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

IDEAS ON LIBERTY

OCTOBER 1958

Barriers to World Commerce . . . . . William H. Peterson 5
Another Tale of Two Cities . . . . . Frederic Bastiat 27
What's Bad about Labor Laws? . . . . Walter Leckrone 28
The Administrative Agency Colossus . . Grey leslie 31
Eachto His Own Folly . . . . . . . Chicago Daily Drovers

Journal 38
Debts and Taxes . . . . . . . . James B. Ut 39
Grasshoppers and Widows . . . . . Robert Lefevre 41
These, Our Gifts. . . . . . . . . LleonardE. Read 44
Freedom and the Purpose of Life . . . Oscar W. Cooley - 52
The Adult Education Boondoggle. . . . Russell Kirk 55
Mental Prep vs. Pragmatic Tech . . . . John Chamberlain 58
Other Books . . . . . . . . . . 62

THE FOUNDATION
FOR ECONOMIC EDUCATION, INC.

Irvington-on-Hudson, New York



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

MEMO ON PRIVATE ENTERPRISE No. 1

‘“. ..1nitiative, ingenuity, inventiveness
and unparalleled productivity.”

“The genius of the private enter- Government competition in its
prise system is that it generates most direct form.”
initiative, ingenuity, inventive-
ness and unparalleled productiv-
ity. With the normal rigidities
that are a part of Government,
obviously, the same forces that
produce cxcellent results in pri-
vate industry do not develop to
the same degree in Government
business enterprises . . .’’ This is
part of the statement made by
Robert L. L. McCormick, Re- }
search Consultant, on behalf of In addition, Post Office Cost
the Citizens Committee for the Ascertainment Reports have
Hoover Report, before the Post shown that during the 32-year
ate Committee on Post Office losses sustained in Post Office
and Civil Service, June 23, 1958. Departmentaccountsalonecarry-

Mr. McCormick went on to ing on parcel post activities
explain why the Citizens Commit- amounted to well over one and a
tee strongly opposes the handling quarter billion dollars! This means
of larger and heavier parcel post that the large users of parcel post
packages than are now accepted are being subsidized at substantial
for movement between first clags 0S to the American taxpayer.
post offices. These packages are It is evident, therefore, that if
now handled by a variety of pri- parcel post size and weight limi-
vate shipping concerns. As the tations were to be increased, it
Committee states, such an ex- would constitute a major blow at
tension ‘“. .. would expose these the fundamental principles of the
privately-owned businesses to American economic system.

The consequences of such an
extension would be widespread.
In the case of the larger private
transportation concerns, the re-
sulting loss of revenue would re-
quire the discharge of thousands
of employees, and, as in the case
of many smaller private cartage
firms, could jeopardize their very
existence.

For a free copy of the informative
booklet, ‘The Truth About Parcel Post,”

address the Public Relations Division, SIU

7 OVEXPRESS ©)

RAILWAY EXPRESS AGENCY, INC. QT Nal
219 East 42nd Street, New York 17, N.Y. i )

A PRIVATE ENTERPRISE IN THE PUBLIC SERVICE RAY 7:5



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

Will you

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Men have died to leave you these H avr the world is trying to destroy

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A Holy Bible —symbol of your right Even in this country, there are people

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(First Amendment, U. S. Constitution) give the U. S. government more and

more control over American life.
A door key—your right to lock your
Sy —Y 3 Y For example, the federal government
door against illegal government force

and prying. already runs some of the electric light

(Fourth Amendment, U. S. Constitution) and power business. And Congress 1s

being pressed to take over still more.

A pencil —freedom to speak or write Even though every such step leads down

what you think, whether you agree the road to socialism, which is one thing
with the government or not. most Americans don't want.

(First Amendment, U. S. Constitution) a . .
If socialism comes to America this

And a free ballot—your right to way—step by step—one day govern-

choose the people who represent you ment will control your job, your inde-
in government—your protection against pendence, your thinking. Then what
government tyranny. freedoms will you be able to pass on to

(Article I, U. S. Constitution) your children? ‘

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

THE

Tecman

A MONTHLY JOURNAL OF IDEAS ON LIBERTY

OCTOBER 1958 Vol. 8 No. 10

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 $12.50 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 (rvington, N. Y., with
additional entry at New York, N. Y. Copyright, 1958, The Foundation for
Economic Education, Inc. Printed in U.S.A.

AddItlonal coples, postpaid, to one address: Single copy, 50 cents;
3 tor $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 "What's Bad
about ‘Labor Laws'?’’ "Each to His Own Folly,’ '‘Debts and Taxes,”
“Grasshoppers and Widows,” and ‘The Adult Education Boondoggle."

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


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

The tariff is but one of many government-imposed...

BARRIERS [lee to World

WILLIAM H. PETERSON

It is the maxim of every prudent master of a family, never to
attempt to make at home what it will cost him more to make
than to buy. ... What is prudence in the conduct of every private
family can scarce be folly in that of a great kingdom.

ADAM SMITH, Wealth of Nations

“WE NOMINATE for oblivion,” de- Reciprocal Trade Act emerged
clared President Eisenhower in a from the legislative mill riddled
speech last May, referring to cer- with “escape clauses,” “peril
tain economic illusions. Among points,” and many other protec-
the President’s nominees for ob- tionist compromises. Congressmen
livion was “the notion that we can from areas where local industries
export without importing.” are vulnerable to foreign competi-
In view of the newly-extended tion — textiles, chemicals, china,
Reciprocal Trade Agreements Act, electrical manufacturing, nonfer-
another idea that ought to be add- rous metals, bituminous coal, do-
ed to the oblivion list is the illu- mestic oil, whiskey distillation, and
sion that lower tariffs, however so on — generally got the protec-
desirable in themselves, necessarily tion they sought, usually in the
mean freer trade; for the stated name of such old reliable argu-
purpose of the Reciprocal Trade ments as “fight the recession and
Program is freer trade through national defense.”
lower tariffs. At least three questions arise: A
The four-year extension to the basic one—which is best for Amer-
ica, free trade or protection? An-
Dr. Peterson, Associate Professor of Eco- other — will the lower tariffs

nomics at New York University, is also a .
weekly contributor to the Wall Street Journal. achieved under the newly-extended

5


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

6 THE FREEMAN October

Reciprocal Trade Program mean ical influence and specious argu-
greater trade? And, finally — if we ments, the protectionists have got-
are in an all-out neck-and-neck race ten many “protective” tariff walls
with communism and economic and numerous other trade restric-
and military proficiency is of tions as well. The protectionists
crucial importance, would greater plead, for example, that high
trade result in higher proficiency? American wages constitute an ob-
stacle to trade — but fail to note
Free Trade or Protection? that wage rates are hardly as sig-
Let us seek the answer to the nificant as unit wage costs, which
first of these questions: Which is may be relatively low for the
best for America, free trade or American producer who is heavily
protection? The question might be mechanized, as compared to a for-
rephrased more broadly: Which is eign producer with little but flesh
best for America, freedom or com- and blood workers.
pulsion? For in the act of protec- Again, the protectionists plead
tion lies the act of compulsion that their industries and workers
(a moral issue not to be treated in “must be saved” for the sake of
this discussion). Under protection prosperity — but fail to note that
consumers are no longer free; the preservation of inefficient in-
their choice is denied. Economic dustries drains resources, capital,
democracy breaks down; the rule and labor from the more produc-
of the few decides. To buy the for- tive industries, with unhappy con-
eign product consumers are com- sequences to national production
pelled to pay a penalty, being and hence real wages — prosperity.
forced in effect to do business with Item: Canada, a country which
a high-cost domestic producer. As ranks second among the highest
a result, the consumer pays more wage-paying countries of the
and gets less. The resources of the world, is Uncle Sam's best cus-
economy are prevented from flow- tomer. Similarly the United States,
ing into the most productive indus- the highest wage-paying country
tries; instead, much of the nation’s in the world, is Canada’s best cus-
resources are locked in inefficient, tomer.
high-cost, protected industries. Item: Western Europe, though
With the exception of the pro- much smaller in physical size and
tected investors and managements, with fewer people but with higher
everyone loses. wage levels by far than in Africa
Protected investors and manage- and Asia, sends the United States
ments disagree. Armed with polit- more goods and absorbs more


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

1958 BARRIERS TO WORLD COMMERCE 17

American goods in international trade? Two boys swapping tops for
trade than do the great populated marbles is free trade. A retailer
low-wage land masses of Asia and paying cash for supplies from a
Africa combined, including the wholesaler is free trade. Free trade
Middle East. is simply voluntary exchange un-
Reasonable conclusion: High hampered by government interven-
wages, rather than being a deter- tion. It is the secret of American
rent to American trade in particu- well-being: 48, now 49, sovereign-
lar and world trade in general, re- ties in a colossal free trade area.
flect greater ability to trade. It is the very heart of a market
This empirical proof is sup- economy. It is part of the human
ported in economic logic by David make-up, what Smith called “the
Ricardo’s Law of Comparative propensity to truck, barter, and
Cost (1817). In his discussion, exchange.”
Ricardo included a hypothetical ex- Free trade is, in a word, ex-
ample of trade between Portugal change — free exchange, along a
and England. Suppose the Portu- two-way street for buyers and sell-
guese could make cloth more ers. But many believe it is better
cheaply (i.e, Portuguese wages to sell than to buy, for selling in-
were lower) than the English, con- volves a seller's profit. One man’s
tended Ricardo, would Portuguese profit, according to this belief,
capital go into cloth? means another man’s loss. The idea
In the long run, no, said the of encouraging selling and dis-
classical economist. For with couraging buying, then, is ex-
Portuguese capital yielding a tended to international trade.
higher return on wine, capital (Here, however, selling becomes
would gravitate to wine and in exporting and buying becomes im-
the course of events cloth would be porting.) So, according to the old
imported from England. mercantilist doctrine, a “favorable
Hence, Ricardo’s “law”: Capital, balance of trade” is a country’s
unhampered, flows to industries of trade whose exports exceed its im-
highest return, and costs should ports —i.e., its sales abroad are
not be compared between countries greater than its purchases abroad.
but within countries. The “favorable balance of trade”
doctrine, still popular, is false. No
buyer would buy if he knew he
The case for free trade becomes, were going to lose. Quite the con-
by logical inference, the case trary, the buyer buys because he's
against protection. What is free convinced he gains. Adam Smith

Free Trade Defined


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

8 THE FREEMAN October

knew this (see quotation, page 5). The formula for free trade, then,
Ben Franklin expressed the mutual could be constructed as follows:
gain of trade as follows: Free trade = international divi-

“In transactions of trade it is sion of labor = greater regional
not to be supposed that, as in gam- productivity = greater trade =

ing, what one party gains the other higher levels of living.

must necessarily lose. The gain to

each may be equal. If A has more The Reciprocal Trade Program

corn than he can consume but What of the second question:
wants cattle, and B has more cattle Will the lower tariffs achieved un-
but wants corn, exchange is gain der the newly extended Reciprocal
to each; thereby the common stock Trade Program necessarily mean

of comforts of life is increased.” freer and hence greater trade?
Our answer, in brief, is No.
Division of Labor Certainly freer trade is the

Free trade both causes and is stated aim of the Reciprocal Trade
caused by what Adam Smith called Agreements Program. The Pro-
“division of labor.” Division of gram, founded in the 1930’s under
labor — i.e., specialization of pro- Cordell Hull, works through the
duction — enables enormous in- principle of a swap. Through dip-
creases in productivity. (Probably lomatic channels, the United States
every reader of these words is in will lower its tariff on, say, Com-
some way a specialized producer.) modity X, which Ruritanians sell
Of further importance to interna- in the U.S., providing Ruritania
tional trade is that specialization will lower its tariff on Good Y,
applies not only to people but also which Americans sell in Ruritania.
to land and natural resources. Ex- So, presumably, with the quid pro
amples of people, land, and re- quo of each country met, lower
sources specialization come to mind tariffs are in the offing.

— Brazilian coffee, Irish linen, - The Program is open to criti-
Swiss watches, Chilean nitrates, cism on two counts:
French wine, and so on. Yet divi- First, the Program, based as it

sion of labor without trade, or is on reciprocity, seems to assume
trade without division of labor, is that tariff reductions can go for-
incongruous if not impossible. Like ward here in America only if com-
Tin Pan Alley’s “Love and Mar- mensurate favors are extended
riage,” trade and division of labor abroad. This places, in Washington
go together like “a horse and car- and in Geneva, Switzerland (head-
riage.” quarters of the UN’s international


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

1958 BARRIERS TO WORLD COMMERCE 9

tariff agency, GATT), heavy bu- trade, are relegated to secondary
reaucratic expense, license, and consideration. What is needed in
power over American industry. place of the philosophy of reci-

The arbitrary and political procity, in short, is a thorough-
power of bureaucrats in the State going philosophy of free trade.
Department at home and abroad Secondly, the Reciprocal Trade
is enormous: Supposing a corpora- Program comes under criticism be-
tion has supported the “wrong” cause it virtually ignores the hard
party in a political campaign or fact of world commerce that tariffs
otherwise fallen out of favor with are but one means of restricting
the powers-that-be, is there not the trade. There are, unfortunately,
danger that the winning party many others. Low tariffs or even
could “sacrifice” the corporation in no tariffs in a country can be com-
tariff negotiations with other pletely obviated by nontariff trade
countries — perhaps by removing restrictions. It is the main purpose
protective tariffs on the industry of this essay to look over the more
or by increasing the protection to important of these nontariff trade
a competing industry as a form restrictions, including:

of hidden subsidy? 1. Exchange controls
Moreover, the decisions of bu- 2. Bilateral trade agreements

reaucrats in the State Department 3. State trading

and in GATT are reached in se- 4. Import quotas

crecy ; and in GATT, American ne- 5. Foreign aid

.gotiators have but one vote in the 6. Cartels and international

international voting. Thus, for ex- commodity agreements

ample, Ghana gets one vote, the 7. Preferential trade treatment

United States one vote —a pre- 8. Inflation and other monetary

carious position for American in- manipulation

dustry. 9. Other statist measures
Perhaps more importantly, the

goal of free trade frequently gets EXCHANGE CONTROL

side-tracked under bureaucratic Exchange control is a state

management. Trade and tariff con- monopoly over foreign exchange.
cessions become a form of foreign As a modern practice it was ini-
aid and get tangled in interna- tiated by Dr. Hjalmar Schacht,
tional politics. The basic interests Hitler's finance wizard and ex-
of the American consumer and the change controller. The objective of
efficient American producer, both Dr. Schacht was autarchy — eco-
of whom stand to gain by free nomic self-sufficiency — to enable


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

10 THE FREEMAN October

Germany to wage war. When that vertibility, i.e., exchange control.
war came, the Allies felt exchange So in London the businessman
control was necessary for their checks with the Exchange Equali-
own total mobilization. The result- zation Account Office. In Paris
ing bureaucracy became a power- with the Office des Changes, in
ful lobby for the perpetuation of Madrid with the Centro Oficial de
exchange control. Today, more Contratacion de Moneda.

than 13 years after the war, and In all these cases he, like his
despite the fact that the chief end European counterpart, finds he has
of the International Monetary to do business with a state mo-
Fund was the abolition of ex- nopoly with its usual trappings of
change control, exchange control red tape and bureaucracy. These
persists throughout most of the are bad enough, but what really
world. In other words, most of the worries him is the suspicion that
world currencies lack free con- he may end up with far fewer dol-
vertibility. (The U.S. is a happy lars than he had first figured on.

exception.) In some countries as many as
thirty different kinds of money
Convertibility Defined with varying exchange rates will

Just what is convertibility ? It’s prevail at one time. There's “tour-
the unhampered freedom to ex- ist” money, “import” money, “ex-
change at market prices one na- port” money, and many subvaria-
tional currency for another, tions of each breakdown. In “im-
whether in coin, paper currency, port” money, for example, it is not
or debits and credits to bank de- uncommon for a country to clas-
posit balances. When it exists, con- sify its imports in importance as,
vertibility greatly facilitates in- say, “critical,” “necessary,” “mar-
ternational trade and investment ginal,” and “unnecessary,” and
by making international payments then to build up the foreign ex-
easier. For countless years it did change rates for each import cate-
exist — the quiet and successful gory as its relative importance
lubricant of private enterprise. diminishes.

But no longer.

Today the American business- Political Determinations
man considering, say, a plant loca- In all these cases bureaucracy —
tion in Britain, a franchised dealer not the market — decides the cru-
in France, or closing a sale in cial question of who gets what and
Spain has to worry, aside from all how much. Perhaps it's theoreti-
his other problems, about incon- cally possible that an all-wise and


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

1958 BARRIERS TO WORLD COMMERCE 11

wholly impartial exchange control rencies, balance of payments diffi-
system could duplicate the success culties —all given to frequent
of private enterprise — speed the breakdowns — manifest the creak-
trader or traveler on his way with ing machinery of exchange control.
a minimum of delay and without The ill-designed machinery can
favoritism or any rigging in the hardly help but clutter and choke
rates of exchange. But such is not trade and investment across inter-
the case in practice. In practice, national boundaries.
for instance, there is the operation
of the Brazilian exchange control- “Dollar Shortage”
lers who force Brazilian coffee pro- The crowning evidence of the
ducers to convert their dollars into futility of exchange control is seen
Brazilian cruzeiros at artificial in the long-persistent plaint of a
“official” rates. Thus are the Bra- ‘dollar shortage” or, as it is now
zilian coffee producers deprived of euphemistically called, the “illiqui-
a big chunk of the world market dity problem.” When other govern-
coffee price. This exchange control ments overprice their currencies
action inevitably discourages Bra- in terms of dollars, dollars, in obe-
zilian coffee producers and ulti- dience with Gresham’s Law, be-
mately hurts coffee consumers the come scarce —i.e., “shart.” Like all
world over. other price-fixing arrangements,
Item: In 1945 the International then, the exchange controllers must
Monetary Fund was established resort to rationing dollars, thereby
with a view toward world converti- placing international trade under
bility of currencies. Yet, 13 years an incredibly complicated system
later, of the 64 national members of of licensing, quotas, and controls.
the Fund, only 11 countries—all in “Dollar shortage,” indeed! Better
the Western Hemisphere, includ- than $60 billion of postwar foreign
ing the U.S. and Canada — main- aid has in no way relieved the
tain convertibility, i.e., the absence “shortage.” The clamor is for
of exchange control. Of the nine more.
countries who are not members of Canada is proof of the efficacy of
the IMF, excluding the Soviet Bloc convertibility. On December 14,
countries, Liberia is the only one 1951, Canada completely dropped
that has no exchange control. exchange control. Immediately the
Licenses, priorities, quotas for outward flow of funds and invest-
imports and subsidies for exports, ment from Canada was reversed
interstate clearing arrangements, into Canada. Assured that their
shunting transactions, blocked cur- profits would not be embargoed in


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

12 THE FREEMAN October

Canada, world investors moved modern practice dating back to the
large amounts of capital into Cana- ingenious Dr. Schacht. Bilateral-
dian industry and mining. The ism is a throw-back to barter, for
Canadian dollar began to rise it involves two countries agreeing
against the American dollar and for a certain period of time to buy
now has surpassed it in value—a and sell to each other in approxi-
dramatic instance attesting to the mately equal amounts and usually
potential of a free market in cur- at predetermined prices. Bilateral
rencies and the vigor of private trade treaties become economic
“foreign aid.” strait jackets as countries commit
themselves to dealing with only
certain other countries for as long
BILATERALISM as five-year terms, regardless of
A basic characteristic of free the adverse economic and political
trade is indirect exchange. While conditions that hold or may de-
international trade consists of velop.
swapping goods and services As an example of bilateralism,
among nations, rarely does the in- note the one-year bilateral trade
dividual trader in one country agreement signed by Japan and
swap goods and services directly Formosa, retroactive to April 1,
with a trader in another country. 1958. The agreement provides for
Instead, foreign exchange is used an exchange of goods worth $85,-
as payment for the traded goods 250,000 each way. The principal
and services. Japansese goods to be exported un-
The volume of foreign exchange der the agreement include ferti-
receipts and payments may add up lizer, machinery, iron, railway
to a deficit balance of payments rolling stock, ships, and textiles.
incurred by traders of Nation A The chief Japanese imports from
in its dealings with traders of Na- Formosa will include crude sugar,
tion B. However, Nation A uses rice, canned pineapple, and salt.
its surplus balance of payments Supposing the United States
achieved in its dealings with Na- government concluded a similar
tion C to meet its deficit with B. bilateral agreement but in a far
The same technique of a “triangu- greater amount with, say, the gov-
lar” settlement holds for B and C. ernment of Mexico, what would
Such international trade and pay- this mean for American consum-
ments is called “multilateralism.” ers? Clearly, consumer freedom
Contrasted against multilateral- would be violated and competition
ism is bilateralism, another in the imported items listed in the


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

1958 BARRIERS TO WORLD COMMERCE 13

agreement would be delimited. Of tive role in negotiations over the
the listed items, only Mexican im- terms of trade, and this also con-
ports would be admitted. Further- stitutes state trading.

more, since American consumers The clearest examples of state
are also, broadly speaking, pro- trading are found in the Soviet
ducers, American overseas markets bloc countries. Inasmuch as a
and competition would also be de- “comrade” in a “people’s democ-
limited. Thus, coming and going, racy” is prevented by law from
producing and consuming, Ameri- holding title to commercial goods,
can consumers would be bound by trading within the bloc is on a
a rigid, unalterable, governmental state-to-state basis —in a simple
decree. single transaction, one government

Again, as in exchange control, it exports, the other imports.

should be seen that bilateralism The USSR, which in April 1918
involves bureaucratic management nationalized foreign trade, has
and political judgments. Importers created various state agencies to
and exporters in the affected coun- handle its foreign trade transac-
tries are not free to deal with the tions. On the export side, for ex-
best sources and markets through- ample, is Soyuzugelexport (coal)
out the world. Price and quality and Soyuzneftexport (oil), and on
considerations are secondary to the import side are such agencies
political considerations. Since as Soyuzemtimport (steel prod-
buyers are forced to turn to rela- ucts) and Textilimport (textiles).
tively unattractive sources and In most of the major countries of
sellers to relatively unattractive the world, the Soviet government
markets, international buying and has established state trading agen-
selling tend to diminish. Interna- cies or “trade delegations.” In the
tional division of labor is stymied. United States, the official Soviet
World commerce is hurt. Con- state trading agency is the Am-
sumers in the bilateral countries torg Trading Corporation, char-
and to a degree in the rest of the tered under New York State law

world lose. in 1924 and presently located at
49 West 37th Street in New York
STATE TRADING City. Amtorg has been relatively

State trading is international quiescent, with the cold war and
trade by governments. Usually the its having figured in a sensational
governments have title to the goods Congressional investigation of sub-
in trade. Sometimes the govern- version following World War II.
ments have no title but take an ac- Outside the Soviet bloc, state


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

14 THE FREEMAN October

trading is much less on a state- ment’s “parity” farm price sup-
to-state basis than it is on a mixed ports. So the U.S. government
basis — one party is governmental “sells’”’— dumps, say many foreign
and the other is private. Almost producers -— its surplus wheat,
half of the foreign trade of Ar- corn, cheese, cotton, and other com-
gentina, for example, has been modities abroad at knockdown
operated by a government bureauc- prices. Ironically, these prices
racy, IAPI. Britain, France, Italy often are much lower than those
are among the many countries paid by American citizens. And
with nationalized industries, which while the law (PL 480) govern-
almost inevitably forces these ing such sales proclaims that no
countries into state trading. The disturbance of world markets and
British government, for example, prices is to occur because of the
monopolizes the importation of American disposal operation, dis-
several commodities and food- turbances have been inevitable.
stuffs through exclusive bulk trade Formal protests to the U.S. have
agreements with other countries. been registered by Australia, Bra-
The French government has been zil, Canada, Denmark, Burma,
buying about one-third of France's Netherlands, Mexico, New Zea-

imports. land, Argentina, and Uruguay.
Item: In 1958 the New England
Stockpiling Operations Governors Textile Committee for-

The United States is not im- mally protested the discriminatory
mune. The American government action of the U.S. government for
has for the past generation been selling cotton to foreign textile
purchasing strategic and nonstra- mills, especially in Japan, at far
tegic commodities on its own ac- lower prices than those paid by
count for stockpiling and price- New England textile manufac-
support purposes. Copper, lead, and turers.
zine, regarded as critical defense The troubles with state trading
industries, have long been the are many. It is an outright denial
beneficiaries of government pur- of free trade. It carries all the
chases, as well as government evils of monopoly. It suffers all the
tariffs. ills natural for bureaucracy and

In exporting, the American gov- socialized industries. It is, more
ernment is engaged in a giant often than not, noneconomic and
overseas surplus agricultural com- discriminatory, forever weighing
modity disposal program, one of political and military considera-
the repercussions of the govern- tions. It tends to incur interna-


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

1958 BARRIERS TO WORLD COMMERCE 15

tional ill will. With international those furthest away. Country
division of labor and free trade quotas eliminate this discrimina-
stymied, consumers in the affected tory feature by allocating the
state trading nations in particular quantitative restrictions to each
and consumers the world over in exporting nation according to the
general, come out on the short end. base-period method. Country
quotas also discriminate, however;
IMPORT QUOTAS this time against those nations
To the protectionist-minded gov- whose export industries are fairly
ernment, tariffs. are faulty in a new and hence could not qualify
number of respects and this ac- under an old base. Import licensing
counts for the rise of nontariff re- frequently imposes limits on the
strictions. One of the faults of amounts of specified goods which
tariffs is the absence of any ac- may be brought into the country,
curate control over the volume of and the licenses themselves are
imports. Technically there is no not uncommonly restricted to fa-
limit to the amount of foreign vored importers.
goods an importer can bring in if Item: The United Kingdom, be-
he’s willing to pay the penalty. fore 1939, used to import freely
While this problem can generally American products now heavily re-
be met by prohibitively high duties stricted by import quotas. For ex-
on the protected goods, many gov- ample, in a recent year, the U.K.
ernments prefer to impose precise admitted the following quantity of
quantitative restrictions. appliances from one company: one
These restrictions —import dishwasher, 35 electric ranges, 25
quotas — are usually for one-year deep freezes, 19 washers and
periods and are expressed in physi- dryers, and 194 refrigerators. In
cal terms: tons, board feet, gallons, the same year, only 650 American
units, as the case may be. Ruri- cars of all makes were permitted
tania, for example, may declare: to be imported into Britain while
We will admit but 10 million bush- British cars were exported to the
els of foreign wheat in 1959. Such U.S. by the tens of thousands.
quotas may be set globally, by Import quotas have not been
countries, or through import licens- common in America. Of late,
ing. Global quotas simply specify though, the U.S. government has
limits which may be imported from been establishing quotas on farm
the rest of the world, which means imports, especially on sugar, ce-
that the closest countries, geo- reals, and dairy products. Also, the
graphically, will have the jump on Eisenhower Administration has


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

16 THE FREEMAN October

set a so-called “voluntary” oil im- dent Eisenhower requested a $3.9
port quota system for the Ameri- billion program of military, eco-
can oil industry. The system had nomic, and technical assistance to
been demanded by domestic oil and “the free world” for the govern-
coal interests. The Administration ment’s accounting year, 1959. The
declares it to be a “defense” meas- President emphasized the role of
ure. Practically all of the major fostering international trade that
oil companies with overseas oil foreign aid was to play. Said the
fields have now “agreed” to speci- President:
fied limits on crude oil imports as- “[The aided countries] must
signed to each oil concern. Politi- have technical assistance to train
cal and economic repercussions their manpower, to explore their
have quickly redounded to the U.S. resources, and to use them produc-
from such oil-exporting nations as tively. They must have supple-
Venezuela, Canada, and Middle mentary capital from abroad for
Eastern countries. investment in agriculture, power,
Quantitative restrictions are transportation, and industry. They
hardly calculated to spread good must have help to tide them over
will among nations. They consti- economic difficulties that threaten
tute a crass form of protection. their stability and cohesion. They
Retaliation is usually quick. France must have increasing trade with
initiated the modern quota system availability of mecessary imports
early during the Great Depression, and growing markets over the
and by 1937 more than 25 other long term.” [Italics added]
countries had some kind of quota It is not feasible at this point to
system in operation. Quotas im- explore the case for foreign aid,
pede international division of which in postwar credits extended
labor. They require costly, arbi- by the U.S. abroad amount to more
trary, bureaucratic, discriminatory than $60 billion. But it is to the
management. They discriminate point to note that foreign aid
against both foreign suppliers and tends to preclude free trade and
domestic importers, as well as private investment.

against the nation’s consumers Certainly, foreign aid disrupts
who must foot the bill with higher normal world trade patterns. Most
prices and bigger taxes. American aid credits — about
three-fourths — must be spent in

FOREIGN AID the United States. Many of the

In his foreign aid message to aided countries would prefer to
Congress in February 1958, Presi- spend these credits elsewhere.


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

1958 BARRIERS TO WORLD COMMERCE 17

They do not, as a rule, wish to im- already hostile toward capitalism
port from their principal creditor resent as degrading charity the aid
nation, and most assuredly they they will nonetheless accept. With
would rather buy where terms are an almost assured flow of aid dol-
most favorable. Other supplier na- lars (aided countries can always
tions, especially those whose prices threaten to turn toward the com-
are lower than those of the U.S., munists), recipient nations are
resent the spectacle of their actual anything but moved toward creat-
or potential customers being sup- ing conditions conducive to pri-
plied gratis or at subsidized prices, vate property and free enterprise
however attractive this might be —the foundations for free trade.
to the aided consumers.

Item: Between 1946 and 1956 it Foreign Aid Nurtures Socialism
is estimated that $60 billion in The crowning result of foreign
American credits were transferred aid, then, is that the U.S. has in-
to “the free world” in foreign aid, advertently nurtured socialism in
two-thirds of it in so-called eco- order to fight its blood brother,
nomic aid. This figure amounts to communism. Socialized industries,
40 per cent of the value of the notorious for their inefficiency,
American exports during the same will hardly fare well in world mar-
period which totaled $155 billions. kets. And inasmuch as socialized

It is important, too, to note that industries are not subject to the
U.S.-provided steel mills, railroads, sovereignty of the consumer, it
electric generating stations, jute follows they will not be eliminated
mills, canning plants, and so on are from the competitive race. Rather,
not sanctioned through market their governments will likely cut
forces and unhampered interna- off foreign competition through
tional division of labor but rather protection and, if there is to be
through the decisions of bureau- “international trade” engage in
cratic management both in the state trading. Consumers in the
U.S. and in the recipient countries. protected country will lose and so
Investment errors of great magni- will the consumers of the world at
tude are likely under such circum- large because of this interference

stances. with the international division of
Moreover, aid is a government- labor.
to-government matter. Private en- It follows, also, that the corol-

terprise in recipient countries is lary of foreign trade, foreign in-
discouraged. So is private invest- vestment, is similarly hampered by
ment from overseas. Governments foreign aid. Capital is timid. It


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

18 THE FREEMAN October

will hardly venture into lands ernment’s participation in com-
where governments are “establish- modity cartels euphemistically
ing” industries and where private called “international commodity
property is suspect and subject to agreements.” The Webb-Pomerene
nationalization. Act provided that American com-
“Trade, not aid,” so worshiped panies could form “export associa-
in the abstract, should be the tions” and fix export prices and
reality instead of the de facto quantities.
“aid, not trade.” Item: Two American airline
companies, Trans World Airlines
CARTELS AND INTERNATIONAL and Pan American, although re-
COMMODITY AGREEMENTS garded by the government as regu-
lated private utilities, participate
Cartels and international com- in an international airline cartel,
modity agreements amount to the International Air Transport
monopolies on an international Association, most of whose mem-
scale. These arrangements aim at bers are nationalized. The Associa-
price-fixing and market allocation tion sets prices, determines oper-
and hence are highly restrictive of ating conditions, and, to an extent,
international trade. They are the allocates markets.
antithesis of free trade. International commodity agree-
Cartels are quasi-private ar- ments are essentially cartels, in-
rangements between two or more variably started by governments.
business firms in different coun- Ordinary cartels are private agree-
tries to reduce or eliminate com- ments ultimately requiring public
petition. The privacy of the ar- support. International commodity
rangements tends to be short-lived. agreements are public agreements
Sooner or later, a cartel must have from the outset. Each, cartel and
government protection, for other- international commodity agree-
wise ‘outsiders’ would flood the ment, is aimed straight at the
cartel’s markets and ‘‘wreck’” heart of free trade and interna-
prices. This would be wonderful tional competition. Their main
for consumers but poison for the purpose is price-fixing or “stabili-
cartel. zation.” This purpose has led to
Cartels are illegal in the United governmental controls over pro-
States under the Sherman Anti- duction and marketing. To court
trust Act of 1890. This restraint public favor, controls are generally
has been diluted by the Webb- declared necessary to achieve an
Pomerene Act of 1918 and the gov- “orderly marketing of staple com-


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

1958 BARRIERS TO WORLD COMMERCE 19

modities,” or some such objective. PREFERENTIAL TREATMENT
Commodity agreements have The point of trade restrictions is
been tried for wheat, sugar, wool, to impose preferential treatment —
rubber, tin, cocoa, coffee, and other almost always a preference for do-
items. The history of such agree- mestic producers, and occasionally
ments shows anything but success for favored foreign producers.
in “stabilizing” prices and con- Tariffs, of course, are a form of
trolling production and marketing. preferential treatment. In 1953
Certainly consumers have little, if Switzerland, for example, in-
anything, to gain from the opera- creased her tariff on American ny-
tion of commodity agreements. Yet lon stockings by 300 per cent, but
the United States participates as a this may have been in retaliation
producing nation in two big cur- against recent increases in the
rent commodity agreements, the American tariff on Swiss watches.
International Wheat Agreement President Eisenhower expressed
and the International Sugar Agree- this preference to the Canadian
ment. The cost of the latter to Parliament last July, as follows:
American sugar consumers, who “Neither of our countries is a
are forced to support inefficient ‘free trader’... . Each of us feels
domestic sugar cane and beet a responsibility to provide some
sugar producers, has been esti- protection to particular sectors of
mated at 50 per cent over the world our economy which may be in dis-
sugar price.! tress. . . . We have taken some
The results of cartels and inter- actions of this sort. So has
national commodity agreements Canada.”
are the same: International com- The President might have il-
petition and investment are stifled. lustrated American protection
International division of labor ac- through preferential treatment by
cordingly suffers. Consumers the pointing to a U.S. government or-
world over are losers. Power poli- der a few years ago to two Pitts-
tics intervene. “German cartels,” burgh companies for generators
to quote from Professor Michael and transformers for the Chief
Heilperin in his The Trade of Na- Joseph Dam on the Columbia
tions (New York: Knopf, 1947. p. River. The order amounted to
87), “greatly encouraged and later $6,300,000. Yet a British concern
- controlled by the state, became the had offered to supply the -same
handmaiden of power politics.” equipment for $5,300,000. How did
Poirot, Paul L. “Flies in the Sugar OUI government justify its paying
Bowl” in The Freeman, May 1956, p. 6. some one-fifth more than the Brit-



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

20 THE FREEMAN October

ish price? It invoked the “Buy unilaterally allow the United States
American” Act of 1933, which or its treaty countries to suspend
authorizes the government to pay or modify a tariff concession in
more for American products when any trade treaty with another
such orders would create work in country when “increased imports
areas of “substantial unemploy- threaten serious injury to the do-
ment” or when “national security” mestic industry.”
is threatened. (Note: After much Canada, too, as the President ob-
delay and political discussion, the served, has also hewed to preferen-
order was withdrawn from the tial treatment. Canada and other
two Pittsburgh companies and British Commonwealth countries,
awarded to the British company.) for example, utilize what they call
Item: Many countries in effect ‘imperial preferences,” meaning
embargo American cars through that goods moving between Com-
the simple expedient of imposing monwealth countries may enter at
weight or power limits on cars and a lower duty rate than the same
trucks for use on their highways. goods originating from countries
Through this technique Bermuda, outside the Commonwealth. Im-
for example, excludes imports from perial preferences got their start,
the American automotive industry. in part, as retaliation against the
Similarly, the U.S. government American Smoot-Hawley Tariff of
subsidizes American shipbuilding 1930 which raised American tar-
and shipping on the theory that iffs to an all-time high. Britain,
these are industries critical for na- again at least partly because of re-
tional defense. However, in this re- taliation, deserted her traditional
gard, the U.S. is little different free trade banner with her highly
from most of the world in such protectionist Import Duties Act of
preferential treatment of shipping. 1932.
“Peril points” and “escape clauses”
are prime examples of American ~Common Market” Schemes
preferential treatment. ‘‘Peril Preferential treatment of sorts
points,” initiated in the 1948 Ex- is one of the aims of common mar-
tension Act, permit the U.S. Tariff ket schemes such as Benelux (Bel-
Commission to review each rate on gium, the Netherlands, and Lux-
the “bargaining list” and deter- embourg) and the just-launched
mine at what point further tariff European Common Market. To he
reduction would “injure” Ameri- sure, common markets (sometimes
can producers. “Escape clauses,”’an called customs unions) widen the
extension of the peril point idea, area of free trade within the com-


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

1958 BARRIERS TO WORLD COMMERCE 21

mon market countries. And this is erential treatment is treatment en-
a good thing, as far as it goes. forced by governments, exerting
Regional division of labor will be their authority over international
broadened, and greater trade trade.International division of
should result. In trade relations labor and international trade and
with countries outside the common investment are certain to suffer as
market, though, common market a consequence.

authorities are likely to erect a

tariff wall higher than the average INFLATION AND OTHER
tariff level prior to the formation = MONETARY MANIPULATION
of the common market. If the nineteenth century was

This is a danger for the Euro- an era of the gold standard, free
pean Common Market in particu- trade, and monetary stability, the
lar. France, a Common Market twentieth century has been an era
member, has long been a notori- of managed currency, protection,
ously protectionist country. France and monetary instability. This in-
thus may force the Common Mar- stability — i.e., violent inflation —
ket tariff wall to great heights. has boded ill for international
For America, this would be an trade, which wholly depends on in-
irony. America has been one of the ternational payments. Inflation —
chief sponsors of the European the expansion of money and credit
Common Market; it may be one of — distorts “official” exchange rates.
the chief losers by it, with Ameri- Domestically, it tends to set in mo-
can goods shunted by Common tion a flight from currency into
Market tariffs from European con- goods. Externally, it tends to cause
sumption. Moreover, there is now another flight: a flight of “hot
talk in world capitals of a South money” fleeing to foreign sanctu-
American common market, a Cen- aries where inflation is relatively
tral American common market, a quiescent. Inflation ultimately
North European common market, causes domestic prices to rise with
and a Far Eastern common mar- the result that foreign importers
ket, all of which conceivably could are strongly inclined to shop
isolate the U.S. in international harder for better bargains else-
trade. where.

Preferential treatment, it must True, gold still continues to
be emphasized, is not the prefer- serve as an international medium
ences of individuals and trading of exchange, though on a very
groups freely deciding what to limited basis. Today practically all
buy, when, where, and how. Pref- the nations of the West, including


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

22 THE FREEMAN October

the U.S., avoid gold — the histori- spend, pumping out ever more
cal lubricant of free trade — as a money. One Keynesian admitted in
domestic standard; i.e., gold re- the London Economist a few years
deemability is no longer a right ago: “Inflation is nine-tenths of

accorded to citizens of the West. any practical full employment
This political “flight” from gold policy.”
has received important intellectual Little wonder, then, inflating

support from the late Lord Keynes governments soon face balance of
who once referred to gold as a payments difficulties. Exports,
“barbarous relic.” It was Keynes loaded with inflated costs, fare less
who sanctioned the notions of well in world markets and shrink
“full employment” and manipu- in volume. Imports become rela-

lated monetary systems. tively cheaper in the domestic mar-
. ket and grow. The government,
Endless Intervention somewhat bewildered, first applies

What does monetary manipula- exchange control to mask inflation
tion have to do with restrictions and maintain the fiction of “offi-
on international trade? Just this: cial” exchange rates. Then to
Full employment policies are na- cheapen its exports and regain
tionalistic policies. If falling for- world markets, the government
eign demand hurts the export in- comes to the inevitable: devalua-
dustries and causes unemployment tion. But, later, still more inflation,
at home, political authorities con- and the cycle of ‘“‘re-evaluation”
tend that the restoration of the (i.e, devaluation) repeats itself.
“full employment equilibrium” re- Inflation, in short, is the hand-
quires import restrictions to “pro- maiden of exchange control and
tect” domestic markets and to protection. It generally spells death
“create” employment. A further for free trade.

Keynesian requirement: inflation,

the forced expansion of money and OTHER STATIST MEASURES
credit. For in “mature” economies, Monetary manipulation (infla-
argue the Keynesians, less-than- tion) is but one form of govern-
full employment is inevitable un- ment.intervention in economic ac-
less some “socialization” of de- tivity. Would that it were the only
mand and investment (i.e., infla- one! Unfortunately there are many
tion) takes place. others, all of which contribute to

The past generation has been the rationale and hence the ma-
one of fantastic inflation the world chinery of protection. Among them
over. Governments spend and are price controls, monopolistic and


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

1958 BARRIERS TO WORLD COMMERCE 23

militant labor unionism, various Company property by Premier
open and hidden subsidies, “plan- Mossadegh of Iran during the
ning,” and nationalization. All of early 1950's affords another ex-
these constitute direct or indirect ample of the futility, but never-
interference on the part of govern- dying vitality, of intervention.
ment with the free forces of sup- Subsidy of exports is another
ply and demand. Bureaucratic form of state intervention, a form
management and political judg- going back to the mercantilistic
ments go into ascendancy. Ineffi- policies of the seventeenth and
ciency, as noted by C. Northcote eighteenth centuries. Subsidy is
Parkinson in his splendid essay, regarded as a form of economic
“Parkinson’s Law,” becomes inevi- warfare. Outright bounties are
table. And with the inefficiency rare. But various indirect means
comes higher costs, pushing do- of subsidizing export industries
mestic prices ever higher and are common. France, for instance,
thereby worsening foreign trade employs the following export de-
positions. Further intervention vices:
then becomes inevitable, for gov-
ernments are inherently not prone Refund of fiscal, payroll, and so-
to admit their failures. Protection cial security taxes
. . Exemption from production tax
is the almost certain answer to the Credit vol limitati ved
. . . redit volume limitations waive
failures of intervention. Interven-

: . . . for exports
tion breeds intervention, in short. Lower discount rate on export

Consider the matter of nation- commercial paper
alization. When Mexico, for ex- Government loans to boost export
ample, nationalized the foreign in- production

vestments in its oil industries in

1938, it was the second largest oil Price Controls

producing country in the world. Take the matter of price con-
Foreign investments, quickly and trols. Usually the basis for price
understandably, came to practi- controls is the advertent or inad-
cally a complete halt in Mexico. vertent policy of inflation by the
Mexican technology was, to put it government. The result of inflation
mildly, inadequate to face the is rising prices. “This is an intol-
many problems imposed by na- erable situation,” declares the
tionalization. Today the Mexican President of Ruritania, asserting
oil industry stands ninth in world that “profiteering” must stop. So
production. The abortive nationali- to stop the “profiteering,” the
zation of the Anglo-Iranian Oil Ruritanian government doesn’t


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

24 THE FREEMAN October

stop the monetary expansion but Britain and France limp along.
institutes price controls. Complica- Whatever the intervention, then,
tions arise. For example, manufac- free international trade is likely
turers using commodities and sup- to suffer. Exporters, finding them-
plies from overseas quickly find selves underpriced in foreign mar-
themselves in a dilemma. They tell kets, demand a subsidy. Labor
their overseas suppliers that they unions, finding employers losing
are sorry but domestic prices are orders because of foreign competi-
under control and Ruritanian man- tion, demand that their govern-
ufacturers can no longer pay the ments undertake “appropriate ac-
world price for commodities and tion,” i.e, protection. Planning
supplies from overseas. Meanwhile, officials, finding the free give-and-
the price controllers are also in a take of international trade upset-
dilemma: If they allow their man- ting their planning targets, de-
ufacturers to pay higher world mand “controls” over international
prices (for other countries are also trade. Almost all of these demands
inflating their credit and curren- spring from prior intervention. All
cies), how will the domestic price of these demands add up to calls
“ceilings” be maintained? A possi- for protection.
ble answer in the “protectionist Item: In February 1958, the
psychology” : bilateral trade agree- American Tariff League, Inc. a
ments, a reversion to barter. The protectionist lobby, listed the fol-
point is that intervention and pro- lowing major nontariff trade re-
tection go hand-in-hand. strictions used by 89 nations of
Item: Between World War II the world:
and 1955, France and Britain en-
gaged in an increasing trend of No.of
state intervention. Relatively Advance Deposit for Imports....13
speaking, West Germany and Exchange Licenses .................... 33

Switzerland engaged in a decreas- Exchange Tax .........oo.o.cooo... 9
ing trend of state intervention. Existence of Blocked

France's tariff level advanced Nonresident Accounts ........... 10
about 35 per cent and Britain's by Export Licenses ............................ 46

about 40 per cent. Switzerland's Forced Exchange of Payments an

tariff level, however, fell by about ecelved In Yorelgn Lurrency

35 t and West , Import Licenses ...............
per cent an est Germany’s Import Quotas, Agricultural .... 9

by some 70 per cent. West Ger- [mport Quotas, Non-

many’s “recovery” from World agricultural ooo.

War II is world-renowned; Great Multiple Exchange Rates ..........


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

1958 BARRIERS TO WORLD COMMERCE 25

Preferential Exchange Systems. .16 Trade and Productivity

Preferential Trade Systems ...... 21 Now for the last of our thiree
Restrictions on Incoming questions: If we are in an all-out
Capital Movements ................ 28 neck-and-neck race with commu-

Restrictions on Outgoing nism and economic and military

Capital Movements ................ . eg

. .. proficiency are of crucial impor-
Restrictions on Payments for p 1d ter trad 1h

Invisible Imports ............. 4b Lance, woula greater irade resu
State Trading ............... 13 in higher proficiency?

Our answer, in brief, is Yes.

In addition, the League says The rule to remember is that
there are 20 other distinct forms what hurts consumers hurts busi-
of nontariff restrictions, including ness, and what hurts business
discriminatory taxation on non- hurts proficiency. After all, what
resident investments (4 coun- is proficiency? Simply the power
tries), bond required of importer to produce. The power to produce
by government (1 country), im- is best determined by free trade,
port embargo (5 countries), and and not hy bureaucratic decree.
surcharge on exchange (6 coun- The power to produce is a corol-

tries). lary of the power to trade. Thus -
the more trade the more produc-
Not Aid to Trade tion, and the more production the
We reach the answer to our more trade.
second question — will the lower Protection, on the other hand, is

tariffs achieved under the newly aimed at the power to trade. In
extended Reciprocal Trade Pro- this, the protectionist government
gram necessarily mean freer and does indeed aid some industries,
hence greater trade? The answer: but only at the expense of all in-
No. While “the free world” de- dustry. Under protection, all do-
plores the protectionism of the mestic industry is deprived of
United States, a policy we need not markets at home and abroad. All
be proud of nor one designed to domestic industry is hurt by the
increase the economic well-being higher costs of labor and ma-
of the nation, the fact remains that terials. Thus by restricting the
our allies are far more protection- power to trade and locking in in-
ist than we. The protection is far efficiency, the protectionist govern-
less today in the form of prohibi- ment restricts the power to pro-
tive tariff walls but rather through duce. :

a bewildering variety of nontariff This means, in turn, that con-
devices. sumers will have less, for produc-


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

26 THE FREEMAN October

tion constitutes the sole means of Item: The Tariff of 1828, in the
consumption. The power to pro- South known as the Tariff of
duce, after all, is the power to con- Abominations, touched off great

sume. Southern animosity and South

Carolina’s Doctrine of Nullifica-

National Defense tion. The Civil War followed in the
One more point: Our final ques- wake.

tion implies the consideration of Item: Beginning in the 1920’s

war. Which is the harbinger of and accelerating during the 1930's,
war, free trade or protection? Pro- increasing protection against Japa-
tection, it will be remembered, is nese imports was a policy of the
frequently imposed as a “defense” American government. The policy
measure. We protect, say the pro- was hardly calculated to incur the
tectionists, to be ready for war. good will of Japan. In 1941: Pearl
But what of the aggression in- Harbor. In 1954, by way of con-
volved in protection? Stopping trast, the American government
goods and services, interfering advanced as one of the reasons for
with the movement of and pay- the extension of the Reciprocal
ment for international trade—- Trade Program: “to improve
these actions hardly are likely to Japan’s trading prospects in the
foster international good will. Au- world, an essential element to
tarchy may well mean self-suffi- stability in the whole Far Eastern
ciency, the basis for a war footing. situation.”

But free trade means civilized, Item: The nineteenth century
peaceful cooperation among free was a century of free trade and rel-
peoples. ative peace. The twentieth cen-

In sum: Protection breeds ani- tury, so far, has been a century of
mosity. Trade breeds friendship. protection and war. ® 00

Hipeas @0 10060974 Competition Is the Mainspring

IT SHOULD NEVER BE FORGOTTEN, however, that to argue for higher
tariffs is automatically to argue against greater competition...
For free competition, and not some particular industry, is the
mainspring of this economy. To the extent it is diminished, the

economy, and consequently the defense effort, must needs suffer.
Wall Strect Journal, March 28, 1865


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

ANOTHER TALE OF

FREDERIC BASTIAT TWO C TI E S

(1801-1850)

ONCE UPON A TIME, there were two few persons in Puera began to
cities—Stulta and Puera. But be- question the idea of retaliatory
cause of the mountains and swamps tariffs against Stulta. The spokes-
between them, they found it diffi- man for this faction argued as
cult to trade with each other. So at follows:
great expense, they built an ex-
cellent highway from one city to “It is true that the restrictions
the other. And as expected, trade imposed upon us by Stulta are a
between them increased rapidly. hindrance to the sale of our goods
But soon thereafter, certain in that city. That is a misfortune.
groups in Stulta began to complain But the restrictions we have im-
that too many products were com- posed in retaliation are a hin-
ing over the new highway from drance to our purchase of goods
Puera. They feared that the econ- from Stulta. This is a further mis-
omy of Stulta would be ruined fortune. Now there is nothing we
thereby. So the government of can do about the restrictions
Stulta began to impose quotas and against trade imposed upon us by
tariffs against products of Puera. Stulta. But we can do something
In retaliation, the government of about the restrictions we ourselves
Puera imposed equal restrictions have imposed upon our purchase
against products from Stulta. And of goods from that city. Since we
so it continued for many years; cannot do away with the total evil,
the advantages gained by the new at least let us abolish that part of
highway were destroyed by the the evil that we ourselves have
restrictions on its use. The amount created. We can always hope that
of trade between the two cities the people of Stulta will someday
was about the same as before the learn that free trade is in their
highway was built. own best interests. Then they will
But as sometimes happens, a abolish their restrictions against
 — us. But meanwhile, we are foolish
tiat, Volume 1. Paris: Guillaumin, 1863. Selves in order to spite the misled
pp. 68-69. people of our neighboring city.”

27


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

LABOR

IT NEVER SEEMS to occur to the
Congress of the United States
that maybe the trouble is we have
too many labor laws already.

The very existence of this vast,
complicated, and often conflicting
body of what we know as ‘labor
law” itself implies that men en-
gaged in any activity of a labor
union are somehow different from
the same men engaged in any other
human activity and hence must be
made subject to special restric-
tions, exemptions, regulations, and
privileges that nowhere apply to
anyone else.

It doesn’t require a very skepti-
cal analysis of the present situa-
tion to come to a conclusion that
most, if not all, the ills that plague
the whole field of labor representa-
tion and relations actually have
been created, or at least enlarged,
by these very ‘labor laws” them-
selves.

Mr. Lockrone is editor of The Indianapolis
Times, which carried this article June 22,
1958.

28

WHAT'S
BAD
ABOUT
LAWS 2

WALTER LECKRONE

Not all this mass of “law” — or
even most of it, of course, has ever
in fact been enacted by any legis-
lative body, either national or local.
Much of it has “just grown.” To
a very large degree it is made up
of the rulings of bureaucrats, in-
cluding thousands of the most
minor-type bureaucrats, employed
in its administration. Another
great segment of it comprises the
decisions of courts, up to and in-
cluding the United States Supreme
Court, many of which go far be-
yond judicial interpretation of en-
acted statutes and actually con-
stitute whole new enactments of
law which Congress has either re-
fused, or failed, to approve.

Nor does it even end there.

* * * *

Any reporter who has watched
at firsthand —as 1 have — very
many of what we euphemistically
describe as “labor disputes” knows
perfectly well that a substantial
lot of de facto “labor law” actually


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

1958 WHAT'S BAD ABOUT “LABOR LAWS”? 29

has been created by authorities no
more competent to do so than local
sheriffs, prosecutors, police chiefs,
and even patrolmen on the beat
where a dispute was in progress.
At this level of government the
practice has been so widespread
and so long-continued of refusing
to intervene in acts of violence
right under their own noses if a
‘labor dispute” was involved —
which under any other circum-
stances would have been con-
sidered rioting or assault and
battery or arson or even, occasion-
ally, murder — that a virtual legal
immunity has been conferred upon
those who commit them, whether
they are done by, or to, the mem-
bers of a union.

Dean Roscoe Pound of the Har-
vard Law School last year pub-
lished an authoritative little mono-
graph, Labor Union Exemptions,
in which he discussed the startling
number of laws applicable to every-
body else but from which unions
are exempted either by statute or
by ruling court decision. Donald
Richberg, a noted authority in the
field, also has written extensively
on the subject.

Besides the ‘special privileges”
thus granted unions there is also
a great and growing number of
“special restrictions’ applied to
them but not to others.

To my own naive and certainly
unlegalistic view there is no dif-

ference between a union president
who steals his members’ money
and a bank president who steals
the money of his depositors. I find
it difficult to distinguish the crack-
ing of a man’s skull with a base-
ball bat — which I have seen with
my own eyes more than once — in
a “labor dispute” from cracking a
man’s skull with a baseball bat in
a dispute over a parking space.

If there ever was a reason —
which I doubt — to compel a union
officer to swear he was not a com-
munist, there certainly was at least
equal reason to compel a corpora-
tion officer to do the same. I can
see no difference between forcing a
man to join a union he doesn’t
want to join and forcing a man to
join a lodge or a church or a politi-
cal party he doesn’t want to join.
An illegal blacklisting or boycott
imposed to destroy a competing or
intractable business still looks to
me just like an illegal blacklisting
or boycott whether General Motors
does it or United Auto Workers
does it. The power of a monopoly
great enough to bring to an in-
stant standstill the whole economy
of the entire nation — which the
Teamsters Union, for instance,
boasts that it has — is precisely as
dangerous in its hands as it would
be in the hands of United States
Steel. Fraud is fraud and a racket
is a racket in my books, no matter
who conducts it.


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

30 THE FREEMAN October

* * * * decision of any Court or agency

I am aware the Congress and the that applies in any degree to any
courts and the National Labor Re- individual, association, partner-
lations Board and many a lesser ship, corporation, and/or union
functionary have not wholly shared shall under all like circumstances
that opinion. They have demon- apply in exactly the same degree to
strated their dissent, indeed, in the all other individuals, associations,
maze of statutes and decisions and partnerships, corporations, and/or
rulings and practices that com- unions which shall all alike be sub-
prise our “labor laws” — in effect, ject to its provisions without ex-
one of the most amazing “double ception, and any statute, ruling, or
standards” of legality in existence opinion, or the decision of any

anywhere on earth. Court in conflict with this clause
I doubt whether any of the spe- is hereby repealed.”
cial privileges these have granted Perhaps an expert at law-writ-

ever actually have helped any ing could state it more clearly, if
union attain any legitimate union not more succinctly.
objective — and obviously the spe-

cial restrictions they have included The idea, though, is that no
have not wholly prevented an oc- group of Americans, whether
casional thief from looting the formed into unions or corporations
union till of which he had gained or whatever else, should have any
custody, or grievously abusing privileges or be under any restric-
union members and others over tions by law which do not apply to
whom he had won power. They all other groups doing the same
may even have handicapped the thing.

sincere, honest, responsible union Under this principle — now fun-
leader and made his efforts less damentally denied by our “labor
effective. laws” — everybody would play by

the same rules and with the same
umpire. Any demand for ‘‘special
If I were in Congress myself — privilege,” by either unions or
a most unlikely possibility — I be- corporations, is essentially a con-
lieve I would now propose a bill fession of their own weakness.
that would read something like Surely American business and
this: American labor are both strong
“Any statute, ruling, opinion, or enough to prosper without it.

* * * *


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

THE ADMINISTRATIVE AGENCY

@lossus

How laws are made — and perverted — with neither
congressional action nor judicial review.

GREY LESLIE

For THE PAST TWO decades and political parties. Thus, they are
more, without fully realizing what not responsible to any electorate.
was happening and with little It is true that some of the au-
scrutiny on the part of the general thority to promulgate rules and
citizenry of the nation, the admin- regulations was allegedly delegated
istrative agencies of our govern- to the agencies, but it is important
ment have been allowed to so in- to recognize that when such rules
terpret their authority over us and regulations have the full ef-
that it amounts to a virtual usur- fect of law, it becomes a delegation
pation of the Constitutional func- of a lawmaking authority.
tions of the Congress and the judi- This technique actually deprives
cial functions of the courts. the people of direct representation
The rules and regulations of the in their government since they had
administrative branch of our gov- no voice in the election or appoint-
ernment actually have the com- ment of the administrative law-
pelling effect of laws. But they are makers.
laws which have been made, not by The laws passed by Congress
the elected representatives of the since 1933, which are currently in
people of the United States, but force, are contained in eleven hefty
rather, by departments, boards, volumes; but the laws by rules and
agencies, and commissions, whose regulations of the administrative
principal officials were appointed agencies, which have the full ef-
by the President and the two major fect of law, require more than
fifty-nine equally hefty tomes, plus
— supplementaries published daily in

Mr. Leslie is a free-lance reviewer and jour. .
nalist from Washington, D. C, the Federal Register.

31


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

32 THE FREEMAN October

To get a graphic idea of our Federal Deposit Insurance

present Administrative Colossus, Corporation
here is a catalogue: Federal Home Loan Bank Board
Federal Mediation and Conciliation
DEPARTMENTS Service
Agriculture Federal Power Commission
Commerce Federal Reserve System
Defense Federal Trade Commission
Health, Education, and Welfare Foreign Claims Settlement |
Interior Commission X
Justice Foreign Trade Zones Board
Labor General Services Administration
Post Office Government Patents Board
State Housing and Home Finance Agency
Treasury Indian Claims Commission
INDEPENDENT AGENCIES Interdepartmental Committee on
Science

Advisory Commission on
Information
Advisory Committee on Weather

Interstate Commerce Commission
National Academy of Sciences

Control National Advisory Committee for
Air Coordinating Committee Aeronautics
Airways Modernization Board National Capital Housing Authority
American Battle Monuments National Capital Planning

Commission Commission
American Nationa! Red Cross National Capital Regional Planning
Atomic Energy Commission Council
Canal Zone Government National Labor Relations Board

Civil Aeronautics Board

Civil Service Commission | Rn | //
Commission of Fine Arts |

Commission on Civil Rights | LAWS PA

Committee for Reciprocity he au
Information +. Pio | T7TTTY

D. C. Armory Board Cd

D. C. Redevelopment Land Agency

Export-Import Bank

Farm Credit Administration

Federal Civil Defense
Administration

Federal Coal Mine Safety Board

Federal Communications
Commission



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

1958 THE ADMINISTRATIVE AGENCY COLOSSUS 33

National Mediation Board pendent agencies have lawmaking
National Science Foundation powers by “rule and regulation.”

National Selective Service Board To be sure, Congress has spas-
Panama Canal Company modically moved to investigate
President’s Committee on Employ-  gych power. There is a vast litera-

ment of Physically Handicapped tyre on the activities and findings
President’s Committee on Scientists of several committees set up to

and Engineers
President’s Council on Youth Fitness
Railroad Retirement Board
Renegotiation Board
St. Lawrence Seaway Corporation
Securities and Exchange

examine them. A history of the
origin and growth of the adminis-
trative agencies is contained in a
“Report of the Attorney General's
Committee on Administrative Pro-
cedures,” (Senate Document #8,

Commission .
Selective Service System 77th Congress, 1st Session, 1941,
Small Business Administration pp. 7-21).

Anyone interested in a compre-
hensive exploration of the subject

Subversive Activities Control Board
Tariff Commission

United States Information Agency two weighty volumes by Professor
Veterans Administration Walter Gellhorn, Professor of Law,

Columbia University, entitled:

The independent agencies here Administrative Law-Cases and

listed have many subdivisions Comments (First Edition, 1940;
which are not enumerated. Second Edition, 1947).

Most, if not all, of these inde- Recently a House Committee on

RS

TT —

iD BY CON

¢



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

34 THE FREEMAN October

Government Operations and a Spe- Later, Justice Cardozo said that
cial Subcommittee on Legislative delegation of the legislative power
Oversight were established to “ex- by the Congress to any agency,
amine the execution of the laws without a clearly prescribed stand-
by the Administrative Agencies ard, is “delegation running riot.”
administrating laws within the

jurisdiction of the Committee to Why Congress Should Legislate

see whether or not the law, as the We have been asked: “What is
Congress intended in its enact- the precise case for legislation by
ment, has been, and is being car- Congress rather than by an execu-
ried out, or whether it has been, tive agency?”

and is being repealed or revamped That is a highly involved ques-
by those who administer it.” (em- tion, and one that has perplexed
phasis added) professors and students of govern-

It is to be hoped that these com- ment for decades. Even skilled and
mittees, or others like them, will experienced members of Congress
reveal and correct the vicious sys- are unable to suggest a “precise”
tem of mushrooming this continu- formula. To answer it intelligently
ing usurpation: of legislative and would require an exhaustive essay
judicial processes by the agencies. on the federal government struc-

But unless the whole subject is ture.
explored on an absolutely non- The administrative process is
partisan basis, and precise stand- not new, although the most spec-
ards are formulated for all of the tacular example is the Interstate
independent agencies, without re- Commerce Commission established
sponse to the innumerable “pres- by statute in 1887. The operations
sures” to be expected in such a of that one agency require numer-
venture, our “hope” may be buried, ous volumes to explain, justify,
with the ceremony of a lengthy clarify, or criticize its functioning.
“report” which will find suitable The Interstate Commerce Com-
interment in the archives. mission is typical of most of the

Congress may need to be re- administrative agencies estab-
minded that the Supreme Court lished during some emergency;
has said: “Congress cannot dele- once established, they seem to en-
gate any part of its legislative trench themselves in the govern-
power, except under the limitation ment. There are exceptions, of
of a prescribed standard.” (U.S. course, such as NRA, CCC, WPB,
vs. Chi., M,, St. Paul and P.R.R. and a few others. The Interstate
282, U.S. 311) Commerce Commission was set up


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

1958 THE ADMINISTRATIVE AGENCY COLOSSUS 35

to meet a crisis in the nation’s rail- seats of the legislature. Special-
road transportation system, an al- ists in the vast divergence of the
leged chaotic condition in trans- economy and the social system
portation rates. Its functions were were then required to devote them-
and are being expanded to include selves exclusively to the supervi-
control over all means of interstate sion and fair application of the
transportation. laws, to insure equity, to hold

It is true that the Constitution hearings, to examine complaints,
in Article I, Section 1, says, “All to gather statistics, to suggest
legislative powers herein granted corrective measures to the legisla-
shall be vested in a Congress of ture, and a multitude of related
the United States, which shall con- duties, the voluminous details of
sist of a Senate and House of Rep- which could not be assumed by
resentatives.” purely legislative bodies.

But it was soon discovered that But it was the Legislature which
the lawmaking powers included the was to retain the office of over-
responsibility of oversight for en- lord, and the Judiciary which was
forcement. It became apparent charged with the judicial function
that, with the multiplication of of passing on the legality of any
laws and controls, such a task of rules and regulations formulated
oversight must exceed the capacity by such agencies.
of the Congress. The detail was far The delegation of authority by
too massive and particular, and Congress to any agency for ad-
the round of work was more ad- ministration and supervision
ministrative than strictly legisla- should not, however, include au-
tive. thorizing the agency to make rules

It was decided that the respon- and regulations having the com-
sibility of “all legislative powers” pelling effect of law, unless they
included an authority to delegate are specifically approved by both
the purely administrative func- Legislative and Judicial branches.
tions to agencies, bureaus, or com-
missions which Congress could How Agencies Operate
create for that purpose. The growing lack of public con-

The expanding body of laws, af- fidence in the “justice” meted out
fecting almost every segment of by administrative agencies now
our economy, meant active and makes it necessary to examine
constant participation in the arena, carefully and exhaustively the me-
rather than occasional and de- chanics by which they operate.
tached observance from the box The basic structure is relatively


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

36 THE FREEMAN October

simple. First, there is the ‘“skele- their staffs, that they are the crea-
ton” statute passed by the Con- tures of the Legislature and that
gress, dealing with an assigned they are not endowed with the
field in broad outline. It gives au- plenary exercise of their own
thority to an Administrator or a power. It is the Legislature and
Commissioner to make “rules and the Judiciary which must jealously
regulations to effectuate the pur- retain and assert primary respon-
poses of this act” or some similar sibility. The administrators and
language. The “rules and regula- commissioners can act only as
tions” are then formulated by an their agents, with clearly defined
interpretation of the law by the and strictly limited authority.
very people who administer it and
who read into the statute exactly A Totalitarian Scheme
what they themselves wish. Then The claim is frequently made
follow more “rules and regula- that parliamentary government is
tions,” even broader than their essentially inefficient — that a nu-
original interpretation. merous, popularly elected legisla-
Under the system as it is being ture cannot possess the knowledge,
practiced today, infractions of skill, or experience necessary to
these rules and regulations are legislate in detail on the technical
subject to punishment by what are and economic questions constantly
called ‘‘administrative penalties” arising in our modern civiliza-
or sanctions, neither of which tion. The eloquent proponents of
were enacted nor authorized by such claims maintain that effi-
Congress but which are inflicted ciencyin government is best served
by administrative tribunals. if the function of the legislature
Citizens are summoned before is delegated to some body of ex-
these agencies, tried, and penalized perts, each dealing with a spe-
by the application of an “adminis- cialty, and empowered to make
trative sanction,” which is actually rules, regulations, and orders
a form of executive punishment which have the effect of law. They
quite unknown and completely argue that efficiency and flexibility
alien to our concept of democratic of government are destroyed if
government. any such rules or regulations are
If there are to be such regula- to be subjected to full judicial re-
tory bodies, then it is of the ut- view by courts which have power
most importance constantly to re- to enjoin them. They further as-
mind the administrators and com- sert, that the judicial process is
missioners of them, together with too archaic to be compatible with


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

1958 THE ADMINISTRATIVE AGENCY COLOSSUS 37

flexible efficiency in government final judge of the validity of his
until the legality of their pro- own actions. The Supreme Court,
nouncements has been judicially in a majority opinion, said: “Such
determined. They plaintively aver a sweeping contention for ad-
that any delay would destroy their ministrative finality is out of
timely usefulness. harmony with the general legisla-

That school of thought would tive pattern of administrative and
make administration itself the be- judicial relationships.” (U.S. vs.
all-and-end-all of democratically Interstate Commerce Commission,
organized society, and would make 337 U.S.)

mere administration a law unto It is certainly “out of harmony”

itself. in any democratic system, but the
Whether or not they recognize habit persists.

it, they are advocating a theory Unless there is a sharp awaken-

of “absolutism” in which the rule ing on the part of Congress,
of law over the rule of men should spurred by the interest of the citi-
be supplanted by an administra- zenry generally, to a realization of
tion of people, things, and the the fact that the continuing ex-
processes of production, distribu- pansion of the authority of our ad-
_ tion, and transport. Such a theory ministrative agencies, tacitly

has painful echoes of a totalitari- vested in them, constitutes a pro-
anism that is currently plaguing gressive assault on genuine demo-
the Western World. It has a fur- cratic government, and unless such
ther painful shock when we read authority is severely limited and
in some of our own Administra- clearly defined, we shall be con-
tive Orders that the acts of certain fronted with a government by bu-
agencies are “final and not sub- reaucracy rather than one of law.

ject to review by ‘any Courts.” This trend toward bureaucratic
(Estap vs. U.S. 327 U.S.) predominance, so prevalent else-

where in the world, can be success-
Out of Harmony fully resisted here, if the elector-

In the establishment of ad- ate becomes sufficiently articulate
ministrative agencies, where Con- in its resentment and insists that
gress has neglected specifically to the Congress cease its easy and
provide for judicial review of convenient habits of abdicating re-
“rules and regulations” promul- sponsibility and delegating law-
gated by the agencies, the ad- making power to some administra-
ministrator becomes the sole and tive agency of its own creation.

®e 0 0 )


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

EACH TO HIS OWN government hands, causing con-

sternation aplenty among the cof-
fee-growing populace.

It also came to pass that other
people in other lands found they,
too, could grow the prized brown
bean, and they did so with great
gusto. For, lo, they could cash in
ONCE UPON A TIME there was a mightily by underselling the price-
brown bean that natives were able proppers and run off with the cof-
to crush or grind and brew into a fee market.
fine stimulating beverage of dark Then the price-propped multi-
brown color. It was a good drink, tudes cried out in protest as their
too, and soon the word about fair returns somehow turned out
coffee spread to other lands. As otherwise, and the free-spending
demand increased and coffee came gent with white beard and striped
to whet the appetites of more and pants from the northlands was
more people, producers of the called to the rescue. “Save us!”
brown bean responded with ever cried the multitudes. “Save us!
greater output. The economies of Save our beans and our markets
whole nations came to revolve and our fair returns, or else our
around the coffee bean, and the house comes tumbling down and
drink, in turn, came to be a house- we will throw in with thine ene-
hold word pretty well around the mies.”
world. Consumers were captivated Uncle Sam, no mean price-prop-
and markets seemed assured. per himself, looked, saw, and wept,

Then it came to pass that an for the multitudes had piled up
idea took hold in those lands — an some 20 million bags of delicious
idea that prices should be pegged coffee, all under fair returns —
and guaranteed so that producers enough to supply Uncle’s entire
would be assured a “fair” return, family for a whole year and then
and it was the State's job to do some.
this, or else the votes would not be “Oh, folly!” cried Sam (who
forthcoming. And after this idea should know), and in bitter tears
was placed into practice, it further he admonished them, saying: “Do
came to pass that world demand as I say, but not as I do, for folly
didn't always hold with what was reaps its own reward.” LCI
thought to be fair returns, and on odirorial f }
great surpluses accumulated in Journal. July 13 105.08 Daily Drovers

38


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

A conscientious congressman reports on...

WHILE there has been a consider- the appropriations for the current
able amount of constructive legis- fiscal year exceeding revenues by
lation passed, I would denominate twelve billion dollars, your national
the second session of the 85th Con- debt will be fifteen billion dollars
gress as being the most financially higher next June 30th than it was
irresponsible Congress in history. in January of this year. This ad-
This is partially due to the fact ditional debt will cost you $450,-
that this is an election year and 000,000 a year in interest from
the average congressman knows here to eternity.
that he will gain votes by what he This week [early August] we
gives to his District rather than are asked to increase the debt
by what he saves for his District. limit by ten billion dollars. You
Even though the gift is illusory will recall that in January of this
and will be paid for by the tax- year we were asked to give the
payer, the general public believes Treasury a five-billion-dollar tem-
that it will somehow and by some porary increase, and I reported to
means escape the judgment day. you that the only thing temporary
There are always times when a about it was that it would again
family cannot have all of the lux- be increased before the adjourn-
uries it desires, or even all of the ment of this Congress. I voted
conveniences, and must survive on against that increase and I shall
bare necessities. It is no different vote against the present increase,
with the nation as a whole. Your as the only way you can stop this
government has just closed its spending is not to give them the
books on the last fiscal year with a money.
three-billion-dollar deficit. With Federal grants in aid to the
The Honorable James B. Utt is U.S. Repro. State, cities, and counties, have in-
sentative {rom the 28th District of California. creased from one to seven billion

This item is from his Washington Report, .
August 7, 1958. Pe dollars annually in the past ten

JAMES B. UTT

39


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

40 THE FREEMAN October

years. The so-called liberal mem- would then destroy every retire-
bers of the House and Senate who ment benefit, both public and pri-
‘were elected and controlled by the vate, every insurance policy, sav-
CIO-ADA have introduced spend- ings account, and every dollar
ing legislation this session which, which you have put into govern-
if enacted into law, would cost you ment bonds.
an additional fifty billion dollars I have never been able to under-
a year. It is only with a coalition stand why legislation which is
of Republicans and conservative bound to lead to such a chaotic
Democrats that this legislation has condition is considered to be “pro-
been kept in committee, but there gressive and liberal,” and why
is a concerted drive by the left- there is such a stigma attached to
wing organizations to replace being ‘conservative’
every conservative member of both I cannot understand why we do
Houses with one of these so-called not learn a lesson from the history
liberals, and to elect one of their of other great civilizations of
own candidates for President in Babylonia, Greece, and Rome, and
1960. realize that the cycle of civilization
Should this occur, such legisla- begins with abject slavery or bond-
tion as I have described would be age and moves upward to a spirit-
enacted into law, and the result ual faith, from a spiritual faith to
would be a sixty-billion dollar an- moral courage, from moral courage
nual deficit which, if paid for “as- to freedom, from freedom to abun-
you-go,” would necessitate an 80 dance, and begins to descend from
per cent increase of every tax on abundance to selfishness, from
the books. The corporation tax is selfishness to apathy, from apathy
now in excess of 50 per cent, and to dependency and from depend-
the man in the lowest tax bracket ency back to the point of begin-
would find himself in the 40 per ning, bondage.

cent bracket. You already work You can calculate our own posi-
four months out of the year to pay tion in this cycle today, as we are
your current taxes . ... in a period of selfishness and apathy

On the other hand, if we do not which is rapidly phasing into de-
“pay-as-you-go” we would have the pendence. The only thing that will
same inflation here as they now stop us from returning to the point
have in France, or in Chile where of beginning will be a renewal of
the exchange rate has gone from spiritual faith and moral courage,
a few pesos to the dollar up to that we may regain our freedom
1,100 pesos to the dollar. This and abundance. ® 0 0


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

Grasshoppers

A look at the other side of government “aid”
ROBERT LEFEVRE

RECENTLY a terrible scourge of crats called on Colorado Governor
grasshoppers swept into eastern Steve McNichols. McNichols called
Colorado and surrounding states, upon the President of the United
devouring the tender young shoots States. The problem of the grass-
of corn and wheat and leaving hoppers was supposed to become a
devastation in their wake. matter of national concern from

There is no question as to the the rocky coast of Maine to the
seriousness of the plight of the un- high and spume-swept cliffs of far-
lucky farmers who suddenly found off California.

themselves in the path of this Over three million acres were
marauding horde. Something had declared a ‘disaster area.” But
to be done, and quickly. some way, the federal government

A few of the more independent didn’t seem to get steamed up over
and stalwart of the planters took the plague beyond that point. Of
action. They purchased insecticide, course, state and county money
built fire trenches, and otherwise was quickly allocated to fight the
met the infestation as men, bat- locusts.
tling to preserve what was theirs. We can only congratulate and

This was not true of the ma- thank the federal management for
jority. Like so many helpless and not taking up the plea of Colora-
dependent children, they set up a do’s governor. And in order to
great wail for help from the gov- understand why we say this, per-
ernment. County and ¢ity bureau- mit us to shift the scene for a
moment.

Here is a widow who lives, let
Mr. LeFevre is President of the Freedom us say, in North Carolina. She has

School and also has responsibility for the edi-

torial page of the Colorado Springs Gazette three chi i i
Telegraph in which this editorial was first children she is trying to put
published, June 19, 1958. through school. One of the chil-

41


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

42 THE FREEMAN

October

Good! You DIDN'T DO WRONG THIS TIME, UNL!



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

1958 GRASSHOPPERS AND WIDOWS 43

dren has just had a bout with farmers. But we are also sorry for
measles and the doctor’s bills are the widow. And if we multiply this
unpaid. She is a month behind in widow by thousands, we will see
her rent. Her meager income, a the true picture that faces all of
small annuity left by her departed us whenever government is called
husband, is not enough to manage upon to render help in a disaster.
all her costs. Fortunately, she does The trouble is that all of us face
own a few shares of stock, as so our own private disasters every
many independent Americans do. day. Mostly, we are ready and will-
This stock does provide her with a ing to help others whose condition
few extra dollars of income twice may be worse than ours. But the
a year. only person who can judge whether
However, to compound the a grasshopper-plagued farmer is
widow’s problems, yesterday her in sorrier straits than we are, is
kitchen caught fire and by the time each one of us individually.
the government firemen finished The government cannot possibly
the demolition job, she was facing have this information nor can it
a $1,000 repair job. Insurance will act on it. The government, then, is
pay about $600 on it, and she must not the proper agency to assist
find the other $400 or do her cook- anyone, It can only render such as-
ing out of doors. sistance at the point of a gun
You ask, “What has the widow leveled at everyone without dis-
got to do with the grasshopper tinction.
plague?” The answer is, of course, This illustration should en-
that morally she has nothing to do lighten us as to the absolute neces-
with it. But because the farmers sity for individual initiative, even
ran to the bureaucrats and the in the face of disaster. The busi-
bureaucrats ran to the governor ness of “togetherness” causes all of
and the governor ran to the Presi- us to sink in the face of any dis-
dent, this widow might have been aster.
compelled to help pay for that Would it not be better and far
grasshopper infestation. more moral for each of us to
Taxes on the income from her handle our own problems, asking
few shares of stock might have for assistance on a voluntary basis
gone up next year so that the far- if we need it, rather than to har-
mers in Colorado could have some ness the guns of government so
bug juice sluiced out upon their that regardless of the problems
fields. everyone else has, they too can be
We, of course, are sorry for the compelled to share in ours? ® o eo


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

LEONARD E. READ

THE TIME: December 1968—shortly able officers of the law to be on
after midnight. his property in a matter of min-
utes. But the phone was dead.
John awakened with the uneasy With a growing sense of panic,
feeling that an intruder was in his John pulled the chain that hung
bedroom. Sure enough, before .the from his reading lamp. Was the
window was the gilhouette of a bulb burned out? There was no
man moving quietly, stealthily light.
toward the table on which lay a He felt his way in the darkness
wallet and other valuables. through several rooms to the gar-
John was trembling, trying to age and his automobiles. John was
think what to do, when he ob- in desperate need of light. Assur-
served the intruder retracing his edly, he could get it here. But the
steps. (The burglar’s tiny flash- battery was dead in his big car!
light had failed to work, making And in his foreign sports car!
the theft impossible.) He vanished The confining darkness gave him
as unobtrusively as he had entered. the feeling of claustrophobia, but
Instantly, John became the man the same lifeless silence greeted
of action for which he was famed. him as he moved from the garage
He flicked the bedside switch that into the open night. No sounds of
had been installed for just such an airplanes overhead nor of trains
occasion. It would flood his lawn nor of auto traffic. Strangely, there
and gardens with a brilliant light. was no reflection on the overcast
But the lights failed to come on. from the lights of the world’s larg-
He quickly picked up the tele- est city.
phone receiver and dialed “0.” “My God! What has happened?”
The short-wave communication breathed John.
system in police cars would en- “Man-harnessed electricity 18

44


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

1958 THESE, OUR GIFTS 45

gone. Men now living on this earth used it has a highly moral func-

are to experience it no more.” tion.”
“Who said that? Where are “Why, then, is this happening
you?” to the civilized peoples? Only the

“You can’t find me, John, and most primitive societies will be
don’t try. Just see if you can unaffected!”

comprehend what I say. There is “You use the term ‘civilized’
no more electricity available to rather loosely.”
man!” “Well, hasn't our civilization

“Do you mean that there is to mastered Nature and turned her
be no more electric light and to our use?”

power? No more live storage bat- “Mastered? And to what use?
teries? No more electric sparks of Those questions are consistent
any kind for our use?” with that speech you made last

“That’s precisely what I mean. evening at the Economic Club’s
Does this make you feel helpless?” Annual Banquet. Shall I quote you

“Helpless? Why, this is unbe- a few lines? Listen to yourself:
lievably awful. Every automobile “‘We are well on our way to the
and truck, all airplanes, radios, mastery of Nature. There is no
televisions, telephones, and tele- longer anything within our desires
graphs are so much junk. And my that is beyond our power to
factory! For all practical purposes achieve, such is the high state of
all factories are useless. And our our industrial and scientific know-
farms? Most of them are mechan- how. We have learned how to pro-
ized and we no longer have a work- duce so much and labor so little
horse population. Why, most of the that the utilization of our leisure
ships at sea are at the mercy of is becoming our major problem.
the elements. They have no power Security we have solved by govern-
and no sails. Millions of people in mental action. And peace? Our mil-
all civilized countries may die of itary might is such that we can
starvation. Why has this horrible maintain peace by the force of our
calamity been visited upon us? own arms. We can now direct mis-
Why are we to be impoverished? siles with hydrogen war heads to
Is it because we have become too any place on the face of the earth.
wealthy ?” Indeed, our problems on this planet

“Of course not, John. Wealth is are so nearly in our control that
meant to be an agency freeing man the exploration of interstellar
from the servitude poverty im- space is logically our next fron-
poses. Properly understood and tier.”


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

46 THE FREEMAN October

“Very well. But, pray tell me, reality. Let's drop that ‘we’ you
what is wrong with what I said? so carelessly toss around and get
I merely stated some self-evident to the case in point: you. Could
facts.” you make a dynamo? The question

“Facts? Obviously, you are un- answers itself. Indeed, there is no
aware of the first fact. You don’t one person in the whole human
even realize that you are not the race who can make one! You talk
Creator. You prate about the mas- about intercontinental missiles and
tery of Nature. Suppose you tell modern war with the nonchalance
me what this electricity is, this of a Master. Yet you couldn't even
force on which you have become so make the wadding used in a Civil
dependent and on which you have War musket.”

built your so-called civilization.” “You go too far in describing
“Well, I don’t know what it is. I my incompetence. Any child could
just know it’s there.” make a paper wad.”
“There? Where is there?” “Could you create a spruce seed?

“Frankly, I can’t ahswer that.” Grow a tree? Mine the ores, refine

“John, if you understood your and alloy them for the metal, and
situation, you would be aware of then fashion it into a machine that
the great Unknown which envel- makes pulp? And even if you had
ops you, and you would realize the pulp, could you make the
that what you do not know is ob- paper?”

viously not of your own creation. “OK, I guess I couldn’t, nor do
You would know that what is not I know of anyone who could.”
your own creation is a gift. You “That’s better. But there is still

would next know that a gift can as more you need to know about how
readily be retrieved as given. Life, little you know. You have already
for instance, is such a gift. And conceded that millions of you ‘civil-
life may be taken. You are as pow- ized’ people will perish now that
erless to stop the taking of your you are to have no more man-
life as you are to create the gift harnessed electricity. You are
of your life.” right enough in your surmise.

“I grant your point about life. Most important, however, is that
Electricity, however, is different. you realize how insufficient and de-
Maybe we don’t know what it is pendent this leaves you. Man-har-
but at least we mastered the har- nessed electricity, as you choose to
nessing of it.” think of it, has been bestowed on

“Your egotism is blinding you mankind for not more than 130
to some elementary aspects of years and, significantly, for less


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

1958 THESE, OUR GIFTS 47

than 60 years. Do you not realize to be financed with funds volun-
that all of the billions of people tarily contributed? Not according
who have lived on earth prior to to your notions! You see nothing
your great - grandfather's time wrong in taking by force the fruits
managed to live without it? In- of the labor of others even though
deed, history suggests that there they may prefer to remain earth-
were some individuals superior to lings. Your private ends are the
you, who existed before 1830 A.D. only ends that appeal to you as
Ever think of that? 1 fear not, valid.”
for you confess that you don’t “You speak of intervention as if
know how to live without this gift. it were evil. I have thought of it
You concede, then, that your an- only as a way of being practical.”
cestors were superior to you, and “John, until you appreciate that
you are right in this unwitting there is a Creativity over and be-
acknowledgment. But it is impor- yond self, you will continue to
tant that you know you are right think this way. And, I repeat, you
in it.” can hardly help it. If you recog-
“Why all of this stress on awe nized a Superior Intelligence, you
or- humility, on knowing that we would think of yourself as one of
do not know?” its manifestations. And, to be just
“It’s not so complicated. The and logical, you would regard other
person unaware that the wonders humans also as manifestations of
all about him are not of man’s de- the Creator. For you, then, to
sign can hardly avoid an exagger- thwart others in their creative ac-
ated sense of self-importance. Such tions, for you to seek your own
a person has no built-in equipment ends at the expense of others, is to
to keep him: from interfering with thwart Creation. There is no
the creative affairs of others. In- greater sin than this.”
deed, he has no natural way of con- “TI won’t argue theology with
cluding that intervention is wrong. you, but I would like to ask a prac-
He has only his reason and in most tical question: How does this in-
persons that is pretty weak. Last tervention interfere with elec-
evening, in that speech of yours, tricity or with goods or things?”
you spoke proudly, not apologeti- “Contemplate a rock and a leaf.
cally, of government social secur- How different they are! Yet, both
ity and of your kind of peace by are molecular configurations. One
force — both being instances of in- configuration manifests itself as
terventionism. And these ventures quartz, another as a maple leaf.
into interstellar space — are they Molecular configurations are in-


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

48 THE FREEMAN October

finite in their possible manifesta- “Now, unless you are aware of
tions. the fact that a typewriter or a

“Human beings with their vari- symphony or a book, or even the
able energies, aptitudes, skills, per- personal service of a physician, is
ceptions, talents can, in a sense, be the product of human energy con-
likened to molecules. If these indi- figurations — variable energies in
vidual energies are configurated in cooperation — you will, more than
one manner a symphony will re- likely, never understand how in-
sult, in another manner a type- tervention can destroy man-har-
writer. This suggests why there nessed electricity or other goods or
can be both symphonies and type- things. Further, you are apt to
writers without a single human on conclude that you are or might be
earth being able to bring either the exclusive author of these
one to final production. miraculous achievements. To think

“Freedom of movement is a ne- this about yourself can be likened
cessity if this process is to work. to the fly on the chariot wheel who
These creative energies cannot exclaimed, ‘Look at all of the dust
move into cooperation except in I am making!”

freedom. Imagine all of the in- “lI get an inkling of your
spiration, talent, learning, extend- thought, but it still isn’t clear.”
ing into the distant past — all of “Very well, John. Let me put

the energies that have gone or go this in terms of your daily ex-
into the symphony you hear and periences. Any good or thing fash-
enjoy. Now assume effective inter- ioned by man has resulted from
vention all along the line: the live- exchanges of creative human ener-
lihood taken from every person gies. These are so complex as to
who took part in the creation, or defy accurate tracing. The tele-
the participants kept in isolation, phone, for instance, has been
or the printers of music and the mostly taken for granted. Yet, no
makers of instruments on per- living man was ever able to create
petual strike, or the exchange of that system or even make the in-
creative energies prohibited by strument on your desk which you
law, or the parties spending all of used for oral communication. It
their time on war or preparation has become available to mankind
for it. There would be no sym- without any individual knowing
phony. Without freedom, such re- how to make it. How is this com-
markable configurations of crea- plex phenomenon to be explained
tive human energies would not and by men who do not even under-
could not form. stand a molecule? It cannot be ex-


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

1958 THESE, OUR GIFTS 49

plained but only an awareness power such as this. The purpose of
might be gained of the miracle electrical energy is creative, not
that flows from creative energy ex- destructive. When this fact isn’t
changes. When you picked up your self-evident, gifts of this magni-
receiver, there instantly flowed to tude are premature.

your service the creative energies The days of atom bombs and air-
that manifested themselves planes and even big guns are over
through Alexander Graham Bell for you. You won't even make
and through unnumbered millions swords for a long time. Survival
of scientists, engineers, metallur- will occupy all your thoughts. Crea-
gists, linemen, operators, and hosts tive energies, manifest in each....”
of others — complex energy ex-

changes that flowed through space John’s tormenting nightmare
and time permitting you to con- was interrupted:

verse almost anywhere in a matter

of moments. Any effective inter- WAKE UP AND A CHEERY GOOD

vention — freedom of flow denied — MORNING, EVERYONE. THIS IS
at any point in these creative YOUR WHOA ANNOUNCER BRING-

energy exchanges must end the ING YOU THE SIX AM. NEWS.
miracles they otherwise bring to HERCULES XVII THE LAUNCHING
pass. Effective intervention into OF WHICH WE TOLD YOU ABOUT
the creative processes leaves each YESTERDAY HAS SUCCESSFULLY
individual to his helpless self, more PLACED THE FIRST EARTHMAN
helpless than you now feel with ON THE MOON. THE NUMBER OF
only electricity denied your use?’ OUR NEW SUPERTHERMAL BOMB-

“It appears to be too late now, ERS NOW IN THE AIR WITH NU-
but why are we to be deprived of CLEAR WEAPONS READY TO
the use of electricity? You say it STRIKE AT THE FIRST OVERT ACT
isn’t our wealth. What have we ON THE PART OF RUSSIA HAS
done to deserve this? I'm curious, REACHED THE THRILLING TOTAL
that’s all.” OF NINETY. THIS LEAVES RUSSIA

“This gift has been removed in BEHIND IN THE COLD WAR RACE
order to save the human race. WITH ONLY EIGHTY-EIGHT IN THE
Within a few months from now AIR READY TO STRIKE AT US, THE
you would have destroyed every BOARD OF TRADE REVEALS THAT
living thing on the face of the THE NATIONAL DEBT HAS
earth. You and most of your con- REACHED ONE TRILLION DOLLARS,
temporaries were neither intellec- WASHINGTON ANNOUNCES THAT
tually nor spiritually ready for any EVERY ASPECT OF AMERICAN LIFE


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

50 THE FREEMAN October

IS NOW UNDER STRICT WAGE HOUR the pickers of the coffee berry in
PRICE AND PRODUCTION CONTROL far off countries, to horticulturists,
AND ADDS THAT DEFENSE PRO- to tillers of the soil, to builders of
DUCTION IS AT AN ALL TIME rails and engines and dynamos and
HIGH. THE UNITED NATIONS cables, to the teachers of arts and
CALLS A SPECIAL MEETING OF morals, and he felt humble and
THE SECURITY COUNCIL TO IN- small in the midst of an Infinite
SURE PEACE. THE HOUSE APPRO- Bigness — an Author — he had not
PRIATES TEN MORE BILLIONS FOR sensed before.
UNIVERSAL EDUCATION. I'LL Why had it taken this nightmare
BRING YOU THE DETAILS IN JUST to awaken him to the reality of
ONE MINUTE, AFTER AN ENCOUR- life? Now he was faced with a new
AGING WORD FROM OUR NEW nightmare — the holocaust about to
SPONSOR, THE FEDERAL OFFICE inflame the earth. The reasons?
OF CONSUMER SECURITY, They were plain to him now. This
frightful destruction between na-
The radio was working. The tions was simply the intervention
reading lamp glowed with light as within nations and between per-
John switched it on. What a relief! sons extended and magnified into
Though his dream experience left fantastic proportions. The huge
him limp, he had the feeling that political units were about to do to
he was really seeing the world for each other what the citizens of
the first time. each unit, through political force,
Breakfast had a different mean- had been doing to themselves. The
ing for him that morning. Instead brutal show about to be staged was
of just orange juice, toast, and merely larger scale, as were the
coffee to be hurriedly gulped, he weapons. Electricity lost to man-
felt as if he were partaking of the kind? Good Heavens! Mankind lost
miracle of creation. Not one item to itself!
had he produced himself. Why, John wondered what he could do
millions of people were waiting on now beyond correcting his own be-
him at that very moment, hardly havior. He would begin by resolv-
any one of whom was conscious ing never again to stand for any
of his existence. An Unseen Hand proposal that would subtract from
was indeed at work, as Adam the creative efforts of a single per-
Smith had once put it, but there son. He would attempt to pull his
also seemed to be an Unseen Head own weight, or a little more, and
and an Unseen Heart. not try to shove his load off onto
John let his thouchts drift to someone else. Whatever his view


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

1958 THESE, OUR GIFTS b1

of the need or the popularity of He saw clearly that here was the
current political projects — be they way to avoid inflicting on others
TVA, or subsidies to farmers or the burdens he would not want
states or cities, or protection for thrust on himself. He perceived
industries or labor unions, or space that this was the formula for keep-
ships or whatever — he would not ing off the backs of others, for
be moved from his new concept of keeping out of the way of creative
right principle. He would have no energies as they are manifested
part in forcing people to support through human beings. Creation is
these things, regardless of their as a magnet. Let man not inhibit
- alleged good. On this he was firm. this Cosmic Force and mankind
Driving to the factory, he was will naturally respond, emerge!
struck with the thought that his Nonetheless, John couldn’t help
new course, although it would not speculating on the influential at-
reform the world tomorrow, would traction his new resolution might
reduce the source of intervention have exerted had he adopted it
by one person, and that this was earlier in his career — say as far
the first obligation of each to all. back as 1958. oo

Awareness of the Unknown

“THAT ALL MANKIND have hitherto he cannot answer; and what distin-
been most tenacious when most in the guishes him in this instance from the
wrong, and reckoned themselves most less improved part of mankind is his
enlightened when most in the dark” knowing this. The like is true in num-
...is, indeed, a very mortifying fact; berless other instances. One of the
but attention to it is necessary to cure best proofs of wisdom is a sense of
that miserable pride and dogmatical- our want of wisdom; and he who
ness which are some of the worst knows most possesses most of this
enemies to improvement. Who is there sense.

that does not remember the time when In thinking of myself I derive some
he was entirely satisfied about points encouragement from this reflection. I
above his comprehension? Who, for now see that I do not understand
instance, does not remember a time many points which once appeared to
when he would have wondered at the me very clear. The more I have in-
question, “Why does water run down quired, the more sensible I have been
hill?” What ignorant man is there growing of my own darkness. ...

who is not persuaded that he under- RICHARD PRICE, Observations on
. . the Importance of the American
stands this perfectly? But every im- Revolution and the Means of

. : Making It a Benefit to the
proved man knows it to be a question World. 1785


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

Some provocative questions concerning. . .

FREEDOM

AND THE PURPOSE OF LIFE

OSCAR W. COOLEY

“THE DECISIVE element in the surface of a pool, we skitter about
predicament of Western man in in the horizontal plane. Lacking a
our period is his loss of the dimen- philosophy of life, we just exist
sion of depth,” wrote Paul Tillich from day to day. Life to us is a
in the Saturday Evening Post of mere spending of time, and our
June 14. This means, said Tillich, ambition is to spend it comfort-
“that man has lost an answer to ably.
the questions: What is the mean- Now when people lack a theory
ing of life? Where do we come of life—of why they are here,
from; where do we go to? What what they should strive to do, and
shall we do; what should we be- what they should try to become —
come in the short stretch between whén the present is all, the future
birth and death?” nothing, they have no reason to
Not only has modern man no prize freedom, for freedom is sim-
answers to these questions but, ply an atmosphere in which it is
said the Harvard divine, he does possible for an individual to make
not even ask them! He is too busy his future better than his past. If
trying to control nature. His life he does not envision or believe in
is in the horizontal dimension. Size a better future — if he is not con-
and number, not depth, preoccupy scious of having a destination,

him. freedom is of little importance to
This can be seen in the routine him,
of people's lives. We all live by It is a matter of public knowl-

schedule, and it is a schedule of edge, says Tillich, that “everyone

activity; there is no place in it for in our social structure is man-

thought. Like water striders on the aged.” Even those who think they
} } are managers know that they in

Mr. Cooley is Associate Prolessor of Economics .

at Ohio Northern University. turn are managed, he says. We live

52


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

1958 FREEDOM AND THE PURPOSE OF LIFE 53

under a sort of regimentation by from the merely physical to the in-
consent. tellectual and spiritual spheres.

It is reported that American Let the youth take upon himself,
GI’s, taken prisoner in Korea, making it his central aim of life,
knew so little about the philosophy to improve himself in all respects
of life in a free country that they — physical, intellectual, moral, and
could not explain to their captors spiritual — to the utmost of his
what the American dream is or capacity. Let him become a truly

how it differs from communism. all-round “athlete,” and for life.
In short, let the answer to the
What Are We Here For? religious question be simply this:

Well, what are we here for? We are here to grow, to develop,
This basic question — which Tillich to live more worthily day by day,
calls the religious question —is according to our best lights and
seldom discussed. It is almost never insofar as our knowledge and abil-
raised in our schools. Only the un- ity make this possible.
usual lad springs it on his philoso-
phy professor, and is fortunate if “Thy Will Be Done”
he gets a satisfying answer. Assuming that there is behind

Perhaps a final answer is not to the universe a Creator with a plan,
be expected. The greatness of cer- could it be the Creator's intent
tain questions lies in the fact that that men deteriorate and that hu-
they cannot be answered. Let us man character retrogress? If so,
consider an exploratory answer the plan has gone awry. Not only
and see what consequence it might the biological evolution of man but
have. reason itself refutes the sugges-

The athlete seeks development tion, for what object could even the
of physique. He strives to build inscrutable mind of the Creator
his muscles and to improve his co- have in making a being only to
ordination. His thought is always have him unmake himself?
on the future. He wants to play a On the other hand, could it be
better game, to improve both his the Creator's intent that man re-
individual skill and his team-play, main changeless, neither progress-
which he finds inseparable. Thus ing nor retrogressing? Study of
his life has an absorbing object, the world of nature reveals change
and it is a matter of observation going on everywhere and unceas-
that youths put forth enormous ef- ingly, and at least some, perhaps
fort in pursuit of this object. all, of this change is from the

Now let this object be broadened lower to the higher. In a universe


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

54 THE FREEMAN October

characterized by progress, would have the freedom to move to any
the Creator have made man, his point on the earth’s surface, or in-
only thinking creature, static? deed to other worlds, in order that
Again, both observation and rea- he may make use of the most pro-
Son answer no. ductive resources as well as the

This leaves but one alternative, richest cultural opportunities. He
namely, that the Creator intends must be free to offer his own serv-
that man shall change for the bet- ices or any of his own property in
ter. And since the Creator has exchange for the goods or services
made man, as well as all else that of others with whom mutually ac-
composes the universe, and hence ceptable prices can be negotiated.
is vastly more powerful than man He must be free to search the uni-
and can unmake him at will, it fol- verse for truth and to speak and
lows that man does well to follow publish as he sees fit. He must be
this intent of the Creator and to free to worship his own God, or not
make it an aim of his life to be- to worship at all if that be his de-
come a better man. sire. He must be free to collaborate

This conclusion is reinforced by with his fellows in doing any or all
the fact that man is capable of of these things, or in doing any-
development; he has demonstrated thing at all which does not directly
this. Men have become vastly bet- interfere with the exercise of the
ter men. Others have become same freedoms by any other hu-
worse. Either result is possible. man being. Then and only then will
The fact that a man may either he be able to pursue his accepted
develop or deteriorate impresses aim of life.

upon us the need of constantly Indeed, is not freedom necessary

pushing forward if only to keep to pursue any worthy aim of life?

from going backward. Regimented, a person can do little

except obey. And is obedience —

Why Freedom Is Needed except to God —a worthy aim of
If this answer is accepted, the life?

desirability, not to say the neces- Libertarians complain that mod-

sity, of individual freedom becomes ern men are blind to the precious
manifest, for a man cannot im- nature of freedom. Perhaps their
prove himself to the utmost unless eyes would be opened if each
he has the freedom to do so. With- could be led to ask and answer for
in the bounds of respect for the himself the great question of life:
private property of others, he must “What am I here for?’ eo eo e


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

THE ADULT EDUCATION

& i

RUSSELL KIRK

A MOST VALUABLE WORD has en- America. In Britain, after World
riched the English language this War II, the Attlee Parliament
past quarter of a century: boon- passed an act requiring local au-
doggle. My next several pages in thorities to furnish teachers to any
this journal of opinion constitute group of adults who might desire
the Boondoggle Series. My first to be taught anything; and I mean
educational boondoggle is Adult anything. In Fifeshire, which I
Education. know well, the villagers ordinarily
Not that I am against the edu- chose basket weaving, ballroom
cation of adults. We do so wretched dancing, and ceramics. The waste
a job of educating children that of funds was severe; the waste of
. we ought to look with sympathy decent teachers’ time was worse,
upon every attempt to rescue per- what with the acute shortage of
sons of mature years from the teachers then caused by the raising
slough of ignorance. The best form of the Scottish school-leaving age;
of adult education is book-reading, and the attitude of the adults was
in solitude. Attendance at serious worst of all. More than one con-
lectures and discussion groups has script teacher complained to me
its merits, too. But the boondoggle that the little knot of villagers
I have in mind is neither of these. didn't desire even to learn basket
I am taking my cudgel to the weaving or ballroom dancing, real-
“adult educational activities” paid ly; what they wanted was a public
for from public funds and mas- servant to bully: “We're the mas-
querading as a just charge upon ters now.”
state and local treasuries. This But we Americans do our full
fraud — I shall describe its nature share of this nominal educating. I
in a moment — is not peculiar to have before me a bulletin entitled
Dr. Kirk, of The Conservative Mind, writes Adult Education, North Shore
regularly for National Review (211 East 37th Schools. The North Shore is the

St., New York 16) in which this article was .
first published, June 28, 1958. north shore of Long Island, still —

55


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

56 THE FREEMAN October

though not so appropriately as these are the names of the
once — called the Gold Coast. All courses.) I am sorry to have to re-
the courses listed in this bulletin port that a few subject-matter
are paid for from public school courses have crept in: RUSSIAN
funds, and almost none of them re- HISTORY AND CULTURE, MARINE
quires any fees from students en- NAVIGATION AND NAUTICAL ASTRON-
rolled. Classes are held in North OMY, AMERICAN LITERATURE.
Shore High School, Glen Head. Every delightful course has a
Some thirty courses are available. delightful prospectus. Here is the
The most popular of these, I am CHARM COURSE: “Taught by former
told, is SECURITIES AND INVEST- Barbizon instructor. Make-Up,
MENTS — for which, as a serious Skin Care, Diet, Nail Care, Hair
study, there is something to be Care and Styling, Clothes Coordi-
said. But three private colleges in nation, Posture, Figure Analysis,
the vicinity offer just such a Grace and Poise, Diction, Spot Re-
course. If adults cannot afford to ducing. Materials charge: 50 cents
pay the course-fee at a private col- per lesson.”
lege, what funds do they have Or DRIVER EDUCATION AND TRAIN-
available for securities and in- ING: “This course consists of be-
vestments? hind-the-wheel instruction in a
dual-controlled car, plus six class-
room sessions covering driving re-
Lest prospective adult students sponsibilities and safety practices.”
be discouraged by so grim a course All for adults.

Charm at Taxpayers’ Expense

title as SECURITIES AND INVEST- Possibly you are fascinated by
MENTS, let me hasten to add that the course in SENIOR CITIZENS:
most of the courses require no in- “(‘Golden Ring’). Primarily for

tellectual endeavor. You can take persons sixty years of age and
SLIMNASTICS or SLIP COVERS or older. Spend leisure time doing
ARTS AND CRAFTS FOR A LEISURE- things, meeting friendly people.
TIME HOBBY or CHAIR CANING or Activities include music, dancing,
COLOR PHOTOGRAPHY or SEW AND travel talks, lectures, arts and
SAVE or HAND-HOOKED RUGS or crafts, parties, reading, talking,
SENIOR CITIZENS or CREATIVE WRIT- and just plain having a wonderful
ING or CERAMICS or PIANO PLAYING time.” No fee, naturally. What we
or PHYSICAL FITNESS FOR MEN or need is to educate the Total Adult.
EXPRESS YOURSELF or CHARM COURSE This charitable expenditure of
or RUSSIAN WITHOUT TEARS or SO- public funds is in aid of the under-
CIAL DANCING. (Honest Injun, privileged denizens of the Gold


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

1958 THE ADULT EDUCATION BOONDOGGLE 57

Coast, Long Island. The Board of assumption of the authorities at
Education seems to have money to North Shore High School.

burn for this sort of thing. It is And why should you and I (yes,
very difficult to find any money for 1 do pay some New York State in-
helping the famous Gifted Child, come tax) be expected to subsidize
of course. If only the Gifted Child these amusements for those that
would content himself with sLiIM~- fancy them? You and I might
NASTICS! choose to spend our share of the
Every man to his own humor, adult education bill in buying a
‘say Ben Jonson and your servant. book or two or in going to a decent
For people who like CHARM COURSE, play. We’d be undemocratic, of
CHARM COURSE is the sort of thing course, and antisocial, and lacking
they like. I have no impulse to set in integration with the group.
them, in the fullness of their years, Probably we ought to be compul-
to reading Virgil and Newman. sorily enrolled in SENIOR CITIZENS,
But if I were a principal in charge or EXPRESS YOURSELF. Still, though,
of such an adult education pro- in this imperfect, unplanned Amer-
gram, at least I would try to lead ican economy, it is our money. This
some of the middle-aged students sort of thing gets under my skin.
toward the works of the mind. Not H-—-1, I can’t Express Myself ade-
everyone is necessarily senile at quately in words. I’m just an Un-
forty, though this seems to be the reconstructed Adult. oo 0

eT TT 0
a ICE A Democratic Madness

IN OUR MAD QUEST for Democracy, I believe we have conditioned
ourselves to overlook the fact that the sacrifice of even one in-
nocent to achieve salvation for others is still murder. Looking at
it from this light, the so-called democratic process of subsidizing
voters by confiscating the honestly acquired property of others is
perhaps the most basically immoral act now current. When you
deprive a man of his livelihood you are in effect depriving him of
his life.

ADMIRAL BEN MOREFLL


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

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN

MENTAL PREP
vs. PRAGMATIC TECH

OUR CRISIS in education is not teacher who believes in all the rig-
quantitative. There is neither a marole of the ‘“child-centered”
crippling paucity of school build- school. Miss Alpha uses the “proj-
ings, nor a deficiency in the nu- ect’ method of instruction. Instead
merical supply of teachers. The of holding separate classes in such
figures offered in this space in the clearly defined categories as read-
last issue of THE FREEMAN, taken ing, penmanship, arithmetic, the
from Mr. Roger Freeman’s au- language arts, and music, Miss
thoritative study, School Needs in Alpha puts the young fry to study-
the Decade Ahead, are quite con- ing, let us say, food. To further the
clusive on this point. project, the children vote to split
Nevertheless, there is a crisis in up into little committees, each
education. John Keats, an unbluff- charged with investigating a dif-
able journalist who has a never- ferent aspect of food.
failing zest for disturbing the bee- In the part of the day in which
hives and anthills into which more the children in a traditional school
and more human beings have been would be studying arithmetic, Miss
pushed by contemporary tribal to- Alpha’s pupils play grocery store.
tems, has neatly ticked off the true One of the students is elected cash-
nature of that crisis in his Schools ier. The rest of the students take
Without Scholars (Houghton Mif- turns going through the counter

flin, $3.00, 202 pp.) line, adding one real apple to two
Lo real apples, and checking up on the
The “Project Method" of Instruction cashier's multiplication to see that

Mr. Keats's method of describ- nobody is overcharged. The spell-
ing the crisis is highly pictur- ing list for the day, though it is
esque. Disdaining a statistical ap- never assigned as a list, consists of
proach, he resolves the current ed- such words as “food,” “eat,”
ucational struggle into its polar ‘‘grow,” “apple,” “pear,” and so on.
opposites. On the one hand there Part of the time spent on the food
is Miss Alpha, the third grade project is devoted to a trip to a

” «

68



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

1958 A REVIEWER'S NOTEBOOK 59

nearby supermarket; another trip
takes the class to a dairy. Some of

the children paint murals (in fin- ® WE are trying to build a public school

ger paint) depicting pastoral system in this country on the theory
scenes connected with food produc- that each American child will have a
tion; others (on the publication full, free, and equal chance to become
committee) mimeograph the var- what he is capable of becoming, ac-
ious committee reports. It’s all pre- cording to his need and ability. This is

sented by Miss Alpha as part of
the process of learning to live to-
gether, to help each other, and to
effect a happy “life adjustment.”
Such reading, writing, and arith-
metic as is learned in the course something wrong with some of them,
of “adjusting” is purely incidental. but that any of them are approaching
this ideal in any way at all.

a noble thought, embracing concepts
of equality and individuality in the
same sentence, and the miracle of our
public schools is not that there might be

Emphasis on Fundamentals JOHN KEATS, Schools Without Scholars

At the other extreme stands

Miss Omega, who believes in Drill

with a capital D. Miss Alpha would to prove in his Christmas Carol,
call it “repetitive experience.” Miss and why he chose his particular
Omega does not ask her pupils to way of proving it.

play grocery store; she makes Going on from grade school, Mr.
them repeat numbers, words, rules Keats follows the pupils of Miss
of syntax, and the important dates Alpha into Pragmatic Tech and
which are appropriate to anchor- those of Miss Omega into Mental
ing the trend lines of history. Prep. Pragmatic Tech abounds in
Where Miss Alpha’s idea of proper such courses as driver training,
English instruction is reading in- home arts, “consumer” mathema-
anities about John and Jane (the tics, manicuring, the technique of
‘“look-see” books), or the operation making long-distance telephone
of a mimeograph machine, or the calls, and problems in American
wording of an invitation to a democracy. Mental Prep sticks to
party, Miss Omega makes her pu- Latin, French, Algebra, and the
pils read stories which have a be- United States: Constitution. In
ginning, a middle, and an end. Pragmatic Tech they regard read-
Then she asks the boys and girls ing as a “skill” necessary to puzz-
to write essays on what Charles ling out directions in a cookbook
Dickens, for example, was trying or a driver's manual. In Mental


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

60 THE FREEMAN October

Prep reading is encouraged be- munities of the land can arrest the
cause it brings the student into drift to “life adjustment” if they
contact with the cultural heritage will only become aroused. He
of the race. In Pragmatic Tech wants parents everywhere to be-
they are lucky if seniors can han- come Paul Reveres. He points to
dle the daily newspaper. Problems New Canaan, Connecticut, as an
of “democracy” are resolved in example of what can be done to
terms of “adjustment” and ‘“coop- save the cause of meaningful edu-
eration.” In Mental Prep they read cation. In New Canaan the citi-
Thoreau’s On the Duty of Civil zens, an alert upper middle-class
Disobedience, Mill's On Liberty group which is strongly college-
and the Sermon on the Mount. oriented, discovered their children
“Problems of democracy,” in this were not growing up to become
school, revolve around such ques- good ‘college material.” Suspect-
tions as “How much authority ing the true cause, they formed a
should the State have?” and committee to investigate the local
“What is the source of that au- school system. When they learned
thority ?” that “life adjustment” was riding
With engaging candor Mr. Keats high, and that multiple-choice and
admits that his Miss Alpha and his true-falge tests had replaced the in-
Miss Omega are both wild carica- dividual essay in examinations,
tures. Most teachers are a com- and that King Arthur and his
posite of the two. As for Pragmatic Knights of the Round Table had
Tech and Mental Prep, there are been abolished in favor of a book
no such schools in America. But, called Fun in the Supermarket, the
says Mr. Keats with appalling fi- New Canaan people decided to
nality, there is far more of Miss clean house. Out went “life ad-
Alpha than of Miss Omega in most justment”; in came a far tougher
of our public school teachers. We curriculum presided over by a new
are approaching Miss Alpha as a principal for Saxe Junior High, a
limit. Moreover, the high schools forty-year-old Harvard graduate
are predominantly moving in the who had somehow escaped the
direction of becoming a nationwide Teachers College blight.
collection of Pragmatic Techs. If
present trends persist, it won’t be Schools Reflect Collectivistic Trend

long before our Miss Omega and Mr. Keats's book is as able a
Mental Prep genes will become piece of pamphleteering as one
completely recessive. could wish. His cure, however,

Mr. Keats suggests that the com- though it may do some good in a


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

1958 A REVIEWER'S NOTEBOOK 61

community of more than average pull the teeth of its Miss Alphas
intelligence, is hardly likely to because the inhabitants of that
make much of a dent over wide fortunate town have not yet suc-
areas. For the truth is that our cumbed to the view that Society is
schools are a reflex of what is fast an organism. They know, although
becoming our basic political phi- not always with perfect clarity,
losophy. We get Miss Alphas and that Society exists for the individ-
Pragmatic Techs not because of a ual, who gives others the benefit
Teachers College plot, but because of the most effective division of
we have ceased to be a nation of labor when he pursues his own
individualists. How can a nation bent.
which worships the collectivity fire Well, how many New Canaans
school teachers who agree with it? are there in our country today? Is
Miss Alpha believes that the im- the farming community which
portant thing is Society, which thinks it the duty of the directing
she regards as an organism. Natu- head of the social organism to as-
rally, in an organism, the heart sign each farmer in the area a
must cooperate with the lungs, and specific wheat allotment likely to
the stomach with both. To gain object to a teacher like Miss
such cooperation, there can only be Alpha? Is the housewife who has
one directing head. The way to get been conditioned to paying without
cooperation in an organism is by protest a social security levy for
“conditioning” the various con- her part-time maid apt to be a
tributory organs into doing their moving spirit in a campaign to re-
assigned jobs without protest. place the local Pragmatic Tech
Otherwise, the directing head will with a Mental Prep? Is a worker
have to use active compulsion. who unprotestingly accepts the
Believing that Society is an or- union shop and the compulsory
ganism, Miss Alpha must think of check-off in any valid position to
individualism in terms of cancer. quarrel with a Teachers College
Naturally she is going to frown on product who considers it the
the type of teaching that tends to “democratic” duty of the indi-
accentuate — and to train — the in- vidual scholar to adjust to the
dividual saliences in human char- “norm”?
acter. The important thing to note
is that she gets her idea from the The “Life Adjustment” Blight
society around her even more than No, the truth is that all America
from her Teachers College past. is currently in danger of being
New Canaan, Connecticut, could conditioned to making a god of


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

62 THE FREEMAN, October

“life adjustment.” The old-time in- tional. Though taxes are high, the
dividualist who believed in going private school is still within the
his own gait is isolated — and, in reach of thousands of Americans
his isolation, he is pushed into who expose their children to Miss
seeming a crackpot. Even whole Alpha and Pragmatic Tech. And
communities of uncompromising one more thing: Mr. Keats might
individualists (there are some) also consider attacking the “life
have had a hard time of it, as wit- adjustment” blight at its philo-
ness the town of Pasadena, Cali- sophical source. With his engaging
fornia, when it tried to make over style, he could make a great con-
its school system to give Miss tribution to the emergence of a
Omega a chance to teach. To this new libertarian philosophy and a
day, Pasadena is looked upon as new politics which would disdain
“fascist” by a great majority who the Miss Alpha approach in all
remember the stories of its trou- things, grammar school and sec-
bles with a school superintendent ondary education included. oe o eo
who refused to give Miss Omega a

job. Just how New Canaan, Con-

necticut, missed being crucified for ¢g One Man’s Fight for Freedom
its temerity in preferring Miss By A. G. Heinsohn, Jr. Caldwell,
Omega to Miss Alpha is still 2 ma- Idaho: The Caxton Printers, Ltd.,
Jor mystery.

Looking for a recipe which 1967. 157 pp. $3.00.
would enable people to save them- EVERY businessman entangled in
selves from having their children the vast governmental network of
fall completely under the sway of administrative agencies will appre-
Miss Alpha, Mr. Keats misses one ciate this record of one man’s tire-
obviously good bet. He might have less fight for freedom since the
advocated more private schools, early days of the New Deal.
both parochial and nondenomina- Though a resident and textile
mill operator of Knoxville, Mr.
Heinsohn holds no brief for the
Any book reviewod in this Book Section (or | 1 ennessee Valley Authority. In
ony other current book) suppliod by return fighting for what he believes, he
mail. You pay only tho bookstore prico. We | has likewise opposed price con-
pay the postage anywhere in the world. trols, minimum wage laws, farm
Catalogue on request. price supports, and other political
THE BOOKMAILER, Box 101, New York 16 violations of Constitutional rights

and economic laws. Typical of his



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

1958 OTHER BOOKS 63

attacks on the bureaucracy is a dealing directly with his workers
lengthy exchange, included in the led to trouble with the National
book, with agents of the OPA who Labor Relations Board. But his
insisted that he furnish cost of employees understood and in 1943
production figures on a type of they rejected, by an overwhelming
shirt material his factory had majority, the efforts of union
never manufactured. agents to organize the plant.
Politicians, hired to do a job Mr. Heinsohn writes of change-
and eager to stay in office, are sel- less principles and economic laws,
dom influenced by the direct ap- concepts which, unfortunately, one
proach Mr. Heinsohn used. It is all too seldom hears. If such ideas
not surprising, therefore, that his were more generally accepted, the
most effective work has been with world situation would be a very
his friends and business asso- different one today. Only when
ciates. these basic doctrines are widely
In 1935, challenged by a new job understood can we hope for an end
as manager of a depression-ridden to government intervention, spend-
textile factory, he went directly ing programs, make-work pana-
to the workers in the plant. He ceas, and other political meddling;
gave them the facts about the then and only then may we expect
firm’s financial status, called for to enjoy the blessings of private
their cooperation, and pointed out enterprise and personal freedom
that “the final judge is the cus- of choice which Mr. Heinsohn
tomer.” Mr. Heinsohn's policy of rightly praises. BETTINA BIEN

We invite your subscription to

MODERN AGE

A CONSERVATIVE REVIEW
VoL. 2, No. 4 (Fall 1958) Edited by Russert Kirk

A SpeciaL NUMBER ON THE SOUTH, INTEGRATION AND PRINCIPLE
Three dollars per year One dollar per copy

Address: FounpaTioN FOR FOREIGN AFFAIRS, INC.
64 East Jackson Boulevard, Chicago 4, Illinois

Free copy available on request



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

IDEAS ON LIBERTY

0 A person's concept of the cosmic order will ultimately dictate his view
of human nature as well as his understanding of the ethical code which
should guide his relationships to others. When men rightly apprehend
their relationship with the nature of things and with each other, there
is harmony and growth. But misunderstanding portends trouble, leading
possibly to the collapse of a civilization if the wrong ideas are widely
shared.

0 The Foundation for Economic Education works within the framework of
the spiritual and ethical understanding embodied in the heritage of
Western Civilization. Its conviction is that this heritage, in its social
aspects, spells out into the philosophy of limited government and free
market economics. Political liberty and economic freedom, in turn, are
important in man’s quest for material sufficiency and spiritual growth.

O The Foundation’s monthly publication, THE FREEMAN, prints articles
dealing mainly with current efforts to restrain economic and political
liberty, with the misunderstandings and fallacies which cause well-
meaning people to invoke these restraints. On the positive side, it
attempts to explore ways in which men in freedom resolve their
economic and political problems,