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

THE

[eed

NOVEMBER 1961

IDEAS ON LIBERTY

The Importance of Beliefs. . . . . . Dean Russell 3
Freedom Is Hard Work . . . . . . . Keith S. Wood 9
Rigged Rules and Fair Play . . . . . John C. Sparks 1
“Buy American’’ Is Un-American. . . . Jack Morano 15
Revolt Against Liberalism . . . . . . Lynn londrum 17
Great Britain and the Common Market . . George Winder 19
The Tale of the Little Red Hen . . . . W. A. Paton 28
The Progressive Income Tax . . . . . John Chamberlain 30
Freedom from Toil . . . . . . . . H.P. B. Jenkins 43
Men Are Not Naturally Good. . . . . Richard S. Emrich 44
Redistributing the Wealth . . . . . . Edward A. Rossit 46
The Inpert in Industry . . . . . . . Neil M. Clark 50
Books:
The Miracle of Responsibility . . . . . John Chamberlain 60

oh THE FOUNDATION
FILE FOR ECONOMIC EDUCATION, INC.

Irvington-on-Hudson, New York



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

Enlarged portion shows the Pennsylvania-New Jersey-Marylana power ‘pool’ and interconnecting lines.
It serves a population of 18,400,000 in an area of nearly 49,000 square miles. Similar projects of
investor-owned companies link communities . . . areas . . . whole states throughout the nation.

MORE POWER...
Let's take an example right off the map

Those magnified lines show one ex- one plant, others supply the commu-
ample of a fast-growing method used nity with no interruption to service.
by America’s investor-owned electric ~~ Costs are kept low, because all cus-
light and power companies to bring tomers benefit from savings of the
ever more power to homes and busi- newest and the most efficient plants.

nesses—and to keep the cost low. 40 YEARS OF EXPERIENCE
The investor-owned electric light and
power companies started Intercon-
necting and Pooling more than 40
years ago. Their networks help give
America the most abundant supply of
electricity on earth— more than the
next 5 nations combined —3 times as
If one area suddenly needs more much as Russia. They are a big rea-
electricity, it can be sent in instantly son why the investor-owned com-
from companies hundreds of miles panies can supply all the additional
away. If an emergency shuts down electricity the nation will need.

Investor-Owned Electric Light and Power Companies | Neop Anonses 3, voit.

Company names on request through this mogazine

It’s called “Interconnecting and
Pooling” of electric power. All around
the nation, investor-owned companies
interconnect their 280,000 miles of
power transmission lines and hun-
dreds of power plants to better serve
the nation’s needs.


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

OUTSTANDING ADVANTAGES FOR SAVERS ;
COAST FEDERAL SAVINGS 4

OF LOS ANGELES

JOIN the more than 100,000 savers who hold individual, joint, trust,
or corporation savings accounts at Coast Federal and get these
important advantages: !

UNMATCHED SAFETY —Assets over $450 million—third largest
association in the U.S. Strong reserves and high ratio of cash and
) government bonds to assure withdrawal of savings immediately
ol on request.
K HIGHEST EARNINGS consistent with safety. Current rate 42%
per annum. Accounts opened by the 10th of the month earn from
7 the first.

JOE CRALIL, PRESIDENT

ES ——  ——  E——  — —  O— — — — — — — —— — —— Sh—— — —— ——— w—

SAVE-BY-MAIL CONVENIENCE — Airmail
postage paid both ways. Prompt, efficient
service on all transactions.

INSURANCE —Each account insured up to
$10,000 by the Federal Savings and Loan
insurance Corporation.

® FREE —Beautiful, full color Guidebook

"const FEDERAL SAVINGS

Coast Federal Savings, Department ''H"’
855 South Hill St. at 9th

Los Angeles 14, Calif. (Please check-mark as desired.)

1. [Jl enclose [J check, [J] money order, to open a 2. [J Please send information
savings account in the following name or names: and L. A. Guidebook to:

Name

Address

City Zone State



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

j THE

[reeman;

Fe E

A MONTHLY JOURNAL OF IDEAS ON LIBER]

NOVEMBER 1961 Vol. 11, No. 11

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.

Copyright, 1961, The Foundation for Economic Education, Inc. Printed
in US.A.

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

Permission is hereby granted to anyone to reprint any article in whole
or in part, providing customary credit is given, except ‘‘Revolt Against
Liberalism,’ "Men Are Not Naturally Good," and *‘The Inpert in Industry.”

Any current article will be supplied in reprint form if there are enough
inquiries to justify the cost of the printing.


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

THE IMPORTANCE O

DEAN RUSSELL

A WISE MAN once said, “Those professional world, you will hear
who forever keep an open mind on all sides that the mark of an
will have a lot of garbage thrown educated person is his toleration
in it.” of opposing viewpoints. All along
That is the theme of my brief the line, you will be encouraged —
remarks this evening to you pupils and re-encouraged —to keep an
of Keith Country Day School — open mind on all subjects, and to
and to your teachers, parents, and be ready always to listen to the
friends who are sharing this occa- ‘other side.”
sion with you. I am here this evening to ques-
It seems to me that, increas- tion that concept of the.educated
ingly, we Americans of today man. I say flatly that no‘person is
don’t really believe deeply about educated who has an open mind
anything. We seem to make a on, for example, the issue of hu-
fetish about keeping an open mind man slavery. It is wrong morally,
on everything. As a result, the socially, and economically. It al-
enemies of human freedom and ways has been wrong, and always
human dignity are throwing in will be wrong. My mind is totally
garbage by the bucketful. closed on the subject. I point-blank
As pupils in high school and refuse to listen to the “other side”
adult citizens in the business and of the question — that is, I will
never listen seriously to anyone
Dr. Russell is Professor of Economics and who favors human slavery.
Chairman of the Department of Economics I assume that you, too, have a
and Business Administration at Rockford Col- : . .
lege. This article is from his address at gradu- closed mind on the issue of slav-

ation ceremonies of the Keith Country Day
School, Rockford, Illinois, June 8, 1961. ery. If so, you can now understand

3


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

4 THE FREEMAN November

the point I am trying to make of value. For while we should
when I state so strongly that toler- never have an open mind on the
ance and open-mindedness are fre- subject of tyranny, we should al-
quently dangerous and destruc- ways search for better ways to
tive. stop it, to defeat it, and to destroy
This example of slavery is, of it. True enough, the honest man
course, too obvious to prove any- may be forced to negotiate with
thing. I have used it only to estab- the robber and murderer who
lish my thesis as quickly as possi- holds a gun. But that unpleasant
ble — that is, some issues are not fact does not mean that the honest
open to rational discussion. Now man has an open mind on the sub-
let us move on to issues that are jects of robbery and murder.
more controversial. Again you may say, “The ex-
For example, President Ken- amples you have selected are too
nedy has just returned from a easy. Surely all of us are opposed
conference with the leader of Rus- to dictatorial communism. You
sia and of world communism. If still haven't proved your thesis
our President went to that con- about the danger of perpetual
ference with an open mind on the open-mindedness and listening to
issue of communism, he is a fool- all viewpoints.” I agree, but I'm
ish man. But I assume that he, not through yet. At this point, at
like me, has a totally closed mind any rate, I hope that you agree
on the subject. I assume that he is with me that only a foolish and
an educated person who under- uneducated person will keep an
stands that communism is a vile open mind on all subjects. Now let
and false philosophy that can lead us explore a few issues that are
only to the complete loss of per- not quite as easy as the two al-
sonal freedom and human dignity. ready cited.
I assume that our President went
to that meeting merely to size up Family Responsibilities
the enemy, to learn as much about I believe that it is the moral,
him and his plans as possible, and social, and economic duty of every
to better prepare himself to lead parent to provide for his children
the Western world in its contin- as best he can. I also believe that
uing struggle with the tyrants it is the moral, social, and eco-
who have enslaved more than 800 nomic duty of every adult son and
million human beings. If that was daughter to take care of his aged
his purpose — and, again, I assume parents when they cannot provide
it was — the trip could prove to be for themselves. My mind is closed


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

1961 THE IMPORTANCE OF BELIEFS 5

on the subject. I will not willingly That is my belief. And as a re-
listen to the siren song of the wel- sult of it, I will not listen to any
fare-staters who advocate the dis- person —1 will not voluntarily
honoring of parents by turning support any proposal or law — that
them over to the government. Nor will in any way undermine the
will I give any consideration moral and economic responsibility
whatever to the sincere but mis- of parents for their children and
guided humanitarians who are of children for their parents.
persuading parents to look to gov-
ernment to take care of their chil- Let the State Provide!
dren for them. If you still have an open mind
I am convinced beyond any shad- on this subject, perhaps you have
ow of a doubt that the weaken- not fully considered the powerful
ing of this parent-child mutual evidence that is so readily avail-
responsibility will lead steadily to able. For example, it is not at all
the destruction of the family as difficult to find families, in Rock-
the basic unit of society. And ford or any other city, where the
when the unity and the mutual re- parents look upon their children
sponsibility of the family is gone, as hindrances to their pleasures.
the basic purpose of organized so- These children are generally neg-
ciety will disappear along with it. lected and are often abandoned.
For obviously, there soon wouldn't But for some perverted reason,
be any individuals to concern this fact is seldom cited as an ob-
themselves about freedom if the ject lesson of what happens when
family unit were totally destroyed. family responsibility is weak or
But suppose, as seems more likely, missing. Instead, it is used as an
that the family unit is not abol- excuse to turn over to the state
ished but is merely corrupted and ql! children — fortunate as well as
weakened? In that case, freedom unfortunate — for supervision and
for the individual will doubtless care in many areas of our daily
continue to be an issue. But it will lives. The responsibility of the
tend increasingly toward a super- parents is automatically taken
ficial and distorted form of free- from them. Thus family unity in
dom. That is, it will become a general is weakened still further
desperate struggle by various in- in a misguided approach to this
dividuals to free themselves from sad problem of helping the victims
slavery, rather than a fight of disrupted families.
against the idea of human bond- Conversely, it is also easy to
age itself. find families in which the chil-


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

6 THE FREEMAN November

dren, in turn, recognize no respon- astrous. While the communist con-
sibility whatever toward their cepts of law and morality are still
parents. Increasingly, our solution a distortion of reality, perhaps it
to this equally sad problem is to is significant to observe that the
demand that the state provide for concept of the family unit was
all elderly persons, whether or not eventually reinstated in Russia.
they have children who can sup-
port them. Thus the circle has “Would You Let Them Starve?”
come full turn. Parents vote to Now many of you may agree
have the state support their chil- with the general thesis that I
dren. And, in turn, the children have here advocated, but add,
vote to have the government sup- “Yes, but the state must at least
port their parents. Under this im- guarantee the bare necessities of
moral concept of parenthood and life to everyone — food, clothing,
of honoring one’s father and education, housing, and so on. For
mother, it is hardly surprising to after all, there are many children
observe the rapid decline of the and old people who literally can-
family as the basis of our society. not provide for themselves and
It seems clear to me that the re- who have no one to provide for
sult is a trend toward degradation them. Would you let them starve,
of the parents, the absence of any Professor Russell?”
real values in the children, and a My answer is clear. “No, I will
society that is increasingly con- not stand by and watch my neigh-
trolled and directed by govern- bor starve. I will not tolerate a
mental authority. situation in which children have
True enough, we employ the no chance for an education. I will
democratic mechanism to legalize not knowingly permit a human be-
this abandonment of our moral ing to die for lack of minimum
and family responsibilities. But medical care. I will do what I can
this does not make the results any to help them with my own time

the better. It is just as immoral — and my own money.”

and just as destructive of society Please observe the pronouns I
— to vote our responsibilities away have used —I and mine. I use
as it is to throw them away. those pronouns proudly. I will not

Even the communist leaders of demean them — nor the sentiment
Russia, who began by totally re- behind them — by saying what
jecting the family unit as the “we” should do in this area of per-
basis of their society, soon dis- sonal responsibility. You will, of
covered that the results were dis- course, do what seems to you


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

1961 THE IMPORTANCE OF BELIEFS 7

right. And doubtless, you already think is good. I will never do it
have your own methods for fulfill- because I am convinced that this
ing whatever moral responsibility procedure cannot be of lasting
you accept in this area. For what value to anyone and cannot pro-
it is worth, here is my own par- vide a lasting solution to any
ticular approach to this ever-pres- problem in this area. In fact, it is
ent problem of aiding my less for- clear to me that governmental so-
tunate and less capable fellow man. lutions to these problems gen-

erally create two new and more

Self-Help Is Best difficult problems for every one
First, I shall provide as well as seemingly solved.
I can for my own children, for my I believe that any measure by

own parents, for my own family. government to make parents less
Then I will do the best I can for responsible for their children —
my immediate neighbors who are or children less responsible for the
in need. When that task exceeds welfare of their parents —is an-
my limited resources — as it does other step in the direction of tyr-
— I shall ask for your help. And I anny and the destruction of a
am confident that you will give it. moral society. If it continues from
On the community level, I will an- the cradle to the grave, it will
swer the plea of my church and make of us only things to be ma-
various other voluntary agencies nipulated, instead of persons to be
that are dedicated to helping the respected. Thus I no longer pay
destitute and the less fortunate. I any attention whatever to the doz-
will also give due consideration to ens of differing viewpoints on the
the appeals of other voluntary other side of this issue. I have lis-
agencies that are dedicated to tened to most of them in the past,
helping unfortunate persons on I have studied many of them care-
the state, national, and interna- fully, I have given much thought
tional levels. to their general promise and per-

But never will I turn to govern- formance — and I have rejected
ment for help in these areas. I them all as basically unsound.
will never join the sincere but Thus I no longer have an open
misguided enemies of human dig- mind on the subject. If I listen at
nity who think of themselves as all, it is merely to try to discover
good citizens and moral persons some way to convince the persons
when they vote to take from you who advance these ideas that their
your money to be used for some seemingly humanitarian proposals
humanitarian purpose that they are basically evil and are destruc-


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

8 THE FREEMAN November

tive of the very thing they profess believe positively in something. In

to want. fact, as we discovered in Korea, be-

: liefs are vital. The Chinese Com-
Your Beliefs and Convictions munists had considerable success
Can Make or Break America in converting to their beliefs a

Now let’s stop a moment and certain segment among the cap-
consider what I have said. Obvi- tured American prisoners. But the
ously I believe the thesis I have evidence is clear that the Ameri-
advanced here this evening; else cans who went over to the other
I would not have submitted it to side had no deep beliefs in any-
you. Is the validity of the thesis thing — God, family, country, or
automatically proved merely be- whatever. Thus their defection
cause I believe it? Not in the ‘was not surprising, And I am con-
least! An idea is good or bad on vinced that this general lack of
its own merits; my belief in it any positive belief is primarily re-
does not make it either true or sponsible for our continuing losses

false. in the “cold war” with the social-
Do you believe it? I do not ists, at home and abroad.
know. But this much I do know. For example, in this nation we

If you forever keep an open mind used to believe firmly in a per-
on the subject, the battle will be sonal God. But he isn't so popu-
lost by default. You won’t count, lar anymore.
one way or the other. So I urge In this country, we used to be-
you to examine it, to think about lieve that the penniless immigrant
it, and then to accept it or reject and the poor boy from the farm
it. This does not mean, of course, could work themselves up to the
that you can never thereafter ex- top in the companies that em-
amine new evidence, if such is ployed them. That idea merely
discovered. It means only that you produces a cynical smile among
can then devote your time and the vast majority today.
thoughts to additional issues and We used to believe that our na-
ideas that also need your atten- tion was the best and greatest in
tion. If you accept this idea of the world. But today, we spend a
personal responsibility, however, great deal of time apologizing for
it will also mean that the enemies existing.
of liberty and dignity will then Only a few years ago, most
have one less open mind to throw Americans believed that every
garbage into. person was responsible for him-
It is important that each of us self and his family — and that


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

1961 THE IMPORTANCE OF BELIEFS 9

charity should provide for the. un- liefs and convictions. They know
fortunate few who just couldn't what they want and how to get it.
make the grade — and that a sub- And they are winning —not be-
sidy from government was a dis- cause their beliefs are good and
grace to be avoided at almost any true, but because so many of us
cost. That belief is now almost to- who have not yet accepted the so-
tally dead in America. cialist philosophy don’t really have

When we had strong beliefs and strong beliefs and convictions to
convictions, we were a growing the contrary. Thus we can’t pos-
people and a great nation. We sibly win — for the simple reason
knew where we were going and that we aren’t fighting for any-
what we wanted. Today we don’t. thing.

But the enemy does. The Commu- Think about it. Yes, even pray
nists and Socialists — at home as about it. The issue is not merely
well as abroad — have strong be- important; it is vital. @®

KEITH S. WooD

A BUSINESS FRIEND of mine com- I think many people in business
plained the other day, “Boy, is the feel that there is something wrong
competition getting tough! with the economy when competi-
Changes are coming so fast I can tion is fierce. They then support
hardly keep up with them. If some- laws to regulate the “cutthroat
thing isn’t done about these dis- competition,” and the like.

counters, I don’t know what’s go- But the fantastic productivity
ing to happen.” of the free society isn’t handed to
Mr. Wood is President and Treasurer of Wood US on a silver platter! It is devel-

Brothers Manufacturing Company, Oregon, .
Illinois. P 8 oped because of the powerful in-


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

10 THE FREEMAN November

centives the free society supplies for example, that “there ought to
to everyone — and the greatest in- be a law” with regard to pricing
centives as well as the highest pres- below costs, as one of his compet-
sures are applied to those who are itors was doing. This was hurting
directly responsible for productiv- my friend's business, of course.
ity : the businessmen. However, exploring the subject

Let me hasten to add that almost further with him revealed that his
everyone of us is, in some sense, a business was by no means entirely
businessman — being responsible dependent on that particular line.
for organizing and using the fac- He’s still in business today and
tors of production. successful,

But those to whom I refer here 3. Successfully meeting competi-
are those more generally recog- tion depends upon creative ideas.
nized as businessmen together with One must have faith that tomor-
some not usually so regarded, such row’s ideas will be sufficient for
as farmers. that day’s needs, just as were yes-

When a businessman is tempted terday’s. Nor can we have tomor-
to look for help from the law, it may row’s creative ideas today; they
be well to consider the following: must come to us in their own good

1. We have no inherent right to time.
manage a business, only the right 4, We should be thankful that we
to try. If others do it so much bet- have this hard challenging work
ter that we have to “close up shop,” to do. It is evidence of our hav-
then we have to join the ranks of ing the responsibilities of free
those who work for others. This is men. In countries lacking freedom,
a proud position in a free society people tend to “take it easy,” to
and not one to be ashamed of. shirk — and the result is boredom

2. In a free society, we usually and frustration.
aren't forced to discontinue a busi-
ness, even though competition We businessmen would do well
hurts. More likely, we have to ac- to expect things to be tough -al-
cept a reduced income, which may ways. If organizing and planning
be temporary or permanent, de- for the needs of society were easy,
pending on the circumstances. why, even the government could do

A friend of mine once suggested, it! ®


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

RIGGED RULES
AND FAIR PLAY

JOHN C. SPARKS

AMERICANS are great sportsmen ting so as to influence potential
and love both to play and to watch home runs. Each golfer must tra-
many sports. Ardent fans can verse the same eighteen holes in
name most of the players on their a match, shoot for the same
favorite baseball or football teams greens, and avoid the same traps.
and can recite age, weight, batting Other golfers in a tournament cer-
averages, yards gained, passes tainly would not permit one of the
completed, and other statistical in- entrants to play a second shot any
formation with an ease that is time he felt his first shot was not
amazing. They know the latest as good as he would have liked it.
idea on the proper golf putting To alter the game in favor of
stance and can engage in an eru- one player or a group would spoil
dite discussion about whom the the game for everyone. What sense
White Sox probably will trade to of accomplishment would come to
the Yankees. a golfer who shoots a 65 but only

They also know the rules of because the rules required him to
their favorite pastimes and par- play 15 holes rather than 18, or
ticularly that the set of rules for who is given special dispensation
each sport applies to anyone and to kick his ball out of the rough
everyone who plays. It would be or other difficult “lies.” Any red-
ridiculous to allow one baseball blooded man or woman would re-
team to play an extra man in the fuse to have the cards stacked in
outfield — or raise and lower the his favor, for the results gained
fence surrounding the ball park by such means would provide no
depending on which team is bat- sense of satisfaction to himself,
Mr. Sparks is a businessman in Canton, Ohio. nor would he be especially re-

11


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

12 THE FREEMAN November

garded by his friends and ac- living, and participating with
quaintances as having the skill in- others going about the same tasks.
dicated by the “doctored” results. The duffer in golf would never
And furthermore, he would have think to ery “unfair” because he
no incentive to improve his own cannot “break one hundred” over
skill since the “doctored” scores the same course the local pro
would reflect no difference be- covers in 72. But in our economic
tween a good golfer and a duffer. life, the duffer and his many as-
Even though the American usu- sociates constitute ripe temptation
ally will root for the underdog to to the politician who strives to
upset the favorite, he will not do win support of his constituents by
so at the expense of rigging the rigging the rules so as to favor a
rules for the underdog. The fans larger number of the voters to the
clamor for the rookie pitcher to detriment of a fewer number. The
strike out Ted Williams but only ruinous socialistic political phi-
if Williams is allowed the conven- losophy, “from each according to
tional three strikes rather than a his ability, to each according to
lesser number. Sports fans will his need,” has enjoyed widespread
urge on the small relatively-un- adoption among the players in the
known college basketball team to game of life. A person who recog-
upset Ohio State University, but nizes fair play and justice in
only if the underdog uses no more sports surely does not lose this
than five men and shoots the ball sense of fairness elsewhere; it is
at the same size hoop as do the more likely he has never stopped
Buckeyes. to think and to understand that
Americans like to compete when the fallacy of “rigged” rules will
the game is fair and when the spell ruin to any game it is ap-
rules are not rigged in favor of plied to—a game of sports —or
some of the participants to the the game of life.
detriment of the others. We have
a superior sense of fairness and When Rules Are Changed
justice when the game being The business leader who as-
played is in the realm of sports. sumed the rules allowed him to
have what he created, discovers
The Game of Life: after he has earned his success
Unfortunately, the same sense that a substantial part of his re-
of fairness does not always carry ward is given instead to those who
over from sports to the day-to-day are distinguished only by their
“game” of working, earning a failure to accomplish anything of


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

1961 RIGGED RULES AND FAIR PLAY 13

value. The industrialist who knows the record of another pitcher on
the essentials of the game — how his team who has had very few
to invest, the know-how to man- successes during the season. The
age capably and produce a profit — leading batsman of the club hits
now finds in the middle of the two home runs and two singles for
game the rules have changed and a “perfect day at bat,” but two
his players must tour the bases of the hits are credited to the
twice to record one run. And the weak-hitting shortstop who has
new potential entrepreneur looks great difficulty maintaining a bat-
over the possibilities of a satis- ting average above .200. From the
factory return for his contem- able to the needy!
plated risk-taking. He is discour- If the game of baseball had its
aged that on one hand he must rules rigged in the manner the
take the risk and absorb the loss socialistic politicians have rigged
if he fails. But on the other hand, the rules of economic life, one
tf he is able to overcome nonpro- could easily predict the bizarre re-
ductive costs added by various sults. The leading hitter would
governmental bodies and the not try so hard for those base hits
unions, and then is able to produce if they were to go to another
a product at a cost less than the player's credit. Nor would the
selling price he can obtain for it pitcher ply his skill so artfully if
in the market place, he will have his hard-earned victory was to-be
to share more than half of the credited to a team mate in need of
resulting profit with the federal an improved record. The game
government. He wisely weighs his would soon fall to a mediocre level,
chances to “get to first base” since and fans would no longer be will-
he realizes the distance to first ing to pay a handsome price of
base has been lengthened by gov- admission to watch baseball
ernmental action considerably be- players who are “socialized.” De-
yond its former distance. The like- generation of the game financially
lihood of his putting a team on the would quickly follow the departure
field at all is reduced considerably. of skill, know-how, and keen com-
petition. When Mickey Mantle
According to Need and the unknown benchwarmer
Carrying the allegory to the in- receive the same reward, then it
dividual players, the credit for will no longer be attractive to try
being the winning pitcher, given to be like either one, for neither
normally to the pitcher who hurls will benefit from baseball spoiled
his team to victory, is entered into by socialism.


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

14 THE FREEMAN" November

Everyone Can Win precluded from the opportunity to
There is a most miraculous fea- try to better the reward.
ture in the game of life as played American people are noted the

by free men which is not anal- world over for their sense of fair
ogous with most games of sport, play and clean vigorous competi-
the latter usually having only one tion in sports. Americans were
winner per game. The game of also noted at one time as the shin-
life played in a free market place ing examples of free men in ac-
by individuals with the right to tion — hard-working, confident,
choose, has many winners but risk-taking, optimistic individuals
very few losers, usually only the who had the resilience to bounce
lazy and indolent. It is recognized ahead, even after temporary set-
that wide variance exists among backs, in the big game of life.
the winners, from the very rich But our reputation is danger-
to the lesser rich. The latter term ously near crumbling today and
is used purposely — for who among with good reason. The swashbuck-
“the poorer of us” is not able to ling fearless competitor has been
command common items of wealth discouraged and hobbled by rigged
today which, less than one hundred rules and is fading from the
years ago, were unavailable to the scene; a less desirable character
world’s wealthiest potentates? To- has taken his place. Opportunity
day’s cheaper secondhand auto- is being replaced with plans for
mobile would have been a fantas- security; self-reliance has given
tic dream available at no price a way to dependency upon others;
century ago. The most inexpensive the rigorous tests of morality and
television set in our stores could honesty have been subverted by
not have been purchased by all legalized immorality and dis-
the world’s wealth fifty years ago, honesty.

and yet there is hardly anyone To achieve the best results, so-
today who cannot own a TV if he cialism must be eliminated from
so desires. the political scene. This can come

When the rules are not rigged, only through the understanding
we all are winners, some under- that socialism is to our economic
standably dissatisfied with the ex- and political life what rigged rules
tent of their “bounty,” but none are to any sport — disastrous!


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

JACK MORANO

HAVE YOU a “feeling of guilt” chase a new American “compact,”
about that foreign car you bought I visited the showroom of a dealer
— or are thinking of buying? If so, handling the car of my choice. I
it probably results from the “Buy informed the salesman of my de-
American” slogan pushed by those sire to “trade in” my foreign car
short-sighted persons who would for one of his new compacts.
have us believe that it is un- “I know of eight people,”
American to be thrifty! beamed the salesman, “who have

Oddly enough, if we were to fol- canceled their annual donations to
low the advice of these misin- a certain charity — since observing
formed “patriots,” the results representatives of that charitable
would be quite to the contrary of organization driving around in
their good intentions. Volkswagens.’”’ The salesman

Recently, having decided to pur- smiled — pleased with himself for
—_— } having recognized what he con-
Some readers may recognize Mr. Morano as

the New York City patrolman whose letter sidered an act of patriotism on
last winter to the Editor of The Wall Street
Journal read in part: my part.

“This country was founded on the premise i i -
that ‘the government that governs least, gov- His smile gave way to amaze
erns best.’ That is to say that a government's ment when I replied: “It seems to
proper function in a free society is to act as .

a policeman, not as a regulator over people's me that persons who practice that

actions or choices. It should institute action . ‘ ss ’ .
only when there is a breach of someone’s kind of ‘patriotism’ are neither

rights. . .
“What is more just than to say that the bright nor thrifty —nor very

proper function of a police department is to i
police? Yet it is amazing how little the New American at all. And I can prove

York City police department is used to fight jt” I added.
crime. City Hall keeps prostituting the proper ’

function of the Police and persists in using the “Prove it?” The salesman was
d ent to enforce its socialistic regula- .
Gea os puzzled. “How can you disprove

15


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

16 THE FREEMAN November

that buying foreign products “Correct —or the ten dollars
makes less work for American in- might be spent on a combination
dustry, and consequently fewer of things, such as one shirt, one
jobs for American workers?” tie, a pair of socks, and a ham-
“That,” said I, “depends on burger and coffee afterward.
whether you wish to protect only Right?”
those engaged in a particular in- “Right!”
dustry — at the expense of the “All right —now can you see
whole economy. Further, your that the haberdashery and the
position is another way of saying hamburger shop, together with all
that only the manufacturer is en- those connected with the manufac-
titled to a break — and at the ex- ture, distribution, and selling of
pense of the consumer.” those products have profited?
“How do you arrive at that?’ While it is true that the camera
The salesman was even more puz- industry in particular did not
zled. profit, all those others did.”
“Look,” I explained, “suppose “Yes, but what about the ten
you set out with $20 in your pocket dollars I paid for the camera, the
to buy a camera that you knew re- dollars that went to Japan?”
tailed at that price. But, at the “Good question! Foreign coun-
camera shop you see a comparable, tries need American money in or-
let us say, Japanese camera for der to purchase our exports. You
$10. You purchase the Japanese will notice that imports and ex-
camera and —-” ports usually balance out. For ex-
“—And an American company is ample, in 1960 we imported from
out $20,” interrupted the sales- Japan $1,148,000,000 worth of
man. goods. The Japanese used this
“True: That particular industry money to purchase from us in the
is out $20 — but you now have $10 same year $1,332,000,000 worth of

left over.” American products. You can’t cut
“Big deal!” imports back without hurting your
“No; good deal,” I corrected. own exports.”

“What would you do with $107?” “Only one hole in your argu-

“Well, I...I'd probably buy my- ment,” said the salesman. “Sup-
self a new shirt — I need one.” The pose I'd stashed the money in a
salesman contemplated. “On sec- bank instead of spending the ten
ond thought, I'd probably have dollars? Wouldn't everyone be
enough to buy myself a couple pair out?”
of socks.” “Same difference! Whenever


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

1961 “BUY AMERICAN” IS UN-AMERICAN 17

you can save money on a purchase, ing at the long-range, over-all ef-
the economy still benefits whether fects.” The salesman thought a
you spend it or “stash it” in a moment, then added, “You know
bank. The bank loans your money — it’s convictions such as yours
to people who are starting new that compelled Detroit to recon-
businesses or expanding one al- sider the wants of the public. I —
ready established and prospering.” what I mean is, there would prob-

“I guess the trouble is that most ably be no such thing as an Amer-
people just see the immediate ican compact had everyone bought
short-range results without look- American.” @®

AGAINST LIBERALISM

LYNN LANDRUM

REPORTS from the University of It does not mean that a majority
Texas are to the effect that new of them are primarily interested
vigor is shown in the campus re- in politics at all. Unless every-
volt against liberalism. Organiza- thing down there has undergone a
tion of the Young Republican Club complete change within the last
movement has progressed to where 50 years, students are still inter-
the University of Texas group is ested primarily in football, dates,
ranked first in the United States. money from home, passing
This does not mean that the courses, food, clothes, and cos-
majority of students in the Uni- metics.
versity of Texas are Republican, But 50 years ago, the student
From the Dallas Morning News, July 25,1961 opinion of the faculty was that


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

18 THE FREEMAN November

they were hopelessly old-fashioned 50 years ago are facing the revolt
and reactionary, except for an oc- of the Young Republicans on the
casional wild-and-woolly Socialist campus now. And they are un-
who wore flashy clothes and gave doubtedly alarmed about it.
out the New Freedom with ora- But the Columntator, being an
torical abandon. The revolt from old reactionary himself, is encour-
conservatism produced a crop of aged by it. It is his doctrine that
young liberals who questioned the what won’t work won’t work, and
range of accepted formulae. They if you give it enough try-out, it
revolted against Bible, Home, and will demonstrate its own folly to
Mother. They were for the initia- any perceiving eye. The young eye
tive and referendum. They knew is essentially a perceiving eye.
instinctively that little business Young people these days are think-
was essentially more moral and ing about taxation, about war,
ethical than big business. They about inflation, about making a
believed that government controls living, setting up a home, and un-
were the answer for the problems dertaking to get ahead in the
of man. They believed municipal world financially and doing a job
ownership of anything was as a citizen.
cheaper than private operation and :
management. They regarded in- All this is good. If nobody gave
terest as usury, profit as robbery, attention to pay day, the whole
and rent as a tyranny of the rich world would go broke all at once.
over the poor. That would stop all “relief,” all
And a lot of those youngsters “aid,” all “rehabilitation,” all
are now gray in hair, pink in poli- “urban renewal,” and everybody
tics, and dedicated to the business would have to go to work again. It
of making young America as “pro- evens out, after so long a time.
gressive” and as “liberal” as they Well, right now is after so long a
are. Some of these revolters of time, isn’t it? Let’s get to work. ®

WHERE BELIEF in the sacredness of authority most lingers, belief
in the sacredness of life, of liberty, and of property, is least dis-

played.

HERBERT SPENCER, Social Statics


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

GREAT BRITAIN

AND THE

COMMON MARKET

GEORGE WINDER

It is the great multiplication of all the different arts, in con-
sequence of the division of labour, which occasions, in a well-
governed society, that universal opulence which extends itself
to the lowest ranks of the people.

—ADAM SMITH, The Wealth of Nations, 1776

WHEN THIS SENTENCE first ap- Throughout most of human ex-
peared in 1776, it probably ex- istence the barriers which hin-
pressed a new idea, but now it is dered the exchange of goods —
almost universally accepted that and consequently robbed mankind
the man who tries to do every- of that wealth which can be de-
thing for himself and does not rived from the division of labor —
specialize his labor and exchange consisted chiefly of natural bar-
its products for the specialized riers such as high mountains,
products of others is assured of tempestuous seas, and unfordable
extreme poverty. This principle rivers. With the revolution in
applies not only to individuals but transport brought about by the in-
to communities and states. vention of the steam engine, and

The greater the field of ex- later by the internal combustion
change, the greater the number engine, these natural barriers
of people who exchange their have been conquered; but they
goods with each other without have been replaced by obstructions
obstructions of any kind, the erected by man himself, among
greater the wealth which will be the most notable of which are

enjoyed. quotas, tariffs, and exchange con-
—_— . trols.

Mr. Winder, formerly a Solicitor of the Su- .

preme Court in New Zealand, is now farming In countries of large areas of
in England. He has written widely on law, .
agriculture, and economics. land and of great and varied nat-

19


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

20 THE FREEMAN November

ural resources the injuries caused nomic unit, while on the other hand
to trade by these man-made bar- ] We.seée an area similar in’ natural
riers, though considerable, are resources but crisscrossed with
never disastrous. Small countries tariff barriers which div ide it into
with few natural resources, how- as many economic units. as there
ever; can: reduce themselves to: are states. It. is this division” of
poverty "by “erecting barriers to ‘ Europe into so many economies
trade in order to protect favored which, more. than anything else,
industries or to obtain ‘greater na- accounts for the poverty of the
tional self-sufficiency. We can European as compared with the
describe any area in which trade -citizen of the United States.

is carried on freely -as forming a Coe

single. economic unit. An economic Man-Made Barriers Reduced

unit generally, but not always, Generally speaking, we may say
coincides with the national unit. that the world entered into the
The larger the unit, the more ad- nineteenth century with its econ-
vantages may be derived from the omy divided into many units by
division of labor, and the more both natural and man-made bar-
prosperous the society is likely to riers. The railway-and the steam-
be. : boat conquered the natural. bar-

The outstanding example of suc- riers but, for the most part, those
cessful production based upon the which man -had himself erected,
great and varied natural resources remained. The revolution in trans-
of its economic unit is provided by port, however, caused some people
the United ‘States of America. to realize that such man-made ob-
Here, the citizens of fifty “sover- structions as tariffs were anachro-
eign states” obtain almost the full nisms, with the result that the cen-
advantage of the division of labor tury saw a number of these tariff
by trading freely with each other. barriers swept away.

Americans usually take for Perhaps the outstanding ex-
granted this freedom of trade be- ample of this reform was the Ger-
tween the states, but in one period man Zollverein which gathered
in the history of their country it many small economic units into a
would have been possible for each single large one embracing the
state to erect tariff barriers whole German Empire, The result-
against every other. When we ing improvement in the German
compare the U.S.A. with Western economy and the flourishing of the
Europe, we see on the one hand German Empire is perhaps the
fifty states formed into one eco- greatest evidence we have for the


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

1961 GREAT BRITAIN AND THE COMMON MARKET 21

superiority of %he large economic loans in those days with complete
unit over the small. freedom from political considera-
. Another important response to tions. This tended to increase the
the new conditions of the nine- advantages derived from the divi-
teenth century was the adoption of sion of labor, for it encouraged
free trade by Great Britain in the production of commodities
1846. The result of this unprece- where the natural conditions were
dented step was that this small most favorable. Few people now
country, with few natural re- realize the great service performed
sources save coal, leapt ahead of by London before World War I in
all her powerful rivals. Because coordinating the production of half
her. free trade policy was not ex- the world for the immense benefit
clusive and was applied to the Em- of all mankind.
pire and foreign countries alike,
even some foreign countries such Small Independent Units
as the Argentine and Denmark While the history of the nine-
found themselves drawn into her teenth century saw the growth of
economic orbit. By the end of the the large economic unit, the twen-
nineteenth century the Dominions tieth century is remarkable for a
had begun to erect tariff barriers reactionary creation of many
against Great Britain. But so com- small units, each trying to be as
pletely had the free trade policy of self-contained as possible.
the mother country caused them The most melancholy example
to gear their productions for the of this is provided by the break-
supply of her markets that in spite ing up of the Austrian Empire in-
of these Dominion tariffs, the to its component parts. The dis-
British Empire with minor reser- solution of this Empire as a polit-
vations formed one vast economic ical unit may or may not have
unit, been desirable; definitely disas-
The free trade policy of Great trous was the breaking up of the
Britain — rather than the much- economic unity it had so long en-
publicized political ties of colonial- joyed.
ism — acted as a central magnet It is quite possible for economic
that drew together many econo- unity to exist without political
mies and gave them a great meas- unity. Had the new countries
ure of unity. Moreover, that policy formed from the Austrian Empire
also had the effect of making Lon- only given each other that free
don the financial center of the access for their goods which they
world, and “The City” made its had formerly enjoyed, their politi-


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

22 THE FREEMAN : November

cal independence would have been pendencies, India for example, to
in no way impaired, and the eco- place tariff barriers against her;
nomic unity enjoyed under the but generally, they were not high
Empire would have been saved. In- or numerous, and most of her
stead, they added 12,000 miles of Asian and African possessions
new tariff barriers to the map of were joined with her in one vast
Europe and formed themselves economic unit.
into small economic units which Now, as each of her dependen-
were completely unviable. cies gains its independence, almost
During World War II the ad- its first legislative act is to erect
vantages possessed by the large tariff barriers against Great Brit-
economic unit were widely rec- ain and the rest of the world. This
ognized, and it became the custom tendency seems to be founded on
to declare that in the new age nothing more than the desire of
which men hoped was dawning young nations to assert them-
the nations would unite into a selves. It "is nevertheless disas-
very few large economies. The trous. The once great united econ-
idealist ‘even saw reason to hope omy of the British Empire is be-
that the world might become one ing broken into many unviable
vast economy in which all peoples parts. There is one factor, how-
might trade with each other quite ever — which we shall consider
freely; customs houses would be- later — which acts as a saving
come relics of a barbarous past. grace and to some extent holds
In spite of men’s hopes, exactly the economy of the British Com-
the opposite tendency manifested monwealth tenuously together.
itself, and customs houses are
now proliferating where none Russian Common Market
had existed before. The chief cause Although many of the economies
of this is the dissolution of the which have been subject to the in-
the British Empire. Although we fluence of Western civilization are
have seen that her white Domin- breaking up, the tendency beyond
ions even before World War I had the iron curtain is exactly the op-
already begun to place tariff bar- posite. Russia provides us with an
riers against the mother country, example of an economic unit which
she had kept the rest of her Em- has lately greatly expanded. This
pire more or less in line with her economic expansion did not take
own free trade policy. With the ex- place at the same time as Russia’s
tension of self-government, she political conquests; it has occurred
had allowed some of her chief de- only within the last two years.


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

1961 GREAT BRITAIN AND THE COMMON MARKET 23

Until then, Russia kept her econ- nevertheless, this communist at-
omy quite separate from the econ- tempt to obtain the advantages of
omies of her satellites. She pre- the division of labor offers the
ferred to obtain goods within her West a definite challenge. The
own territory if this were possible. West should at least try to reverse
When she did purchase goods from the disastrous tendency for its
her satellites, she paid for them at economies to grow smaller and
rates which differed from those should combine economic units
used in pricing the goods of her where possible.
own factories; and when she sold
to her satellites, she charged them Sixes and Sevens
higher rates than those applying There are in Europe today two
in Russia itself. important movements which have
She has now realized, however, this object in view. The first of
that this policy is contrary to the these is usually described as the
principle of the division of labor Free Trade Area or the Outer
which, of course, has international Seven in which Great Britain,
as well as internal application. She Sweden, Norway, Denmark, Switz-
has abolished the organizations erland, Austria, and Portugal have
which formerly controlled Soviet- mutually agreed to lower their
satellite trade and established a tariffs against each other until
“Committee for Economic Mutual they completely disappear, when
Assistance” on which are repre- all seven countries will form one
sented all the communist gov- economic unit. This in no way in-
ernments of Eastern Europe and volves the creation of a common
which the Chinese attend as ob- tariff barrier against the rest of
servers. The object of this body is the world; and though this move-
to form what may well be called a ment toward economic unity is
Common Market embracing all somewhat stultified by reserva-
communist countries, including tions, it constitutes a most desir-
China. If this project succeeds, able development.

an economic unit at least six times The other important movement
as large as that of the United to amalgamate economies is the
States will be formed. formation of the European Com-

It is a fact, of course, that the mon Market in which France, Ger-
communist system of state control many, Italy, Holland, Belgium,
prevents that complete coordina- and Luxembourg have agreed to
tion of an economy which can only abolish, over a period of time,
occur under the free price system; their tariffs against each other.


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

24 THE FREEMAN November

This movement, however, differs Britain hesitates, and those who
from that of the Outer Seven in oppose her joining are arousing
that these six countries intend to themselves for a serious political
erect a common barrier against battle. The reason for this is that
all other countries. Six tariff bar- Great Britain was once the center
riers are to be replaced by one of an economy which, with all its
common barrier, and few will defects and one-sided tariffs, was
doubt that this amalgamation will the largest economic unit in the
bring the same benefits to the six world; and many Britons are still
countries concerned as the Zoll- conditioned by this past. They
verein of the nineteenth century realize that more than a shadow

brought to Germany. of that economic unity with the
Empire still exists, and instinc-

Should Britain Join? tively feel that these survivals are
The big question now troubling still the bases of British strength.
the minds of all Britons and most Here, we must clear up popular

Europeans is: Why does not Great ideas concerning the so-called sys-
Britain join this European Com- tem of Empire Preference. The
mon Market? If she would only Dominions place lower tariffs
join, it is presumed that the other against Great Britain than against
members of the Outer Seven would the foreigner and are inclined to
also find their way behind the com- consider this a generous form of
mon tariff curtain which would preference for British goods. In
then protect Europe from the rest the great majority of cases, how-
of the world. The question is ever, this preference is only a
rapidly becoming the great politi- cloak for overcoming opposition to
cal issue of the time, and at the tariffs against the mother country.
moment it divides every political It is the importation of goods from
party in Great Britain. : Great Britain which the Dominion

The advantages of the European manufacturer usually fears, and
Common Market for Great Britain the lower tariff "barrier is made
are obvious. She would have free sufficiently high to keep them out.
access to a market of 160 million This object having been at-
people. Equally important, if Great tained, a still higher — but more
Britain remains outside the com- often than not merely nominal
mon tariff barrier which will sur- tariff —is then placed against the
round the six, Germany with her foreigner who in any case has
great rival industrial capacity will probably never supplied the goods
have an immense advantage. Yet, concerned. Empire Preference has


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

1961 GREAT BRITAIN AND THE COMMON MARKET 25

meant little to Great Britain, and affect Hong Kong, Great Britain
the painful fact remains that, in has virtually no tariffs against her
spite of its alleged advantages, the Commonwealth. In fact, as far as
economic unity of her Empire has her Commonwealth is concerned
been reduced by innumerable she is, for all practical purposes,
tariffs imposed on her goods by just as much a free trade country
the Dominions. Now, these tariff as she was in the days of Glad-
impositions are being repeated by stone. This means that approxi-
India and by every one of her matelyshalf®er imports come into
colonies as soon as they receive the country as freely as they did

their independence. in her great days of free trade.
It also means that the Common-
Commonwealth Trade wealth countries, in spite of their

Looking at these rising tariffs, tariffs against the mother coun-
one is inclined to pronounce that try, find themselves very much un-
the economic unity of the British der the influence of her markets,
Commonwealth is already a thing which still act as a magnet having
of the past and that Great Britain a powerful influence in drawing
might just as well join the Euro- their individual economies into
pean Common Market and save one vast coordinated whole.
herself from being left a solitary, New Zealand, for example, tries
isolated, and fading economy. But to be an industrial nation and has
I have already said that although erected all kinds of tariffs against
the economic unity of the British the mother country; but still, the
Empire, now called the British British market into which she has
Commonwealth, is breaking up, complete freedom of entry for her
it possesses a saving grace holding wool, butter, cheese, mutton, lamb,
it tenuously together. beef, timber, and every other com-

This saving grace is that, in modity she can produce, is the
spite of the fact that her Domin- overriding fact in her economy. If
ions have piled up tariff walls that market failed her, she could
against the mother country, and not afford to buy even the raw
in spite of the fact that her former materials she needs for the sickly
Asian and African possessions are growth of her protected secondary
equally assiduous at this form of industries.
economic warfare, Great Britain In spite of New Zealand's pro-
has never retaliated. Except for tective tariffs, the free trade policy
duties on sugar and on certain of the mother country has made
manufactured goods, which chiefly that Dominion almost as much


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

26 THE FREEMAN November

part of the British economy as is wealth will be shattered forever.
Devon or Cornwall. The same dom- The six Common Market coun-
inating influence of the home mar- tries have already established a
ket is felt by Australia and by duty of 20 per cent against wheat,
many of the former African and 20 to 24 per cent against beef, mut-
Asian possessions. It is felt by Ire- ton, and lamb, 20 to 25 per cent
land, for although that country against bacon, 24 per cent against
has left the Commonwealth, Great butter, and 23 per cent against
Britain persists in treating her, cheese. If Great Britain enters the
for trade purposes, just as if she Common Market, she would have
were still a member. It is felt by to erect these duties against her
South Africa, which is the latest Commonwealth. The effect would
country to leave the Common- be serious indeed. To New Zealand
wealth; as yet, there has been no in particular, it would constitute a
notice from Great Britain that her shattering blow as these commodi-
free trade policy toward South tiesareamongthe Dominion’schief
Africa will be withdrawn. exports. Moreover, Holland and the
other members of the six would
have free entry to Britain for such
Many Commonwealth countries, goods.

in spite of their insistence on pro- If those who ask Great Britain
tective tariffs, still find their econ- to join the European Common
omies largely oriented toward Market were to suggest that she
the British market, and are likely place tariffs against goods coming
to remain so as long as Great Brit- into the rest of the country from
ain continues toward them her Devon and Cornwall, the whole
free policy. It is the knowledge absurdity of the proposal would
that a great measure of Common- be obvious. But the surgical opera-
wealth economic unity still re- tion they now ask her to apply
mains that has now aroused the against New Zealand is no less
opposition among British people serious, because for all practical
to their country’s entry into the purposes that Dominion is just as
European Common Market. They much part of the British economy
realize that if Great Britain goes as are Devon and Cornwall.

behind the trade curtain which As a result, many people look
the Common Market proposes to upon the demand for Great Brit-
erect against the rest of the world ain’s entry into the Common
that remaining measure of eco- Market, not as a constructive de-
nomic unity with her Common- velopment, but as a demand for

Oriented Toward British Market


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

1961 GREAT BRITAIN AND THE COMMON MARKET 27

the final dissolution of what is ter the Common Market accom-
left of the British Empire. That panied by her Commonwealth — or
"Empire as a political entity is now at least her white Dominions. The
virtually dissolved but a measure nations of the Outer Seven group
of economic unity still remains would then almost certainly enter.
and strengthens and makes pros- This would make the largest eco-
perous all its parts. Economic nomic unit in the world. But this
unity is perhaps all that is really does not appeal to the Common
useful in any Empire: it is the Market Six. The products of the
substance when the insubstantial temperate British Dominions
glory has departed. It is also would provide the European with
worth noting that approximately food at very much lower prices
half of Great Britain's exports go than he pays today, the same low
to her Commonwealth, whereas, prices for wheat, meat, and butter
at present, the six countries of the as the British people now enjoy.
Common Market take only 14 per Apparently, this is a disaster

cent. which must be avoided at all costs!
There are other reasons, of
courSe, for opposition to Great We can compare the European

Britain’s entry into the Common Common Market to a fine new
Market. There is the fear that the mansion and imagine Great Brit-
Common Market, as envisaged in ain as a man who is offered its
the Treaty of Rome, implies a shelter, but only on the condition
planned rather than a free market, that he must first pull down his
and there is a natural reluctance own highly serviceable cottage in
on the part of the British people which he has long enjoyed eco-
to have their economy planned by nomic security with his children
a central authority which must in and dependents. This Common-
the nature of things have a ma- wealth Cottage of his may be frail,
jority of foreigners. They doubt its roof may shake, the winds of
very much whether their own change may blow through it, and
countrymen can plan their econ- storm may enter, but it has been
omy, let alone a Board of foreign- built with his own hands and it
ers. Then, there is fear of the polit- is fragrant with the memories of
ical implications of the Treaty of his fathers. Moreover, it still
Rome. serves a very useful purpose. It
is doubtful that the British people

A possible solution, of course, will desert it for the bright new
would be for Great Britain to en- mansion next door. ®


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

he “Toke of; Little Red Hen. She picked out a

nice piece of ground near the fence

- and worked hard scratching it up

into good loose soil. Then she made
¢ some holes, well spaced, dropped a

kernel in each hole, and filled them

: carefully with dirt.
Ud tos The Little Red Hen visited her
5 bit of wheat field every day, pulled

. out the weeds that came up, used
(Adapted from earlier versions) her sprinkling can to water the soil
when there wasn’t enough rain.
W. A. PATON Soon the green wheat sprouts
broke through the ground and
EARLY ONE MORNING the Little grew into sturdy plants, and fi-
Red Hen was out looking for nally the stalks and wheat heads
something to eat, and in the course appeared and ripened. When the
of her search she came upon sev- Wheat was ready: to cut, the Little
eral plump, fresh kernels of Red Hen appealed to her “friends”
wheat, spilled by somebody in the again: “Who will help me cut:the
road. She was just about to swal- Wheat and take it tothe mill?” ~
low them when the thought oc- “Not I” said the duck. “Not I,”
curred to her that perhaps she said the ‘goose. “Not L” said the
might instead get into the wheat Pig.
business in a small way by plant- “Well, I will then,” said the
ing the kernels. So she called to Little Red Hen. She cut the wheat
some of her farm friends: “Look, stalk: by stalk with her shears,
I've found some wheat. Who will bound it into several bundles and
help me dig up some ground so that carried each bundle on-her- back
we can plant: this wheat and raise over the hill and down by the river
acrop?’ = to the mill. The miller spread the
“The “friends” didn’t take kindly wheat out on his threshing floor
to the idea. “Not I,” quacked the and pounded the heads with his
duck. “Not ‘I,” honked the goose. flail until the kernels were all sep-
“Not 1,” grunted the pig. arated from the husks. Then he
“Well, I will then,” said the blew away the straw and chaff
and ground the beautiful red
Dr. Paton is Professor Emeritus of Accounting Wheat into flour. He put the flour

and of Economics, School of Business Admin- . . .
istration, University of Michigan, in a sack (after taking out his

28


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

1961 THE TALE OF THE LITTLE RED HEN 29

toll for the work he’d done), tied planted it; I pulled the weeds and
up the sack, and gave it to the watered the ground when it got
Little Red Hen. She carried it on too dry; I cut the wheat and car-
her back all the way home — a ried it all the way to the mill; I car-
long, hard trip. When she had the ried the flour home myself; I made
sack of flour safely in her house, the flour into dough and baked
she went out and called to her it. None of you would help until it
“friends” once more. “Who will came time to eat. And I'm going
help me make my flour into dough to eat my own bread all by my-
and bake it into bread?” . self.” She shut the door with a
“Not I,” said the duck. “Not I,” bang, and sat down to a good meal
said the goose. “Not 1,” said the of hot bread, with plenty of butter
pig. on it! And it didn’t bother her a
“Well, I will then,” said the bit that she was not sharing the
Little Red Hen. She bustled about results of her foresight, initiative,
making the flour into dough, and and labor with those unwilling to
putting it in her round baking contribute to production but very
pan. After the dough had risen, eager to consume what someone
she put it in the oven-and late in else had produced.
the afternoon she took it out (be- ®#  * x
ing careful not to burn herself), Unfortunately, -the fable’s end-
and there on the table was a round ing doesn’t square with the facts
loaf of the loveliest brown bread of life in 1961 America. The duck,
anyone ever saw or smelled! the goose, and the pig, constituting
The Little Red Hen then went a democratic majority, have au-
to the door and — with a bit of thorized their income tax collector
a glint in her eye — called out: to take from the very productive
“Who will help me eat this lovely little hen up to nine-tenths of the
loaf of bread that I have baked?” bread she has earned. Added to
“I will,” quacked the duck, very this ruinous levy there may be a
loudly. “I will,” promptly honked sizable fine to which she is sub-
the goose. “I will,” squealed the ject for having grown wheat in
pig. And all three rushed to the excess of the quote allowed her
door of the Little Red Hen’s under the farm price-support pro-
house. gram. Far from enjoying the
But they didn’t get any encour- whole loaf she produced by her
agement from that point on. “No,” own efforts, she’ll be lucky in 1961
said the Little Red Hen. “I found if her “needy” mnéighbors leave
the wheat; I prepared the soil and her as much as a crumb. @®


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

Some background briefs on...

= PIRI0/G|RIE/S|S!I|VIE
INCOME TAX

JOHN CHAMBERLAIN

EXPENDITURES, says Parkinson in of course, hand most of it back as
his famous Law, always rise to welfare — or as legalized patron-
meet income. age. But even in handing it back
It is too bad that Parkinson, there will be strings attached to
that canny man, wasn’t around it: following Galbraith, the po-
way back in 1913 when the pro- litico will tell the people how the

gressive income tax was first money is to be spent.
adopted in America. If he had Looking back on 1913, one can
been on the scene, he might have only be amazed at the incredible
shocked at least a few people into innocence of that generation of
sobriety by observing that his Americans. When the Sixteenth
Law, as it applies to government, (the progressive income tax)
must be phrased this way: “The Amendment to the Constitution
expenditures of the State always was formally ratified, the Con-
rise to meet potential income.” In gress responded by adding a
other words, the politico, with the seemingly quite inoffensive federal
people’s total earnings at his po- income tax rider to the Under-
tential legal disposal, will inevit- wood Tariff Act. The rider called
ably move toward taking it all. In for rates running up to a maxi-
return for votes the politico will, mum of seven per cent on the last
bracket of a $200,000-a-year in-

Mr. Chamberlain, noted critic, journalist, and come.

editor, regularly presents ‘A Reviewer's Note- eo

book” in THE FREEMAN. Among recent works Although the principle of the
is his exciting analysis of The Roots of Capi- . .

talism (Princeton: D. Van Nostrand, 1959). income tax had been subject to a

30


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

1961 THE PROGRESSIVE INCOME TAX 31

long controversy (it had been de- paid today to give him a take-
clared unconstitutional by the Su- home purchasing power compara-
preme Court in 1894), the legisla- ble to his 1981 earnings. Out of a
tors took it lightly. When famed salary of $80,000 in 1931, Babe
attorney Joseph Choate remarked Ruth had $68,535 after federal in-
ominously that, in time, the tax come taxes. If “The Babe” were
could go to 50 per cent or even alive in 1961, he would need a
higher, Senator William E. Borah salary of about $960,000 to give
arose and shook his massive head. him as much purchasing power,
The very idea that anyone could after inflation and other federal
ever be taxed at a 50 per cent rate income taxes, as he had in 1931.
seemed silly to the Progressive
Republican from Idaho. Hurling Early Warnings
his rhetoric directly at Choate, Long before Joseph Choate
Borah asked: “Whose equity, voiced his prophecy, English econ-
sense of fairness, of justice... omists were taking a dim view of
does he question?” what might happen under progres-
As things have turned out, sive taxation. Said Ramsay Mec-
Joseph Choate was altogether too Culloch in 1845: “The moment
moderate a prophet: today the top you abandon... .the cardinal prin-
income tax rate is 91 per cent, ciple of exacting from all indi-
and the 50 per cent rate begins at viduals the same proportion of
the $16,000-a-year level. In 1913 their income or their property,
dollars, $16,000 a year is worth a you are at sea without rudder or
mere $5,350. During World War I compass and there is no amount
the tax took its first swift leap up- of injustice or folly you may not
ward, only to fall back after the commit.” And he continued: “The
Peace of Versailles. Ever since the reasons that made the step be
revenue act of 1934 first turned taken in the first instance, backed
the full fury of a depression-rid- as they are sure to be by agitation
den generation on anyone and and clamor, will impel you for-
everyone with an income of $25,- wards.... Why not take 50 per
000 a year or more, the rates at cent from the man of two thousand

the top have been deadly. pounds a year, and confiscate all

The change in the tax tempera- the higher class of incomes before
ture over the span of the past you tax the lower?.... Graduation
thirty years can be most graphi- is not an evil to be paltered with.
cally perceived if we consider what . . . The savages described by

a Babe Ruth would have to be Montesquieu, who to get at the


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

32 - THE FREEMAN November

fruit cut down the tree, are about to generate income, then the tax
as good financiers as the advocates base itself must narrow and di-
of this sort of taxes.” minishing returns set in.

It was only three years after
McCulloch’s warning that Karl A Theory of Justice BN
Marx and Frederick Engels, in the To make a tax acceptable, it
Communist Manifesto, advocated a must be levied in accordance with
heavy progressive tax as-a means a theory of justice that is an arti-
of despoiling the “bourgeoisie” cle of faith with the majority.
and softening middle-class society When justice, or the appearance
up for the dictatorship of the pro- of justice, fails, revolt is inevita-
letariat. Walter Bagehot, editor of ble: the Puritan Revolution in
the London Economist, feared that England, the American Revolu-
the Marxians would prevail: he tion of 1776, and the French Revo-
predicted that. the progressive lution of 1789 are all cases in
tax, in combination with the prin- point. The theory of justice behind
ciple of universal suffrage, would the progressive income tax is that
result not only in the destruction it imposes ‘equality of sacrifice”
of the rich but in the very dissi- — and as long as this is believed,
pation of the productive capital the tax will be palatable to a
which gives society (the poor in- majority. “Equality of sacrifice”
cluded) its margins of comfort. is the democratic way.

The predictions of McCulloch Time was when the progressive
and Bagehot have not yet come to tax would not have been accepted
pass in their ultimate direness; as equitable even by a majority of
maybe they failed to reckon with the poor. Traditional equity re-
the adaptability of man. Psycho- quired that taxes should be levied
logically speaking, there is obvi- proportionately, not progressively.
ously some point where the pro- This was in accordance with the
gressive tax must. recoil upon it- belief that a man’s property, or
self, destroying the base from his income, was an index of de-
which it might hope ‘to achieve a serving achievement, or of value
maximum of “take.” Just where contributed in the market place to
the point is we cannot tell: there society. True, some men inherited
is no way of measuring businesses their property or incomes — but
that are unborn, or energies and that was something to be handled
creative enthusiasms that simply or regulated under laws of inherit-
fail to well up. But when a pro- ance. In any case the erosion of
gressive tax dampens the impulse time could be counted on to take



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

1961 THE PROGRESSIVE INCOME TAX 33

care of the inefficient use of in- theory that “it is not equal to treat
herited fortune —‘“shirtsleeves to unequals equally.” In cases of char-
shirtsleeves in three generations” ity, this is undoubtedly true, but
expressed the common wisdom in no comprehensive legal system can
this matter of luck in the choice be reared on a rule which begins

of one’s parents. by regarding everybody as an ex-
Under the proportional theory ception.
of tax equity, a rich man would To rationalize their inapposite

pay more taxes than a poor man, view, these economists sought the
naturally. But every dollar of as- support of “marginal utility”
sessed property value, or of in- analysis; they argued that the
come, or of spending, would be “utility” of the rich man’s “last
taxed in equal amount, at flat per- dollar of income” must be con-
centage rates. Dollars would be siderably less to him than the util-
treated equally, no matter who ity of the poor man’s last dollar
owned them, or spent them. Thus to the poor man. To take more of
the citizens would be accorded the what the rich man valued less
“equal protection of the laws” — was, to these economists, a way of
and his “privileges and immuni- achieving tax justice. They based
ties” would be equal, as provided their theory of tax gradation
for in the United States Constitu- from bracket to bracket on the old
tion. Any other way of treating pleasure-pain calculus of the Eng-
taxation was regarded as discrim- lish utilitarian philosophers: ob-
inatory, or as putting penalties viously, so they said, there must
on ability, ambition, and success. be more pleasure and pain involved
in satisfying (or in failing to sat-
The Communist Manifesto isfy) basic hungers than in buy-
It was Marxian socialism — ing a Rolls-Royce or subscribing
“From each according to his abil- for a seasonal box at the opera.
ities, to each according to his By taking more of the supposedly
needs” — which fathered the great less-valued “Rolls-Royce dollar”
attack on proportional tax equity: than of the highly-valued bread-
a “heavy graduated income tax” and-beer dollar, “equality of sacri-
is a salient feature of the Com- fice” could theoretically be trans-
munist Manifesto of 1848. But lated into a law which would satis-
the Marxians would have made fy the ethical sense of the major-
little headway if non-Marxian ity.
economists had not come unwit- Superficially considered, there is
tingly to their support with the a certain amount of rough prac-


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

34 THE FREEMAN November

tical justice in this way of re- Who is to say whether the “last
garding the “last dollars” — or the dollar” of a poor man taking a
upper brackets —of a man’s in- flyer on the “daily double” at the
come. If it is merely a question of race track is worth more to the
satisfying the basic hungers for individual than the “last dollar”
food, shelter, clothing, and the of a biochemist who wishes to buy
minimal cultural decencies, “last a year’s leisure to experiment
dollars” undoubtedly mean much; with rare bacterial cultures? Who
they may even mean life and is to say whether the last dollar
death. But this is an argument for spent by a housewife on a new
a basic exemption from taxation, Easter hat is worth more to its
not for levying progressively owner than the last dollar thrown
steeper surtaxes in the middle and into the kitty by a Rockefeller to
upper brackets. plant Easter lilies or tulips at
Beyond a certain subsistence Rockefeller Center?
and cultural minimum, the idea
that “last dollars” can be rated in “Equality of Sacrifice”
accordance with a scale of “mar- Money has such protean uses
ginal utility” to the individual be- that its personal valuation can
comes a fiction. Since men differ take a thousand-and-one turns. It
by inherited temperament, by cir- can command leisure, freedom,
cumstance, by ambition, and by security, adventure, education,
training, every living human be- veneration, esthetic gratification,
ing values his “last dollars” dif- and appendicitis operations — plus
ferently. If intensity of avarice the whole economic gamut of or-
could be measured, the French dinary goods and services. It can
peasant clutching his franc of command both power and the pro-
profit and Hetty Green clutching tection of the individual against
her millions might come out at the power. As a cynical wit has put
same place. A Huckleberry Finn — it, though you may be able in some
or an ascetic St. Simeon Stylites instances to buy happiness with
seated on his column — will care money, you can’t buy money with
little enough even for a “first dol- happiness — which could conceiv-
lar,” whereas a Major Armstrong, ably give the “last dollar” of in-
intent on.raising the money need- come a “one-up” position even to
ed to protect his patent rights to a man in love.
a radio amplifier, may desperately To make the attempt to force
value — and need — his “last mil- “equality of sacrifice” by taking
lion.” more of what the well-to-do man


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

1961 THE PROGRESSIVE INCOME TAX 35

presumptively values less is, then, poor man’s contribution to the
to pursue a chimera into a quag- Red Cross and the rich man’s eve-
mire. The utility of a dollar — any ningdissipation atthe Copacabana.
dollar — to an individual is a Even where the comparisons are
purely subjective phenomenon, freighted with seemingly unargu-
and cannot be measured in any able moral distinctions, there are
known unit. One cannot multiply quicksands within quicksands. A
quantities by qualities and get a night club might support a strug-
mathematically respectable answer, gling musician while he is com-
as Sir Isaac Newton observed long posing a great rhapsody, and a
ago. To suppose that anybody val- dog track could conceivably lead
ues his “last dollars” less than to far-reaching discoveries in
anybody else is to substitute mind- canine genetics. On the other
reading (and emotion-reading) for hand, charity — or a newly-cre-
objective measurement. It puts a ated industry — may result in
self-righteous and wholly tyranni- prodigious waste.
cal power into the hands of a ma-
jority, or into the hands of the Marginal Utility
politicians who represent what Used in price analysis, mar-
they think is the majority. ginal utility has something objec-
As for the value of an indi- tive to work on: the amount of
vidual’s last dollar to society, this goods which clear the market
depends wholly on the uses to when-the price is either raised or
which it is put. It is the respon- lowered. By utilizing theoretical
sibility, the ingenuity, and the supply-and-demand curves, one
creativity of the individual which can even make reasonable guesses
establishes the social “marginal about the future. But marginal
utility” of the last dollar of in- utility, which is of no use whatso-
come. But here, also, utility can- ever in judging the intensity of
not be expressed in a priori terms, personal feelings, cannot legiti-
by taxing a man because he mately be used to give society a
might waste his tax dollars. right to political dictation of the
The pleasure-pain calculus is social uses of “last dollars.” To
wholly impotent when it comes to tax possible investment capital on
comparing a poor man’s ticket to the theory that “society,” as rep-
the dog races (theoretically of resented by government, might in-
little use to society) and a rich vest it better is to indulge in a
man’s investment in a job-creating wild guess. Measurement (via a
business. Or, for that matter, the tax) cannot be undertaken before


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

36 THE FREEMAN ’ November

the dollars are spent. This is why sistent discouragement of -excel-
men have traditionally been left lence by means of periodic cancel-
the use of their dollars to spend lation or retraction of rewards?
them or to invest them as they If it does, then mankind must au-
please. When the market decides, tomatically be deprived of the
there is no uncertainty about the benefits normally accruing to it
comparative: rating of ‘men’ S de from the natural variation of hu-

sires. : ~~. . man beings. With the fostering of
. a widespread -“what’s the use” at-
An Equality of Misery : © titude, new inventions, new quali-

‘Equality - is an idea that leads tative changes, new theories,
inevitably to’ contradictions, de- ideas, and fashions, must falter;
pending on the values of the in: the standard of living must re--
. dividual who advocates it. One can cede; the birth rate must drop;
begin with the theory that every- and the equality thus achieved will
one should start with the same ad- be an equality of misery.
vantages in life: such advantages Insofar as it results in “equal-
as equality before God and the ity,” the progressive income tax
law, ‘equal ‘opportunity for educa- is a spawn of the second idea. It
tion, and a basi¢ subsistence that attempts to pull the exceptional at
will keep. one from being warped least part way back into the pack
or -stunted.- during the growing by canceling a good part of the
period. This is an idea of equality previous year’s gain every April
that ‘is firmly "imbedded in the 15. Since it is not a tax on capital,
American dream:-it has-also been the progressive income tax cannot
roughly attainable in American do the whole job of diffusing a’
practice. Granted this equality, more or less complete equalitarian-
however, people who are clever, ism throughout ‘society. But it
able, persistent, or merely per- keeps newcomers from amassing
suasive must soon outdistance the capital on their own out of sav-
rest. As a people we have accepted ings — and, taken in conjunction
this, traditionally, as being emi- with stiff inheritance taxes, it
nently fair. : could carry out a revolutionary job

"It. does not;- however, result in of leveling within the space of a
an equalitarian society. Does true few generations.
equality consist, then, of pulling How “moral” is this approach
everyone who has exceptional abil- to equality via the tax collector?
ities back into the pack at stated If the end to be achieved were a
intervals? Does it entail the con-" benevolent brotherhood, then there


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

1961 THE PROGRESSIVE INCOME TAX 37

might be something to be said for competition to get income in
it. But the means are neither rele- terms of social services (un-
vant to nor consistent with such taxed). The State is called upon
an end. Equality via the tax col- to provide more money for
lector operates through the social schools, medical services, pen-
motive of envy, not love or char- sions, what-not. Producers, who
ity. It begins with the politics of have their own corporate income
“soak the rich.” Soon the defini- taxes to worry about, struggle for
tion of “rich” is expanded to in- special tax write-offs; every dif-
clude the middle classes. And it ferent productive group, from ag-
all ends with the exaltation of the riculture to labor, wants exemp-
bureaucrat, who is in charge of tions. The result is an intense ma-
spending the spoils. Minorities terialism which is rendered all the
are inevitably put at the mercy more ugly because it puts guns in-
of majorities — and everybody is to the hands of any group which
at the mercy of the politicos, who thinks it has a chance of trans-
get first whack at the resources of forming a minority into a ma-

the State. jority by the mere offer of a trade
: in votes.

Injecting a Psychology of The depredation psychology has

Depredation into Society its reflex within voluntary associ-

. Instead of fostering brother- ations which are compelled to sly
hood, then, the progressive in- expedients in order to retain as-
come tax introduces a psychology sets, earning capacity, or mere
of depredation into society. Pres- utility. Businesses are diverted
sure groups everywhere go for from thinking about productiv-
their share of the spoils. The arid ity; decisions are often made
states want big dams — at the ex- with a primary eye to “tax ad-
pense, not of willing investors, vantage.”

but of the common people who Take the case of a small sponge
have chosen to stay in greener, rubber company in Connecticut's
though more densely populated, Naugatuck Valley, for example. It
New Jersey and Connecticut. has been built up by hard-work-
Everyone has his pet scheme for ing partners. But the partners find
spending other people’s money, their only way of cashing in on
and empires grow in Washington their creation in their old age is
as the politicos cater to the via capital gains. So they sell their
schemers. As money income is business to a big Akron, Ohio,
taxed away, there is a tremendous rubber company, with their sons


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

38 THE FREEMAN November

receiving stock as their inheri- Undistributed Profits
tance instead of a going share in As a defensive reflex against
a family business. A somewhat the depredation psychology, high
similar instance of a small busi- individual tax rates result in the
ness firm disappearing into the retention of earnings by corpor-
maw of a larger, forms the sub- ations. The proof of this is objec-
stance of Cameron Hawley’s novel, tive: undistributed profits made
Cash McCall. up some 30 per cent of corporate
Many a small businessman is profits after tax in 1929 and some
tempted to sell out for capital 50 per cent in 1959. By leaving
gains rather than continue to potential dividend money in a
work for an annual income. The business, the investor gets a capi-
result is that big companies grow tal appreciation that is taxed at
as small family businesses disap- the 25 per cent of income limit if
pear. In the big companies salar- he chooses to sell his stock. In ad-
ies are paid partly in cash, partly dition to helping the shareholder
in “future income” via such things stay out of a higher tax bracket,
as pension rights, commitments this also provides a method where-
to retainers for “advisory aid” in by ownership can duck the effects
the years after retirement, and of double taxation of dividend
stock options leading to capital money. While it may be imma-
gains. Expense allowances go up terial to a given company that it
as entertainment, housing, car chooses to finance its future
use, medical examinations, and growth out of retained earnings
vacations-cum-business trips are (or undistributed profits) instead
all allocated to ‘business costs.” of going into the market for
For its own part, labor devotes share capital, this method of fi-
a great deal of its organizational nancing robs the investor of his
energy into fighting for “fringe flexibility of decision. The in-
benefits” that will not appear on vestor sticks, perforce, to his “old
the ordinary tax forms as income. company” instead of surveying
“Fringe benefits” result in an un- the field for new options. And the
even diffusion of gains among “old company” may do the diver-
the workers, for, while everybody sifying which the investor used
foregoes a possible raise in order to do for himself; it may branch
that the company may finance a out into unrelated lines, which
fringe benefit, not everybody col- can have good or bad effects de-
lects on the benefit to the extent pending on the ability of manage-
of his due, ment to handle diversification


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

1961 THE PROGRESSIVE INCOME TAX 39

within a single corporate set-up. necessarily diverted into the busi-
In any event, business must pay ness of defending oneself against
some cost for being tax-oriented, the government — a loss of energy
not production-oriented. Some ef- which might be put to far more
ficiency is lost if only because tax productive purposes, with society
lawyers come high. the richer for it all around.

If the need to defend against a
depredation psychology has its Tax Exempt Securities
subtle effects on voluntary asso- Finally, to protect against dep-
ciations, it also puts a premium on redation psychology, the rich
slyness as practiced by the in- seek refuge in tax-exempt bonds.
dividual taxpayer. A well-known Thus potential risk capital disap-
book company advertises a “Fed- pears into the sink of dead-horse
eral Tax Course” and offers a spe- debt. This is the ultimate com-
cial report guaranteed to show mentary on progressively taxing
what deductions can legally be “last dollars.” Ironically, it would
claimed for business expenses on take a ‘“degressive tax,” i.e., one
transportation, entertainment, that taxed “last dollars” least, in
lodging, gifts, theatre tickets, order to bring money from tax
club dues, and bills, and “your exempts back into the pool of risk
wife's expenses if she travels with money that should be available to
you.” Another special report is the man with a new idea.
advertised as showing how “men The late Professor Henry
in the $20,000 to $100,000 class Simons of the University of Chi-
can virtually cut their tax in cago economics faculty argued
two” by dividing income among that the case for drastic progres-
the family. Income can be trans- sions in income taxation “must be
ferred to minor children; prop- rested on the case against in-
erty used in a business can be equality.” If the human race has
turned over to a member of the a natural interest in human varia-
family and leased back (at a rent tion, then-the.case for progressive
deduction); income-producing taxation is indeed ‘uneasy” (to
property can be sold from one use the phrase of Walter Blum
member of a family to another to and Harry Kalven, Jr.). But if
gain a depreciation advantage; equality (in the leveling sense)
and so on. All of this comes under can by any stretch of the im-
the heading of “tax avoidance,” agination be considered the touch-
which is perfectly legal. Never- stone of the good society, then
theless, a great deal of energy is the progressive tax falls into


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

40 THE FREEMAN November

place as a relevant means to the tion, with its fantastically efficient
achievement of social justice. But machine development, not to any
it is only one relevant means, and “redistribution” effected by the
if it is left to operate alone it tax.) :

will not achieve its leveling end. What the progressive income
tax cannot do is to cut down the
The Sorry Record money-mobility - of the rich. A

For better or worse, the pro- man with a fortune can protect
gressive income.tax in America his equity by moving money about
has obviously not achieved an on the board of opportunity. He
equalitarian result, This does not can invest his money in super-
mean, however, that it should be markets in Venezuela, or buy oil
‘written off as socially innocuous. rights in Western Canada, or be-
Instead of introducing a leveling come a partner in swiftly growing
principle into society, it has re- industries such as plastics, elec-
sulted in some strange distortions tronics, or aviation. Thus he can
of the social pyramid. While it circumvent the ravages of infla-
has not produced equality, it has tion and expand his fortune via
resulted in a very practical denial capital gains,
of the old American ideal "of But while the well-to-do have a
“equality of opportunity.” continuing access to opportunity

The reason for this is that it (which they can also open to
tends to stratify classes as they their sons by making them part-
are. Since it is a tax on income, not ners in expansive situations), the
a capital levy, it leaves old owner- middle classes are denied the
ship intact without encouraging chance of building fortunes in the
new — or additional ownership. first instance to protect. Under
The rich (within inheritance tax progressive taxation an Averell
limits) tend to keep their for- Harriman, a Joseph P. Kennedy,
tunes. But Joe Doakes can hardly a John Hay Whitney can keep
aspire to amassing a fortune — their financial status (and even
or even a sizeable nest egg —on become ambassadors to the Court
his own if he attempts to do it of St. James). But the deck is
out of saving for investment pur- stacked against the emergence in
poses. (The fact that millions have our times of new ambassadorial
risen into “middle income status’” material. During the past genera-
since the time of the income tax tion the “middle condition of
amendment has been due to the man” has been ground between
fecundity of American produc- the upper and nether millstones



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

1961 THE PROGRESSIVE INCOME TAX 41

of inflation and steeply rising technique (or a subject) and then
progressive tax rates. Reckoned produce a single best-seller. But
in terms of “disposable income” the gains for which the years
in “1939 dollars,” the purchasing have been preparing will not be
power of the $18,000-a-year man commensurate with the effort and
in 1961 is no more than that of dedication involved. A doctor
the $6,000-a-year man of 1935. If spends his young manhood in
the middle income man has been medical school, internship, and
committed to insurance payments, building a practice: then, rela-
his equity in saving has been cut tively late in life, his income may
in half. But the rich, who have hit the stratosphere without leav-
invested in the insurance com- ing him much after taxes for his
panies, have preserved their old age. To gain crude equity for

equities intact. himself, the doctor will, in turn,

grade his fees on an “ability to

Soak the Middle Class pay” basis, taking more from the
The fairness of the tax even rich and less from the poor.

within its own “ability to pay” Then there is the case of the

rationalization is entirely ques- public performer whose income is
tionable. The tax exempts the clearly related to the state of his
poor —or taxes them at such a muscular reflexes, or the youth-
low rate of progression that it is fulness of his (or her) face and
negligible. And, as we have seen, figure. Ballplayers are lucky to
it tends to exempt the rich, who last in the big leagues (and the
have ways of compensating for big money) after the age of 33
loss of dividends by the capital or 34. A Joe Louis may earn mil-
appreciation route. It is the peo- lions in a brief heyday as heavy-
ple in the middle income brackets weight champion —and then spend
who do most of the paying. Thus his middle age in irretrievable
what started as “soak the rich” hock to the government for back
has become “soak the middle taxes for the mere sin of having
class.” depended on altogether-too-san-

Moreover, the tax bears down guine income tax accountants. A
with peculiar cruelty on the er- Sugar Ray Robinson may be
ratic earner, who may be compen- forced back into the prize ring
sated in a single high-tax spurt after retirement to recoup a for-
for years of patient effort. An tune which will prove to be just
author or a playwright may another mirage when the tax col-
struggle for a decade to master a lector is satisfied. In the case of


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

42 THE FREEMAN November

the professional tennis player, a be closed in return for an across-
single year in the big money is the-board cut in the progressive
the most to which the average- rates. Vain delusion! The closing
good-amateur-turned-pro can as- of the “loopholes” will mean more
pire. Once the crowds have seen income for government. But (to in-
him on one round of the circuit, voke Parkinson once more), ex-
he is through. penditures rise to meet income.
As for movie stars and Broad- So why should the State give any
way performers, they may be able of that “loophole” money back in
to make the jump from ingenue the form of a tax cut? The “loop-
charm or youthful agility to hole” money will support lots of
middle-age character parts. But bureaucratic job holders —and as
not every starlet becomes a con- Parkinson’s Other Law says, work
tinuing star —and in such an event expands to fill up the time of those
the high earnings of youth will available to do it.
never afford the basis for a
middle-age income, No, we as a people are on the
Since the onerousness of the rack for having accepted an un-
present progressive tax rates are just Constitutional Amendment in
becoming obvious to too many the first place. We will remain
voters, a trade has been proposed: right where we are until a limi-
let the many present legal “loop- tation is placed on the principle
holes” (big expense accounts, the of the progressive income tax it-
oil depletion allowance, and so on) self. @®

Who Spends Your Money?

THIS BUSINESS of federal aid actually simmers down to one
central question: Do you want to spend your own money, or do
you want someone else to spend it for you?

The only way the federal government gets money is to take it
from you. If you want to know how much it takes, look at the
part of your pay check that you never touch—federal income tax
and social security tax. Add them up over a period of a year and
then figure out what you would like to do with that same amount
of money. See what you might have done for yourself and your
family if you could have kept even half of those taxes.

If you think the federal government will do a better job of
spending that money than you can do, you're interested in fed-
eral aid and government dictation of your life.

From The Indianapolis Star, August 17, 1961



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

\ LTE ~

\ \/ ~~
or — THE EMERGENCE.OF A LEISURE CLASS
~~ iN S

Ny
The sun was standing overhead !
When Kaspar woke at last; \
And as he put the kettle on
To break his morning fast, /
Came Peterkin and Wilhelmine ya
To watch the panoramic screen. S >
{ /
They saw a string of country towns \

Where certain streets and squares or
Were lined with folks who sprawled at ease /
In cozy rocking chairs;
While men with badges on their caps
Were heaping dollars on their laps.

“Is that some kind of money game?”
The little children cried.

“It's Welfare Payments,” Kaspar said
In tones of honest pride.

“It frees the folks on welfare rolls

From hunger, toil, or begging bowls.”

“Are all those paper dollars real?”
Gasped little Wilhelmine.
“They're really dollars,” Kaspar said,
“Though getting very lean.
They're taken from the skimpy pay
Of folks still working every day.”

“Why all the chairs,” asked Peterkin;
“Can’t people stand in line?”
“"Twould smack of work,” Old Kaspar said,
“And therefore undermine

Their right to sit and just relax
While others work to pay the tax.”

“Are all those kids,” asked Wilhelmine,
“Allowed to work in school?”

“We'll hold that question,” Kaspar smiled,
“Until the judges rule.

Perhaps they’ll be allowed to lurk

While other kids do all the work.”

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


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

Men Are NOT Naturally Good

THE FOUNDING FATHERS of this The Founding Fathers were real-
. country (see Alexander Hamilton ists, and remarkably free of senti-
in The Federalist Papers) believed mentality.
in’ the “universal venality of hu- °~ Since power in the hands of
man nature.” Men were by nature men is dangerous, they believed
selfish, rapacious, and always cor- that it must be broken up, frag-
rupted by power. Because of this mented; and so they devised a sys-
sinful human nature, privilege is tem of .government in which
misused, and no man or group of - power is not concentrated but dis-
men may be trusted with un- persed. They created a system of
limited power. : checks and balances.

Once men get power they do There are three branches of
not give it up, but will rationalize government (executive, legisla-
any extravagances or justify any tive, and judicial), each checking
social conditions to maintain it. the others. Church and State were
This sinfulness is not just in one separated, not because they
man, but every man; not just in wanted a godless state, but be-
one group, but every group; and cause the religious intolerance of
even a superficial view of history Europe revealed that the power of
‘reveals that the church, the mili- Church and State should not be
tary, capital, labor, education, men combined. Power was further dif-
and women — everybody — have fused by giving rights to the
misused power. Men always claim states and local governments; and
to be purer than they are, and al- the final power was placed in the
ways fail to see that their own people so that in the last analysis
power is based on some injustice. they could “throw the rascals out.”
The Right Reverend Richard S. Emrich is But even the people were not
Episcopal Bishop of Michigan. This article to be trusted, for a majority can

first appeared in The Detroit News of June 25, . . .
1961. tyrannize over a minority, and

44


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

1961 MEN ARE NOT NATURALLY GOOD 45

mobs often deprive individuals of ignorance or the social system
their rights. So the people, who under which men live.
can be fickle, were placed under But if evil is due to ignorance,
‘the limitations of law. then all professors should be
With a realistic view of corrupt ~ saints; and to say that is to laugh.
human nature, America was .And if evil is due to the social
founded upon: a profound skepti- system, then we must ask who cor-
cism about all concentrations of rupted the social system? Do we
power, and in particular govern- really believe that men will neces-
mental power. We believe, then, in sarily be improved by shifting the
our system of government, not be- furniture of society?
cause men are good, but because Having lost our deep realism
they are not; not because men are about human nature, we have lost
pure, but because they are corrup- also our realism about government
tible. Having seen the fruits of and our skepticism about concen-
this realism about human nature, trations. of power. The fact that
you will understand it when I say governmental power has grown in
that the teaching of Original Sin America is not the deepest dan-
is a most fortunate and blessed ger; because of the growth of the

teaching. nation and the complexity. of our
. problems, it had to grow. What is
Lack of Spiritual Realism alarming is our loss of skepticism

The cause of political freedom about governmental power. But it
has been weakened in the modern is all quite logical. If men are
world because we have lost this good and can be trusted, and if
spiritual realism. For a profound some immediate advantage comes
view of human nature, we have to us from permitting it, why not
substituted the sentimental belief let the government concentrate
that men are naturally good. power?

Rather than seeing what every It is sobering to remember that
man who studies history ought to our real danger is our sentimental
be able to see — that men are by belief that human nature is na-
nature selfish and only made into turally good. If human nature is
something half decent by disci- good, we don’t need either the wis-
pline and the Grace of God —we dom of the Constitution or the
have attributed human evil to Grace of God. @


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

Redistributing the Wealth

EDWARD A. ROSSIT

“LET'S TAKE the money away What's wrong with redistribut-
from the rich and give it to the ing the wealth? Actually, there's
poor!” With monotonous regu- nothing wrong with sharing
larity this statement, in one form wealth, as long as it is done vol-
or another, has popped up to untarily. In a free economy,
plague the imaginative, the tal- wealth is redistributed myriads
ented, the brilliant, the educated, of times daily. It is the forced and
and the just plain, hard-working compulsive redistribution which is
people who have earned and saved wrong — the element of coercion.
some money. From the fictional, When tax laws are imposed not
glamorized thief, Robin Hood, to to raise revenue but to redistrib-
the modern, real-life thief, Fidel ute wealth, such laws are wrong.
Castro, the share-the-wealth ap- Why redistribute wealth any-
peal has fired mobs with enthusi- way? What would be the purpose
astic and greedy approval. On the of such an act? If the purpose
“theoretical” scene, the same old were to destroy initiative and in-
impractical and unworkable idea centive to work, that purpose
has been kneaded and rekneaded would surely be fulfilled. Under
from Marx, through Keynes, to continuous equalization of wealth,
Galbraith, who refers to it today there would be no will to work.
in the ultramodern language of If anybody created more wealth,
taking from the private sector of it would automatically be taken
the economy to give to the public and redistributed to maintain the
sector. state of equality. With no incen-
Mr. Rossit does public relations work in tive to create and indeed a pen-
Seattle, Washington. alty in the form of confiscation —

46



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

1961 REDISTRIBUTING THE WEALTH 47

the total to be divided among all with the ridiculously petty book-
the people would steadily go down, keeping and paperwork needed to
as would everybody's equal share. keep track of inventories of shared
As food supplies were eaten and wealth; and an equally large num-
as clothing and tools and machin- ber of people would be needed to
ery wore out, we would soon reduce spy on people’s holdings, to con-
ourselves to a state of equal fiscate goods by force, and to de-
poverty. liver to those with less. Since

If “justice” were the purpose there would be no incentive to
of sharing wealth, how would this create, make, invent, or build, the
justice be done? Equality of op- sum total of wealth would decline
portunity is not the same as equal- as existing wealth, now totally
ity of wealth. Surely, those who shared, wore out, was eaten, grew
have worked longer, harder, more stale, or became obsolete. The dis-
brilliantly, or with greater talent tributive process could theoreti-
deserve more than those who have cally continue as more and more
loafed, idled, labored stupidly and people shared less and less until

inefficiently, or just doodled. finally there would be nothing
left to share, everybody sharing

it Wouldn't Last equally.
How long could a state of equal Actually, a total, complete, and

wealth last? One week? One day? absolutely equal sharing of the
One minute? Probably not even wealth is impossible, and few peo-
that long. Some drunk, enjoying his ple seriously advocate such a
equal share of liquor, would surely thing. It would be too laughable.
stumble in his kitchen and break However, the general idea persists
his drinking glass, thus making in modified forms. Don’t share all
himself poorer by one glass and the wealth — just some of it —is
a portion of liquor. Another in- the feeling. And so, arbitrarily,
dividual, more creative than the levels are set above which people
others, would sew up a hole in his should be forced to share. It is in-
pants pocket, thus making himself teresting that in each case, who-
richer than the others by the pos- ever sets an upper limit on wealth
session of a better pair of trou- sets it higher than his own level.
sers. Almost immediately there Naturally, everybody who advo-
would be inequalities, which would cates sharing the wealth expects
have to be redistributed by con- to gain, rather than be made
tinuous force. A large number of poorer.

people would be kept occupied How much could we expect to


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

48 THE FREEMAN November

gain initially from a forced redis- them. Now, how much does each
tribution of wealth? Let us say of us get if we divide a million
that we were very “fair” and very dollars? The answer, approxi-
“just” and only took from the bil- mately, is $.0055 per person, or
lionaires. There aren't many of 55¢ for every hundred Americans.
them around, and we could all get This is not making us as rich as
rich by taking their money. How we thought! If we confiscated one
much would each American get if million dollars from each of a
we took a billion dollars away thousand millionaires, and divided
from someone and gave everybody and shared all this money, our
an equal share? A billion dollars equal shares would come to the
is an almost astronomical amount staggering sum of $5.50. We could
of money. Would we each get fifty hardly take five and a half dollars
thousand dollars? Not quite that and buy cars, yachts, furs, and
much! How about at least a thou- jewelry. With gasoline taxes as
sand dollars apiece? No! It is less they are, it would take the biggest
yet. Surely each of us would get part of five and a half dollars to
at least a hundred dollars if we fill our own car’s gas tank.
destroyed this billionaire and Well, if we can’t get enough
shared his wealth. No, it would money this way, let’s lower our
still be less. The arithmetic is sim- sights to people with $100,000.
ple! Divide one billion dollars by After all, nobody “needs” more
180 million, which is the approxi- than a hundred thousand dollars!
mate population of the United Since it would be difficult to know
States. When we do this, we come just how many people have that
up with the answer of a little over much or more, we would have to
five and a half dollars apiece. It is hire and pay a large staff of
very disappointing. And since snoopers to find out. Even then,
there are very few American bil- the results would be consistently
lionaires, there would be very lit- disappointing.

tle of this kind of wealth to share.

If we lower our sights to mil- The Gross National Product
lionaires, we increase the number The gross national product in
of people from whom we can steal, 1960 was valued at approximately
but we decrease the size of the five hundred billion dollars. This
share to be gained from each of 1s it!/ Supposing we just shared
them. The exact number of mil- everything that everybody pro-
lionaires in this country is not duced in the whole year? Share
certain, but there aren't many of and share alike! Surely that would



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

1961 REDISTRIBUTING THE WEALTH 49

make us rich! If we divide five large numbers of people will pull
hundred billion dollars by 180 mil- the average way, way down.
lion people, we do get more. We Somewhere along the way, we
get about $2,800 each. More than may discover that this share-the-
this is impossible without raising wealth business, which was sup-
the gross national product itself. posed to make us all so rich, will
You can’t have both an equal share really make us quite poor. And no-
and a larger share of the pie un- body wants to share wealth, who
less you get a bigger pie. We will end up with less than when he
would simply have to produce more started.
wealth. But we know that forceful Why, then, be fooled by this
sharing of the wealth would cause bromide of taking from the rich
the gross national product to de- to give to the poor? It is morally
cline — not rise. So we know now wrong to do this, and it is eco-
the most that we could possibly nomically destructive, It is wrong
get through a redistribution of whether we call it outright theft
wealth. (Robin Hood), government expro-
We know the most — but do we priation (Fidel Castro), or taking
know the least? If those who have from the private sector of the
more are to be forced to share with economy to give to the public sec-
those who have less, we may be in tor (Professor Galbraith).
trouble. We are all Americans —
citizens of the richest country in Let’s stop thinking about force-
the world. If compulsive sharing fully redistributing wealth and
is right for some people, it must start thinking about letting people
be right for all. do it freely. Many lazy sons have
Very roughly, we have almost inherited large sums of money
half of the wealth of the entire from industrious fathers, and
world in the United States. If wasted the money, dying penniless.
wealth is to be shared, then we Many other men have started pen-
must all share and share alike. The niless, and have built huge for-
Indian who earns $100 per year, tunes. We can’t stop wealth from
the Chinaman who earns $50 per being redistributed. But the best
year, and the African who man- opportunity for multiplying
ages on less than $25 per year will wealth, so that each may have
then also be entitled to share in more, is to let the redistribution
this forced redistribution. And be voluntarily managed under
such lack of wealth among such freedom. @®


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

The Inpert in Industry

NEIL M. CLARK

EMPLOYERS usually buy only part ment to do his thinking and tink-
of a man when they hire him, and ering. Today, young scientists
not necessarily the smartest part. trained in graduate schools are
That he has a brain as well as grabbed before they are dry to
manual dexterity or other skills work in richly equipped laborato-
interests most of them only mod- ries. Trust in research has become
erately. Yet progress in business almost No. 1 item in the creed of
as elsewhere depends on the steady progressive businessmen and gov-
flow of ideas, on brains at work to ernment leaders. Research and
improve every operation, on a con- development activities of the
stant upward surge at every level. American Telephone and Tele-
The oceans are strewn with the graph Company, according to a
flotsam of businesses that started company publication, are carried
off with a brave new idea and con- on by a force of ‘about 11,000
sidered one enough. scientists, engineers, technicians,

Growing realization of the need and their associates.” President J.
for an idea flow has brought an F. Keener of the B. F. Goodrich
increasing number of eager busi- Company, speaking to members of
nessmen to the doors of research. the New York Society of Security
At one time an inventor — yester- Analysts on March 7, 1960, told
day’s “research man’ — was lucky his listeners: “In 1960 we have
if he were allowed free time and a more scientists and abler scien-
bench of his own in a dark base- tists and are investing more money
—— in their ideas and talents than at
Mr. Clark is well-known for his free-lance any time in our history.” E. Finley

writing in The American Magazine, The Satur- .

day Evening Post, Nation’s Business, and many Carter, president of the Stanford
other magazines. This article, like his general . . .
appraisal of “The Inpert Situation” which ap- Research Institute, estimated in

peared in last month’s FREEMAN, are from a . .

50



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

1961 THE INPERT IN INDUSTRY 51

ford Review that total research is a useful word designating an
and development expenditures in attitude that isn’t eggheadish.
the United States in 1940 were Let’s take the high hat off. Re-
about $750 million, whereas in search can be defined, simply, as
1960 they were expected to exceed asking questions and looking for
$12 billion. Others forecast much answers. A country boy imbued
higher expenditures in years to with wonder at the world about
come. him may make firsthand observa-
Business has accepted Research tions on the lowly and sometimes
with the capital “R,” and is pay- destructive groundhog and learn
ing big money for brains in this facts and reach conclusions (a-
department and getting big bout hibernation, for example)
results. Is this enough? Has busi- which scientists do not yet know.
ness really done more, yet, than He may learn things he never
open one tiny window on what’s thought of looking for. That's a
there to be gathered? common happening in research,
In order to approach an answer, dignified with a special name,
several other questions must be serendipity.
asked. First, what is “research”? Research, in short, is not solely
Second, how is it done? — how are a matter of white coats, gleaming
ideas captured in any human laboratories, letters after the
brain? — is the ability to capture name, and big appropriations. It
them limited to a few or can it be is intelligent curiosity at work at
cultivated and stimulated in any point, exploring something
many ? — is hothouse idea produc- unknown (at least to the asker),
tion always the best way? Third, crossing some frontier to new
who can do research and what knowledge. When educators and
training is essential? And finally, frocked scientists in universities
what more, if anything, can busi- mention research, they are like-
ness leaders profitably do about ly to be thinking of “pure” re-
the creative potential in workers search, meaning the pursuit of
who are not customarily thought knowledge with no utilitarian pur-
of as research personnel? pose: a crossing of frontiers into
the great dark of the unknown,
What Is Research? sometimes referred to as the
As commonly used, the word has “growing edge” of human knowl-
a touch of eggheadishness: the edge. Results of such research may
ten-dollar price tag on it scares or may not enable anyone to bake
people, This is too bad, because it better bread. Soon after he came


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

52 THE FREEMAN November

back to Chicago after receiving a man is free to perform purposive
Nobel Prize for his discovery of action, and accordingly that he
the Compton Effect, Dr. Arthur is a being with moral responsibil-
H. Compton told some of us that ity for his actions. It may be that
the King of Norway asked him, in this philosophical inference is of
Stockholm, what “good” his dis- greater human importance than
covery was: what use it could be many so-called ‘practical’ inven-
put to. Compton said he told the tions.”

King that so far as he knew, it That’s how research is on all
wasn't “good” for anything, might levels. Where curiosity will lead
never have any practical applica- cannot be known in advance. If
tion. It was something not known results were precisely predict-

before, but now known. able, there would be no need for
A characteristic of even such research.
research is that as soon as a new “Pure” research tends to be-

fact is learned, some use for it is come “applied” in industrial lab-
likely to turn up. Compton re- oratories, although they may over-
ceived the prize in 1927. Thirty- lap there, too. The common phrase,
three years later I asked him research and development, rather
whether he could now point to accurately expresses what the
any measurable result. He replied businessman expects of research.
by letter, saying: He wants new products or new

“I cannot point to any ‘practical’ uses for old products, and trained
application that has appeared of research men are likely to find an-
the Compton Effect. There has, swers if they can be found. But
however, been important use .... progress in business occurs, or
in the derivation by Werner Heis- should occur, on every front, and
enberg (1927) of -the principle of research laboratories and engi-
indeterminateness, which has led neering staffs simply cannot be
to the acceptance among phy- made big enough to think of every-
sicists of the view that events in thing and they would not think of
the physical world cannot be fore- everything if they were many times
told with definiteness but only larger. It follows that much on-
within a certain well-defined prob- the-job progress can be done best,
able error. This has led to a gen- perhaps only, by those who are do-
eral agreement that there is no ing the jobs. The workman is us-
conflict between the observed de- ually well fitted to see chances for
gree of determinism of physical improvement in his own bailiwick,
events and the intuitive view that because he is so close to the opera-



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

1961 THE INPERT IN INDUSTRY 53

tion. Dynamic management makes Some steps that seem to favor
it worth the worker’s while to be the development of creativity are
creative. known. There are recognized

In this view, then, Research means of gathering facts, tools
with a capital “R” may be for that can be used, and research re-
eggheads, but research with a lies on them. But something over
small “r” is for everyone. And the and above the assembly of facts
inpert’s definition of a frontier takes place in the creative leap.
may not be what mankind does not Exactly what, no one knows. But
yet know or do, but what he, his facts combine in new ways. Indi-
organization, his industry, or his vidual creativeness can be stimu-
special group in any field, does lated and encouraged if the knack
not yet know or has not found for it exists. Conditions favoring
out how to do best. Frontiers of its emergence can be provided. In-
that kind are past counting. They formation about what is already
exist in every job. All are suscepti- known can be gained at “knowl-
ble of being crossed by active, edge factories” (schools, colleges,

creative minds. universities, even teaching ma-
This says something about what chines), and this background of
research is. But how is it done? information undoubtedly can in-
crease the chances of pulling the

How Is Research Done? rabbit out of the hat and putting

Here, mystery enters. The im- two and two together to make
aginative leap from known ideas five. “One cannot be creative with-
and methods to new ones is one of out having ideas to work with.
the most puzzling performances of Educators use this argument to
Homo sapiens. “The source and justify the rote learning of much
manner of production of ideas no basic information.”2 All life ex-
philosopher, no metaphysician, no periences, even if they seem re-
scientist has ever been able to mote from a given problem, may
‘fathom. Somewhere, out of the furnish just the materials needed
void, that which did not exist be- for the creative act. But no one
fore leaps into the mind of man.”! knows any formula for stocking a
This is what is known as creation. given brain with just those things
Creativity is the skill wanted in which will enable it to function
research, "2 Donald E. P. Smith, Reading De-
_— velopment Services, Bureau of Psycho-

1 Henry M. Wriston, “The Challenge logical Services of the Institute of Hu-

of Being Free.” The Saturday Evening man Adjustment, the University of
Post, December 10, 1960. Michigan: letter to the author.


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

54 THE FREEMAN November

creatively. Creative ability is and to contrive a variety of asso-
where it is found; creation hap- ciations over a period of time.”
pens where it happens. The obvi- Sometimes, he admitted, this
ous thing to do is to give it every works; sometimes it doesn’t. He
encouragement and trust to luck. also stressed the importance of
strong motivation, which may
Some Educated Guesses spring from good command of a
I have questioned many people field of knowledge, from the drive
about these matters, including of a value system, or from a sense
creative people and teachers de- of “political” urgency; and he felt
voted to training students for use- that young people with nimble
ful and creative work, but I have minds “should be deliberately ex-
yet to find one who would venture posed in the educational process”
to say exactly what the creative to these three. Summing up, he
process is or how it functions. said that invention seems to be
There are many guesses. Some are “an intensely individual process”;
illuminating. Dr. James P. Dixon, hence, any educational procedure
president of Antioch College, once seeking to encourage it “would
said in a brief article in Antioch necessarily emphasize those fac-
Notes, “A central concern of edu- tors which set the individual
cation is to encourage human ca- mind free rather than empha-
pacity for innovation.” I asked sizing those which require con-
him to elaborate the role educa- formity”; and since the human ca-
tion can play in this. “This is a pacity for inventive ability can-
matter,” he replied, “about which not at present be predicted, he be-
it is possible to have hunches, but lieved “the best we can do is es-
as far as I know no truths have tablish an educational environ-
yet been deduced which would ment in which we believe inven-
stand the test of the scientific tion can prosper, recognize if we
method.” He cited certain specula- can the individual of inventive
tions. If a mind is to invent, he mind, and courageously foster his
pointed out, it must be aware that individual creativity.”
invention is possible; hence, “one Professor Raphael Demos, a
element of the educational climate stimulating teacher of several
is to maintain this point of view.” generations of Harvard students,
As to methods he said, “When one echoed some of these ideas, saying
is faced with the task of formulat- that the question of training the
ing fresh ideas on a subject, he ability to create or invent “is one
tends to put the matter in his mind on which I have pondered but to



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

1961 THE INPERT IN INDUSTRY 55

no avail.” As a teacher, he said, Dr. Donald A. Glaser, whose de-
“my attitude has been to look for velopment of the “bubble cham-
creative ability in a student’s re- ber” for exploring and photo-
cord and then to encourage, to graphing the interior of atoms
stimulate, and to discipline it so won him a Nobel Prize in Physics
that it may be truly fruitful. But in 1960, made the imaginative
I have never felt that, as a teach- leap to the idea while watching
er, I could create the power to the foaming action of an uncapped

create, in another person.” bottle of beer. He theorized that
the beer foamed due to heat in
An Unknown Process the vicinity of the bottle and to

It is apparent that in order to being struck by a particle of mat-
create, the mind must have ma- ter from the atmosphere. He felt
terials to work with, assurance that the same effect would take
that invention is possible, and the place, and could probably be photo-
desire to create or invent. But how graphed, if subatomic particles
the mind comes up with something were passed through a suitable
new, we simply do not know. Dr. liquid, leaving bubbles. Experi-
Laurence Young, a mathematician ment proved it was so. Could any-
with the United States Army one have predicted any connection
Mathematical Research Center at between a slightly warm bottle of
the University of Wisconsin, told beer and a Nobel-Prize-winning
of working for two years without idea in atomic physics? John
success on a certain problem. He Jewkes and associates, in their
went to a concert one evening to pathfinding study of the sources
get away from his work, and while of invention, reached this conclu-
the orchestra played, his mind sion about the process:
wandered. In a flash, he said, he “There is nothing in the history
saw the problem’s solution and of technology in the past century
within a minute had written it on and a half to suggest that infalli-
the back of a postcard. “Most of ble methods of invention have
the time,” he added, “I am absol- been discovered or are, in fact,
utely blind” — creatively. “Every discoverable. It may be true that
so often I get a flash — a new slant in these days the search for new
on something. One nice piece of ideas and techniques is pursued
work in five years feels good.” with more system, greater energy
Creation, one of his colleagues and, although this is more doubt-
said, “looks easy and it is easy, ful, greater economy. Yet chance
but it isn’t easy to make it easy.” still remains an important factor


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

56 THE FREEMAN November

in invention, and the intuition, One view is that we must rely
will, and obstinacy of individuals chiefly on scholastically trained
spurred on by the desire for minds. A professor of higher edu-
knowledge, renown, or personal cation noted in the Michigan
gain the great driving force in Alumnus Quarterly Review that
technical progress. . . . In many more than a third of a million stu-
fields of knowledge, discovery is dents are presently engaged in
still a matter of scouting about on graduate studies at American uni-
the surface of things where im- versities: more, he declared, than
agination and acute observation, were enrolled in all United States
supported only by simple techni- colleges and universities at the
cal aids, are likely to bring rich start of the century. He said the
rewards.”3 graduate school is the future
Whether the creative idea is a training ground for “the forces
new conception in physics, a new of enlightenment in the perpetual
poem, or a new way to get the top war against ignorance”; and with
off a can, nobody really knows something of a sneer for the col-
who is most likely to think of it, legeless Fords and Edisons of
or how, when, or where. It can’t earlier days, he declared “no one
be predicted or ordered for de- thinks that the technological
livery tomorrow morning with geniuses of tomorrow will be
the paper and milk. The stage can trained in news butchering or bi-
be set elaborately, but nobody cycle repairing. They will come
knows ahead of time what the from the graduate schools.” A
play will be. This much, though, good deal of weight must be given
is known: the imaginative leap to this view. Knowing what is al-
will occur first in just one human ready known can be a necessary
mind, and no other mind might springboard for the leap into the
ever think of it. unknown. But there is also a dan-
ger. “They” (authorities, text

Who Can Do Research? writers, ‘“experts”) know so
This leads to the third ques- much. Isn't it presumptuous to
tion: who can do research? who assume they didn’t know every-
can create? who has the potential thing, or to suppose that some of
for innovation? what they “know” isn’t so? Train-
ing imperfectly directed can be-

8 John Jewkes, David Sawers, and get awe, timidity, and conformity,
Richard Stillerman, The Sources of In- 1 tivit
vention. New York: St. Martin’s Press, as well as creativity. .
1958. p. 23. The late Charles F. Kettering



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

1961 THE INPERT IN INDUSTRY 57

was profoundly impressed with a Southwestern gasoline plant
the need in every field for im- came, not from specialists trained
provement and invention. But no- to make such improvements, but
body was more anxious than he to from an overalled young man who
take the high hat off research. He was hired to operate, not to think
recognized fully that it needs to be — to use his hands, not his brains?
purposive and directed. ‘“‘Acciden- It so happened that he was work-
tal discoveries are too casual and ing for a company which intelli-
uncertain for a high-geared indus- gently encourages and pays well
trial civilization,” he said to this for creative ideas, no matter who
writer some years before his thinks of them, But for that, this
death. Much of our directed re- young man might have had the
search, he knew, must be done in idea he did have, but probably he
institutional laboratories by would have said nothing about it.
trained workers. But he warned As it was, his idea resulted in the
against the failure to encourage recovery of an additional half-mil-
creativity at all levels. Thinking lion gallons of gasoline liquids per
far beyond cloistered laboratories, year; and for thinking of it and
he said, “We are not yet keeping proposing it, he pocketed a special
as many creators busy in industry check for $1,020.

as we should.” He said that as a No one knows whose brain has
director of research he had to be the special equipment to come up
constantly on guard against with important ideas. A Chicago
trained minds that placed too much feed salesman heard a poultry sci-
faith on training and commonly- entist speak of the need for better
accepted ideas. Creative minds, he sources of poultry grit. One of his
insisted, had to be constantly customers was a Georgia firm pro-
crawling out of ruts in which they ducing granite paving blocks, a dy-

tended to bog down. ing industry. On his next trip the
. salesman asked the owners why
Anyone May Be Creative they couldn’t grind up granite for

Can even the untrained create? chicken grit. No one else had made

There is evidence on every hand the creative leap resulting in this
that many of them can, and often suggestion, which revivified a
do. Furthermore, they frequently business on the way out. An Okla-
“have something” that elaborately homa farmer named Joseph Danne,
trained minds lack. Why was it, whose education ended at the
for example, that the suggestion eighth grade, died in October,
for a new arrangement of pipes in 1959. Danne “invented” Early


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

58 THE FREEMAN November

\

Triumph wheat, a variety with ideas inperts have are often like
qualities long sought but never the seeds nature produces by the
found by trained geneticists. It is millions, only a few of which ever
said he put an extra $10 to $25 find fertile soil and bear fruit.
million every year into the pockets When an occasional employer

of Oklahoma farmers alone. learns how to use this off-beat re-
search, he tends to make things

Don’t Overlook the Nonspecialist tough for competitors.
Who can invent? It’s safe to A dramatic instance is James F.

place a lot of reliance on those Lincoln, chairman of the Lincoln
trained for it: research special- Electric Company of Cleveland.
ists. But it’s smart not to forget Taking over a near-bankrupt com-
that there are other mines, some pany, he made it the leader in its
rich in ore. Jack in the shop or field by blasting the almost uni-
Jennie in the office may have good versally accepted notion that an
ideas, too. They may very well hit employee in a particular job is
on something that would never oc- “worth” so much and no more.
cur to a white-coated Ph.D. in the Lincoln believed that if he bought
laboratory. This is nothing against the whole man instead of just a
laboratories. It is simply a fact piece of him, the individual's
about individual human nature worth to the business might prove
and the mystery of creation that nearly limitless. He pays the go-
needs to be fitted dynamically in- ing wage for each kind of work.
to the total research effort if prog- But at the year’s end, each worker
ress is to be as rapid as hoped for. is appraised for his year’s contri-

Research “experts” fit into an bution and a bonus is paid based
obvious category. They occupy a on that. There is nothing automat-
neat place on the organization ic about it. A man who has done
chart. Their employer knows nothing particularly outstanding
where to put his finger on them. may receive a sum amounting to 5
That’s handy. Inperts, however, or 10 per cent of his year’s wages.
can upset applecarts. They tend to Another may receive a sum
give the shudders to intermediate amounting to several times his
executives who like to speak cor- year’s wages, It puts a different
rectly and say “Yes, sir!” to the aspect on a job for an inpert when
big boss. Consequently, the idea of he knows that by making full use
turning inperts loose in business of his abilities, he may earn not
isn’t always altogether welcome: merely the $6 or $7 thousand that
it is often frowned on. So, the comes in the pay envelope, but



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

1961 THE INPERT IN INDUSTRY 59

perhaps enough in a lump sum to people who can’t see the sense of
buy a new house or put his kids them, or don’t want to bother.
through college.

Business in general has barely Give Inperts Their Heads
begun to find out what can happen What it comes to for the inpert
when its inperts function at high as a worker is too often a feeling
levels. Many companies offer cash of frustration: the notion, prob-
for usable ideas through sugges- ably correct, that his employer
tion systems. Many of these pro- wants just one thing from him
duce good results. Probably the and no bright ideas. The reaction
majority, however, are only a tip to frustration depends on the in-
of the hat to a project which is dividual. He may slip into a don’t-
secretly thought of as more bother give-a-damn attitude, and no or-
than it is worth. The vice-presi- ganization touched with that poi-
dent of one of the biggest aviation son is heading for a profit heaven.
companies lays the blame, for sug- If the individual has get-up-and-
gestion systems that fail, squarely go and a chance to work else-
on management, “Of course, sug- where, he may quit and take an-
gestion systems are worth-while,” other job or start a rival company.
he says; “of course, they work — Often an employer finds he has
if management honestly works not merely lost an undervalued
them. The practical approach, but employee, but has gained a com-
it’s a rough one, is to open the eyes petitor who is beating the pants
of the top brass to the reservoir off him.
of ideas latent in any group — Our hope for progress at any-
wake them up — get them to wel- thing like the rate we want, lies
come ideas.” It isn’t enough for in giving inperts their heads and
inperts to have smart ideas if seeing what they come up with —
putting them to work depends on and using what’s good. @®

IDEAS ON LIBERTY Open Competition

THE GREATEST POWER for the benefit of mankind is the free mar-
ket with its open competition. Within its structure is the smooth-
est and wisest regulator of human endeavors. In addition, it is
self-policing. Individual as well as group gain comes because it
reduces indolence, demonstrates the value of discipline and de-
pendability, teaches good principles, and tends to build com-
peteney.

RALPH E. LYNE, Taylor, Michigan


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

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN

EVERY AGE believes in its fairy lections chosen by the FEE edi-
tales. In the ancient world there tors for this year’s Freedom An-
was the fable of Scylla and Cha- thology. Carlton Williams speaks
rybdis, those twin perils between of “The Miracle of Individual Re-
which the purposeful mariner was sponsibility.” W. M. Curtiss tells
hard-pressed to steer a safe and how we have been “Insuring Irre-
successful course. In the modern sponsibility.” Naturally, if indi-
world, there is the fable of the Id viduals aren’t responsible for their
and Society. actions, something must be in-
The Id, as Benjamin A. Rogge voked to tell them what to do. And
explains in the delightful updat- so, in the presence of modern dis-
ing of the story of George Wash- belief either in the Inner Light or
ington and the cherry tree which in Divine Revelation, we have the
is his contribution to Essays on supposedly omnicompetent State.
Liberty: Volume VIII (selected The consequences of state as-
from The Freeman and from Notes sumption of responsibility for the
From FEE, Foundation for Eco- individual are touched upon either
nomic Education, $3), is what lies directly or tangentially in prac-
within the person to deprive him tically all the essays in the book.
of moral control of his actions. Some of the more notable pieces
And Society is what lies outside which are directly devoted to dem-
the individual to render him doub- onstrating what happens when the
ly irresponsible. Between the Id State tries to substitute itself for
and Society, nobody is to blame voluntary action are Howard
for anything he or she may do. Stephenson’s “A Tale of Two Rail-
This theme of “Who’s to Blame?” roads” (the Canadian National
(the title of Dean Rogge’s essay) versus the Canadian Pacific), Syl-
is orchestrated with many a perti- vester Petro’s “Union Power and
nent variation in most of the se- Government Aid,” Henry Hazlitt’s

60



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

1961 THE MIRACLE OF RESPONSIBILITY 61

“What Rent Control Does,” Karl ciety, being a collection of com-
Brandt’s “The Hard Core of the pulsive Ids, merely reflects the
Farm Problem,” and Morley Cas- chaos created by a multiplicity of

sidy’s “It Isn’t Insurance.” hatchets hacking at the roots of
fruit trees everywhere. Seeking to
A Miracle Either Way save itself from itself, the Soci-

This reviewer has no desire to ety can, of course, turn the prob-
offer a mere catalogue of the con- lem of controlling a myriad of
tents of this or any anthology. hatchet wielders over to a commit-
What interests him here is some- tee. But the committee, by defini-
thing that projects itself from a tion, will be composed of Ids. And
reading of all the essays at a pro- these ‘Ids, with policemen’s guns
longed sitting. It suddenly strikes to play with, can do a lot more
the reader who puts Benjamin damage than any number of
Rogge’s contribution together,say, Georges with hatchets.
with Leonard E. Read’s “Con- No matter how you look at it,
science of the Majority” that if the “miracle of responsibility”
the Id is to blame for our troubles, must be admitted somewhere. If
then neither Society nor its polit- the Id is not responsible, then a
ical agent, the State, can lead us miracle must intervene to make
out of the woods. The Id, by defini- that collection of Ids known as So-
tion, is something that cannot be ciety into something better than
ordered around by policemen. On the sum of its parts. If Society it-
the other hand, if it is Society that self is not responsible, then it
is Irresponsible, it can hardly be must be a miracle indeed to sup-
trusted to choose a responsible pose that it can select a committee
government. We get ourselves in- of Ids that can somehow transcend
volved in a whole mess of non se- themselves. Such transcendence
quiturs whenever we cut loose being unlikely, then maybe a single
from the idea that individuals have purposeful Id may impose himself
only themselves to blame for the on his more irresponsible commit-
consequences of their choices. teemen, say, a Napoleon, or a Hit-

Suppose it were the Id which ler, or a Stalin, or a Khrushchev.
put an irresistible compulsion But who is to guarantee that the
upon George Washington to hack Id who assumes over-all responsi-
down the cherry tree. George had bility for telling society what it
to do it—and when you get a lot of must do will be responsible to any
Georges doing what they have to canon of decency or humanity?
do, there is no stopping them. So- After all, an Id is an Id — and in-


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

62 THE FREEMAN November

stead of chopping down cherry be so deduced, then why can’t the
trees an all-powerful Id may elect individual conscience be deduced,
to chop off heads. too? As a matter of fact, Freud,
Since we are dealing in miracles who kicked conscience out the
anyway, we might as well believe front door of his edifice of theory,
in the miracle of the responsible had to bring it in again through
individual. If things are left to the backdoor. He called it by a
him, he may indeed choose to chop new name, that of the censor. The
down a cherry tree. On the other censor, to Freudians, may be sus-
hand, he may choose to plant an pect —it is, so they say, an un-
orchard. natural construct foisted on the
In his “Conscience of the Ma- child by his-parents who, in turn,
jority” Leonard Read denies that fear Society. But where did the
such “conscience’ is statistically idea of Right and Wrong, to which
possible short of the miracle that the unseen censor responds no less
51 per cent will think absolutely than the unseen conscience, come
alike. What a majority votes to ac- from? Again, we have the miracle;
cept is, outside of a Quaker meet- the idea of Right and Wrong is
ing, a compromise of principles something we can’t escape even if
held by individuals — and, as such, we try.
it must violate what most of the
individuals privately believe. An Economics vs. Statistics
averaging of consciences is a mere If human beings are responsible
convenience — and as such it is so agents, which is the basic assump-
far from being the Voice of God tion of the contributors to these
that it should only be resorted to [Essays on Liberty, it follows that
on a most limited basis. (Thus the economics is something more than
sanity of the Inalienable Rights a branch of statistics. Economics
philosophy, which puts certain hu- is and must be a branch of moral
man activities beyond the reach of philosophy. Statistics, on the other
government.) hand, can never be anything more
Of course, nobody has ever seen than a mathematical statement of
a conscience, so maybe the basis what results from the normative
for Mr. Read’s essay must be behavior of morally impelled in-
thrown out the window. On the dividuals. Norms may vary in
other hand, nobody has ever seen their expression from time to
an Id. The Id must be deduced time, but they are always estab-
from the activities or expressions lished within configurations im-
of individuals. But if the Id can posed by stubborn truths about



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

1961 THE MIRACLE OF RESPONSIBILITY 63

human nature. Unless the econo- Rothbard, in what is perhaps the
mist can have a clear idea of what most original contribution to this
these stubborn truths consist, he is year’s Essays on Liberty, calls for
in constant danger of giving sta- a revolt against the keeping of de-
tistics an independent life. tailed records. When the State
Thus, if a nation happens to didn’t know what businesses were
have achieved a certain rate of doing, or what people were indi-
growth in the past, the worshiper vidually earning, there were cer-
of unattached statistics may as- tain natural limitations on what
sume that such a rate is desirable political agents could do to steal
for any given year regardless of social power from the citizenry
how much has been added to steel and transform it into political
capacity, say, in the year before. power for themselves. Mr. Roth-
But, since it is much easier to bard argues that since individual
make a 100 per cent leap from one companies know their own mar-
to two than it is to make a similar kets, they don’t need to keep elabo-
jump from forty to eighty, the rate records; altogether too much
rate of growth statistic may be time and energy is wasted in fill-
utterly misleading if it is de- ing out forms to be passed on to
tached from certain truths about Washington. As for the small con-
man as producer. The statistician cern and the individual, they are
who argues willy-nilly for a “pour not in a position to keep elaborate
it on” treatment of the rate of books and make their livings at
growth will not scruple to advo- one and the same time. So the rec-
cate governmental force-feeding of ords suffer, The individual free
the economy. But the very attempt lance, forced to assemble complete
to force-feed may induce malin- proof of his business expenditures
vestment, or inflation, or a rate of for the tax authorities — and this
taxation that will provoke a disin- is what it is coming to — will be
clination to work at one extreme compelled to overstate his actual
and an inability to save money for net income in default of complete
leisure-time pursuits at the other, records or risk going to jail.
The International Business Ma-
The Case for Revolting chines Company may not like what
Against Record-Keeping Murray Rothbard has to say. But
Contemplating the results of Mr. Rothbard does not propose
what happens when governmental smashing the giant computers,
planners have access to unlimited which would still be of use for au-
power to collect statistics, Murray tomation purposes. What Mr.


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

64 THE FREEMAN November

Rothbard would like to do would might be doing at the moment.
be to make it illegal to force in- Mr. Rothbard, in his war on the
dustries to collect statistics for federal statistics collector, may
Washington at their own expense. seem to be whistling in the dark.
This, after all, is part of the mod- Indeed, everything which this col-
ern slavery to which Mr. Read ob- lection of Essays on Liberty pro-
jects. If government had to gather poses runs counter to the prevail-
its own statistics from voluntary ing current of the age. But don’t
offerings, and if industries and be too sure that Mr. Read is
individuals could be protected wrong when he speaks of ‘The
against the snooping federal sta- Coming Renaissance” of freedom.
tistics collector by applying to his People aren’t so certain any more
activities the present law covering that the statist approach is right.
the issue of search warrants, plan- The ice still covers the river — but
ners would be forced to desist it is honeycombed with softness
from ordering us about for lack of and one of these days it may go
certainty about what any of us out with a roar. @®

is now under the editorship of

EUGENE DAVIDSON

$4.00 per year $1.25 per copy
Address: 64 East Jackson Boulevard, Chicago 4, Illinois



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

ESSAYS
ON LIBERTY

VOLUME VIII, just published (448 pp., indexed),
contains selected writings from THE FREEMAN and
NOTES FROM FEE, from June 1960 through June 1961.

Cloth, $3.00 Paper, $2.00

Z Sy Cloth, $19.00
Ye — all 8 volumes Paper, $13.00
Consider these volumes, either singly or in the set, as

choice and thoughtful Christmas gifts.

ORDER FROM!

THE FOUNDATION FOR ECONOMIC EDUCATION, Inc.

Irvington-on-Hudson, New York



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

~ —~
| Tesgz33
Sz%z2-8R0 =
: 3 =x Cc - — —
— FT OO on a» OO =
0 MD ~O un oo
7 on < =<
‘ © ~ O “=o
PeB IST
306898 v0< |
4r- - @ = =< Oo w
IT 0 I3 500 T35
Io = Ov ® a @ a -—
i 2 RPA « § Q mm
2° 3 0 o aD I) pi
— 0 =~ n 3 3 Wn pr
\ le we x00 _ 0 2 —
™ = < QO ~ 3 0 -
-n C =< wn —
- ~*~ 3 = Jc OT ol
Q a om — < =X
[e) D == oO ® 3d 2
3 OO wx Zo x =
i Q = 0d a + ~
5 O = = oO
> 39 235s =>
3 Qo 5 = 0 q
< 2 Lo =
< O23 Ho
PN
> 2
nN >»
m 0