddis, 9:2
J. Madison, 3:16 Passing of American Neutrality, 1987-1941,
Mullendore, W. C. The. By D. Drummond. Reviewed by H.
Do Wage Hikes Cause Inflation? 6:43 Barnes, 1:59
“If We Behave Wisely,” 1:4 Penalty of Surrender. By L. Read, 4:21
Murphey, Douglas J. Petro, Sylvester
How's Your Thinking? 11:8 Do Antitrust Laws Preserve Competition?
Murray, John 10:12
Moors’ Proverb, The, 8:39 Labor Policy of the Free Society, The. Re-
My Forty Years with Ford. By C. Sorensen. viewed by L. Wolman, 10:11
Reviewed by J. Chamberlain, 1:55 Voluntary Associations and the State, 11:43
Myth and Guilt. By T. Reik. Reviewed by G. Pettengill, Samuel B.
Heard, 10:60 Enter into Life, 10:25
i When Lineoln Was a Boy, 2:9
N Pew, J. Howard

Governed by God, 7:9

National Review Reader. Edited by J. Cham- Phillips, Charles F.

berlain. Reviewed by E. Opitz, 5:62

titi But . . .; quote,
Natural Resources: The Economics of Con- We Are for Competition, Bu a
servation. By A. Scott. Reviewed by M. a
Rothbard, 4:63 y Philosophy through the Bars. By F. Harper,

Navarro V., Augustin
Christmas Presents, 4:58

Needles, Robert J.
Grave Matter, A, 6:47

Nowhere Was Somewhere. By A. Morgan.
Reviewed by F. Harper, 7:61

Plague We Spread, The. From Indianapolis
Star (Dec. 15, 1956), 2:46

Poirot, Paul L.
Socialism at Its Best, 7:18

Positive Employee Relations. By H. Markley,

8:19
Pound, Roscoe
o Development of Constitultional Guarantees
Official Abuse of the Taxing Power. By H. of Liberty, The. Reviewed by J. Cham-
Spitsbergen, 2:42 berlain, 5:56
Oliver, Robert T. Price System, The. By W. Wallis, 7:24
Pyrrhic Victory, 7:35 Professional Amateur. By C. Kettering. Re-
One-Man Pressure Group. By D. Burgess, viewed by J. Chamberlain, 6:59
4:27 Pyrrhic Victory. By R. Oliver, 7:35
Opitz, Edmund A.
Adventure Eternal—-An Easter Sermon, 4:3 R
Christmas Message, The, 12:3 Rand, Ayn
Use of Books, The, 2:30 Atlas Shrugged. Reviewed by J. Chamber-
Reviews: lain, 12:53
American Faith. By J. Bates, 11:58 Rape of the Mind, The. By J. Meerloo. Re-
Carnival of Buncombe, A. By H. Mencken. viewed by G. Heard, 3:63
Edited by M. Moos, 1:60 Read, Leonard E.
Conquest of the American Mind. By F. Exception Makers, The, 8:10
Wittmer, 3:64 He Who Would Bear Witness, 6:31
Fountain of Justice: A Study in the Natu- Importance of Awe, The, 11:11
ral Law. By J. Wu, 1:63 Let Anyone Deliver Mail, 7:2
God, Gold and Government. By H. Kersh- Penalty of Surrender, 4:21
ner, 5:63 Seen and the Unseen, The, 10:32

61


===== PAGE 64 =====

Recent Changes in the American Constitu- Sovereign States: Notes of a Citizen of Vir-

.tional Theory. By J. Burgess. Reviewed by ginia, The. By J. Kilpatrick. Reviewed by

J. Chamberlain, 3:59 J. Chamberlain, 7:55
Reik, Theodor Sparks, John C.

Myth and Guilt. Reviewed by G. Heard, Crowing for the Sun To Rise, 3:54

10:60 Spitsbergen, H. E.

Rent Controlled Slums. By C. Brogan, 5:12 Official Abuse of the Taxing Power, 2:42
Rich but Restless. From Indianapolis Star, Steiner, C. J.

“The (July 15, 1957), 10:30 Educational Challenge, An, 4:34
Richberg, Donald R. Straight Line, The. By R. LeFevre, 9:17

Labor Union Monopoly: A Clear and Pres-

ent Danger. Reviewed by J. Chamberlain, )

9:60 Theory and History: An Interpretation of
Right To Work, The. By C. Faddis, 7.47 Social and Economic Ewolution. By L.
Risk Within, The. By D. MacArthur, 1:2 Mises. Reviewed by B. Bien, 11:59
Rushdoony, R. J. Thing We Call Time, The. By R. Bradford,

Freedom and Security in Ur of the Chal- 5:38

dees, 7:44 Those Tricky Gadgets. By O. Johannsen,
Russell, Dean 10:24

Three Great Deceptions. By W. Chamberlin,
6:24
To Shoot a Myth. By F. Harper, 11:2

Two Ways To Develop a Country, 5:1

S Today’s School Problem. By B. Bien, 9:30

Sargant, William Tripp, Vollie

Battle for the Mind. Reviewed by G. Heard, Competitive System Is Humane, The, 11:32

10:60 cae What Price Security? 10:53

Satan in Politics. By H. Sennholz, 3:39 Two Kinds of Inflation. By H. Hazlitt, 2:20
Schaller, Herbert L. Two Ways To Develop a Country. By D.

How Poor the Farmer? 1:22 Russell, 5:1
Schmidt, Emerson P. ro

Government and Business, 8:4 u
Scholarship and Intelligence. By R. Bradford, UN-Competent Only for Mischief. By W.
Scott, Anthony Chamberlin, 7:37 } }

Natural Resources: The Economics of Con- Union Power, and Public Policy. By L.

olman, 6:

gervation. Reviewed by M. Rothbard, 4:63 .
Seen and the Unseen, The. By L. Read, 10:32 Use of Books, The. By E. Opitz, 2:30
Sennholz, Hans F.

Do Unions Cause Automation? 12:46 Vv

Irrational Foundation of Statism, The, Vollmer, W. G.

8:14 Our Four Great Faiths, 1:34
Satan in Politics, 3:39 Voluntary Associations and the State. By S.
Welfare States at War, 2:2 Petro, 11:43
Shall the Needy Inherit Our Colleges? By F.
Harper, 7:29 Ww
Shuman, Charles B. Walker, Frederick
Agriculture with a Future, 5:32 Everyman’s Dossier, 9:26 .
Simply Speaking. By F. Harper, 6:55 Wallis, W. Allen
Sleeping Cat, The (A Sermon). By E. Green- Price System, The, 7:24 )
fed. 9:42 Watts, V. Orval
Small, G- Sumer of Socialism and Com Why Humans Must Be Free, 11:23
e - .
munism, The, 5:44 We Forget What Makes America Great. By
ith, EI d P. ’ to
Smit woo Welfare State and Honesty, The. By T. Hoff,

Declaration of Independence, A, 9:19

Social Discipline. By H. DeGraff, 11:16
Socialism at Its Best. By P. Poirot, 7:18 Welfare States at War. By H. Sennholz, 2:2

Sorensen, Charles E. . Well, I'll Be Switched. By F. Harper, 1:48
My Forty Years with Ford. Reviewed by J. What Are We Guaranteed? By G. Leslie,

3:37

Chamberlain, 1:55 12:52
Sorckin, Pitirim A. What Brandeis Said about Contempt for

Criminality of Rulers, 4:9 . Law. By E. Hutton, 4:20

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What Is the National Debt? By M. Evans, Wittfogel, Karl A.

10:37 Oriental Despotism: A Comparative Study
What Price Security? By V. Tripp, 10:53 of Total Power. Reviewed by J. Chamber-
What To Read about Labor. By L. Wolman, lain, 10:56

10:9 Wittmer, Felix
When Lincoln Was a Boy. By S. Pettengill, Conquest of the American Mind. Reviewed

2:9 by E. Opitz, 3:64
Who Are We Kidding? By R. Bradford, 6:35 Wollman, Leo
Why Humans Must Be Free. By V. Watts, Union Power and Public Policy, 6:3

11:23 What To Read about Labor, 10:9
Why the President Said No. By G. Cleveland, Review:

3:15 Labor Policy of the Free Society, The. By
Why Wages Rise: 11. Pricing an Hour of S. Petro, 10:11

Work; 12. Riding the Waves of Business. Wonalancet Company

By F. Harper, 1:13, 2:48 Management Shakeup in the Satellites, 3:26
Why Wages Rise. By F. Harper. Reviewed World Invisible. By Diogenes, 1:31

by J. Chamberlain, 2:58 Wu, John C. H.

Wilson, Elizabeth W. Fountain of Justice: A Study in the Na-

India’s Road Ahead, 6:21 tural Law. Reviewed by E. Opitz, 1:63
Winder, George Y

Administrative Law in Great Britain, 8:42 Your Tax Burden: 1. Fruits of Intolerance;

Ferdinand de Lesseps and the Suez Canal, 2. Limits of Tolerance. By F. Harper, 4:48,

9:6 5:17

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The Golden Rule and Utility Are Harmonious

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