===== PAGE 1 =====

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===== PAGE 2 =====

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One operator scalps more than 200,000 pounds of Ingersoll Scalping Machine,
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In addition 10 the machine,


===== PAGE 3 =====

by Herbert
Hoover

The genius of the private enter-
prise system is that it generates
initiative, ingenuity, inventive-
ness and unparalleled produc-
tivity. With the normal rigidities
that are a part of Government,
obviously the same forces that
produce excellent results in pri- directing personnel is not in-
vate industry do not develop to cluded on their payroll. More-
the same degree in Government over, in addition to the fact that
business enterprises. most of them pay no taxes, they
The Government creates busi- deprive the Government of taxes
ness-type enterprises in economic which would otherwise be paid by
emergencies, in the emergencies private enterprise if it conducted
of war, and for the development these operations.
of projects which are not adapted The continuance of such activi-
to private enterprise because of ties by the Government must be
their nature or their magnitude. madesubjecttorigid justification;
The Government business-type occasionally this can be done, but
enterprises, except in a few in- theburdenofproofinallinstances
stances, pay no taxes, and pay must be on the Government. Un-
little or no interest on the capital justified continuance is a definite
invested; they seldom charge de- injury to the vitality of the whole
preciation and frequently their private enterprise system.

The above comments are condensed from the Preface to the ‘Hoover Report on
Business Enterprises.” A copy of the complete Preface may be obtained by writing to:

The Public Relations Division

219 East 42nd Street, New York, New York

A PRIVATE ENTERPRISE IN THE PUBLIC SERVICE


===== PAGE 4 =====

J] THE

[eCMmall A MONTHLY JOURNAL OF IDEAS ON LIBERTY

SEPTEMBER 1958 Vol. 8 No. 9

LEONARD E. READ President, Foundation for
Economic Education

PAUL L. POIROT Managing Editor

THE FREEMAN is published monthly by the
Foundation for Economic Education, Inc.,, a non-
political, nonprofit educational champion of private
property, the free market, the profit and loss system,
and limited government, founded in 1946, with offices
at Irvington-on-Hudson, New York. Any interested
person may receive its publications for the asking.
The costs of Foundation projects and services, in-
"cluding THE FREEMAN, are met through volun-
tary donations. Total expenses average $12.60 a year
per person on the mailing list. Donations are invited
in any amount — $5.00 to $10,000 — as the means of
maintaining and extending the Foundation’s work.

Accepted as controlled circulation publication at Irvington, N. Y., with
additional entry at New York, N. Y. Copyright, 1958, The Foundation for
Economic Education, Inc. Printed in U.S.A.

Additional copies, postpaid, to one address: Single copy, 50 cents;
3 for $1.00; 25 or more, 20 cents each.

Permission is hereby granted to anyone to reprint any article in whole
or in part, providing customary credit Is given, except “Inflation Is a

Burglar,” ‘‘Market Relationships,” and “Who Wants To Pay for a New
Airport?”
FE

Any current article will be supplied In reprint form If there are enough
Inquirles to justify the cost of the printing.


===== PAGE 5 =====

.

oy] Gonghtf er id
Ee rae

ould YOU have
cigned it?

7 .
sees
oh Georg 12 “4. w= RALPH BRADFORD

IT became the literary fashion simply a rich smuggler who had it
thirty years or so ago, and con- in for the British.
tinues to be the vogue in some Samuel Adams, of the eloquent
quarters, to demote, if not to de- speech and provocative letters?
fame, that group of men who are Just a broken-down Boston agita-
generally designated as the Found- tor who couldn’t even afford the
ing Fathers of this Republic. trip to Philadelphia or a new suit
The framers of the Constitution to wear until his friends passed
were given their full and bitter the hat for him.
share of obloquy; but the signers Benjamin Franklin, wise coun-
of the Declaration of Independence selor and witty commentator ? Just
seemed to be special targets for a dabbler in pseudoscience; a suc-
detraction. Idol smashing was the cessful printer with an unsavory
order of the day. Certain types of youth; a shrewd old publicist with
writer, politician, and public an eye to the main chance.

speaker took delight in uncovering Thomas Jefferson, statesman,
and proclaiming feet of clay. No philosopher, architect, musician?
niche was sacred. Stuff! He was a rich young aristo-

John Hancock — he of the big, crat with a dilettante’s relish for
bold signature which, as legend the excitements of public life.
has it, he boasted could be read by John Adams, fearless champion
King George without glasses? A of unpopular causes? Pah! An am-
lot of baloney! Hancock was bitious Massachusetts lawyer who

Mr. Bradford is a well-known writer and business organization consultant.


===== PAGE 6 =====

4 THE FREEMAN September

had recently defended the British the fact that Lexington and Con-
soldiers in the Boston Massacre cord were already household words
case and who had now switched to throughout the Colonies, that
the other side. Bunker Hill had been fought, that
And so on and on and on. Begin- Charlestown and Falmouth had
ning around 1920, and continuing been burned, that Boston had been
even to the present, it has been beseiged — in short, that the Revo-
open season on the signers. What lution was in full and lusty prog-
were their motives? What personal ress!
advantages did they seek? What There is less of that sort of
selfish interests did they serve? sniping now, but it is still to be
Hardly anyone of them was spared heard, especially among those who
derogatory questions, innuendoes, find the Constitution archaic and
accusations. the Declaration outmoded because
It was even pointed out that the principles asserted in those
some of the signers had come into documents come between them and
the Congress after action had been their plans for collectivization by
taken on the Declaration; and it force.
was implied that there was some- Well, to all such — to all who jeer
thing strange, and possibly rep- or scoff or belittle —I have one
rehensible, about their desire tp short, hard question: Would you
affix their signatures ex post facto! have signed it?
Some writers with the iconoclas- Let us think a little about the
tic urge made much of the fact circumstances.
that among the fifty-six signers
there were twenty-two lawyers, ten History Book Impressions
merchants, and fourteen wealthy Most of us have a kind of cop-
land owners; and one such writer perplate impression of what went
was almost tearfully indignant be- on in Philadelphia that summer of
cause the great Document bore no 1776. It centers in a tableau-like
signature of either a laboring man picture of the signing. Certain old
or a dirt farmer. The implication history book illustrations form the
seemed to be that there was some- basis of that impression.
thing a little questionable about all A group of bewigged and
those well-to-do landed proprietors, clubbed-haired gentlemen in knee
business men, and professional breeches, silk stockings, buckle
people getting together and cook- shoes, baggy coats, and outsize
ing up a revolution. waistcoats sit around a large room
This attitude, of course, ignored in comfortable chairs. They have


===== PAGE 7 =====

1958 WOULD YOU HAVE SIGNED IT? 5

been discussing the ills that the of them, “most ardently desired.”
American Colonies have suffered And so there had been a suc-
at the hands of the British Crown. cession of “humble petitions” to
They have also been discussing the Crown, with protestations of
what to do about the Revolution loyalty and desire for accommoda-
which, contrary to the present-day tion. There had even been an ‘“ad-
misconception held by many, was dress to the British People.” The
not started as a result of their ac- Adamses, John and Sam, and some
tion but was already under way. others, had protested that all such
Nearly forty years later, when gestures were in vain — and so it
John Adams was eighty years old, had proved. The humble petitions
he was to write that even the war had been answered by the dispatch
with Britain was “no part of the of more warships and troops; the
Revolution.” And he added: “The appeal to the British people had
Revolution was in the minds and been answered not at all.
hearts of the people, and this was By the spring of 1776 the hope
effected from 1760 to 1775, in the of peaceful reconciliation had
course of fifteen years, before a grown very dim indeed. A few
drop of blood was shed at Lex- stout loyalists like John Dickinson
ington.” still believed the miracle would be
It is possible that Adams, in wrought; but their ranks were
retrospect, misjudged the minds thinning. Independence was in the
and hearts of the people during air.
that fifteen year period. What they Finally, goaded by the Adams
really wanted, probably, was cousins and others, the Congress
simply to be let alone. Maybe he got around to facing the question
endowed them with the sentiments of independence officially. At first
of his own stout heart and flaming there was opposition even to con-
spirit. At any rate, it is clear that sidering it. Many of the delegates
the representatives of those people, still looked upon themselves as
in Congress assembled, were re- British subjects, loyal to the
luctantly revolutionary and not by Crown. They were deeply shocked
any means strong for independ- at the thought of separation from
ence. Most of the delegates be- the Mother Country. A few—a
lieved it was their duty to work very few — were never reconciled
for “the restoration of union and to the change. Most, however, rec-
harmony between Great Britain ognized at last that the move was
and the Colonies” —a harmony inevitable.
that was, by the greater number On June 7, Richard Henry Lee


===== PAGE 8 =====

6 THE FREEMAN September

introduced a resolution. It con- ing job, the language and spirit of
tained only 47 words, but like the thing, are his.

Mercutio’s wound, it was enough Finally on Tuesday, July 2, the
— enough to create a new nation; Lee resolution was passed and the
enough to change the course of next step was to adopt the Declara-
British history; enough to throw tion. It, too, was debated. Certain
the Congress into a prolonged and changes were made; things were

bitter debate. eliminated; things were added, as
was to have been expected. At last
The First Draft it came to the question on July 4,

At last it was decided to post- and the Declaration of Independ-
pone final decision for three weeks, ence was adopted.
until July 1. Meantime it was And then — so goes our impres-
agreed by all that a drafted Decla- sionistic picture of the event — the
ration of Independence should be delegates filed sedately up to the
prepared so that, if the vote went front table and affixed their several
that way, Congress would not have signatures. And that was that.
to throw something together at the
last minute. The Dramatic Signing .

So they appointed a committee Actually, it didn’t happen that
— Jefferson, Franklin, Sherman, way at all. The copy in use by the
Livingston, and John Adams. The Chairman and Secretary during
committee, in turn, delegated the the debate was so scratched out
actual writing to a subcommittee and interlined that it would never
consisting of Adams and Jefferson. do as a public document. It had to
Because Jefferson had already be printed in its final form and
demonstrated his skill as a writer, signed later. But we cling to our
and possibly because Adams was picture of the scene.
anxious for reasons of unity to It is a kind of historic set-piece,
show deference to the Virginia a well-worn tableau. There is little
delegation, Adams insisted that reality in it. Indeed, to give some
the young Virginian do the draft- of the iconoclasts their due, it was
ing. He said, in effect, “Jefferson, partly in an effort to impart a
you do it.” more lively feel of reality to this

But Jefferson was not the sole scene that they began to ‘“human-
author. Both Adams and Franklin ize” the principal actors in it. It
made important suggestions, and was characteristic of the spirit of
Jefferson altered his copy to meet the twenties and thirties, however,
their ideas. But the essential draft- that the only way these realists


===== PAGE 9 =====

1958 WOULD YOU HAVE SIGNED IT? a

could think of to humanize the gether — and that Franklin replied
signers was to subject them to a jokingly, “Yes —or we shall all
process of denigration. hang separately.”

A much simpler and far more Jokingly? I doubt it. Franklin
dramatic means was at their hand, was a realist. Simply and bluntly,
if they had only possessed the he was stating what might very
imagination to see it. The musty well happen to every one of them.
little tableau could have been In their world, revolution was a
brought startlingly alive. All its risky business, and still is. Among
apparent drabness and seeming some of the Latin peoples, revolu-
placidity could have been illumi- tion seems at times to be merely a
nated with a shattering light of dramatic technique to effect a
hard reality. The reality was this: change of administration. Not so

If the Revolution failed, as there with the Anglo-Saxons. You'd
was at that time good reason to be- better think not just twice but
lieve it might, every one of those several times before you set out to
men was putting his name to some- overthrow one of their govern-
thing much more than a rhetorical ments by force. You may turn out
declaration of political principles. to be a hero if you succeed, but

He was signing his own death you'd better succeed — for if you

warrant! fail, you may very well be judged
. a traitor; and treason is punish-
Deadly Serious Business able by death.

Does that- make the picture a British ministries of that day

little less drab? Do those solemn- were not notably compassionate
faced men in the funny garments toward persons who sought to dis-
and queer haircuts look a bit less rupt their empire. From their
funny now? point of view, and from that of
Does old Doctor Franklin, who the average Englishman of 1776,
was getting quite paunchy and that group of men in Philadelphia
bald and who peered at the world were the opposite of patriots. They
through queer-shaped lenses of his were traitors to the Crown, and if
own devising — does he look a little caught would be dealt with accord-
different in this sharp white light ingly.
of danger? In the light of that situation,
Legend has it that someone of what shall we say of the “political
the signers remarked that from opportunism” of John Adams?
now on there must be no dissen- What shall we say of the thirty-
sion; that they must all hang to- three-year-old Jefferson who knew


===== PAGE 10 =====

8 THE FREEMAN September

full well that he was not making some project that was of concern
an idle gesture when, with the only to our community — a project
others, he pledged his life, his for- that ought to have been paid for
tune, and his sacred honor? And locally since it was purely for local
what now of the late-comers — the use and benefit — did we lift our
ones who were not in the Congress voices against it, or did we “go
when the vote was taken, who along”?

didn’t have to sign it, but who When the congressman from
wanted their names to stand beside your district was campaigning on
the others? Or, let’s put it another the promise to work for drastic

way for emphasis: reduction in the size and power of
Would you have signed it? the federal bureaucracy; when he
Would I have signed it? demanded a return to solvency in
our national finances; when he

Time for Introspection stood for a balanced budget; when

While we ponder those ques- he refused to cater to one or more
tions, let's ask ourselves a few of the pressure groups in your

others. area, but pledged himself to serve
When there was corruption in the interests of the whole country
our local government — at the City — in all this, did you support him?

Hall or in the County Court House Or if your congressman stood for
— did we speak out against it, you the opposite principles — did you
and I? Or did we decide that it oppose him? And in either case,
was a political question, and that did you let your support or your
it would be bad business for us to opposition be known? Or did you
meddle with it? keep discreetly still because you
When the federal millions began feared your action might offend
to be distributed to states and some noisy leftist politician or
communities, did we protest, you some articulate “liberal” group in
and I — or did we figure that such your community, and thus be “bad
action would make us unpopular for business”?
with the politicians and others who
were profiting from the handouts? They Were Men!
And is it possible that we even If your answer or mine is that
figured we might in some way we did not let our voices be heard
profit, ourselves, from the federal or our influence felt on such issues
largesse? because we were afraid of possible
When our city government de- business reprisals — then what do
cided to go after federal money for you think our attitude would have


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

1958 WOULD YOU HAVE SIGNED IT? 9

been toward signing a document general statement of political and
that could have cost us, not just social principles. It left no doubt as
some business, not just the good to its meaning. It did not hint or
or bad will of a greater or fewer imply or evade or mince words. In
number of people — but our lives? hold phrases it recited the political
and economic sins of the King of
What kind of men were the England, and it declared that the
signers? Did they have their pecu- Colonies were free from the rule
liarities, their foibles, their jeal- of the British government. In the
ousies, their vanities, their selfish eyes of that government, such
interests ? Of course they did — and statements were treasonable; and
so do all men. But that is not the treason was punishable by death.

point of importance. The thing to When a man put his name to
remember is that when the chips that Document,itcould have meant,
were down, they were men! and there was a very good chance

The piece of paper they had that it would mean, not merely
signed was not a thing a signer the loss of his business and his
could squirm out of or explain property, but his life.
away later. It was not a vague and Would you have signed it? oe o o

Eternal Vigilance

THOMAS JEFFERSON said: “Do not talk to me about the integrity
of public officials. I say chain the politicians to the limitations
of the Constitution itself.” And that is what the authors of our
Constitution sought to do.

But it has been said that a successful politician is a man who
can rock the boat himself and persuade everybody else that there
is a terrible storm at sea. So if the boat rocks violently enough,
and if people are thoroughly frightened, they will agree to jet-
tison the chains of which Jefferson spoke. After that, it is only a
matter of time until the politicians — thus released — forge new
and stronger chains with which to bind the people.

IRVING S. OLDS, The Thousand Miles of Lao-Tse


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

hy £8
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3 A. Devaney, Inc, N.Y

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ANN TERRILL

as Let

ACROSS THE NATION the number the week in board rooms across
of stockholders in almost every the nation.
large company is steadily growing. The case for private ownership
The amazing part of this is not of property is well-stated in these
so much the total expansion of words of Abraham Lincoln:
ownership as the fact that a goodly “Property is the fruit of labor;
percentage of ownership is by property is desirable, is a positive
people with incomes of less than good in the world. That some
$7,600 a year! should be rich shows that others
Under communism, common may become rich and hence is just
ownership means ownership by the encouragement to industry and en-
State, for the “good” of the citizen. terprise. Let not him who is house-
The free enterprise system of less pull down the house of an-
‘“‘common ownership’ involves other, but let him work diligently
strictly private ownership which to build one for himself, thus by
upholds the freedom and dignity example assuring that his own
of the individual as the only sound shall be safe from violence.”
basis for national well-being. The Some of the people some of the
mechanics of such ownership may time have not understood the wis-
be seen in operation any day of dom of Lincoln's advice, and many

Ann Terrill is a housowife from Manhattan Beach, California.

10


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

1958 COMMON OWNERSHIP — AMERICAN STYLE 11

in recent years have been taught operate at a profit. The tremendous
to distrust the workings of com- growth in popularity of mutual in-
petitive private enterprise. They vestment funds, for instance,
have demanded more and more points up the radical change taking
“benefits” from the Welfare State place in the composite picture of
— supports, security, and the like the “Investor.”
—instead of relying on their own While mutual diversified invest-
initiative and resourcefulness. ment plans have been in existence
Politically powerful majorities in one form or another since 1822,
have ganged up to “tear down the and in the United States since
house of another,” leading many a 1893, their real popularity has
person to seek his pot of gold at come about just since World War
the end of someone else’s rainbow. II. The primary advantage of such
But there is evidence today that plans is that the shareholders
the basic concepts of practical eco- thereby enjoy greater diversifica-
nomic freedom and privilege which tion, better management, and con-
Mr. Lincoln spelled out are once tinuous supervision of their inter-
more becoming popular. ests. The growth of mutual funds
Many factors are involved in provides a good yardstick for
this improved understanding ac- measuring the growing interest in
corded private enterprise — as em- ownership.
ployees begin to see that they can The average American does not
have profits on savings as well as go into business for himself these
wages for services rendered, that days, nor is it necessary that he do
savings amount to claims upon the so. But it is becoming more de-
services of others. sirable, and more possible every-
Monthly stock investment plans, day, for him to “buy into” someone
employee stock purchase plans, and else’s going organization. Indeed,
mutual investment pool plans have as a shareholder in a mutual fund,
all done their share to bring this he collects profits on his invest-
about. They have made the sedate ment in literally hundreds of di-
Wall Street Journal into a popu- versified enterprises. :
larly well-read newspaper. They Mutual fund shareholders in-
have helped provide an owner’s eye clude labor-union groups, church
view of the entire structure of this groups, service organizations,
nation’s economy. They have initi- teachers, students, housewives,
ated Mr. Average Citizen into the factory workers, professional peo-
realms of capital gains, dividends, ple, and even children whose shares
and why and how a business has to are held in trust for them. Earn-


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

12 THE FREEMAN September

ings of the fund, less a manage- side of private enterprise, the pur-
ment and initial purchase fee, are veyors of such plans have added to
passed on to the investor. Risk of the ranks of supporters thousands
loss, normal to the investment of people who might not have been
field, is minimized by the diversi- there otherwise. They can see first-
fication of interests which the fund hand the sound basis upon which

holds. that system works fairly for the
Approximately 3 out of 4 share- benefit of all.
holders in mutual funds have in- Isn’t that what this nation

comes of $7,500 or less. The total needs? If, in an expanding econ-
number of shareholders has more omy, a little diversification of own-
than tripled since 1940, and it ership, as well as of interest, is not
isn’t surprising to learn that mu- included in the scheme of things,
tual funds account today for then private enterprise is a little
roughly 6 per cent of all invest- too private for its own good. And
ments. Funds are now offered in all the programs for enlightening
numerous variations to fit a wide the rest of the world cannot save
variety of investment goals and this nation. Anything, no matter
purses, by some 165 different com- how good, must have the support
panies. of its own people to succeed, and it
These operations are indeed, as is more than likely that a man’s
someone has said, a part of Main faith and support will be placed
Street. They have, in fact, brought squarely behind his money. Private
the kernel of private enterprise to enterprise, the investment in it,
the folks that live there. True, the subsequent risks — involving
their shareholders have little to do both profit and loss — need to be
in the usual sense with Wall understood by the customers and
Street, the Stock Exchange, Se- the employees as well as by the
curities Club, or wide speculation. growing number of proprietors
But one thing is certain. Besides along Main Street.
having broadened the base of own- Through such privately held
ership in our economy, thereby en- multiple ownership of the produc-
riching and strengthening it, a tive facilities of our economic sys-
great good is being accomplished tem, individuals may well gain a
in the interests of private enter- clearer concept of the peaceful
prise generally. harmony that should embrace all
By making it possible for per- mankind. This is the only practical
sons of limited income to take ma- approach the world has seen to the
terial advantage of the ownership “common ownership” of anything.


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

Samuel B. Pettengill .

WHEN I WAS A BOY in Vermont,
there was a year when the apple
crop was so huge that the apples
did not bring enough to pay for the
barrels to put them in. All we could
do was to turn the hogs loose in
the orchard to eat their fill.

This was hard luck, but not de-
flation. Contrarily, freezing weath-
er in Florida last winter made or-
anges scarce and their price high.
But scarcity or glut of one com-
modity or another is not inflation
or deflation, even though it makes
the price of the commodity rise or
fall.

Nevertheless, these apples and
oranges illustrate an important
way by which inflation causes a
general rise in the price of nearly
all commodities, like groceries, or
services, such as pulling teeth or
hospital care. Such a general price

Ta
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rise has no necessary connection
with the scarcity or glut of com-
modities or services.

Under “runaway” inflation, the
cost of hospital care would be sky
high even though hospitals were as
thick as service stations.

Increase in Money Supply

Inflation, which makes practi-
cally all prices rise, has been chiefly
due in recent years to an excessive
increase in the money supply which
distorts the price balance between
money and commodities.

This can be seen clearly if we
were to imagine a government de-
cree which made every leaf on the
trees a “dollar.” As you raked up
bushels of these leaf dollars, what
would happen to prices?

No government has ever made
dollars out of leaves, but dozens of

Mr. Pettengill, noted attorney and author, was formerly a congressman from Indiana. This
article first appeared in the June 1958 issue of The Pure Qil News.

13


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

14 THE FREEMAN September

governments have made ‘“‘dollars”
or marks or francs or rubles out of
paper which can be made from
leaves! In short, paper money can
be made as worthless as leaf
money.

Prices move up during inflation
because the value of money goes
down, due to an oversupply. This
fools millions of people. They can
easily see prices go up because a
price tag is fixed to whatever they
buy, but they cannot see the value
of money in their pocketbooks go-
ing down.

Because this ‘sleight of hand”
fools people, during inflation prac-
tically every consumer blames the
producer, farmer, manufacturer,
middleman, or merchant for the dity for another commodity. If a
rise of prices, just as some people bushel of potatoes exchanged for a
blame the oil companies for even bushel of sugar beets in a German
the small increase in the price of town before the inflation, it is
gasoline today. likely that they still exchanged,

This causes hard feelings be- bushel for bushel, at the height of
tween the different economic the inflation, even though a bushel
groups in a country, a demand for of potatoes or sugar beets was
price and wage controls, and in “worth” a million marks!
some countries even revolution. In short, commodities probably
did not rise in Germany at all! 1t
was only the German mark (mon-

The terrific inflation in Germany ey) which fell to zero in value by
in the 1920's was a big factor in reason of the glut of marks. This
the rise of Hitler to power, which was due to the government run-
finally cost us billions of dollars ningthe monetary printing presses

Inflation in Germany in the 1920's

and the blood of our sons. night and day, not to the producers
Yet the German inflation prob- or dealers in commodities.
ably caused little or no change in It can, I think, be laid down as a

the exchange value of one commo- universal rule that all inflation is


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

1958 INFLATION IS A BURGLAR 156

caused by the acts or politics of number of dollars. As inflation pro-
government, among which is any ceeds and dollars lose purchasing
large increase in the debts of the power, all of these savings lose
central government. A large in- value.
crease in government debt by bor- Since 1940, inflation has eaten
rowing at the banks creates a glut away 200 billions of dollars of
of money, which causes money to these nest eggs, and right now is
lose value just as each apple lost doing so at the rate of billions of
value when there was a glut of dollars a year. While we continue
apples. (Why government debt in- to work, most of us can keep
creases the money supply requires abreast of our losses from infla-
~ more space than the editor has tion. But sickness comes, and old
available in this issue.) age advances when you no longer
However, it is plain that no gov- can work. The dollar is now worth
ernment will permit any private less than at any time since George
person (counterfeiter) to manu- Washington's day.
facture dollars. Consequently, a
large permanent increase in the Inflation a Hidden Tax
dollar supply which reduces the If the government had taxed you
exchange value of dollars for com- what you have lost in the value of
modities and services is always due your savings, you would raise
to actions taken by the government
—not the people, except that be-
cause so many do not understand
inflation, the people permit the
politicians who run the govern-
ments to proceed with their
" sleight-of-hand magic.

.As Inflation Proceeds

Now then, why is inflation a
burglar robbing millions of hard-
working people while they sleep?
It is because most of what we save
during our working ‘years, other
than a home, is in the form of life
insurance, company pensions, gov-
ernment bonds, social security, and
savings accounts payable in a fixed



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

16 THE FREEMAN September

Cain. What we need to know is he asked what the fare was. The
that inflation ¢s a hidden tax, with cab driver said, “200,000 marks.”
no exemptions or deductions! It is, The man said, “That’s more money
in fact, the cruelest of all taxes be- than I ever saw. I can’t pay.”
cause it falls on the poorest the The driver said, “Let me see
hardest. what you have.” So the man
This is a serious subject. But opened his purse; the driver took
we can still get a laugh out of it. out a coin and gave him 1,000,000
Before inflation hit Germany, an marks in change!
old man was put in an insane asy- The poor old fellow said, “Take
lum. At the height of the inflation me back to the asylum. I'm not
he was declared sane, given back cured after all.”
his purse with a few old coins in The only cure for inflation is
it, and told to take a cab to his public understanding which will
brother’s home. When he got there, demand sound money. eo 0



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

a of oe 4

-~

OP ORAL RY

SOCIALISM is indeed the great farmers, federal aid to education,
leveler. But the fact that the level- TVA, and “social security’ are but
ing is always downward seems to a few examples of the lethal social-
escape most theoretical socialists. istic weapons designed to do a
They fail to see that their victims leveling job. “The enshrinement of
include not only those from whom mediocrity” is a description no so-
the fruits of their labor are taken cialist will relish, but it accurately
but also those among whom the describes the result of dragging
spoils are distributed as well as down the successful to nourish the
those who police such compulsory not-so-successful.
redistribution.! There is, however, an upgrading
The leveling of socialism in- system which, like a magnet held
volves cutting off the mountaintops on high, tends to draw everyone
to fill the valleys, taking from each upward. Instead of leveling people
according to ability and giving to toward an economic bottom, it
each according to need, substract- frees, releases, and attracts them
ing the cream from some and add- to whatever economic heights are
ing it to the skim milk of others. consonant with their desires and
The progressive income tax, gov- abilities. As might be expected, it
ernment housing, subsidies to is socialism’s opposite: the free
_ market, private property, severely
‘Read, Leonard E. Victims of Social limited government way of life.
Leveling. Irvington -on-Hudson, N. Y.: In terms of our planet’s exist-

Foundation for Economic Education,
1953. Copy on request. ence, one need turn back the clock

17


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

18 THE FREEMAN September

no more than a moment or two — Their low economic state was only
to the beginning of the Industrial highlighted or emphasized as some
Revolution — to observe economic became able to stand economically
freedom’s early triumphs at eco- erect.
nomic upgrading. Except for the As suggested above, the free
very few — a fraction of one per market economy has never been
cent of the population on whom the tried all the way. The British Em-
monarchs bestowed titles and large pire gave it the best trial next to
estates — nearly everyone at that the U.S.A. However, even these
time lived in abject poverty. Adam partial attempts have not only
Smith reported that there were eliminated famines but have con-
areas in the British Isles where a ferred tremendous economic boun-
mother had to bring twenty chil- ties upon people from all walks of
dren into the world to be assured life. Millions of wage earners have
of rearing two to adulthood. been upgraded to the point where
The Industrial Revolution they enjoy food and clothing and
brought a great change. Its dis- shelter quite comparable to that
tinctive features were division of available to persons of great
labor, free exchange of the result- wealth. Indeed, their economic sta-
ing specializations, savings or capi- tus and their opportunities for
tal formation, and mass production travel, luxury, leisure surpass
which is production for the masses. what but a short time ago was the
While this market or exchange fare of monarchs.
economy has never been completely
practiced, it certainly was begun Hired Help in Switzerland
spottily, only in minor ways here Let me shift the line of argu-
and there. Upgrading a whole ment for a moment. Recently,
people who were lying economi- while at a meeting in Switzerland,
cally prostrate was a task too several of my American friends
enormous for these revolutionary commented on different occasions,
devices in their infancy. But, lift “I just love these Swiss people.”
up bit by bit they did. The plight Well, so do I, but why be so em-
of the people lying prostrate was phatic? Reflection and observation
not worsened as has been errone- supplied the answer. The bar-
ously reported by numerous tender at our hotel, I noted, had
pamphleteers posing as historians.? a passable command of six lan-
Hayek, F. A, Capitalism and the Histor- guages. In some ways he was a
ians. Chicago: University of Chicago More cultured person than many
Press, 1954. of those he served. And, he was


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

1958 BENEFICIARIES OF FREE MARKET UPGRADING 19

typical of many Swiss who perform available by specialized industries.
personal services. Who wouldn't Seen from the point of view of the
be favorably impressed if waited consumers, button pressing became
upon by superior individuals! the equivalent of two men’s labor.
The point is that the wage for Domestic help was released by ma-
“servants” in Switzerland is very chines, freed to seek a higher level
low when compared to the U.S.A. of employment.
While Switzerland has a much
better economy than do most coun- Machines Displace Servants
tries, nonetheless, it is far from The further away from a true
being a truly free enterprise econ- market or capitalistic economy a
omy. As a consequence, many per- country is, the greater will be its
sons of ability, resourcefulness, percentage of “lower class” and the
and quality have not been raised more will personal servants be
from the personal servant status available at low wages. In a coun-
—have not been economically up- try like India, for example, one
+ graded. Their numbers are so high with a relatively modest income
relative to demand that their wage can afford a half dozen servants.
is low. And, their numbers are high The socialists in rebuttal might
because of an absence of capital — point to Russia as the exception
horsepower and tools. They have to this rule. Russia is actually a
been left to labor with little but confirmation of it. The vast ma-
their hands. jority of Russians don’t even enjoy
A European friend of mine told the status of servants who have
me that in his grandfather’s house the choice of quitting or taking
in a big provincial city of the Aus- jobs. They're slaves, for they have
trian Empire during the 1870°s one masters who coercively direct their
male servant’s time was completely lives.
absorbed by carrying water and The U.S.A. in spite of present
wood for the kitchen, water for the trends to the contrary, has more
family washing and bathing and, nearly approached the market
in winter, in chopping and carry- economy than has any other coun-
ing wood, heating the stoves, and try. Observe this striking fact: In
cleaning the oil-burning lamps. An- no place the world over is there so
other man turned up three times much talk about “the servant prob-
a week to dispose of the garbage lem” as here in our homeland.
and to clean the toilets. All these Cooks, maids, chauffeurs, valets,
chores thirty years later were laundresses are only for the well-
taken care of by installations made to-do. In Westchester County, New


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

20 THE FREEMAN September

York, it is difficult to obtain seven ing dishwashers and numberless
hours of competent house-cleaning other mechanical servants not only
service for ten dollars. Teen-age for the well-to-do but for them-
babysitters receive more in one selves. Economically, the trend
evening for watching the neigh- would be toward the open as dis-
bor’s TV than I received as a boy tinguished from the closed, static
for sixty hours of pulling weeds in society of the pre-Industrial Revo-
the hot sun. Domestic help, even lution period. Classes would give
in the deep South with its hang- way to a social fluidity — persons
over of slavery, is performed by moving in and out of different
the less and less competent and at wealth levels.

higher and higher wages. Millions The real economic interest of the
of Americans with extremely great mass of any society is in the
limited skills have been stepped to perfection of the free market econ-
higher rungs on the economic omy — in the upgrading influences

ladder — beneficiaries of the mar- — even though this may not be ap-
ket economy’s upgrading power — parent to them. They approve of
and, thus, are no longer available leveling only because it is sold to
as “servants.” them as a process which would

The person who succeeds in be- elevate them. But despite the label,
coming relatively well-to-do may the package they are being sold
complain about the lack of com- can only level downward. This will
petent and faithful servants such continue until those of us who
as grandpa had. Yet, this is pre- know the upgrading powers of the
cisely the situation the free market market economy .devise better
economy tends to create. While it ways to explain this wealth-giving
does not necessarily lessen the phenomenon.
wealth differential between people Showing how the millions may
in a comparative sense, it does have a hand in creating nonhuman
move the great mass of us into a servants that in turn will serve
wealth echelon over and above the them as well as others is a possible
domestic or servant or serf status. step not only toward better ex-

Actually, if the market economy planation but in rescuing the free
were permitted to function, we market economy which presently
could expect the day when hardly is on the socialistic skids. For it is
anyone would have personal ser- this economy which makes it the
vants. The ‘cheap help” just interest of each to serve all, an
wouldn't be available. They would incentive we should seek ardently
become highly paid workers mak- to improve, not lightly to destroy.


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

Tiles

Some pertinent questions as to whether the government ought to be...

GEORGE WINDER

HE Right Honorable Mackenzie in the State, and that its issue
King, when Prime Minister of was a government prerogative of
Canada, once made the following which, at some period of history,
statement: “Until the control and it has been deprived, either by the
issue of money is restored to the people or perhaps by the private
government, and recognized as its banks.
most conspicuous and sacred re- This is a presumption which
sponsibility, all talk of the sov- can be completely refuted, for the
ereignty of Parliament and of known facts indicate quite clearly
democracy is idle and futile.” that money was in circulation
Now I believe that there is no even before any settled organiza-
greater danger to democracy than tion resembling our conception of
for the source of its monetary sup- the State came into existence.
ply to be in the hands of the gov- If we go back to the earliest
ernment, and in this article I will times, we find that no State con-
give some reasons for thinking as trolled the supply of cattle, knives,
I do in this matter; but the chief spears, furs, salt, or ornaments
fault I find with the above asser- which were among the first forms
tion is the suggestion contained in of money of which we have any
the word “restored.” record. In the Book of Genesis
The rest of the statement is, I (chapter 24, verse 22) we read:
suppose, a matter of opinion, but “It came to pass, as the camels had
by the use of this word it is turned done drinking, that the man took
into an averment of fact. It im- a golden earring of half-a-shekel
plies — and appears to take for weight and two bracelets for her
granted —that money has its source hands of ten shekels weight of

Mr. Winder, British suthor, journalist, and lecturer, is best known for his writings on behalf
of freedom in economic affairs.

21


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

22 THE FREEMAN September

gold,” and gave them to Rebekah. ates by placing its imprint upon
It seems most unlikely that these them as warranty that they are
ornaments, which were then the what they profess to be. So long as
favorite form of gold money, and the State keeps to this function,
were measured by weight, were there is every hope that a sound
either produced or weighed by a coinage will be the result.

state-owned industry. It is only when the State goes

Sir George Macdonald — perhaps further than this, and becomes re-
the greatest authority on coinage sponsible for the whole production
— attributes the invention of coins and issue of coins, that corruption
in Europe to Greek merchants to occurs and baser metals are passed
facilitate the circulation of their for genuine gold and silver.
stock of metals. The first known Debasement of the coinage is
instance of the State venturing nearly as old as the State itself.
into the monetary field occurred Macdonald mentions that, in an-
when the Kings of Lydia stamped cient Greece, the democratic States
their seal on coins made of elec- preserved the value of their coin-
tron, a natural amalgam of gold age rather better than those ruled
and silver. Croesus, who came to by tyrants, while someone has ob-
the throne of Lydia in 560 B.C., served that in Rome the good Em-
melted this electron down to pro- perors issued good coins and the
duce gold and silver coins. bad Emperors bad ones.

Sir George Macdonald also tells In the Middle Ages, the debase-
us that the original object of the ment of coinage by governments
impression made on coins by a was so general that, when Venice
merchant was to indicate its purity struck an honest ‘“ducat” and
and not its weight. It was only Florence an honest golden “florin,”
later, when coins came to be manu- they were used for commerce over
factured in uniform sizes so that the greater part of Europe.
their value could be ascertained by
tally, that the State came into Private Coinage of Gold

prominence in the monetary field In the sixteenth century, the
by stamping coins to attest to both Africa Company gave England
their purity and weight. her most reliable gold coinage. The

One of the first duties of any sound principle was at that time
government is to see that citizens accepted that anyone who pos-
keep faith with one another; and, sessed gold could take it to the
if merchants issue coins, this aim mint and have it converted into
is furthered if the State cooper- coins stamped with the state in-


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

1958 THE SOURCE OF MONEY 23

signia to guarantee their weight be so, he is again quite wrong. The
and purity. No seigniorage or note issue was not the invention of
charge of any kind was made. The a state official, nor has its develop-
Africa Company made use of this ment taken place at the instance of
service to convert the gold it ob- the State; quite the contrary.
tained from Guinea into coins of a Paper money was evolved from
nominal value of twenty-one shil- the receipts given by goldsmiths
lings. A small elephant — the Com- for coins and bullion deposited
pany’s trade-mark — was also im- with them for safekeeping. De-
pressed upon them, perhaps as an positors found that when they
additional assurance to the public. wanted to make a purchase, it was
This golden guinea became so pop- sometimes easier to hand over the
ular that men gradually used it to goldsmith’s receipt than to collect
value all other commodities, and so and transfer the gold. To facilitate
it became the national unit of ac- this custom, the goldsmiths even-
count in place of the silver shilling. tually made their receipts with the
In this way the country moved space for the depositor’s name left
from a silver to a gold standard blank. Later, instead of giving
without conscious effort. only one receipt for the gold de-
When the guinea was super- posited, they issued a number of
seded by the pound in the early receipts in convenient denomina-
part of the nineteenth century, it tions. By the time of Charles I,
left behind it the ineradicable these receipts were recognized by
habit of all professional men to merchants as the secure promises
charge for their services in of honest men to produce gold and
guineas instead of pounds, a cus- silver money on demand. They
tom which plagues the British peo- passed from hand to hand in the

ple to this day. ordinary course of business in pay-
ment for goods and services. The
Goldsmiths Issued Paper Money goldsmith’s receipt had evolved in-

There is certainly nothing in the to the forerunner of the bank note.
history of primitive money or of The State had nothing to do
coinage to support the supposition with this development, but, in the
that the State was the original reign of Charles II, it did try to
source of the supply of money. It imitate it. In 1667 Parliament
is, of course, possible that when granted Charles the right to issue
Mr. Mackenzie King made his paper notes promising to pay
statement, he was thinking only of money from the revenue. These
modern paper money; but if this were issued in denominations as


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

24 THE FREEMAN September

low as £1, £2, and £5 and were given by the Ohio Bankers Asso-
used to pay the contractors who ciation in 1935, he said: “The
supplied the dockyards and other power to coin money and to regu-
public works. They are the first late the value thereof has always
known examples of an English been an attribute of a sovereign
government actually issuing paper power.” As a general statement
money. this is quite wrong, but we will
Had the experiment proved a take it that Mr. Eccles was think-
success, it might have changed the ing only of his own country. He
whole history of modern money went on to say: “It was one of the
and given at least a partial justifi- first powers given to the federal
cation for Mr. Mackenzie King’s government by the Constitutional
suggestion that governments were Convention.” True, but it is a little
once responsible for the monetary surprising that Mr. Eccles men-
system. But it was not a success. tions it. The grant of power to
This state issue of money was which he refers was made in 1775
repudiated by Charles in 1672, by the Continental Congress which
and Great Britain did not see met at Philadelphia. It issued
state-created paper money again notes in denominations of 14; to 8
until the outbreak of war in 1914 dollars. On each side of their text
when Treasury notes were issued. the words “Continental Currency”
The State no more originated were boldly printed.
paper money than it did any other But what happened to this first
form of money. There are, how- issue of United States dollar
ever, a few countries in the New notes? It wag their fate to provide
World which can claim that their the English language with that
right to create money, including expressive phrase: “Not worth a
paper money, is practically con- Continental,” — thus crystallizing,
temporaneous with the State it- as it were, in the very language

self. itself, a warning against the follies
of all government-created curren-

x : , . . [3
Continental Currency” cies. A subsequent experience with

The most important of these ex- the famous greenbacks gives us
ceptions to the general rule is, of another example of the dangers of
course, the United Sates itself. Mr. government-created money in
Marriner Eccles, Chairman of the America.

Board of Governors of the Fed- I think it is safe to say of the
eral Reserve Board, probably had United States that far more wealth
this in mind when, at a dinner has been taken from owners with-


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

1958 THE SOURCE OF MONEY 25

out their consent as a result of gov- trol of the State. In that year its
ernment-inflated currencies than control passed to the British Treas-
has ever occurred through the oc- ury, where it has remained ever
casional fraud or failure of private since, although it was not nation-
bankers. alized until 1946. The Bank, like
But why confine my case to the Suez Canal, was one of those
showing the dangers of state- great projects which owe their ex-
created money? These are, after istence to the imagination and
all, negative arguments. Let me energy of a company promoter.
now give an example of money The man responsible in this in-
created by private enterprise stance was William Paterson, a
which became the most useful cur- Scotsman. He was not a banker;
rency the world has ever known, he possessed the typical drive and
and the very symbol of honesty optimism which characterizes the
and worth. entrepreneur. Another of his pro-
motions was the Hampstead Water
A Word Was Coined Works. Most of his schemes were
The word “sterling” originally vast and magnificent, but he
meant nothing more than “little brought a capable brain to work
star,” and referred to the symbol on his attempts to implement some
on ancient Norman coins. By be- of them. Like that other great pro-
ing constantly associated, however, jector, Ferdinand de Lesseps, he
with the British pound, it has ab- was interested in canals. One of
sorbed a reflected glory; and now, his ideas was to cut through the
according to the Oxford Diction- Isthmus of Panama, and he ac-
ary, means “genuine, of standard tually examined the terrain for
worth or purity.” this purpose, but decided that the
There is little doubt that the times were a little premature for
“pound sterling” owes a great deal such an undertaking. He did, how-
of the respect in which it was once ever, form a company to establish
held to the long record for honesty a British settlement on the Isth-
and security earned by the Bank of mus, which he hoped would break
England, so that to say that any- the Spanish monopoly and open up
thing was “as safe as the Bank the trade of South America to the
of England” became proverbial. world. The failure of this famous
In the great days of the pound “Darien Scheme” wrecked his
sterling, before the outbreak of health and was the commercial
war in 1914, this great bank was scandal of the century.
a private company beyond the con- Such was the man who secured


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

26 THE FREEMAN September

a Charter from the Crown to form From this time forward the
the Bank of England. In 1694 the Bank flourished. It appeared to
Bank was safely established with have learned the great lesson that
a private capital of £1,200,000, the more it could keep itself free
after which Paterson sold his from the influence of the State the
shares to devote his energies to more secure it would be. However,
his Darien Scheme. Fortunately, such a bank has sometimes no
his co-directors — or Governors, as option but to advance money to the
they were described in the Charter State, and this led to another un-
— were typically hardheaded busi- happy experience.
nessmen, with less imaginative
minds than the founder of the firm. Wartime Troubles
They were also highly respected Toward the end of the eight-
— a great advantage to the Bank eenth century, the bank was re-
when it ran into trouble, as it did quired to finance the war against
within two years of its inception. Republican France and to supply
As always in its subsequent his- the Emperor of Austria with
tory, it was the government which money to keep his troops in the
was the author of its misfortunes. field. This led to its gold being
One of the objects of the Bank was drained away. On February 18,
to lend money to the government, 1797, the Bank suspended gold pay-
but this time it lent more than it ments. The final rush on the bank
could afford. By May 1696, the had occurred when it was an-
Bank was unable to meet its notes. nounced that the French Fleet was
Strange as it may seem, the off Beachy Head. Later, the French
holders of these notes had such landed in Wales but were easily de-
confidence in the integrity of the feated. This French expedition to
Bank's governors that they were Wales is one of the mysteries of
satisfied with payments on account. history. It had no possible chance
The bank tellers recorded on the of success. The explanation some-
backs of the notes presented the times offered is that its sole pur-
amount paid and promised to find pose was to bring about the failure
the balance later. of the Bank of England. The
The Bank was then able to per- French believed that the Bank's
suade the government to repay part notes would be valueless without
of its loan by regular monthly in- gold backing.
stallments, and, by the end of the However, after the first shock of
year, it was able to meet its notes the suspension, the Lord Mayor
in full. and four thousand London busi-


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

1958 THE SOURCE OF MONEY 27

nessmen signed a declaration that Industrial Age — completely es-
they would accept payment of debts caped the government’s legislative
in notes, and it soon became ap- net.
parent that the Bank’s inconvert- This Act of 1844 also gave the
ible notes had become the chief Bank of England a monopoly of
medium of exchange in the coun- the note issue. But for the same
try, and for the carrying on of the reason, this again made little dif-
war. ference.

Inflation did ensue, but it was
mild compared with that which oc- Competitive Banking
curred during the last two world During this period, as a result
wars. The important point, how- of the repeal of restrictive legis-
ever, is that, after Napoleon had lation, several great joint stock
been banished to St. Helena, the banks, all with the power of issu-
Bank of England took steps to ing credit money, grew up and
meet all its liabilities in full and by flourished. These treated the Bank
May 1821 — twenty-four years of England as a central bank with
after it had suspended gold pay- which they kept an account and
ments — it was able honorably to deposited their gold. They did this
meet all its notes in gold. not from compulsion but because

Thus Great Britain returned to the Bank provided reliable service.
the gold standard. From that date In the British Dominions this
to the outbreak of war in 1914, same type of private banking
banking in England was free from developed, each bank issuing its
state control, except for those gen- own notes. The result was as satis-
eral laws which govern the honesty factory as in Great Britain itself.

of all men alike. Seldom have undeveloped coun-
It is true that, in 1844, the Bank tries been developed so quickly.
Charter Act was passed in an at- It must be remembered also

tempt by the government to re- that the nineteenth century was,
strict the quantity of money by for England, the period of her
controlling the note issue. This greatest expansion. The whole
Act, however, completely failed in weight of this development was
its object, for bank notes had by borne without difficulty by this
this time become merely the small private banking system. Not only
change of commerce. Bank credit did the pound sterling become the
money — the medium by which the securest form of money which a
far greater part of the country’s trading people have ever possessed,
business was carried on during the but-it also became so widely re-


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

28 THE FREEMAN September

spected that it was used for the Great Britain suffered not only
payment of cargoes of merchan- inflation but also severe deflation
dise passing from one country and the greatest unemployment
to another in any part of the she has ever known. A somewhat
world. The Bill of Exchange, pay- similar experience was also in-
able in pounds sterling, accepted flicted upon America. Apart alto-
by a London banker, became a type gether from wartime inflation, the
of money which is very badly once sterling pound has lost a third
missed today. It became, in fact, of its value in the last ten years.
the most perfect international cur- These are some of my reasons
rency the world has ever known. for believing that Mr. Mackenzie
But, from the point of view of King’s statement is utterly and
the American citizen today, faced dangerously false. The exact op-
with the steady deterioration of posite is the truth. Unless the crea-
his own country’s currency, the tion and issue of money is with-
all-important fact concerning this drawn from the State and restored
British nineteenth century pri- to the private banking system, I
vately-issued pound sterling is that believe that parliamentary govern-
its purchasing power was almost ment and democracy will become
exactly the same when the system impossible to maintain.
ended in 1914 as when it began John Maynard Keynes, in Essays
with the Bank of England return- in Persuasion, referring to the fa-
ing to the gold standard in 1821. mous statement of Lenin as to the
This is so in spite of the fact that, best way to destroy the capitalist
during the same period, wages had system, wrote: “Lenin was cer-
nearly trebled. tainly right. There is no subtler,
Privately-owned banking had no surer means of overturning the
served the people so well that, in existing basis of society than to
1914, they did not know what in- debauch its currency. This process
flation was. With the outbreak of engages all the hidden forces of
war, most States took control of economic law on the side of de-
their banking systems and have struction, and does it in a manner
not surrendered them since. Dur- which not one in a million is able
ing the next forty years, nearly all to diagnose.”
the currencies of Europe were The strange thing is that it ap-
either completely destroyed or pears never to have occurred to
greatly reduced in value, and their Lord Keynes that, under a free
depreciation frequently went on economy, it is impossible to de-
just as steadily in peace as in war. bauch the currency. ooo


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

Fv SATAN

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UNSATISFIED DE ae

OST OF US have many unsatis- Much of the unhappiness —
fied wants or desires. Since much of the misery — in the world,
the means available for satisfac- is due to unsatisfied wants of
tion of these wants are limited — human beings. Those unsatisfied
that is, scarce, there are two meth- desires go beyond the primitive
ods of treatment of our wants: (1) need of food, shelter, and clothing.
We can try to satisfy our wants by They include, in addition to the
exerting efforts to obtain the goods minimal requisites of existence,
or services needed for their satis- such things as dental and medical
faction; or (2) we can discipline services; services of entertainers,
ourselves in suppression of our musicians, actors, and athletes;
desires so rigorously that we find facilities and service for transport
most of those desires shrink to to other places; items of personal
nothing and the few remaining are adornment; and many other goods
limited to minimal necessities for or services.
cheap food, crude shelter, and Not all the miseries in the world
scant clothing. would be eradicated if we were able
Generally speaking, and with to satisfy the human desires for
few exceptions, the second method goods and services. Many of the
of “satisfaction” of our wants fails most powerful stimuli to human
to appeal to most people. Most of action are effective outside the
us are powerfully activated to ac- sphere of economic calculation.
quire and use good food, good com- Poets have sung of the beauties of
fortable, and convenient homes, nature and of the stars and above
and to wear clean, comfortable, all of human love. Song writers
and good looking clothing, as well have told us, “The Best Things in
as to have available to us the Life Are Free.” Material posses-
other comforts that accompany sions —and even availability of
wealth. services of expert professional men

Mr. Morrison of Seattle has recently retired as an official of Boeing Airplane Company.

29


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

30 THE FREEMAN September

— are not the end-all and be-all of wants which acquire priority in
our desires. Even though the gen- this way were, perhaps, never rec-
erality of us were so well supplied ognized as wants until the earlier
with all material possessions and wants had been satisfied. Their
able servitors, there would still total seems to grow without limit.
remain unsatisfied desires. Eco- How, then, can we allocate our
nomic analysis cannot give us the productive abilities to supply
answer to the problem of minimiz- wanted goods and services in such
ing human miseries. a way as to give the greatest sat-
But we may essay an analysis isfaction — that is, maximize hu-
of the wants of mankind for goods man happiness?
and services with the object of
reducing human misery in that What Each Knows Best
field. Elimination of economic Generally speaking, and with but
miseries — that is, increase of eco- few exceptions, each of us knows
nomic satisfaction — may aid or his own wants better than he
may not aid in amelioration of knows the wants of others and
some of the noneconomic problems. better than others know his wants.
A man whose economic wants are Therefore, if we make it possi-
largely satisfied may have leisure ble for each individual to purchase
to enjoy the beauties of nature or freely those goods and services he
star gazing or philosophic or re- desires most, with the purchasing
ligious contemplation. power available to him at the time,
But such speculations lie beyond that person will have achieved the
this essay. Its purpose is to inquire maximum satisfaction possible to
into what needs to be done to mini- him.
mize our unsatisfied wants. That satisfaction will be great-
Our wants are not all of the est if the persons who produce
same intensity. They vary in in- those goods (or who render the
tensity from time to time even in services) are free to offer the goods
the same individual. Different in- and services most in demand.
dividuals have different wants The best way to effect the maxi-
even at the same time. As one want mization of offers of goods and
of an individual is satisfied —per- services is to reward the sellers in
haps only for the time being — its ratio to their supply of the goods
priority is yielded to other wants most desired by buyers. Then the
of the individual, and those, if buyers will make wealthy those
satisfied, to still other wants and who serve them. They will do so
so on endlessly. Many of these new by their purchases. They will re-


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

1958 UNSATISFIED DESIRES 31

fuse to make wealthy those who they result in diminution of sat-
buy (at the offered price). Their isfaction of human wants.
absention from buying will, and Some people seem to believe that
does, make failures of those whose “government” or the “State” or
offers of goods are unattractive to some political device can supply
buyers. goods or services to them “free.”

Generally speaking and with few There is no political device — no
exceptions, producers of goods and method of voting — which will pro-
sellers of services will devote their vide anything “free.” Someone
energies to the supply of goods must produce the good or render
and services in which they have the service. If payment be not
the greatest proficiency to satisfy made by the recipient, then the
the wishes of purchasers. That is, government must force someone
they will do so unless prevented by else to pay for it. The exercise of
intervention of force or threat of such governmental force involves
force. Legal intervention is always expense to the government. That
backed by force or threat of force. expense also has to be paid for. So
Legal intervention prevents sup- the recipient of “free” goods or
pliers from competing freely to services always receives less in
supply the wishes of consumers. goods or services from the govern-
Legal intervention is usually done ment than the government takes
under the guise of protecting con- from those who pay for them. In
sumers, although many laws are that manner the total of satisfac-
enacted at the behest of the sellers tion of wants is diminished — not
in order to help the sellers raise maximized.
prices (or fees) charged con- If we wish to increase human
sumers. happiness, we will do all we can

Fair Trade laws are an example to permit purchasers their free
of laws designed to raise prices to choice of goods to be purchased
the injury of consumers and to the and permit producers the utmost
benefit of sellers. . of freedom in making and bring-

So it is with all other legal and ing to market the goods (or serv-
extralegal interferences with free ices) desired by the consumers.
markets, regardless of the an- Freedom to purchase, combined
nounced intent of their advocates. with freedom to produce and sell,
They have one thing in common. will maximize human happiness in
They raise prices to consumers; those areas of human action in-
and, since we are all consumers, volving goods and services.

® 0 °


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

GUARANTEE
OF

reedom

Wg



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

ESS

= i Widespread celebration of Constitution Day on September
17 reflects a justifiable pride in the charter of a nation
: .; whose history records many blessings and accomplishments
(of freedom for individuals. But the idea of a Constitution
- { Day also involves danger of worshiping a document,
| blindly unaware that its words are losing their meaning
| ond its ideas being perverted until freedom in nome
| tends toward compulsory collectivism in fact.

Behavior of individuals according to the spirit behind
| constitutionally limited government is the only real guar-
'  antee of freedom.

M. ROBERT BEASLEY

Whether you earn fifty dollars a
week or fifty thousand a year,
there is a precious parchment in
Waghington, D. C., designed to
guarantee your freedom and pur-
suit of happiness. Anyone, regard-
less of race, creed, or color is as-
sured these rights; the only re-
quirement necessary is American
citizenship. This document, which
costs you nothing, is unquestion-
ably your most precious American
heritage.

So treasured is this single sheet
of aged parchment that the bronze
and glass case in which it reposes
is filled with helium gas, protect-
ing it from any possible damage
from free oxygen. Special yellow
cellulose acetate filters have been
blended into the glass, shielding it
from the ultraviolet rays of sun-
light. A steel and concrete vault
has been constructed beneath the

Mer. Beasley is a free-lance journalist.

33


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

34 THE FREEMAN September

floor to protect it from fire, bomb- done without causing the national
ing, or invasion; a special mechan- blood pressure to rise, but if an
ism can lower it into this fireproof- attempt were made to lay as much
bombproof chamber in less than as one finger on, say Article I of
one minute, should danger threat- the Bill of Rights, to alter freedom
en. An armed guard is present at of utterance, every single Ameri-

this shrine 24 hours a day. can would be—and rightfully
Almost a million people annually should be — up in arms.
gaze in reverence at this precious And so it is with the other nine

document that promises every amendments. If you take away one
American — in ink that has faded of them, you will weaken them all.
during these turbulent years, but Take freedom from your neighbors
in words that never dim—the right and you enslave yourself. In the
of unfettered life, personal liberty, words of the late beloved William
and pursuit of happiness. This in- Allen White, “Liberty is the only
tended guarantee to all Americans thing you cannot have unless you
against control by totalitarian gov- are willing to give it to others.”
ernment is your Bill of Rights.
Few of the guarantees, which Extraordinary Law

are commonly referred to as “con- To Americans, the first ten
stitutional rights,” are contained amendments have the force of
in the Constitution itself; they are moral law, on a much higher plane
in the first ten amendments, placed than ordinary legislation, not to be
in force on December 15, 1791. In abridged or abolished — even by
reality, the precious liberties Congress. They are the Supreme
shown on the yellowing face of the Law of the land, and we expect the
Bill of Rights mean more to the Supreme Court to guard the liber-
American citizen than the actual ties they promise and nullify any

Constitution. law which would lessen their ef-
The Constitution, which is basi- fect.
cally a blueprint for our govern- Powerful as the ten amendments

mental machinery, became effec- are, they are still written — just as
tive in March 1789, only because a the Ten Commandments — in ever-
definite understanding had been yday language understandable by
reached that a Bill of Rights would all. It does not take a legal mind
be added as soon as the first Con- to comprehend the wonderful
gress went into session. words of the Bill of Rights.

It is entirely possible to change Article I alone sets forth in one
the Constitution, and it has been sentence enough freedom to make


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

1958 GUARANTEE OF FREEDOM : 35

dictatorship impossible in Amer- issued unless good cause has been
ica: “Congress shall make no laws shown and sworn oath taken; no
respecting an establishment of re- accusation by witnesses unless they
ligion, or prohibiting the free ex- can be produced in open court to be
ercise thereof; or abridging the confronted by you; nor can you be
freedom of speech; or of the press; forced to incriminate yourself; and
or the right of the people peace- no person is to be tried twice for
ably to assemble, and to petition the same charge. You shall not be
the Government for a redress of subject to excessive bail, torture to
grievances.” obtain confessions, or cruel or un-

There, in language plain to usual punishment. You shall have
everyone, our government took the the inalienable right to a speedy
unprecedented step of protecting trial- and to have assistance of
the citizens from itself. It freed counsel and the right to subpoena
religion from all interference by witnesses in your behalf.
the State; and by promising free These rights make us the freest
speech and press, it exposed itself, people in all the world and place
as no dictatorship would dare do, the power to protect these rights
to the devastating winds of open in the hands of all American citi-
and collective criticism. zens.

The people retain the right to
criticize with impunity and round- A Duty of Citizenship
ly denounce Congress, the Supreme But ironically enough, some-
Court, or the President himself. where in the -country the Bill of
This not only provides a safety Rights is violated every minute of
valve for the pressures that inevi- the day! Its most dangerous foes
tably develop in a complex society, are not foreign dictators or schem-
but also is an ever-present sword ing politicians, but those of us who

hanging over the heads of the gov- — while claiming every privilege
ernment officials to keep them on for ourselves — would deny it to
their toes. others. To rise in defense of a

American citizens have the right neighbor’s rights is a first duty of
to keep and bear arms, says Article citizenship. A second is outspoken
II, and the next amendment bans criticism of every form of local and
the government from confiscation federal government when it fails
of your property without reason- in its duty to the first ten amend-
able indemnification. Your home is ments. When the people think —
immune to search by police with- and say what they think — the gov-
out a warrant, which cannot be ernment obeys!


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

36 THE FREEMAN September

Edwin McNeill Poteat, D.D., owed in earliest laws and morals.
once said from his pulpit: “Free- Some are suggested by the Magna
dom is placed in jeopardy more by Charta. Some are written into the
those who will not exercise it than Roman Code which maintained the
by those who will not permit it. essential dignity of the free citi-
Indifference opens more gates to zen however poor. Some are im-
the enemy than does tyranny.” plicit in the teachings of Christ.

The precious guarantees of the Over and over the Old Testament
Bill of Rights were not born be- tells us that all men are created
cause some high-minded gentlemen equal — not alike, naturally — but
penned self-evident truths shortly equal in the sight of a just God
after our country was founded. before whom kings stand naked as
Our liberty was conceived ages ago do their slaves.
in the darkness of dungeons where
brave minds whispered to un- Early Struggle for Freedom
broken souls. It was wrenched into Actually the American people
birth when limbs were pulled apart had been hammering away at the
on the torturer’s rack and knew the problems of self-government for
screams of women who saw their 150 years before our Revolution.
men butchered. It drew its breath Rocking on the wild Atlantic, the
of life as ill-trained farm boys Mayflower Pilgrims in 1620 drew
choked their last breaths, pinned up, in their famous Compact, the
to the earth by the bayonets of first instrument of our republic;
Hessian mercenaries. imperfect as it might have been, it

The fight to gain recognition of was an honest beginning. The pri-
these “inalienable rights” is as old mary mistakes of the Puritans
as man’s faith in them. Tyranny is were corrected by Roger Williams
a sleepless foe. Always somewhere in 1644. Then there followed Wil-
in the world men are being told liam Penn's famous Charter of
they have no rights but what the Liberties granted to the Pennsyl-
State allows. Such a State gives vania colonists. The words, “in-
you but one liberty — that to obey. violable rights,” turn up in a peti-
What a world of difference from tion signed by the inhabitants of
our belief that ‘“‘government de- Anson County, North Carolina, in
rives its just power from the con- 1769. The Virginia Bill of Rights
sent of the governed.” (1776) and the Massachusetts

The limitations on the power of Declaration of Rights (1780) were
government which we have defined but the older sisters of the first ten
in the Bill of Rights are foreshad- amendments to the Constitution.


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

1958 GUARANTEE OF FREEDOM 37

No wonder that, when the of Rights, authored by George
Founding Fathers signed the Con- Mason —one of Washington's
stitution in 1787, which enumer- neighbors on the Potomac — and on
ated only a few rights of the com- Madison’s own works for religious
mon citizen, the people were indig- freedom in Virginia, the original
nant. They had fought a bloody presentation to Congress was com-
war, ill-armed, starving, barefoot, prised of seventeen amendments.
for more than this —~ they had These were quickly incorporated
fought to secure their individual and reduced to a total of twelve
rights — and they knew what they amendments. From the twelve ar-
meant by them. ticles that were proposed, the first

So did some of the delegates to two were rejected. On September
the Constitutional Convention, who 25 the ten articles in their present
refused to sign the original docu- form passed the House and Senate
ment because it contained no Bill by the necessary two-thirds major-
of Rights. So did Thomas Jeffer- ity and were referred to the legis-
son who wrote from Paris, where latures of the several states. In
he was Ambassador, indignant pro- nine months enough states had
tests stating that the lack of the ratified to make these amendments
Bill of Rights was to him a “fatal part of the Constitution. Finally,
defect.” Some of the states ratified on December 15, 1791, these ten
the Constitution only on the under- amendments of the Bill of Rights
standing that a Bill of Rights were placed in active force as part
would be added. Among those of our Constitution.
states were Virginia and North Sometimes you hear that your
Carolina which had adopted a reso- Bill of Rights “guarantees” you
lution declaring their refusal to your liberties. United States Su-
ratify the Constitution until the preme Court Justice William O.
Bill of Rights had been guaran- Douglas once said on this point:

teed. “The Bill of Rights promises much,
but it is up to the American peo-

The First Ten Amendments ple to make that promise good.”
In his first inaugural address, Chief Justice Warren, speaking

George Washington reminded Con- on the fifth amendment, made it
gress of this duty. Madison intro- plain that the Bill of Rights applies
duced the subject on June 8, 1789, to the uneducated as well as the
about three months after the first learned, by saying: “The intent of
Congress had assembled. Drawing the witness should be considered,
largely on the earlier Virginia Bill the claim of privilege does not re-


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

38 THE FREEMAN September

quire any special combination of touch. When we look at the condi-
words. ..."” tions of the people in those un-
U.S. District Judge Harold R. happy lands and contrast them
Medina, who presided over the his- with our own country, we can
toric trial of eleven American com- really appreciate what the Bill of
munists and sentenced them to Rights means to each and every
prison, said: “I am for the Bill of American.
Rights. That includes the Fifth
Amendment. I would rather see all The great liberties assured by
the communists go scot-free than the Bill of Rights were paid for in
to lose one provision of the Bill agony, blood, and the sacrifice of
of Rights. ...” lives. They can be kept secure only
A vast portion of the world, un- by vigilant conscience and the
familiar with the rights we claim, courage to speak out.
is under communist control at this Dr. Wayne C. Grover, Archivist
very moment. In these communist of the United States, who is
lands the individual cannot walk in charged with the security of this
dignity, secure in his rights, and priceless document, sums up his
free in his actions; for dictator- feelings: “All we can guard is the
ship denies the basic principle that written words on the parchment.
each individual has dignity and Only the American citizens can
freedom that the State cannot guard their spirit.” eo oo

00008 ON 1008aTY., Your Choice

WE MUST CHOOSE between the destruction caused by government
paternalism and the security insured by individual freedom with
individual responsibility as expressed in the Bill of Rights. There
is no other choice.
As it must, the choice rests with each of us as individual
+ Americans. No one can tell us what to think or do. No one should.
To do so would be a violation of both the spirit and the words of
the Bill of Rights. As responsible persons, each of us has the
privilege and the obligation to pursue what each considers to be
the right course of action. But this above all — before we act,
let us understand the meaning of our actions, the direction in
which we are going.
DEAN RUSSELL, The Bill of Rights


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

ROBERT LE FEVRE RELATIONSHIPS

WHEN WE COME to examine it, the moral lesson in the something for
basic human relationship is a something practice. There is an
market relationship. We do not appalling lack of morality in the
mean to imply by this statement something for nothing idea.
that man is simply a materialist, It is time that we understand
seeking evermore for a better just what a market is. There seems
gadget. Man is clearly a composite to be a general feeling that a
of many drives, among them both market must consist of a building
an intellectual and spiritual moti- or a group of buildings in which
vation. Man wants to be loved and the public can be admitted so it
understood. He also wants to love can make purchases. The truth is
and to understand. that a market place exists any
But the market relationship is place in the world where goods
one which functions even in this and services are exchanged on a
area. The concert singer does voluntary basis.
what he does, not only because he Even the family relationship is
likes to sing and because he can based on a market concept. Two
sing surpassingly well, but be- may not be able to live as cheaply
cause he also has to eat. He con- as one. But two, working together,
trives to put his talent into the can accomplish far more than in-
market place. He exchanges his dividuals working apart. This ac-
ability for your dollars, giving you complishment is based on special-
pleasure as you give him a means ization in which both partners in
to subsist. the family group provide some
The market relationship is based special talent or skill, thereby as-
on trade. And trade we must de- sisting the other partner in what-
fine as any exchange of something ever has to be done.
for something else. There is a fine Altogether too often, persons

Mr. Le Fevre is President of The Freedom School. He also writes the editorials for the Colorado
Springs Gazette Telegraph, from the July 14, 1958 edition of which this article is reprinted.

39


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

40 THE FREEMAN September

rebel at an economic understand- what you want is from other peo-
ing simply because they fancy ple. And in order to obtain from
themselves above the materialistic others in an honest manner, you
facts of life. They wish to be must give them something they
teachers, philosophers, artists, want and are willing to trade for.
dancers, writers, singers. And, It is, of course, possible in a
because they do not understand primitive or backward civilization
the market relationship, they fancy to provide almost all of what you
that the business of making a liv- want yourself. You can raise your
ing is for less talented and skilled own wheat, grind your own flour,
members of civilization. They im- make your own bread, construct
agine that they can subsist, like your own furniture, form your own
froth on a mill stream, never tak- primitive tools, and live as a her-
ing the time to realize that what- mit. This is true if you do not
ever it is that pleases them must value your own human energy too
also please others in the market highly and are content with sub-
manner, or they will starve. sistence only.

Whether you fancy yourself as But if you want the finer things
a businessman, supplying goods of life and are anxious to have
and services to people for a price more than just enough to get by,
that includes a profit, or as an you must undertake to provide
artist, awakening a love of beauty something for others. It is on the
and graciousness in the minds of surplus of your production that
people, the fact remains that your you will progress farthest. And
basic association with all other this is true, whether your surplus
persons is a market association. consists of superior sermons re-

Only those who succeed in the specting the hereafter, superior
market place can ever be truly dancing ability, or a superior skill

happy. in displaying merchandise.
To live at all means that you
must trade that which you have for In American civilization, we

those things you would rather have grown rich and prosperous
have. You cannot exist as an iso- both in material and spiritual
late, satisfying all of your own re- things, by virtue of the fact that
quirements. Whether you seek we have so largely employed the
money or applause, a high stand- market relationship. And an
ard of gadgetry or simple recog- understanding of this relationship
nition, the only place you can get is primary. oo 0


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

A skilled analyst

oftaboriowand | THE PROPER ROLE

labor relations

el OF TRADE UNIONS
IN SOCIETY

SYLVESTER PETRO

» Beyond fairly narrow limits it of society in which we actually
is arrogant and presumptuous for live, let alone the kind in which we
any person to define the role and wish to live.

conduct of any other person or

» While recognizing the existence
group of persons.

of the moral, intellectual, and social
» Assuming one has thought the chaos of our times, I do neverthe-
matter through, one may go so far less have a set of standards to
only as to set outside limits of which I adhere because they seem
conduct for others. But setting to me compelling, both historically
such limits will be a vain and and rationally; and those standards
merely personal indulgence —it form the basis of my judgment
will not be accepted as the basis of concerning the “proper role” of
general social policy or action — trade unions in society. Everything
unless it meets one extremely im- I have to say here is rationally
portant requirement: the limits derived from the basic standards
must be based upon widely under- which I shall now elucidate.

stood and equally widely accepted

» In the first place, I take per-
principles and standards. P P

sonal freedom as the central and
» One of the saddest features of basic social institution, because I
our age lies precisely in the deep feel that the only kind of society
and widespread differences which worth living in is a free society;
exist concerning basic standards because I believe that, men being
— and indeed concerning the kind the kind of creatures they are, only
Dr. Petro is Professor of Law at New York University School of Law. Further detail concerning

the views outlined here may be found in his book, The Labor Policy of the Free Society (New
York: Ronald Press, 1957).

41


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

42 THE FREEMAN September

a free society can endure; and the organizing or the collective
because I believe that the ultimate bargaining stage. If a man does
goals of men, spiritual and ma- not wish to join a union, he is
terial, stand their best, if not their entitled, under this theory, to
only, hope of realization in a free expect his society to prevent a
society. union from forcing him to join;

he has an equal right to society’s
protection of his decision to ap-
ply for work, or if he already has
a job, to continue working at it
during a strike.

» A society cannot be free in any
meaningful sense unless all men
have the rights of private property
and freedom of contract.

» The rights of private property 2. If unions have acquired the
and freedom of contract exist only kind of power associated with
if stealing, cheating, and physical monopoly in the true sense, the
force are prohibited. law of the free society should
» The right of freedom of con- also prohibit them from exerting
tract means that every man has economic pressure upon em-
the right to join with other men ployees to join. For in the hands
in the pursuit of common objec- of a true monopoly, economic
tives, so long as the group action coercion is the real and practical
does not interfere with the equal equivalent of physical coercion
rights of other men equally to pur- in respect of the rights of pri-
sue their own interests as they vate property and freedom of
wish. contract — and this means that

in the present condition of
things, the Taft-Hartley Act is
entirely sound in forbidding
both physical and economic coer-
cion by trade unions. The same °
analysis suggests that prohibi-
tion of all forms of compulsory

» This means that every person
has a right not only to join, but
also to refuse to join, any group; it
means, too, that every group has
the right to grant or to deny ad-
mission to anyone seeking to enter

the group. unionism is sound — that, in
» From these standards, at least other words, those states which
two general inferences are immedi- have “right-to-work’” laws are
ately clear concerning the proper on the right track. This analysis
role of trade unions in a free suggests, again, that the ma-
society : jority-rule (or exclusive-repre-

1. No form of physical com- sentation) principle should be

pulsion is permissible, at either repealed.


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

1958 THE PROPER ROLE OF TRADE UNIONS 43

» Now, as to the objectives of ested in a free society will draw
union conduct. Assuming that the the line at the use of compulsion
question of standards for the con- and coercion by trade unions in the
duct itself has been settled, here pursuit of their objectives. They
is where a great deal of modesty will contend that trade-union par-
is required. If a voluntary associa- ticipation in management decisions
tion does not engage in conduct de- must always come about as a result
priving others of their basic of peaceful, voluntary agreement —
rights, it seems to me that not too not as a result of coercion, force,
much can be said about the specific and violence. Admittedly, this
details of the association’s objec- leaves the general matter of union
tives: objectives and functions in a some-
higher wages and better work- what vague posture.
ing conditions,
participation in other manage-
ment decisions (for the first
can be considered management
decisions whatever they may
be called),
pricing of product, choice of lo-
cation, and other similiar
matters. :
All these may, under the theory So too it is not within anyone's
of the free society be regarded as competence to say that a union
perfectly permissible objectives — May not aspire to improving wages
if no rights are infringed in the and working conditions or to any
seeking. One must be careful here, of the other objectives mentioned
however. Libertarians will not put 2bove.
arbitrary limits upon a man’s in- One can say only that, from all in-
come; they will not give vent to dications, whether theoretical or
churlish envy when their neigh- historical, there is little reason to
bors or acquaintances achieve ma- believe that a union as such can
terial success. On the other hand, 90 very much about any of the
they will be quite careful in evalu- listed objectives, except perhaps
ating the methods utilized to gain the single one of cooperating in the
material ends. So too in the case achievement of better day-to-day
of trade unions. While refusing to Working conditions.
set arbitrary limits upon the func- And even here there is some ques-
tions of trade unions, those inter- tion. For the political character of

» This much may be said, how-
ever: while a ditchdigger has
every right to aspire to be a nu-
clear physicist, or a physician to
be a dramatic actor, there is little
reason to believe that either occu-
pation, as such, contributes much
to the achievement of the other.


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

44 THE FREEMAN September

unions tends to embarrass the ment is in a better position to do.
grievance-prosecuting function,

Ne The worst feature of the confusion
rather than to aid it.

which exists today in the area un-
» Iam left, then, with the conclu- der discussion is that it has tended
sion that while I must admit the t0 confuse people on that very
right of unions to try to do what- point. Real improvements can come
ever they wish to do, and while I ©only from the same source which
must emphasize the right of Increases the wealth of nations
workers to form and join unions generally — freedom for savers, in-

if they wish — despite all that, I vestors, entrepreneurs, and busi-

. ness management.
see no great hope of significant anag

improvement from trade-union ac- » The answer to the fundamental
tion. and abiding problems of the em-

ployer-employee relationship is not
» All the things which unions trade unions but better employee
would like to do, business manage- relations departments. oo 0

DJEJATSOIN NE | Employee Opportunities

THE FREE MARKET allows a person the opportunity to be both
an employee and a stockholder under a single corporate man-
agement. The market offers the opportunity, though it does not
guarantee any individual an unlimited supply of personal
ability or capital with which to take advantage of all oppor-
tunities. The fact that an employee has the opportunity to
invest capital in the corporation is a protection to him. If he
feels that the stockholders are getting more than a fair share of
the corporate product, he may protect his interests by purchas-
ing some of the stock. Most of the industrial corporations pay
out in wages and salaries each year more than enough money to
buy a controlling interest in their voting stock — if the em-
ployees wanted to use their earnings for that purpose.

Aside from the possibility of dividends, there are at least two
other reasons why employees might want to invest some or all of
their savings in the common stock of the corporations which
employ them: (1) This is a proper method of gaining control
over management, and (2) Such investment may help to increase
the supply of raw materials, tools, and plant facilities which

are necessary if there are to be more and better job opportunities.
PAUL L. POIROT, Bargaining


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

— a TT

© An
Ancient I
1 Chinese

\_ Story 4

eer eto esr + prem

FREDERIC BASTIAT (1801-1850)

HERE WERE in ancient China many unemployed Chinese. But
two large cities, called Tchin that isn’t all.
and Tchan. They were connected At the end of three months the
by a magnificent canal that had Emperor summoned his Prime
been built to encourage more trade Mandarin and said: “Kouang, look
at less cost between the cities. But across the old canal.”
during a period of unemployment Kouang looked and saw a multi-
in that section of China, the Em- tude of men at work. On the other
peror decided to create jobs by side of the old canal, these workers
ordering large blocks of stone were excavating, filling, leveling,
thrown into the canal, thus making and paving. They were building a

it useless. highway between the two cities to
The Emperor’s Prime Mandarin, facilitate trade!

when ordered to carry out this When another three months had

plan, said to him: “Son of Heaven, elapsed, the Emperor again sent

this is a mistake!” for his Prime Mandarin and said:
The Emperor replied: “Kouang, “Kouang, look!”

you talk nonsense.” (I am here And Kouang looked. He saw the

giving you only the substance of road completed. Crowds of carts
their conversation.) At any rate, were carrying goods from one city
the quarrying, transporting, and to the other. And a multitude of
throwing of these blocks of stone Chinese porters were carrying on
into the canal provided jobs for their tired backs enormous bur-

45


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

46 THE FREEMAN September

dens from Tchin to Tchan and perity can be created by obstruct-
from Tchan to Tchin. He also no- ing trade.
ticed that builders were busy con- Kouang no longer argued that all
structing inns for travelers along this labor was merely being di-
the new highway. Kouang was be- verted from other employment;
ginning to be convinced that his that these same people would also
Emperor’s scheme to make jobs by have been eating, trading, build-
filling in the canal was a brilliant ing, and so on even if the eanal had
and practical idea. But there is been left open; that the people as a
still more. whole were now working harder
Another three months passed, and producing less. Like his Em-
and the Emperor sent again for peror, he was so intrigued with
Kouang and said: “Look!” what he saw before his eyes that
Kouang looked. In addition to he completely ignored the other
all the jobs he had seen before, side of the picture.
there were now a great many Eventually the old Emperor
more. The hostelries were now died. His successor, Son of Heaven,
completed and full of travelers. gave serious consideration to that
And to supply their needs, there other side of the economic equation
were butcher shops, bakers’ stalls, represented by this fable. After
shops for the sale of edible birds’ deep thought on the matter, he
nests, and so on. There were also spoke as follows: “I have not come
tailors, shoemakers, sellers of par- to this high office to create obsta-
asols and fans, and many more. cles to trade and to divert and mis-
And as these service people also apply labor. It is my duty as Em-
needed houses, there was a plenti- peror to facilitate the transit of
ful supply of masons, carpenters, goods and passengers between
and roofers. Then, of course there Tchin and Tchan; to encourage the
were policemen, judges, and other most economical methods of trans-
necessary government officials —as portation; to see to it that the
well as smugglers, thieves, robbers, prices of tea and clothing are as
and characters like that. low as possible. For these reasons,
Finally Kouang was fully con- I command that the canal be re-
vinced that his Emperor was in- opened to those who choose to use
deed the most brilliant genius who jt.” so 0 0
had ever lived. The Son of Heaven = —w—-——
had proved conclusively that em- T ransluted ond condensed by Loon Rus-
process of destruction; that pros- 1863. pp. 184-187.


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

the “Plot” that never was...

BETTINA BIEN

“THEY” are opposed to free enter- are, possibly conceive, let alone
prise. “They” want more govern- carry out successfully, such a com-
ment controls. “They” seem to be plex scheme as would have been
“plotting” to place control of the necessary to “plot” precisely in ad-
government and of the country in vance the path to present-day so-
their own hands. “They” appear to cialistic government?

have been responsible for the ever-
increasing trend toward socialism
and communism over the last hun-
dred years or more. But who are
“they”? Is it possible for a few
human beings, no matter how bril-
liant or clever they might have
been, to have planned the whole
thing?

Those who think that “they”
were responsible for the New Deal,
the Fair Deal, and other recent
socialistic legislation imply that
these are all results of conscious
planning. In retrospect, it certainly From time to time throughout
looks as though a “plot” was con- history, various persons have
ceived to destroy freedom and in- united to work for common goals,
dividual enterprise. Each day’s sometimes frankly and openly,
events, necessarily built on the other times forming conspiracies
foundation of events which pre- for certain definite purposes. There
ceded, often appear to arise from is no doubt that some people have
situations consciously created with sincerely believed that capitalism
a definite purpose in mind. Yet was “bad” and should be destroyed
could any individuals, or groups of and, as a result of their belief,
individuals, fallible as all humans have worked to that end. No doubt

A. Devaney, Inc., New York

Whe are ‘they’?

Miss Bien is a member of the staff of the Foundation for Economic Education.

47


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

48 THE FREEMAN September

many people have believed that the once expressed, gain acceptance
future peace and prosperity of the slowly. Some never attain wide
world depended on the coming of popularity and gain only a nar-
socialism and, in all sincerity, have row and limited circle of adher-
taken steps they thought would ents. Others, however, may spread
lead in that direction. Undoubtedly like wildfire and appeal to persons
an international conspiracy exists far and wide. One idea that has
today. gained wide popularity is the be-
Such man-conceived plots and lief that government force can be
plans, aimed at specifically stated an agent for positive good.
goals, appear from time to time Although largely credited to
on the stage of history, only to Marx, this idea preceded him by
vanish once more when their prin- many years. The Mercantilists, for
cipals, both founders and followers, instance, favored using the power
pass on. of government to control world
It is not difficult, when study- trade. Before the Industrial Revo-
ing the history of such conspira- lution, the British government
cies later, to understand the role supported the price of wheat and
each individual played in their de- paid subsidies to encourage ex-
velopment, accomplishments, and ports. Even Adam Smith, who de-
conclusions, whatever they might serves a great deal of credit for
be. Such man-conceived plots and recognizing that free men, without
plans, however, are necessarily direction, could plan their own af-
limited in scope. fairs better than if they were dic-
What, then, is the explanation tated to by government, favored
of the much broader movement, government control of interest
the world-wide ideological shift rates.

toward socialism? As men gained more understand-
} ing of economic theory, however,
Ideas Determine Action they gradually began to see that

People act on the basis of ideas government interference with pri-
they hold. It is the individual vate affairs was not only unnec-
choices and actions of countless essary but detrimental. Apprecia-
persons, considered together and tion for the reasons why the prin-
interpreted, that make up the big ciples of “laissez faire” should be
movements, trends, and changes of applied consistently to all phases
history. of the economy spread during the

Every idea originates in the seventeenth and eighteenth cen-
minds of individuals. Some ideas, turies. As a result, the freedom


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

1958 THE “PLOT” THAT NEVER WAS 49

philosophy, even though not always proposed as a means to destroy
perfectly understood, became the capitalism are now considered by
idea that guided the majority in many persons as a way to preserve
their actions during that period of it. In this respect, Marx was wiser

history. than the majority of the people to-
day. Nevertheless, belief in" the
Marx intervenes false idea that government inter-

All during this time, a number vention can preserve capitalism
of persons clung to the socialistic has led countless persons to advo-
philosophy that government, in cate policies which have been tak-
order to do “good,” should control ing this country, and the world,
and regulate individuals in their down the road to socialism.
private affairs. Toward the end of What the people who want to do
the nineteenth century, this old positive good by passing added
idea gained more and more adher- laws do not see is that government
ents. The writings of the French interferences with the free inter-
Positivists and of Karl Marx had play of individual actions on the
appeared. These works contained market worsens, rather than im-
just enough truth to make them proves, the situation. With the best
believable among persons who of intentions, in the sincere belief
lacked an understanding of eco- that legislation can remedy or im-
nomic theory. The ideas they ex- prove a bad situation, one law is
pounded appealed to many persons enacted. When it makes matters
‘who felt, for some reason or other, worse, men, who believe that gov-
that their own special talents were ernment force can be used con-
not sufficiently recognized and who structively because they do not un-
believed that government force derstand free market checks and
could be used to remedy this situa- balances, advocate another law.
tion as well as to perform other This in turn creates a new predica-
acts of positive good. ment which it is again suggested to

At one phase in his development, remedy by still a new law.

Marx asserted that government in-

tervention should be used to de- We See the Results

stroy capitalism. Through the The present situation, the trend
years, this idea has become so in- one sees over the years which has
tertwined with the belief that gov- taken us into more and more so-
ernment force can be used for cialism, therefore, is simply a con-
positive good, that many of the sequence of the idea held by so
measures which Marx specifically many people that government in-


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

50 THE FREEMAN September

terference can be used as an agent good advantage the situations in
for “good.” Faith that government which they find themselves.
interference can help matters The steps individuals take at
dominates the thinking of most any instant depend on what they
people today. It leads individuals consider expedient at the time.
to advocate more and more laws in They plan. Everyone must. But
the attempt to solve the problems any individual, group, or organi-
which are constantly arising from zation with a definite goal in mind,
past laws and changing conditions. must constantly make changes in

More and more predicaments re- various details, even if they con-
sult, for which solutions are again tinue to aim at the same goal, in
sought by making new laws. As order to adapt and adjust to unan-
government becomes bigger and ticipated conditions appearing in
bigger, and individuals are left the world as a result of the acts
with less and less freedom to plan and deeds of other persons outside
their own affairs, chaos and con- their control. Although a series of
fusion increase. In such a situa- actions may seem in retrospect to
tion, power-hungry individuals have been planned perfectly in ad-
may come to prominence. They vance, it wasn’t. As a matter of
recognize a situation of which they fact, it can appear so only if new
can take advantage. But to say decisions are constantly being
that they or their forerunners had made in the light of changed situa-
the foresight or the intelligence to tions.

plot the whole thing over cen- Only if a “plan” for human ac-
turies, or even decades, is to endow tion is adaptable, in other words, if
them with superhuman powers. it is not plotted definitively in ad-

vance, will it appear to have been
Adaptability to Change so planned when one looks back

It may sometimes appear that after the results at the pertinent
those who have been cleverer than events. Only with flexibility, can
others at taking advantage of con- each step be built so logically on
ditions must have planned pre- the ones preceding it that the
cisely in advance the conditions whole sequence seems later to fit
that made their success possible. together smoothly to make one
But there are limits to human perfect whole.
ability. Men must always plan Therefore, there need be no
their actions in the light of events “plot” to explain our present situa-
over which they have no control. tion. There need to be no “they.”
Their success consists of using to All one needs to know to under-


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

1958 THE “PLOT” THAT NEVER WAS 51

stand why we have the “socialistic” actively in voluntary interpersonal
government we do is that very few relations if the “right” laws for
people have an appreciation of the this purpose are enacted and forci-
function of the free market and bly administered. The dominant
open competition. Countless per- ideology of our times is undoubt-
sons in this country today have edly faith in government interfer-
strong convictions that the govern- ence and a belief that it can result
ment can do “good” by interfering in positive good. eo 0

Freedom To Create

IT MAKES LITTLE DIFFERENCE, in fact, what field of human
endeavor we consider, whether it be science, the arts, the spirit-
ual disciplines, or the secular affairs of men, our progress will
depend on the maintenance of an atmosphere which will foster
individual effort at its maximum level. It seems to me that such
an atmosphere has two essential components: first, a maximum of
opportunity for individual self-expression and, second, a maxi-
mum of incentives for achievement.

It is extraordinary performance that makes for high accom-
plishment and for social and material progress. Average perfor-
mance is simply not enough, and if we are to enjoy new horizons
of the spirit, the mind, or of the body, we need to be sure there
is a sufficient array of external incentives to make men willing
to attempt the really difficult tasks even while recognizing the
possibility that they may fail in that attempt.

There have been, at various times and in various countries,
periods which saw a great outpouring of achievement with an
extraordinary number of superior men to leave the stamp of
genius upon the pages of history. In each of these Golden Ages,
for a time, some phenomenal fertility was induced into the soil of
accomplishment. And diverse as were the conditions, there is one
common element: the intellectual freedom essential to the crea-

tive process.
CRAWFORD H. GREENEWALT, Human Achievement and the Free Society


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

WHO WANTS-10 PEARY!

— FOR 1 ANEW AIRPORT?

asks EpiTOR FRANK H. COOEY in
The Lima (Ohio ) News,
June 8, 1958

A QUESTION that all Limaland is business or pleasure it would be
going to find itself facing in the most advantageous. Such an air-
near future is: “Who wants a new port would certainly make it more
airport?” likely for new businesses and in-

To answer this question with the dustries to locate in the area. And
neat reply, “Everybody wants a we could give some other very good
new airport,” then calls for a sec- reasons why having an airport is

ond question. highly desirable.
“Who wants a new airport badly And we're in favor of a modern,
enough to pay for it?” up-to-date airport for Limaland

In a limited sort of way we have regardless of the location of the
been conducting a bit of a poll to airport site.
see if we could find out who really But when you seek an answer to
wants an airport badly enough to the question, “Who wants an air-
pay for it. And we were not par- port badly enough to pay for it?”
ticularly surprised to discover that there seems to be considerable dif-
there are remarkably few people ference in how much concern there
who want an airport badly enough is in the community. Ask a few
to “put their money where their people the next time you are just
mouth is.” sitting around talking. Ask them

Sure it would be fine to have a if they would be willing to support
huge, well-controlled, well-operated a campaign for funds, like a
airport. It would be “an asset to United Fund campaign, to con-
the community.” For those who struct and maintain an airport.
have private planes it would be Don’t ask a man whether he would
almost a must. For those who be willing to vote the other fellow’s
would utilize the airplanes for money to buy a new airport. Just

62


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

1958 WHO WANTS TO PAY FOR A NEW AIRPORT? 53

ask if he is willing to lay it on the new industry will bring new people
line so that such an installation into the area which will provide

could be established. the newspaper with a bigger mar-

If the people you talk to are ket for the sale of the newspaper.
anything like the ones we have But a newspaper that wants to
heard, you are very apt to hear have the area population increase
such replies as these: so that its market will be better at

“I haven’t been up in an airplane the expense of widows, pensioners,
for six years. What do I need with and the low income bracket people
an airport?” is not performing a public service.

“Living on a pension, it doesn’t This is a venal approach to the
help me much to have a new in- question that in the long run can
dustry come into Lima or the only hurt everyone, including the

vicinity.” newspaper.

“We almost never ship anything
by air — let the air shippers who If “everybody” wants a new air-
want it pay for it.” port, then there shouldn't be any

“A new airport means more difficulty in gathering up subscrip-
planes and the ones we have now tions to buy, install, and operate

roaring overhead are pests.” such a venture. And if there is
“I'll chip in a little to help get difficulty in getting the money for
the ball rolling — but that’s all.” the project, it is pretty good evi-
Etcetera, etcetera. dence that “everybody” doesn’t

Now a newspaper has an obvious want to pay for a new airport and
reason for wanting the finest sort that the only way it can be done
of air installation possible. Such is to use the power of government
an installation would undoubtedly to force the people into paying,
attract some new industry, and whether they wanttoornot.e e e

| votes ©N 1008047 Beware of Enslaving Others

WHAT YOU SHUN enduring yourself, attempt not to impose on
others. You shun slavery — beware of enslaving others! If you
can endure to do that, one would think you had been once upon
a time a slave yourself. For vice has nothing in common with
virtue, nor freedom with slavery.

EPICTETUS


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

A selection of refreshing highlights from the report
for the year ended April 80, 1958, of the City of Oglesby,
Illinois, prepared by City Clerk, Edward Hand.

AT THIS TIME one year ago eight It is not unkind to assert here and
building permits had been issued now that the unemployed Ameri-
for new single-family dwellings. can should have learned thrift and
This year six have been issued. prudence in the fat days, and it is
When it is considered that con- only just to inform the Congress
stantly mounting prices with auto- that if they do not cease deficit
matic built-in wage hikes cannot spending and debasement of the
help being a deterrent to a pros- dollar, the nation faces a future
pective home owner, the total is more hideous than the possibility
amazingly good. The inflationary of slavery forced on us by Russia.
actions of the federal government One never ceases to wonder how
— less apparent it is true in the ad- members of Congress presumably
ministration than in the Congress possessed of common sense in their
— would be ludicrous as one pon- years in their home communities
ders the daily grist from the Po- as lawyers, teachers, merchants
tomac as members vie with each can go so completely off base when
other to slay the recession dragon, they get to Washington and begin
were they not so tragic in their to feel the power of the purse.
impact on the suffering, silent, un- * x 0%

organized, fixed-income, pensioned The city borrowed $140,000 at
minority. The members of both 414 per cent interest just before
houses at Washington rush into money began to cheapen last fall
print, grab a microphone, hog a in water-revenue-10-year bonds to
TV camera to plead that their drill, equip, and house deep water
every heart-throb is attuned to the well number four and to install a
unemployed industrial worker liv. municipal water softening plant.
ing on unemployment compensa- This type of borrowing is repug-
tion and rearing six or seven kids. nant to those of us who operate the

54


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

1958 OUR TOWN 55

business of the city. It is the first have built our own plants and now
issue of revenue bonds in our his- through a confiscatory federal tax
tory. As heretofore reported, an collection we are paying for sew-
emergency arose in the failure of age plants in Ottawa, La Salle, and
well number two. Insufficient time Spring Valley.

and money made the undesirable We have protested long and per-
debt unavoidable. sistently to the Congress to cease
* x 0% making grants to local communi-

No recent report of this city ties for the construction of sewage
would be current without paying plants. No excuse exists for such
our disrespects to the State of Illi- handouts now nor has there ever
nois Sanitary Water Board for been any justification for this fed-
permitting three area cities to de- eral racket except that it enables
lay the construction of sewage politicians of both major parties to
treatment facilities long enough to. act like gods dispensing favors.
participate in the federal sewage There is not in this area a city
grant racket. We all started even that cannot afford the cost of treat-
in 1954 but only Oglesby and ing its own wastes. To say other-
Streator were naive enough to be- wise is to abandon the pride that
lieve that the state agency in- all of us ought to have in the cities
tended strict enforcement. We we call home. oo 0

High school students were taken through
the city’s new architectural concrete water
treatment plant and explanations made
to them of the water supply and distribu-
tion system of the city-owned utility. This
quotation would be appropriate perhaps
at this point and is taken from Time,
March 31, 1958: “But most of all, we
need to do some thinking about the true
ends of education. The worth-while in-
novations in method brought by Dewey's
educationists should be kept. But their
exclusive devotion to techniques and
group adjustment should never again be
allowed to hide the fact that American
education exists first of all to educate
the individual in a body of learning, with
a tradition and purpose behind it.”



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

FRANK CHODOROV

oO

AS A FINE ART

KuTuzZov was a general. By all letting Napoleon destroy himself.
odds, he was a successful general; His staff officers, however, were
for he did what no other general of a different mind. They were full
up to his time had been able to do, of strategy, tactics, logistics, and
though the best in Europe had all the other things one learns at a
tried it; he beat Napoleon. How war college, and had evolved elabo-
did he accomplish this extraordi- rate plans for engaging Napoleon
nary feat? By snoring. Yes, simply and beating him at his own game.
by snoring at the most appropriate Of course, different generals had
times; namely, at staff meetings. different plans, each guaranteed to
He called on this stratagem most bring results, and each different
effectively after Napoleon had from what the others put forth.
reached the burned-out city of ‘They wrangled no end at staff
Moscow and was perturbed by the meetings, as planners are wont to
fact that Kutuzov’s army was still do, and when the arguments got
intact. Kutuzov knew what was real hot, Kutuzov would close his
going on in the Frenchman's mind eyes and start snoring. In due time
— that he was intent on engaging he would wake up and say some-
the Russian forces in a showdown thing like this: “Very well, gentle-
battle in order to destroy them. men, we will retreat.”
But, the wily old snorer had a Meanwhile, Napoleon, ensconced
strange notion that it was poor in a ghost town, with dwindling
business to exchange one Russian supplies, stewed in his own juice.
life for even two French lives. He The Russians did not attack, as he
also knew how this compulsion expected them to do, and nothing
would ultimately destroy Napoleon he did enticed Kutuzov to come in-
if it went unrequited. He was for to the ring. Soon the heavy snows

Mr. Chodorov is the well-known author, editor, journalist, and individualist.

506


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

1958 SNORING AS A FINE ART a7

descended and the great strategist The essay was written long be-
was compelled to make his disas- fore the conflict with the Kremlin
trous retreat, just as Kutuzov was thought of, somewhat before
knew he would. our passion for planning had
reached the point of insanity, but
its message is quite up-to-date.
That is how snoring won a war. Snoring, as a fine art, needs to be
As you read this brilliantly written restored, since planning has proven
essay — the title essay of the jnadequate, to say the least. The
baker’s dozen by Albert Jay Nock, pertinence of this lead essay is
heretofore uncollected® —you begin characteristic of the other twelve,
to wonder whether a bit of appro- even though all of them were writ-
priate snoring would not help in ten a score of years ago, and, un-
our current “cold” war. Maybe all less the nature of things is miracu-
this fuss and fury over psycho- ously transmogrified, each essay
logical warfare, all the plans for contains a lesson which our chil-
meeting the Kremlin in economic dren’s children could profit by.
battle, all the marching and coun- They have the quality of relevance
termarching of our “best brains” that never grows old; they are not
in Washington, only fit in with the “dated.”
pattern the communists have de-
signed for us. Maybe if we stopped Nock, a Master of Style
planning so much — and did a little There is an additional big profit
snoring — the enemy would destroy to be had from the reading of this
himself. Maybe nature will accom- collection, a dividend which should
plish what our strategists seem un- pe expected from one’s investment
able to. There are economic laws of reading time, but which is rare-
working for us; why not let them ly received. It is the enjoyment of
work? Human nature, too, tells us good writing. Anyone who has any
that the Russians, patriotic though familiarity with Nock’s style — or
they undoubtedly are, do not like with that of any master, for that
the slavery they must endure and matter — knows how futile it is to
will, when the time is ripe, throw try to describe it. It has to be
their rascals out; why not wait for tasted to be appreciated. But,
the right time? Nock’s reply to an idle question
*Snoring as a Fine Art and Twelve put to him by this reviewer gives
Other Essays by Albert Jay Nock, In- an inkling to the reason for its
troduction by Suzanne LaFollette. . .
Rindge, N. H.: Richard R. Smith Pub- charm. The idle question, more
lisher, Inc., 1958. 196 pp. $3.00. rhetorical than inquisitive, was:

We Might Try Snoring


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

58 , THE FREEMAN September

“How did you train yourself to pouring out of our presses these
write this way?” His reply: “All days; but one suspects that this
know about writing I got from the was due to his complete mastery of
King James Bible and the Book of the subject he was dealing with,
Common Prayer.” This is an over- that he did not have to resort to
simplification; but it does explain ambiguity to hide any uncertainty
in part the lucidity, the abundance or intellectual deficiency.

of Anglo-Saxon words, the easy The best one can say about this
flow and graphic expressions that book of essays is: read it and have
characterize his style. It is com- fun. If you do, you'll read it a
pletely devoid of the ponderosity second time. oo 0

J]

kooaas ow toca Reciprocity

TSEKUNG asked, “Is there one single word
that can serve as a principle of conduct
for life?” Confucius replied, “Perhaps
the word ‘reciprocity’ will do. Do not do
unto others what you do not want others

to do unto you.”
LIN YUTANG, The Wisdom of Confucius

We invite your subscription to

MODERN AGE

A CONSERVATIVE REVIEW
Vor. 2, No. 3 (Summer 1958) Edited by RusseLL Kirk
Contains Articles by:
ANTHONY LEJEUNE, AucusT HECKSCHER, AND GEORGE A. LUNDBERG

Three dollars per year One dollar per copy
Address: FounpaTioN For ForeicN AFFaAIRs, INc.
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Free copy available on request



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

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN

OF DOLLARS

AND SCHOLARS

SAYS the Ladies’ Home Journal equipped. ... (in 1957) the short-
for July 1958: “A history-making age of public school classrooms
document that will shape educa- stood at 142,000. There were
tional philosophies and practices 1,943,000 pupils in excess of ‘nor-
for years to come, the Rockefeller mal’ classroom capacity. Some
Report, is released today.” The elementary and high schools and
Ladies’ Home Journal is an estim- colleges had found it impossible to
able publication, and its editors are hire well-qualified teachers in such
not easily gulled. In the past these basic subjects as English, lan-
editors have published such nota- guages, and social sciences; some
ble articles as Dorothy Thompson's have even had to drop chemistry,
“Must Schools Be Palaces?’ And, physics, and mathematics from
truth to tell, the Rockefeller Re- their curriculum since there were
port, issued as The Pursuit of Ex- no teachers to teach them.”
cellence: Education and the Future
of America (Doubleday, 49 pp. Quantitative Measurements
75¢.) has its good points. Daringly, There it is, the standard com-
it urges our democratic society to plaint which reduces all our big
forget its leveling preoccupation problems in education to quantita-
for the moment and concentrate tive measurements, whether ex-
on providing excellence. But pressed in terms of the dollar, the
beyond its insistence on the quali- square foot, or the student-teacher
tative aspects of education, the ratio. The whole rigmarole has
Rockefeller Report swallows the been dinned into us so often, espe-
big cliché: there is nothing wrong cially by the proponents of in-
with our educational system that creased federal aid to education,
money — and lots of it— won’t that it passes for a true bill prac-
cure. tically everywhere. The land is full
“Our schools,” it says, “are over- of zealous souls who can cite the
crowded, understaffed, and ill- statistics offered by the National

59


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

60 THE FREEMAN September

Education Association or the U. S. der the authorship of Roger Free-
Office of Education — and if one man, this book riddles every single
raises a feeble voice to object that quantitative cliché of the Rocke-
the tax bill for public education is feller Report.
already inordinately high, one is
immediately branded as an “enemy Classroom Requirements
of the schools.” Are our schools overcrowded?
But what about the alleged “true Mr. Freeman, with an almost be-
bill”? The common sense of John wildering display of charts,
or Jane Smith must tell him or her graphs, and statistical tables, ap-
that since World War II the local proaches the question from many
communities have been building angles. Since virtually all of our
schoolhouses like crazy. My own schools stand vacant and idle for
community of Cheshire, Connecti- four months out of twelve, the
cut, had only one grammar school question may seem to be a loaded
in 1946 and no high school; now one in the first place. If there
it has three grammar schools really were a school housing crisis,
(which have been periodically en- we could have a combination of
larged) and a big high school com- double-shifting, a shortened school
plete with an auditorium that does day, and a longer school year. But
duty for election day balloting and there is no such crisis. Back in
for town meeting. And Cheshire is 1954 the U. S. Office of Education
certainly not unique; its program predicted that by 1959 there would
could be matched in thousands of be a shortage of 470,000 class-
communities from Maine to rooms. In 1958, however, the Office
Oregon. of Education's own construction
Fortunately for those who have statistics had reduced the proph-
doubted the claims of the so-called ecy of a 1959 shortage to 79,100
“educationists” that the U. S. has classrooms. Even this figure is sus-
shamefully neglected the money pect, for “needs” are judged on a
aspects of its school system, a book basis of asking local school super-
has just been issued embodying intendents how much money they
the findings of the Institute for would require “to bring their
Social Science Research. Called school plant to a level they deem
School Needs in the Decade satisfactory.” The judgment of the
Ahead: Volume I (Institute for superintendents is so diverse that
Social Science Research, 917 15th it virtually eludes statistical com-
Street, N\W., Washington 5, D. C., putation.
301 pp. $5.00), and put forth un- When all is said, the U. S. can


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

1958 OF DOLLARS AND SCHOLARS 61

take satisfaction from one irref- such things as the base year from
utable statistic: virtually half of which comparative changes are
our school-age children now attend measured. If one takes 1935 as a
schools that were constructed base, it can be proved that physi-
after World War II. In Europe, on cians and dentists have fared much
the other hand, the children still better than teachers. But if 1929
sit at cramped desks in buildings is selected as the base year, the
that are over-age and dilapidated. teacher’s lot seems comparatively
As for Russia, it doesn’t consider much happier. The reason: people
that the school plant is important didn’t pay their doctors and den-
at all; the communists are not in- tists in the depression, which
terested in where a student sits, makes their increase in emolument
but in what goes into his head. since 1935 look terrific.

Cutting into the subject of “over- Looking back over the long span,
crowding” from another angle, Mr. Mr. Freeman is able to show that
Freeman notes that “building the pupil-teacher ratio has been
space allowances per pupil have steadily declining since 1900. At
gone up between 50 and 100 per the beginning of the century the
cent over the past twenty to thirty average ratio was one teacher to
years.” The reason: it requires 85.6 pupils. In 1956 the ratio was
more room to teach in a “child- one to 25.6. Does this look like ‘“‘un-
centered” school than it did in the derstaffing” ? Mr. Freeman has the
“subject-centered” schools of our temerity to think that the figures
fathers. When a curriculum in- prove that teachers have too few
cludes such things as courses in students per class, not too many.
marriage and family relationships, He quotes Ralph Cordiner, presi-
grooming, beauty care, date be- dent of General Electric, as say-
havior, consumer buying, square ing: “There are some educators
dancing, junior homemaking for who are actually proud of the de-
boys, and fly casting, one has to clining ratio of students to faculty.

have a lot of physical space in ... To my knowledge, there is no
which to turn around. other field of human endeavor

which actually prides itself on de-
Availability of Teachers clining productivity.” Certainly

Are our schools understaffed? there has been little effort to
Is teacher recruitment lagging? spread the usefulness of unusual
Are teachers underpaid? Ob- teaching ability by making TV re-
viously, one can prove almost any- cordings of lecture material. In-
thing here simply by manipulating deed, the teachers have reacted to


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

62 THE FREEMAN September

the use of TV as trade unionists, committee has put the cart before
not as educators. If a good lecture the horse. There will be plenty of
can be used twice or three times, chemistry teachers — or even
says the fearful teacher, it might teachers of calculus — once school
displace inferior lecturers. True requirements are changed to insist
enough, but the fear hardly ac- on more science.

cords with the contention that

there is a teacher shortage. One could go on for hours throw-
. ing Mr. Freeman's statistics at the
The Curriculum Makers compilers of the Rockefeller Re-

As for teacher recruitment, Mr. port. But the game becomes weari-
Freeman finds that teaching is be- some. The truth is that the failure
coming more popular, not less. The of U. S. education is not quantita-
field is actually overcrowded when tive at all. It can even be argued
it comes to such things as social that we would have better schools
studies, speech, music, art, home if less money were spent on them.
economics, and men’s physical edu- We need less emphasis on plant, on
cation. If there is a current short- physical space, on gadgetry. The
age of physics and trigonometry Europeans, with far less opulent
teachers, the blame should be plant, turn out students who are
placed on the curriculum makers two years ahead of their Ameri-
who have been dropping science can counterparts after twelve
courses. Naturally there will he years of schooling. Doesn’t this
fewer algebra teachers around if indicate that it is the curriculum
the course ceases to be compulsory. that needs overhauling, not the
In complaining that the high plant?
schools can’t offer chemistry For an answer to this question,
courses because of a paucity of the reader is advised to turn to
chemistry teachers, the Rockefeller John Keat’s Schools Without
Scholars (Houghton Mifflin, 202
pp. $3.00). Using a shrewd, knock-
about irony, Mr. Keats takes the
Any book reviewed in this Book Section (or ideas of our modern “education-
any other current book) supplied by roturn ists” apart. But that is a story that
mail. You pay only the bookstore price. Wo can hardly be jammed into a re-
pay the postago anywhere in the world. |  yjew of the quantitative troubles,
Catalogue on request. real or fancied, of the American
THE BOOKMAILER, Box 101, Now York 16 | Schools. It must wait for a separate

commentary on its own. e eo e



===== PAGE 65 =====

1958 OF DOLLARS AND SCHOLARS 63

+ Nationalizations — Ten Years has taught at the Universities of

Later. Chicago, Wisconsin, and North-

By Dr. Melchior Palyi. Chicago: The western.
Heritage Foundation, Inc., 1958. Among Dr. Palyi’s recent books
36 pp. 50¢. are The Dollar Dilemma and Com-

THE STATE-OPERATION of part or pulsory Medical Care and the Wel-
all of the economic activity of fare State. He is a well-known
European countries is not of recent popular writer and public lecturer
origin. But the tempo of this move- as well as a consulting economist.
ment was considerably accelerated Each of the nine chapters tells
following World War II. Britain its story in a simple, direct, but
and France found the promises of devastating way. The chapter
nationalization especially attrac- headings will whet the appetite of
tive. anyone concerned with the prob-

How well has nationalization ful- lems of socialism: “Labor Rela-
filled its promises to cure unem- tions under Nationalization,”
ployment, to guarantee fair wages, ‘Profitless Monopolies,” “Wasting
low prices to consumers, and good Resources,” “Deficits and Inflation-
returns to the government? ary Consequences,” ‘‘Socialized

A little booklet (36 pages and Medicine,” and “The Nationaliza-
an index) by Dr. Melchior Palyi tion of Savings.”

makes some pointed observations Here are a few samples of what
on this question. It is a collection to expect:
of articles which appeared in the “The history of a socialized coal

Chicago Tribune in early 1958. Dr. industry in the United Kingdom
Palyi called the series, “National- is an almost uninterrupted record
izations—Ten Years Later.”’* of labor strife.”

Dr. Palyi is an American citizen “France has carried nationaliza-
of Hungarian descent. Before com- tion further than any other ‘free’
ing to America he taught at the country, and she happens to. be
Universities of Keil, Goettingen, further than any other, except
and Berlin. He was Chief Econo- Finland and Turkey, on the road
mist to the Deutsche Bank in Ber- to national bankruptcy.”
lin, and later, Scientific Advisor to “The ‘freedom’ from profit and
the Reichsbank. In this country he loss considerations, is a clear in-
* Also available from the Foundation for vitation to waste. Waste of re-
Economic Education, Irvington-on-Hud- sources 18 the outstanding feature
son, N. Y. 50¢. The price is less on larger Of nationalized managements.”
quantities. W. M. CURTISS


===== PAGE 66 =====

ND) 1
hy “yy 4
57 =r.

HOW HIGH IS YOUR STANDARD OF LIVING?

Can you guess how many ways
you put electricity to work?

One good measure of your stand- There’s entertainment — TV, ra-
ard of living is the number of ways dios, record player. And don’t for-
electricity works for you. The more get things like lamps, heating pad,
ways, the more likely you are to live hair dryer, electric clocks.

well and comfortably. How many for comfort? Air con-

Strange as it seems, most people  ditioner? Fans, space heaters? Then

can’t remember all the jobs elec- there are the “service” jobs, like
tricity does for them. Can you guess ~~ Washer, iron, power tools. And how
how many it does for you? many more? Remember the oil

} ) burner —the furnace blower.
Just for fun, try making a list of

all the ways you use electricity. Here
are some tips to help you:

* If your list adds up to 30 or more,
you're living very well. If it’s more
than 45, your standard of living is

Start with the kitchen. Refrigera- excellent! Are you surprised at the
tor, of course. Coffee-maker, toaster? total for your home? It gives you
And remember things like the ex- an idea of the real value of your
haust fan, the knife sharpener. electric service, doesn’t it?

AMERICA'S INDEPENDENT ELECTRIC LIGHT AND POWER COMPANIES*

* Company names on request through this mogazine


===== PAGE 67 =====

Coast Federal Savings and Loan Association

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===== PAGE 68 =====

y INES

TCE SEPTEMBER

Would You Have Signed 18? . . . . .
Common Ownership —American Style

Inflation Is a Burglar . . . . . . .

Boneficiaries of Froe Market Upgrading
The Source of Money . . . . . . .
Unsatisfied Dosires .

Guarantoo of Freedom .

Market Relationships A
The Propor Role of Trade Unions in Socioty .
An Ancient Chinese Story . . . . . .
The “Plot” That Never Was

Who Wants To Pay for a New Airport? .
QurTown . . . . . . . . « .
Snoring asa Fine Art . . . . . . .
Of Dollars and Scholars ce
Qthor Books . . . . . . . . .

1958

Ralph Bradford
Ann Terrill
Samuel B. Pettengill
Leonard E. Read
George Winder
Jay Morrison

M. Robert Beasley
Robert LeFevre
Sylvester Petro
Frederic Bastiat
Bettina Bien

Frank H. Cooey
Edward Hand
Frank Chodorov
John Chamberlain

10
13
17
21
29
32
39
41
45
47
52
54
56
59
63