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

IDEAS ON LIBERTY

DECEMBER 1959

Qil’s Second Century . . . . . . . Robert G. Dunlop 3
Flight from Integrity. . . . . . . . LleonardE. Read 12
Christmas Eve in England . . . . . . H.P.B. Jenkins 19

Competition, Monopoly, and

the Role of Government. . . . . . Sylvester Petro 20
The Web of Intervention . . . . . . Paull. Poirot 29
The Last Billionaire . . . . . . . . Dean Russell 32
The Syndrome of Liberalism . . . . . Frank Chodorov 40
Piercing the lvory Curtain . . . . . . Albert Porter 44
Favors for Farmers . . . . . . . . John Chamberlain 48
OtherBooks . . . . . . . . . . © 52
Index . . . . . . . . CC . . 57

an THE FOUNDATION
FIE FOR ECONOMIC EDUCATION, INC.

Irvington-on-Hudson, New York



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

Coast Federal Savings and Loan Association

Join the thousands of others from all 50 states and many foreign countries
who hold individual, joint, trust or corporation savings accounts and get the
following outstanding advantages for your invested savings.

HIGHEST EARNINGS- since October 1, 1959, we are paying at the
rate of 44% per annum. Accounts opened or added to by the 10th of
any month earn from the Ist of that month.

ASSETS OF OVER $365 million, with over $117 million in cash and

government bonds and Reserves of over $30 million as of June 30, 1959.

AVAILABILITY OF FUNDS — Coast Federal has always paid every

withdrawal immediately on request.
SAVE-BY-MAIL — Airmail postage paid both ways on all transactions.

SECURITY of principal assured through progressive, conservative manage-
ment and the additional protection of $10,000.00 insurance on cach account.

a
JOE CRAIL, PRESIDENT 0

a .
©
MEMBER — FEDERAL HOME LOAN BANK — FEDERAL SAVINGS AND LOAN INSURANCE CORP.

Coast Federal Savings, Department “H"
855 South Hill St. at 9th (Please check-mark as desired.)
Los Angeles 14, Calif.

1. [JJ 1 enclose [J chock, [J] money order, to opon 2. [J Please sond me a copy of your
a savings account in the following name or Booklet “Let's Get Acquainted”,
names: _ Savings Account Information

and latest financial statement.

Name
Addross

City ___ i Zone _.State



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

CAN YOU GUESS HOW MUCH

YOU ARE TAXED FOR "PUBLIC POWER"?

You and other Americans have al- light and power companies are ready
ready paid out about $5,500,000,000 and able to supply all the electricity
in tax money to put the federal gov- the nation could conceivably need —
ernment into the electric business. without depending on taxes.

That averages about $100 per fam- These are the companies that have
ily. And this federal “public power” doubled the supply of electricity in
threatens to cost each family around 1g years, and will double the present
$200 more! supply in the next 10.

That's exactly what could happen,
if the “public power” lobbyists and
pressure groups have their way.

They're urging Congress to spend among your friends. As soon as

$10,000,000,000 more tax money to enough people know, you can be sure
put the government still farther into it will be halted.
the electric power business. ~~

Unnecessary “public power” spend-
ing goes on because most people don’t
know about it. So spread the word

All this spending of your money  \ypypn “PUBLIC POWER” WINS _

for more and more federal “public YOU LOSE! Every time another federal
power’ is unnecessary. America’s “public power” proposal goes through
hundreds of independent electric ~~ Congress, you are taxed to pay the bill.

America’s Independent Electric Light and Power Companies

Company mames on request through this magazine


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

THE

Tecmail

FE
E

DECEMBER 1959 Vol. 9 No. 12

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 $12.00 a year
per person on the mailing list. Donations are invited
in any amount — $5.00 to $10,000 — as the means of
maintaining and extending the Foundation’s work.

Accepted as controlled circulation publication at Irvington, N. Y,, with
addltlonal entry at New York, N.Y, Copyright, 1959, The Foundation for
Economic Educatlon, Inc. Printed In U.S.A.

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

Permission Is hereby granted to anyone to reprint any article in whole
or In part, providing customary credit Is given, except "0Oll's Second
Century” and “The Last Blilionalre.”’

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


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

IIS
SECOND
CENTURY

ROBERT G. DUNLOP

JUST 100 years ago, by the slim- their time and invest their money
mest of margins, Edwin L. Drake in the search for oil. If they found
found a small, stray sand contain- it, it was theirs —and it could
ing oil at 69% feet in a well make them rich. Many of those
drilled near Titusville, Pennsyl- who followed Drake did find oil.
vania. Call it a miracle or an acci- Many others, of course, found
dent, no one else among the thou- none.
sands who took to drilling wells in To regard Drake's success as an
the woods of Western Pennsylvania accident is less fitting than to re-
ever produced oil from the same gard it as a miracle. (I suspect it
shallow sand. On the slender is only oil men who are tempted,
thread of this discovery hung the in the throes of the vexatious
incentive that led men to give problems thrust upon them, to
think irritably that it was an acci-

Mr. Dunlop is President of the Sun Oil Com- dent that the oil industry was ever
pany. This article is from his remarks before b 1
the Delaware Oil Men’s Association at orn!)

Wilmington, September 14, 1959. To say that Drake's success was
Above: Gleaming like a giant Christmas Tree a miracle, however, is to deny
this Houdriflow catalytic cracking unit at credit to the dogged determina-
Tole ermine at ebtaty he. eracking iow tion Of that lanky, bearded man;
out of competition among oil companies to it would be to renounce the axiom

produce larger yields of higher quality gaso- .
line. Photo: Courtesy Sun Qil Company of our heritage that the Lord

3



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

4 THE FREEMAN December

helps those who help themselves. until they ave useful to people.
It surely may be regarded as a Natural resources, plus man’s re-
miracle, however, that in God's sourcefulness, equals progress.
scheme of things, millions of years I know of no study, but I would
ago there lived and died lower venture that nine-tenths of the
forms of marine creatures which world’s presently known oil was
became buried, and compressed, discovered by Americans or with
and transformed, that Man might American methods and equipment.
one day have heat and light and an Americans, as a group, have
abundance of power. It is in this proven themselves to be the great-
sense that we speak of natural re- est oil finders and developers in
sources — nature's gifts. Yet how the world. I contend that this is
significant it is to recognize that so because the incentive to Ameri-
one hundred and one years ago the cans to be resourceful has been
United States had no petroleum uniquely powerful under our eco-
resources. We are forced to con- nomic concepts of competition,
clude that the petroleum resources private management, and private
we enjoy today are equally a prod- property.
uct of the resourcefulness of men.
Those who contend that oil and Oil Men Take Pride in Achievements
gas are nature's gifts and so be- At this juncture in their his-
long to all the people are, to say tory, oil men share two feelings.
the least, insufficiently critical in One is the feeling of pride in what
their analysis. Primitive, tribal, their resourcefulness has accomp-
and civilized societies for genera- lished in just 100 years ... aided
tion upon generation trod the and abetted, it is true, by the re-
ground over the vast oil reserves sourcefulness of interdependent
of the Middle East. Yet it was not industries — the automobile and
until the 1930's that the major aviation industries, machine tools,
discoveries were made and the de- chemicals, and many others — all
velopment began of Middle East motivated by the same incentives.
oil as we know it today — the rich- If the oil industry had done no
est single oil area of the world. If more than light lamps and grease
oil is truly a gift, why did not all wheels, it would have made a
those preceding generations ac- great contribution to the material
cept it and use it? well-being of the American people.
The answer, of course, is that For it would have created re-
natural resources are not wholly sources where none existed before
natural; nor are they resources — it would have found the oil that


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

1959 OIL’S SECOND CENTURY 5

hadn’t been found — and it would early boomtowns of oil, resulting
have made useful the raw, unus- from greed and also from insuffi-
able crude that came from the cient technical knowledge and in-
earth. adequate equipment. It was from
But it has done much more. within the industry itself, how-
Today the glamour attaches to ever, that the initiative and states-
new petrochemicals created by manship came for the establish-
petroleum science —the raw ma- ment of sound conservation prin-
terials for synthetics of many ciples and methods.
types. Crude oil and natural gas Despite the inflation of which
constitute a vast storehouse of we are all so conscious, petroleum
such wonders today and even products are a bargain in price.
greater marvels yet to come. But One of my associates joined the oil
basic to all else is the major con- industry in 1914, and he likes to
tribution petroleum has made to keep track of what has happened
the plentiful availability of low- since then. His figures show that
cost energy. This has given the the price of the industry’s prin-
United States unsurpassed eco- cipal product — gasoline — is about
nomic leverage. We account for 50 per cent higher today than in
more than 40 per cent of the 1914, compared with a rise of
world’s energy consumption, with nearly 300 per cent in the so-called
only 6 per cent of the world’s pop- cost of living index. In some coun-
ulation. Nearly 70 per cent of our tries, low-priced products reflect
energy requirement is supplied by low-paid workers, but my associ-
oil and gas. It is no wonder that ate’s records show that wages in
we have enjoyed a standard of liv- the U. S. oil industry are up 1,000
ing unequalled anywhere at any per cent since 1914, and in addition
time. As Newsweek magazine so petroleum industry employees are
aptly put it in an article this sum- the recipients of fringe benefits of
mer, “the whole bountiful civili- unequalled liberality.
zation of the mid-twentieth cen- By the tests which may be used
tury is petroleum and the myriad to measure the social and economic
economic and scientific reactions performance of an industry, the
that it has stimulated or helped petroleum industry ranks high in
make possible.” maintaining adequate (in fact,
In exercising their resouceful- more often overabundant) sup-
ness, oil men have been neither plies, in conserving resources, in
spoilers nor exploiters. developing new products, in im-
True, there was waste in the proving the quality of conventional


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

6 THE FREEMAN December

products, in competitive pricing, in hydrocarbon energy reserves of
treatment of employees. It has the country are under federal gov-
sought to reward its stockholders ernment control. The discoverer of
commensurately with their risks, natural gas can neither sell it in
but if there is a weakness on the interstate commerce—nor stop sell-
industry’s scorecard I confess it is ing it once he has started — with-
in this regard. out federal government approval.
The price at which he sells, should
the sales be approved, is controlled
Reviewing the facts of the pe- by the federal government. Many
troleum industry’s performance, it of the contracts producers had
is perhaps understandable that oil made in good faith with buyers
men regard their industry with have been swept aside as invalid by
pride. But as I mentioned a mo- administrative action of the fed-
ment ago, oil men share two feel- eral government. Today, the terms
ings. The second is a profound con- of tentative agreements between
cern. buyers and sellers are often
In one of Edgar Allan Poe’s changed by administrative action
short stories — “The Pit and the of the federal government during
Pendulum” — a man is trapped in the lengthy process of contract ap-
a room whose hot metal walls are proval —a process which not un-
slowly closing in on him, forcing commonly consumes two to three
him toward a pit containing a hor- years. By administrative action of
ror so monstrous he cannot de- the federal government the buyer
scribe it. The terror in Poe’s tale of natural gas is as likely as not
lies in the man’s utter helplessness. to be required to pay less than he
Oil men are not so helpless, but the was willing to pay, and the seller
analogy is useful otherwise. Slow- has the choice of accepting the
ly, but inexorably, the freedom of lower price or nothing.
the managers of oil companies to In natural gas controls, the oil
conduct their business in accord- man is twice injured. Not only does
ance with the dictates of the mar- the price he is permitted to receive
ket place is being restricted. The for his gas limit his financial abil-
walls are closing in. And the pit, ity to search for new reserves to
as we know from the experience replace those he has committed to
of all nations which have embraced gale, but the arbitrarily-estab-
totalitarianism, is too horrible to lished gas price is a regulator —
contemplate. and a depressant — of the price the
Already, half of the proved oil man receives for his distillate

Restrictions Cause Profound Concern


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

1959 OIL’S SECOND CENTURY 7

and residual fuels. Such fuels com- freezes-in the unequal treatment
prise more than a third of the total and denies to the managements of
yield of petroleum products from individual companies the oppor-
crude oil. Thus oil men live daily tunity to work out their own sal-
with an example of the truism that vations, all facing an identical de-
the imposition of controls on one terrent to importation. A realistic
part of a free economy breeds addi- tariff that would apply to all im-
tional controls in the other seg- porters would constitute such a
ments. Direct controls on gas pro- deterrent. Its great advantage is
ducers who sell in interstate com- that it would leave the manage-
merce also indirectly regulate ments of the separate, competitive
prices of gas in intrastate com- companies free to exercise their
merce and the prices of a substan- ingenuity and to discharge their
tial percentage of our hydrocarbon responsibilities to their stock-
energy supply which is in liquid holders, employees, and customers
form. according to their individual capa-

Liquids represent the presum- Dbilities.* Such is the traditional
ably free half of our proven hydro- method of a society which believes
carbon energy supply. But oil men in a competitive economic system.
do not need to be reminded that Oil men also find the walls clos-
managerial discretion in selecting ing in on them as they attempt to
sources of crude oil to meet refin- meet price competition in the mar-
ery requirements has been sub- kets for gasoline — their major
stantially supplanted by the admin- product. In this area they are suf-
istrative discretion of the federal fering uncommon harassment.
government. This is disquieting enough. But

In the interests of national de- the oil man’s greatest concern is
fense the federal government has over the ultimate destination of the
decreed that crude oil and petro- course we are being required to
leum product imports should be take. What the federal government
limited. This limitation is being appears to be saying to the oil in-
accomplished through the manda- dustry is that a sheltered position
tory oil imports program under must be maintained for everyone
which a quota has been assigned to who engages in gasoline market-
each importer. Surely equal treat- ing; that large marketers must not
ment for all must have been a con- *I am not here arguing for protection-
sideration of those who designed ism but merely saying that, if the gov-
the quota system, but its result is ernment insists on a policy of deterring

g oil imports, the tariff is a more equitable
unequal treatment. Worse yet, it device than is an import quota system.


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

8 THE FREEMAN December

compete very vigorously with oil men face today, I would be
smaller marketers; and that price guilty of wasting your time on su-
inflexibility is to be preferred — all perficialities. I have taken time for
in the name of preserving competi- both, however, to sharpen a con-
tion! trast which must concern us if we
If a large marketer reduces are to get beneath the surface to
prices to a large number of dealers, the heart of our difficulties—which,
he risks a judgment — not by a I believe, are America’s difficulties
court, but by a quasi-judicial fed- as well.
eral government agency — of hav-
ing engaged in “predatory” pric-
ing. It he reduces prices to a few If oil men’s problems were their
dealers, he risks a judgment of own, unique to them, they would
having engaged in ‘“discrimina- not be worthy of exceptional public
tory” pricing. Oil men listen in notice and concern; all of us could
amazement as a regulatory agency regard them simply as conditions
policy-maker asserts in one breath of the business — factors to be
that “hard competition” is to be weighed by those who contemplate
fostered, and in the next breath engaging in petroleum. But the
that the defense of a seller who has fact is that such problems as I
reduced prices should be disre- have touched upon are manifesta-
garded if he pleads, when he is tions of an issue that will decide
brought to the bar, that he made our nation’s future.
the price reduction in good faith to Approximately 120 years ago
meet the lower-priced competition Alexis de Tocqueville, reporting on
of other sellers! his observations, wrote: “In Amer-
But price reductions are not ica... the citizen... never thinks
alone suspect; price increases also of soliciting the cooperation of the
are a source of difficulty —this government; but he publishes his
time stemming from a different plan, offers to execute it himself,
federal agency. This is a matter courts the assistance of other indi-
which may be unbecoming of me to viduals, and struggles manfully
discuss, since we will have quite a against all obstacles. Undoubtedly
bit to say about it later on —in a he is often less successful than the
Federal District Court. State might have been in his posi-
If I appeared before you today tion, but the sum of these private
only to recite the accomplishments undertakings far exceeds all that
of the petroleum industry in the the government could effect.”
past and to describe the troubles De Tocqueville's description fits

Issue Will Decide Nation's Future


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

1959 OIL’S SECOND CENTURY 9

the climate of American ideas and ical and economic freedom which
ideals as Edwin L. Drake came on the patriots of 1775 fought to se-
the scene. cure for us? Or do we stand for a
Not much more than 80 years hybrid system which has borrowed
before Drake — 60 years before de some of the worst from feudal,
Tocqueville — the independence of socialist, and dictatorial systems
these United States had been de- we rejected so vigorously at an
clared by men whose experience earlier time?
made them wise in the ways of
governments. They were deter- Let's Not Let Freedom Die
mined not just to make this new The answer should be clear, yet
nation free from domination by the walls have closed in to a dan-
any foreign government, but to gerous degree. I hope that succeed-
keep the people free from domina- ing generations cannot say of us
tion by their own government. The that we lived in the grabbag era of .
unique political system they estab- American history, out for what we
lished enjoyed as its harmonious can get today, unrooted in the past,
counterpart a unique economic uncommitted in our philosophy,
system which, for the first time, unsure of our own capabilities, un-
put self-interest to work for the concerned about responsibilty to
public interest. For a long time — the future. I hope they cannot say
certainly far beyond the days of that we let freedom slip through
Drake — those who followed were our fingers because we didn’t
disciples and practitioners of the understand or didn’t care.

new meanings of liberty and inde- This is a serious concern, for
pendence. They were, if you please, there is abroad in the land today
skilled in dialectic Americanism. the idea that if there are obstacles

We need such believers and ad- in the path, one should not strug-
vocates today; articulate men fired gle manfully against them, but
with the conviction and the mis- should ask Washington to remove
sionary zeal to bring about a re- them. If there are problems, let
birth of faith in freedom, to re- Washington solve them. If he has
store pride in self-reliance, to re- succeeded and you have failed, ask
establish success as a worthy goal. for a transfer of funds. As this
We need such men because we have idea grows, our government comes
come to another of the periods in to resemble less a republic than a
our history when we need imper- perpetual plebiscite through which
atively to know what we stand for. various groups seek to vote them-
Do we stand for the system of polit- selves large shares of the good life.


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

10 THE FREEMAN December

Many Americans are already de- trols to be imposed on the author-
luded with the notion that we can ity of the President under pre-
simply vote full employment, high scribed conditions —an example,
incomes, short hours, low prices, if there ever was one, of attacking
and complete economic security. Of the symptoms rather than the dis-
course, we can no more do those ease!
things with impunity than we can It is proposed that graduated in-
vote to require that objects fall up come taxes be imposed on corpor-
rather than down. The conse- ate profits. Here the idea is appar-
quences of the attempts already ently that the more people want
made are there for all to see in a the goods or services of a partic-
vast federal bureaucracy, a swollen ular company, and the more effi-
national debt, and a cancerous in- cient that company is in supplying
flation that has distorted values, those wants, the more it should be
penalized the prudent, rewarded penalized and the more stock-
the improvident, and, most unfor- holders should be encouraged to in-
tunately, undermined morality. vest their funds instead in other
Such evidence does not in the companies which aren’t doing such
least deter those who advocate a good job, or which are producing
greater governmental regulation goods or services that people don’t
of business, additional restraints want so much.
on the functioning of free markets, I will mention just one more —
and more onerous disincentives to out of a long list, I might say — be-
achievement. It is proposed, for cause it relates specifically to the
example, that Congress build new petroleum industry. A determined
rigidities into the price system by effort is being made to have Con-
requiring large companies to file gress reduce percentage depletion
advance notice of any price in- for oil and gas wells under the In-
crease and to appear within thirty ternal Revenue Code. A number of
days thereafter to justify their in- supporters of the reduction joined
tent at hearings conducted by the in sponsoring a bill for a gradu-
Federal Trade Commission. If we ated cut, the idea being that small
are to prohibit prices from regulat- producers would continue to be
ing the employment of the factors eligible for a 27% per cent rate,
of production, our only alternative medium-sized producers would be

is government dictation. eligible for a 21 per cent rate, and
It is proposed that Congress act large producers for 15 per cent.
to curb inflation by enacting a full Now the truth is that there is a

set of price, wage, and rent con- percentage which represents capi-


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

1959 OIL'S SECOND CENTURY 11

tal — the value of the producer’s oil will bury us and proposed that we
in the ground — which he depletes engage in friendly economic rival-
every time he produces and sells a ry. He and his associates are goal-
barrel of oil out of a field or a cubic centered, tough-minded, articulate
foot of gas out of a reservoir. That believers in the superiority of gov-
value is either 27% per cent —lim- ernment planning, ownership, con-
ited as it now is by the provision trol, and direction of the means of
that the deduction may not exceed production. Realistically, his na-
50 per cent of net income from tion has discarded the socialist
each lease — or it is some other per- idealism of equal incomes for all —
centage. But it isn't one percent- and even more the communist
age for one producer and another theory of from each according to
percentage for a second producer. his ability, to each according to his
Yet the most vocal advocates of a needs. Soviet production today is
cut in percentage depletion for oil spurred by an array of incentives,
and gas have joined in proposing both monetary and non-monetary.
different percentages. This simply Indeed, the Soviet Union appears
unmasks the campaign of this par- to have added incentives to
ticular group as inspired by the achievement as fast as we have
idea that the way to make political crushed them.
hay is by penalizing those who After more than a quarter of a
have managed to succeed. century of intimate association
I'm sure I need not labor further with the oil industry as an out-
the point that we Americans need standing example of the achieve-
to decide what system we believe ments possible under a system of
in. Tomorrow [September 15], Mr. economic freedom, I have no doubts
Khrushchev, who happens to be- about the superiority of competi-
lieve in his particular system, will tive capitalism over communism.
arrive for a visit on our shores. And this is so whether the test is
A month or so later, Mr. Eisen- building a strong nation, improv-
hower is scheduled to visit in turn ing the material welfare of all the
in the USSR. We may hope that people, contributing to science and
these visits will contribute to an the arts, or in advancing moral and
honorable easing of world tension. spiritual values. But in the con-
But wecannotignoretheannounced test, we must make sure it is truly
goals of the Soviet Union, nor the Freedom that contends with Com-
long history of our difficulties with munism.
communist regimes. Mr. Khru- That is our challenge in oil's sec-
shchev has both asserted that he ond century. ~


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

LEONARD E. READ

FLIGHT from
INTEGRITY

SOME YEARS AGO the public rela- This is a serious charge. Let’s
tions officer of a large corporation explore it. In order to get this
summarized for me his guiding matter into perspective, contem-
principle: “Find out what the plate the countless specialized
people want and do more of it; find subjects known to mankind. Take
out what they don’t want and do any one of them — landscape paint-
less of it.” ing, for instance — and arrange the
While seldom so succinctly population of the U.S.A. in a pyra-
stated, such an external, “other mid according to proficiency or
directed” guide to behavior is find- quality. There would be some one
ing ever wider acceptance in person at the very peak. Under
American life. Implicit in its ac- him would be a few competent
ceptance is a flight from personal landscape painters; there would
integrity; and here may be found follow perhaps one million having
an important explanation for some a discriminating appreciation of
of the mischief presently beset- such art; after which there would
ting our society. be the great mass — millions upon
Doubtless, this is good enough millions, unconscious, unaware, ut-
as a formula for getting rich. terly ignorant of the art or the
However, if an individual looks standards by which its perfection
upon wealth as a means to such could be attained or judged.
higher ends as his own intellectual Rearrange the population in pro-
and spiritual emergence or realiz- ficiency pyramids for all of the
ing those creative potentialities countless subjects which engage
inherent in his nature, then the human interest and each of us
formula has its shortcomings. And, would find himself near the base of
in certain areas, it is downright most of the pyramids. Few are
destructive. leaders or among the highly com-

12


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

1959 FLIGHT FROM INTEGRITY 13

petent — except rarely and momen- instruction and leadership in such
tarily, if at all. Each of us has a circumstances is tailored to the
potential for growth and develop- level of the “know-nothings’ of the
ment — especially if advantage is given subject, to the values at the
taken of the help available from base of our imagined pyramid
those on higher levels. | where over 90 per cent of the peo-
With the above in mind, let us ple are. Integrity is forsaken. Po-
explore the implications of integ- tential leadership is diverted from
rity to the situation we are con- higher aspiration and, instead,
templating. It involves the accu- panders to the tastes and foibles
rate reflection in word and deed of of the ignorant.
that which one’s highest insight The fields of art and music,
and conscience dictate as true and where new “lows” are now so much
right. Now, a person’s concept of in evidence, illustrate the flight
what is true may not in fact be from integrity. Consider the fol-
truth, but it is as close to truth as lowing confession, ascribed to the
he can get. It is the individual’s famous painter, Picasso:
nearest approximation to truth, his “In art, the mass of the people
most faithful projection of that no longer seek consolation and ex-
approximation, the most accurate altation, but those who are refined,
reflection of his best lights. rich, unoccupied, who are distillers
of quintessences, seek what is new,
strange, original, extravagant,
With the pyramid picture and scandalous. I myself, since cubism
this conception of integrity in and even before, have satisfied
mind, let us now observe what hap- these masters and critics, with all
pens when the skilled in any sub- the changing oddities which passed
ject — the competent who are near through my head, and the less they
the peak — adopt the practice of understood me, the more they ad-
finding out what the people want mired me. By amusing myself with
in order to “do more of it” and find- all these games, with all these ab-
ing out what they do not want in surdities, with all these puzzles,
order to “do less of it.” In such cir- rebuses, and arabesques, I became
cumstances, from whence comes famous, and that very quickly. And
the instruction for what each of fame for a painter means sales,
the skilled is to do? From the best gains, fortune, riches. And today,
that is in each skilled person or as you know, I am celebrated, I am
available to him? From the highest rich. But when I am alone with
conscience of each? Indeed not! The myself, I have not the courage to

Adverse Selectivity


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

14 THE FREEMAN December

think of myself as an artist in the the individual who cares anything
great and ancient sense of the about himself has the choice, in
term. Giotto, Titian, Rembrandt, these fields, of turning off the TV
and Goya were great painters; I and not reading or viewing the
am only a public entertainer who rubbish that is so overwhelmingly
has understood his times and has served up to him. He can, if he
exhausted as best he could the im- chooses, go his isolated, unmolested
becility, the vanity, the cupidity of way.
his contemporaries. Mine is a bit-
ter confession, more painful than The Realm of Politics
it may appear, but it has the merit But no such freedom of choice is
of being sincere.”! allowed the individual when flight
I have a TV program in mind. from integrity occurs in the realm
The star is an accomplished actress of politics. The individual, irre-
with an attractive voice. Does she spective of his scruples, his morals,
sing the lovely songs of which she his ideals, his tastes, is helplessly
is capable? swept with millions of others into
Only now and then. For the most the miserable mess which the dull
part, she and those in charge of her weight of ignorance gradually but
TV appearances insist on the stuff inevitably inflicts on everyone.
which nickels in juke boxes indi- A candidate for the Presidency,
cate as mass-popular. Instead of supposedly brighter and better ed-
the millions at the lower part of ucated than average, nevertheless
the pyramid being lifted in their polled the mass of voters to find
musical tastes by this singer at what they wanted from govern-
her creative best, we observe her ment. As could have been foretold,
descending and catering to the they wanted the very things that
lowest or base tastes — an imita- crumbled the Roman Empire —
tion of ignorance, so to speak. Thus “bread and circuses.” The farmers
is the music of our day degraded. wanted subsidies, not for outstand-
However unhappily we may view ing performance, but for not farm-
the wreckage which these re- ing. The labor unions wanted
sponses to ignorance have brought grants of coercive power that they
to the fields of music, art, litera- might extort more pay for less
ture, entertainment, journalism, work. Many businessmen wanted
and the like, we must concede that various protections against com-
— . petition. Vast hordes wanted the
Broderick, Alan Houghton, Mirage of . .
Africa. London: Hutchinson & Co., Ltd., guaranteed life: pensions, ease, re-
1953. p. 203. tirement; in short, to be relieved of


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

1959 FLIGHT FROM INTEGRITY 15

responsibility for self. These are Parliament, put the case for integ-
the things our candidate professed rity in unequivocal and unmistak-
to stand for and promised to de- able terms:
liver, if elected. Instead of stand- “But his [the successful candi-
ing consistently for the highest date’s] unbiased opinion, his ma-
principles of political economy ture judgment, his enlightened
known to him, he imitated the low- conscience, he ought not to sacri-
est common denominator opinion fice to you, to any man, or to any
of the population. His campaign set of men living. These he does
manager confided that he had to not derive from your pleasure —
do this to get elected; that once in no, nor from the law and the Con-
office he would then do what he stitution. They are a trust from
regarded as right. This oppor- Providence, for the abuse of which
tunity never came; the candidate he is deeply answerable. Your rep-
was defeated. And, defeat was his resentative owes you, not his in-
just due. One who runs a campaign dustry only, but his judgment; and
without integrity proves openly he betrays, instead of serving you,
that he would, at any time, for- if he sacrifices it to your opinion.”
sake integrity if it appeared ex- George Washington had the
pedient for him to do so. same practical and lofty senti-
This explains why the two ma- ments in mind when he reportedly
jor political parties in the United said to the Constitutional Conven-
States today stand for the same tion:
things. Both have chosen to re- “If, to please the people, we offer
ceive their instructions from pre- what we ourselves disapprove, how
cisely the same source, the lowest can we afterwards defend our
common denominator of popular work? Let us raise a standard to
opinion. The result is a one-party which the wise and honest can re-
system under two meaningless pair. The event is in the hand of
labels. This deplorable situation God.”
can never be remedied until there
is a return to integrity, with can- Socialism Leaves Little Choice
didates whose outer selves and No individual, whoever he may
actions will reflect their own best be, can escape the immediate con-
thoughts, regardless of the effect sequences of ignorance in politics,
this may have on their political as he can in art, music, journalism.
fortunes. There is no way to avoid the pains
Edmund Burke, addressing which bad political action inflicts.
those who had just elected him to For ignorant political action en-


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

16 THE FREEMAN December

compasses all —one’s life and the ance of mass ignorance as our Di-
sustenance of life which is the rector of Doing?
fruit of one’s own labor; one’s free- Doubtless, there are numerous
dom to choose how one shall live reasons, some of which may be too
his own life. Political collectivism obscure for ready discovery and
— the pattern consonant with polit- examination. One possible explana-
ical ignorance — means what it tjon has to do with a false economic
says: Everyone swept indiscrimi- gaggumption. We, having paid so
nately into a human mass, the col- much heed to material progress
lective.? and well-being, to ever higher
When an individual, in his think- standards of living, let our eco-
ing and actions, unhitches himself nomic concepts pattern other as-
from integrity, he “lets himself pects of our lives. Erring in our
20,” so to speak. He is anchored to economic assumptions, we com-
nothing more stable than whimsy, pound the error in our social, polit-
momentary impulses, mere whiffs ical, moral, and spiritual judg-
of fickle opinion. He is adrift and ments.
without compass. This shows Here is the error in economic
through in much current art, diagnosis: We assume that “Find
music, poetry, and unquestionably out what the people want and do
accounts, in a very large measure, more of it” has been the formula
for the rapidly growing socialism, for our success, for our prolific
collectivism, decadence — call it production of goods and services.
what you will. There remains, how- Thus, in the economic area, so we
ever, the task of discovering why think, our guidance has come from
integrity is so easily, casually, even the mass market rather than from
eagerly abandoned. Why this conscience or higher realms of
wholesale divorce from personal mind. The current cliché, “The con-
conscience, this shameless accept- sumer is king,” tends to support
this view.

2This dim view of political collectivism

is not to be mistaken as a backhanded The Spiritual Nature of Progress
endorsement of the “philosopher king" . .

idea of Plato and its modern counter- Actually, instruction from the
parts that society should be wholly gov- mass market has to do only with
erned by committees of the creative elite. : :

There is no political process of knowing duplication. The market deter-
or selecting in advance the persons who mines whether or not an economic
will be most creative. The only process good is to be duplicated and, if so,
that will bring the creative minority to t hat extent

the top, that will encourage their effec- 0 wha ex en : )
tiveness, is complete freedom, Duplication, sometimes called


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

1959 FLIGHT FROM INTEGRITY 17

‘““mass production,” admittedly Where, for example, did Thomas
controlled by the market, is not, Alva Edison get his ideas for the
however, the secret of productiv- electric lamp? Not from the mass
ity. The secret lies back of that. It market! How could a people give
has its genesis in the creation, the specifications for something about
invention. Ralph Waldo Trine helps which they were totally unaware?
with this explanation: In reality, the productive proc-
“Everything is first worked out ess works outward from that which
in the unseen before it is mani- is first presented uniquely to an
fested in the seen, in the ideal be- individual mind as awareness or
fore it is realized in the real, in consciousness or insight (the re-
the spiritual before it shows forth ception of ideas — ideation) and is
in the material. The realm of the then accurately (with integrity)
unseen is the realm of cause. The worked out or reflected in the ma-
realm of the seen is the realm of terial good or service. There is a
effect. The nature of effect is al- distinctively spiritual accomplish-
ways determined and conditioned ment before the good or service is
by the nature of its cause.” held up to view before the mass
The noted economist, Professor market.
Ludwig von Mises, reputedly the
greatest free market theorist of Let Each Do His Best
our time, adds his judgment to this American economic progress has
view: been truly phenomenal. But this
“Production is a spiritual, intel- progress has been founded on in-
lectual, and ideological phenom- spiration from the highest insights
enon. It is the method that man, di- of individuals, not on advice from
rected by reason, employs for the the lower levels of ignorance. In
best possible removal of uneasi- this manner the masses progres-
ness, What distinguishes our con- sively are freed from poverty and
ditions from those of our ancestors slavery, free men’s material needs
who lived one thousand or twenty gratified as never before, and op-
thousand years ago is not some- portunities opened to everyone to
thing material, but something spir- pursue and develop those creative
itual. The material changes are potentialities inherent in his own
the outcome of the spiritual personality.’ If we would succeed

changes.” — ~

fTouched upon here is the moral function
3From In Tune with the Infinite. Indian- of wealth. Whether or not people use
apolis: The Bobbs-Merrill Co., 1897. wealth to free themselves for higher
4From Human Action. New Haven: Yale effort is beyond the scope of this essay.
University Press, 1949. p. 141. Many do not.


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

18 THE FREEMAN December

with our political institutions, we incapable of rising to higher levels.
have in the productive process a Now and then we observe indi-
model to emulate. However, we viduals who can be depended upon
must understand how this process to state accurately that which they
really works: that it finds its believe to be right, persons un-
power in highest conscience and moved by fickle opinions, by the
the accurate reflection thereof, in lure of applause, or by the sting of
short, in integrity. censure. We may disagree with
One’s highest conscience, re- such persons, but be it noted that
gardless of the step it occupies on we trust them. For their creed ap-
the Infinite Stairway of Right- pears to be:
eousness and Wisdom, is sensitive
to the way one treats it. Lie about This above all, to thine own self be
it, distort it, reflect it inaccurately, true; }
take contrary instruction from in. And it must follow, as the night the

ferior sources or yield to the temp- day

. Thou canst not then be false to any
tation of fame or fortune or popu- man.
larity or other weaknesses of the
flesh at its expense and it will be- Such persons are possessed of in-
come flabby and flaccid and will be . tegrity! LS
| meas @K LIBEBTY The Major Problem

THERE IS ONLY ONE major problem in the whole world, and that
is the salvation of the individual soul.

Our own personal problem is quite the same as that of every
other sane, red-blooded, earnest man or woman in the whole
wide world. It is to make ourselves as big and fine and useful
and human as we possibly can and, were we so fortunate as to
have wellborn sons and daughters, to help them to be bigger
and finer and more useful and more human than we are. It is
a much less spectacular job than the artificial problems of gov-
ernment, dynasty, empire, ecclesiasticism, trade unionism, so-
cialism, communism, commercial supremacy, dictatorship, and
all the other aggressive mass movements; but it is the one real
and important problem whose solution will bring peace and
tranquility and worth to a world now very much distraught.

HANFORD HENDERSON, “Hands Off”
From Tho North American Review, December 1924


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

CHRISTMAS EVE
in ENGLAND

OR—FEATHER BEDS AND EMPTY GRATES

It was a cold December day
At story-telling time.
Old Kaspar chose a fresh cigar
And poured a rum-and-lime,
While Peterkin and Wilhelmine
Warmed up the television screen.

They saw a mob of cheering men
Upon an empty quay,

Who stood with happy faces turned
Toward the open sea,

Where rusty freighters, one by one,

Appeared against the setting sun.

“Now tell us what it’s all about!”
The little children cried.
“It’s Christmas Eve in England, dears,”
Old Kaspar soon replied;
“Those cheering men are feeling gay,
For they’ll have coal on Christmas Day.”

“Those rusty ships,” said Kaspar then,
“Are full of Yankee coal;

They've sailed for days across the sea
And now they've reached their goal,

Where English mothers wait and pray

For coal to burn on Christmas Day.”

“But doesn’t England have some coal?”
Asked little Peterkin.

“There's lots of coal in English mines,”
Said Kaspar with a grin;

“But mining coal is slow and late

Where folks have got a Welfare State.”

“A Welfare State,” Old Kaspar said,
“Means Equal Shares for all —
For all the lazy, sick, or weak,
Or strong, or short, or tall;
It means for each an equal share
Of labor, feather beds, and hair.”

“Since miners work just twice as hard
As other people do,

The Planners set each miner’s share
At one day’s work in two.

So that’s why folks in Welfare States

Have feather beds, but empty grates.”

H. P. B. JENKINS
Economist at Fayetteville, Arkansas

19


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

IN THE free society government
keeps the peace, protects private
property, and enforces contracts.
Government must do these things
141 effectively, and it must do nothing
Competition, else; otherwise, the conditions ab-
solutely necessary to genuine per-
sonal freedom in society are ab-
Monopoly, sent. Whether or not a genuinely
free society is attainable no mortal
man can know; the limits of our
and the Role of knowledge are too narrow. But one
thing we do know: that until at
least the advocates of the free so-
Government ciety are fully aware of the condi-
tions necessary to its existence, it
can never come about. For they
must ever be on guard against new
SYLVESTER PETRO movements, ideas, and principles
which would endanger its realiza-
tion. And on the other hand, they
must be sharply aware of existing
impediments so that they may di-
The great monopoly problem rect their energies intelligently to
mankind has to face today the removal of the causes of cur-
is not an outgrowth of rent imperfections.
the operation of the market I take up with considerable trep-
economy. It is a product jdation the task of arguing that
of purposive action government should quit trying to
on the part of governments. promote competition by means of
It is not one of the evils the antitrust laws, especially since
inherent in capitalism gome proponents of the free so-
as the demagogues trumpet. ciety believe that vigorous en-
It is, on the contrary, the fruit forcement of those laws is abso-
of policies hostile to capitalism lutely indispensable. Yet, antitrust
and intent upon sabotaging and laws are inconsistent with the
destroying its operation. Professor Petro of New York University School
of Law reveals here some results of his special

, attention to labor and antitrust legislation and
—LUDWIG VON MISES, Human Action policy.

20


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

1959 COMPETITION, MONOPOLY, AND THE ROLE OF GOVERNMENT 21

basic principles of the free society, ment. Now we are off on another
private property, and freedom of antimerger binge, and so Bethle-
contract; they deprive persons of hem and Youngstown are enjoined
private property in some cases and from doing on a smaller scale what
outlaw certain contracts which U.S. Steel did on a grand scale.
would otherwise be valid. More- Socony and other integrated oil
over, ‘they expand the role of companies were told that they
government far beyond that en- might not buy up distress oil at
visaged by the theory of the free prices set in competitive markets.
society and thus amount to an un- But only a few years earlier the
conscious admission that the fun- Appalachian Coals Association was
damental theory itself is incoher- permitted to act as exclusive mar-
ent; for antitrust policy implicitly keting agent for most of the coal
accepts the Marxian premise that production of an entire region.
an unregulated economy will result Forty years after its foresight,
in the decay of competition and in courage, and capital had been in-
the emergence of abusive monop- strumental in developing the great
oly. Finally, and this may be the General Motors productive com-
most pressing reason for the pres- plex, the du Pont Company was
ent article, in their attempt to ordered to give up control of its
promote competition the antitrust G.M. stock because of a relatively
laws may in fact be inhibiting it. picayune buyer-seller relationship
between them. Only space limita-
Vague and Uncertain Laws tions preclude an almost endless
One of the basic evils in the listing of equally contradictory
antitrust laws is the vagueness and and inequitable results of the un-
uncertainty of their application. predictable eruptions from the an-
They have produced mainly con- titrust volcano. At present, the
fusion. Sixty years ago the anti- allegedly competitive policies of
trust laws prevented the Great the Sherman Act are mocked by
Northern Railway and the North- those patently anticompetitive
ern Pacific from merging, al- components of the antitrust laws,
though but a minor fragment of the Robinson-Patman Act and the
their respective lines overlapped fair-trade laws.
in competition. But a few years Thus, to the careful and honest
later United States Steel was per- observer the antitrust laws appear
mitted to consolidate a vast pre- tobe a charter of confusion, rather
ponderance of the steel production than the “charter of economic lib-
of the country under one manage- erty” which oratory calls them.


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

22 THE FREEMAN December

They have been transmogrified by served by an increase in the num-
the political vagaries to which ber of firms. It is a commonplace
their vagueness makes them sus- that competition may be more vig-
ceptible into an insult to the idea orous and the service to society
that laws should apply equally to greater when an industry has few
all. Some may regard these con- firms than when it has many. The
sequences as merely unfortunate question from the point of view
incidents of a generally praise- of society is not how many firms
worthy program. Yet we need con- there are, but how efficiently and
tinually to remind ourselves that progressively the firms — no
law is for the benefit of the citi- matter how few or how numerous
zenry, rather than for the sport - utilize scarce resources in the
of government and of the legal service of the public. Maybe pro-
profession. The main function of duction will improve after a single
law is to provide people with clear large producer is split into frag-
and sound rules of the game, so ments; but it is equally possible
that they may pursue their affairs that it will not. No one can tell
with a minimum of doubt and un- in advance, and it is also impos-
certainty. sible to do so after the fact. The
While aggravating the existing only thing that can be said with
uncertainties of life, the antitrust certainty about the breaking up
laws can make no demonstrable of businesses is that government's
claim to improving competition, power has been used to deny prop-
despite the contentions of enthu- erty rights rather than to protect
siastic trustbusters. I have heard them. If we really believe that
it said that the result of breaking private property is the most valu-
up large firms is to create com- able institution of the free society,
petition among its fragments, and and that in it lies the strength of
thus to contribute to social well- the free society, then it is wrong
being. But a moment's reflection to abrogate that institution on
will expose this as a bare and un- the basis of pure guesswork.
supportable assertion. Even though
additional firms may be created by Monopoly Unionism
breaking up large businesses, the The antitrust approach to im-
result is not necessarily in the proving competition loses even
social interest, nor does it neces- more of its glamor when one un-
sarily create or improve competi- derstands that the most abusive
tion. The sociai interest and com- and socially dangerous monopoly
petition are not automatically which exists today in this country


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

1959 COMPETITION, MONOPOLY, AND THE ROLE OF GOVERNMENT 23

is the direct product of special nonunion operator has been killed,
governmental privileges. Labor five union members charged in
unions are today the most destruc- the fatal shooting, and three
tive monopolies in our system, and ramps damaged by dynamite since
they are also the greatest benefi- the strike began March 9. It has
ciaries of governmental special made idle more than 7,000 men
privileges. over the union’s demands for a

First and foremost, there is the $34.25 a day wage, a $2.00 in-
virtual privilege of violence, which crease.” The grimmest aspect of
trade unions alone enjoy. Neither the dispatch lay in the news that
individuals nor other organizations Governor A. B. Chandler of Ken-
are so privileged. Memory is tucky was threatening — after a
strangely short as regards union full month of terror and pillage
violence, and yet every big union by the union — to order National
in America has used it habitually, Guardsmen into the coal fields.
in both organizing and “collective
bargaining.” The Pattern of Violence

Of the men who resist union This is no isolated case. On the
membership, many are beaten and contrary, violence and physical ob-
some are killed. They have much struction are standard features of
more to fear than do persons who most strikes, except where the
reject the blandishments of sellers struck employers “voluntarily”
of other goods or services. And shut down their businesses, in ac-
this is true despite the fact that cordance with the Reuther theory
the right not to join a union is as of enlightened management which
firmly entrenched in legal theory I have described in a recent book,
and the theory of the free society Power Unlimited: The Corruption
as is the right to buy as one wishes of Union Leadership (Ronald
or to refuse to buy when one so Press, 1959). A special dispatch to
wishes. The New York Times, dated Au-

Last spring, the United Mine gust 5, 1959, reports that «“ a siege
Workers engaged in one of its peri- was lifted today for 267 super-
odic purges of the nonunion mines visory employees at the United
which spring up continually owing States Steel Company’s Fairless
to the uneconomic wage forced Works here... From now on the
upon the organized mines by the supervisory personnel will be al-
UMW. I have before me an Associ- lowed to enter and leave the plant .
ated Press dispatch, dated April at will for maintenance.” The dis-
10, 1959, which reports that “one patch is silent concerning the prob-


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

24 THE FREEMAN December

able consequence of any attempt by “no-raiding pact” divides the
the steel companies to maintain whole organizable working force in
production. But the fact that su- accordance with the ideas of the
pervisors were besieged because of union leaders who swing the most
maintenance operations suggests weight in the AFL-CIO. It deter-
that rank-and-file workers who at- mines which unions are “entitled”
tempted to engage in production to which employees. The theory of
would be mauled. It is not out of modern labor relations law is that
order to infer that the siege of the employees have a right to unions
supervisors, otherwise a pretty of their own choosing. Reversing
silly act, was intended to get that principle, the “no-raiding
across that message. pact” asserts that the choice be-
The careful student of industrial longs to the union leadership. If
warfare will discern a pattern of any business group were so openly
violence which reveals an institu- to dictate the choices of consum-
tionalized, professional touch. ers, it would be prosecuted by sun-
Mass picketing, goon squads (or dry federal agencies and hailed be-
“flying squadrons” as they are fore the eternal Kefauver Commit-
known in the Auto Workers tee. It would not receive congratu-
union), home demonstrations, latory telegrams from the chief
paint bombs, and perhaps most politicians of the nation.
egregious of all, the “passes”
which striking unions issue to ©overnment Intervention
management personnel for limited The more one examines Ameri-
purposes — these are the carefully can labor law the more one be-
tooled components of the ultimate comes convinced of the validity of
monopoly power of unions. Professor Mises’ theory that no
As a matter of fact, we have be- abusive monopoly is possible in a
come so befuddled by, and so weary market economy without the help
of, the terror, destruction, and of government in one form or an-
waste of the unions’ organizing other. If employers were permitted
wars that we view with relief and to band together peacefully in or-
contentment one of the most pro- der to resist unionization, as
digious contracts in restraint of unions are permitted to engage in
trade ever executed —the cele- coercive concerted activities in or-
brated ‘no-raiding pact” of the der to compel unionization, it is
AFL-CIO. No division of markets probable that the purely economic
by any industrial firm has ever (nonviolent) pressures of unions
achieved such proportions. The would not be as effective as they


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

1959 COMPETITION, MONOPOLY, AND THE ROLE OF GOVERNMENT 25

have been in increasing the size ing unit” the exclusive representa-
and power of the big unions. But tive of all employees in that unit,
the government has taken from including those who have not voted
employers all power to resist un- at all, as well as those who have
ionization, by peaceful as well as expressly rejected the union as
by violent means. At the same bargaining representative. Major-
time it has permitted unions to re- ity rule is a monopolistic principle;
tain the most effective methods of it is always to be contrasted with
economic coercion. And so picket- individual freedom of action. But
ing, boycotts, and other more sub- it is particularly prone to monopo-
tle modes of compulsory unionism listic abuse in labor relations. De-
are in many instances as effective termination of the “appropriate
in compelling unwilling member- bargaining unit” is left to the vir-
ship — in the absence of counter- tually unreviewable discretion of
vailing economic pressures from the National Labor Relations
employers — as sheer physical vio- Board. And that agency has in nu-
lence. merous instances felt duty-bound

Monopoly unionism owes much, to carve out the bargaining unit
too, to direct and positive help most favorable to the election of
from government. Consider the unions. Indeed, politicians might
vigorous prohibition of company- learn something about gerryman-
assisted independent unions which dering from studying the unit de-
has prevailed for over twenty terminations of the Labor Board.
years. Although such small unions Even if the gerrymandering
might at times best serve the in- could be eliminated, the majority-
terests of employees, the early Na- rule principle would remain a
tional Labor Relations Board prac- source of monopolistic abuse, based
tically outlawed all independent on monopoly power granted and
unions, and recent decisions con- enforced by government. A union
tinue to favor the big affiliated may be certified exclusive repre-
unions. sentative in a 1,000-man bargain-
ing unit on the basis of as few as
301 affirmative votes, for an elec-

But perhaps the most significant tion will be considered valid in
contribution of government to mo- such a unit when 600 employees
nopoly unionism is the majority- participate. If a bare majority
rule principle which makes any then votes in favor of the union,
union selected by a majority of the remaining 699 are saddled with
votes in an “appropriate bargain- the union as their exclusive bar-

The Maijority-Rule Principle


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

26 THE FREEMAN December

gaining representative, whether or is to be found in failures and er-

not they want it. rors of government which the most
: elaborately conceived antitrust
Competitive Safeguards laws could not cure. The basic job

Society has nothing to fear of government is to keep the peace.
from unions which without privi- It has not kept the peace in labor
leged compulsion negotiate labor relations. Local, state, and federal
contracts and perform other law- governments have all failed to pre-
ful and useful jobs for workers vent labor goons and massed picket
who have voluntarily engaged lines from interfering with the
their services. For they are then freedom of action of nonunion em-
but another of the consensual serv- ployees and of employers in bar-
ice associations or agencies which gaining disputes. A similar fail-
a free society breeds so prolifically. ure in organizing campaigns has
Moreover, the free society has permitted unions which would be
demonstrated that its fundamental pygmies, if they represented only
mechanism, free competition in workers who wanted them, to be-
open markets, is tough and resil- come giants. The antitrust laws
ient enough to defend against ex- would equally clearly do nothing to
ploitation by any genuinely volun- remedy the monopolistic conse-
tary association. The critical prob- quences of the positive aids
lem arises when a man or an asso- granted by government to the big
ciation destroys society’s chief unions, such as the majority-rule
defense mechanism by violent and principle and the virtual outlawry
coercive conduct, or when that of small independent unions.
mechanism is blacked out by spe- I am convinced that the socially
cial privilege from government. dangerous aspects of big unionism
For then, without the checks and have been brought about by the
balances of free men vying against = errors and failures of government
free men in civilized competition, which we have been considering.
society lies as prone to exploita- Government has on the one hand
tion by the unscrupulous as a rich been tolerating the violence and
store would be without guards and economic coercion by means of
burglar alarms. which the big unions have attained

When the sources and compon- their present power, and it has, on
ents of union monopoly are under- the other hand, positively inter-
stood, it becomes clear that the vened in their support. Moreover,
antitrust laws cannot cure the for the last generation officers of
problem. The fundamental source the national administration have


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

1959 COMPETITION, MONOPOLY, AND THE ROLE OF GOVERNMENT 27

played a critical role in the key to markets are withdrawn. Repeal
industrial disputes which have set of the tax laws which unfairly pre-
the pattern of the so-called infla- vent high earners from amassing
tionary wage-cost push. the capital necessary to compete
The latter is a much more im- with existing firms would also help
portant fact than it may seem at much more than antitrust prosecu-
first view. It suggests that the tions do in promoting competition.
checks and balances of free enter- In short, if government would con-
prise are adequate to protect the fine itself to protecting property
public even from the artificially and contract rights, and if it would
constructed compulsory labor mo- desist from impairing those rights,
nopolies which we now know. it would be doing all that govern-
Moreover, it is not unreasonable ment can do to promote competi-
to infer that those checks will work tion. And we should not need to be
even more effectively if politicians greatly concerned about monopo-
not only stay out of negotiations lies and contracts in restraint of
but also enforce the laws against trade. For, as Mark Twain’s ac-
compulsory organization. These count of the career of the river-
considerations suggest that the boat pilots’ monopoly in the nine-
logical first step for those con- teenth century demonstrates, the
cerned about union power is to in- free enterprise system is in itself
sist that government remove the fully capable of destroying all abu-
present special privileges which sive restraints upon competition
unions enjoy and then wait pa- which are not supported and pro-
tiently, to see if the problem will tected by government.
work itself out without further In the years before the Civil

government intervention. War, Twain writes in Life on the
Mississippi, the river steamboat

7 » . . . . .
Government's Limited Role pilots formed an association which

I believe that the same approach was to become, as Twain put it,
should be taken in respect to busi- ‘the rightest monopoly in the
nesses suspected of monopolistic world.”” Having gone through
abuses. Rather than following the many trials in building up its
hit-or-miss political vagaries of the membership, a sudden increase in
antitrust approach, it would be the demand for pilots gave the as-
better to make sure that all special sociation its first break. It held
privileges, such as tariffs, exclu- members to their oath against
sive franchises, and other govern- working with any nonmember, and
mental devices for blocking access soon nonmembers began having


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

28 THE FREEMAN December

difficulty getting berths. This diffi- naturally had to climb to at least
culty was increased by the associ- the level of the pilots’, and soon
ation pilots’ safety record, which the increased costs had to be re-
grew out of an ingenious method flected in increased rates. Then
evolved by the association for cur- society's checks and balances went
rent reports on the ever-changing to work. This is Twain’s summa-
Mississippi channel. Since the in- tion:
formation in these reports was “As I have remarked, the pilots’
confined to members of the associa- association was now the compact-
tion, and since nonmembers had no est monopoly in the world, per-
comparable navigation guide, the haps, and seemed simply indes-
number of boats lost or damaged tructible. And yet the days of its
by the latter soon became obvi- glory were numbered. First, the
ously disproportionate. “One black new railroad . . . began to divert
day,” Twain writes, “every cap- the passenger travel from the
tain was formally ordered (by the steamers; next the war came and
underwriters) to immediately dis- almost entirely annihilated the
charge his outsiders and take as- steamboating industry during sev-
sociation pilots in their stead.” eral years . .. then the treasurer
The association was then in the of the St. Louis association put his
driver’s seat. It forbade all ap- hand into the till and walked off
prentices for five years and with every dollar of the ample
strictly controlled their number fund; and finally, the railroads in-
thereafter. It went into the insur- truding everywhere, there was
ance business, insuring not only little for steamers to do but carry
the lives of members but steam- freights; so straightway some
boat losses as well. By United genius from the Atlantic coast
States law the signature of two introduced the plan of towing a
licensed pilots was necessary be- dozen steamer cargoes down to
fore any new pilot could be made. New Orleans at the tail of a vul-
“Now there was nobody outside of gar little tugboat; and behold, in
the association competent to sign,” the twinkling of an eye, as it were,
says Twain, and “consequently the the association and the noble
making of pilots was at an end.” science of piloting were things of
The association proceeded to force the dead and pathetic past!”
wages up to five hundred dollars
per month on the Mississippi and The moral: government's job is
to seven hundred dollars on some done when it defends the right of
of its tributaries. Captains’ wages competitive businessmen or


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

1959 COMPETITION, MONOPOLY, AND THE ROLE OF GOVERNMENT 29

workers to take over functions The steel strike would not have
which are being abused by mo- lasted nearly so long if govern-
nopolistic groups. The deeper ment had effectively protected the
moral is that monopolistic abuses right of the steel companies to
rarely survive without a basis in keep their plants operating and
one form or another of special the right of employees to continue
privilege granted by government. working during the strike. ->

wd

NTERVENTION

“.. PAUL L. POIROT

OUTDATED is the story of the gasoline goes for taxes. With
farmer who had alm st taught his every gallon of gasoline pur-
mule to eat sawdust/in place of oats chased, the customer must take at
— when the critter died. But a least a ‘gallon of government.”
modernized version might tell of And motors respond no better to
the motorist who tried to fuel his such a fuel mixture than does a
car with government in place of sawdust-fed mule.
gasoline. One clear consequence of the
The 1-cent hike in the federal government-boosted price of gaso-
gasoline tax on October 1, 1959 line is the current popularity in
brought the national average of the United States of small, fuel-
state and federal gasoline taxes to conserving, foreign-made cars. Do-
10.2 cents a gallon. In addition to mestic auto manufacturers are do-
these direct state and federal ing their utmost to cope with the
levies, there are corporate income situation, by adjusting motor and
taxes, payroll taxes, real estate chassis design and by other meas-
taxes, and numerous other assess- ures which eventually will bring
ments by all levels of government, pressure upon the U.S. government
all along the line from production to impose tariffs, quotas, and other
to consumption, that also are re- barriers against auto imports.
flected in gasoline prices. All told, This illustrates how governmental
well over half the retail price of interference with the market at


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

30 THE FREEMAN December

one spot, as in the taxing of gaso- most part being to encourage the
line, inevitably brings demand for development of foreign sources of
corrective intervention at other oil. The Great Depression marked
spots. a change of policy, however, with
The web of intervention alsomay tariffs imposed in 1932 and import
be traced backward to the reason quotas the following year. Since
behind the ever-increasing gaso- then, the policy has wavered some-
line taxes: the now almost unques- what through hot and cold wars,
tioned view that road building is but culminated in a Presidential
a function of the government. The proclamation of mandatory im-
more roads demanded of govern- port control, effective in March
ment, the more taxes needed to de- 1959, primarily on grounds that
fray mounting costs. One depar- national defense requires virtually
ture from the free market method a self-sufficient oil industry.
of providing the goods and services Behind this argument lies (1)
people want leads on to other de- the fact that known domestic re-
partures —and to more substitu- serves of oil have failed to keep
tion of coercive intervention for pace with rates of extraction in re-
voluntary production and ex- cent years, (2) the fear of deple-
change. tion of domestic supplies, and (3)
Closely related to these matters the presumption that government
of gasoline prices and taxes and protection against foreign oil
intervention is The Question of would encourage exploration and
Governmental Oil Import Restric- development of new domestic re-
tions, examined by New York Uni- serves at a faster rate than known
versity associate professor of eco- reserves are being consumed.
nomics, William H. Peterson, in a Dr. Peterson’s analysis of these
69-page booklet published by the facts and theories finds no justifi-
American Enterprise Association, cation for restricting oil imports.
August 1959, $1.00. “Quite the contrary ;” he concludes,
Dr. Peterson briefly traces the “study of the program in practice
background and growth of govern- indicates that it is harmful to the
ment oil import policy since the foreign relations of the United
launching of the oil industry a cen- States, disruptive to the defense
tury ago at Titusville, Pennsyl- position of the armed forces, de-
vania. The policy was essentially pletive to domestic oil reserves, in-
one of free trade in oil up through jurious to the vitality of the Amer-
the end of World War I, the limited ican oil industry both at home and
government intervention for the abroad, costly to American con-


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

1959 THE WEB OF INTERVENTION 31

sumers, and finally it establishes available to oil producers? And
precedents for further interven- how do each of these and numerous
tion incompatible with the precepts other governmental interventions
of a free society.” interact on one another? Just how
So, we are faced again with would the property of taxpayers
these precedents for further inter- have been used had the govern-
vention incompatible with the pre- ment not intervened to deny that
cepts of a free society. The govern- personal freedom of choice? No one
ment is asked to build roads, the knows or can know that answer,
precedent for gasoline taxes, which any more than anyone knows or
in turn are the precedent for im- can know how to govern the crea-
port restrictions against foreign- tive activities of those other than
made cars. And who can say that himself.
high gasoline taxes are not also All we can possibly know in this
responsible for many of the gov- regard, supported by growing
ernment regulations and controls mountains of evidence, is that one
over domestic output and imports governmental intervention leads to
of petroleum products? By the another in an endless chain of re-
early thirties, state and federal gas trogression from the best of which
taxes averaged more than 5 cents a free men are capable. What peace-
gallon — 28 per cent of the average ful persons are forced to give and
service-station price consumers receive, through governmental in-
were paying. If that 5 cents — now tervention, cannot help being less
doubled — had gone for gasoline in- satisfying than would have been
stead of government, who is to the consequences of their volun-
know or say what might have been tary efforts, cooperation, and ex-
the effect on discovery and develop- change. For the effort expended in
ment of additional oil reserves dur- forcing individuals to produce
ing the past quarter century? And other than as they choose is that
what was the effect of these taxes much effort subtracted from the
on exhaustion of known reserves gross productive potential.
and on imports of foreign oil? Mules cannot live on sawdust.
Would there have been more, or Motors cannot run on government.
less, stringent prorationing of do- Human beings cannot realize their
mestic crude oil production in the potentialities for progress if re-
absence of gasoline taxes? Did the strained and coerced. Coercive ac-
state and federal gas taxes have tions are precedents for further
anything to do with the 27% per intervention incompatible with the
cent depletion allowance made precepts of a free society. ~


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

THRE
LAST
BILLIONAIRE

DEAN RUSSELL

A MAN named Albert Strelow once exceptionally high increase in the
passed up a large fortune because value of his stock. Then he heard
he thought the profits of Ford about a promising gold mine in
Motor Company were too small. Canada. So he sold his 50 shares
Strelow was a hard-working car- of Ford stock for $25,000 — and
penter who had established a suc- bought into the gold mining vene
cessful paint and carpenter busi- ture. As sometimes happens, the
ness in Detroit around 1900. In mining venture proved to be more
1903, he reconditioned an old glitter than gold, and Strelow lost
wagon shop he owned, and rented his money. Some years later, he
it out for $75.00 a month to the applied to the Ford Motor Com-
newly-formed Ford Motor Com- pany for a job.
pany as its first headquarters and If he had held on to his stock for
factory. another 12 years until Henry Ford
The founders of that company bought out his minority stock-
had lots of ideas and plans, but holders, he would have received a
not much cash. So they offered total return on his $5,000 invest-
their landlord a 5 per cent interest ment of about $18 million.
in the company for $5,000. He took A Detroit school teacher risked
it. her savings of $100 in the new
The new company was success- venture in 1903, When she sold her
ful from the start. Strelow got single share in 1919, she had re-
over the next four years, plus an ©n her investment.
—_— A young clerk invested $1,000 in
Dean Russell, formerly of the Foundation staff,

is Professor of Economics at Rockford College. cash — plus a note for an addi-

This article is from a study he has recently tional $1 —
made on the automobile and its impact on the $ A400 and went to work

American economy and government. for the new company. He used a

32


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

1959 THE LAST BILLIONAIRE 33

small part of his dividends to pay billion dollars and more? Did he
off his note and to buy a few more really earn it?
shares of stock. After 16 years, he Henry Ford had already been
sold his stock for $30 million. in two unsuccessful automobile
Nobody really knows how much manufacturing ventures before
Henry Ford himself got. At one 1908 and the founding of the Ford
time, he was offered a billion dol- Motor Company. In none of the
lars for his company. By then, he three ventures did he put up any
had drawn many millions in divi- actual cash. In each instance, he
dends and salary, and had exten- swapped his mechanical know-how

sive other holdings. and improved motor for an inter-
est in the company — always a mi-

Did He Really Earn It? nority interest — and went to work
Can the effort and contribution for the company on a salary basis.
of any one man really be worth a In the third and successful ven-

billion dollars to his fellow men? ture, Henry Ford and most of his
This writer casually put that ques- partners were soon in strong dis-
tion to 29 of his friends, associ- agreement on company policy. Ford
ates, and acquaintances. All of wanted to use almost all of the
them are college graduates. All of company’s earnings for expansion.
them hold executive positions in Most of the other stockholders fa-
various companies. The question vored a more even split between
was put to them in such a way expansion and dividends.

that they had no idea they were But most controversial of all
being interviewed. In different
ways and in different words, each
of the 29 replied that no man could
possibly be worth a billion dollars
to his fellow men. Admittedly, 29
is a small sample, but it is here
assumed that the result of the test
generally represents the viewpoint
of most business leaders in Amer-
ica today. Perhaps their viewpoint
- is the correct one. Perhaps it isn’t.
At any rate, the career of Henry
Ford should be examined before a
final decision is made. Just how
did he manage to gain control of a

Henry Ford
in his first car

Courtesy Ford Motor Co. )


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

34 THE FREEMAN December

was Henry Ford’s obsession with tion. But this much is certain:
the idea that he could make a good There would have been no Ford
car for $600 that would be bought Motor Company — and no Model T
by millions of Americans! That's — without Henry Ford.
what he wanted the company to do. This study is not intended to
But in the early 1900's, Ford's deny in any way the vital contribu-
vision of a mass-produced and low- tions of men like Edsel Ford, John
priced car to put an entire nation and Horace Dodge, James Couzens,
on wheels seemed like a crazy idea Walter Flanders, Norval Hawkins,
to his partners and stockholders. Peter Martin, Harold Wills,
The controversy continued. So Charles Sorensen, William Knud-
Ford decided that the best solution sen, and the many others who de-
to the problem was to gain control voted their genius to the success
of the company for himself. And of the Ford Motor Company.
that’s what he did. Henry Ford could not have done
Alexander Malcomson, the man it without their help. But while
who was Henry Ford’s equal part- acknowledging the vital part
ner in establishing the company, played by Ford's partners and
sold his 255 shares to Ford for employees, this is primarily the
$175,000. That was about seven story of Henry Ford himself. Was
times their original value. That his contribution to the American
purchase — added to his own origi- people worth the billion dollars he
nal 2565 shares — made Ford the got from them in profits? Just
majority stockholder in the 1,000- what did he do for that money?
share company. Thus, in 1906, he
became his own boss, and there- New Uses for Old Ideas
after did mostly as he pleased. Some of Ford's critics claim
In 1919, after a suit by the mi- that Henry Ford himself contrib-
nority stockholders compelled him uted few, if any, truly new and
to pay bigger dividends, Ford de- original ideas to the development
cided to buy out the remaining of the automobile. For example,
stockholders and become sole own- they point out that Ford once de-
er of the company. He did, and the feated a patent infringement suit
company became a totally family- against his company by proving
owned enterprise. that his automobile engine was
There may have been no Ford basically the same engine that had
Motor Company without the origi- been invented in France in 1860
nal financial backing of Malcom- by Jean Lenoir.
son. That is a debatable proposi- Who deserves the credit for the


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

1959 THE LAST BILLIONAIRE 35

mass production and efficiency con- during the eleventh century were
cept of an assembly arrangement also familiar with those ideas.)
that brought the work to the man, And the first manufacturer who
instead of the other way round? ever had trouble with a supplier
At the Ford Motor Company, that of raw materials or parts was well
idea was developed into an art that aware that vertical integration —
astounded everyone who saw it. Ford's program to own or control
But as Ford himself wrote, “The his sources of supply —may be
idea [for a moving assembly line] profitable from several different
came in a general way from the viewpoints.

overhead trolley that the Chicago
packers use in dressing beef.”
Actually, the basic idea had been According to Mr. Ford himself,
used successfully more than a cen- he gained his success by basing his
tury before either the meat actions on these five ideas and
packers or Ford Motor Company principles:

adapted it to their particular 1. He observed that the American

Operating Policies

needs. In fact, the original idea people could use millions of cars.
may well have been conceived by 2.It was obvious to him that a
the Venetian shipbuilders who durable and inexpensive single
were “mass producing’ boats in model was necessary to meet that
the thirteenth century. need and demand.

Ford's policy of taking a small 3. He decided that the needed mil-
profit on many units, instead of a lions of vehicles could be pro-
large profit on a few units, had duced both cheaply and profit-
been profitably used by many pro- ably by weaving together both
ducers in other lines long before new and old technological ele-
Henry Ford began producing his ments into an industrial complex
Model T. And several of those designed to mass produce the
earlier manufacturers were also type of car he had in mind.
aware that it’s good business to 4. His actual experience soon con-
service the product you manufac- firmed his belief that price re-
ture and sell. duction would result in market

Specialization, division of labor, expansion.
and interchangeable parts were 5. He was of the opinion that high
standard practices among Ameri- wages would mean more cus-
can gun makers long before Henry tomers and, as a result, more

Ford was born. (The builders of profits.
the great cathedrals in Europe Whether or not Henry Ford


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

36 THE FREEMAN December

contributed new ideas, or merely about it, most of his listeners
improved upon existing ideas, is tended to dismiss him as a crack-
not at all vital to this story. The pot. But as we know, Mr. Ford
important question is this: Why stayed with his idea. And his
was he so much more successful famous Model T made its appear-
than his early competitors who ance late in 1908.
had full access to the same ideas In the beginning, the price was
and inventions? not $500 but $825. But even so, as
Well, there were two primary the advertisements said with some
reasons. First, he and his associ- justice, “No car over $2,000 offers
ates applied and perfected all the more except in trimmings.”
above ideas (and many more) True enough, there were no
better than had ever been done be- trimmings — and the car wasn’t ex-
fore. Second, Henry Ford had a actly beautiful to gaze upon. But
vision that drove him on. He ac- it was simple to operate and re-
tually wanted the American farm- pair, and it generally got you
ers and factory workers to own where you wanted to go. If there
and drive their own cars. He happened to be a good road handy,
dreamed of a world in which the Model T would operate just
everyone would be prosperous and fine on it. But its specialty was
happy. As he said, he put service rough roads, mud holes, ruts, and
first and the profits just naturally bridgeless streams — just the sort
followed. of practical and rugged vehicle de-
It can’t be proved, but perhaps manded by the road conditions of
Ford’s vision was a more powerful that time. And Henry Ford was
incentive than his profits. At any right — the people began buying
rate, he often claimed it was. We them by the thousands, then by the
are safe in assuming that if either hundreds-of-thousands, and finally
the profits or the vision had fal- by the millions.
tered in the beginning, there would In 1909, the Ford Motor Com-
have been no Ford Motor Com- pany produced and sold 10,607

pany as we know it today. cars. That was less than 10 per

cent of the total number of cars

The Model T produced and sold by the entire
Let's examine that vision — automobile industry that year.

Henry Ford's “crazy idea” that he By 1914, Ford had 42 per cent
could build a car so cheap and so of the total business with 248,307
good that millions of people would Model T’s. Meanwhile, his price
buy one. When he first talked had dropped to $440, with a prom-


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

1959 THE LAST BILLIONAIRE . 37

ise to refund $50.00 of that price to lutionary labor policy of Ford
all purchasers during 1915 if the Motor Company caused a riot in
company sold 300,000 cars during Detroit. More than 10,000 men ac-
the year. tually stormed the plant in their
That goal was easily exceeded frenzy to get jobs.
and the refunds promptly made. Also in 1914, the profits of the
Anyone could buy a car for $390. Ford Motor Company exceeded
And old but still serviceable Model $30 million. Most of that belonged
T’s could be had for less than $100. to Mr. Ford himself, and as ma-
Henry Ford’s crazy idea of a mass- jority stockholder he controlled the
produced and low-priced automo- disposition of all of it.
bile was no longer considered Here is what Henry Ford gave
crazy. His concept of an America in return for that multi-million-
on wheels was well on its way to dollar profit. He produced an ex-
reality. cellent car for $390. He paid wages
twice as high as his competitors.
$5.00 for Eight Hours He cut the working day down to
It was also in 1914 that Mr. eight hours.

Ford initiated his revolutionary In 1921, a depression year, Ford
policy of a minimum wage of $5.00 produced and sold 845,000 Model
for an eight-hour working day. T’s. That was almost 55 per cent

The automobile workers had al- of the total passenger automobile
ways earned a higher wage than business. It was, of course, a
their counterparts in other indus- better car than the one of 1914.
tries. If they hadn’t, they would The price was also lower — $325.
never have left their old jobs in And the Ford employees were
the first place — especially not the earning higher wages. Henry
trained mechanics that the new Ford's personal profit for the year
industry had to have. But Ford's was about $75 million.
$5.00 minimum was more than In 1923, Ford produced more
double the going rate! than two million cars and trucks.

The automobile workers had also Every few seconds, a new Model
generally worked shorter hours T rolled off the end of that world-
than employees in the older indus- famous assembly line. But even
tries. But Ford’s policy was an so, Ford sales dropped to less than
eight-hour day at a time when half of the total automobile busi-
twelve hours was still the standard ness for that year.
in many places. In 1925, the Ford Motor Com-

The announcement of that revo- pany sold about 1.5 million cars —


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

38 . THE FREEMAN December

and its percentage of the total sales Ford's declining profits soon
for the industry dropped closer to turned into heavy losses. What had
40 per cent. In 1926, Ford's per- happened?
centage of the business dropped to In the early 1920’s, Ford's com-
about 33 per cent, and the outlook petitors had decided that the
was for a continued steady de- American people were willing to
cline. pay a higher price for a more styl-
On May 26, 1927, Henry Ford ish car, a closed car, a more com-
produced his last Model T. After fortable car, a car with a gear
making 15 million of them, he shift and similar mechanical im-
stopped production and closed provements, Mr. Ford disagreed,

down his plants. Why ? and stayed with his rough-and-
ready Model T.
Consumers’ Choice He was wrong and his com-

The answer is simplicity itself. petitors were right. The consumers
The American people had stopped said so, with their own money —
buying them! They bought some, and Henry Ford's Model T was
of course, but not as they used to. through. Later on, he came back
They were buying cars made by with his Model A, but that is an-
Ford’s competitors — Chevrolet, other story. (Ironically, the vast
Overland, Dodge, Essex. changes brought about by the

In an effort to hold his market Model T seem to have made the
in the mid-1920’s, Henry Ford instrument of the change itself
chanted his magic formula once obsolescent!)
again. Raise wages, he said. And True enough, no one man was
increase production, improve the responsible for putting America
product, and cut prices. It was on wheels and for perfecting ma-
done. For a short while during that chines that enabled farmers all
period, the Model T “Runabout” over the world to produce more in
was priced at $260. less time and with less toil. And

That tried and true formula had no single person, however dedi-
always worked before. It had al- cated, deserves more than a frac-
ways brought more sales and more tion of the credit for creating
profits, not less. It had made completely new industries and
Henry Ford a billionaire. But this changing the living and thinking
time, it didn’t work. After 1924, habits of the people of an entire
sales and profits continued down- nation. It required the full time
ward. The consumers preferred to and best efforts of many men to
pay a higher price for a Chevrolet. supply the tools and know-how


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

1959 THE LAST BILLIONAIRE 39

that enabled millions of workers eager applicants for every avail-
to earn more by producing more, able job.
and thus to lead more comfortable Ford's dealers, agents, and sub-
and happier lives. But, unques- contractors profited greatly from
tionably, Henry Ford was the their business with him. There was
leader of the few thousands who much competition for those Model
do deserve the credit for it. T agencies. And many of the
Was Ford's leadership and con- dealers became millionaires in
tribution worth the billion dollars their own right.
and more that he got in profits? Or The Ford Motor Company was
did Henry Ford profit at the ex- naturally one of the nation’s larg-
pense and loss of his customers est taxpayers, as well as the source
- and the American people in gen- of the earnings of hundreds-of-
eral? thousands of other taxpayers. So
the government certainly profited
in many ways — including war pro-
Well, first, he didn’t force any- duction — from Ford's efforts.
one to buy his product. He
couldn’t. Millions of free and in- Everyone Gained
dependent persons voluntarily From a social viewpoint, Henry
chose to exchange their hard- Ford was a pioneer in hiring
. earned money for a Model T, Negroes, physically handicapped
rather than to buy something else persons, and old people who
with it. In fact, they sometimes wanted to work but couldn’t get
put their names on a list and jobs elsewhere. He also hired hun-
waited many months for delivery. dreds of probationary ex-convicts
Those purchasers of Model T's who otherwise would have been
were of the strong opinion that kept in prison. Certainly they
they profited by the exchange. profited. The American people in
That's the only reason they bought general also profited greatly when
them. And when they no longer Henry Ford fought and defeated
considered the Model T a good buy, the ‘“‘Selden patent’’ that once
they bought the product offered threatened to monopolize and ham-
by Ford’s competitors. string the young automobile indus-
Beyond any question, the em- try. The living and working con-
ployees of Ford Motor Company ditions of industrial employees
were sure that they profited by throughout the country (and in
swapping their labor for Ford various foreign nations as well)
wages. There were hundreds of were improved immeasurably

Voluntary Exchange


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

40 THE FREEMAN December

when Mr. Ford gave the architect, to establish the Ford Foundation
Albert Kahn, free rein to express to give most of it away for the
his revolutionary ideas about purpose of hospitals, education,
changing the dark and dismal fac- and other similar projects for the
tories of the early 1900's into the general public.
bright, clean, and airy places that
are now the general rule. And we We American people have now
should never forget that Henry arranged our government and
Ford offered a mew car at the economy so that there can never
lowest price the world has ever again be another billionaire. In a
known — $260. democracy, we have the political
By any meaningful and realistic right to do that if we want to. But
test, Henry Ford earned every that fact has no bearing whatever
penny of his vast fortune. It was on whether or not the services of
rightfully his to do with as he a person may be worth a billion
chose. It so happens that he chose dollars to his fellow men. ~

THE SYNDROME OF

LIBERALISM

FRANK CHODOROV

THE SOCIALIST, or his blood brother times self-contradictory, you know
the communist, is forthright and that behind its twists and turns
honest. He makes no bones about is a clearly defined direction. You
his purpose, which is all written can do business with him, just as
out in his credo in unmistakable you can with a horse trader, be-
language; even though the “party cause you know what he is up to.
line” he follows is devious and at But, what is a “liberal”? He has
—_— no Karl Marx to direct his think-
Mr. Chodorov is well known as a preacher | . . .

and practitioner of individualism. The Rise ing or behavior, no articles of faith

and Fall of Society (Devin-Adair) is his latest . aye
book-length treatment of the subject. to which he unfailingly adheres


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

1959 THE SYNDROME OF LIBERALISM 41

and by which you can identify him. done is to come up with what he
In politics, he may be a Republican calls a syndrome — which, in medi-
or Democrat, though differing with cine, is “a group of concurrent
others who share his label. He may symptoms characterizing a dis-
or may not be a follower of John ease.” ‘
Dewey, and for his intellectual And yet, as one reads his lively
godfathers he sometimes lays diagnosis, one can readily identify
claim to both Thomas Jefferson the disease of “liberalism”; it is
and Franklin D. Roosevelt. Indeed, simply socialism without Marx.
in a book written by a recognized For, despite the tergiversations of
mentor of “liberalism” practically “liberalistic” thought and the per-
every prominent New Dealer is siflage with which “liberals” ob-
included in a list of American gcure their purpose, the goal to
“conservatives.” Intellectually which the clan is constantly driv-
speaking, he is a slippery pole. ing is the increase of political
Under the circumstances, the power at the expense of social
best one can do by way of identi- power. In economics, no good “lib-
fication is to extract from state- eral” — Republican or Democrat —
ments and deeds of those who call puts faith in the ability of free
themselves “liberals” something enterprise to effect the “general
that will do for a definition; that good’; that can be achieved only
is, to dig down to their basic by an admixture of intervention
premises and prejudices. This, and free choice — although there
William F. Buckley, Jr., has done is no agreement among these cooks
in his new book, Up from Liberal- as to the proper recipe. They are
ism (New York: McDowell, Ob- generally concerned with the dis-
lensky. 206 pp. $3.50). Taking a tribution, not the production, of
parcel of the better known “lib- wealth. Social behavior with them
erals” — alive and kicking — he at- is not a matter of personal morals,
tempts to find some pattern of but of conformity to an amoral
thought by which that breed can pattern laid down by law. They
be identified. To be sure, a cut- never question the competence of
and-dried definition is impossible political power, particularly when
because the assumptions of “lib- “liberals” are in charge, to im-
erals” — that there are no abso- prove the common welfare in all
lutes, no immutable values, that directions. The more government
all things are relative and truth is (properly manned), the more free-
what works — defy all the rules of dom. What else is this but free-
definitive thinking. What he has wheeling socialism?


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

42 THE FREEMAN December

Bankruptcy of "The Left’ phraseology; “liberalism” is in-
Mr. Buckley comes to the con- deed the conformity of the campus.
clusion that “liberals” are intellec- Through control of the press and
tually bankrupt. What else did he the air waves they manage to
expect? They start without any promulgate their bias, to the ex-
capital investment, philosophically, clusion of any contrary points of
and have no means of accumulat- view, while the foundations they
ing any because of their basic as- have captured give them the
sumptions. The denial of principles wherewithal to pursue their pur-
makes a consistent philosophy im- poses. Despite its lack of intellec-
possible. Having no guide for tualintegrity — or perhaps because
their groping minds, the best the of it — “liberalism” is riding high,
“liberals” can come up with is a wide, and handsome.
congeries of make-shift phrases, Mr. Buckley believes, however,
more or less related, expressing a that a discredited doctrine cannot
general attitude; that is, a syn- endure, and he sees signs that bode
drome. What Mr. Buckley means ill for the future of “liberalism.”
by the insolvency of “liberalism” There are grounds for his hopeful-
is that experience has made a ness. Without listing all the evi-
mockery of their claims, and that dence of an increasing public dis-
whenever the facts disprove their illusionment, one need only cite his
premises, “liberals” shift their own book; fifteen years ago it could
position to suit. That is, “liberal- not have found a publisher. But,
ism” cannot stand the test of he submits, you cannot dislodge
either logic or experience. “liberalism” from its high estate
Nevertheless, as Mr. Buckley merely by pointing out its inade-
points out, our lives are enmeshed quacies and its failures, nor even
in the works of the “liberals.” In by presenting the intellectual su-
the political field, to which they periority of conservatism, its op-
are attracted by their worship of posite. Conservatives have not yet
power, they have enacted a flock learned how to present their case
of interventionary and repressive cogently.
laws from which there seems to be
no escape. They dominate the edu-
cational establishment to such an Conservatism has a time-hon-
extent that any inclination of the ored and definitive literature —
young toward logical and consist- from John Locke to the Declara-
ent thought, any search for values, tion of Independence to present-
is submerged by their amorphous day schools of free market econo-

Ambiguity on “The Right’


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

1959 THE SYNDROME OF LIBERALISM 43

mists — but, nevertheless, there are prophetic admonition: we must re-
ambiguities in the conservative turn to principles. In the spirit of
argument as generally presented. Patrick Henry's famous dictum,
For instance, while conservatives he says:

are strong for the free economy “I will not cede more power to
and limited government, many of the state... I will hoard my power
them are advocates of protection- like a miser, resisting every effort
ism, which is a denial of the free to drain it away from me. I will
economy, and very few would use my power as I see fit. I mean
maintain that all government in- to live my life an obedient man,
terventionism is bad. How many but obedient to God, subservient to
would support a movement to the wisdom of my ancestors; never
abolish the government monopoly to the authority of political truths
of the postal business, or even to arrived at yesterday at the voting
abolish the Sixteenth Amendment? booth. That is a program of sorts,
And how many would do away Is it not? It is certainly program
with subsidies from which they enough to keep conservatives busy,

derive a profit? and liberals at bay. And the nation
Conservatives are in dire need free.”
of a method of presentation that That is to say, conservatism is

carries conviction in the here and essentially a moral philosophy, and
now. It is fatuous merely to point if conservatives will abide by it
with alarm to what might befall at all times, they can leave the
us as a long-run consequence of politics and economics to work
“liberalism.” The “long-run con- themselves out.

sequences’ are upon us, being but

another name for the mess we are What the book will do for con-
in. “The revolution was,” to use servatism is difficult to say; per-
Garet Garrett's words. haps nothing more than an inspir-

ing speech does for a college grad-
Moral Conviction Needed uate. But, one can predict with

Does conservatism have a clearly some assurance that it will irritate
defined next step, and a step after the “liberals” no end. For the au-
that? If so, what is it? Mr. Buck- thor takes them apart with a sharp
ley stops short of such an ap- and shiny lancet, and puts their
proach. He shies away from a pro- intellectual “innards” on public
gram, and leaves us instead with a view. PN


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

NOTE: Mr. Albert Porter, Associate Professor of
Business at San Jose State College in California,
was one of the 64 participants last summer

in the College-Business Exchange

Program coordinated by the Foundation for
Economic Education. His voluntary

testimony to the efficacy of the program, being
a typical reaction, is here offered for

teachers, businessmen, and other students

of liberty who may be interested.

Piercing the Ivory Curtain
ALBERT PORTER

“I SUSPECT that the difficulty in in- firms either question the value of
creasing these Fellowships is pri- the program for their purposes or
marily a financial one,” said du else lack familiarity with the de-
Pont’s President Greenewalt in tails of it.
reply to my letter of thanks. I had
written him about the values re- Several Applicants for Each Spot
ceived from this summer's six Even from the professor’s point
weeks at du Pont, and expressed of view, there is the financial prob-
my conviction that both industry lem of balancing the net return,
and the academic world would after the expense of living away
benefit from a great increase in from home, against the other sum-
the number of firms participating mer earning opportunities. Sum-
in FEE’'s College-Business Ex- mer school teaching would yield
change Program. more income! But apparently the
How can a corporation justify professors feel the program is
to its stockholders an outlay of “worth it,” since there are about
$800, plus travel costs, to cover half a dozen applicants for each
one of these fellowships for a available fellowship.
professor of business or eco- I can’t prove that a firm gets its
nomics? The limited company par- money’s worth from a fellowship
ticipation suggests that many program anymore than I could

44


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

1959 PIERCING THE IVORY CURTAIN 45

justify the last thousand dollars and became involved in a discus-
spent for advertising or public sion of economics with a profes-
relations; some things aren't sor. This started Mr. Crane think-
measurable with such exactness. ing about a program whereby
But let. me review here some of professors of business and eco-
my thoughts on the matter during nomics could come right into an
these weeks since my return from organization and ask questions of
Wilmington. the executives themselves. He felt
Suppose it is your firm that that an important cause of aca-
wants to participate in the pro- demic suspicion and mistrust of
gram. What would happen? Some- “business” was that most profes-
thing like this: Months in advance sors have little or no such direct
you would have told Dr. W. M. contact with those on the firing
Curtiss of FEE what type of per- line of industry. Du Pont’s execu-
son you'd like to have — his back- tive committee agreed, and the
ground, field of interest, and the company since then, except for the
like. Based on these specifications, war years, has sponsored one or
he would have sent you the folders two professors each summer.
of several applicants. You'd select Later, FEE assumed coordination
one — or perhaps two or more — of the program, as other firms be-
from these candidates. Dr. Curtiss came interested in participating.
would notify the person or persons
selected, and from there on the Hard Work — But Worth It
communications would be up to But, back to du Pont’s program:
you. On the appointed day, your Probably six months before our
professor (s) would arrive— for starting date, Bill Harrison of the
six weeks. Employee Relations Department
I believe each company is quite was telephoning executives
free to arrange the details of the throughout the organization, set-
six weeks. But, briefly, here's how ting appointments for us. “Us,”

du Pont handles it. incidentally, included Dr. Paul
: Nadler, of Rutgers. When we ar-
How the Program Started rived the morning of June 22, the

Incidentally, du Pont pioneered six weeks were fully scheduled —
the program about 1938. As I un- mimeographed and distributed to
derstand it, Mr. Jasper Crane, all those with whom we would be
now a director, but then a vice- talking.
president and executive committee For us, it was six weeks of inten-
member, was attending a meeting sive, interesting — and exhausting


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

46 THE FREEMAN December

— interviews with du Pont execu- boxes of notes, pamphlets, speech
tives. Three to five or more per reprints — which I hope to distill
day took place at the home office into a final report. But also, I
and at two plants: across the river gained new ideas, new enthusiasms
at Deepwater, N. J., and down at for my teaching of business ad-
Richmond, Virginia. ministration subjects. And as
Yes — like most truly valuable Elbert Hubbard said, “Enthu-
educational experiences —it was siasm is the vital ingredient for
hard work. Day after day we doing great work.” Time alone will
talked and questioned our way prove the value of my ideas; but
through all 12 “Auxiliary Depart- at the moment I have real hopes
ments” (Legal, Traffic, Central of doing a better job of developing
Research, and so on) and two of my students’ abilities to think, to
the 12 “Industrial Departments” take initiative, to improve their
(Organic Chemicals and Film). preparation in college for their
Hard work to keep the mental ma- future careers in business.
chinery going at top capacity —
trying to make the most of this
once-in-a-lifetime hour with Mr. We asked several of the com-
Rittenhouse, head of the Legal pany executives what du Pont ex-
Department; Dr. Salzberg, man- pected to get out of the program.
ager of Central Research; Mr. Their answers would, I believe, fit
Knowles, plant manager of the under two headings: (1) A con-
huge Chambers Works. On and on, tribution to higher education,
through Accounting, Engineering, hence a long-range return to all
Labor Relations, and other depart- industry through better, more
ments. Concentrate on the excu- realistic, college teaching of busi-
tive’s summary of his organiza- ness and economics; (2) The bene-
tion and its place in the company. fit to the executives of crystalliz-
Try not leave unasked that which ing in their own minds, in order
ought to be asked. Here are the to explain to us, just what their
people who come to grips “for key functions are; what are their
real” with those thorny classroom most important problems; how
questions like, “Just what should does each of them and the work
an executive do about a subordin- of his section fit into the com-
ate who is ambitious, but who pany’'s forward movement. I think
has, in the executive's opinion, one of the most overlooked aspects
reached his limit?” of education is the process of
I came back with two large learning through being asked

Benefits to Business


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

1959 PIERCING THE IVORY CURTAIN 47

penetrating, general questions. that the experience of formulating
The question which most effec- these answers was also of some
tively challenged me on my Ph.D. value to them.
oral examination came from the A word of advice: two heads are
Chemistry Department — my minor better than one. One professor
field. I was fairly well prepared alone would have an almost impos-
on such matters as the preparation sible task to bear six weeks of
of nylon, the electron configura- continual interviewing. Two, tak-
tion of nitrogen, and such details. ing turns, can “keep the ball in
But I floundered a good ten the air.” If a company must limit
minutes over the question, “What its participation to one candidate,
would you say to a high school I strongly suggest that he be given
senior class in five minutes about half of each day for studying files
the field of chemistry as a subject and reports — preferably for the
for career specialization?” I still department he will visit the next
feel guilty when I walk into Stan- day.
ford’s Chemistry Department. But Whether it was “worth it” to du
a few weeks later, a fairly good Pont, or would be to your com-
answer began to shape up in my pany, I don’t know. But in these
mind, and since then I have tried days when all America seems bent
to re-evaluate all my fields of study on penetrating the iron curtain
from that viewpoint. Needless to through exchange of personnel,
say, du Pont’s executives had little may I voice the plea that American
difficulty in giving us excellent an- industry not overlook the need for
swers, affording us real insights piercing the “ivory curtain” be-
into managerial practice. But tween those who teach business
several of them later commented and those who practice it. ~

A PRINTED ANNOUNCEMENT of the 1960 College—~Business
Exchange Program is available, Businessmen and college
professors who are interested can obtain a copy from:
W. M. Curtiss
The Foundation for Economic Education

Irvington-on-Hudson, New York


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

A REVIEWER'S NOTEBOOK JOHN CHAMBERLA N

FAVORS FOR ___

ee EO
a JRL V) 7
THE FARMER in America has al- once cited the tariff as a justifica-
ways been a member of a favored tion for the counter-subsidizing of
class. He was favored in the be- the farmer through the AAA.
ginning by nature: there was free Superficially considered, it seemed
land in the colonies virtually for plausible to assert that one good
the taking. He was favored in Jef- bit of graft deserved another.
fersonian times by the simple fact But, in retrospect, one wonders
that he constituted a majority (a just how much the farmer actually
century ago our population was 80 suffered from the tariff. The argu-
per cent rural, and it took one ment used to be that he sold his
farmer to feed himself and three crops at free world market prices
others). The political bias in fa- and then had the devil’s own time
vor of the farmer was written in- trying to stretch his income so
to the Constitution itself, with its that he might meet the protected
provision for two senators —no prices of industry. What he spent
more, no less — from each state re- his big sums of money on, how-
gardless of population densities. ever, was machinery — and our
With the Constitution as his shield mass production machine-making
and buckler, the farmer — by way industry (cars, tractors, and so
of Farm Bloc “logrolling” trades on) has never been particularly
with the industrial states — has al- favored by the protectionists. As
ways had his political way. for the farmer’s food and housing,
He has, of course, had to reckon they ordinarily came cheap — far
with the shade of Alexander cheaper, indeed, than the city
Hamilton, who went “one up” on man's food and rent. Besides, in
Thomas Jefferson and his ag- the period after the Civil War, the
rarian supporters by putting over farmer could get a quarter section
the idea that industry deserved its of land in the West merely by
subsidy in the form of the protec- complying with the easy terms of
tive tariff. I blush to recall that I the Homestead Act. Railroads, of

FARMERS

48


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

1959 FAVORS FOR FARMERS 49

course, got a comparable land sub- and in getting something for
sidy — but other industries had to nothing he has become hypocriti-
pay for their real estate. cal.

Professor Peterson goes deep
into the colonial origins of agrari-

Since the American farmer, his- anism. The historical sections of
torically, has been a very decent his book present a succinct re-
member of society, no one be- cital of the problems, mainly re-
grudges him his original free volving around the currency ques-
land. But does the fact that he tion, of a century and a half of
was originally favored by the political agitation. Classically, the
emptiness of the North American West and South wanted cheap
continent give him a claim to spe- money — whether in the form of
cial treatment forever? In his The greenbacks or the free coinage of
Great Farm Problem (Regnery, silver at a sixteen-to-one ratio to
235 pp., $5.00), William H. Peter- gold. The argument was that it
son, associate professor of econ- was not Christian to squeeze a
omics at New York University, debtor to favor an abstraction
says “no.” Farming may be a way such as “Wall Street.” But this
of life, but it is a way that loses was to assume that the creditor
all its historic virtues of inde- had originally made his money in
pendence and democratic free- some easy, not quite legitimate
masonry once it is made the ob- way, and that he “owed” it to so-
ject of a “charity” that is not ciety to lose it. In any case, the
forthcoming in proportionate stereotype of the virtuous debtor
amounts to other ways of life. and the wicked “Wall Street”
Blacksmithing and carriage mak- moneylender has been called into
ing were once “ways of life,” too question by recent scholarship.
— but the village smith of Long- It turns out on investigation
fellow’s poem never was suffi- that big eastern bankers lent very
ciently numerous to get a pressure little to western farmers: as Allan
group going for him in the U.S. G. Bogue has shown in his Money
Senate, so he had to transform at Interest (Cornell University
himself into a diemaker or an Press), it was more often the
automobile mechanic to live. The small mortgage company, often
farmer, on the other hand, has situated in the Mississippi Valley,
been able to get his fabled ‘“inde- which helped the farmer get cash
pendence” underwritten at the when he needed it. Since it took
automobile mechanic’s expense — only about a thousand dollars in

Special Treatment Forever?


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

50 THE FREEMAN December

cash plus a government grant in land which could hardly support
land to get a Nebraska farmer even debt-free production in times
and his family started in life in of world plenty.

the eighteen eighties, it is hard to Since the farmer had always
justify the argument that “bank- been pampered politically, he
ers’ were the root cause of the thought it incumbent on the rest
Populist and Bryanite agrarian of the population to bail him out
“crusades.” It was nature —in the for his unfortunate World War I
form of the drought cycle — that gamble. Accordingly, scheme after
was to blame. And it would have scheme was offered in Congress to
taken more than greenbacks or give the farmer the benefit of
free silver to save the farmer who such things as the McNary-
had moved too far out on the high Haugen “two-price system.” To
plains from the consequences of his credit, Calvin Coolidge vetoed
his mistaken judgment about cli- the McNary-Haugen scheme for

mate. subsidizing farm exports on two
} separate occasions. “It cannot be
Wartime Land Boom sound,” he said, “for all of the peo-

Professor Peterson makes it in- ple to hire some of the people to
dubitably plain that the twentieth produce a crop which neither the
century farmer got into trouble producers nor the rest of the peo-
when he was caught up in World ple want.” The Republicans later
War I hysteria. During the years gave way to the idea of price-
when the European farmer's acres propping and created the Farm
were being trampled by armies, Board. And when the New Deal
the international price of Ameri- came into office, “farm laws,” as
can foodstuffs naturally rocketed. Professor Peterson says, “came
Anyone with half an eye could fast.”
have foreseen that the high prices
were destined to be short-lived. The Failure of “Planning”

Yet farmers went greedily into The real dynamite of Professor
long-term debt to take advantage Peterson’s book is packed into the
of what was bound to be a short- final chapter, “Analysis,” which
term advantage. Naturally, they takes up fully a third of the
were stuck with their mortgages author's space. What Professor
when peace brought an end to Peterson proves, essentially, is
$3.40 wheat and $2.00 corn. More- that any and all attempts by the
over, many of the mortgages had government to solve the farm
been taken out on submarginal problem by intervention must end


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

1959 FAVORS FOR FARMERS 51

by defeating the intentions of the lion who do not need help to sus-
“planners.” Ever since 1933 the tain them in their “way of life.”
individual farmer has always been The remaining two-and-one-half
able to outwit the planner. Money million farmers who might argue
paid to farmers for limiting their that they need a subsidy to stay
planting has been spent on fer- on the land actually get very little
tilizers and tools that have re- money from the government. (Pro-
sulted in bigger surpluses from fessor Peterson's figures show that
fewer acres. Land taken out of the small farmer, with less than
corn has been put into other crops $2,500 market sales a year, gets
that have also proved to be re- a mere $109 in price support and
dundant. The point has been stabilization costs where the big
reached where every family in the farmer with sales of $5,000 or
United States is taxed $100 a year more gets $1,993.) In consequence
(on the average) in order to pay of the disparity in supports, the
farmers a total of $6 billion a year small farmer has been giving up
for withheld production. Yet the his “way of life.” Despite all the
surpluses have increased in spite crocodile tears shed by the farm
of such gimmicks as the Soil interventionists, there has been a
Bank. Dumped abroad or stuck drop of 28 per cent in total farm
away in caves and warehouses to workers since the beginning of
decay, the surpluses have not re- World War II. In 1940 there were
sulted in lower prices to the 1,600,000 cotton farmers; today
American city consumer. This there are only 850,000. The farm-
consumer pays his taxes to give ers who have been pushed out into
farmers in the United States an city life are not needed on the
average annual subsidy of $1,300 farm, for in the past two decades
per farm. And then the consumer the remaining farmers have in-
pays twice over in higher food creased total U. S. agricultural
prices as the government takes production by some 35 per cent.
the still ever-mounting food sur- By the same token, however, the
pluses off the local market by such remaining farmers are not the
devices as “nonrecourse’ loans. ones for whom the interventionist
theorists used to weep.

Welfare for the Wealthy Professor Peterson, following

The irony of the whole per- Henry Hazlitt, has a solution for
formance is that most of the sub- the ‘great farm problem.” He
sidy money has gone to the richer would cut subsidies to nothing
farmers, the productive two mil- within a given period of time.


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

52 THE FREEMAN December

This would bring supply and de- and that these cycles of activity
mand — and future plantings —in- stem from mysterious processes
to a natural balance; and the good deep within the capitalist system.
farmer would find himself a free It is Part III of this work (the
man once more. As for the un- other parts being out-dated histori-
economic farmer, he must accom- cal and statistical material) that is
modate himself to the fact of here reprinted for the second time,
change. It is not a happy circum- this time in paperback.
stance to give up a cherished “way It is certainly true that the late
of life,” but his sons are quitting Wesley Mitchell had an enormous
the farm anyway. It is best for influence on all later studies of the
him and for the nation to face business cycle and that he revolu-
reality. ~ tionized that branch of economics.
But the true nature of this revo-
<> Business Cycles and Their lution is almost unknown. For
Causes there had been great economists
By Wesley C. Mitcholl. Berke. "PO Were not only aware of, but
ley: The University of Cali- also discovered theories to explain,

fornia Press. 226 pp. $1.50. the dread phenomena of boom and
American Business Cycles, bust. They did this much before
1865 - 1897 Mitchell’s time, and went far be-

By Rendigs Fels. Chapel Hill: Yond him. For one thing, Mitchell

The University of North Caro- and his followers have never tried

lina Press. 244 pp. $6.00. to explain the business cycle; they
The student of economics is in- have been content to record the
variably taught a certain myth- facts, and record them again and
ology about the history of the again. Mitchell's famous “theoret-
study of business cycles. That ical” work is only a descriptive
mythology holds (a) that before summary. Secondly, these same
1913, nobody realized that there economists were discovering a
are cycles of prosperity and de- great truth that escaped Mitchell
pression in the economy — instead, and has continued to escape econ-
everyone thought only of isolated omists ever since: that boom and
crises or panics, and (b) that this bust cycles are caused — not by the
all changed with the advent of mysterious workings of the capi-
Wesley Mitchell’s Business Cycles talist system —but by govern-
in 1918. Mitchell’s supposed mental interventions in that sys-
achievement was to see that there tem.
are booms and then depressions, The real founders of business-


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

1959 OTHER BOOKS 53

cycle theory were not Mitchell but work where Mises first outlined
the British classical economists: his theory appeared about the
Ricardo and the Currency School, same time as Mitchell's.
whose doctrines have unaccount- The classical, and now the Mises,
ably been shunted by historians theories have been generally
into the pigeonhole of the “theory scorned by modern writers, and
of international trade.” They first mainly for this reason: that Mises
realized that boom-bust cycles are locates the cause of business cycles
caused by disturbances of the free in interference with the free mar-
market economy by inflationary in- ket, while all other writers, follow-
jections of bank credit, propelled ing Mitchell, cherish the idea that
by government. These booms them- business cycles come from deep
selves bring about a later depres- within the capitalist system, that
sion, which is really an adjustment they are, in short, a sickness of
of the economy to correct the in- the free market. The founder of
terferences of the boom. The this idea, by the way, was not
sketchy theory of the classicists Wesley Mitchell, but Karl Marx.
was elaborated during the nine- The Mises theory, then, is uni-
teenth century; later, the impor- vyersally dismissed as “too simple.”
tant role of the interest rate was Professor Rendigs Fels’ new book
explained by the Swede, Knut js a typical example of current
Wicksell; and finally, the full- ork on business cycles. Fels deals
grown theory of the business cycle with the cycles of late nineteenth-
was -developed by the great Aus- century America, and he certainly
trian economist, Ludwig von reveals a great many valuable facts
Mises. of the hitherto neglected cycles of
Mises’ theory shows the com- that era. But how does he explain
plete workings of the boom-bust these cycles? Here he tries to syn-
cycle: the inflationary injection of thesize the most fashionable of
bank credit, fostered by govern- current theories, with most em-
ment; a boom marked by malin- phasis on the theory of the late
vestments caused by inflation’s Professor Schumpeter. Almost
tampering with the signals of the every theory is incorporated in
free market; the end of inflation some way, except that of Dr.
revealing these unfortunate malin- Mises. Oddly enough, whenever
vestments; and finally, the depres- Fels does mention monetary fac-
sion as the correction by the free tors, or the “shortage of capital”
market of the wastes and distor- aspect of Mises’ theory (which he
tions of the boom. Ironically, the discusses fleetingly and mislead-


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

54 THE FREEMAN December

ingly, and without mentioning It is true that, in recent years,
Mises’ central role), he has to ac- the so-called “Chicago School” has
knowledge that it fits the facts been placing more emphasis on
neatly. But then he is quickly off monetary causes of the cycle. But
again, in pursuit of more and these economists have only
better fallacies. thought of money as acting on the
Schumpeter’s theory, alone of general price level and still do not
all theories aside from Mises’, has realize that monetary inflation
one great merit: it attempts to in- creates maladjustments in the
tegrate an explanation of business economy that require subsequent
cycles with general economic recession. As a result, the Chicago
theory. Other economists are con- School still believes that govern-
tent to fragment business cycles ment can eliminate business cycles
as if general theory simply does by juggling the monetary system,
not exist, or is irrelevant to the by pumping money in and out of
“real world.” But Schumpeter’s the economy. The Misesian, on the
theory is simply wrong, as can be other hand, sees government as
seen by his conjuring up a large having one and only one proper
number of “cycles,” nearly one for role in the economy: to keep its
each industry, which are supposed hands off and to avoid any further
to interact to form the total eco- inflation. This is the only “cure”
nomic picture. An economist that government can bring to us.
should realize that industries in MURRAY N. ROTHBARD
the market economy are bound up
together, so that basically the << Two Concepts of Liberty
economy is in ‘the throes of only By Isaiah Berlin. London: Ox-
one cycle at a time. ford University Press. 57 pp.
The reader will gain little en- 80¢.
lightenment, therefore, from these THIS little book is a brilliant argu-
works on business cycles. From ment for what the author calls
Mitchell he will obtain only a de- “negative” liberty — freedom from,
scriptive summary of a typical as opposed to the prevailing idea
cycle; from Fels he will find many of “positive” liberty — freedom for
important facts, but all distorted or to. Champions of the former,
by erroneous attempts at expla- aware of the propensity to en-
nation. Both authors virtually ig- croach which power invariably dis-
nore what we can call the “mone- plays, want to curb political au-
tary malinvestment” theory of thority. Keeping government
Mises and his classical forebears. shackled is their means; the end


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

1959 OTHER BOOKS 55

is to stake out an area of freedom light of what his fellows think
within which each person may and feel him to be. Asked who he
have scope to exercise his facul- is, he explains his uniqueness in
ties, grow, and achieve the goals terms of his involvement with his
he deems good, right, or sacred. family, his community, his pro-
Proponents of the “positive” fession, his nation, his club, his
theory, on the other hand, do not church, his party, the philosophi-
distrust the political authority — cal school to which he belongs, and
provided they are at the controls. so on. And he makes this explana-
Freedom, as they understand it, is tion in a language which is a com-
equivalent to participation in rule, mon possession. This is part of
or the exercise of power. what it means to be a person, and
This book invites comparison this is the creature who needs
with Mill's essay, On Liberty. liberty to meet the total demands
Berlin does, in fact, pick up where of his nature.
Mill leaves off, first stopping to The proponents of “positive”
patch up several loopholes in Mill's liberty, on the other hand, are
argument. He finds, for instance, victims of their own semantic con-
that Mill overstates the concept fusion, pinning the label “liberty”
of individualism and, in addition, arbitrarily on various other values.
blurs the real distinction between But, as the author says, “Every-
individual liberty and majority thing is what it is: liberty is
rule. Mill and his followers tend liberty, not equality or fairness or
‘to neglect the social components justice or human happiness or a
which are blended into every per- quiet conscience. ...and it is noth-
son’s makeup. The spheres of in- ing but a confusion of values to
dividual and social life are not as say that although my ‘liberal,’ in-
mutually exclusive nor separated dividual freedom may go by the
by as hard and fast a dividing line board, some other kind of freedom
as they seem to think. Seldom is — ‘social’ or ‘economic’ —is in-
any individual’s course of action creased.”
without consequences which might
affect other people for good or ill.
Man is not disembodied reason, Co .
) vee. . Any book reviewed in this Book Section (or
nor is the individual a solitary any other current book) supplied by return

Crusoe: human lives mesh in intri- mail. You pay only the bookstore price. We
’ pay the postage anywhere in the world.
cate and subtle ways. To some de- Catalogue on request.

gree, each person’s image and esti-

! : - THE BOOKMAILER. Box 101, New York 16
mate of himself is framed in the



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

56 THE FREEMAN December

Almost every moralist in his- tive and uncriticized political be-
tory, Professor Berlin points out, liefs.” Witness the clash of ide-
has praised liberty, but the term ologies that currently rocks the
is so porous that more than two world!
hundred senses of the word have Isaiah Berlin is no “single for-
been recorded. This confusion is mula” man; the facts of life, as
due in part to the nature of the they appear to him, are too various
subject matter — human, civic, and to fit neatly into a single, all-em-
social relationships of almost in- bracing system. No man knows
finite complexity. Some philoso- enough to try to trim others to fit
phers, “intoxicated by their mag- his blueprint, according to “the
nificent achievements in more ab- a prior: barbarities of Procrus-
stract realms . .. neglect the field tes,” nor does any combination of
of political thought, because its men. No individual is to be sacri-
unstable subject-matter, with its ficed to “the belief that somewhere,
blurred edges, is not caught by the in the past or in the future, in
fixed concepts, abstract models, divine revelation, or in the mind of
and fine instruments suitable to an individual thinker, in the pro-
logic or to linguistic analysis.” nouncements of history or science,
But “to demand a unity of method or in the simple heart of an un-
in philosophy and reject whatever corrupted good man, there is a
the method cannot successfully final solution.” In the recognition
manage is merely to allow oneself of how little we know, liberty takes
to remain at the mercy of primi- root. EDMUND A. OPITZ

We invite your subscription to

MODERN AGE

A CONSERVATIVE REVIEW
Published Quarterly ER VoL. 4, No. 1 (Winter 1959-60)

dl . £1 . >

“Scattershot Scholarship’ by Harold L. Clapp
and
A Symposium on William Graham Sumner
$4.00 the year 81.25 the copy
Address: 64 East Jackson Boulevard, Chicago 4, Illinois



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

THE FREEMAN, Volume 8, January-December 1959

(Titles and authors of articles and of books reviewed) | N D E X

Prepared by VERNELIA A. CRAWFORD of the Foundation staff

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

A Bouscaren, Anthony T.
Guide to Anti-Communist Action, A. Re-
viewed by B. Lee, 8:59
Bradford, Ralph
Fighting Fire for Profit, 2:32

Agricultural Subsidies in Great Britain. By
G. Winder, 7:40

Allan, Alfred K.
Samuel Smith's Patriotic Song, 4:52

ons Horse and Buggy Days, 3:23
Allen, William R. . . . .
Scarcity, Parking, and the Price System. Broinwashing in the High Schoola: An Ez.
By N. Breckner and W. Allen, 6:46 amination of FEleven American History

Textbooks. By E, Root. Reviewed by J.

Alternative to Competition, The. By E. Chamberlain, 1:60

Dykes, 1:11
American Business Cycles, 1865-1897. By R, Branden, Barbara .

Fels. Reviewed by M. Rothbard, 12:52 Moral Antagonism of Capitalism and So-
American High School Today, The. By J. cialism, The, 11:28

Conant. Reviewed by J. Chamberlain, 4:54 Brayman, Harold
Anyone for Apples? By G. Bosworth, 1:30 Rich Man’s Tax—Poor Man's Burden, 2:13
Apropos of the Presidency. By F. Man- Breckner, Norman V.

chester, 6:3 Scarcity, Parking, and the Price System,
Are Municipalities Exploiting Federal Ex- By N. Breckner and W. Allen, 6:46

travagance?! From The New Haven Reg- Brogan, Colm

ister, 3:57 Tale of Two Islands, A, 1:51
Auction Sale, The. By V. Tripp, 11:49 Brown, Joseph E.
Union Coercion and Your Newspaper, 4:32
B Bruckberger, R. L.

Barrington, Patrick Image of America. Reviewed by J. Cham-

“I Want To Be a Consumer,” 9:27 berlain, 9:60
Bastiat, Frederic

How To Guarantee a Favorable Balance of Brustat, August w.

Trade, 8:26 k i "
It Veors Were Wealtln Yuote, 162 Ne tod Communist, The. By W. Skousen,

Law, The; quote, 5:66
Beasley, M. Robert

Greatest Bell in the World, The, 2:28
Benn, Sir Ernest

Buchanan, James
What They Said; quote, 11:25
Buck, William Alvadore

Socialism Is a Disease; quote, 11:14 Emancipation by Machine, 2:20
Berlin, Isaiah Buckley, William, Jr.
Concepts of Liberty, The. Reviewed by E. Up from Liberalism. Reviewed by F. Cho-
Opitz, 12:54 dorov, 12:40
Better Way of Selecting Presidents, A. By Burke, Edmund
F. Manchester, 10:20 Thoughts and Details on Security, 10:44

Bien, Bettina
Handwriting on the Wall? 2:54

Black Book on Red China, The. By E. Hunter.
Reviewed by Z, Kapner, 2:62

Bogey of ‘Administered Prices,” The. By M.

Burnham, James
Congress and the American Tradition. Re-
viewed by E. Root, 8:60
Business Cycles and Their Causes. By M. Mit-

Rothbard, 9:39 chell. Reviewed by M. Rothbard, 12:52
Bosworth, Grace Business Taxes Concern Everyone. By H.

Anyone for Apples? 1:30 Sennholz, 3:32

In Defense of Pocketbooks, 11:64 But What Can I Do? By J. Kahn, 9:3

67


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

58 THE FREEMAN December

Ld Chodorov, Frank
Can This Be Liberty? By H. Harper, 8:45 BE ene et 1:41
Can Wage and Price Controls Cure Inflation? Reform: quote, 4:66
By F. Harper, 7:46 Rise and Fall of Society, The. Reviewed by
Capital and Interest. By L. Mises, 8:52 E. Opitz, 4:59
Carver, T. N. Reviews
In a Free Economy, 11:12 Evolution of a Conscrvative, The. By W.
Case for Panhandling, The. By L. Read, 7:21 Chamberlin, 6:60
Chamberlain, John Up from Liberalism. By W. Buckley, Jr.,
From Whence Come Profits? 10:6 12:40
Roots of Capitalism, The. Reviewed by E. Christmas Eve in England. By H. Jenkins,
McDowell, 6:62 12:19
Reviews Coercion at the Local Level. By R. LeFevre,
American High School Today, The. By J. 1:32
Conant, 4:54 Coleson, Edward
Brainwashing in the High Schools: An Ez- Complex World of Claudius Ptolemy, The,
amination of Eleven American History 4:10
Textbooks. By E. Root, 1:60 Is Freedom the Liberty To Restrict? 1:37
Economics of Freedom: American Capital- Competition, Monopoly, and the Role of Gov-
ism Today, The. By M. Salvadori, 9:60 ernment. By S. Petro, 12:20
Education and Freedom. By H. Rickover, Complex World of Claudius Ptolemy, The. By
4:64 E. Coleson, 4:10
Essays on Liberty, Vol, VI, 11:57 Conant, James B.
Failure of the “New Economics”: An An- American High Schools Today, The. Re-
alysis of the Keynesian Fallacics, The. viewed by J. Chamberlain, 4:54
By H. Hazlitt, 5:55 Concepts of Liberty, The, By I. Berlin. Re-
Fiat Money Inflation in France. By A. viewed by E. Opitz, 12:54
White, 7:59 Congress and the American Tradition. By
Foreign Aid Reexamined: A Critical Ap- J. Burnham. Reviewed by E. Root, 8:60
praisal, Edited by J. Wiggins and H. Conquistadores del Cielo. By L. Read, 2:41
Schoeck, 3:59 Consumer Theory of Prosperity, The. By J.
Great Farm Problem, The. By W. Peter- Mill, 10:38
son, 12:48 Cooley, Oscar
Image of America. By R. Bruckberger, 9:60 Why Not Pay Cash? 5:9
Landmarks of Tomorrow. By P. Drucker, Corresponding Duty, A. Quote by W. Sumner,
6:57 7:20
Martin Van Buren and the Making of the Corruption of Union Leadership, The. By S.
Democratic Party. By R. Remini, 10:61 Petro, 5:38
New History of the United States, A. By W.
Miller, 1:60 D
Power Elite, The. By C. Mills, 8:56 Day’s Demand, The. By J. Holland, 8:66
Sociological Imagination, The. By C. Mills, Declaration of Independence Against Itself,
8:66 The. By E. Opitz, 3:3

Status Scekers, The. By V. Packard, 8:56 Deficit, The. By H. Jenkins, 9:49
Wedemeyer Reports! By A. Wedemeyer, Devil's Wages, The. By N. Hawthorne, 2:26

2:68 Do Antitrust Laws Preserve Competition?
Chamberlin, William Henry Quote by S. Petro, 9:66

Ethics Is Personal, 3:16 Doenges, James L.
Evolution of a Conservative, The. Reviewed “Third Party” Medicine, 8:27
India's Bspnomte Road, 11:40 Dollar Scarcity, The. By H. Jenkins, 7:29
Khrushchev's Bogus Challenge, 1:8 Dollar Will Be on the Defensive, The, By L.
Some Animals Are Always More Equal, ertig, 4:40

8:14 Drucker, Peter F,
Some Fallacies of Foreign Aid, 7:28 Landmarks of Tomorrow. Reviewed by J.
Supreme Issue: The Individual versus the Chamberlain, 6:57

State, The, 5:18 Dunlop, Robert G.

Child's Diary, A. By R. Grieco, 65:80 Oil's Sccond Century, 12:3


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

1959 INDEX 59

Dykes, E. W. Four Days in July. By C. Lengyel. Reviewed
Alternative to Competition, The, 1:11 by E. Opitz, 7:63
“Relax .... Enjoy Yourselves!” 10:17 Fox, P. M.
Sham and the Delusion, The, 2:53 Welfare State Doctrine, The, 9:29
Free Enterprise and European Unity. By G.
. . E . a Winder, 6:10
Economics of Freedom: American Capitalism Free Society, A.? By L. Noonan and S. Petro,
Today, The. By M. Salvadori. Reviewed by 7:14
J. Chamberlain, 9:60 Free Will and the Market Place. By F. Chod-
Economics of King David, The. By O. John- orov, 1:41
son, 11:54 Freeman, Gaylord A., Jr.
Education and Freedom. By H. Rickover. Re- Moral Goal for Business, A., 3:13
viewed by J. Chamberlain, 4:54 From Whence Come Profits? By J. Chamber-
Emancipation by Machine. By W. Buck, 2:20 lain, 10:5
Equality of Rights. Quote by T. Paine, 11:66
Esgays on Liberty, Vol. VI. Reviewed by J. G
Chamberlain, 11:67 Goodrich, Pierre
Ethics and the Moral Life. By B. Mayo. Re- Why Liberty? Reviewed by E. Opitz, 5:62
viewed by R. Gray-Smith, 11:61 Government in the Housing Business. By E.
Ethics Is Personal. By W. Chamberlin, 3:16 Schmidt, 8:8
Evolution of a Conservative, The. By W. Government's Expanded Role. From First
Chamberlin. Reviewed by F. Chodorov, 6:60 National City Bank Letter, 11:22
Gray-Smith, Rowland
Failure of the ‘New Economics’: An An- Reviews
alysis of the Keynesian Fallacies, The. By Ethics and the Moral Life. By B. Mayo,
H. Hazlitt. Reviewed by J. Chamberlain, 11:61
5:56 Study in Ethical Theory, A. By D. Mackin-
Farmer's Two Masters, The. From Indian- non, 11:61
apolis Star, 9:17 Great Expectations. By W. Williamson, 7:38
Federal Aid for Education. By H. Jenkins, Great Farm Problem, The. By W. Peterson.
6:31 Reviewed by J. Chamberlain, 12:48
Fels, Rendigs Great Job-Killer, The. By H. Jenkins, 8:13
American Business Cycles, 1865-1897. Re- Greatest Bell in the World, The. By M. Beas-
viewed by M. Rothbard, 12:52 ley, 2:28
Ferrero, Romulo A. Greaves, Percy L., Jr.
Inflation in Underdeveloped Countries, 2:15 Jobs for All, 2:18
Fertig, Lawrence Greenewalt, Crawford H.
Dollar Will Be on the Defensive, The, 4:40 Uncommon Man, The. Reviewed by W.
Only Way to Sound Growth, The, 10:68 Peterson, 4:58
Fiat Money Inflation in France. By A. White. Grieco, Rose
Reviewed by J. Chamberlain, 7:59 Child's Diary, A, 5:30
Fighting Fire for Profit. By R. Bradford, Growth—The Dutch Example. By W. Peter-
2:32 son, 11:40
First Fourth of July, The. By R. Woods, 7:8 Growth Objective, The. From Guaranty Sure
First National Bank of Boston — Argentine vey, 6:25
Letter Guaranty Survey
Where the Road Leads, 5:53 Growth Objective, The, 6:25
First National City Bank Letter Guide to Anti-Communist Action, A. By A.
Government's Expanded Role, 11:22 Bouscaren, Review by B. Lee, 8:69
First Things First. Quote from Industrial
News Review, 8:42 H
Fleming, Harold Handwriting on the Wall? By B. Bien, 2:54
“Undue Concentration’ in Business, 9:33 Harper, F. A.
Fleming, Lamar, Jr. Can Wage and Price Controls Cure Infla-
U. S. Agricultural Subsidies; quote, 7:45 tion? 7:46
Flight from Integrity. By L. Read, 12:12 Harper, Harriet
Foreign Aid Reexamined: A Critical Apprais- Can This Be Liberty? 6:45

al. Edited by J. Wiggins and H. Schoeck. Hawthorne, Nathaniel
Reviewed by J. Chamberlain, 3:59 Devil's Wages, The, 2:26


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

60 THE FREEMAN December

Hazlitt, Henry Inflation in Underdeveloped Countries. By R.
Failure of the “New Economics’: An An- Ferrero, 2:16

alysis of the Keyncsian Fallacies, The. Inflation Spells Ruination. By R. Moon, 3:42

Reviewed by J. Chamberlain, 5:56 Is Freedom the Liberty To Restrict? By E.
How the Spiral Spins, 11:32 Coleson, 1:37

Portrait of Russia? 9:19

“Stabilization Crisis’; quote, 10:66 . 4
What Russian Trade? 5:13 Jebb, Reginald
He Who Tends the Tree. By A. Terrill, 8:21 Socialist Propaganda, 6:21
Helping Hand, The. By V. Tripp, 5:23 Jenkins, H. P. B.
Henderson, Hanford Christmas Eve in England, 12:19
Major Problem, The; quote, 12:18 Deficit, The, 9:49
History Is with Him. From Indianapolis Dollar Scarcity, The, 7:29
Star, 6:29 Federal Aid for Education, 6:31
Holland, Josiah G. Great Job-Killer, The, 8:13
Day's Demand, The, 8:66 How Wages Rise, 2:46
Horse and Buggy Days. By R. Bradford, 3.23 Mutual Security, 3:41
How Green Is the Emerald Isle? By W. Peter- Surplus Wheat, The, 10:43
son, 1:16 Tax Decalogue for the Welfare State, 4:9
How Labor Unions “Cause” Inflation. By L. Ultimate in Unionism, The, 5:37
Read, 5:3 United Nations, The, 11:39

How the Spiral Spins. By H. Hazlitt, 11:32 Jobs for All. By P. Greaves, Jr. 2:18
How To Disemploy a Slave. By D. Russell, Johnson, Mallory Cross

11:16 Why Not Socialize Qur Economy? 9:21
How To Guarantee a Favorable Balance of Johnson, Orien

Trade. By F. Bastiat, 8:26 Economics of King David, The, 11:54
How To Kill Trade. Quote by A. White, 6:20 K

How Wages Rise. By H. Jenkins, 2:46

Human Rights Are Property Rights. By M,
Rothbard, 4:28

Hunter, Edward

Kahn, J. Kesner
But What Can I Do? 9:3
Kapner, Zelda

. Review
Black Book on Red China, The. Reviewed Black Book on Red China, The. By E.
by Z. Kapner, 2:62
Hunter, 2:62

Hutton, E. F.
Learning by Doing, 10:16
Let There Be Light, 2:48

Kelf-Cohen, Reuben
Nationalism in Britain: The End of a
Dogma. Reviewed by L. Ruthenburg,

Wirk, 5:46 4:63
i Khrushchev’s Bogus Challenge. By W. Cham-
“I Want To Be a Consumer.” By P. Bar- berlin, 1:3
rington, 9:27 L
If Work Were Wealth. Quote by F. Bastiat, Labor vs. Management. By W. Peterson, 7:16
6:63 Landmarks of Tomorrow. By P. Drucker.
Image of America. By R. Bruckberger. Re- Reviewed by J. Chamberlain, 6:57
viewed by J. Chamberlain, 9:60 Last Billionaire, The. By D. Russell, 12:82
In a Free Economy, By T. Carver, 11:12 Law, The. Quote from F. Bastiat, 5:66
In Defense of Pocketbooks. By G. Bosworth, Learning by Doing. By E. Hutton, 10:16
11:64 Lee, Brad
Incompetent Employers. By F. Walker, 10:10 Review
Indianapolis Star, The Guide to Anti-Communiat Action, A. By A.
Farmer's Two Masters, The, 9:17 Bouscaren, 8:59
History Is with Him, 6:29 LeFevre, Robert
Let's Not Choose Slavery, 11:20 Coercion at the Local Level, 1:32
Welfare State in Action, 7:67 Steps to Learning, 8:40
India’s Economic Road, By W. Chamberlin, Lengthening Shadow of Government, The,
11:46 Quote by E, Opitz, 6:66
Industrial News Review Lengyel, Cornel
First Things First; quote, 8:42 Four Days in July. Reviewed by E. Opitz,

Inflation Ahend. By H. Sennholz, 1:20 7:63


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

1959 INDEX 61

Let There Be Light. By E. Hutton, 2:48 Moral Goal for Business, A. By G. Freeman,
Let's Not Choose Slavery. From Indianapolis Jr. 3:13
Star, 11:20 Mutual Security. By H. Jenkins, 3:41
Listening Is a 10-Part Skill. By R. Nichols,
9:42 N
Lynch, Alberto Benegas Naive Nervousness. By L. Read, 8:82
Unemployment and Unionism, 6:51 Naked Communist, The. By W. Skousen. Re-
M viewed by A. Brustat, 8:58
McBain, Hughston M. Nationalism in Britain: The End of a Dogma.
Merchant's Appraisal of Inflation, A, 6:14 By R. Kelf-Cohen. Reviewed by L. Ruthen-
McDonald, Forrest burg, 4:63
We the People: The Economic Origins of Nevels, Luman N., Jr.
the Constitution. Reviewed by R. Weaver, Still Some Individualists, 6:38
5:58 New Haven Register, The
McDowell, Edwin Are Municipalities Exploiting Federal
Review Extravagance? 3:57
Roots of Capitalism, The. By J. Chamber- New History of the United States, A. By W.
lain, 6:62 Miller. Reviewed by J. Chamberlain, 1:60
Mackinnon, D. M, Newhall, David H.
Study in Ethical Theory, A. Reviewed by What Is Virtue? 7:30
R. Gray-Smith, 11:61 Nichols, Ralph G.
Mahaffy, Francis E. Listening Is a 10-Part Skill, 9:42
Was Karl Marx Right? 8:43 Nongovernmental Farm Program, A. By P.
Major Problem, The. Quote by H. Henderson, Roy, 6:54
12:18 Noonan, Lawrence
Manchester, Frederick A. Free Society, A.? By L. Noonan and 8.
Apropos of the Presidency, 6:3 Petro, 7:14
Better Way of Selecting Presidents, A,
10:20 o
Martin Van Buren and the Making of the Obenshain, Richard D.
Democratic Party. By R. Remini. Reviewed Public Power and the Tennessee Valley
by J. Chamberlain, 10:61 Authority, 9:50
Mass Man, The. By L. Read, 6:32 Observations from Europe. By F, Walker,
Mayo, Bernard 5:21
Ethics and the Moral Life. Reviewed by Oil's Second Century. By R. Dunlop, 12:3
R. Gray-Smith, 11:61 On the Training of Scientists and Moral Re-
Merchant's Appraisal of Inflation, A. By H. sponsibility. By D. Stewart, 11:34
McBain, 6:14 Only Way to Sound Growth, The. By L.
Mill, John Stuart Fertig, 10:58
Consumer Theory of Prosperity, The, 10:38 Opitz, Edmund A.
Miller, William Declaration of Independence Against It-
New History of the United States, A. Re- self, The, 3:3
viéwed by J. Chamberlain, 1:60 Lengthening Shadow of Government, The;
Mills, C. Wright quote, 6:66
Power Elite, The. Reviewed by J. Chamber- Religious Foundation of a Free Society,
lain, 8:56 The, 9:13
Sociological I'magination, The. Reviewed by Reviews
J. Chamberlain, 8:56 Concepts of Liberty, The. By 1. Berlin, 12:54
Mises, Ludwig Four Days in July. By C. Lengyvel, 7:63
Capital and Interest, 8:52 Rise and Fall of Society, The. By F. Chod-
Mitchell, Wesley C. orov, 4:69
Business Cycles and Their Causes. Ree Why Liberty? By P. Goodrich, 6:62
viewed by M. Rothbard, 12:52 Our First Thanksgiving. By S. Prentice, Jr,
Modern Idol Worshipers. By V. Tripp, 4:48 11:3
Money Talks. By C. Williams, 4:27
Moon, Robert P
Inflation Spells Ruination, 3:42 Packard, Vance
Moral Antagonism of Capitalism and So- Status Seekers, The. Reviewed by J. Cham-

cialism, The. By B. Branden, 11:28 berlain, 8:85

<


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

62 THE FREEMAN December

Paine, Thomas Reflections after Concerts. By F. Walker,
Equality of Rights; quote, 11:66 2:38
Palyi, Melchior Reform. Quote by F. Chodorov, 4:66
Socialized Medicine: quote, 8:31 “Relax. . . . Enjoy Yourselves!" By E. Dykes,
Pernicious Unemployment. By F. Chodorov, 10:17
8:3 Religious Foundation of a Free Society, The.
Peters, Lovett C, By E. Opitz, 9:13
Way To Finance Higher Education, A., Remini, Robert V.
3:51 Martin Van Buren and the Making of the
Peterson, William H. Democratic Party. Reviewed by J. Cham-
Great Farm Problem, The. Reviewed by J. berlain, 10:61
Chamberlain, 12:48 Rich Man's Tax—Poor Man’s Burden. By H.
Growth—=The Dutch Example, 11:40 Brayman, 2:13
How Green Is the Emerald Isle? 1:16 Rickover, H. G.
Labor vs. Management, 7:16 Education and Freedom. Reviewed by J.
Review Chamberlain, 4:54
Uncommon Man, The. By C. Greenewalt, Rise and Fall of Society, The. By F. Chodo-
4:58 rov. Reviewed by E. Opitz, 4:59
Petro, Sylvester Robins, The. By A. Terrill, 4:47
Competition, Monopoly, and the Role of Roeder, Reese
Government, 12:20 Private Investment Is Best, 4:42
Corruption of Union Leadership, The, 5:38 Root, E. Merrill
Do Antitrust Laws Preserve Competition? Brainwashing in the High Schools: An
quote, 9:66 Examination of Eleven American History
Free Society, A.?7 By L. Noonan and S. Textbooks, Reviewed by J. Chamberlain,
Petro, 7:14 1:60
Philosophy of the Blur, The. By M. Rukeyser, Review
7:8 Congress and the American Tradition. By
Piercing the Ivory Curtain. By A. Porter, J. Burnham, 8:60
12:44 Roots of Cawitalism, The. By J. Chamberlain.
Piracy—Reincarnated. By L. Read, 11:26 Reviewed by E. McDowell, 6:62
Poirot, Paul L. Rothbard, Murray N.
Strikers Are Bound To Lose, 10:14 Bogey of ‘Administered Prices,” The, 9:39
Web of Intervention, The, 12:29 Human Rights Are Property Rights, 4:23
Porter, Albert Reviews
Piercing the Ivory Curtain, 12:44 American Busincss Cycles, 1865-1897. By
Portrait of Russia? By H. Hazlitt, 9:19 R. Fels, 12:52
Power Elite, The. By C. Mills. Reviewed by Business Cycles and Their Causcs, By W.
J. Chamberlain, 8:66 Mitchell, 12:52
Prentice, Sartell, Jr. Roy, Paul
Our First Thanksgiving, 11:8 Nongovernmental Farm Program, A, 6:54
Private Investment Is Best. By R. Roeder, Rukeyser, Merryle Stanley
4:42 Philosophy of the Blur, The, 7:8
Proposition in the Lower Mathematics, A. Runaway Spending Brings Crisis in Local
Quote by D. Seymour, 1:15 Governments. By L. Sullivan, 4:8
Public Power and the Tennessee Valley Au- Russell, Dean
thority. By R. Obenshain, 9:50 How To Disemploy a Slave, 11:12
R Last Billionaire, The, 12:82
Raffles of Singapore. By G. Winder, 9:6 Ruthenburg, Louis
Read, Leonard E. Review
Case for Panhandling, The, 7:21 Nationalism in Britain: The End of a
Conquistadores del Cielo, 2:41 Dogma. By R. Kelf-Cohen, 4:63
Flight from Integrity, 12:12 Rutledge, Archibald
How Labor Unions “Cause” Inflation, 6:3 Security May Betray Us; quote, 1:66
Mass Man, The, 6:32
Naive Nervousness, 8:32 S
Piracy—Relncarnated, 11:26 St.-Ivanyl, Alexander
Why Not Try Freedom? Reviewed by A. Review

St.-Ivanyi, 1:67 Why Not Try Freedom? By L. Read, 1:57


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

1959 INDEX 63

Salvadori, Massimo Still Some Individualists. By L. Nevels, Jr.,
Economics of Freedom: American Capital- 6:38
ism Today, The. Reviewed by J. Cham- Strikers Are Bound To Lose. By P. Poirot,
berlain, 9:60 10:14
Samuel Smith's Patriotic Song. By A. Allan, Study in Ethical Theory, A. By D. Mackin-
4:52 non. Reviewed by R. Gray-Smith, 11:61
Scarcity, Parking, and the Price System. By Sullivan, Lawrence
N. Breckner and W. Allen, 6:46 Runaway Spending Brings Crisis in Local
Schmidt, Emerson P. Governments, 4:3
Government in the Housing Business, 8:8 Soviet Empire Tottering, 1:56
Schmidt, Marvin M. Sumner, William Graham
What Industry Expects of the Engineer, Corresponding Duty, A; quote, 7:20
6:41 Supreme Issue: The Individual versus the
Schoeck, Helmut, editor State, The. By W. Chamberlin, 5:16

Foreign Aid Reexamimed: A Critical Ap- Surplus Wheat, The. By H. Jenkins, 10:43
praisal. Edited by J. Wiggins and H.

Schoeck. Reviewed by J. Chamberlain, T
3:59 Tale of Two Islands, A. By C. Brogan, 1:61
Security May Betray Us. Quote by A. Rut- "Tax Decalogue for the Welfare State. By H.
ledge, 1:66 Jenkins, 4:9
Self-Discipline. Quote by A. Skutch, 3:22 Terrill, Ann
Sennholz, Hans F. He Who Tends the Tree, 8:21
Business Taxes Concern Everyone, 3:32 Robins, The, 4:47
Inflation Ahead, 1:20 They Passed a Law, By V, Tripp, 2:49

Seymour, Douglas “Third Party” Medicine. By J. Doenges, 8:27
Proposition in the Lower Mathematics, A; Thoughts and Details on Security. By E.

quote, 1:15 Burke, 10:44
Sham and the Delusion, The. By E. Dykes, Toward a Point of No Return. By R. Tyson,
2:53 2:3 }
Skousen, W. Cleon Tripp, Vollie
Naked Communist, The. Reviewed by A. Auction Sale, The, 11:48
Brustat, 8:58 elping Hand, The, 5:23

Modern Idol Worshipers, 4:48
They Passed a Law, 2:49

Tyson, Robert C,
Toward a Point of No Return, 2:3

Skutch, Alexander F.
Self-Discipline; quote, 3:22

Socialism Is a Disease. Quote by E. Benn,
11:14

Socialist Propaganda. By R. Jebb, 6:21

Socialized Medicine. Quote by M. Palyi, 8:31

Sociological Imagination, The. By C. Mills.
Reviewed by J. Chamberlain, 8:56

Some Animals Are Always More Equal. By
W. Chamberlin, 8:14

Some Fallacies of Foreign Aid. By W, Cham-

uU
Ultimate in Unionism, The. By H. Jenkins,
5:37
Uncommon Man, The. By C. Greenewalt. Re-
viewed by W. Peterson, 4:58
“Undue Concentration” in Business. By H.
Fleming, 9:33

berlin, 7:23 s Fo
robe Unempl t Uni . By A. Lynch,
Some Reflections on Foreign Aid. By A. PS oyment in Tniomism. BY ve
Spooner, 5:29 . Union Coercion and Your Newspaper. By J.
Soviet Empire Tottering. By L. Sullivan, Brown, 4:32
1:56 United Nations, The. By H. Jenkins, 11:39
Spooner, Arthur B. U. S. Agricultural Subsidies. Quote by L.
Some Reflections on Foreign Aid, 6:29 Fleming, Jr., 7:45
“Stabilization Crisis." Quote by H. Hazlitt, Up from Liberalism. By W. Buckley, Jr.
10:66 Reviewed by F. Chodorov, 12:40
Status Seekers, The. By V. Packard. Re-
viewed by J. Chamberlain, 8:56 Vv
Steps to Learning. By R. LeFevre, 8:40 Van Buren, Martin
Stewart, Daniel K. ‘What They Said; quote, 11:25

On the Training of Scientists and Moral © Velasco, Gustavo R.
Responsibility, 11:34 Way to Economic Progress, The, 5:47


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

64 THE FREEMAN December

Violence. Quote by E. Opitz in Essays on Where the Road Leads. From First National

Liberty, Vol. 111, 6:66 Bank of Boston—Argentine Letter, 65:63
White, Andrew Dickson
w Fiat Moncey Inflation in France. Reviewed
Walker, Francis Amasa by J. Chamberlain, 7:59
Incompetent Employers, 10:10 How To Kill Trade; quote, 6:20
Walker, Frederick Who Is Watching You? By R. Woods, 4:18
Observations from Europe, 5:21 Why Liberty? By P. Goodrich. Reviewed by
Reflections after Concerts, 2:38 E. Opitz, 5:62

Was Karl Marx Right? By F. Mahaffy, 8:43 Why Not Pay Cash? By O. Cooley, 5:9
Way to Economic Progress, The. By G. Vel- Why Not Socialize Our Economy? By M.

asco, 6:47 . Johnson, 9:21
Way To Finance Higher Education, A. By L. yy. Not Try Freedom? By L. Rend. Re-
Peters, 3:51 viewed by A. St.-Ivanyi, 1:57

We the People: The Economic Origins of

the Constitution. By F. McDonald. Re- Wiggins, James W., editor

. . Forcign Atd Reecxamined: A Critical Ap-
viewed by R. Weaver, 5:58 praisal. Edited by J. Wiggins and H.

Weaver, Richard M. Schueck. Reviewed by J. Chamberlain,
Review 3:59

We the People: The Economic Origins of
the Constitution. By F. McDonald, 5:58
Web of Intervention, The. By P. Poirot, 12:29
Wedemeyer, Albert C.
Wedemeyer Reports! Reviewed by J. Cham-

Williams, Carlton
Money Talks, 4:27
Williamson, W. Rulon
Great Expectations, 7:38

berlain, 2:68 Winder, George
Wedemeyer Reports! By A. Wedemeyer. Re- Agricultural Subsidies in Great Britain,
viewed by J. Chamberlain, 2:68 7:40 .
Welfare State Doctrine, The. By P. Fox, 9:29 Free Enterprise and European Unity, 6:10
Welfare State in Action. From The Indian- Raffles of Singapore, 9:6
apolis Star, 1:57 World Monetary System, A, 10:53
What Industry Expects of the Engineer. By Wirk. By E. Hutton, 65:46
M. Schmidt, 6:41 Woods, Ralph L.
What Is Virtue? By D. Newhall, 7:30 First Fourth of July, The, 7:8
What Russian Trade? By H. Hazlitt, 5:13 Who Is Watching You? 4:18
What They Said. Quotes by M. Van Buren World Monetary System, A. By G. Winder,
and J. Buchanan, 11:25 10:53

BINDERS FOR THE FREEMAN

* These binders, of handsome blue Leatherlex and
stamped in gold, hold 12 issues each, keep your
copies together in one place. $2.25 each

Order from
THE FOUNDATION FOR ECONOMIC EDUCATION
Irvington-on-Hudson, New York


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

High Speed Marking at

Lowest Costs!

AUTOMATIC
MARKING
MACHINE

Fast!

Automatically applies pre-cut,
pre-printed, self-sticking markers

around objects 3-5 times faster
than manual methods.

Low Cost?

Markermatic pays for itself.
Markers in production quantities
cost less than 1/6¢ each.

Versatile!

Bundles tiny wires, parts.

Applies stock or special Brady
self-sticking markers from

Blue Streak® Dispenser Cards.

Small Parts!

Wires, components, small tools —
any cylindrical, oblong or tubular

shape gets complete wrap around

or flag identification in seconds.

\ Write for complete
W. H. B R A [1] Y, CO. details, specifications
and a demonstration
719 W. Glendale Ave., Milwaukee 9, Wis. EST. 1914 in your plant.

Mfrs. of quality pressure-sensitive tape products and dispensing machines 88


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

o
3
bud
[ad
nn
 O 1 =
z 45%
m2 2a

=
S
I a
=
Q =
c =
TR)
® 8
=x =
© oT
= 8
a 2
0
3, =
3 =~
nm =
TT ~~
® =
Oo
=
© 3,
— Un
oc <=
= 2
ze
I=]
= 4
® on
— 3
> a
a =
9
® “n
oo ©
© 3
= a
Qn
3 ©
~~ —
wn ©
‘LQ.
Q
3 wn

oo