===== PAGE 1 ===== the Freeman VOL. 26, NO. 2 « FEBRUARY 1976 A Bicentennial Question: An Ascendant or Setting Sun? Clarence B. Carson 67 Can we bring back to life in America the vital principles underlying the Revolution? A Mineral Alert Paul L. Poirot 78 A growing '‘public sector’ diminishes market opportunities to serve consumers. The Businessman and Free Enterprise Benjamin A. Rogge 81 Some suggested ways to help preserve a climate in which business may function. Why Reforming the ICC Is Not Enough William D. Burt 80 if justice and necessity are to prevail, transportation will be deregulated. A Free Society Bernard H. Siegan 98 The awesome power of zoning authorities over human beings has no place in a free society. Robert Owen: The Woolly-Minded Cotton Spinner Co Melvin D. Barger 101 Caught in his own web of humanitarianism, messianism, and determinism. Academic Freedom Joan Wilke 110 Not the squabbling inherent in politics but the alternatives open in the market. Socialized Hot Dogs? David J. Scholl 116 Private vs. governmental conduct of business affairs. Book Reviews: 123 “Steet Titan: The Life of Charles M. Schwab’ by Robert Hessen “The Highest Virtue’ by Alan Stang Anyone wishing to communicate with authors may send first-class mail in care of THE FREEMAN for forwarding. ===== PAGE 2 ===== the Freeman A MONTHLY JOURNAL OF IDEAS ON LIBERTY . IRVINGTON-ON-HUDSON, N. Y. 10533 TEL: (914) 591-7230 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. Any interested person may receive its publications for the asking. The costs of Foundation projects and services, including THE FREEMAN, are met through voluntary donations. Total expenses average $15.00 a year per person on the mailing list. Donations are invited in any amount as the means of maintaining and extending the Foundation’s work. Copyright, 1976. The Foundation for Economic Education, Inc. Printed in U.S.A. Additional copies, postpaid: 3 for $1.00; 10 or more, 25 cents each. THE FREEMAN is available on microfilm from Xerox University Microfilms, Ann Arbor, Michigan 48106. Some articles available as reprints at cost; state quantity desired. Per. mission granted to reprint any article from this issue, with appropriate credit, except ‘A Free Society.” ===== PAGE 3 ===== CLARENCE B. CARSON A Bicentennial Question: {An Ascendant or Setting Sun? As the Constitutional Convention A painter of course, can distin- at Philadelphia drew to a close in guish between an ascendant and a 1787, James Madison noted some setting sun. However, for those of concluding remarks by the elder us attempting to assess the state of statesman of the gathering, Ben- the republic of the United States jamin Franklin. His observations on the two hundredth anniversary had to do with a sun painted on the of its founding, it is not easy to lo- back of the chair of the presiding cate the position of our sun. The officer. Franklin declared signs are mixed, and the sun is ob- scured by a cover of clouds. that Painters have found it difficult There are many indications that to distinguish in their art a rising these United States are in the as- from a setting sun. I have, said he, cendant. Certainly, the wealth of often and often in the course of the Americans is great as is attested to Session, and the vicissitudes of my by their homes, their automobiles, hopes and fears as to its issue, looked thei Ii es. thei kend and at that behind the President without r app lances, their wee en - an ’ vacation paraphernalia, and the being able to tell whether it was ris- ing or setting. But now at length I food they consume. The great abun- have the happiness to know that it is dance in the land can be viewed in a rising and not a setting sun. the innumerable markets within . easy access of almost any inhabit- Dr. Carson has written and taught extensively, ant of the country: the supermars- specializing in American intellectual history. . . His most recent book, The Rebirth of Liberty Kets with their array of food and (1973), covers the founding of the American : iP . Republic from 1760 to 1800. drink, the department stores with 67 ===== PAGE 4 ===== 68 THE FREEMAN February their astonishing variety of goods, evangelists, painters, architects, the gleaming automobiles for sale and lawyers abound. Missions of in the lots, and the specialty stores one sort or another to other parts which cater to almost every whim of the world attest to some degree and taste. Public buildings are usu- to the ascendancy of .the United ally massive and nearly always in States. - a good state of repair. Superhigh- ways crisscross the land to link the people together, as do television ~~ But the signs are mixed, as I networks, railroads, airlines, and said; some point to ascendancy, two-lane highways which have long others to descent, decline, to a set- since become commonplace. Engi- ting sun. One such sign is the fiscal neers manipulate tiny computers operations of our governments. De- to set in motion giant construc- spite the huge take in taxes, the tion equipment to build more still debt of the United States govern- of what is wanted to dwell in, work ment, already grown astronomical, in, look at, or use in some fashion. continues to mount. Qur politicians A disinterested observer surveying do not have the courage to balance this immense material achievement the budget, reduce expenses, or set would surely be moved to declare aside funds for the retirement of that the American sun is in the as- the debt; indeed, few appear to cendant. reckon the debt as a problem. Many Nor should it be thought that states and municipalities totter un- the reaches of the mind and spirit der the heavy burden of bonded have been neglected in the United indebtedness. The huge debt, both States. Although it is not possible public and private, is kept afloat by alluding to outward signs to largely by massive infusions of pa- give any measure of the quality of per money which results in a con- what is provided, there is much to tinuous deterioration of the value show that wealth and attention of the dollar. have been lavished upon intellec- Back of this mounting indebted- tual and spiritual matters. Of ness accompanied by the decline in books, records, libraries, schools, the value of the dollar is a related colleges, universities, churches, development which is its cause. It seminaries, newspapers, maga- is the proliferating government zines, seminars, theaters, and audi- programs of aid, subsidy, and wel- toriums there are a plenitude. fare. Most of these programs have Clergymen, professors, musicians, started modestly and then begun to writers, commentators, critics, balloon in fairly short order. The Not Clearly Marked ===== PAGE 5 ===== 1976 A BICENTENNIAL QUESTION 69 Medicare program cost somewhat tatively, in terms of deep-seated over $3 billion in 1967, its first full trends and where they are tending. year. Advance estimates of the cost Unbalanced budgets, deficit spend- in 1975 are just under $14 billion. ing, and inflation are long-term So it has been, in program after trends, but back of them and lying program. The advance commit- at their roots are others which ments of the Federal government need to be explored. have reached the point that it is difficult to conceive how the budget . could be balanced, much less that To discern these, it helps to re- the debt should be funded. call what it was that led Franklin It is not my intention, however, to conclude that the painting was to enter upon a lengthy recital of of a rising sun. His remarks were the assets and liabilities of either prompted, of course, by the approv- their government or the American al which the Convention had given people. Whatever the merits of to their handiwork of the last sev- such assessments, they are regular- eral months, the United States ly made by the Bureau of the Bud- Constitution. If Franklin intended get and wrestled with, however in- any effect from his words — and he effectively, by the President and probably did, for he was a skilled Congress. And certainly, it is not diplomat with many years of prac- to the purpose here to construct tice. in calculating the effect of lists of American virtues and vices what he said with great care —- it from which to draw conclusions was to say to those who heard him about where we are headed. Those to get on with the business of with a taste for American virtues getting this Constitution ratified and vices, particularly the vices, and put into operation. Between Hope and Despair can find accounts aplenty, if the But his words conveyed more daily newspaper does not entirely than that. They summed up the al- dull the appetite for more. ternating hope and despair which Whether the American sun is in he and others must have felt about the ascendant or is setting cannot developments in America inthe pre- be determined by totting up what ceding dozen years or so. Against someone or other believes are our great odds, odds lengthened by the virtues and vices, entering them in ineffectiveness of their govern- separate columns, and drawing ments, they had achieved independ- conclusions about which predomi- ence from Britain. Not only were nate. The question must be answer- they confronted all along the way ed, if it can be answered even ten- by the danger of breaking up into ===== PAGE 6 ===== 70 THE FREEMAN February factions and camps; but also, once has been all too often the story of victory was won, they were little rulers riding roughshod over the nearer to achieving real unity. The populace while they were oppressed Constitution promised a govern- and bound. ment which could bring the states into union. The Constitution provided for There have been, of course, gov- more than an energetic govern- ernments which provided greater ment which would bring about a measures of justice than this would United States, however; if it suggest, rulers who were contained worked as intended, it would pro- to allow considerable freedom for vide for Americans something rare, the people, and monarchs who were much sought after but seldom held in check by constitutions. But achieved. The United States Con- these latter have been rare enough stitution promised limited govern- to make the promise of limited gov- ment and free men. It promised to ernment and free men something bind those who governed to the out of the ordinary if it could be performance of their appointed fulfilled. tasks and thus to loose the energies Perhaps “promise” is not the of Americans to go about their con- right word. The United States Con- tructive activities. If it accom- stitution does not just promise lim- plished this, there should be little ited government and free men; in doubt that the American sun was fact, no such statement is to be rising. found in the document. The Pre- How unlikely that this promise amble does state that one of its pur- should be fulfilled is not sufficient- poses is “to secure the blessings of ly appreciated. The story of most liberty to ourselves and our pos- governments in the course of what terity,” but the body of the docu- we know of history is more sordid ment is taken up with arrange- than not. It is the story of unleash- ments for the exercise of power, ed power, of tyrants, of oligarchies, who should exercise it, and what of Caesars, of arbitrary kings, of powers were to be exercised at all. absolute monarchs, and of dicta- From what the Founders produced tors. It is the story of the plunder- we can deduce that they thought ing of peoples by robber barons, of promises would be nothing more ubiquitous tax collectors eating out than rhetorical flourishes. The Con- their substance, of contests for stitution at that point did not even power erupting in assassinations, contain a bill of rights. What they intrigues, rebellions, and wars. It attempted to do was to build into Limitations on Power ===== PAGE 7 ===== 1976 A BICENTENNIAL QUESTION 71 the structure of the government underlying idea was to invoke hu- the limitations which would free man nature in the continuous men. | struggle to limit government. The main way they attempted to Benjamin Franklin's prophecy do this was by an intricate disper- of a rising sun was correct. Under sion and balance of powers. The the auspices of the new constitu- powers of government were dis- tion, the United States did expand persed among the three branches and grow. Americans, their ener- of the Federal government and be- gies loosed by it, did press on tween the Federal and state gov- across the Appalachians, push ernments. (Of course, the United their way to the Mississippi, surge States Constitution does not grant across the great plains, pick their powers to the states, though it pro- way through the Rockies, and es- hibits them from exercising cer- tablish themselves on the Pacific. tain powers; the powers of state Those who were at first denied the governments derive from their own full benefits of liberty were in the constitutions.) course of time freed. Americans built on a scale hitherto unimag- ined: they hacked their way The Constitution says, “All leg- through forests to make farms, islative Powers herein granted built roads, canals, railroads, shall be vested in a Congress of the bridges, factories, and cities. The United States ....” “The executive production of the United States Power shall be vested in a Presi- became one of the wonders of the dent of the United States of Amer- world to which others sought the ica.” “The Judicial Power of the secret. In time, they were so pro- United States, shall be vested in ductive that the Europe which had one supreme Court, and in such once succored them would turn to inferior Courts as the Congress America for sustenance. The may from time to time ordain and United States became a power establish.” The main purpose of among the powers of the world the separation, balance, and dis- and wielded great influence in persion of power was not only to world affairs. prevent its concentration but also The rise of America followed to limit its exercise; each branch upon the establishment of indi- and government might be expected vidual liberty, upon allowing the to guard its own powers and pre- individual scope for exercise of rogatives by preventing the growth his abilities for the benefit of him- in the powers of the others. The self and others with whom he Three Branches ===== PAGE 8 ===== 72 THE FREEMAN February worked, traded, discoursed, played, and prayed. The pertinent Bicen- tennial question is this: Do those same conditions still prevail in these United States? Is individual liberty still the keystone of the American government arch? George Washington could say with assurance in his Farewell Address, “Interwoven as is the love of lib- erty with every ligament of your hearts, no recommendation of mine is necessary to fortify or confirm the attachment.” Would the state- ment be true if it were made fo- day, and what does it portend if not? Now it is doubtful that the question of whether Americans love liberty today as they were said to do in 1797 could be an- swered directly. The individual in America is attached to many val- ues, and we may hope that one of those values is liberty. The chances are good that if someone were to attempt to answer the question for today he would take a poll of a selected group of Americans. Those polled would probably be asked to rank liberty with other values which would be named. The re- sults might have some interest, but their reliability would be most doubtful. So much would depend upon how the questions were posed; what we would most likely get would tell us more about the pollsters than the polled. At any rate, there is a much better way to get at what people believe. By their fruits you shall know them, Scripture says, and that is certainly much more to the point than what people say or think they believe. The thrust of political activity for a good many years now has not been in the direction of maintaining or ex- tending individual liberty. Rather, it has been in the direction of cen- tralizing power in the Federal government, the empowering of groups, the imposing of controls, increases in taxes, and the political determination of more and more questions. A Tenvous Balance The semblance of a balance of power remains in the structure of our governments, but if the heav- ens were as out of kilter as this “balance,” the law of gravity would not suffice to keep the stars on an orderly course. In the first place, there is today a gross im- balance between the powers of the Federal and the state govern- ments. The sway of the Federal government is such that states de- pend increasingly for revenues upon the government of the un- ion, contrive their programs to fit the Federal formulas, and seek in- creasing aid while clinging to the remnants of fiscal and legal inde- pendence. The states are today ===== PAGE 9 ===== 1976 A BICENTENNIAL QUESTION 73 little more than puppets, moving and carried on extensive personal in whatever way they are manipu- diplomacy with the leaders of lated by the government in Wash- other mations — and was every- ington. where understood to be at the In the second place, the balance apex of power in the United within the Federal government States. among the branches has been Since the mid 1960's, however, greatly altered. There never was indications are that the office of a perfect balance among the the presidency has declined in branches in the sense of each of power and influence. It began dur- them having equal power. The ing the last years of the Johnson makers of the Constitution gave administration, continued through considerably more weight in deci- the Nixon years, may have been sion making to the Congress than accelerated by the disgrace of to the President or Supreme Nixon, and has not abated with Court. (Within the Congress, how- the coming of President Ford. The ever, the weight of the House and trend does not thus far signal a the Senate was made about as restoration of a balance of power, nearly equal as might be.) Con- however. The executive branch gress was given the power not continues to grow in numbers and only to make the laws, appropriate powers accorded it; but it is the money, and declare war, but also growth of a body while the head a share in appointive powers and shrinks. Most likely, it was Nix- authority to impeach and remove on’s inept wrestling to gain con- members of other branches as well trol over the executive branch as that of governing themselves. which may now be beyond admin- In the twentieth century, how- istering that was his undoing. ever, the weight has shifted away from Congress, if not technically then in actuality. From the early Meanwhile, the Supreme Court 1930’s to the mid 1960’s the pow- has assumed unprecedented powers ers of the President were vastly in recent years. The Warren Court, augmented. In effect, the Presi- as it came to be called, solidified dent usually initiated legislation, this trend in the 1960's by its ac- conceived programs for the gov- tivist decisions. Under the sway ernment and administered them, of a mass of decisions, the Fed- conducted the increasing involve- eral courts became not only the ment in world affairs — dispatched final arbiter of the meaning of the armies, disposed of foreign aid, Constitution but also the only The Supreme Court ===== PAGE 10 ===== 74 THE FREEMAN February arbiter. Congressmen are heard to branch of the government, it comes say that we cannot know whether nearer to being another govern- this or that measure is in keeping ment. It is as if we now have over with the Constitution until there us the state, Federal, and bureau- is a court ruling on the matter. cratic government. There is hy- This is a serious abrogation of the perbole in this way of looking at duties of a Congressman and a the matter, but not as much as contribution to the unbalancing of might be supposed. powers. Sonn of Congressmen are sworn to up- oi of Bureaucracy hold and defend the Constitution. The separate bureaucratic gov- Their first line of defense of the ernment phenomenon is best ex- Constitution is to enact no laws emplified by the “independent” believed to be in conflict with its boards and commissions, such as, provisions. This is made more seri- Federal Communications Commis- ous by the presumption of the sion, Civil Aeronautics Board, In- courts in favor of the constitu- terstate Commerce Commission, tionality of acts of Congress Equal Employment Opportunities signed into law by the President. Commission, National Labor Rela- Be that as it may, the Federal tions Board, and so on. They are courts have assumed extensive called independent because they powers over American schools and are creatures of Congress and do unusual powers to determine the not fall under the administrative legal rules under which we live. authority of the chief executive. There is yet another develop- They may be thought of as sep- ment, however, which more seri- arate governments because they ously effects the balance of power perform all three functions of gov- than the others, if that is possible, ernment; they legislate, adminis- and has changed the posture of ter, and enforce the laws which our government. It is the accele- they devise. The constitutional rated growth of the bureaucracy separation of powers is abridged, and its expansion into more and and power is concentrated in single more areas of our lives. Some have bodies. referred to the bureaucracy as a These and other bureaus now fourth branch of the government. produce 10 times as many rules or, The intent of the characterization more accurately, laws as does Con- may be good, but it fails adequate- gress. This lawmaking power has ly to describe the development. The become so obtrusive that there is bureaucracy is not just another now before Congress a bill to sus- ===== PAGE 11 ===== 1976 A BICENTENNIAL QUESTION 75 pend the operation of some of the eral courts, and the proliferation bureaucratic legislation until Con- of the bureaucracy have been a gress has had the opportunity to letting loose of government from examine it. Congress, which has its constitutional confinement. The all the constitutional authority to one being confined by the sway of legislate, would gain a veto power this power is the individual. over bureaucratic acts —a notion What do these things portend sufficiently strange to provoke for America? Is the sun in the mirth if not tears. ascendant or is it setting? Bureaucratic control, however, At the rate things are going, the is not a fit subject for mirthmak- sun is setting for individual lib- ing; it is serious, often dead seri- erty in America. There are those ous. Bureaus now hold life and who claim that what is being reg- death powers over virtually all ac- ulated and controlled is only the tivities in America. Whether one economy. Such claims are entirely wishes to build a church, operate a specious; the economy is an ab- printing press, produce a car, buy straction to which government a house, buy and sell widgets, hire controls cannot be applied. It is or fire, he finds one or more or people who are regulated and con- many bureaucrats athwart his trolled. Moreover, it is not pos- path. They license, certify, ap- sible to regulate people in the eco- prove or disapprove, inspect, class- nomic aspect of their lives and ify, lay down rules, hold hearings, leave them otherwise free. compile dossiers, make rulings, re- . . Economic Factors strict, restrain, and confine. They are ubiquitous and omnipotent and There is no aspect of our lives often behave as if they were om- that is not hinged in some way to niscient. the economic. Everywhere that we Judging by these developments, are and everything that we do in- a reversal has been and is taking volves the use of property; whether place. The constitutional principle asleep or awake, whether eating was, as stated, a limited govern- or fasting, whether reading or ment and free men. The trends ex- looking at television, whether amined show government being walking or riding, it is all upon loosed and men being limited and or with property. Every transac- confined. The concentration of tion we engage in, whether buying power in the Federal government, a newspaper or book, whether con- the growth of the executive branch, tributing to the church or buying the assertion of power by the Fed- a house, whether traveling to Eu- ===== PAGE 12 ===== 76 THE FREEMAN February rope or visiting Colonial Williams- burg, is economic in nature. In- deed, there is no angle from which to control our lives that can begin to equal the economic. The spread of economic controls, or the con- trol of business, as it is sometimes called, signals the decline of indi- vidual liberty. Government control signals, too, the setting of the sun for Amer- ica. There is no knowing how long a people can survive ever-tighten- ing controls. For a very long time, no doubt. But they do so at the ex- pense of prosperity, of economic growth, of that vitality which makes for greatness of a people and a nation. Controls make it ever more difficult to adjust to chang- ing circumstances and conditions. There is good reason to believe that the United States is already visibly suffering from the rigidity of an economy made so by bureau- cratic controls. Repeated efforts to revive the economy by massive jolts of government power by in- flating fails in its object. It fails because the problem is not mone- tary in origin, though the attempt to solve it in this way certainly aggravates the problem. The prob- lem arises, in the main, from in- flexibility, rigidity, and restric- tions which stand in the way of making the needed adjustments. The long wait for bureaucratic approval and inspection before changes can be made hampers businesses. We would probably have Alaskan oil today rather than at some date in the future if ‘en- vironmentalists had not intempe- rately delayed the drilling and laying of pipelines. ‘A people who will tolerate such interference with their lives can expect that their lives will become harder and harder. Time to Reconsider The American sun may appear to be in the ascendant, but there is strong reason to believe that it has entered upon its descent. It is especially appropriate in this Bi- centennial season to think back upon and ponder these things. Anyone who cares to know may rediscover those principles which reassured Franklin that he was looking upon a rising sun. Those who care to do so may review as well the histories of peoples who have not been so fortunate as to start their national careers on the foundation of great political prin- ciples. When they have thus stud- ied history, they may well wish to restore those principles to their former place. It will be no easy matter to do so. Governments are not easily in- duced to relinquish the powers they have obtained and are used to exercising. Politicians and bureau- crats do not relish yielding up their authority over our lives. ===== PAGE 13 ===== 1976 A BICENTENNIAL QUESTION T7 Only a resolute populace deter- nations. It is within their power mined to assert itself and claim its to change the course, even to re- rights can prevail against them. verse it, to restore principles, to Only those who have that love of be revived and revitalized. When liberty intertwined with every liberty gives way to fullfledged op- ligament of their hearts could be pression it is most likely lost for a expected to make the effort. long time, but liberty threatened There is one hopeful thought. can be more readily recovered. The rotation of the earth on: its ~~ It would be good indeed if we axis which produces the rising and could use the occasion of our na- setting of the sun is a natural tional Bicentennial not to pay trib- phenomenon, something we can ute to the dead but to rediscover only observe but not control. The and reinstitute those great prin- sun having risen, continues up- ciples which characterized ‘the ward to its zenith, commences to American Revolution — principles descend, and must inevitably set. which could be made to live again It is not so with peoples and with in America. 0 ® ; ta My Freedom Depends on Yours IN ORDER for the highest ideas and ideals of mankind to prevail generally, it seems obvious that a condition of peace and freedom {DEAS ON is required — a society wherein no person molests any other per- : son; a society wherein no person prevents any other person from 5 developing his creative potentialities to the fullest extent’ of his LIBERTY understanding and ability. This desirable state of affairs will not occur all at once. It will grow only as freedom is understood and as faith in it is restored. If one person decides today to practice freedom, the evolutionary process in human relationships will move forward one more step. That is the only possible path to freedom — a peaceful change in thought and understanding and action among individual persons. Anyone can begin the practice of freedom whenever he chooses to do so. DEAN RUSSELL ===== PAGE 14 ===== PAUL L. POIROT PR A Mineral Alert HAVE WE WITHDRAWN so much ing 25 of the 27 states east of the land from mineral exploration and Mississippi River is no longer acces- development as to seriously affect sible even for mineral exploration, the long-term mineral position of not to mention development for min- 9 . _ ng. tion exnlocsd oy Ga ony dues Much of this withdrawn land is in regions where mineral deposits of and 1. Courtland Lee, young pro- economic significance are most like- fessionals in the Department of ly to occur — in the western United the Interior, in an article “Is Our States and Alaska especially. Account Overdrawn?” in the Sep- tember 1975 issue of the Mining Lots of laws and governmental Congress Journal. agencies are involved in this story President of the American Min- but the essence of the situation is ing Congress, J. Allen Overton, that of 824 million acres of public Jr., introduces the article: lands potentially available for min- eral leasing, 24 per cent were with- Bit by bit, acre by acre, vast tracts drawn as of 1968 and 73 per cent of the public lands of the United withdrawn as of 1974; and of 742 States are being withdrawn from million acres of public lands sub- entry for mineral exploration. The ject to the Mining Law of 1872, various federal bureaus and agen- 17 per cent had been withdrawn cles have sharply accelerated this f.,0, hocsible use in 1968 and 67 withdrawal process since 1968, with- } out coordination and without regard per cent as of 1974. Much of the for the cumulative effect on future problem developed in Alaska over production of metals and minerals the Native Claims Settlement Act from domestic sources. of 1971. But other significant with- Unbelievable as it may seem, an ~~ drawals have been made in the area larger than that encompass- name of National Parks, Military 78 ===== PAGE 15 ===== 1976 A MINERAL ALERT 79 Claims, Wilderness Areas, Wild lem of chronic famine and starva- and Scenic Rivers, Fish and Wild- tion that still plagues people dedi- life Refuges, Utility Corridors, cated to socialism; the problem of and Primitive and Roadless Areas, over-grazing the commons in old among others. England, and in the early days in Special interest groups have New England where all produce gained political power to have went into a common storehouse lands set. aside exclusively for for withdrawal by “each accord- their own purpose, thus preclud- ing to his needs”; the problem ing any other possible use of such that has only been solved in com- land — even if two or more pur- paratively modern times in those poses might have been served si- comparatively few places where multaneously. At any rate, mining the people have understood and interests are deeply concerned respected the institutions of pri- about this recent trend of land vate ownership, specialized pro- withdrawal from mineral explora- duction, and voluntary exchange tion and use. : in open competition. This is the Lest this be construed as spe- problem that currently perturbs cial pleading by mining interests, mining interests with respect to let us view the matter in broad exploring and developing mineral perspective. Of the total land area deposits on government lands. But of 2,264 million acres in the 50 on those same government hold- states, approximately one-third is ings is the same problem with ‘federally owned/controlled — and respect to grazing rights, water not quite half of the latter is in rights, timber rights or any other Alaska. Private owners may have potential use the market might personal problems or difficult de- indicate. : cisions about the sale or use of Private owners of land and their property, but there is no other scarce resources are free to public or general problem over waste them as they choose, of mineral rights or withdrawals on course, but always strictly at their privately-owned land. The problem own expense. If a private owner arises in. the public sector — on chooses to hold a given area as a land not subject to market regu- park or preserve or for some other lation and control. limited use, the market demand This is the old, old problem of for other potential uses makes the wasteful use of scarce re- that owner painfully aware of the sources under a system of owner- opportunity costs he bears to sat- ship in common; the ancient prob- isfy his particular purpose. And ===== PAGE 16 ===== 80 THE FREEMAN February he may be tempted, even per- And that bill is falling due far suaded, to allow a small mine open- sooner than many had supposed — ing or an oil drilling rig or pump next week, or next month (or was or even some supervised timber it yesterday?) for New York City. harvesting on his otherwise scenic The bill already has fallen due preserve. It is to his selfish inter- and is being paid for government est to develop and use as econom- mismanagement of natural gas ically as possible every scarce and and petroleum prices, production, marketable resource available on marketing, and wasteful consump- his property. There is every in- tion. centive for him to conserve rather The bill has fallen due and is than waste what he owns. being paid in countless ‘“down- Not so on “the commons” —on towns” laid waste in the name of that third of the land area of the zoning and rent control and pub- United States remaining under lic housing and urban renewal Federal ownership and control. and related objects of urban plan- Not the bids and offers of poten- ning. And there will be additional tial buyers and sellers but only bills to be paid for urban and the numbers of voters favoring or rural land utilization schemes and deploring a given use have real regulations. meaning to the government official Whenever scarce and valuable in charge of the land. To open resources are taken out of private such land to the highest bidder in ownership and control — with- the market place would be to bring drawn from the market — and it under private ownership — and thrown into “the commons” there that would diminish or even close is a cost and the taxpayer will be out entirely the job of that gov- obliged to pay. So let us beware ernment official. So his only incen- the plans and controls and with- tive is to continue the land in some drawals we applaud, for most cer- politically palatable but econom- tainly we will pay for them. ically wasteful use — some purpose No one knows precisely what the that millions pretend to applaud price will be or how long before though unwilling to support it the bill falls due for the recently with their own resources. accelerated withdrawal of a major Yet, when public officials dictate part of the public domain from the disposition of scarce and valu- mineral exploration and use. But able resources, the millions who we should be grateful to Messrs. applaud are nonetheless obliged Bennethum and Lee for the early sooner or later to foot the bill. warning. ® ===== PAGE 17 ===== » dre. NS XT «= ¢| The Businessman o KEE Si NG and Free Enterprise BENJAMIN A. ROGGE THE QUESTION before this house is ment and asks, “Have you had this not whether the survival of capi- before?” To this the patient re- talism is in doubt (this is admit- plies, “Yes,” and the doctor says, ted). The question for us, as it “Well, you've got it again.” Quite was for Lenin at an earlier time, obviously something more than is What To Do? His concern was this is needed. Proper therapy how best to hasten the collapse of usually rests upon diagnosis of the capitalism; our concern is how to specific problem, including some postpone or ward off that collapse. notion of how the patient got into Frankly, I feel more at ease as his fix, whatever it might be. the diagnostician than as the ther- I begin then with the question apist. Cancer is still easier to iden- “What is our problem?” In an ify than to cure, and so is over- earlier sentence, I identified the expanded government. Admittedly, problem as that of over-expanded diagnosis must usually precede government. This is not really therapy. After a lengthy diagnos- correct for the purposes of ther- ‘tic examination, the.doctor looks apy. Over-expanded government is, up at the patient in some puzzle- in fact, but the most noticeable, Dr. Rogge is Distinguished Professor of Polit- objectively-evident symptom of our ical Economy of Wabash College. This article problem. Our problem is in the is from a speech of September 16, 1975, be- : : fore the Indianapolis Rotary Club. . form of a set of ideas whose im- 81 ===== PAGE 18 ===== 82 THE FREEMAN February plementation calls for the use of ety.” An accurate verbalization of force and government in that agen- these ideas is to be found in the cy of society given a monopoly of statement of Newton Minow, who the right to use force. For so long said’ as chairman of the agency as those ideas are dominant in so- controlling television in this coun- ciety, Behemoth will continue to try, “What is wrong with the tele- grow. Nor is it useful for those vision industry in this country is who hold and espouse those ideas that it is giving the viewers what to publicly regret the associated they (the viewers) want.” growth in government and all its.” Compare this, for example, with instrumentalities. Thus Senator these words from Adam Smith’s Edward Kennedy has said recent- Wealth of Nations: ly that “one of the greatest dan- What is the species of domestic in- gers of government is bureauc- dustry which his capital can employ, racy,” and Senator Gaylord Nelson and of which the produce is likely to has said that, “The federal bu- be of the greatest value, every indi- reaucracy is just an impossible vidual, it is evident, can, in his local monstrosity.” All well and good situation, judge much better than any but that growth in bureaucracy statesman or lawgiver can do for him. which they so rightly lament is the The statesman, who should attempt necessary and inevitable outcome to direct private people in what man- . ner they ought to employ their capi- of the ideas that these two (and tals. would not only load himself with , y load himself wi others) have so well and so con- , pg unnecessary attention, but as- vincingly espoused. sume an authority which could safely be trusted, not only to no single per- son, but to no council or senate what- What are these ideas that pro- ever, and which would nowhere be so duce bureaus as larvae do moths? dangerous as in the hands of a nan They can be expressed in various who had folly and presumption ways but their essence is to be enough to fancy himself fit to exer- found in the following related ¢s€ it propositions: Some of you may see in other (1) There exist individuals and idea-systems (such as economic de- groups in society who know mot terminism, or relativism or envy only what is best for them but or what have you) the real source what is best for others as well; and of our malignancy. God, my wife, (2) This wisdom, when com- my children and all of you know bined with the coercive power of that I am fallible and perhaps I the state, produces “the good soci- have chosen poorly in this case. Man and Superman ===== PAGE 19 ===== 1976 : THE BUSINESSMAN AND FREE ENTERPRISE 83 What I am prepared to. argue in a that finally count are those that more strenuous way is my convic- relate to such fundamental ques- tion that our struggle is at the tions as the nature of man, his level of ideas and not thas of men purpose here on earth and the or institutions. - moral character of human action. In the words of the celebrated Arguments on the basis of eco- John Maynard Keynes: nomic efficiency are not alone cap- able of saving capitalism. The ideas of economists and polit- . ical philosophers, both when they are According } to J oseph Schum- : “.. .1it is an error to be- right and when they are wrong, are beter: more powerful than is generally un- lieve that political attack [of cap- derstood. Indeed, the world is ruled italism] arises primarily. from by little else. Practical men; who be- grievance and that it can be turned lieve themselves to be quite exempt by justification. Political criticism from any intellectual influences, are (cannot be met by rational argu- usually the slaves of re Jefumet ment. Utilitarian reason is in any economist. Madmen in authority, who 40 weak as a prime. mover of hear voices in the air, are distilling . eo. group action. In no case is it a at % tow yea adem match for the extra-rational deter- minants of conduct. The stock ex- My first point then is that we change is a poor substitute for the are involved in a war of ideas. My Holy Grail.” second is that our target is not the masses but those men and women !deas Shape Society in. society who deal in ideas and I have now enumerated my as- who shape the thinking of the guymptions as to the nature of the masses. In the words of one of the tagk in which we are involved. I great idea men of this century, the have argued that we are really in- late Ludwig von Mises: volved in a struggle for ‘the souls _ The masses, the hosts of common Of men, that in that struggle it is men, do not ¢onceive any ideas, sound ideas that count and that the or unsound. They only choose between questions that are relevant are the ideologies developed by the intel- largely ethical in nature. Moreover, lectual leaders of mankind. But their ] have argued that our target is choice is final and .determines -the not the masses but those who live course of events. If they prefer bad py the spoken and written word doctrines, nothing can prevent dis- and who thus largely shape opin- aster. ion in society. My third point. is that the ideas - If these assumptions be even ===== PAGE 20 ===== 84 THE FREEMAN February roughly valid, what then is im- man for free enterprise when his plied as to the role of the business- job seems to require that he op- man in the fight to save capital- pose immediate decontrol of oil ism? Before attempting an answer prices? How can the President of to that question, let me consider General Electric stand four-square one that seems to precede it. for capitalism, yet support export Should the businessman as busi- subsidies for many of the products nessman even get involved in the sold by his firm? struggle? The Busi 's Dil A number of factors would seem € Businessman's Dilemma to indicate a negative answer to The fact is that there is hardly that question. To begin with, the a businessman in this country who businessman is not typically hired is not receiving favors from gov- by the stockholders to carry on ernment in one way or another. programs of social reforms; he is The fact that this is true of most hired to add to the net worth of other elements in the society, in- the company. Admittedly the net cluding his critics in the ranks of worth of the company may be ad- the intellectuals, does not really versely affected by particular acts change the nature of the business- of government, and the stockhold- man’s dilemma. His job may seem ers would surely approve of man- to require of him that he support agement action in opposition to specific government intervention those specific threats to profits — in the economy of precisely the for so long as the potential gain kind that, in the fight for men’s exceeds the cost. At the same time, souls, he must condemn as gen- the company may often stand to eral practice. Knowledge of Kant’s gain through specific acts of gov- Categorical Imperative — do only ernment, including actions that that which you would be willing to work against the principles of cap- see done by all — may get you an italism. Is it a tariff against for- A in a college course in philosophy eign steel producers? or an export but may get you fired if you at- subsidy that would increase the tempt to practice it as a business- demand for the company’s prod- man. ucts? or a government-enforced In other words, his very position price or interest rate that adds to may seem to require of the busi- the profits of the company? How nessman that, in the struggle now the businessman? How can against government intervention, the President of the Mobil Oil he be as often a part of the prob- Company be a convincing spokes- lem as of the solution. Moreover, ===== PAGE 21 ===== 1976 THE BUSINESSMAN AND FREE ENTERPRISE 85 how can he face those he is at- the argument. This is not his turf, tempting to persuade to hold the nor is he usually adept at the capitalist faith when his own word games played on it. hands are so obviously unclean? What I am saying in essence is This is not a plea for the busi- that here, as in most of life, the nessman to abjure all government prizes (in this case, the souls of assistance, even at the cost of dol- men) will go largely to those who lars and perhaps survival. With are specialists in the arts involved. Adam Smith, I assume that busi- Admittedly there are some such (I nessmen (as all others) are rarely could name you. a dozen or so) prompted by general benevolence. from the ranks of the business- In fact, with Adam Smith, I would men, but their skills in the arena urge us to “examine any proposal of ideas and words are not a prod- which comes from this order of uct of their business experience men (the businessman) not only but of what they have done on with the most scrupulous but with their own initiative to improve the most suspicious attention.” their own understanding of the A second reason for a possible ideas involved here and their skills negative answer to the question of in communicating those ideas. whether the businessman should get into the fight to save capital- ism is that he is usually an ama- Where then does this leave us? teur in the practice of the arts re- Can the typical businessman do quired by that struggle. The art nothing but deplore the growth of required is not that of making or government and go on about his selling men’s suits or aircraft mo- task — which may have been made tors; the art is that of the dealer easier in some ways and more dif- in abstract ideas, including partic- ficult in other ways by that self- ularly systems of ethical judgment. same expansion of government in- Don’t misunderstand me; it is not volvement in economic life? I be- that the businessman is unintelli- lieve that the answer to that ques- gent. I yield to no one in my re- tion is “no” —but I have some spect for the great practical and real sympathy with those business- theoretical intelligence required men (and this will be the great for effective entrepreneurship. It majority) who by their inaction is simply that his intelligence is say “yes”. After all, as Henry not applied, day in and day out, to David Thoreau put it, “I came into the kinds of questions and consid- this world, not chiefly to make this erations that are at the center of a good place to live in, but to live Who Stands Most to Lose? ===== PAGE 22 ===== 86 "