===== PAGE 1 ===== - IDEAS ON [IBERTY December 2000 Vol. 50, No. 12 FEATURES 8 WHO’s Hidden Agenda by Twila Brase 12 Why Classical Liberals Should Love Harry Potter by Andrew P. Morriss 17 They’re Just Dying to Be Rescued by Karen Selick 19 A Year at the Movies by Raymond J. Keating 23 Capitalism and the Zero by John Hood ¥ 30 High Savings Rates and Asia’s Economic Crises by Christopher Lingle 34 Standing to Gain from Tattling by Timothy D. Terrell » 38 The Self-Imposed Poverty of Economics 0 o 0 by Tibor R. Machan and David M. Brown 0 O 0 0 0 o © 0 COLUMNS THOUGHTS on FREEDOM—Universal Values by Donald J. Boudreaux 15 IDEAS and CONSEQUENCES—An Open Letter to Statists Everywhere by Lawrence W. Reed 21 POTOMAC PRINCIPLES—Forgotten War in a Forgotten Country by Doug Bandow 28 PERIPATETICS—Death by Government Protection by Sheldon Richman ¥ 32 ECONOMIC NOTIONS—How Government Prevents Us from Buying Safety by Dwight R. Lee 43 ECONOMICS on TRIAL—How Many of You Are on Food Stamps? by Mark Skousen 53 THE PURSUIT of HAPPINESS—Don’t Fear Deficits by Russell Roberts DEPARTMENTS 2 Perspective-Divide and Conquer by Sheldon Richman 6 Markets Aren’t Efficient? It Just Ain’t So! by Robert P. Murphy 41 Capital Letters 45 Book Reviews The New Anti-Liberals by A. Alan Borovoy, reviewed by Thomas F. Bertonneau; The Day of Deceit: The Truth About FDR and Pearl Harbor by Robert B. Stinnett, reviewed by Bettina Bien Greaves; Power Grab: How the National Education Association Is Betraying Our Children by G. Gregory Moo, reviewed by David Kendrick; Beer and Circus: How Big-Time College Sports Is Crippling Undergraduate Education by Murray Sperber, reviewed by George C. Leef; A Cure Worse Than The Disease: Fighting Discrimination Through Government Control by M. Lester O’Shea, reviewed by William H. Peterson; Vital Remnants: America’s Founding and the Western Tradition, edited by Gary L. Gregg II, reviewed by Wesley Allen Riddle. 55 Annual Index Lesson plans for ¥ articles are available at www.fee.org. ===== PAGE 2 ===== IDEAS oR, ON [IBERTY PERSPECTIVE Divide and Conquer Published by . . . The Foundation for Economic Education If had to pick my Favorite sentence in all Irvington-on-Hudson, NY 10533 of Ludwig von Mises’s Human Action (a Phone (914) 591-7230 Fax (914) 591-8910 daunting task in a 900-page book), it would be E-mail: iol@fee.org FEE Home Page: http://www. fee.org President: Donald J. Boudreaux Editor: Sheldon Richman Managing Editor: Beth A. Hoffman this one: “The fact that my fellow man wants shoes as I do does not make it harder for me to get shoes, but easier” (p. 673 of the Third Revised Edition). That sentence may seem rather pedestrian compared to all the sen- Editor Emeritus tences Mises used to establish the science of Book Review Editor praxeology (human action) and to spin out its George C. Leef countless implications for economics. But it’s Editorial Assistant a perfect example of how Mises showed that i ad untutored intuitions about social interaction Columnists . Charles W. Baird are often wide of the mark. Doug Bandow There is an old school of thought, widely Dwight R. Lee identified with the Reverend Thomas Malthus, arene eed but actually quite older, that held the opposite Mark Skousen of Mises’s position. Beginning with the unde- Thomas Szasz niable assumption of scarcity, that school Walter E. Williams believed the human race was doomed to mis- Contributing Editors : ery. Population would grow until it strained pom Sa the carrying capacity of the environment; then Clarence B. Carson starvation, disease, and conflict would set in Thomas J. DiLorenzo and scale back the numbers. This process was Burton W. Folsom, Jr. more or less the permanent fate of mankind. Joseph S. Fulda How could it not be? Growing numbers of Bettina Bien Greaves . Lo. Robert Higgs people would be vying for limited resources. John Hospers Life had to be poor, nasty, brutish, and short, Raymond J. Keating though not, as Hobbes had it, solitary. Dapiel B. Klein Mises was surely not the first to see it oth- Wendy McElroy erwise, but he was second to none in spelling Tibor R. Machan . out why the pessimists are wrong. He first Andrew P. Morriss Ronald Nash seemed to concede their point, then zeroed in Edmund A. Opitz on what they missed. “The characteristic mark ne L ene of the ‘state of nature,’” Mises wrote, “is illiam H. Peterson . . . 3 irreconcilable conflict. The means of subsis- Jane S. Shaw . Richard H. Timberlake tence are scarce and do not grant survival to Lawrence H. White all. . . . The source of conflict is always the fact Ideas on Liberty (formerly The Freeman: Ideas on Liberty) is the month- that each man’s portion curtails the portions of ly publication of The Foundation for Economic Education, Inc., Irvington- oth er men ’” on-Hudson, NY 10533. FEE, established in 1946 by Leonard E. Read, isa . non-political, educational champion of private property, the free market, What saves man from the dismal existence and limited government. FEE is classified as a 26 USC 501(c)(3) tax- ) . ne exempt organization. of wild animals? The division of labor, the Copyright © 2000 by The Foundation for Economic Education. Per- : : : mission is granted to reprint any article in this issue, except “They're fir st topic taken up by Adam Smith m The Dying to Be Rescued” provided credit is given and two copies of the : : Ma rearied material ave set to FEE. Wealth of Nations. As Mises put it, “What The costs of Foundation projects and services are met through dona- makes friendly relations between human tions, which are invited in any amount. Donors of $30.00 or more receive . . . . . a subscription to Ideas on Liberty. For delivery outside the United States: beings possible 1s the higher productivity of $45.00 to Canada; $55.00 to ail other countries. Student subscriptions are or. $10.00 for the nine-month academic year; $5.00 per semester. Addition- the division of labor. It removes the natural al copies of this issue of /deas on Liberty are $3.00 each. Bound volumes of The Freeman are available from The Foundation for calendar years 1972 to 1999. The magazine is available in microform from 2 University Microfilms, 300 N. Zeeb Rd., Ann Arbor, MI 48106. ===== PAGE 3 ===== conflict of interests. For where there is divi- The movie theater is not typically a place sion of labor, there is no longer question of where devotees of capitalism and individual the distribution of a supply not capable of liberty can find comfort. But as the year 2000 enlargement.” (Here Mises differs with Smith. closes, Ray Keating revisits some of the bright Smith thought the division of labor grew out exceptions that have come out of Hollywood. of man’s “propensity to truck, barter, and Much went into the evolution of capitalism. exchange one thing for another.” For Mises, The institutional and ideological history is exchange comes from the realization that rich. Yet John Hood finds that “nothing” has gains were available from trade and the divi- been ignored. sion of labor. I take Mises’s side in this con- Societies are often lauded for their high troversy.) Mises drives home the point: savings rate and chided for their low savings “Because many people or even all people rate. Things are not so simple. Christopher want bread, clothes, shoes, and cars, large- Lingle takes a new look at the Asian econom- scale production of these goods becomes fea- ic crises. sible and reduces the costs of production to Should the law reward people for tattling? such an extent that they are accessible at low Environmental law and the courts do just prices.” that. Timothy Terrell says the development is The upshot is that because of the produc- ominous. tivity specialization makes possible, the rest The attempt to reduce all motivation to eco- of the animal kingdom holds few lessons for nomics seems to leave out some of the rich- mankind. Anyone who believes government’s ness of human life. What about moral values? role is to temper the market with cooperation Tibor Machan and David Brown have an idea needs to learn that lesson. where economics went wrong. For more, see Wendy McElroy, “The Effi- Here’s what our columnists have come up ciency of Natural Rights,” The Freeman: with this month: Donald Boudreaux muses on Ideas on Liberty, December 1997. universal values. Lawrence Reed pens an open letter to statists everywhere. Doug Bandow describes the horror of the Burmese When the World Health Organization civil war. Dwight Lee demonstrates that in the ranked 191 of the world’s health-care systems, name of safety, the government makes us less the United States placed an unspectacular safe. Mark Skousen wonders how many peo- 37th. As Twila Brase points out, serving ple are on food stamps. Russell Roberts says patients was not the overriding criterion. fear not budget deficits. And Robert Murphy, Does the Harry Potter phenomenon have hearing Michael Kinsley’s doubts that mar- any relevance to classical liberals? Andrew kets are efficient, protests, “It Just Ain’t So!” Morriss sees something in the best-selling Subjects for our book reviewers: campus books for lovers of liberty. illiberalism, Pearl Harbor, the National Women who are likely to be brutalized by Education Association, college fluff, anti- estranged husbands too often seem to prefer discrimination laws, and Western tradition. * %k %k that fate to a measure that could significantly And don’t miss our comprehensive annual reduce the chances of their becoming victims index. of violence. Karen Selick explains. —SHELDON RICHMAN ===== PAGE 4 ===== Thoughts on Freedom by Donald J. Boudreaux Universal Values 'm writing these words on my son’s first ticular set of political values. We want our son day at school. Well, really, today is his first to think for himself and to come to his politi- day at pre-school. Thomas is only three. Nev- cal views, whatever they turn out to be, ulti- ertheless, in just a few minutes he and his mately because se believes in them. Never- mommy will walk a few blocks to the Immac- theless, we’re optimistic that if Thomas is ulate Conception School here in Irvington, reared and educated properly, he will share meet his teacher and classmates, and set foot our classical-liberal values. for the first time in a classroom. This very day We have good reason to be optimistic. is the first of what will probably be 3,500+ Classical-liberal (or, if you prefer, libertarian) days of formal education for Thomas. political values are no more than the applica- He’s got a long way to go, but it can be a tion to society at large, and to government, of wonderful adventure! some of the most fundamental and indispens- What will Thomas learn? What lessons will able rules that every decent person learns stick? What lessons will escape him? Will his early in life and adheres to until death. teachers—today and tomorrow—>be dedicated What are these rules? “Keep your promis- educators or will they be dilettantes or es.” “Tell the truth.” “Don’t take other peo- drones? Will he be taught to think or to ple’s stuff.” “Don’t hit other people.” emote? Will he be inspired to be and to do These rules are among those that Karol and good? Or will his head be clouded with any of I and most other parents teach our little ones. the countless assortments of nonsense, super- Success and happiness are possible only for stitions, and misconceptions that are forever those who follow these rules. Anyone who on the loose? What values will he encounter? refuses to follow them finds himself, at best, Of course, all along the way Karol and I without friends and trading partners, and, will do our best to ensure that our son receives possibly, in prison—or worse. Following an excellent liberal education, just as we’ll do these rules might not guarantee happiness, but our best to instill in Thomas those values that you’re guaranteed to be miserable if you reject we believe are necessary for him to live a full, any or all of them. productive, and rewarding life. To see just how fundamental each of these But will we actively try to ensure that rules is, ask yourself if you can imagine Thomas eventually shares our political val- teaching your child the opposite: “Listen ues? No and yes. up, Johnny: whenever you see something Parents are unlikely to meet much success you want, just snatch it” Or: “Jane, lying if they insist that their children adopt any par- is always A-okay.” Or: “Suzie, always take maximum advantage of others; keeping promises is for suckers.” Or: “Timmy, it’s Donald Boudreaux is president of FEE. essential that you randomly strike people ===== PAGE 5 ===== from time to time with your fist. That way Indeed so! Professor Bird, however, they’ll respect you!” believes that radically insisting (as libertarians Clearly, civil society is possible because do) that the government be bound by all of the almost everyone abides by these obvious rules same basic rules of decency that bind individ- against theft, cheating, and initiating vio- uals does not really render libertarians radical. lence. As I recently wrote in this space, if by “radi- As Karol and I teach these rules to Thomas, cal” we mean consistently sticking to sound we will emphasize that they are universal. principles, then libertarians are indeed radi- Everyone should follow them; there are no cal—and radical in a way that deserves praise. excuses for transgressing them. People who But Professor Bird is correct that libertari- do transgress these rules always deserve con- ans are not radical by his own implicit defini- demnation and, in most cases, punishment. tion. Libertarians abhor the notion of recon- We will emphasize that these rules apply even structing the world according to academic to politicians and other government employ- notions of how society ought to operate. The ees—from those who work in the local court- reason is that such reconstruction inevitably house to those who work in the White House. means that some people—those with state These are not rules to be applied selectively. power—are exempted from following the Indeed, insisting that government officials basic rules of decency that we teach to our be held to the same standards of decent, daily children and that all the rest of us must follow. behavior that we teach our children is a dis- People empowered to do the reconstructing tinguishing feature of libertarianism. Liber- get to take at least some of what belongs to tarians are simply more consistent than others others and initiate coercion against those who in respecting and insisting on basic rules of don’t cooperate with the reconstructors. And decent behavior. such power means that the reconstructors do In this light it is interesting to read a recent not have to deal as equals with those whom observation about libertarianism by Universi- they rule; the relationship between ruler and ty of Virginia government professor Colin ruled is not based on voluntary exchange and Bird. He tries his hand at explaining the contract. It’s based on coercion. Mutually increased acceptance, over the past 30 years, advantageous and voluntary exchanges are of libertarian ideas. In his opinion, this suc- replaced by unilaterally advantageous threats cess results from of violence. The scope for promise-making and promise-keeping shrinks, while that of the fact that libertarianism was able to rep- Wielding coercive power expands. resent itself as the true heir to the liberal Karol and I prefer a different route for our mainstream rather than as a revolutionary Son. We will teach Thomas the basic values of departure from Western political values. respecting other people’s persons, property, That is not to deny that libertarians often dignity, and individuality. If we succeed, our portrayed themselves as radical and even SOn likely will lead a prosperous and fulfilling socially progressive: but at root libertarian- life—and he’s also likely to share his parents’ ism claims to be radicalizing the familiar ethics. Cl (individualism, freedom, rights) rather *Colin Bird, The Myth of Liberal Individualism (Cambridge: than to be familiarizing the truly radical.” Cambridge University Press, 1999), p. 139. ===== PAGE 6 ===== IDEAS ON [IBERTY Decemser 2000 Markets Aren’t Efficient? these curves supposed to mean? They do not accurately describe the decision-making process of real businesspeople; nor do these * 9 | unrealistic models make accurate predictions. It Just Ain t So! The entire enterprise of modern mainstream economics can only offer a simplified analogy to the real economy in hopes that the study of this theoretical world can offer us insights I: his ‘August 22 Washington Post piece, into the real one. “What’s New About This Economy?” It is a common mistake to say that econom- Michael Kinsley summarizes the prevailing ics is about money. As such, when people talk orthodoxy among economists: about the “marginal cost” of production, it is believed that this refers to the dollar amount In the church of economic theory, as in that spent on raw materials, labor, and so forth. other church, the central symbol of the But cost is the value of opportunities forgone, faith is a cross. Only this one is tilted and and it is always estimated in an ex ante sense, “x” “t.”” As any commu- cost is never “realized.” A woman chooses looks like an “x” not a nicant learns early on, the x represents sup- one out of many competing suitors. The ben- ply and demand “curves” (usually por- efits of her choice are clear enough. But the trayed as straight lines). . . . [W]here the costs are not the money spent on the wedding two lines cross is the blessed point of and dowry—these would have been spent “equilibrium,” where the price is exactly anyway if a different man had been selected. what is needed for supply to equal demand. Rather, the true cost is the subjective value At that point markets clear, utility is maxi- she places on a lifetime spent with the next mized, lions are beaten into plowshares, best suitor. It is clear that this value will never bread walks on wine, and so on. be known, for it is a lost opportunity; a for- tiori, no outsider can calculate it. Kinsley then makes a remarkably brave After his confession, Kinsley elaborates confession: “Having been inducted into the further on neoclassical theory. In a competi- faith in college, I'm a fairly devout believer in tive market, price equals marginal cost. (If it the basic doctrines. But I have always been were higher, a rival would cut prices to cap- troubled by doubts on one item: In my inner- ture the entire market, and if it were lower, most heart, I wonder if the supply curve real- firms would make more money by restricting ly slopes upward. (There, I've said it.)” production; only when P=MC is everyone Those of us who have been excommunicat- happy.) Marginal costs have to be rising “to ed from the mainstream must applaud Kins- avoid the embarrassment of supply and ley’s courage. He recognizes, as we do, the demand curves that never cross.” Further, at utter absurdity of the doctrine of entrepre- the point where supply and demand inter- neurial infallibility. Kinsley is perfectly cor- sect, it had better be the case that marginal rect to challenge the standard assumption that cost exceeds average total cost—otherwise marginal costs always rise. But that’s not the the firm would be losing money. Kinsley half of it. finally gets to his point: “[T]he news these The really radical response to the neoclas- days is full of controversies where the basic sical practice of drawing all sorts of elegant problem is that marginal costs do not rise. cost curves is not simply to wonder whether They start out below average cost and stay they rise. The first question must be: What are that way.” ===== PAGE 7 ===== 7 Already the reader should be skeptical. either. It is true that they would prefer to sell When someone laments that costs are not all the seats at a high price, but the demand is higher than they already are, chances are this lacking. If the choice is between “clearing the person is drawing an illegitimate conclusion market” (selling all seats) at a low price, and from an economic model. (This same phe- leaving a few empty at a higher price, which nomenon occurs when critics lament that earns them greater profits, it is quite likely the Microsoft did not charge enough for its airlines will adopt the latter strategy. browser. These people are afraid of low Kinsley believes the features of the New prices, just as Kinsley is afraid of low costs.) Economy “[undermine] the case for a free Airline seats, says Kinsley, are a good exam- market.” By this he undoubtedly refers to the ple of this: Once the first 20 seats have been mainstream definition of efficiency: If there sold, it costs the airline virtually nothing to exists a technologically feasible alternative sell the 21st seat. But clearly each person arrangement of society’s economic affairs, an can’t be charged this marginal cost, for the arrangement that is unanimously preferred to average cost of an airline seat is much higher. the current arrangement, then the status quo is One wonders what the big fuss is about. “inefficient.” But this definition tells us noth- Kinsley himself acknowledges the airlines’ ing about how to improve the situation. solution: Charge different amounts for the Indeed, all the “market failure” literature “same” seats. On any given flight—even teaches us is that if certain industries behaved restricting ourselves to those flying coach— in the way assumed in the various models, each passenger does not pay the same price then we could logically imagine the world for his or her seat. Already we have aban- being a better place. Any argument that uses doned the world of neoclassical models, these results to justify government interven- where P is uniform. Moreover, the seats real- tion is a complete non sequitur. ly aren’t the “same” good; those who bought Such condemnations of the free market are their tickets well in advance presumably paid even more dubious when it is realized that much less since, unlike those who procrasti- these models do not at all capture the ingenu- nate, they were willing to forgo flexibility and ity and resilience of unshackled entrepre- commit to a certain date. Taken to the other neurs. Low marginal costs were no problem extreme, discount theater tickets are always for Sam Walton or other founders of whole- available to those who forgo the luxury of sale clubs, in which the customer pays a flat knowing which show they will actually attend membership fee for the right to purchase that night. goods at huge discounts. Most of the problems Kinsley raises are due Kinsley is right to challenge the realism to the necessity of avoiding the “embarrass- of mainstream economics. But he must real- ment” of disequilibrium. But whenever a ize that the problems of “the one true faith” plane, bus, or subway has empty seats, that’sa (as he calls it) run far deeper than he has surplus, or glut, in the neoclassical’s book. As imagined. [J one who frequently uses public transportation, —ROBERT P. MURPHY I can attest that 1 am absolutely delighted by Ph.D. candidate in economics disequilibria. And the owners are not hurt New York University ===== PAGE 8 ===== IDEAS ON IBERTY Decemser 2000 WHO’s Hidden Agenda by Twila Brase he World Health Organization (WHO) institutions and resources that are devoted to didn’t blink twice before shooting down producing health actions.” Government over- the United States’ world-class health-care sys- sight functions, public health activities, per- tem. In a recently released report, “The World sonal health dollars, and health-care financing Health Report 2000—Health Systems: schemes are all part of the system. Improving Performance,” the WHO ranked In addition, the WHO adds goodness and the overall performance of the U.S. health fairness to the traditional service objectives of system at 37th out of 191 countries surveyed. a health system. High-performing health sys- In fact, for a study purported to be a “bal- tems should not only deliver health-care ser- anced judgment” of the world’s health sys- vices, but also be responsive to patient expec- tems, the WHO waited only until the third tations and provide equal treatment to all paragraph of a six-page press release to herald patients irrespective of finances or social sta- its conclusion that the United States’ system tus. With these goals in mind, the WHO's crit- did poorly in the evaluation. Published in ical measure of a health system’s performance June, the WHO’s “first ever analysis of the was its “achievement relative to resources.” world’s health systems” listed America well The World Health Organization primarily behind first-ranked France, second-ranked faults the United States for not requiring Italy, and various other European, Middle mandatory insurance or offering social wel- Eastern, and Asian countries. fare programs to all citizens—in other words, At gut level, this assertion rings false. When for being a free country with independent cit- was the last time someone chose France or izens. Given America’s high level of health- Italy over America for health care? How about care spending, the U.S. system does not the third-place little island of San Marino? achieve the organizations fairness and distri- Since the U.S. ranking fails to correspond with bution goals relative to total health-care the documented practice of foreign patients’ resources. In addition, the report criticizes the flocking to the United States for care, a brief move toward medical savings accounts and description of the report’s terms is required. the fact that 56 percent of America’s health- A health system, according to the WHO, is care expenses are privately funded. quite inclusive. Not only does it include the Interestingly, the WHO completely failed to doctors, clinics, and hospitals that deliver broadcast that America’s health system patient care, but also “all the organizations, ranked first in responsiveness to patients’ needs for choice of provider, dignity, autono- Twila Brase, R.N., is president of the Citizens’ Coun- timely care, and confidentiality. In other cil on Health Care in St. Paul, Minnesota (www. WOrds, where it matters most to patients, the cchemin.org). U.S. system excels. ===== PAGE 9 ===== 9 Since health-care systems are created sole- That this centralized approach requires ly to meet the needs of patients, it seems only health-care rationing to vulnerable, sick, dis- natural to assume that responsiveness would abled, elderly, and politically disenfranchised receive top consideration when judging per- citizens does not bother the WHO, an formance. Yet, first-ranked France ranked unabashed supporter of explicit rationing. only 16th or 17th in responsiveness, while WHO officials describe rationing as central to second-ranked Italy ranked 22nd or 23rd. their emerging vision of “new universalism”: Oman was given a ranking of eighth in per- “Rather than all possible care for everyone, or formance, but only 83rd in responsiveness to only the simplest and most basic care for patients. And Morocco, ranked 29th in perfor- the poor, this means delivery to all of high- mance, was ranked at 151-153 in responsive- quality essential care, defined mostly by crite- ness—near the bottom of the list. ria of effectiveness, cost and social accept- According to the WHO, America did not ability. It implies explicit choice of priorities even outperform Canada, which received a among interventions, respecting the ethi- performance ranking of 30th despite the regu- cal principle that it may be necessary lar visits of Canadians to American hospitals and efficient to ration services, but that it is and doctors. Surprisingly, the Netherlands, inadmissible to exclude whole groups of the known for involuntary euthanasia—a less population.”? than patient-friendly policy—was rated 17th To enforce the necessary limits on health- best, 20 countries higher than the United care services, the report suggests that physi- States. cians and other practitioners be monitored through data collection, and if necessary WHO's Global Agenda sanctioned for providing patients with care classified as unnecessary or impermissible. Because the World Health Organization Noting that practitioners are difficult to con- took great pains not to announce publicly that trol, the WHO advocates the creation of a the United States took grand prize in patient national benefit package with lists of available care, there is reason to believe its public chas- health-care treatments. The lists, coupled with tisement has little to do with America’s quali- practitioner-control mechanisms such as clin- ty and delivery of health-care services. ical protocols, registration, training, and Indeed, the criticism appears to be aimed at licensing and accreditation processes, can furthering redistribution of American dollars then be used to enforce health-care rationing. around the globe. The WHO claims govern- ments are responsible for “mobilizing the col- lective action of countries to generate global public goods such as research, while fostering Besides the organization’s draconian pro- a shared vision towards more equitable devel- motion of global health-care rationing, the opment across and within countries.” In addi- drive to cultivate collectivist health care can tion, the WHO's overall mission is “the attain- be seen through a subtle deviation from typi- ment by all people of the highest possible cal terminology. The WHO premises its report level of health, with special emphasis on clos- and assessment on comprehensive “health ing the gaps within and among countries.”! systems” organized by government bureau- The WHO writes that its vision includes cracies rather than “health-care systems” “placing health at the centre of the broader comprised of individual providers treating development agenda,” most likely through individual patients. Private funding by indi- financial transfers from countries with greater viduals and the private practice of medicine resources. It is not surprising then to find the are assiduously discouraged throughout the WHO report promoting centralized collec- report. tion, pooling, and redistribution of health-care In these health systems, governments are funds—and chastising countries that fail to to assume the crucial role of “stewardship” march in step with collectivist thinking. to enforce “rational” use of health-care ser- Collectivist Control ===== PAGE 10 ===== 10 IDEAS ON LIBERTY © DECEMBER 2000 vices. Governments are thus called on to health care is financed privately, WHO offi- collect health-care funds from citizens, set cials note with dissatisfaction, the level of and direct health policy, define allowable financing is decentralized as a result of “mil- health-care services for citizens, and provide lions of individual decisions”—a situation the oversight. WHO apparently wants to avoid to keep its Because system-wide control of health- agenda intact. care resources is desired, WHO officials Not only does the WHO desire prepayment, express particular distaste for America’s it wants fairness throughout the system. But abundance of private financing for health care its definition of fairness emphasizes equitable (56 percent) and Congress’s advancement of distribution of services, not necessarily relat- medical savings accounts (MSAs) for individ- ed to individual needs for services. As the ual provision and payment of health care. report clarifies, “If services are to be provided Although they acknowledge that MSAs are a for all, then not all services can be provided.” form of prepayment—the pooling mechanism According to the report, the level of annual they aggressively support—they assert that health-care funding available to patients is to MSAs and private funding prevent centralized be determined once funds are pooled and pri- pooling of dollars without which certain pub- orities are set. lic health initiatives may never be funded. Fairness is also strongly advised for financ- In addition, they argue that individual ing strategies. As noted in the report: “the financing fosters fee-for-service payments— risks each household faces due to the costs of as if paying for the care you need at the time the health system are [to be] distributed you need it is ill-advised—and makes it diffi- according to ability to pay rather than to the cult to regulate and control the treatment risk of illness.”s Therefore, those with higher practices of providers—a blessing to patients incomes are to contribute more than those who value unrationed care. with lower incomes, regardless of lifestyle Ironically, the report attempts to discredit choices or behaviors. Indeed, the WHO MSAs for performing the insurance function declares, “Fairness of financial risk protection insurance is meant to perform. WHO officials requires the highest possible degree of sepa- are displeased that “the healthy and the ration between contributions and utilization.”6 young, whose risk is usually low, might pre- The organization’s skewed view of equity is pay for a long time without needing the ser- seen most clearly in its contention that vices for which they had saved.”3 wealthy citizens must prepay more for health care than poor citizens because left to their WHO's System of Control own resources, a greater percentage of the poor family’s income goes to health care than According to the report, the control of that of the wealthy family. Lest we forget, this health-care spending should be placed in the is the case for any purchase made by one per- hands of bureaucrats through mandatory and son who earns less than another person. If one pooled prepayments for health-care services. man earns $100,000 and another earns Each household’s prepayment could be based $10,000 and both want to buy a $1,000 used on a defined percentage of the income that car, the cost is ten percent of the lower income remains after anticipated food expenses are but only one percent of the higher income. subtracted from total household income. Following the organization’s line of reason- These prepayments would then be collected ing, why stop with health care? If such “fair- using employment-based insurance schemes, ness” can be required in one type of pur- direct taxation, or social security programs. chase—health care—it can be mandated Prepayment is key because it facilitates across all purchases of social value. decisions about spending limits. As prepay- WHO officials have become present-day ment rises, “spending is more and more deter- Robin Hoods, declaring that individuals have mined by the policies and budgets of public no right to keep what they earn. To rationalize entities and insurance funds.” But when their position, they dismiss real fairness—the ===== PAGE 11 ===== WHO’s HIDDEN AGENDA 11 ethic inherent in earning, keeping, and con- Clearly, WHO officials have an agenda that trolling the fruits of one’s own labors—in is neither patient-friendly nor protective of exchange for a perverted description of fair- individual freedoms cherished by American ness that fits their own need for control. citizens. Given the opportunity, they would readily place control of every person’s earn- ings and every patient’s care into a few pow- Banking on America erful hands. Although never stated directly, the WHO's American (axpayers pay over $96 million baseless criticism of the U.S. health-care sys- per y & roughly 25 percent of its general budget.” tem appears to be an attempt to pressure Rather than dignifying the WHO report with America’s policymakers into commandeering further self-evaluation, Americans should a larger share of Americans’ health-care dol- lars for contribution toward global and public question congressional support of this organi- health initiatives around the world zation, which insufficiently understands and : : ; : respects the constitutional freedoms that have It is also entirely possible that improved : : made the U.S. health-care system number one health care is not the primary goal of coun- X with patients around the world. ] tries seeking the American dollar. The other p 190 member countries of the World Health 1. World Health Organization, “The World Health Report 2000,” Organization may view dollars designated for =~ “Ovriew.” June 21, 2000. health care as a meal ticket for purchases not 3. Ibid., “Who Pays for Health Systems?” p. 99. : : : 4. Ibid., “Overview.” directly related to medical services. After all, 5. Ibid.. “How Well Do Health Systems Perform?” p. 35. it can be reasonably argued that improved 6. Ibid., “Who Pays for Health Systems?” p. 97. : : 7. Telephone interview with Nelle Temple Brown, external rela- roads, schools, environment, transportation, officer, World Health Organization Liaison Office, Washing- and agriculture all positively affect health. ton, D.C., July 26, 2000. THE CLASSIC BLUEPRINT FOR A JUST SOCIETY HE LAW BY FREDERIC BASTIAT Introduction by WALTER E. WILLIAMS Foreword by SHELDON RICHMAN “Phenomenal! An amazing and timeless treatment of the cost of using government to solve problems.” — Russell Roberts, author of The Choice 96 pages with index, $3.00 paperback * $12.95 hardcover Shipping within U.S.: $2.00 California residents: Add applicable sales tax. Call 800-326-0996 * Fax to: Dept. FEE at 415-544-0597 ===== PAGE 12 ===== IDEAS ON [IBERTY Why Classical Liberals Should Love Harry Potter by Andrew P. Morriss s anyone with children can tell you, the First, for those who have somehow missed Harry Potter books by British author the stories, here is the plot in a nutshell. Harry J. K. Rowling have taken the world by storm. Potter was orphaned as an infant when the Now in its fourth installment, this series of evil Lord Voldemort killed Harry’s parents stories about the education of a young British while attempting to use his magical powers to wizard at Hogwarts School of Witchcraft take over the world. Harry then spent his first and Wizardry is wildly popular with children ten years living with his thoroughly repulsive and adults alike. Harry made the cover of Muggle (nonmagical) Uncle Vernon, Aunt Newsweek, prompted the redesign of the New Petunia, and cousin Dudley Dursley. Then York Times bestseller list (authors of adult Harry was whisked away to Hogwarts to books complained that the Potter books were begin a seven-year education, although he still occupying too much room at the top of the spends summers with the Dursleys. Along the list), jolted the publishing industry (Ameri- way, Harry makes friends with other wizard cans buying the books from Amazon.co.uk kids, battles Lord Voldemort, plays an excit- forced the U.S. publisher to alter its publica- ing wizard sport called Quidditch for his tion schedule), prompted attempts to remove house team, and learns about the ways of wiz- the book from schools (some religious parents ards. Telling you more would spoil the books. objected to the depiction of witchcraft as Classical liberals should love Harry Potter wholesome), and upset critic Harold Bloom because there are three strikingly classical lib- (he didn’t think the books lived up to The eral features of the wizarding world. The first Wind in the Willows). is its banking and monetary system. Really. The Potter books are, despite Bloom’s crit- Wizards do not use ordinary English fiat cur- icism, great fun to read. Rowling is also the rency, instead their money supply is based on best known “welfare to work” story I’ve heard precious metals. Gold Galleons, Silver Sick- in quite some time. The first book was written les, and Copper Knuts are the basis of wiz- (supposedly on napkins) in coffee shops in arding commercial transactions. And there are Britain while the single mother was on wel- lots of those transactions—despite their pow- fare—she’s now obviously become quite ers, wizards must buy most of the things they wealthy. But those aren’t the reasons classical need from the private sector. Wizards keep liberals should love these books. their money in Gringotts, a private bank run —_— by goblins who are quite ruthless in protecting Contributing editor Andrew Morriss is Galen J. Roush Professor of Business Law and Regulation at the money ene ted to their pe ture is th Case Western Reserve University and a senior asso- € second classical liberal teature is the ciate at the Political Economy Research Center, €Xtent to which commerce is presented favor- Bozeman, Montana. ably. True, Uncle Vernon’s business career, 12 ===== PAGE 13 ===== 13 like everything else about Uncle Vernon, is not exactly gripping stuff. But the most excit- ing places in the wizarding world are Diagon Alley, the wizard shopping zone in London, and Hogsmeade, the only all-wizard village in England, which is crammed to the gills with fascinating shops. Harry's friends, George and Fred Weasley, aspire to open a shop them- selves, selling wizarding jokes, rather than follow their brother and father into govern- ment. Sporting broomsticks are manufactured competitively, and new models are brought out as regularly as new cars are in the Muggle world. Small Government Most important, however, is the role of the government. Wizards don’t have much to do with Muggles, and so most of the British gov- ernment has little relevance to the lives of wizards—truly a fantasy situation. Nonethe- less, there is a Ministry of Magic, headed by including one who sneaks a relative out of a wizard minister. What is amazing—remem- prison and so unwittingly aids in the return of ber these are books by a former welfare moth- Lord Voldemort. Indeed, judging from these er—is that the ministry does almost nothing. books, Rowling seems to have a firm grasp of Its primary focus is preventing Muggles from the basics of public choice theory. figuring out that there are wizards living That’s pretty much it. There is no Depart- among them—allowing the wizards to live in ment of Wizard Welfare, no minimum wage peace. No anti-discrimination laws, no quotas for wizards, no safety commission for magi- for magical folks—just memory charms to cal charms. There is plenty of opportunity for make Muggles who stumble on the wizards such stuff—Harry’s friend Ron comes from a forget they are there. poor wizard family and must make do with The ministry does do some other things. It secondhand clothes and wands, but his family runs Hogwarts school, more or less as a char- doesn’t receive any government assistance. ter school with control firmly vested in a The most recent book comes closest to touch- board of governors and the headmaster. It ing on a potential issue of political correct- helps stage international wizard games and ness: One of Harrys friends takes up the competitions. It investigates and eliminates cause of house elves, magical creatures who dangerous magical creatures. It runs a wiz- live to serve. She campaigns for a living wage arding prison, albeit indirectly by contracting and an end to their serfdom, but finds few with shadowy beings called “dementors.” elves or wizards who are interested. When it does anything more, like investigate The bad guys are going to seem familiar to the thickness of foreign cauldron bottoms, it classical liberals too. Lord Voldemort is a is held up to ridicule by the book’s characters. ruthless killer, a thoroughly evil wizard who Moreover, it doesn’t do most of these things relishes torturing and killing his victims and particularly well. The minister for magic, allies alike. Theres no justification for his Cornelius Fudge, is a pompous buffoon, more behavior, no explanation that he was misun- concerned about preserving his job than the derstood as a boy or mistreated at school. It is safety of the public. Lower level ministry offi- Voldemort’s ambition and his ambition alone cials break rules to favor their own interests, that leads him to attempt to take over the ===== PAGE 14 ===== 14 IDEAS ON LIBERTY ® DECEMBER 2000 world. This is a villain classical liberals can what is right and what is easy, remember what love to hate—a power-mad, evil leader whose happened to [the student], who was good and goal is to reduce the world to slavery. kind and brave, because [the student] strayed The heroes are people we can cheer about across the path of Lord Voldemort.” too. Albus Dumbledore, the powerful wizard These books are not, however, junior ver- headmaster of Hogwarts, is a great guy all sions of Atlas Shrugged. There is no overrid- around. At the end of the fourth book he gives ing message of liberty, or anything else that I a speech to the students that ought to make am aware of, in the books. And perhaps I am most classical liberals applaud. Telling the reading a bit much into them. After all, the students about the return of Lord Voldemort, Harry Potter books are first and foremost the evil lord’s killing of a Hogwarts student, well-written escapist fantasy about kids being and the government’s refusal to acknowledge kids. But I think it is important that such pop- it, Dumbledore asks the students to stand up ular stories are set in a society that we would to evil as individuals: “Remember [the dead recognize as having classical liberal features. student].* Remember, if the time should come All those kids growing up with Harry Potter when you have to make a choice between are, after all, left with a vision of a world in "The major mystery in the book is who is killed. I won’t spoil it which the government p lays a strikingly small by using the student's name. role. And that’s quite magical. Inspired? Shocked? Delighted? Alarmed? Let us know. We will print the most interesting and provocative letters we receive regarding articles in Ideas on Liberty and the issues they raise. Brevi- ty is encouraged; longer letters may be edited because of space limi- tations. Address your letters to: Ideas on Liberty, FEE, 30 S. Broad- way, Irvington-on-Hudson, New York 10533; e-mail: iol@fee.org; fax: 914-591-8910. ===== PAGE 15 ===== Ideas and Consequences by Lawrence W. Reed IDEAS ON [IBERTY Decemeer 2000 An Open Letter to Statists Everywhere Dear Statist Friends: dom do, you demonize us as heartless number know, I know. You're already objecting to crunchers who don’t care about people. my letter. You don’t like the label “statist.” Sometimes we all get so caught up in the You don’t think of yourselves as worshipping particulars that we ignore the big picture. I government; rather, you think of yourselves as propose that we step back for a moment. Put simply wanting to help people, with govern- aside your endless list of things for govern- ment being your preferred means to achieve ment to do and focus on the whole package. 1 what is usually a very worthy end. “Statist,” need some thoughtful answers to some ques- you say, is a loaded term—a pejorative that tions that maybe, just maybe, you’ve never suggests an overweening, irrational kinship thought much about because you’ve been too with the state. wrapped up in the program du jour. Well, let’s wait and see how the term stacks At the start of the 1900s, government at all up after you've read my whole letter and levels in America claimed about S percent of answered its questions. Meantime, if you have personal income. A hundred years later, it any doubt about whether this missive is takes more than 40 percent—up by a factor of directed at you, let me clarify to whom I am eight. So my first questions to you are these: writing. If you're among those many people Why is this not enough? How much do you who spend most of their time and energy want? Fifty percent? Seventy percent? Do you advocating a litany of proposals for expanded want all of it? To what extent do you believe a government action, and little or no time rec- person is entitled to what he (or she) has ommending offsetting reductions in state earned? power, then this letter has indeed found its I want specifics. Like millions of Ameri- mark. cans planning for their retirement or their You clever guys are always coming up with children’s college education, I need to know. new schemes for government to do this or I've already sacrificed a lot of plans to pay that, to address this issue or solve that prob- your bills, but if you're aiming for more, I'm lem, or fill some need somewhere. You get us going to have to significantly curtail my char- limited-government people bogged down in itable giving, my discretionary spending, my the minutiae of how your proposed programs saving for a rainy day, my future vacations, are likely to work (or not work), and while and perhaps some other worthwhile things. we're doing the technical homework you sel- I know what you’re thinking: “There you go again, you selfish character. We're concerned E—— about all the le’s needs and you’re onl Lawrence Reed is president of the Mackinac Center ut a peoples y y Jor Public Policy (www.mackinac.org), a free-market interested in your own bank account” But research and educational organization in Midland, who is really focused on dollars and cents Michigan, and chairman of FEE's Board of Trustees. here, you or me? 15 ===== PAGE 16 ===== 16 IDEAS ON LIBERTY ® DECEMBER 2000 Why is it that if | disagree with your means, Give me something deeper than that, or I'll you almost always assume I oppose your round up a majority posse to come and right- ends? I want people to eat well, live long and fully claim whatever we want of yours. healthy lives, get the prescription drugs and Why is it that you statists never seem to health care they need, etc., etc., just like you. learn anything about government? You see But I happen to think there are more creative almost any shortcoming in the marketplace as and voluntary ways to get the job done than a reason for government to get bigger but you robbing Peter to pay Paul through the force of rarely see any shortcoming in government as government. Why don’t you show some con- a reason for it to get smaller. In fact, I wonder fidence in your fellow citizens and assume at times if you are honestly capable of identi- that they can solve problems without you? fying shortcomings of government at all! Do We’re not ignorant and helpless, in spite of we really have to give you an encyclopedia of your many poorly performing government broken promises, failed programs, and wasted schools and our having to scrape by with a lit- billions to get your attention? Do we have tle more than half of what we earn. In fact, to recite all the workers’ paradises that give us credit for managing to do some pretty never materialized, the flashy programs that amazing things even after you take your 40 fizzled, the problems government was sup- percent cut—things like feeding and clothing posed to solve but only managed into expen- and housing more people at higher levels than sive perpetuity? any socialized society has ever even dreamed Where, by the way, do you think wealth of. comes from in the first place? I know you're This raises a whole series of related ques- fond of collecting it and laundering it through tions about how you see the nature of govern- bureaucracies—“feeding the sparrows through ment and what you’ve learned, if anything, the horses” as my grandfather once put it— from our collective experiences with it. I see but tell me honestly how you think it initially the ideal government as America’s founders comes into being. Come on, now. You can say did—in Washington’s words, a “dangerous it: private initiative. servant” employing legalized force for the I’ve asked a lot of questions here, I know. purpose of preserving individual liberties. As But you have to understand that you’re asking such, it is charged with deterring violence and an awful lot more in blood, sweat, tears, and fraud and keeping itself small, limited, and treasure from the rest of us every time you efficient. How can you profess allegiance to pile on more government without lightening peace and nonviolence and at the same time any of the previous load. If anything I've call for so much forcible redistribution? asked prompts you to rethink your premises Don’t invoke democracy, unless you're pre- and place some new restraints on the reach of pared to explain why might—in the form of the state, then maybe the statist label doesn’t superior numbers—makes right. Of course, I apply to you. In which case, you can look want the governed to have a big say in what- forward to devoting more of your energies to ever government we have, but unlike you I actually solving problems instead of just talk- have no illusions about any act’s being a legit- ing about them, and liberating people instead imate function of government if its political of enslaving them. supporters are blessed by 50 percent plus one Sincerely, of those who bother to show up at the polls. Lawrence W. Reed ===== PAGE 17 ===== IDEAS ON [IBERTY They’re Just Dying to Be Rescued by Karen Selick BELLEVILLE, ONTARIO, CANADA—Why don’t Give him his way? If you surrender to abused women want to defend themselves? extortion once, the demands would never end. Three times within the past year, and many Lay criminal charges? She might get a times previously, I have been consulted in brief respite while he was in jail, but his matrimonial cases by women who have told desire for revenge could make things even credible and terrifying stories of violence, worse later. stalking, and death threats on the part of their Get his hunting rifles taken away? That’s estranged spouses. In each case, it was quite like shooting a grizzly bear with a slingshot— plausible that the woman would someday it’ll just make him angrier. And if she thinks become a statistic—just another one of the he won’t know how to buy another gun on the several dozen Canadian women who are mur- black market, or how to manufacture one in dered each year during the course of separa- his metal shop, she’s led a very sheltered life. tion or divorce proceedings. Besides, a knife or a baseball bat can make We discuss her options. A peace bond. A her just as dead. restraining order. Moving away and changing her name. Settling the case his way. Laying criminal charges. Seeking a firearms prohibi- tion order. I try to give her realistic, practical This year I finally decided to suggest anoth- advice. None of these standard “solutions” er option—one so taboo in today’s political will guarantee her safety, and I don’t want a climate that I have always hesitated to propose false sense of security to increase her danger. it before, for fear the client would think me Peace bonds and restraining orders are just insane. I asked my clients whether they would pieces of paper, I point out. Anyone who’s be interested in taking firearms safety training determined to commit murder won't be and applying for a permit to carry a gun for deterred by the thought that he’s breaching a self-defense. restraining order in the process. It’s not that I believe they'd actually be Moving away might work sometimes, but granted one. My discussions with firearms not if the case involves children to whom the experts over the years have led me to believe threatening spouse has court-ordered access. that even though Canadian law provides for Going underground would violate the court such permits, very few are issued. The most order. Besides, it’s not easy to give up a job, a likely outcome of such an application would home, friends, and family. be a test of the law. However, that quickly became a non-issue, Karen Selick is an attorney and a columnist for aS each of the three women recoiled in alarm Canadian Lawyer. Copyright 2000. at my suggestion. Oh no, they said unani- 17 Taboo Suggestion ===== PAGE 18 ===== 18 IDEAS ON LIBERTY ® DECEMBER 2000 mously, I'd be afraid to own a gun. I'll just call citizens are also prevented by gun-control the police if he shows up. laws from taking the most effective remedy Right, I thought to myself, just like Doreen available for their own defense: keeping an Leclair and Corrine McKeowen did. They appropriate firearm and ammunition readily were the Winnipeg sisters who in February accessible. called 911 five times in one night to report And in Canada, as my clients demonstrat- that one woman’s former boyfriend was ed, widespread propaganda portraying guns breaching a restraining order. They were as instruments of unadulterated evil has actu- found stabbed to death in their home shortly ally brainwashed potential victims into not after their last call. even wanting to try to save themselves. But the failure of police to respond in time They're just dying to be rescued, I guess. to save these two women is hardly a unique I'd love to donate copies of Stevens’s book occurrence. In a cursory search of the Cana- to women’s shelters across the country, dian Press database for 1998 and 1999 alone, together with another book, The Best Defense I was quickly able to unearth ten other by Robert A. Waters. Together, these two vol- instances, from Kamloops to Sydney, where umes contain dozens of heart-pounding true innocent people had been murdered waiting stories of ordinary citizens—some elderly, for police to respond to their frantic 911 some teenagers, some in wheelchairs, many calls. female—who have saved their own or other This phenomenon is the subject of Virginia people’s lives by being armed with a gun. lawyer Richard W. Stevens’s book Dial 911 Those who campaign for gun control and Die. (See also his April 2000 article in always use the argument that their proposed Ideas on Liberty.) Stevens outlines case after restrictions on the freedom of law-abiding cit- case in which police have been found not izens are worth it even if they save “only one liable to citizens (or their estates) for egre- life.” By this reasoning, private gun owner- gious negligence in failing to respond to 911 ship, with its proven record of saving lives, is calls. Yet in many places (including Canada), unquestionably worth it. Internships at the Foundation for Economic Education FEE offers internship opportunities throughout the year to undergraduate students interested in promoting classical liberal and free-market ideas. Past interns have worked on a variety of projects, from assisting with Ideas on Liberty to building outreach programs in Eastern Europe and Latin America. The objective of FEE's internship program is both to educate students in the ideas of free markets, individual liberty, private property, and the rule of law, and to introduce them to the challenge of spreading those ideas throughout the world. If you—or someone you know—would make a great candidate for the summer or fall of 2001, please contact FEE at the address below, or visit www.fee.org. Summer applications due: February 2 x * “x irector of Programs/FEE * + of 3 South Broadway | Irvington-on-Hudson, NY 10533 914-591-7230, ext. 223 internship@fee.org ===== PAGE 19 ===== IDEAS ON [IBERTY Decemser 2000 A Year at the Movies by Raymond J. Keating t’s been decades since Hollywood regularly In the end, Maximus returns to face the cor- produced films celebrating such notions as rupt Commodus, not only in the name of jus- liberty, individualism, and hard work. Howev- tice for his family but also for a more princi- er, a few exceptions periodically make it to pled, republican form of government. local movie theaters. Indeed, 2000 turned out Similarly, in The Patriot Mel Gibson to be a relatively good year for watching indi- portrays Benjamin Martin, who also is viduals take risks and fight tyranny on the sil- spurred to action by an attack on his family, Ver screen. this time during the American Revolutionary In Gladiator, for example, Russell Crowe War. plays a Roman general named Maximus. He The Patriot received criticism from both the not only is a great soldier and warrior, but also political left and right when it was released is faithful to God, family, and his emperor. His just prior to Independence Day. Some conser- desire after winning the latest military victory vatives did not like Martin’s initial unwilling- is to return to his wife, son, and farm. The ness to go to war against the British. He filmmakers make a point of clearly noting that. opposed the tyranny of taxation without rep- Maximus is a man uncorrupted by politics. resentation and favored American indepen- However, Maximus’s life is shattered when dence, but at the beginning of the film would Commodus, the emperor’s son, murders his not fight for these ideas. Not only were the own father to gain power and has Maximus’s memories of his own actions during the family butchered. Maximus avoids death him- French and Indian Wars apparently so painful self, but is made a slave and forced to fight as that he did not wish to shed blood again, but a gladiator. Martin also possessed a strong desire simply Commodus, who longed for political power to be left alone—in reality, a very American throughout his life, stands out as a glaring trait. example of governmental tyranny and corrup- However, after a ruthless British officer tion. He is ruthless, perverse, and manipula- kills one of his sons and takes another away to tive, and does not govern according to princi- be hanged, Martin must take action. Eventu- ple, but instead appeals to the people’s most ally, he moves beyond mere revenge as his base instincts. The metaphor for today’s poli- motive for waging a guerrilla-style war tics is striking. against the British and becomes a true patriot fighting for liberty. In the film’s final epic bat- Contributing editor Raymond Keating is chief econo- je for example, he puts aside a chance to mist for the Small Business Survival Committee, a weekly columnist for Newsday, and co-author of exact justice for his family in order to pick up U.S. by the Numbers: Figuring What's Left, Right, the flag and urge on the American rebels in and Wrong with America State by State. inspiring fashion at a crucial moment. 19 ===== PAGE 20 ===== 20 IDEAS ON LIBERTY ¢ DECEMBER 2000 The strength of The Patriot is its emphasis by the X-Men, a group of mutant superheroes, on family and the great personal sacrifices looks to work constructively with mankind. made by our forebears in securing freedom. So the primary conflict in the film is not Here is a loving father looking to protect his between mutants and humans, but between family, and in doing so comes to see the just these two groups of mutants—in a way offer- nature of the American fight for indepen- ing an interesting statement about how vari- dence. One would think that conservatives ous minority groups over the years have react- would warmly embrace such a portrait. ed against discrimination. The political left was aghast to see Gibson’s Indeed, by emphasizing a group of individ- character hand rifles to two of his young sons, uals as outcasts, X-Men serves as a metaphor who help in an assault on British soldiers to for issues like race and immigration. But the rescue the son being taken off to be hanged. unmistakable message is one of embracing Martin had taught his sons to shoot—a neces- people as individuals. sity of the times—and after the attack, he cor- The movie is particularly pro-immigration. rectly tells his boys that there was “nothing It is no mere coincidence that the final battle wrong” in what they did. scene takes place on and around the Statue of In today’s era of gun phobia, it should sur- Liberty and Ellis Island, with the newcomer prise no one that this scene generated contro- X-Men fighting to save New York City—in versy. Those crusading against the right to fact, mankind—from destruction. bear arms fail not only to understand the U.S. Finally, another big hit of 2000 offers an Constitution and history, but also the simple affectionate look at individuals willing to fact that guns are not inherently evil. Like work hard to make their way in life. After see- most other tools and instruments, they can be ing The Perfect Storm, I'll never complain used for good or bad, depending on who car- about the price of fish again. The movie is ries the weapon and what his intentions are. based on a true story about fishermen out of The Patriot makes this quite clear when com- Gloucester, Massachusetts, who lost their paring the acts of the ruthless British officer lives during a massive storm in the fall of to Martin’s fight for justice and liberty. 1991 while trying to support themselves and their families. X-Men and The Perfect Storm The moviegoer truly gains a feel for the hard and dangerous life of fishermen, and is While Gladiator and The Patriot deal with even treated to a lesson in economics on how the past, X-Men is a sci-fi flick about the not- a sword boat works. The boat owner, captain, too-distant future, when mutations are appear- and each member of the crew get paid accord- ing more often and are characterized as the ing to a cut of the final catch. Everybody has next step in human evolution. This film offers strong incentives to work. a clear anti-intrusive-government message, as While the boat owner in the movie was cast well as a celebration of the individual. in a less-than-appealing light, overall The Per- Stirring up fear among humans against the fect Storm was nothing less than an ode to Mutants, one U.S. senator calls for a new law those who work hard and literally risk every- to mandate mutant registration, comparing thing fishing the open seas. it to federal gun registration. The Mutants It is a rare year when those who embrace oppose this act of invasive government, but liberty, immigrants, and hard work can their responses split them into two camps. respect, to varying degrees, so many top Hol- One faction reacts violently and seeks to lywood films. Perhaps we should enjoy it destroy humans, while the second camp, led while we can. ===== PAGE 21 ===== Potomac Principles by Doug Bandow IDEAS ON [IBERTY DeceMBER 2000 Forgotten War in a Forgotten Country rom a distance the jungle looks peaceful. for autonomy since Burma won independence. Dense, green plant growth covers hills During the last decade some of them have that march endlessly onward. Primitive vil- come to terms with Rangoon. But the Karen lages emerge in simple clearings: wood and and several other ethnic groups fight on. bamboo buildings, covered by thatched roofs, In response, the SPDC has expanded its sitting on stilts, and open to rain, animals, and military to some 400,000. Two years ago 13- mosquitoes. year-old Yei Shweh took a bus to Rangoon to War is everywhere. Two million ethnic see the big city: he was seized by the army minorities have been displaced by 50 years of when he arrived. conflict: 243 of them lived in Law Thi Hta, just Rangoon maintains numerous bases in across the Moi river from Mae Sot, Thailand. eastern Burma and periodically strikes at vil- War consumes their lives. One 22-year-old lages suspected of harboring rebels. SPDC told me he had been fighting “for many forces impress civilians as porters for months years,” perhaps ten. But General Bo Mya, at a time. Refugees report frequent atrocities, who also serves as vice president of the Karen stories confirmed by Yei Shweh and other National Union (KNU), joined the Karen rev- defectors. olution when it started in 1949. As a result, the Karen fight desperately. The General Ne Win seized power in Burma, battle remains sadly uneven, however. The now officially Myanmar, in 1962. Mass Karen National Liberation Army (KNLA) democracy protests in 1988 were crushed fields 4,000 to 5,000 ill-equipped guerrillas. with martial law backed by bullets. The ruling The troops I met tended to be in their teens to junta foolishly called elections two years later, their 30s. They mix fatigues and boots with which were won by the National League for ethnic Karen wraparound skirts, flip-flops, Democracy, headed by Aung San Suu Kyi. and American-language shorts, t-shirts, and The self-styled State Peace and Development baseball caps. Soldiers carry a motley assem- Council (SPDC) annulled the election, put blage of arms. Suu Kyi under house arrest, and arrested The KNLA forces usually inflict far more many of her followers. casualties than they suffer—they claim a 20- Although international attention has to-1 kill ratio. But they can rarely stop a deter- focused on Suu Kyi, the more serious threat to mined SPDC offensive and are increasingly the ruling junta comes from the Karen and pressed against the Thai border. other ethnic groups, which have been fighting Doug Bandow, a nationally syndicated columnist, is The “Killing Season” a senior fellow at the Cato Institute and the author } A and editor of several books, including Tripwire: The dry season is known as the “killing Korea and U.S. Foreign Policy in a Changed World. season” because steep jungle trails dry out 21 ===== PAGE 22 ===== 22 IDEAS ON LIBERTY ® DECEMBER 2000 and rushing streams run low. Military action can restrictions impoverish those who lan- typically ends mid-year, but SPDC troops guish under dictatorial jackboots. arrived at Law Thi Hta before the rain. Just six Moreover, warns Robert Manning of the weeks after my visit, Burmese troops burned Council on Foreign Relations, as a result of the village, including a small hospital con- sanctions Rangoon “has drifted toward Bei- structed by Christian Freedom International jing.” The ASEAN states (Rangoon joined in (CFI), a relief group based in Front Royal, 1997) similarly complain that U.S. policy has Virginia. A second clinic to the north, along hindered their efforts to counter Chinese with the refugee camp housing 4,000 people influence. where it was situated, was also destroyed. Some see failure as a reason for more “This happens every year,” observes CFI head restrictions. KNU President Saw Ba Thin says Jim Jacobson, but this is “one of the worst that “wed like to see the U.S. government years.” increase pressure like trade sanctions and The Burmese government’s victories are diplomatic sanctions, and other pressures.” usually costly and often temporary. The But sanctions have evidently failed and most SPDC cannot garrison the rugged and isolat- countries are moving in the opposite direc- ed jungles. But it doesn’t have to. All it has to tion. At meetings in Seoul earlier this year do is terrorize and displace the Karen. As Asian, European, and U.S. officials met to KNLA General Saw Htey Maung acknowl- consider new approaches to Burma. edges, “the SPDC try to fight the grassroots, Some Karen pine for Western military our back bone, the villages,” so the people intervention. Last year a top KNU official told “don’t have the morale to support us with Rich Miniter, a journalist colleague of mine: food or anything else.” “Do like you did in Kosovo.” Saw Ba Thin The plight of the Karen is only likely to concurs: “If the American government could worsen. Thailand recently announced that do it, it would be helpful.” Similarly, General with the help of the United Nations High Htey says, “You are from the U.S. You can Commissioner for Refugees it hopes to move come and help us.” 100,000 refugees back into Burma within However, America’s interest in the Karen's - three years. struggle is humanitarian, not strategic, and Yet fighting continues to rage. Earlier this does not justify risking U.S. lives. Tragedy year Rangoon rejected an offer from the KNU abounds in the world; the resulting horror to negotiate at a neutral location outside of should not be compounded by involving U.S. Burma. Unfortunately, there is no evidence soldiers. that the SPDC is prepared to end its murder- A better alternative to current policy is ous depredations, let alone offer the autono- probably a mix of diplomatic pressure, which my for which the Karen have been fighting for can most effectively be applied by Japan, a half century. India, and the ASEAN states, and economic Which leaves the Karen—along with Suu engagement, primarily by private individuals Kyi—hoping for outside support. General and organizations. New Delhi has a particu- Htey says, “If we had a chance we would larly important role to play, since it has request that the American people help us to already moved to counter China’s rising influ- get our freedom state.” ence in Burma. But what can be done about a repressive Over time broader contact with the West and isolated regime like the SPDC? It is sup- offers the possibility of strengthening internal ported by China, which covets naval access to democratic forces. But this will be an uncer- Burma’s long coastline and began arming and tain and long-term process at best. financing Rangoon in 1990. The West’s most important role may be to U.S. and European Union economic sanc- help the Karen and other ethnic peoples cope tions inconvenience the SPDC, but have not with SPDC brutality. That largely means pri- shaken its hold on power. Unfortunately, vate assistance, such as that provided by though, as in Cuba, Iraq, and Serbia, Ameri- Christian Freedom International. O ===== PAGE 23 ===== onJhikT Decemser 2000 Capitalism and the Zero by John Hood n traditional discussions of the rise of free- appear to have pioneered such crucial tools as market capitalism, great attention is paid to business partnerships and interest-bearing changes in institutions, technologies, and ide- loans in the centuries before 2000 B.C. The ologies. We read the great philosophers and lending of breeding stock was most likely the classical economists. We study the legal and origin of the latter innovation. Indeed, the political systems of England and Holland, intimate connection between lending and live- which limited the power of government and stock is easily seen in language. The ancient promoted trade and economic freedom. We Sumerian word mash, which archaeologists trace the history of kings and statesmen. But identify as “interest,” was also the word for serious students of this fortunate event in “calf.” The ancient Greek word for “interest,” human history should examine another factor fokos, had the onginal meaning “calf” too. with a far more ancient pedigree: the discov- The Latin root of the modern “pecuniary” is ery of the number zero. pecus, meaning “flock.” And the ancient Our story begins in the cradle of human Egyptian word for “interest” doubled as “to civilization, Mesopotamia. Historians are give birth.” Perhaps the rate of interest in learning more and more about the inhabitants early contracts referred to the number of of this land (modern-day Iraq). Civilization calves or lambs owed the owner of a stud. began in the region not only because of farm- Later the concept of rate of return in breeding ing opportunities that the Tigris and contracts came to be applied to other business Euphrates rivers created, but because the arrangements. Sumerians, Babylonians, and Akkadians were Certainly by the time of Hammurabi’s reign an industrious and inventive lot. They came in Babylonia, in the 1700s B.C., lending must up with a variety of agricultural, military, and have been commonplace. Historians know cultural innovations. New archaeological dis- this because surviving tables chronicle gov- coveries suggest that their success was also ernment regulations on the interest rate; a cap due to the growth of trade and commerce, of 20 percent was frequently specified but just which were in many cases surprisingly as frequently evaded by manipulating loan sophisticated. length and terms. Other records dating to the Primitive people had, of course, engaged in same period from Ur, the Biblical Abraham’s trade far back into prehistory. But merchants hometown, reveal the existence of a financial in Mesopotamian towns such as Uruk and Ur district, a sort of ancient Wall Street, where John Hood is president of the John Locke Founda- lenders congregated to make deals, compere ’ tion, a state policy think tank in North Carolina, and an ance long-range trade. ese early author of The Heroic Enterprise: Business and the financiers apparently experimented not only Common Good (Free Press). with lending at interest but also with business 23 ===== PAGE 24 ===== 24 IDEAS ON LIBERTY ® DECEMBER 2000 forms distinct from the traditional family concept of economic independence that fully proprietorship. ! free markets require. Most of the lending, for One tablet tells the story of Ea-Nasir, amer- example, was for “emergency needs” rather chant from Ur who assembled a group of 51 than profitable investment, and the emergen- investors who provided either silver or trade cies almost always involved taxes or temple goods, particularly baskets. Ea-Nasir conduct- requisitions, which were really the same ed trade missions southward to Persian things. More generally, Mesopotamian soci- Gulf ports, where he traded for copper, ety simply did not allow for much large-scale precious stones, and spices. Ea-Nasir’s business economic activity outside of government, appears to be a rudimentary form of the limit- which officially owned large segments of the ed-liability partnership. Investors were liable arable land and lorded over tenant farmers in only for the money or goods they contributed ways more despotic than Europe’s feudal up front. Losses beyond the capital investment barons ever dreamed. were apparently swallowed by Ea-Nasir, as were the bulk of the profits to compensate him ee or for this risk. In addition, the investors were Individualistic Greeks compensated not strictly with interest but with The individualistic, landowning ancient a share of profits earned from Ea-Nasir’s trips Greeks, particularly in Athens, built on the south. In other words, they were equity Mesopotamians’ early commercial innova- investors—and not all large ones. Records tions. The Greek economy, more so than in show that ordinary citizens, investing a the Near East, featured long-term investment bracelet or two, could participate, anticipating in such products as olives and wine. Stable the idea of mutual funds of small investors. private property rights and the decentralized, “The effect of this business structure upon participatory government they engendered personal fortunes was profound,” writes Yale fostered long-term investment and made pos- University historian William Goetzmann. sible true private-sector banking, albeit on a “People were able to ‘insure’ themselves relatively small scale. Athenian lenders against personal failure—if their own venture invested in overseas trade, providing maritime collapsed, then the investment in Ea-Nasir’s loans as well as opportunities for equity might carry them through hard times.” investment. Banks accepted deposits of Still another tablet chronicles the use of money from natives as well as out-of-town interest rates to teach mathematics to young merchants. One successful banker was scholars, illustrating the close connection Pasion, a former slave who lived in Athens in between business and numbers. The Babylon- the fourth century. His masters were bankers, ian system of counting was based on 60, too, from whom he learned the trade. At his rather than the decimal system we use today, death, his was the largest bank of at least and was expressed in a form of writing called seven operating in the city.2 cuneiform that is clumsy by today’s standards. Still, it 1s difficult to separate ancient invest- Yet the system was sufficient to allow the ment from government, since the same Babylonians to chart the heavens, survey their lenders financing international trade were also property, conduct their businesses, and collect frequently government creditors, public offi- their taxes. It is likely that difficulties in chart- cials, or a hated “tax farmer.” The latter, ing the increasing amount of trade led the known in Jesus’s day as “publicans,” were Babylonians around the third century B.C. to contractors who bought the right to collect invent a “placeholder” number so they could taxes in a particular neighborhood or town, calculate large quantities. But they didn’t then profited by charging a higher rate, loan- actually come up with the concept of zero as ing money to debt-strapped farmers without a mathematical quantity. Nor did other other means of paying taxes, and in many ancient mathematicians. cases by hiring goons to confiscate property For all its intriguing innovations, the on the flimsiest of pretenses. The ravages-of Mesopotamian economic system lacked the the tax farmers and the financial insiders ===== PAGE 25 ===== CAPITALISM AND THE ZERO 25 associated with rapacious governments who from Arabic traders, wasn’t the result of some profited from public works and the sale of esoteric pursuit of truth. It was a practical military supplies, coupled with the envy that solution to a common problem—bookkeeping lenders and investors have always seemed to errors. Particularly before the widespread use engender in their fellow countrymen, gave of Arabic numerals, maintaining accurate ancient financiers a bad name and paved the records of any large-scale operation, business way for much government meddling. or not, was a major challenge. Imagine having In both Mesopotamia and Greece, govern- to keep books with Roman numerals. Com- ments periodically issued debt amnesties and merce existed, of course, but it was inherent- tried to regulate interest rates. Prophets and ly limited. Nor was it possible for merchants philosophers railed against the wealthy of different cultures to find common ways of bankers. Socrates called government debt valuing their enterprises and developing long- relief the tool of the “demagogue,” but he term relationships. wasn’t above comparing moneylenders to Here’s where mathematics re-enters the pic- wasps and parasites. Rome typifies the blend- ture. While the Babylonians (and, indepen- ed nature of ancient finance. By early imperi- dently, the Mayans across the sea in present- al days, Rome had developed a fairly sophis- day Central America) had come up with a ticated financial sector, complete with “placeholder” zero, Indian scholars in the lending, banking, (quasi-) limited-liability sixth or seventh centuries introduced the idea enterprises, and the sale of “stock” in such that zero represented “nothing.” It sounds enterprises among Roman nobles. Unfortu- banal, but it had revolutionary implications, nately, much of this financial activity revolved particularly after the concept was introduced around lucrative tax-farming contracts in Asia into the dynamic and adventuresome Islamic Minor and other Eastern provinces. culture by famed mathematician Al-Khwariz- Even those nascent forms of monetary invest- mi in the ninth century. Al-Khwarizmi himself ment might have evolved into something acknowledged that his interest in Indian more closely approaching international capi- numeration systems based on zero arose from talism if the empire itself had not grown in the need for people to solve practical problems size and cost. As economist Lawrence Reed related to inheritances, wills, purchase and tells the story, swelling bureaucracies and sales contracts, surveying, and tax collection. armies led emperors to attempt ever more As what we now call Arabic numerals began to desperate ways of financing the government spread throughout the Islamic world in the and paying debts. These included hiking ninth and tenth centuries, the traditional small- existing tax rates, inventing new forms of tax- scale partnerships that characterized com- ation, inflating the money supply, and confis- merce early in Islamic history—a business cation. Ultimately, the money economy itself form in which the Prophet Mohammed had was driven out of the West, not to return for himself participated—gave way to large-scale several hundred years. When it did, ironically trading companies in which investors owned enough in Italy, one of the catalysts was the the equivalent of stock and around which a Zero. system of banking and credit evolved. Unfortunately, Islam’s early trading institu- Medieval Business Innovations tions, though elaborate and the source of : tremendous wealth, never developed into cap- The first glimmers of the re-emergence of italism of a European sort. As was previously large-scale private commerce can be seen in the case in ancient Mediterranean societies, the eleventh century. It began with an innova- Islam’s rulers were heavily involved in busi- tion that makes few millennial history lists ness enterprises, rarely paid their own debts, but, small as it may seem, set the stage for and imposed excessive costs in the form of capitalism itself. Double-entry bookkeeping, taxes, regulations, wars, and outright confisca- developed by Italian merchants in the tion. Neither Islamic law nor Islamic rulers eleventh century based on concepts borrowed recognized the independence of trading cities ===== PAGE 26 ===== 26 IDEAS ON LIBERTY ® DECEMBER 2000 or the enterprises that populated them. And as international business finance far surpassing historian Subhi Y. Labib has noted, other basic anything developed by the Mesopotamians, concepts such as commercial insurance Greeks, Romans, or Muslims. After all, “remained practically outside the scope of lenders in these societies had a major handi- Islamic economic thought” during the period.3 cap. Outside their own circle of family and business acquaintances there were huge trans- action costs in extending credit. Independent information about prospective borrowers was But Arabic innovations, particularly in nearly impossible to derive. Double-entry mathematics and bookkeeping, would find bookkeeping gave lenders a common fertile ground across the sea by the eleventh accounting language and a useful means of century. As merchant families from Venice distinguishing the appearance of prosperity and other Italian trading cities began to resus- from the reality. The practice, write Nathan citate long-range trade in the Mediterranean Rosenberg and L. E. Birdzell, Jr., “grew into after the interruptions of the Dark Ages, an agreed-upon procedure for recording all someone armed with the new Arabic numer- economic events in a measurable and there- als hit on a bright idea. To detect accounting fore calculable way. In a very real sense, eco- errors in his business, he would enter all nomic reality became that which could be transactions twice, once as a debit and once as expressed in numerical terms in the books.” a credit. For example, the purchase of a new scale would require the entry of an asset (the . . . value of the scale) and a liability (the cash The Financial Revolution withdrawal or debt incurred to purchase it). At Double-entry bookkeeping was followed the end of any recording period, typically a closely by a succession of other innovations month, the merchant would total all debits and institutions that formed the building and credits. If the two totals didn’t match, he blocks of capitalism. Armed with the ability would know to look for a flawed entry. to calculate business values accurately, mer- Double-entry bookkeeping became far chants developed a body of commercial law more than an error-detection device, however. to provide predictability in a world of petty For the first time, it allowed managers to tyrants, a patchwork of fiefdoms, and the determine accurately the net worth of their ever-present threat of piracy. The ancient businesses at any point. But more important, Greeks had pioneered the use of maritime it created a conceptual doorway to what we loans to underwrite long-range trade, but by now know as modern industrial capitalism. the twelfth century Italian merchants had Here’s how. The only way for assets to equal invented more formal insurance contracts that liabilities is if the equity stake is itself consid- guaranteed a trading mission against loss in ered a liability—an obligation to the owner. return for a stated premium. Later, insurance Double-entry bookkeeping, in other words, is markets in Italy, Amsterdam, and London dif- based on the concept that a business is distinct ferentiated maritime insurance, a risky prod- and separate from its owner(s). In an uct covering acts of piracy or God on the high eleventh-century world of family businesses, seas, from more marketable commercial this was revolutionary, to say the least. Such insurance, which covered the profitability of separation was necessary for the future devel- the subsequent sales. “The division between opment of limited-liability partnerships and specialists in maritime risks and specialists in corporations, the building blocks of a modern market risks greatly facilitated the growth of capitalist economy. Economic historian Wern- maritime trade,” Rosenberg and Birdzell er Sombart summed it up well: “One cannot write. imagine what capitalism would be without Bills of exchange, in existence by the thir- double-entry bookkeeping.” teenth century, permitted merchants to trans- One further effect of this innovation was to fer the amounts they owed each other without make possible the creation of a system of having to exchange coin or goods directly. Double-Entry Bookkeeping ===== PAGE 27 ===== CAPITALISM AND THE ZERO 27 These early checks were themselves traded of Western Europe, increasing population among far-flung traders, giving rise to a pri- pressures in the thirteenth century led to vate system of paper money based on the robust competition for arable land and pas- credibility of the merchant families against tures, increasing enclosure of range land, and whom the bills of exchange were drawn. the evolution of laws governing alienation and Deposit banking was the next logical develop- transfers of land. States took over the admin- ment, as lesser merchants deposited funds istration of private property claims from feu- with prominent trading families whose drafts dal barons. At the same time, kings began to were credible money in faraway lands. The give exclusive franchises to private entities to creditors found that they need not maintain operate certain economic enterprises or the entire face value of their circulating notes monopolize certain trade routes. While hardly and could use some of their deposits to buy free-market in nature, these franchises other bills of exchange at discount—"“that is, weren’t tax farms in the Roman or Muslim for lending money at interest despite the pro- sense. They were honest-to-goodness trading hibition of usury.’ enterprises that allowed private merchants to Also in the thirteenth century, some gov- build up physical capital (ships and equip- ernments began a tentative, but inexorable ment) and human capital (skilled labor and movement away from arbitrary taxation to a knowledge of routes and markets) without as more predictable system for collecting rev- much fear of interference or confiscation of enue, controlled in England and later in Hol- their ships or workers by governments.? land by the merchant class sitting in council It is no exaggeration to say that these inno- rather than by kings or tax farmers. Kings put vations, setting the stage for the birth of capi- up with their diminution of the direct power to talism, followed directly from the discovery tax in exchange for a steady flow of revenue. of zero and its introduction into European One result in both England and Holland was commerce. No king subsidized its invention, that real capital assets such as vessels and and no government program mandated its trading stations could be owned and operated acceptance. Common folks, of many national- by private enterprises without fear of arbitrary ities, had simply come up with a tool that seizure by sovereigns, a right that continental helped them solve their problems. From such merchants—and, indeed, most of their coun- a lowly beginning, human freedom and terparts in the Islamic world, India, and progress took giant leaps forward. OJ China—simply could not take for granted. 1. William N. Goetzmann, Financing Civilization, forthcoming. This made large-scale private investment pos- 2. Richard Pipes, Property and Freedom (New York: Alfred A. : : 3 : Knopf, 1999), pp. 98-99. sible for the first time in markets previously 3. Subhi Y. Labib, “Capitalism in Medieval Islam,” The Journal the province only of governments or small- of Economic History, March 1969, pp. 93-95. 8 4. Quoted in Nathan Rosenberg and L. E. Birdzell, Jr., How the scale merchants. . West Grew Rich: The Economic Transaction of the Industrial World The final innovation needed to pave the way (New York: Basic Books, 1986), p. 127. for the Mercantile and Industrial Revolutions > Ibid. : 6. Ibid., p. 118. of the latter half of the millennium was the 7. Tbid., p. 117. 1 : 8. Douglass C. North, Structure and Change in Economic Histo~ development of truly private property rights ry (New York: W. W. Norton & Co., 1981), p. 141. and institutions. In England and other regions 9. Ibid., p. 133. 0 0 0 oO 0 0 O 0 o © 0 ===== PAGE 28 ===== Peripatetics by Sheldon Richman IDEAS ON [IBERTY Decemser 2000 Death by Government Protection Puy for the sake of discussion, let’s or to be so unmindful of the consequences of assume the worst about Firestone and their actions that they harm others. The social Ford: that gross negligence led to the produc- system called capitalism, the essence of tion of tires that killed and injured people rid- which is private property, does not promise to ing in Ford Explorers. What does this add to rid the world of such people. That would be the debate between capitalism and the regula- utopian. Instead, it assures that its defining tory state? features perforce discourage such conduct. It Crusaders for government regulation think further provides the grounds and procedures it adds a great deal. “Consumer advocates” for restitution when it does occur. That is the and pundits almost gleefully proclaim that the best we can hope to achieve. No competing Firestone/Ford case demonstrates that the system can deliver more; indeed, any alterna- deregulation movement is wrong. If reminded tive would deliver a good deal less and worse. that the case occurred in a regulatory regime What generally keeps businesspeople from that includes the National Highway Traffic making products that are unreasonably dan- Safety Administration (NHTSA), the regula- gerous?* The desire to stay in business would tionists reply that the agency was gutted in the seem to be a strong incentive to avoid endan- alleged anti-government 1980s, its budget 30 gering one’s customers. The classic fly-by- percent lower today than it was in 1980. night con man of course does not intend to The implication of course is that a beefed- stay in business. But a fly-by-nighter lacks a up NHSTA would have prevented the purvey- reputation, and that in itself limits the damage ing of lethal tires. Is there anything to this? he can do. On the other hand, the company Before taking up this question, some general that intends to be in business a long time has observations are in order. The preference for much to lose by making products the reason- the self-regulating market over a government- able use of which harms or kills customers. regulated market does not hinge on any belief Consumers put companies out of business for that businessmen are more virtuous than any- much less serious offenses. Actual and poten- one else. That would be naive indeed. tial competition assures that consumers will The case for capitalism, rather, begins with have alternatives to products about which they the premise that people ought to be free to have doubts. Because shareholders under- pursue their happiness unmolested by others. stand this, Firestone’s stock hit an eight-year Thus advocates of capitalism need harbor no low in mid-September. Its existence is seri- unconditional love for anyone who calls him- ously in doubt. self a businessman. People have free will. They are capable of choosing to do bad things *I phrase it that way because, as Dwight Lee has been pointing out in this magazine, in a world of scarcity, perfect safety, even if it terme could be achieved, would require tradeoffs that consumers would Sheldon Richman is editor of Ideas on Liberty. find unacceptable. 28 ===== PAGE 29 ===== 29 Consumer retribution in the marketplace, NHTSA, the agency whose airbag and fuel- moreover, is only part of the story. The law of efficiency mandates and obfuscation have torts stands as a warning that negligence and demonstrably cost lives. This agency’s advo- recklessness will have serious consequences cates want a bigger budget, more personnel, for a company. tougher standards, and more authority to This leads us to wonder what happened recall tires. But those things are not costless. inside Firestone or Ford. At this writing, we As Robert Levy of the Cato Institute points simply don’t know. What we do know is thata out, NHTSA bureaucrats would have an private company with a stake in automotive incentive to prematurely recall tires: if they safety, State Farm Insurance, alerted the gov- don’t recall them and someone dies (for what- ernment two years ago and nothing happened. ever reason) in a car equipped with them, The fact that Firestone and Ford did not act as they’ll have congressmen and reporters the theory of markets says people will fend to breathing down their necks. But if they recall act does not invalidate the theory. We use the tires, no one would ever know if anyone thousands of products every day. Serious, not would have been killed had the recall not to mention catastrophic, malfunctions are the occurred. Face it: there is no perfectly safe exception. Recalls make news because they tire. are rare. And businessmen now have a new Another cost of a more active bureaucracy lesson in Firestone and Ford. If they didn’t would be the inevitable delays and added know it before, they know it now: unreason- expense of new tire technologies that didn’t ably dangerous products are bad business. meet the government’s standards. Just as the FDA keeps life-saving medicines off the mar- ket for long periods (even when they are being used successfully in Europe), the NHTSA As Thomas Sowell says, in our world there could keep revolutionary tires off the road. are no solutions, only tradeoffs. Keep that in They might have saved lives, but no one mind as we consider the state alternative to would know and no bureaucrat would be held market-based consumer protection. Advo- responsible. cates of government regulation assume it is The promise of government protection car- costless: not that there are no money expens- ries an even greater cost: the consumer vigi- es, but that nothing important is traded away lance forgone owing to the false sense of secu- when the state displaces the market as the pro- rity the promise of government protection tector of consumers. Yet economists over the induces. The government cannot actually last 40 years have documented the costs of deliver on that promise—medical licensing government protection. Most dramatic is the has not eliminated quacks—but it’s the literature about the Food and Drug Adminis- promise that counts. Since people generally tration. We now know that government pro- believe the government looks out for them, tection kills by delaying the availability of they develop an unarticulated frame of mind life-saving drugs. Further, thanks to econo- summed up by the words: “they couldn’t sell mists of the Public Choice school, we know that if it was dangerous.” A false sense of that bureaucrats, despite the best intentions, security is worse than no security at all. It sets confront incentives that are adverse to the people up to be victimized. interests of consumers. An FDA official who If the government stopped regulating—and delays a valuable drug because any post- everyone knew it—the buying public’s vigi- approval mishap would bring him bad public- lance would grow. People would seek out ity is not serving the “public interest.” (See information. Entrepreneurs would respond. Daniel Klein, “Economists Against the FDA,” Insurance companies would assume a larger Ideas on Liberty, September 2000.) role. Private consumer advocacy would What is true for the FDA is true for the expand. Lives would be saved. C] Government as Protector ===== PAGE 30 ===== IDEAS ¥ Current Issues ON [IBERTY High Savings Rates and Asia’s Economic Crises by Christopher Lingle high rate of saving among Asians was selves holding growing inventories and earn- once credited for its important contribu- ing lower profits as they resort to the price- tion to the remarkable performance of their cutting necessary to shed unwanted stock- “miracle” economies. But Japan’s recession piles. At the same time, there will be reduc- and China’s deflationary cycle indicate that a tions in employment that induce households high rate of saving does not guarantee high to begin another cycle of saving more and growth. This is because high savings reduces spending less. overall spending by households and compa- In South Korea, according to estimates nies. It may also lead to high public and pri- from the Asian Development Bank and Inter- vate debt owing to relatively low borrowing national Monetary Fund, where unemploy- costs. ment moved toward an all-time high of 2 mil- It has become clear that neither aggressive lion, or just over 9 percent, gross national sav- investment spending nor high saving rates can ings rose to over 35 percent of GDP in 1998 guarantee sustainable growth. High savings from about 33 percent in 1997. The figure for should be now interpreted as a symptom of Japan is about 27 percent, just over 30 percent despair in some of East Asia’s economies. In for Hong Kong, and over 45 percent for particular, uncertainty over the future has Malaysia and Singapore, while in Thailand raised savings rates in China and Japan while savings are 34 percent of GDP. also contributing to deflation in both countries. Similar results are being observed in China. In much of East Asia, a considerable part of Although always high (about 44 percent), its the investments over the past decade evapo- marginal saving rate climbed substantially rated in a property bubble or disintegrated during 1999. Pressures from declining prices into excess capacity of production facilities. induce households and businesses to defer This destruction of wealth represents one of spending. the greatest daylight heists in modern time. Japan’s saving rate is likely to continue to As many of the regions economies are remain high and perhaps be pushed higher. reviving from slowdowns or full-blown reces- Households there have ignored rising public sions, uncertainty about the future is inspiring expenditures, entreaties from political lead- many Asians to save even more money. Obvi- érs, even free sales vouchers. Instead they ously, the increase in savings means there is continue to add to their savings. There is little less buying. In turn companies find them- wonder why. Japanese workers do not spend because Christopher Lingle (CLingle@ufm.edu.gt) is adjunct they are worried about whether they will lose professor of economics at ESEADE-Universidad their jobs. And then demography works Francisco Marroquin in Guatemala. against rising consumption owing to Japan’s 30 ===== PAGE 31 ===== 31 swelling ranks of elderly who are not big “institutional infrastructure” to make their spenders in any country. Facing huge bills for economic policies more compatible with the recapitalizing Japan’s banks and for the addi- requirements for successful engagement with tional government spending, taxpayers must the global economy. put away funds in anticipation of rising taxes This also involves abandoning reliance on in the future. Young Japanese are finding their export-led, neo-mercantilist develop- fewer prospects for employment, and many ment policies. Policymakers must be made to may face a difficult choice to emigrate. In this understand that the principal advantages from tough environment of tight-fisted consumers, trading are not from exporting. Instead, trade it is difficult imagining businesses wishing to is mostly beneficial because purchases by pro- invest. Even were they willing or able to ducers and consumers from the least-cost expand, the banking crisis makes it unlikely provider bring about increases in competition that they would find banks willing to lend. and efficiency that promote economic growth. And so it 1s domestic woes that have been Import-led growth arises from foreign com- the undoing of countries that staked their eco- petitors’ imposing pressures on domestic pro- nomic futures on exports. As a consequence ducers that must become efficient to survive. of their neo-mercantilist approach to develop- When these improvements lead to gains in ment, most East Asian economies had two labor productivity, wages rise and provide the distinct sectors. Their international sectors basis for higher consumption. Productivity tended to be modernized and geared up to gains also lower unit costs while allowing meet and beat competition from global com- growth in profits to enhance shareholders’ petitors, while the domestic sectors tended to wealth that can boost consumption and invest- be much less open to competition. In some ment. cases this was due to restrictions on foreign And then the benefits begin to extend to the ownership and investments, while in others international sector. Allowing inputs or inter- there were tariff and nontariff barriers to mediate goods to be imported for the export trade. sector leads to lower operating costs. As pro- duction costs fall and productivity increases, Shielded from C omp etition the capacity to sell in a competitive export market rises. As domestic multinational enter- Consequently, companies operating locally prises experience rising profits, they are able often found themselves shielded from internal to shop around for overseas production facili- and external competition. Years of protection ties and better sources of raw materials. behind regulatory walls kept them from being East Asia’s economies have to undergo a cost conscious or stripped them of incentives to radical transformation that focuses on inward innovate. As in most economies, their domestic development through a further opening and sectors were the largest component, and it is liberalization of their trade and financial mar- this sector that is pulling these economies kets. Savers deserve higher returns on their down and holding them back from full recov- assets. This will inspire greater efficiency ery to a sustainable growth trajectory. arising from competition and provide a solid Political leaders seeking to see their coun- base of domestic demand to ensure sustain- tries escape the economic doldrums need to able economic growth. Ironically, the clearest understand there must be massive restructur- signals of recovery for East Asia’s economies ing of their domestic sectors. At the same will be when savings decline and imports time, there should be an overhaul of their rise. Ol ===== PAGE 32 ===== Economic Notions by Dwight R. Lee ¥ Economics How Government Prevents Us from Buying Safety here is a limit to how much people will provide safer conditions on all jobs because voluntarily pay to reduce the risk of acci- workers would rather have the additional safe- dental injury or death. In other words, the ty than the higher salary and wages that oth- marginal value people place on their lives is erwise could have been paid. We spend more finite. We accept some risks to take advantage on smoke alarms, slip-resistant bathtub interi- of opportunities to do things that, at the mar- ors, air filtration systems, and outside lighting gin, provide more value than the expected to make our homes safer. We demand levels of sacrifice in health and life expectancy. In sanitation in the food we eat, the water we effect, people routinely put a price on their drink, the air we breathe, and the clothes we lives. They do it every time they go skiing, wear that would have been considered ridicu- roller blade in the street, spend too much time lous a couple of generations ago, and unimag- in the sun, drive to the store, walk across the inable in many poor countries today. Airline street, overeat, stay up late, go swimming, or travel is far safer now, with the number of do any of a thousand other things. miles traveled increasing as the number of air- But saying that there is a limit to how much line fatalities is decreasing. And the car you people will pay to reduce risk implies they are drive today is safer than the ones available a willing to spend something. People value few years ago because they are better safety just as they value other things, and they designed, have better brakes, and contain will purchase it up to the point where, in their more safety features. estimation, its marginal value equals its mar- Our increased demand for safety, and the ginal cost (the value of what has to be sacri- response to that demand, is explained primar- ficed to get the additional safety). In fact, we ily by marketplace incentives. Without the are buying more safety now than ever before cooperation and coordination created by mar- because we are richer and can afford more of ket incentives, we would not have experienced almost everything. the growth in wealth that increased our For example, our jobs are far safer now demand for safety. And when our demand for than they were in the past. In part this reflects safety increases we can communicate that the shift away from jobs demanding manual demand through prices and profits to those labor (like farming and mining) and into best able to respond. An automobile company office jobs where paper cuts are the biggest that tried to sell cars no more safe than those hazard. But employers also spend more to made in 1970 would quickly go bankrupt, as would an airline with the same safety as 30 Dwight Lee is Ramsey Professor at the Terry College years ago. Some people will object that gov- of Business, University of Georgia, and an adjunct ernment regulations have forced automobile fellow at the Center for the Study of American Busi- manufactur ers, food processors, the airlines, ness at Washington University in St. Louis. building contractors, and employers to pro- 32 ===== PAGE 33 ===== 33 vide the additional safety. It cannot be denied sumption or pollution. To the extent that the that government regulations have had an standards increase gas mileage, the cost of impact, but it has been a far less desirable driving will go down and people will drive impact than most people realize. more miles. Also, because the standards Governments often enact regulations increase the cost of new vehicles, particularly requiring more safety only after the private the larger ones that are artificially restricted in sector has started providing the desired supply, people drive their old cars longer than amount. Indeed this is about the best we can they otherwise would, and older cars com- hope for, even though government regulations monly get poorer gas mileage and almost commonly increase the cost of providing always pollute far more than new cars. But it more safety by specifying one-size-fits-all is clear that CAFE standards do increase traf- approaches rather than allowing firms to use fic fatalities by preventing people from buy- approaches best suited to their situations. But ing additional safety at very little cost. government regulators often require that we Because of CAFE standards, automobile pay for far more safety than we want because manufacturers have had to produce cars that of the tendency toward bureaucratic expan- are smaller and lighter on average than con- sion, the desire for greater power, and the sumers want to buy. Straightforward physics demands of politically organized groups. For insures that, everything else equal, smaller example, some Environmental Protection and lighter vehicles are less safe than large Agency regulations are estimated to cost over heavy ones—occupants are closer to wind- $4.5 billion per life saved, and some Occupa- shields and dashboards and they are sur- tional Safety and Health Administration regu- rounded with less cushion. Not surprisingly, a lations that are estimated to cost over $72.7 recent study using government and insurance billion per life saved.! data found that for every mile per gallon added because of CAFE, 7,700 additional The CAFE that Kills lives are lost in traffic accidents.2 One has to conclude that there is a stronger Unfortunately, while some government reg- bias in the political process to expand regula- ulations are making us buy very little safety at tions than to increase safety. What other exorbitant cost, others are discouraging us explanation is there for simultaneously from buying a lot of safety at low cost. Con- imposing regulations that provide almost no sider federal Corporate Average Fuel Econo- safety at ridiculously high costs and prevent- my (CAFE) regulations that require automo- ing people from significantly reducing their bile manufacturers to produce vehicles that risks at the cost of a few gallons of gas? average no less than a specified number of Unfortunately, CAFE is not the only regula- miles per gallon. CAFE now requires that new tion that prevents people from buying more cars average 27.5 miles per gallon and that safety at low cost. For example, thousands of new light trucks (pickups, minivans, vans, and people have died needlessly in the United sport utility vehicles) average 20.5 miles per States because of federal Food and Drug gallon. These regulations were imposed in Administration restrictions on buying medi- 1978 to force us to conserve gasoline—after cines that have been widely and successfully the federal government imposed gasoline used in other countries to reduce the risks of price controls that denied people the informa- heart attacks, strokes, and other diseases. tion and incentive to conserve more efficient- Details on these restrictions will have to wait ly on their own. More recently, environmen- until a future column. C] talists have lobbied for increasing the required mileage to cut down on the emission of pollu- 1. I discussed these and other examples of extremely costly safe- ty regulations in my October column and explained why they result tants and alleged greenhouse gases. in less, rather than more, safety. It is not clear that CAFE standards do 2. This study was discussed by Murray Weidenbaum, “Saving on . ; . Gas Costs Us Money—and Lives,” Chicago Sun-Times, September much, if anything, to reduce either gas con- 17, 1999, op-ed page. ===== PAGE 34 ===== IDEAS ON [IBERTY December 2000 Standing to Gain from Tattling by Timothy D. Terrell ost of us learn early in life to despise ists standing to sue after the group claimed it tattlers. Sometimes this revulsion had been harmed by an incinerator’s disposal results from a desire to avoid punishment for of waste into a river near Roebuck, South Car- a serious offense, such as an unauthorized olina. Even though there appeared to be no redecoration of the guest bathroom wall with evidence that Laidlaw Environmental Ser- a permanent marker. Often, however, the tat- vices’ emissions-permit violations actually tler is complaining of an offense that is no caused any environmental damage or health legitimate concern of his: “Bobby and Sarah risk, the Court’s 7-2 majority held that “con- are making ugly faces at each other” Such a cern” about possible damages was sufficient complaint might meet with a parental to show harm and establish standing. While response along the lines of, “What's it to we can appreciate the possibility of subjective you?” It is an appropriate question for a par- harm to a plaintiff, it would seem reasonable ent to ask of an unharmed child complaining to place the burden of proof on the plaintiff to of a sibling’s petty annoyances. demonstrate the nature of that harm. Imagine a parent, however, without a sense Significantly, there is nothing but the errat- of proportion in meting out punishments or ic whim of the court to limit the application of the common-sense ability to distinguish this principle outside environmental cases. In between serious and trivial offenses and with antitrust cases, for example, the concern of 30 feet of shelf space devoted to complex monopolization could be enough to warrant rules and regulations (which are sometimes standing. We may well see, in coming years, a mutually contradictory and may be inconsis- flood of suits alleging various vaporous tently interpreted) and a standing offer of “harms.” goodies for tattlers. Imagine now how a “liti- The background for the Laidlaw decision gious” child could abuse the system if this includes a number of cases dating from the parent agrees to hear frivolous complaints early 1970s that broke from the common-law from unharmed tattlers. tradition requiring the would-be plaintiff to One of the most important U.S. Supreme prove some reasonably observable harm, or Court decisions this year concerned whether infringement on a property right, before just anyone may sue if a law has been violat- appearing in court with a lawsuit. A 1973 ed. In Friends of the Earth v. Laidlaw, the case, US. v. Students Challenging Regulatory high court granted a group of environmental- Agency Procedures (SCRAP), is probably the most notorious. In this case, George Washing- Timothy Terrell (terrelltd@wofford.edu) is assistant ton University law students were granted professor of economics at Wofford College in Spar- Standing to sue the federal government's rail- tanburg, South Carolina. road rate-setting bureau on grounds that a 34 ===== PAGE 35 ===== 35 surcharge on shipments of freight produced a for Individual Rights has referred to citizen- price differential between recycled and nonre- suit provisions as “an off-budget entitlement cycled products. This, the students alleged, program for the environmental movement,” would lead to decreased use of recyclables. and compared environmental advocacy Through a long chain of events, environmen- groups to bounty hunters with incentives to tal harm could result in the form of increased over-enforce the law.3 litter in public places and air pollution from Both the tattler analogy and Greve’s bounty having to manufacture new materials. hunter comparison can go only so far, of Cases such as SCRAP, along with numer- course. In addition to suing private parties for ous new statutes permitting “citizen suits,” alleged violations of the law, some groups have substantially weakened the requirement often sue the government if they believe some that concrete and particularized harm to the regulation has not been enforced with suffi- plaintiff be a prerequisite for appearing in cient vigor. The citizen-suit provisions present court. The historic principle that the legisla- in almost all federal environmental statutes ture should address harms inflicted on the explicitly grant this privilege to “any person” general population and that the courts should who perceives a violation of the law. Yet the address harms to individuals or minorities EPA can’t lose, even when its “opponent” was implicitly scrapped. wins in court. As Ben Lieberman of the Com- petitive Enterprise Institute pointed out recently, these “sweetheart suits” result in an expansion of the agency’s power, as well as In addition to the satisfaction the plaintiff/ the usual pecuniary rewards for the plaintiffs. tattler receives from destroying the property “In reality, EPA often wants to be sued by rights of landowners, the environmental environmentalists and agency records indeed group is usually reimbursed generously for its reveal that it hands out millions of taxpayer services in bringing the violation to the atten- dollars to the very organizations that routine- tion of the regulatory agency.! There are two ly take it to court.” chief forms in which this compensation In the early 1990s it appeared that the comes. Court might be moving in a more reasonable First, if the plaintiff prevails in court, he is direction. Justice Antonin Scalia, one of the usually reimbursed attorneys’ fees and litiga- soundest minds on the Court, wrote several tion costs at the “community market rate” for majority opinions, including Lujan v. Nation- for-profit legal services. This might not seem al Wildlife Federation and Lujan v. Defenders inappropriate, until it is pointed out that the of Wildlife, which appeared to restrict the abil- suits are generally brought by public-interest ity of undamaged parties to complain in court. law firms that charge fees considerably lower According to research I conducted in 1998, than the market rate. after the second case the EPA seemed less Second, many settlements in environmental vigorous in its enforcement of environmental citizen suits include “supplemental environ- regulations.5 Property owners were somewhat mental projects,” or “mitigation projects,” more secure from the threat of legal assaults which require the defendant to fund certain by environmentalists. However, in Laidlaw projects set up by environmental groups. the high court backed over these previous Though the plaintiff organization is itself decisions and gave environmentalists virtual- excluded from among the group of recipients, ly unlimited standing to sue. these credit programs benefit the environmen- The problem of standing is essentially a tal movement as a whole. It is not unreason- problem of allocating a scarce resource— able to expect that environmental advocacy judicial decisions—to the highest and best groups might collusively seek out this project uses. Judges in any appellate court face what money for their mutual benefit. The sum of Bertrand de Jouvenel called a “chairman’s these transfers to environmental groups is so problem,” or rationing problem, when decid- substantial that Michael Greve of the Center ing which cases to hear.6 Judges are attempt- Generous Reimbursement ===== PAGE 36 ===== 36 IDEAS ON LIBERTY ® DECEMBER 2000 ing to make these allocations without benefit the traditional, common-law restrictions on of crucial price information. Calculation by standing. judges of the total costs and total benefits of This is because a restrictive standing policy deciding specific cases is impossible. An has a unique element of efficiency. It limits altruistic judge might attempt such a calcula- the set of potential plaintiffs who may be tion, but as Ludwig von Mises would point approached by a potential offender for bar- out, the hope of consistently producing effi- gaining. Without some limitation of plaintiffs cient outcomes is quite dim.” Liberalizing to those who are concretely and particularly standing rules may increase the probability harmed by an action, there would be no way that those outcomes will be inefficient. Judi- for a potential defendant to approach each one cial decisions always exist on the basis of cer- to secure permission or offer compensation tain presuppositions, and one traditional pre- for the offensive act he is considering. Possi- supposition has been that those who are bly profitable exchanges could not occur, and objectively and individually harmed have potential wealth could not be created. more at stake than others, and should have priority when limited court time is allocated. Furthermore, those who have suffered harm Avoiding Nuisance Suits that is common to the general population tra- For instance, suppose a forester is consider- ditionally have been referred to the legislature ing harvesting activity that would add silt- for relief. bearing runoff to a stream and possibly harm [19 One solution to de Jouvenel’s “chairman’s those owning the stream or property along the problem” is, as Murray Rothbard put it, stream. To avoid a potential nuisance suit, he “recasting the concept of rights in terms of approaches the stream owner or property private property rather than in terms of free- owners along the stream and offers compen- dom of speech or assembly.”® That is, a sation in exchange for permission to pollute. chairman facing a number of would-be If he succeeds in obtaining these rights, and speakers “could ask for price bids for scarce has not omitted a property owner, he is secure places at the podium and then award the from legitimate lawsuits. If anyone can sue, places to the highest bidders. . . . There including those claiming a “concern” about would then be no shortages, and no feelings pollution, there is no way to contract out of of resentment at a promise (‘equal access’ of the problem. An anti-logging group in anoth- the public to the column, podium, or micro- er state could assert an “aesthetic or conser- phone) reneged.” vational” interest in the purity of the stream’s But beyond this, as Rothbard pointed out, water and succeed in enjoining the forester’s the owner of the meeting place (for example, harvesting. Certainly members of such a the court) must be the ultimate allocator of group could actually suffer psychic harm permission to speak. Therefore, as long as the from the forester’s activity. However, the need owner is concerned for his own well-being, he for predictability in all our activities seems to will attempt to make such allocations as max- promote a conservative view of standing. imize his satisfaction. Currently, there is little expectation that A private arbitration firm would have the state-run courts will give way to private arbi- incentive to choose those cases that would tration on anything like a large scale. Howev- provide it with the highest profit, presumably, er, there is a way to sidestep the entire stand- those that either enhance the reputation of the ing issue. Reducing the need for adjudication firm or offer high compensation from the liti- would reduce the need to decide standing gants. Each arbitrator would then have to issues. It is no coincidence that standing has establish standing criteria. One can imagine come to the forefront of judicial controversy many versions of the standing doctrine that at the same time that government regulation might evolve through different arbitration has exploded into almost every area of human decisions, but we would expect private arbi- decision-making. trators to come up with something similar to Citizen-suit provisions are now a fixture in ===== PAGE 37 ===== STANDING TO GAIN FROM TATTLING 37 federal environmental regulation, and profes- and the U.S. Supreme Court, those children sional “tattling” is big business for environ- who didn’t learn that lesson have grown up to mental advocacy groups. If it is not political- make a career of tattling. OJ ly feasible to eliminate citizen-suit provisions, 1. Michael S. Greve, “Private Enforcement, Private Rewards: and if the courts continue to downplay the How Environmental Citizen Suits Became an Entitlement Program,” “What's i 9 : : in Michael S. Greve and Fred L. Smith, Jr., eds., Environmental Pol- ats 1t to you: question, then reducing itics: Public Costs, Private Rewards (New York: Praeger, 1992). regulation would eliminate some of the fuel 2. Michael S. Greve, “The Private Enforcement of Environmen- for standing controversies. “Concerned citi- Lene Lvs Reutew 65 (1950). 2. 341. zens” cannot sue for the enforcement of a 4. Ben Lieberman, “Environmental Sweetheart Suits,” October 1 : 21, 1999; http://www .cei.org/UpdateReader.asp?ID=823. property right destroying statute that does not 5. Timothy D. Terrell, “Rent Secking and Standing to Sue in exist. Environmental Policy” (doctoral dissertation, Aubum University, © : . 1998). He who passes by and meddles In a quar 6. Bertrand de Jouvenel, “The Chairman’s Problem,” American rel not his own is like one who takes a dog by Political Science Review, June 1961, pp. 305-32. ” 7. See Ludwig von Mises, Economic Calculation in the Social- the oars,” say's the Book of Proverbs, chapter ist Commonwealth (Auburn, Ala.: Ludwig von Mises Institute, 26. Some of us learned as children to stay out 1990). Sg : 8. Murray N. Rothbard, The Ethics of Liberty (New York: New of matters that were no legitimate business of York Univenity Press, 1998 [1982]). p. 115. ours. Thanks in part to citizen-suit legislation 9. Ibid., p. 116. FEE’s Book Service: An Important Announcement We are proud to announce a distribution alliance with Laissez Faire Books, the supplier of the world’s best selection of books on liberty. Lais- sez Faire Books will now take and fulfill orders for all the titles in FEE’s Essential Library. Please direct your orders to: * Laissez Faire Books, Dept. FEE, 938 Howard Street #202, San Francisco, CA 94103 You may also Fax your order to 415-541-0597, Attention: Dept. FEE, * Telephone toll-free 800-326-0996 (identify yourself as a FEE customer), or e Use FEE's online bookstore at www.fee.org ===== PAGE 38 ===== IDEAS @ Philosophy, Economics ON[IBERTY Decemser 2000 The Seif-Imposed Poverty of Economics by Tibor R. Machan and David M. Brown ife is more than a game, and human “game theory may explain what we do; but we beings are more than rule-bound strate- are not only small.” gists. Moral values are possible. Authentic Economists, like other social scientists, are allegiance to such values is possible. always seeking some comprehensive and uni- Too obvious a point to debate, you think? tary explanation of human behavior, one that Maybe not. In The New Republic (June 5, mimics the natural sciences, especially 2000), the very bright and philosophically physics. What they want is surefire pre- astute Professor Peter Berkowitz of George dictability of regular phenomena, a basic Mason University Law School reviewed Eric motive or drive to explain why people do what A. Posner’s interesting book, Law and Social they do; and that explanation, once arrived at, Norms (Harvard University Press, 2000). Pos- is expected to be exhaustive. Usually the ner’s book is essentially a rendering into eco- favored motive is the desire to prosper, even nomic language of the ethical and political though the content of prosperity may vary issues of human life. Posner sets out to show tremendously from person to person, age to that, using the tools of scientific economics age, and region to region around the world. alone (or even more narrowly, of game theo- Indeed, just to make sure he covers every- ry), we can explain why people act as they do. thing, the economist tends to define prosperi- Why, for example, do people sustain their ty as the getting of what one desires to get. commitments to others even despite opportu- Every sought goal is thus ipso facto an eco- nities to “advance” their interests “by means nomic goal. of what game theorists call ‘defecting’ or Posner proposes that the explanatory ‘opportunistic behavior,” and what ordinary scheme he draws from economics and game people call lying, cheating, and stealing”? theory can make complete, comprehensive The analysis by Berkowitz is insightful, sense of ethics and politics. Ethics and poli- largely setting forth, rather adeptly, often- tics may not seem equivalent to straightfor- heard complaints against economic reduction- ward economic thinking and behavior, but in ism. He explains that there is really more to fact they are just differing expressions of the ethics and politics, at their best, than merely same motivation: people do the right thing the working out and following of narrow because it will get them what they want, ful- strategies for realizing what one desires in fill their concrete desires, whether over the life. “In so far as we are small,” he concludes, short run or the long run. Laws and social P—— norm common practices that help us Tibor Machan is a professor of philosophy at s are but onp cs ¢lpu Chapman University. David Brown is the editor of get our way, they are strategies for living. The Daily Objectivist (www.dailyobjectivist.com), a Actions that seem to supply evidence of moral webzine. commitment are really, according to Posner, 38 ===== PAGE 39 ===== 39 just “behavioral regularities” undertaken “to simply miscalculated or misjudged the proper show that they are desirable partners in coop- strategy. erative endeavors. Defection in cooperative Posner’s reductionist economics has no endeavors is deterred by fear of reputational room for choice (except insofar as it is smug- injury. . . . People who care about future pay- gled into the discussion in contradiction to the offs not only resist the temptation to cheat in terms of that discussion). But a bona fide a relationship; they signal their ability to understanding of ethics and politics requires a resist the temptation to cheat by conforming recognition of the genuine choices that human to styles of dress, speech, conduct, and dis- beings confront. If one ought to be honest, it crimination. The resulting behavioral regular- must also be true that one might be either ities, which I describe as ‘social norms,” can honest or dishonest. If one ought to care for vastly enhance or diminish social welfare.” one’s children, it must also be true that one Plausible—as far as it goes. Certainly might either care for them or neglect them. human action is purposeful, at least; we do And indeed, we know well enough that just pursue ends and deploy means to achieve such is the case: lots of people act as they those ends. But as Berkowitz observes, Pos- should and lots of others do not. But because ner seems not only to be rather gratuitously this sort of economics, rational-choice theory, translating the “wisdom of the ages” into the and game theory fail to take full account of language of economic theory, but also to be morality and choosing, theoreticians like Pos- claiming, “With Machiavelli, that it is more ner wipe morality from the slate and reduce it important to appear good than to be good.” A to mere scheming. Even justice, on this corollary claim seems to be that morality is account, can be broken down into what either a mirage or, in Berkowitz’s words, “at Socrates took so much trouble to argue least a discourse that is reducible to some- against, namely, “the advantage of the thing more fundamental and thoroughly non- stronger.” moral.” Such an understanding of ethics and poli- With deep moral commitment banned from tics also faces the problem of explaining why the picture, so are its obvious incarnations; seeming to be good would ever matter to any- thus Posner, Berkowitz writes, can perform one, if the capacity to be genuinely good is “the remarkable feat of writing an entire but a myth enlisted for strategic purposes. If it chapter on marriage and the family without is a myth that one can be invisible or levitate, ever mentioning love.” His stance thus failsto what benefit is gained by someone who man- capture the wealth of human motivations and, ages to feign such abilities (other than the in the end, is vacuous. If what drives us is the limited entertainment value magicians cash in desire to have our desires satisfied, we do not on)? There is none. But sensible people do learn anything about why there are so many believe in moral possibilities (they experience extremely varied desires “driving” people. It those possibilities themselves), and that is is an odd science indeed that offers the same why faking moral fiber might at least briefly alleged explanation for the bank robber as it fool even those who would not believe in your does for the bank executive, for the thief as power to levitate. Just as hypocrisy is the for the producer, yet that is just how the eco- compliment vice pays to virtue, so pretending nomic explanation of human behavior tends to be good is the compliment pretentiousness to go. pays to morality. Despite its critical acumen, Berkowitz’ analysis of Posner fails to give an account of why economists have such a serious problem It is odd, too, that the economists account with ethics properly understood—that is, not of morality makes little room for immorality. as a strategic device but as a principled guide One is invited to suppose that when people do to action enabling us to live proper human lie, cheat, deceive, commit fraud, murder, lives. Interestingly, it is the father of scientific rape, assault and such, somehow they have economics who may be called on to assist us Where Is Immorality? ===== PAGE 40 ===== 40 IDEAS ON LIBERTY ® DECEMBER 2000 in understanding this problem. In The Wealth virtues as honesty, integrity, and justice). With of Nations, Adam Smith noted that even by prudence expelled from the moral realm, his time, moral virtue had come to be regard- however, all the economists can do to render ed as disconnected from mortal happiness and commerce and business respectable is to col- the good life: lapse them, along with the rest of life, into expressions of near-bodily functions a la Ancient moral philosophy proposed to Hobbes (which is what, in the end, Posner investigate wherein consisted the happi- does, and what Berkowitz finds so objection- ness and perfection of a man, considered able). If economic value-seeking were taken not only as an individual, but as the mem- to be as morally legitimate as any other ber of a family, or a state, and of the great human endeavor, the economist would not be society of mankind. In that philosophy, the quite so tempted, whether in self-defense or duties of human life were treated of as sub- for revenge, to strip morality from human servient to the happiness and perfection of doings and replace it with game-theoretic human life. But, when moral as well as nat- constructs instead. ural philosophy came to be taught only as If the mechanistic world view of many subservient to theology, the duties of economists is in part a response to Kantian human life were treated of as chiefly sub- reworking of moral theory, the Kantian phi- servient to the happiness of a life to come. losophy was itself an attempt to escape the In the ancient philosophy, the perfection of dilemmas spawned by the metaphysics of virtue was represented as necessarily pro- mechanism. For Aristotle and other moral ductive to the person who possessed it, of philosophers, self-development and flourish- the most perfect happiness in this life. In ing were things a person had to exert his will the modern philosophy, it was frequently to achieve; they were not automatic. And so represented as almost always inconsistent the care of the self could be seen as a moral with any degree of happiness in this life, virtue, a chosen, effortful practice for which and heaven was to be earned by penance credit could be due. But when the notion and mortification, not by the liberal, gener- gained prominence that human beings behave ous, and spirited conduct of a man. By far exactly like the rest of matter-in-motion in the the most important of all the different universe, free will took a beating. Hobbes, a branches of philosophy became in this materialist of the highest order, spent a life- manner by far the most corrupted. (Ran- time denying its reality; he debated the topic dom House, 1937, p. 726) : until the day he died. In its stead he posited a drive for self-preservation, something that Smith saw that when morality, or ethics, is seemed close enough to the deterministic conceived along lines that would be fully real- motion of matter. Self-preservation, on this ized in the work of Immanuel Kant—who view, is directly impelled by antecedent caus- denied that anything done to advance one’s es; the acting agent has no real autonomous own cause can have moral significance— say in the matter; he can only submit. Obvi- moral thinking cannot embrace the virtue of ously, such ineluctable submission cannot prudence, or practical wisdom. (Nor can any earn one any moral credit. moral virtue be construed or justified, howev- Kant could not accept this obliteration of er broadly, in relation to the acting agent’s moral responsibility. But in the process of sal- own well-being and flourishing.) But pru- vaging the moral dimension of life, he didn’t dence—recognized as a prominent virtue quite abandon the Hobbesian notion that we indeed in the ethics of Socrates and Aristo- are all naturally driven by self-preservation. tle—would make plenty of room for an ethi- What he proposed was only that we can cal conception of most economic activity. escape that natural drive and choose a differ- While prudence may not be the highest virtue ent course of action—a moral course. If we in human life, economic action is well under- will things impartially, utterly without regard stood as an expression of it (as well as of such to any personal drives or motives, and if we ===== PAGE 41 ===== THE SELF-IMPOSED POVERTY OF ECONOMICS 41 tear ourselves from a “dead insensibility” to ues that can constitute and animate it. A rich perform an action “only from duty and with- conception of individual flourishing would out any inclination,” our action is now moral- surely embrace all the virtues of honor, ly praiseworthy. By this move, morality was integrity, commitment, and so forth. Prudent “rescued,” in a way, but rescued at the concern for self is not inherently inimical to expense of relevance to individual life and any of these, nor to the heeding of the flourishing. It is this kind of sundering that “promptings of conscience.” Smith was reporting, even before Kant’s final This isn’t the place to address all the prob- “solution” arrived on the scene. lems with the Kantian “solution” or with the In their very different ways, Posner and scientism that lies behind the Hobbesian and Berkowitz each accept the pitting of morality Posnerian perspectives. Suffice it to note that against individual well-being. For Berkowitz, a richer, more robust understanding not just of the shortcoming of the game-theoretical uni- human affairs but also of reality itself—one verse is that it “permits explanations of that does not seek to reduce everything to just human conduct only in terms of rational self- one thing—would go far to remedy matters. interest.” And it is true enough that we can act Such an understanding would also make against our own interests (and also that we can ample room for the moral virtue of prudence act irrationally). But the more fundamental and therefore for the task of every person to problem of the Posnerian universe is that it is look after his or her prosperity. Economists premised on a too-narrow conception of self- can teach us a great deal about that, and can interest, banning from its ken the moral val- be proud of doing so. OJ message “Free Our Money.” More important- ly, it is depositable into any bank. CAPITAL LETTERS =m SERN FES vs. FRS. Which system will it be? Rejoice! NORFED’s solution to our nation’s . manipulated government currency is simple Liberty Dollar and profitable: Stop using “their” money. To the Editor: Start using the Liberty Dollar and return Lawrence H. White's focus on the difficul- America to value—one dollar at a time. ties of launching a competing currency and its —BERNARD VON NOTHAUS, minimum personal rewards are well known Senior Economist (“A Competitor for the Fed?” July 2000). So in NORFED (www.norfed.org) response to such difficulties, NORFED’s plan . ol ue is simply to develop a currency owned by the Compassionate Capitalism people and built on the free enterprise system To the Editor: (FES). “When the People own the money, they If Tom Palmer (“For-Profit Medicine and control the government. When the government the Compassion Motive,” October 2000) owns the money, it controls the People.” wants to generalize on the basis of a single One of the greatest difficulties is that experience at a nonprofit hospital, let me do the new gold- and silver-backed ALDollar the same with his article. Free-market propo- (American Liberty Dollar) did not clear nents err in attributing to the economic sys- through the fiat Federal Reserve System (FRS). tem blame that properly should be laid on For that reason a $20 American Liberty Check individual human character. was issued on October 1, 2000. More than just His conclusion, that compassionate care is a commemorative for NORFED’s second more likely in a hospital motivated by profit, anniversary, the ALCheck is a powerful, of course is plausible. But it is conceivable proactive, educational tool that carries the that what was perceived as “compassion” was ===== PAGE 42 ===== 42 IDEAS ON LIBERTY ® DECEMBER 2000 artful pretense and not genuine concern. It a general pattern. Plenty of experience shows may be that truly compassionate doctors and that incentives matter. I merely wanted to sug- nurses are more comfortable working at a gest that they may also matter in more areas nonprofit institution. Until a study more cred- than most people may currently believe. ible than an anecdote 1s done to suggest oth- As to whether a doctor’s compassion is erwise, a more plausible explanation is simply “artful pretense” rather than “genuine con- that Palmer unfortunately found himself cared cern,” I have no way of knowing. It also may for by a jerk. not matter as an ethical matter. Recall that Of people with sour personalities there isno “ethics” is derived from the Greek word for shortage, not in medicine, or law, or anywhere. “habit”; to be habituated into considering the There are caring doctors and nurses and there feelings and interests of others when interact- are cold doctors and nurses at all hospitals, ing with them is to become a better person. because hospitals are staffed by people. Character is not normally something you’re Indeed, the reality of medical economics and just born with; you acquire it through experi- physician reimbursement is exceedingly com- ence and habit. Being habituated through plex. To simplistically dichotomize the situa- incentives to take into account the feelings tion as Palmer does makes his article read more and interests of others will certainly have an like a fable than an instructive experience. effect on individual human character. So I By the way, I would ask if the procedure reject Mr. Cohen’s stark dichotomy between done by the unconcerned doctor at the non- “the economic system” and “individual profit institution resulted in pain relief. It human character.” Surely they are related, and could be argued that what the compassionate that was all my essay was intended to suggest. doctor owes his patient is skill and good judg- Mr. Cohen’s final question is clear, but the ment, not necessarily warmth and kindness, suggestion that follows it is not. The answer to although these human qualities certainly are the question is that I did indeed enjoy an ame- to be desired. lioration of my condition because of the injec- —MERRILL A. COHEN tion I received at the nonprofit hospital. But York, Pennsylvania the term “what the compassionate doctor owes his patient” is unclear. If Mr. Cohen is Mr. Palmer replies: referring to the result of contract, it would be Mr. Cohen raises some interesting points in hard to contract for kindness. But how would his letter. First, I certainly agree—as I clearly it have diminished a doctor’ efficiency to stated in the essay he criticizes—that the sam- exhibit concern for my well-being as well? ple size was too small to draw any robust con- My vision of a good society includes not only clusions. So we agree on that. What I tried to material improvement, but warmth and kind- get across in my personal story was that the ness too. There’s more to life than material pursuit of profit can plausibly be tied to com- goods, after all, and I believe it to be not only passion, precisely because the profit-seeker a reasonable hypothesis that capitalism nur- must put himself or herself into the position tures kindness and concern for others but also of others in order to—as the British say— a fact supported by mountains of historical “gain their custom,” that is, to make them into evidence. Concern for others who are other- customers. That makes it a hypothesis, or a wise unknown to us is virtually unknown in plausible candidate, for an explanation. And societies that do not engage in trade, and as suggesting plausible candidates for explana- the range of trade has increased, so has the tions is not a bad thing to do. The hypothesis scope of philanthropy. And not only philan- is that incentives matter. When we find that thropy, but also kindness to animals, which is fairly consistently you get more courteous virtually unknown in noncapitalist societies. service at the local FedEx office than at the I'd wager that if you want a society charac- local Post Office and more concern for the terized by widespread kindness and compas- value of your time at the car repair shop than sion toward strangers, you're more likely to at the Department of Motor Vehicles, we find get it with a free market economy. OJ ===== PAGE 43 ===== Economics on Trial by Mark Skousen IDEAS ON [IBERTY DECEMBER 2000 How Many of You Are on Food Stamps? “There is a strong case for reducing the role of the government budget in providing health services beyond a minimum.” —Viro TANZI and LUDGER SCHUKNECHT! t the recent San Francisco Money Show, about Social Security and Medicare than they I asked an audience of several hundred are about food stamps? investors, “By a show of hands, how many of The following table shows the stark con- you are on food stamps?” Not a single hand trast between the food stamp program and went up. Then I asked, “How many of you are Social Security and Medicare. on Social Security or Medicare?” A third of the audience raised their hands. Finally, I asked, “How many of you think you will be on the food stamp program during your lifetime?” Again, not a single hand went up. But when I asked how many would even- tually go on Social Security or Medicare, Social almost everyone raised his hand, Security 180.0 442 $375 billion My point was simple. The food stamp pro- pjedicare 180.0 ~~ 38.4 $215 billion gram is a social welfare program limited to pg,og the very poor; there's a means test to qualify, Stamps 19.8 19.8 $17 billion and most Americans attending investment . . . (Washington D.C.: U.S. Dept. of Commerce, 1999), other hand, Soc) Security and Medicare are Tables 173, 614, 616, 636. Figures for Social Security universal social insurance plans. All people ng Food Stamps are for 1998; Medicare for 1997, the pay taxes for the programs, and at age 65 atest available. (sometimes earlier) they all collect benefits, even though most Americans can afford their « ’ own pension program and health insurance. Is Why Not “Foodcare”? there any wonder voters are more worried Suppose the President of the United States _ proposes a new welfare program called pe poi (http: www mskousen.com, mskousen “Foodcare.” Since food is even more vital to aol.com) is an economist at Rollins College, : fe SN Department of Economics, Winter Park, FL 32789, a each American cite n han heatth of tire Forbes columnist, and editor of Forecasts & Strate- ment, he argues, the too stamp. program gies. His textbook, Economic Logic, is now available Should be expanded and universalized, like from Laissez Faire Books. Social Security and Medicare, so that every- 43 U.S. Social Welfare Systems Program Total Current Total Annual Coverage Recipients Expenditures (in millions) (in millions) ===== PAGE 44 ===== 44 IDEAS ON LIBERTY © DECEMBER 2000 one qualifies for food stamps and pays for the Roosevelt had conceived Social Security in program through a special “food stamp” tax. 1935 as a retirement plan for only the less for- Congress agrees and passes new welfare leg- tunate who could not plan ahead financially, it islation. Thus, instead of 19.8 million Ameri- would be a relatively inexpensive welfare pro- cans on food stamps, suddenly 180 million or gram that would require taxpayers to pay at more begin paying the “food stamp” tax and most 2-3 percent of their wages and salaries in collecting food stamps, representing perhaps FICA “contributions,” not 12.4 percent as they 10 percent of household budgets. do today. If President Johnson had proposed What effect do you think this universal Medicare in 1965 as a supplemental med- “Foodcare” plan would have on the food ical/hospital plan limited to the needy, today industry? Would we not face unprecedented taxpayers would be paying 0.5 percent of their costs, red tape, abuse, and powerful vested wages and salaries to Medicare, not 2.9 percent interests’ demanding a better, more compre- as they do today. Instead, the systems were hensive “foodcare”? And suppose snacks made universal, and the duplication is horren- were not covered by “Foodcare”—wouldn’t dous—and unnecessary. the general public start demanding that they Because we all pay in and we all benefit, we be covered by the government because their don’t always think straight about these “enti- costs were rising too fast? Ludwig von Mises tlements.” Example: A stockbroker recently was right: “Middle of the road policies leadto told me about a client who called and com- socialism.” plained bitterly about attempts by Congress to Fortunately, there is no nightmarish “food- revamp Medicare. He angrily said, “They can care” program. Granted, there have been cut spending all they want, but don’t touch my abuses and waste in the food stamp program, Medicare!” While the stockbroker listened but the problems of efficiency are few com- patiently to this man’s tirades, he pulled up the pared to, say, Medicare. In fact, since 1995 client’s account on his computer screen. He the number of Americans on food stamps has had an account worth $750,000! If anyone declined from almost 27 million to under 20 could afford his own medical insurance plan, million, and the costs have fallen from $22.8 it was this man. He didn’t need Medicare. Yet billion to $16.9 billion.3 Yet has the size of he saw Medicare as his right. He had paid into Social Security or Medicare declined? Never. it all his life, and he deserved the benefits. Imagine what this man would be saying about Congress and food prices if we had Safety Net or Dragnet? about Cong d food p Foodcare. OJ The conclusion is clear. Government welfare systems—if they should exist at all—should be 1. Vito Tanzi and Ludger Schuknecht, Public Spending in the limited to those who really need assistance. 20th Century; A Global Perspective (Cambridge: Cambridge Uni- versity Press, 2000), p. 201. They should be safety nets, not dragnets that 2. Ludwig von Mises, Planning for Freedom, 4th ed. (South Hol- : 3 land, I11.: Libertarian Press, 1980), pp. 18-35. This argument applies capture everyone. It was a tragic mistake to equally to today’s efforts to include pharmaceutical drugs in create a Social Security and Medicare system Medicare coverage. : war 3. “Federal Food Stamp Program, 1995 to 1998,” Table 636, Sta- where everyone at Some point became a . d tistical Abstract of the United States (Washington, D.C.: U.S. of the state. I'm convinced that if President Department of Commerce, 1999). ===== PAGE 45 ===== equality in the law, saw women elected to BO OKS high public office and selected for the upper echelons of corporate management, and gen- erally succeeded in persuading people that the The New Anti-Liberals feminist agenda was simply a manifestation of the broader social trend toward equality by A. Alan Borovoy and dignity for all people, men and women. The Canadian Scholars’ Press ® 1999 ® 193 pages As these gains piled up, cracks began to open ® $14.95 within the feminist coalition. “Numbers of feminists became increasingly hard-line in their political demands,” Borovoy writes. In a characteristic incident, a well-known Canadi- mericans concerned about the inroads an university president who had been outspo- that political correctness continues to ken in his support of the feminist agenda make into their lives would do well to look found himself stained by an accusation of northward to Canada. The intrusive regime of racism. The accusers were a group of black moral reformation according to the left is women who claimed employment discrimina- about ten years more advanced there than itis tion. In another case, the Canadian Civil Lib- in the United States. The situation permits us erties Association, which was closely identi- to see our probable future. So stifling indeed fied with feminist goals, came under denunci- has the atmosphere of legal intimidation ation by prominent feminists for being unduly become in the land of the maple leaf that “male” in its outlook and insufficiently sensi- author A. Alan Borovoy, a lawyer long com- tive to “women’s issues.” mitted to so-called progressive causes, has Under the guise of further stigmatizing found it necessary to challenge the trend. His racial bigotry, a coalition of Canadian minori- book, The New Anti-Liberals, describes how, ties succeeded in establishing a raft of “anti- over the last 25 years, the program of advo- hate legislation.” Borovoy argues that such cating “social equality” and tolerance has laws far exceed the goal of non-discrimina- been transformed into a campaign against tion in the public sector, in protection of those who dissent from mandatory dogma. which, in any case, a bevy of laws already True to his roots, Borovoy says that exists. “Anti-hate laws,” he argues, are in “attacks on liberal values” came historically effect infringements of free speech that cor- from “right-wing sources.” Today, however, “a rupt the polity by smudging the line between number of new constituencies have begun to words and deeds. They make hurt feelings, or attack liberal values.” The book’s table of con- worse yet the mere claim of hurt feelings, tents makes it clear who these “new con- rather than physical tort, the cause for action stituencies” are: feminists, racial and ethnic and lead to a general fear about free expres- minorities, academics, members of the peace sion. movement, and the federal and provincial The story of campus speech codes in Cana- governments—roughly the same constellation dian colleges and universities parallels that of as south of the 49th parallel. In Borovoy’s “anti-hate laws” in the Canadian polity at analysis, these groups initially pressed their large. The difference is (as in the United claims legitimately in terms of “equal rights,” States) that the codes are more fanatical in but then, having secured their goals, they their stipulations than the laws. Proponents of began pressing for what amount to privileges the codes argue, in Borovoy’s summation, that for themselves and a diminution of rights for “there can be no meaningful speech without others. equality” and that in a society presumed Feminism illustrates the way in which “pro- racist, sexist, and so forth, certain groups moters of equality . . . have gone off the deep require extra protection and increased dispen- end.” Canada’s first-generation feminists sation in order to be equal. The codes will argued for and gradually achieved gender therefore invoke penalties against anyone who 45 Reviewed by Thomas F. Bertonneau ===== PAGE 46 ===== 46 IDEAS ON LIBERTY ® DECEMBER 2000 might utter anything perceived as demeaning by someone in a designated group. To show the absurdity of such strictures, Borovoy cites the case of a pro-feminist law professor who assigned half his class the task of defending an anti-pornography law and the other half the task of arguing against it. A number of women who fell into the first cate- gory accused the professor of “sexual harass- ment.” The administration failed to defend the accused; worse, it lectured him that “the way he had divided the assignment . . . could cre- ate serious distress for those who had to argue against their own personal opinions.” Thus the sanctity of personal opinion trumps the rigor of how to make an effective forensic argu- ment. “The lesson,” Borovoy writes, “is clear: if you want to avoid having to worry about possible discipline, avoid controversy. . . . That’s quite an outcome for an institution of higher learning to create.” Perhaps the most alarming chapter of The New Anti-Liberals is the one on “Govern- ments and their Agencies.” Borovoy here doc- uments how deeply the attitudes of anti-liber- alism have ensconced themselves in the fed- eral and provincial bureaucracies. The provincial Human Rights Commissions regu- larly act on complaints as arbitrary and as shoddily motivated as the “sexual harass- ment” complaint against the pro-feminist law professor. The same commissions impose quotas in hiring and recruitment, and the lin- guistic authoritarianism in Quebec province is well known. One could criticize Borovoy for making the assumption that the original welfare-state liberalism was as benign as he says. F. A. Hayek and Eric Voegelin, to name only two, have persuasively argued that the distortions of that liberalism, revealed in a tendency toward totalitarian management of individu- als, were present in its inception. It is never- theless encouraging that some “progres- sives,” like Borovoy, have been pushed too far and now dare criticize those old allies on the left who formerly enjoyed exemption from judgment. J Thomas Bertonneau is a professor of literature and adjunct scholar with the Mackinac Center for Public Policy. The Day of Deceit: The Truth About FDR and Pearl Harbor by Robert B. Stinnett The Free Press ® 2000 ® 386 pages + xv ® $26.00 Reviewed by Bettina Bien Greaves O: December 7, 1941, the Japanese navy attacked the U.S. fleet at Pearl Harbor. The following day, President Roosevelt described it as “a date that will live in infamy.” In spite of this country’s official neu- trality, Roosevelt personally had been eager to have the United States enter the war on the side of England. He had persuaded Congress to assist England with money, food, muni- tions, planes, ships, and Lend Lease, and by patrolling and convoying British ships in the Atlantic. These measures were intended, Roo- sevelt assured the people, not to take us into war, but to keep us out. Japan’s attack, while we were still formally at peace and negotiat- ing to settle various disputes, gave Roosevelt the excuse he wanted to ask Congress for a declaration of war. When the President announced that the fleet had been attacked “suddenly and deliber- ately” by Japan, people believed him. Only after the war did the people discover that FDR’s administration and top military offi- cials had not been as surprised as they were: the U.S. government had been privy to many of Japan’s intentions since mid-1940 when intelligence officers deciphered her top diplo- matic code. Washington officialdom had been expecting aggressive Japanese action some- where in the Pacific. Whether or not they were expecting the Pearl Harbor attack is another question. For years rumors have circulated to the effect that Roosevelt knew that Japan planned to attack Pearl Harbor—and just let it happen. By far the most detailed and credible claim to date is contained in Robert Stinnett’s book Day of Deceit: The Truth About FDR and Pearl Harbor. Stinnett is a Navy veteran of World War II who spent his life as a newspa- per journalist and photographer. He argues that ample evidence was available to U.S. administration and military officials— ===== PAGE 47 ===== Books 47 through Japanese intercepts decoded and back to Pearl Harbor. Also on November 25, translated before the attack—to indicate that the Navy in Washington told Kimmel to route Japan was planning to attack Pearl Harbor. all transpacific shipping southward leaving The Pearl Harbor commanders, Admiral Hus- the north Pacific “vacant” and thus, according band E. Kimmel and General Walter C. Short, to Stinnett, open for the approach of the would not have been surprised if they had Japanese convoy. been properly informed. Washington, howev- Judging by the words and actions of Roo- er, chose to keep them in the dark. sevelt and his advisers it is hard to believe that Stinnett describes what appear to be three they were as sure as Stinnett indicates they “conspiracies”: the first to compel the Japan- were that the Japanese attack on Pearl Harbor, ese to attack the United States and thus to which they wanted, was imminent. For bring us into World War II; the second to instance, at a meeting of Roosevelt’s “War deprive the Pearl Harbor commanders of Cabinet” on November 25, secretary of war available information about Japan’s inten- Henry Stimson remarked that “the Japanese tions; and the third an attempt, which still per- are notorious for making an attack without sists, to keep pre-attack information from the warning, and the question was . . . how we public. should maneuver them into the position of fir- The first “conspiracy” began, Stinnett says, ing the first shot without allowing too much in October 1940, with a memorandum by danger to ourselves.” Japanese expert Captain Arthur McCollum, Even though Stinnett’s case does not seem chief of the Far Eastern Section of Naval to me entirely convincing, he has certainly Intelligence. The memorandum listed eight assembled a great deal of information previ- steps to induce Japan “to commit an overt act ously unavailable. His book makes fascinat- of war.” First, the main strength of the U.S. ing reading for anyone interested in the events fleet should be retained in Hawaii. This Roo- leading up to the Japanese attack and the sevelt promptly arranged, over the objections administration’s subsequent attempts to deny of James Richardson, commander-in-chief of responsibility and pin the blame on the com- the U.S. fleet. Over the following year, manders, who were not only deprived of vital McCollum’s other suggestions were also military intelligence, but also were impeded adopted. in their efforts to gather it themselves. 0 According to Stinnett, U.S. cryptographers Bettina Greaves served FEE for more than four had deciphered not only Japan’s diplomatic gecades as a senior staff member and resident schol- code known as MAGIC, but also some of her ar. Now a resident of North Carolina, she is a mem- military codes, enabling operators in U.S. ber of FEE's Board of Trustees. monitoring stations around the Pacific to intercept and decode countless Japanese mili- tary dispatches. Significant information was Power Grab: How the National Education received from these intercepts, Stinnett says, I ; . including the Japanese Task Force’s last- Association Is Betraying Our Children minute choice for its staging area, its destina- by G. Gregory Moo tion, and its attack order. But that intelligence Regnery Publishing, Inc. ® 1999 © 337 pages was purposively withheld from the Pearl Har- © $24.95 bor commanders. ; : : On November 23, Kimmel, as the Fleet’s Reviewed by David Kendrick Commander in Chief, had ordered, without White House approval, a search for Japanese onsider these words of the late Albert forces north of Hawaii and had moved the Shanker, long-time president of the Pacific fleet into the North Pacific. When American Federation of Teachers. “It’s time to White House officials learned of this and admit that public education operates like a feared the fleet might encounter the Japanese planned economy, a bureaucratic system in attack convoy, Kimmel’s ships were ordered which everybody’s role is spelled out in ===== PAGE 48 ===== 48 IDEAS ON LIBERTY ® DECEMBER 2000 advance and there are very few incentives for teachers’ creativity and mischannels precious innovation and productivity. It’s no surprise time and energy that teachers could produc- that our school system doesn’t improve: It tively invest in their teaching.” Furthermore, more resembles the communist economy than contracts requiring the “maintenance” of our own market economy.” working standards, for instance, become It might seem strange that the same man roadblocks to changing teacher schedules to who so accurately described the flaws of gov- accommodate changes in student enrollment, ernment-controlled education could also cav- or changing teachers’ room assignments to alierly dismiss its victims when he said, accommodate changes in class sizes. “When school children start paying union Why don’t principals try harder to keep out dues, that’s when I'll start representing the bad teachers? Moo explains that a recommen- interests of school children.” But as Gregory dation against tenure must usually be defend- Moo points out in his book, Power Grab, it ed before the local school board, where the only makes sense for the bureaucracy to NEA will aggressively attack the principal’s defend the taxpayer-funded government competence, professionalism, and motivation. monopoly on education. “Monopolies that Evidence of the teacher’s incompetence exist under law and receive funding through becomes virtually irrelevant. People who the taxing authority of governments—without attend these hearings “could only conclude regard to productivity—,” Moo writes, “are that the principal is on trial. . . .” The NEA’ breeding grounds for sprawling bureaucra- tactics deter most principals from sticking cies.” Naturally, they put their own interests their necks out. But remember, only teachers first. pay dues. Moo, a former school administrator, pre- What is to be done? Moo refutes half- sents an inside view of how the National Edu- hearted measures that would merely modify cation Association (NEA) has made itself into or otherwise “fix” government-sector monop- a “powerful private government.” “When I oly bargaining. Instead, he calls for the repeal was a high school principal,” he writes, “I of state monopoly-bargaining laws and the often commented [rhetorically] that the NEA elimination of mandatory union dues as the was out of control. But the truth is otherwise.” best way to establish policies that reward The NEA is in control, not of just the pay and teachers for bringing out the best in students, working conditions of teachers, but also of as opposed to simply paying homage to the “curricula, programs, personnel, policies, union. budgets, and children.” With his years of experience as a teacher The tool by which the NEA has seized this and administrator, Moo understands the reali- power was pioneered by the state of Wiscon- ties of NEA hegemony far better than most sin, which in 1959 passed the first law forcing other education writers. However, since he public employees to accept union bargaining writes exclusively from his experience in gov- authority even if they voted against union rep- ernment schools, it is not surprising that he resentation. Today, 34 states allow NEA offi- leaves unquestioned the wisdom of putting cials to impose their monopoly bargaining government into the education business in the power over all teachers in the public schools, first place. Others, of course, have raised that amounting to nearly two-thirds of all govern- question. Government institutions are inher- ment-school teachers. In 20 of those states, ently prone to political manipulation, and as which account for more than half of all public necessary as it is to defang the NEA, I hope school teachers, from California to Ohio to that something else will not simply take its New York, they can also force teachers to pay place. ] union dues as condition of emp loyment. David Kendrick is the executive director of the Moo focuses on the damage done by the warional Institute for Labor Relations Reform. witches’ brew of compulsory unionism and government-run education. He has seen first- hand that the NEA union hierarchy “inhibits ===== PAGE 49 ===== Books 49 hyperactive social lives—to keep their stu- dents happy and distracted and the tuition dol- lars rolling in.” I think he is right, but leaves out a crucial element, namely the pervasive Beer and Circus: How Big-Time College Sports Is Crippling Undergraduate Education by Murray Sperber dumbing down of education at the lower lev- Henry Holt & Co. ® 2000 ® 352 pages ® $26.00 els. More on that later. Sperber has nothing against sports per se. Reviewed by George C. Leef The root of the problem is that many universi- ty administrators are not content to preside pokesmen for the higher education estab- over an institution that simply teaches stu- lishment can be counted on to do two dents. There isn’t much prestige in that. No, things: first, to proclaim that America’s high- what confers prestige (in the eyes of the high- er ed system is the best in the world, and sec- er ed community, anyway) is having a retinue ond, to plead for more government funding. of graduate schools and research programs. Fortunately, there are naysayers on both That requires hiring academic “stars” who counts, and it is especially interesting to find will demand high salaries in return for doing the occasional education “insider” who is a tiny amount of teaching but lots of research willing to dissent from the orthodoxy. and writing. But moving into the ranks of the Professor Murray Sperber is not opposed to “research university” requires a lot of money. government funding (he has been teaching Perhaps some prodigiously wealthy alum will English at Indiana University for almost 30 donate the funds, but the surest way to years), but can’t stomach the canard that increase the inflow of cash is to expand the American higher ed is marvelous. In his view, student body. That’s where sports comes in. undergraduate education is little more than an Young Americans—men especially, women expensive joke at many of our “elite” univer- also but to a lesser degree—are big on sports. sities, and in his new book, Beer and Circus, Many organize their lives around the offerings he explains why it is in an advanced state of on ESPN and the networks. Schools with well- decay. The book’s subtitle identifies his vil- known football and basketball teams have a lain-in-chief, but his story weaves together huge advantage in recruiting compared to several strands. Also complicit are university schools that don’t. Sperber recounts how administrators bent on achieving “prestige” applications at Boston College increased by 25 status at all costs and faculty members who percent the year after the B.C. football team are so fixated on their own “research” projects defeated mighty University of Miami in a that they treat undergraduate teaching as nationally televised game in 1984. College nothing more than a necessary evil. The trian- administrators made the connection—winning gle of athletic directors, starry-eyed adminis- big-time sports can lead to enrollment gains. trators, and faculty members who try to avoid Thus many of the prestige-challenged uni- teaching has indeed made a terrible mess at versities went head over heels trying to build many schools. (Sperber’s school, Indiana Uni- winning teams in the ’80s and *90s. At some, versity, is still reeling from the events sur- the University of Oregon, for example, the rounding the dismissal of long-time basket- gambit worked and sports victories led to ris- ball coach Bobby Knight.) ing enrollments. At others, like the University Heres his conclusion: “[M]any universi- of Buffalo, it flopped. But win or lose, the ties, because of their emphasis on research impact on the quality of undergraduate educa- and graduate programs, and because of their tion was bad: fewer decently taught classes in inability to provide quality undergraduate exchange for more of the “beer and circus” education to most of their students, spend environment of team boosterism. increasing amounts of money on their athletic One of Sperber’s most important chapters is departments, and use big-time college on what he calls the faculty/student nonag- sports—commercial entertainment around gression pact. He explains that “Big-time Us which many undergraduates organize their handle their undergraduate education problem ===== PAGE 50 ===== 50 IDEAS ON LIBERTY ¢ DECEMBER 2000 by establishing a truce between faculty who The goals sound lofty, but many writers want to spend a minimum amount of time on have remarked on the impossibility of right- undergraduate teaching and students who ing old wrongs when neither those who per- want to obtain a degree as easily as possible.” petrated them nor the victims are around. And The result is lots of fluff courses guaranteeing even if the ends were good, are the means good grades (anything less than a B is court- acceptable? That question is at the heart of ing trouble) for negligible work. Sperber says this book, a tour de force of solid reasoning, that the truce “short-circuits students’ natural honesty, and courage. curiosity and desire to learn.” Lester O’Shea, a California entrepreneur In a few cases that’s undoubtedly so, but and lawyer, contends that it is counterproduc- great numbers of students these days enter tive to bring the full might of the state crash- college just wanting to buy a degree without ing down on people, business firms, or other effort. Having gone through 12 years of institutions that ostensibly “victimize” blacks, schooling with low standards, they insist that women, the aged, the disabled, Latinos, gays, college be a continuation of the self-esteem lesbians, and a host of other categories. Anti- building. The “truce” is to be found not only discrimination laws necessarily mean substi- at the big universities, but also at small tuting government power for individual judg- schools with no sports or research. ment, and the result is unending litigation and Although Beer and Circus probably won’t bitterness. change the universities one iota, Sperber’s In his foreword to the book, Professor Wal- exposé should cause a reassessment of the ter E. Williams sees government antidiscrimi- direction of higher ed in the United States. [] nation laws and regulations as a zero-sum George Leef is the director of the Pope Center for ~B83MC that has bred a vast multi-billion- Higher Education Policy at the John Locke Founda- dollar-a-year race industry . . . involving tion and book review editor of Ideas on Liberty. armies of lawyers, consultants, bureaucratic enforcers and compliance workers,” one that “has divided the country and harmed the osten- A Cure Worse Than The Disease: sible beneficiaries by spreading defeatism, Fighting Discrimination Through dependency and resentment.” O’Shea proceeds Government Control to make that indictment stick. , Consider, for example, the ludicrous 1970 by M. Lester O’Shea U.S. Supreme Court decision that set the basis Hallberg Publishing © 1999 © 279 pages ® $24.95 of racial quotas, Griggs v. Duke Power. The company had used racially neutral standards for employment qualification. For many jobs in the company, a high school diploma was a “ A merica’s constant curse.” requirement. The plaintiffs complained that So the British weekly The Economist the high school diploma requirement was brands racism long after the appearance of racially discriminatory because a higher per- “affirmative action,” the official policy centage of blacks than whites had not finished unleashed by the Civil Rights Act of 1964 and high school. The High Court rewrote clear designed to “correct” historical injustices by statutory law and held that racial discrimina- instituting preferences for members of certain tion could arise from unintended statistical “protected classes.” This law and its legal differences between racial groupings in the embellishments blithely ignore the First Duke Power employment force. Duke Power Amendment guarantee of freedom of assem- was guilty of employment discrimination. bly, while outlawing discrimination on With that decision, the idea that an employer grounds of race, gender, age, disability, sexu- had the right to set his own employment stan- al preference, religion, or national origin. Far dards was eviscerated and “civil rights” from eradicating racism, the governments lawyers went on a rampage looking for statis- policy actually reinforces it. tical disparities everywhere. Reviewed by William H. Peterson ===== PAGE 51 ===== Books 51 As a result of Griggs, many fioms and gov- Vital Remnants: America’s Founding ernment agencies have taken to hiring to fill ee quotas with little or no regard to qualifica- and the Western Tradition tions. While the demagogues of racial politics edited by Gary L. Gregg II call it “progress,” O’Shea is disturbed by the ISI Books ® 1999 ® 369 pages ® $24.95 implications of lowering job standards just so we can say that minority group members are Reviewed by Wesley Allen Riddle “rising” and we are becoming “more equal.” O’Shea is especially good at exposing the verbal and statistical trickery in affirmative his book is a collection of essays that had action proceedings and behind such bugaboos their genesis in lectures delivered at a as “institutional racism,” “environmental week-long conference on “America and the racism,” “mortgage lending bias,” and “glass Western Tradition,” in Colonial Williamsburg ceilings.” It is vital to the affirmative action in 1998. The Intercollegiate Studies Institute industry that it continually find new cases to (ISI) brought together some of the best stu- fan the flames of resentment and make itself dents and college faculty in the country to look important. Therefore, complaints are explore the Western roots of the American conjured up out of thin air. constitutional order. Professor Gary L. Gregg, Life is unfair, O’Shea acknowledges, but who holds the Mitch McConnell Chair in affirmative action only makes it unfairer still. Leadership at the University of Louisville, He quotes Shakespeare’s Hamlet, who has written a fine introduction and done a protested “the whips and scorns of time/ superb job in editing the ten well-crafted The oppressor’s wrong, the proud man’s con- essays that make up the volume. tumely ....” The various authors do not subscribe to the The author’s solution is far from the timid popularized notion that everything is relative; tinkering with affirmative action that is the nor do they call true whatever happens to be norm among politicians: He would repeal the useful in achieving political goals, whether anti-discrimination laws altogether. If people conservative or “liberal”—including certain want to pursue a “more equal” society, let progressive constructions of history. Instead, them do so through non-coercive means. they explain and reflect on the long tradition So I wish America would move with all of Western civilization and culture of which deliberate speed into a new era of a colorblind America is part. As Gregg states in his intro- society in which Americans, to quote from duction, “America is a multicultural nation Martin Luther King, Jr’s speech at the 1963 because it is a Western nation and it is in that Civil Rights March on Washington, “will not Western heritage that our values and our insti- be judged by the color of their skin but by the tutions find their roots and continuing vitali- content of their character” After reading ty.” The Founding generation also contributed Lester O’Shea’s book, you will understand to Western tradition and, in that sense, our why getting there requires that we do away inheritance is both Western and uniquely with the assault on freedom known as “affir- American. mative action.” OJ In that vein, Wilfred McClay opens the col- William Peterson, adjunct scholar at the Heritage fection with a qu estion: “1s America an Foundation, is the Distinguished Lundy Professor Experiment?” His is an interesting discussion, Emeritus of Business Philosophy at Campbell Uni- because the word “experiment” actually versity in North Carolina. occurs in 24 of The Federalist papers. McClay uses the language of Washington, Hamilton, and others to demonstrate the degree to which the Founders believed America was “experi- mental.” The connotations of their day reduce the spirit of radical experimentation substan- tially. Their “declaration of independence” ===== PAGE 52 ===== 52 IDEAS ON LIBERTY ® DECEMBER 2000 was political; it was independence not from Johannes Althusias and David Hume is actu- every stable arrangement, tradition, or given, ally the correct idiom for America’s founding. and the states were to be “laboratories of The American constitutional order embraced democracy” only within very serious con- divided sovereignty and recognized the legiti- straints. macy of independent social authorities, as E. Christian Kopff demonstrates the impor- well as the right to resistance. tant influence the classics had on the Found- Bruce Frohnen states the American Revolu- ing generation, though mediated by Christian- tion was in fact a conserving war, which ity and American experience. To the extent we sought to re-establish the balanced constitu- fail to understand a basic Western canon, tion of post-1688 England. In this light, inde- including the classics and tenets of Christian- pendence was hardly based on abstractions, ity, we are distanced from our Founders’ nor was it a design to remake society. One vision and philosophy. Indeed, Graham Walk- such design, however, is examined by Peter er contends in his essay that our constitution- Lawler. His concluding essay penetrates the al order was grounded in Augustinian theolo- postmodern attempt to create a therapeutic gy, which came to frame an American notion society. The therapeutic society is an Ameri- of common sense. can “experiment” divorced from actual histo- Robert George sees the Founders as dedi- ry, not even rational in the Socratic sense. It cated to a natural-law understanding of poli- seeks to produce universal prosperity and tics, albeit one that did not necessitate judicial equality and to eradicate all human experi- enforcement of principles not found in the ence of unpleasantness. Constitution. The Founders’ natural law did Lawler brings the point home, but danger is not embrace expansive judicial review or judi- implicit in all the essays, lest we sell our cial activism at the expense of legislatures and inheritance for the “pottage of the hour.” This states. It meant, rather, that certain crucial book aims to revitalize and to reappropriate aspects of human endeavor were not subject select remnants of America’s shared past, to to political dictates at all. call into question widespread cultural celebra- Barry Alan Shain examines several under- tion of the unreflective approval of things new standings of the concept of liberty used in the and “modern.” For once we forget totally, all eighteenth century. In every case, the notion things are indeed possible—pernicious, as of liberty is consistent with a Western, com- well as benign. The amnesia of our day is a munally based understanding in which rights dread and potentially deadly malady. Vital are married to responsibilities. To the Remnants is tonic for it—and for postmodern Founders, liberty was restrained by moral pur- reformulations against the principles of pose and “framed by traditional Anglo-Amer- ordered liberty and truth of human existence ican presuppositions of a divinely ordered that watchfully wait our sleep. OJ universe in which the twin antitheses to liber- ie ead kes oa Donald ities Institute in Washington, D. Cc, and a correspon- dent for Fragments magazine. His publications called Enlightenment politics. He shows that jnciude The American Political Tradition (FEE, an alternate, “medieval” tradition espoused by 7996). Wesley Allen Riddle is fellow at the National Human- The apple icon ® identifies articles that are appropriate for teaching students sever- al major subjects—including economics, history, government, philosophy, and current issues. We also provide sample lesson plans for these articles on our Web site www.fee.org and in written form. Professors, teachers, and homeschooling parents need only to visit our Web site or request written lesson plans to take advantage of this unique service. ===== PAGE 53 ===== The Pursuit of Happiness by Russell Roberts IDEAS ON [IBERTY Decemeer 2000 Don’t Fear Deficits t current tax rates, barring a recession, So now we’ve got surpluses. When is that the federal government will run large house of cards going to fall apart? Are the and growing surpluses during the next decade effects of deficits so sinister that we have to and beyond. Yet regardless of the identity of wait even after the deficits have been the new president or the character of the new reversed? Are deficits so insidious that their Congress, we are certain to hear a great deal evil effects can be unleashed years and of talk in the coming months about deficits decades after the accumulated debt has been rather than surpluses. paid off? Call it Ross Perot’s legacy. He seems to have I don’t think so. created a permanent fear of government debt So why did we get away with it? Shouldn’t and deficits within the hearts and minds of the those deficits have harmed the economy? American people. Shouldn’t they have driven up interest rates This is quite an impressive achievement. and stifled growth? Between 1970 and 1997, the federal govern- A federal budget deficit, if large enough, ment ran a deficit every single year. There could harm the economy, but a deficit of $200 were some good years and bad years over that billion is “small” in a certain sense. It’s hard time period, so why the fear of the deficit? to accept, but the budget deficits of the *80s Between 1982 and 1996 the federal budget and 90s had no appreciable effect on interest deficit exceeded $100 billion dollars every rates. In 1993, the first year of the Clinton year. In eight of those years the deficit exceed- administration, the deficit was $255 billion. In American economy added over 25 million billion. But interest rates are higher than they jobs. were than when Clinton took office. They’ve During those years we listened to dire pre- bounced around. But there is no relationship dictions of what those deficits were going to between interest rates and federal budget do to the economy. Sure, those Cassandras (deficits. warned us, the economy is doing fine, but you How can that be? When the federal govern- just wait. You just wait! ment goes to borrow billions of dollars, We waited. Between 1982 and 1996, the shouldn't that drive interest rates higher? Isnt economy got 50 percent bigger after taking that what you learned in Economics 101? account of inflation. But it’s a house of cards, Well, the poet (Alexander Pope) said a little the worriers warned us! It’s all going to come jearning is a dangerous thing. For an increase tumbling down. in demand to drive up prices it has to be a sig- Russell Roberts (roberts@csab.wustl.edu) is an econ- nificant part of the market. If I decide to dou- omist with the Center for the Study of American Busi- ble my apple purchases, the price of apples ness at Washington University in St. Louis. will not rise. If the city of St. Louis doubles its 53 ===== PAGE 54 ===== 54 IDEAS ON LIBERTY © DECEMBER 2000 demand for apples, there will be no signifi- The right question is how big a mortgage. cant effect on the price of apples. Sure, a mortgage can be so big that it is irre- When the U.S. government increases its sponsible. Sure, it’s unwise to burden the fam- demand for credit by $100 billion dollars, the ily with mortgage payments that threaten its effect is small in a world credit market that is ability to pay for food, education, and health many trillions of dollars. care. There is another sense in which the U.S. But it would be just as irresponsible to plan budget deficit was small in the *80s and ’90s. to pay cash for such an expensive house by It was never so large as to alarm investors that putting money aside every year, money that we might not honor our debts. True, $290 bil- would be unavailable for food, education, and lion seems like a large number. But the econ- health care, just to avoid going into debt. omy in that year (1992) was $6.2 trillion. The It’s the size of the house that determines government collected over a trillion dollars in whether the family is being responsible or taxes. Were we spending more than we took not, not how the house is financed. in? Yes. But there was never a sense in which And the same is true for the federal gov- we were spending beyond our means. ernment. What the government spends money A friend of mine asked me the other day on is usually going to be vastly more impor- whether the analogy of personal debt applies tant than whether it finances the spending via to the government. Isn’t it bad to go into debt, taxes or bonds. A boondoggle ditch-digging to live beyond your means? Doesn’t that bur- project that achieves nothing but is fully paid den future generations. for by taxes is much more harmful than a I asked him if he owned his house. Yes, he sewer project that is paid for with bonds. said. Had he paid cash or borrowed the money So let’s ignore the forecasts of surplus or from the bank? He laughed and admitted he the dire predictions of doom if deficits re- had borrowed the money. appear because of a tax cut. All those predic- What, I asked, in mock amazement? tions are wild guesses anyway. Lets focus Wouldn't it have been better to save up money instead on the proper role of government and and pay cash? How could he saddle his fami- whether the money spent by government is ly with a mortgage? spent wisely. C] ===== PAGE 55 ===== 55 INDEX Antitrust, continued BARBARIANS at Bill Gates (Shughart) Microsoft case: divestiture won't help 4:23-29 IDEAS ON LIBERTY consumers {(D.T. Armentano) 4:21-22 BARRY, Norman VOLUME 50 Patents and monopoly privilege (Mayer) Constitutional protection of economic - 10:45-47 liberty. 11:26-30 pv ARY-DECEMBER Philosophical influence behind the The logic and morality of takeovers. Microsoft trial (Hunter) 10:28-31 7:33-37 Unions and antitrust: governmental The stakeholder fallacy. 3:33-36 Prepared by Beth A. Hoffman ARMA AN BT) 263-64 BL eaeric and Mary Ann Murphy of the The Microsoft case: divestiture won't BASTIAT, Frederic, ideas of ; : help consumers. 4:21-22 Bastiat’s birthday (Richman) 6:2-3 editorial staff of Ideas on ARMENTANO, Paul Plunder gets a boost (Sandefur) 1berty A man’s home once was his castle. 10:8-9 2:25-26 The war against drug-speech. 6:19-20 BATEMARCO, Robert. See book reviews See also book reviews (Norris, Conrad, (Bovard; Holcombe) Note: in page references, the number and Resner) BAUER, P.T,, ideas of preceding the colon designates the month, ASIA P. T. Bauer’s market-liberal vision Articles have at least three entries—author, High savings rates and Asia’s economic BENSON, Bruce L. tile, and Sibject-except in cases when the crises (Lingle) 12:30-31 Why crime declines. 1:22-25 Ic appropriate subject coincide. ASSET that’s a liability (Richman) 7:2-3 BERTONNEAU, Thomas F. See book Books reviewed are listed alphabetically by ~~ ATTARIAN. John zis (Borovoy) author on pages 63-64. ’ : _ . y The myth of the Social Security “trust BIG one? (Richman) 10:34-35 W articles are listed under lesson plans for fund.” 3:17-21 : BIGGS, Andrew G. case reference p See also book reviews (Ferrara and Private investment is more risky than Y Tanner; Roth and Nixon) Social Security? it just ain’t so! 8:6-7 AULT, Richard W. and Laband, David N. BIOGRAPHY The Internet and the death of the sales Gottfried Haberler: a centenary tax. 5:19-20 appreciation (Ebeling) 7:46-51 A AUSTRIAN economics. See Economics, Paul Heyne, R.I.P. (DiLorenzo) 7:8-9 economic theory William E. Rappard: An international ACROSS the sea of commerce (Young) AUSTRIAN “inflation,” Austrian “money,” man in the age of nationalism 1:8-11 and federal reserve policy (Ebeling) 1:33-41 AGRICULTURE (Timberlake) 9:38-43 BIPARTISAN drug entitlement (Bandow) End the farm dole once and for all AUTOMOBILE 9:24-25 (Reed) 9:16-17 Enemies of the automobile (Clark) BLUNDELL, John Running out of agricultural land (Lee) 11:10-13 The miracle of privatization. 9:8-9 7.4445 Freeing the freeways (Jenco) 11:14-15 BOAZ, David AHIAKPOR, James C.W. More “public investment” needed? it just Israel Kirzner on supply and demand. ain’t so! 3:6-7 7:23-24 B BOUDREAUX, Donald J. AIR transportation, airlines, airports Thoughts on freedom column Another reason for airport privatization American culture. 4:4-5 (Poole) 6:8-9 BAIRD, Charles W. Cleaned by capitalism. 2:4--5 Heart over mind: the death of JFK, Jr. A light goes out in New Zealand. 9:35-37 Freedom of association. 8:4-5 (Nolte) 2:45-47 Sources of pro-union sentimentality. Thomas Babington Macaulay. 10:4-5 Mad scramble at 30,000 feet (Lopez) 3:45-47 Markets, politics, and civility. 7:4-5 2:42-44 The pursuit of happiness column Moderation in all things. 3:4-5 ALBAN, Dan and Stephenson, E. Frank OSHA at home. 8:63-64 Mutual accommodation. 5:4-5 The economic virtues of federalism. Pulling us apart. 5:63—64 Self-government. 9:45 11:18-19 Shameless in California. 11:63—-64 The selfishness of the unselfish. 6:4-5 ALLEN, Candace. See book reviews Unions and antitrust: governmental Two indispensable lessons. 1:4~5 (Graglia) hypocrisy. 2:63-64 Two radicalisms. 11:4-5 AMERICA in East Asia (Bandow) 5:24-25 See also book reviews (Ackerman and Universal values. 12:4-5 AMERICAN culture (Boudreaux) 4:45 Alstott) See also book reviews (Blau; Cox and AMERICAN history. See History BANDOW, Doug Alm; Sowell) AMERICANS With Disabilities Act Potomac principles column BOVARD, James Government's assault on golf (Keating) America in East Asia. 5:24-25 Government as slave owner. 2:20-22 11:20-23 Bipartisan drug entitlement. 9:24-25 Property and liberty. 9:10-15 ANDERSON, William L. The Clinton regulatory miasma. The right of resistance. 8:34-36 In praise of athlete’s high salaries. 11:24-25 BRASE, Twila 8:8-11 Cut taxes, not the debt. 4:30-31 WHO's hidden agenda. 12:8-11 ANOTHER reason for airport privatization Economic freedom or foreign aid? BREACH of public trust (Hopper) 5:29-30 (Poole) 6:8-9 7:27-28 BROUILLETTE, Matthew. See book ANTI-CAPITALISTIC mentality, updated The end of U.N. peacekeeping. 10:22-23 reviews (Lieberman) (Skousen) 11:53-54 Forgotten war in a forgotten country. BROWN, David M. See co-author ANTITRUST protects competition? it just 12:21-22 (Machan) ain’t so! (Saleno) 4:6~7 NATO’s disastrous victory in Kosovo. BURMA ANTITRUST and monopoly 6:21-22 Forgotten war in a forgotten country Barbarians at Bill Gates (Shughart) New excuses for old failures. 1:26-27 (Bandow) 12:21-22 4:23-29 Stealing from ATM machines. 3:26-27 BUSINESS, business ethics Butter monopoly? (Keating) 8:19-20 Visiting the killing fields. 8:21-22 Logic and morality of takeovers (Barry) Hands off (Richman) 2:27-28 What ain’t broke: the renewed call for 7:33-37 Merger policy fails hi-tech test conscription. 2:23-24 Stakeholder fallacy (Barry) 3:33-36 (Demmert) 6:10-11 See also book reviews (Buchanan) BUTTER monopoly? (Keating) 8:19-20 ===== PAGE 56 ===== 56 IDEAS ON LIBERTY e¢ DECEMBER 2000 CREATING jobs vs. creating wealth (Lee) DIVIDE and conquer (Richman) 12:2-3 C 1:42-43 DO we really want more policemen? CREATIVITY and criminality: the two (Payne) 7:12-13 CAMBODIA = faces of responsibility (Szasz) 11:31-32 DOES insanity “cause” crime? (Szasz) Visiting the killing fields (Bandow) CRIME 3:31-32 8:21-22 I. — . Creativity and criminality: the two faces DOES rape violate the commerce clause? CAMERA reaches 100 (Reed) 2:15-16 of responsibility (Szasz) 11:31-32 (McElroy) 10:36-39 CAT ALON refortn corm enh Do we really want more policemen? DON'T fear deficits (R. Roberts) 12:53-54 y pe thee oS oR i ance (Payne) 7:12-13 DON'T tax the Internet (Reed) 6:12~13 the Bulwer of the people! (Roberts) Does insanity “cause” crime? (Szasz) DORN, James A. Cc AMP AIGN-finance reform will end 3:31-32 P. T. Bauer's market-liberal vision. corruption? it just ain’t so! (Richman) Does rape violate the commerce clause? 10:24-25 pis “1 : (McElroy) 10:36-39 DOUBLE take. (Richman) 1:2-3 CAN the free market provide public Just dial 911? the myth of police DOWNSIZING, 1860s-style: lessons from education? (Richa) 6 fie 3 protection (Stevens) 4:12—-15 the Pony Express (Schweikart) CANADA ) : They're just dying to be rescued (Selick) 8:39-45 Hospital food and socialized medicine 12:17-18 DRIFTING in and out of socialism: the (Reed) 3:15-16 Uplifters try it again (Mencken) case of Ireland (Payne) 4:38-42 They’re dying to be rescued (Selick) 10: 10-12 - DRUG war’s assault on liberty 12:17-18 cy crime declines (Benson) 1:22-25 DRUGamberton) 8:46-50 . , drug war CAPITAL Jesters (letters © he pave . La lucha: the human cost of economic Chemical straitjackets for children 1 59. 12:41 AG repression in Cuba (Linderman) 531-34 (Szasz) 7:38-39 Cc APITALISM and the common man Peychinel = a communist utopia (Faria) rid No as hus castle c AP TAL ame) LS (Hood) CULTURE Progress in pain relief (Szasz) 9:33-34 12:23-27 American culture (Boudreaux) 4:45 War against drug-speech (P. Amentano) C APITALISM Capitalism and the common man 6:19-20 . (Williams) 1:63-64 . DRUGS, pharmaceutical. See Medicine Cleaned by capitalism (Boudreaux) 2:4-5 Evolution of capitalism (Peron) 6:41-43 CENSUS: inquiring minds want to know a Creativity and criminality: the two faces of responsibility (Szasz) 11:31-32 . Day we read no more (Crane) 3:48-50 Lyd po RE for children Why classical liberals should love Harry E (Szasz) 7:38-39 Potter (Morris) 12:12-14 CHICAGO Fire Year at the movies (Keating) 1 2:19-20 EBELING, Richard M. Lessons from the Chicago Fire (Oliver) ~~ CURL, William D. See book reviews Gottfried Haberler: a centenary 28-12 CUT tones ot the debr (Bandow) 4:30-31 appreciation. 7:46-31 CHILDREN. See Families; Education €s, not the debt {Zandow) 4: William E. Rappard: an international CHINA CUYAHOGA revisited (Thomas) 5:37-38 man in an age of nationalism. 1:33—41 Economic growth and freedom in the ECONOMIC advantages of a commitment coming millennium (Lingle) 4:36-37 to liberty (Lee) 4:43-44 Trade and freedom in China: a reality : D ECONOMIC freedom or foreign aid? check (Lingle) 9:22-23 (Bandow) 7:27-28 CLARK, Ralph W. ECONOMIC growth and freedom in the Enemies of the automobile. 11:10-13 DANGERS of growing up comfortable coming millennium (Lingle) 4:36-37 CLEANED by capitalism (Boudreaux) (Yates) 5:8-13 ECONOMIC illiteracy (Cleveland) 4:32-33 2:4-5 DAY we read no more (Crane) 3:48-50 ECONOMIC insecurity: are we the enemy? CLEVELAND, Paul A. DEATH by government protection (Lingle) 6:39-40 Economic illiteracy. 4:32-33 (Richman) 12:28-29 ECONOMIC mobility is a sham? it just CLINTON regulatory miasma (Bandow) DEATH tax is fair? it just ain’t so! ain’t so! (Schmidtz) 7:6-7 11:24-25 (Holcombe) 10:6-7 ECONOMIC notions column. See Lee CLITES, Roger DEBT, deficit. See National Debt ECONOMIC virtues of federalism (Alban It’s about power—period. 5:50-51 DECLARATION of Independence: it’s and Stephenson) [1:18-19 COLONIAL origins of American liberty Greek to me (Peron) 8:16-18 ECONOMIC history (Woods) 9:26-32 DEMMERT, Henry Across the sea of commerce (Young) COMMON good demystified (Y ounkins) Merger policy fails hi-tech test. 6:10-11 1:8-11 5:48-49 . DEMOCRACY Constitutional protection of economic COMPETITOR for the Fed? (White) Two indispensable lessons (Boudreaux) liberty (Barry) 11:26-30 7:14-18 1:4-5 . 150 years and still dismal! (Levy) 3:8-10 CONSTITUTIONAL counterrevolution DENSON, John V. See book reviews Adam Smith: moral philosopher (Twight) 10:15-21 (Ferguson) . (Otteson) 11:46-51 CONSTITUTIONAL intentions (McElroy) DiLORENZO, Thomas J. ECONOMICS for the 21st century 6:14-18 Paul Heyne, R.I.P. 7:8-9 (Skousen) 1:49-50 CONSTITUTIONAL protection of Hurricanes are creative destruction? it ECONOMICS on trial column. See economic liberty (Barry) 11:26-30 just ain’t so! 2:6-7 Skousen COPS program Regulatory extortion. 3:37—42 ECONOMICS, economic theory Economic virtues of federalism (Alban Trade and the rise of freedom. 6:23-29 Austrian “inflation,” Austrian “money,” and Stephenson) 11:18-19 DISASTER relief then and now (Hermann) and federal reserve policy CORDATO, Roy E. 5:21-23 (Timberlake) 9:38-43 Free markets and “highest valued use.” DISASTERS, disaster relief Divide and conquer (Richman) 12:2-3 5:26-28 Hurricanes are creative destruction? it Entrepreneurial discovery and the law of High gasoline prices are your fault? it just ain’t so! (DiLorenzo) 2:67 supply and demand (Kirzner) 2:17-19 just ain’t so! 11:6-7 Lessons from the Chicago fire (Oliver) Final comment on Salemo’s monetary COURTS. See Justice, courts, policing 2:8-12 program (Timberlake) 9:47-48 CRANE, Angus E. Orissa’s man-made tragedy (Mitra) High savings rates and Asia's economic The day we read no more. 3:48-50 2:13-14 crises (Lingle) 12:30-31 ===== PAGE 57 ===== INDEX 57 Economics, continued Environment, continued FREE markets How the theory of comparative Who may harm whom? (Williams) Asset that’s a liability (Richman) 7:2-3 advantage saved my marriage 4:63-64 Economic insecurity: are we the enemy? (T. Roberts) 11:37-38 EVOLUTION of capitalism (Peron) 6:41-43 (Lingle) 6:39-40 Humble hubris (Richman) 3:2-3 EXPLOITING asthmatic children Free trade and flexible markets (Mayer) Hurricanes are creative destruction? it (Lieberman) 8:27-28 4:48-50 just ain’t so! (DiLorenzo) 2:6-7 . Golden rule and the free market Inequality of wealth and incomes (Peterson) 6:48-49 (Mises) 4:8-11 Government is the stabilizer? it just ain’t Irresistible force of market competition F so! (Garrison) 1:67 (Kirzner) 3:11-14 Internet access should be left to the free Is there an Anglo-American economic FAMILIES, children market (Reed) 4:19-20 model? (Lingle) 10:26-27 Dangers of growing up comfortable Irresistible force of market competition Israel Kirzner on supply and demand (Yates) 5:8-13 (Kirzner) 3:11-14 (Ahiakpor) 7:23-24 Exploiting asthmatic children Market for space in the market (Galles) Law of supply and demand (Kirzner) (Lieberman) 8:27-28 3:24-25 1:19-21 Female-parent wage gap requires action? Markets aren’t efficient? it just ain’t so! Much-deserved triumph in supply-side it just ain’t so! (Palasek) 9:6-7 (Murphy) 12:6-7 economics (Skousen) 2:48—49 Internet: parental guidance preferred Markets, politics, and civility Puzzle and its solution: rejoinder to (Wade) 2:33-35 (Boudreaux) 7:4-5 Professor Ahiakpor (Kirzner) Peanut butter, education, and markets FREE speech 7:25-26 (Olsen) 11:35-36 Mandatory student fees and freedom of Self-imposed poverty of economics FARIA, Miguel A. speech (Leef) 8:23-26 (Machan and Brown) 12:38-41 Psychiatry in a communist utopia. War against drug-speech (P. Armentano) Toward an Austrian critique of 11:33-34 6:19-20 governmental economic policy See also book reviews (Proctor) FREE trade and flexible markets (Mayer) (Kirzner) 4:16-18 FARMING. See Agriculture 4:48-50 ECONOMISTS against the FDA (Klein) FDA FREE trade 9:18-21 Economists against the FDA (Klein) American culture (Boudreaux) 4:45 ECONOMISTS’ misplaced faith in an 9:18-21 Food, famine, and free trade (Peron) invisible hand (Klein) 8:31-33 FEDERAL Reserve 4:45-47 EDUCATION Austrian “inflation,” Austrian “money,” Getting it right (Richman) 8:2-3 Can the free market provide public and Federal Reserve Policy No dog in that fight (Richman) 2:2-3 education? (Richman) 6:37-38 (Timberlake) 9:38—43 Trade and freedom in China: a reality Chemical straitjackets for children Competitor for the Fed? (White) 7:14-18 check (Lingle) 9:22-23 (Szasz) 7:38-39 Final comment on Salemno’s monetary Trade and the rise of freedom Economic illiteracy (Cleveland) program (Timberlake) 9:47—48 (DiLorenzo) 6:23-29 4:32-33 FEMALE-parent wage gap requires action? ~~ FREEDOM of association (Boudreaux) 8:4-5 Mandatory student fees and freedom of it just aint so! (Palasek) 9:6-7 FREEDOM of the price (Lee) 5:46-47 speech (Leef) 8:23-26 FIELD, Bill FREEING the freeways (Jenco) 11:14-15 Nock on education (McElroy) 1:44-48 In defense of grocery coupons. 3:22-23 Peanut butter, education, and markets FINAL comment on Salerno’s monetary (Olsen) 11:35-36 program (Timberlake) 9:47-48 G Universal values (Boudreaux) 12:4-5 FIRESTONE/Ford controversy Whole language: emancipatory Death by government protection pedagogy or socialist nonsense? (Richman) 12:28-29 GALLES, Gary M. (Groff) 7:40-43 FLEW, Antony. See book reviews The market for space in the market. EDWARDS, James Rolph. See book (Giddens; Tooley) 3:24-25 reviews (Overbeek) FOLSOM, Burt. See book reviews GAMBLE, Richard M. See book reviews END of U.N. peacekeeping (Bandow) (Gray; Kennedy) (Bryan) 10:22-23 FOOD, famine, and free trade (Peron) GARRISON, Roger. The government is the END the farm dole once and for all (Reed) 4:45-47 stabilizer? it just ain’t so! 1:6-7 9:16-17 FOR-PROFIT medicine and the GATES, BILL ENEMIES of the automobile (Clark) compassion motive (Palmer) 10:32-33 Barbarians at Bill Gates (Shughart) 11:10-13 FOREIGN policy, foreign aid 4:23-29 ENEMY hath done this (Skousen) America in East Asia (Bandow) 5:24-25 See also Microsoft case 9:53-54 P. T. Bauer's market-liberal vision GATTUSO, James L. See book reviews ENERGY (Dorn) 10:24-25 (Liebowitz and Margolis) High gasoline prices are your fault? it Economic freedom or foreign aid? GETTING it right (Richman) 8:2-3 just ain’t so! (Cordato) 11:6-7 (Bandow) 7:27-28 GLOBALIZATION ENTREPRENEURIAL discovery and the End of U.N. peacekeeping (Bandow) Is there an Anglo-American economic law of supply and demand (Kirzner) 10:22-23 model? (Lingle) 10:26-27 2:17-19 Forgotten war in a forgotten country Retum to a global economy (Vasquez) ENVIRONMENT, environmentalism (Bandow) 12:21-22 11:41-45 Cuyahoga revisited (Thomas) 5:37-38 Mere “isolationism”: the foreign policy GOLDEN rule and the free market Enemies of the automobile (Clark) of the old right (Stromberg) 2:29-32 (Peterson) 6:48—49 11:10-13 NATO’S disastrous victory in Kosovo GOLF. See Sports Exploiting asthmatic children (Bandow) 6:21-22 : GOVERNMENT as slave owner (Bovard) (Lieberman) 8:27-28 New excuses for old failures (Bandow) 2:20-22 Humble hubris (Richman) 3:2-3 1:26-27 GOVERNMENT deposit insurance: a Quartering species (Morriss and Stroup) Stick to the facts, please (Larsson) dumb idea (Reed) 10:13-14 10:48-50 7:21-22 GOVERNMENT is the stabilizer? it just (Revisionist) walk in the park (Morriss) FORGOTTEN war in a forgotten country ain’t so! (Garrison) 1:6-7 8:12-13 (Bandow) 12:21-22 GOVERNMENT, government intervention Standing to gain from tattling (Terrell) FREE markets and “highest valued use” Census: inquiring minds want to know a 12:34-37 (Cordato) 5:26-28 lot (Reed) 5:17-18 ===== PAGE 58 ===== 58 IDEAS ON LIBERTY ® DECEMBER 2000 Government, continued HIGH gasoline prices are your fault? it just Incomes, continued Creating jobs vs. creating wealth (Lee) ain’t so! (Cordato) 11:6-7 Nothing left to buy? (R. Roberts) 1:42-43 HIGH savings rates and Asia’s economic 6:63-64 Economic virtues of federalism (Alban crises (Lingle) 12:30-31 Pulling us apart (Baird) 5:63-64 and Stephenson) 11:18-19 “HIGHEST valued use,” free markets and INDIA How government prevents us from (Cordato) 5:26-28 Orissa’s man-made tragedy (Mitra) buying safety (Lee) 12:32-33 HISTORY 2:13-14 How many of you are on food stamps? Capitalism and the zero (Hood) INDIVIDUAL liberty, individualism (Skousen) 12:43-44 12:25-29 Dangers of growing up comfortable How to sink a car ferry (Morriss) Colonial origins of American liberty (Yates) 5:8-13 1:12-16 (Woods) 9:26-32 Drug war’s assault on liberty I support coercion and I vote (Sanders) Constitutional counterrevolution (Lamberton) 8:46-50 11:8-9 (Twight) 10:15-21 Self-government (Boudreaux) 9:4-5 Merger policy fails hi-tech test Constitutional intentions (McElroy) Selfishness of the unselfish (Boudreaux) (Demmert) 6:10-11 6:14-18 6:4-5 Open letter to statists everywhere (Reed) Declaration of Independence: it’s Greek Silly talking (Williams) 7:63-64 12:15-16 to me (Peron) 8:16-18 Universal values (Boudreaux) 12:4-5 Plunder gets a boost (Sandefur) 2:25-26 Evolution of capitalism (Peron) 6:41-43 Why the war on smoking will fail (Revisionist) walk in the park (Morriss) Thomas Babington Macaulay (Yates) 7:10-11 8:12-13 (Boudreaux) 10:4-5 INDIVIDUAL trust and privacy on the Net Self-government (Boudreaux) 9:4-5 HOLCOMBE, Randall G. (Klein) 5:14-16 Selfishness of the unselfish (Boudreaux) The death tax is fair? it just ain’t so! INEQUALITY of wealth and incomes 6:4-5 10:6-7 (Mises) 4:8-11 Toward an Austrian critique of HOOD, John INFLATION and money: a reply to governmental economic policy Capitalism and the zero. 12:23-27 Timberlake (Salerno) 9:43-47 (Kirzner) 4:16-18 HOPPER, M. Reed INSANITY defense See also Regulation A breach of public trust. 5:29-30 Does insanity “cause” crime? (Szasz) GOVERNMENTs assault on golf HOSPITAL food and socialized medicine 3:31-32 (Keating) 11:20-23 (Reed) 3:15-16 INTERNET: parental guidance preferred GREAT Britain HOW government prevents us from buying (Wade) 2:33-35 Miracle of privatization (Blundell) 9:8-9 safety (Lee) 12:32-33 INTERNET access should be left to the GREAVES, Bettina Bien. See book HOW many of you are on food stamps? free market (Reed) 4:19-20 reviews (Stinnett) (Skousen) 12:43-44 INTERNET and the death of the sales tax GREED versus compassion (Williams) HOW the theory of comparative advantage (Ault and Laband) 5:19-20 10:63-64 saved my marriage (T. Roberts) INTERNET commerce should be taxed? it GREED 11:37-38 just ain’t so! (Shughart) 6:6-7 Is greed good? (Skousen) 5:51-52 HOW to sink a car ferry (Morriss) 1:12-16 INTERNET GROCERY stores HUMBLE hubris (Richman) 3:23 Don’t tax the Internet (Reed) 6:12-13 In defense of grocery coupons (Field) HUNTER, Barbara Spam, spam, spam, and spam (McGath) 3:22-23 The philosophical influence behind the 3:28-30 Market for space in the market (Galles) Microsoft trial. 10:28-31 Trust and privacy on the Net (Klein) 3:24-25 HURD, Michael J. 5:14-16 GROFF, Patrick Why medicine is slowly dying in INVENTION. See Technology Whole language: emancipatory pedagogy America. 2:38-40 IRELAND or socialist nonsense? 7:40-43 HURRICANES are creative destruction? it Drifting in and out of socialism: the case GUNS, gun control just ain’t so! (DiLorenzo) 2:6-7 of Ireland (Payne) 4:38—42 Big one? (Richman) 10:34-35 IRRESISTIBLE force of market protection (Stevens) 4:12-15 IS greed good? (Skousen) 5:51-52 Right of resistance (Bovard) 8:34-36 | | IS there an Anglo-American economic They're just dying to be rescued (Selick) model? (Lingle) 10:26-27 12:17-18 I SUPPORT coercion and I vote (Sanders) IT can’t happen here? (Richman) 8:29-30 Uplifters try it again (Mencken) 11:8-9 IT just ain’t so! feature 10:10-12 IDEAS and consequences column. See Antitrust protects competition? it just GUNS, gun laws, and liberty (Reed) Reed ain’t so! (Salerno) 4:6-7 8:14-15 IF you build it—privately—they will come Campaign finance reform will end (Skousen) 8:51-52 corruption? it just ain’t so! (Richman) IMMIGRATION 5:6-7 H Sweatshops: look for the INS label Death tax is fair? it just ain’t so! (McElroy) 7:29-32 (Holcombe) 10:6-7 IMPERFECT opponents (Richman) 10:2-3 Economic mobility is a sham? it just HABERLER, Gottfried: a centenary IN defense of grocery coupons (Field) ain’t so! (Schmidtz) 7:6-7 appreciation (Ebeling) 7:46-51 3:22-23 Female-parent wage gap requires action? HANDS off (Richman) 2:27-28 IN defense of the rich (Skousen) 6:50-51 it just ain’t so! (Palasek) 9:6~7 HARMFUL tax practices? (Laband) IN praise of athletes’ high salaries Government is the stabilizer? it just ain’t 10:40-42. (Anderson) 8:8-11 so! (Garrison) 1:67 HAVING their cake (Skousen) 10:53-54 INCENTIVES and disincentives: they High gasoline prices are your fault? it HEALTH care. See medicine really do matter! (Reed) 11:16-17 just ain’t so! (Cordato) 11.6-7 HEART over mind: the death of JFK, Jr. INCOMES, economic mobility Hurricanes are creative destruction? it (Nolte) 2:45-47 Economic mobility is a sham? it just just ain’t so! 2:6-7(DiLorenzo) HERMANN, Janet Sharp ain’t so! (Schmidtz) 7.6-7 Internet commerce should be taxed? it Disaster relief then and now. 5:21-23 In defense of the rich (Skousen) 6:50-51 just ain’t so! (Shughart) 6:6-7 HEYNE, Paul, R.1.P. (DiLorenzo) 7:8-9 In praise of athletes’ high salaries Markets aren’t efficient? it just ain’t so! HEYNE, Paul. See book reviews (Anderson) 8:8-11 (Murphy) 12:6-7 (Varoufakis) Inequality of wealth and incomes More “public investment” needed? it just HIDDEN cost of taxation (Lee) 3:43—44 (Mises) 4:8-11 ain’t so! (Boaz) 3:6-7 ===== PAGE 59 ===== INDEX 59 It just ain’t so! feature, continued Labor, continued Lesson plans, continued Private investment is more risky than Light goes out in New Zealand (Baird) Economic growth and freedom in the social security? it just ain’t so! (Biggs) 9:35-37 coming millennium (Lingle) 4:36-37 8:6-7 OSHA at home (Baird) 8:63—64 Economic mobility is a sham? it just IT’S about power——period (Clites) Shameless in California (Baird) ain’t so! (Schmidtz) 7:6-7 5:50-51 11:63-64 Evolution of capitalism (Peron) IT’S the margin that counts (Lee) Sources of pro-union sentimentality 6:41-43 6:44-45 (Baird) 3:4547 For-profit medicine and the compassion Spreading the work to create more jobs motive (Palmer) 10:32-33 (Lee) 2:36-37 Freedom of the price (Lee) 5:46—47 J Sweatshops: look for the INS label Hidden cost of taxation (Lee) 3:43—44 (McElroy) 7:29-32 High savings rates and Asia’s economic . Take this job and shove it, at the margin crises (Lingle) 12:30-31 JENCO, Leigh (Lee) 9:49-50 How government prevents us from Freeing the freeways. 11:14-15 JOBS. See Labor Unions and antitrust: governmental buying safety (Lee) 12:32-33 JUST dial 9117 the myth of police hypocrisy (Baird) 2:63—64 In defense of grocery coupons (Field) CC 'e LAMBERTON, Lance 3:22-23 protection (Stevens) 4:12-15 , . . yr . JUSTICE, courts, policing The drug war's assault on liberty. In praise of athletes’ high salaries Day we read no more (Crane) 3:48-50 §:46-50 (Anderson) 8:8-11 Do we really want more policemen? LARSSON, Tomas It’s the margin that counts (Lee) (Payne) 7:12-13 Stick to the facts, please. 7:21-22 6:44-45 Economic virtues of federalism (Alban LAW of supply and demand (Kirzner) La lucha: the human cost of economic and Stephenson) 11:18-19 1:19-21 } repression in Cuba (Linderman) Just dial 911? the myth of police LAWSON, Robert. See book reviews 5:31-34 protection (Stevens) 4:12-15 (Friedman) Lessons from the Chicago Fire (Oliver) Punishing the many (Madden) 6:46-47 LEE, Dwight R. 2:8-12 Why crime declines (Benson) 1:22-25 Economic notions column Mandatory student fees and freedom of Creating jobs vs. creating wealth. speech (Leef) 8:23-26 1:42-43 Marginalism and the morality of pricing K The economic advantages of a human lives (Lee) 10:43—44 commitment to liberty. 4:43—44 Markets, politics, and civility Freedom of the price. 5:46-47 (Boudreaux) 7:4-5 KEATING, Raymond J. The hidden cost of taxation. 3:43-44 Property and liberty (Bovard) 9:10-15 The butter monopoly? 8:19-20 How government prevents us from Return to a global economy (Vésquez) The government's assault on golf. buying safety. 12:32-33 11:41-45 11:20-23 It’s the margin that counts. 6:44-45 (Revisionist) Walk in the park (Morriss) A year at the movies. 12:19-20 Marginalism and the morality of pricing 8:12-13 KENDRICK, David. See book reviews human lives. 10:43-44 Running out of agricultural land (Lee) (Moo) Marriages, mistresses, and marginalism. 7:44-45 KIRZNER, Isracl M. 8:37-38 Sacrificing lives for profits (Lee) Entrepreneurial discovery and the law of Running out of agricultural land. 11:39-40 supply and demand. 2:17-19 7:44-45 Self-imposed poverty of economics The irresistible force of market Sacrificing lives for profits. 11:39-40 (Machan and Brown) 12:38-41 competition. 3:11-14 Spreading the work to create more jobs. Spreading the work to create more jobs The law of supply and demand. 1:19-21 2:36=37 (Lee) 2:36-37 A puzzle and its solution: rejoinder to Take this job and shove it, at the margin. Take this job and shove it, at the margin Professor Ahiakpor. 7:25-26 9:49-50 (Lee) 9:49-50 Toward an Austrian critique of LEEF, George C. Why crime declines (Benson) 1:22-25 governmental economic policy. Mandatory student fees and freedom of LESSONS from the Chicago Fire (Oliver) 4:16-18 speech. 8:23-26 2:8-12 KIRZNER, Israel, on supply and demand See also Book reviews (Anderson and LEVY, David M. (Ahiakpor) 7:23-24 Moss; Buckley; Conquest; S. Cox; 150 years and still dismal! 3:8-10 KLEIN, Daniel B. Fingleton; Greve; Hunt; Kosters; LIEBERMAN, Ben. Economists against the FDA. 9:18-21 Simon; Sperber; Troy; Zimbalist) Exploiting asthmatic children. 8:27-28 Economists’ misplaced faith in an LESSON plans ® articles suitable for LIGHT goes out in New Zealand (Baird) invisible hand. 8:31-33 classroom or homeschooling use. For 9:35-37 Trust and privacy on the Net. 5:14-16 plans, see www.fee.org, or contact LINDERMAN, Patricia KNIPPRATH, Joerg W. See book reviews FEE. La lucha: the human cost of economic (Gerber) 150 years and still dismal! (Levy) 3:8-10 repression in Cuba. 5:31-34 KOSOVO American culture (Boudreaux) 4:4-5 LINGLE, Christopher NATO'S disastrous victory in Kosovo Big one? (Richman) 10:34-35 Economic growth and freedom in the (Bandow) 6:21-22 Camera reaches 100 (Reed) 2:15-16 coming millennium. 4:36-37 KRAUSS, Melvin Lo Can the free market provide public Economic insecurity: are we the enemy? Saving money by taking lives. 2:41 education? (Richman) 6:37-38 6:39-40 Capitalism and the common man High savings rates and Asia’s economic L (Williams) 1:63-64 crises. 12:30-31 Census: inquiring minds want to know a Is there an Anglo-American economic lot (Reed) 5:17-18 model? 10:26-27 LA LUCHA: the human cost of economic Colonial origins of American liberty Trade and freedom in China: a reality repression in Cuba (Linderman) (Woods) 9:26-32 check. 9:22-23 5:31-34 Constitutional protection of economic LITTMANN, David L. See book reviews LABAND, David N. liberty (Barry) 11:26-30 (Atkinson; Luttwak) Harmful tax practices? 10:40—42 Creating jobs vs. creating wealth (Lec) LOGIC and morality of takeovers (Barry) LABOR 1:42-43 7:33-37 Creating jobs vs. creating wealth (Lee) Economic advantages of a commitment LOPEZ, Edward J. 1:42-43 to liberty (Lee) 4:43—44 A mad scramble at 30,000 feet. 2:42—44 ===== PAGE 60 ===== 60 IDEAS ON LIBERTY ® DECEMBER 2000 Medicine, continued MORRISS, Andrew P. and Stroup, M WHO's hidden agenda (Brase) 12:8-11 Richard L. Why medicine is slowly dying in Quartering Species. 10:48-50 MACAULAY, Thomas Babington America (Hurd) 2:38-40 MUCH-DESERVED triumph in supply- (Boudreaux) 10:4-5 MEIER, Conrad F. See book reviews side economics (Skousen) 2:48-49 MACHAN, Tibor R. and Brown, David M. (Lichter and Rothman) MURPHY, Robert P. The self-imposed poverty of economics. MENCKEN, H. L. Markets aren’t efficient? it just ain’t so! 12:38-41 The uplifters try it again. 10:10-12 12:6-7 MACHAN, Tibor. See book reviews (Den MERE “isolationism”: the foreign policy of = MURRAY, Philip R. See book reviews Uyh) the Old Right (Stromberg) 2:29-32 (Klein) MAD scramble at 30,000 feet (Lopez) MERGER policy fails hi-tech test MUTUAL accommodation (Boudreaux) 2:42-44 (Demmert) 6:10-11 5:4-5 MADDEN, Russell MICROSOFT case: divestiture won’t help MYTH of the Social Security “trust fund” Punishing the many. 6:46—47 consumers (D.T. Armentano) 4:21-22 (Attarian) 3:17-21 MADISON, James, ideas of MICROSOFT case Constitutional counterrevolution Barbarians at Bill Gates (Shughart) (Twight) 10:15-21 4:23-29 N MALTSEYV, Yuri. See book reviews Hands off (Richman) 2:27-28 (Pipes) Imperfect opponents (Richman) 10:2-3 MAN’S home once was his castle (P. Philosophical influence behind the NATIONAL debt Armentano) 10:8-9 Microsoft trial (Hunter) 10:28-31 Cut taxes, not the debt (Bandow) MANDATORY student fees and freedom Regulatory extortion (DiLorenzo) 3:37-42 4:30-31 of speech (Leef) 8:23-26 MILITARY Don’t fear deficits (R. Roberts) 12:53-54 MARGINALISM and the morality of War (Bastiat) 6:30-36 NATO’s disastrous victory in Kosovo pricing human lives (Lee) 10:43—44 What ain’t broke: the renewed call for (Bandow) 6:21-22 MARGINALISM, economic conscription (Bandow) 2:23-24 NEITHER left nor right (Skousen) 7:52-53 It’s the margin that counts (Lee) 6:44-45 See also Foreign policy NEW excuses for old failures (Bandow) Marriages, mistresses, and marginalism MILLENNIUM 1:26-27 (Lee) 8:37-38 Economic growth and freedom in the NEW ZEALAND Take this job and shove it, at the margin coming millennium (Lingle) 4:36-37 Light goes out in New Zealand (Baird) (Lee) 9:49-50 Economics for the 21st century 9:35-37 MARKET for space in the market (Galles) (Skousen) 1:49-50 NO dog in that fight (Richman) 2:2-3 3:24-25 Two indispensable lessons (Boudreaux) NOCK, Albert Jay, on education (McElroy) MARKETS aren’t efficient? it just ain’t so! 1:4-5 1:44-48 (Murphy) 12:6-7 MIRACLE of privatization (Blundell) NOLTE, Eric MARKETS, politics, and civility 9:8-9 Heart over mind: the death of JFK, Jr. (Boudreaux) 7:4-5 MISES, Ludwig von 2:45-47 MARRIAGES, mistresses, and Inequality of wealth and incomes. 4:8-11 NOTHING left to buy? (R. Roberts) marginalism (Lee) 8:37-38 MISES, Ludwig von, ideas of 6:63-64 MATHESON, Victor A. See book reviews Anti-capitalistic mentality, updated (Sen) (Skousen) 11:53-54 MAYER, Christopher MISSOURI earthquake O Free trade and flexible markets. 4:48-50 Disaster relief then and now (Hermann) Patents and monopoly privilege. 5:21-23 10:45-47 MITRA, Barun S. OECD A privatization story. 5:42-45 Orissa’s man-made tragedy. 2:13-14 Harmful tax practices? (Laband) McELROY, Wendy MODERATION in all things (Boudreaux) 10:40-42. Constitutional intentions. 6:14-18 3:4-5 OLIVER, Daniel T. Does rape violate the commerce cause? MONEY, banking Lessons from the Chicago Fire. 2:8-12 10:36-39 Austrian “inflation,” Austrian “money,” See also book reviews (McKenzie) Nock on education. 1:44-48 and federal reserve policy OLSEN, Darcy Sweatshops: look for the INS label. (Timberlake) 9:38-43 Peanut butter, education, and markets. 7:29-32 Competitor for the Fed? (White) 7:14-18 11:35-36 McGATH, Gary Final comment on Salerno’s monetary See also book reviews (Galinsky) Spam, spam, spam, and spam. 3:28-30 program (Timberlake) 9:47-48 ONE HUNDRED FIFTY years and still MEDICINE Government deposit insurance: a dumb dismal! (Levy) 3:8-10 Bipartisan drug entitlement (Bandow) idea (Reed) 10:13-14 OPEN letter to statists everywhere (Reed) 9:24-25 Inflation and money: a reply to 12:15-16 Economists against the FDA (Klein) Timberlake (Salerno) 9:43-47 ORISSA’S man-made tragedy (Mitra) 9:18-21 Much-deserved triumph in supply-side 2:13-14 Exploiting asthmatic children economics (Skousen) 2:48—49 OSHA at home (Baird) 8:63-64 (Lieberman) 8:27-28 Stealing from ATM machines (Bandow) OTTESON, James R. For-profit medicine and the compassion 3:26-27 Adam Smith: moral philosopher. motive (Palmer) 10:32-33 They can afford it, can’t they? (R. 11:46-51 Hospital food and socialized medicine Roberts) 3:63—64 (Reed) 3:15-16 Will the savings crisis lead to Price of resistance (Richman) 4:34-35 stagnation? (Skousen) 3:51-52 P Progress in pain relief (Szasz) 9:33-34 MONOPOLY. See Antitrust Psychiatry in a communist utopia (Faria) MORE “public investment” needed? it just 11:33-34 ain't so! (Boaz) 3:6-7 PALASEK, Karen Remembering Krafft-Ebing (Szasz) MORRISS, Andrew P. Female-parent wage gap requires action? 1:31-32 How to sink a car ferry. 1:12-16 it just ain’t so! 9:6-7 Remembering masturbatory insanity A (revisionist) walk in the park. 8:12-13 See also book reviews (Klicka) (Szasz) 5:35-36 Why classical liberals should love Harry PALMER, Tom G. Saving money by taking lives (Krauss) Potter. 12:12-14 For-profit medicine and the compassion 2:41 See also book reviews (Lessig) motive. 10:32-33 ===== PAGE 61 ===== INDEX 61 PATENTS and monopoly privilege PRIVATE investment is more risky than Regulation, continued (Mayer) 10:45-47 Social Security? it just ain’t so! Death by government protection PAUL, Ellen Frankel. See book reviews (Biggs) 8:6-7 (Richman) 12:23-24 (Young) PRIVATE property OSHA at home (Baird) 8:63—64 PAYNE, James L. Man’s home once was his castle Stealing from ATM machines (Bandow) Do we really want more policemen? (P. Armentano) 10:8-9 3:26-27 7:12-13 Mutual accommodation (Boudreaux) 5:4-5 Tribute to the jitney (Reed) 1:17-18 Drifting in and out of socialism: the case Property and liberty (Bovard) 9:10-15 REGULATORY extortion (DiLorenzo) of Ireland. 4:38—42 Redundancy (Richman) 4:2-3 3:37-42 PEANUT butter, education, and markets Starship private enterprise (Sandefur) REMEMBERING Krafft-Ebing (Szasz) (Olsen) 11:35-36 5:39-41 1:31-32 PERIPATETICS column. See Richman PRIVATIZATION story (Mayer) 5:42-45 REMEMBERING masturbatory insanity PERON, Jim PRIVATIZATION, private initiative (Szasz) 5:35-36 The Declaration of Independence: it’s Another reason for airport privatization RETURN to a global economy (Vasquez) Greek to me. 8:16-18 (Poole) 6:8-9 11:4145 The evolution of capitalism. 6:41-43 If you build it—privately—they will (REVISIONIST) walk in the park (Morriss) Food, famine, and free trade. 4:45-47 come (Skousen) 8:51-52 8:12-13 PETERSON, William H. Miracle of privatization (Blundell) 9:8-9 ~~ RICHMAN, Sheldon The golden rule and the free market. More “public investment” needed? it just Campaign-finance reform will end 6:48—49 ain’t so! (Boaz) 3:6-7 corruption? it just ain’t so! 5:6~7 See also book reviews (Barry; O'Shea; Technology, progress, and freedom Peripatetics column Williams) (Younkins) 1:28-30 The big one? 10:34-35 PHILOSOPHICAL influence behind the PROGRESS in pain relief (Szasz) 9:33-34 Can the free market provide public Microsoft trial (Hunter) 10:28-31 PROPERTY and liberty (Bovard) 9:10-15 education? 6:37-38 } PLUNDER gets a boost (Sandefur) 2:25-26 ~~ PSYCHIATRY in a communist utopia Death by government protection. 12:28-29 PHILOSOPHY (economic, political, moral) (Faria) 11:33-34 Hands off. 2:27-28 Common good demystified (Younkins) PSYCHIATRY It can’t happen here? 8:29-30 5:48-49 Remembering Krafft-Ebing (Szasz) 1:31-32 The price of resistance. 4:34-35 Moderation in all things (Boudreaux) Remembering masturbatory insanity Perspective a. 3:4-5 (Szasz) 5:35-36 An asset that’s a liability. 7:2-3 Neither left nor right (Skousen) 7:52-53 ~~ PULLING us apart (Baird) 5:63—64 Bastiat’s birthday. 6:2-3 Right of resistance (Bovard) 8:34-36 PUNISHING the many (Madden) 6:46-47 Divide and conquer. 12:2-3 Self-imposed poverty of economics PURSUIT of happiness column. See Baird; Double take. 1:2-3 (Machan and Brown) 12:38-41 R. Roberts; Williams Getting it right. 8:2-3 Adam Smith: moral philosopher PUZZLE and its solution: rejoinder to Humble hubris. 3:2-3 (Otteson) 11:46-51 Professor Ahiakpor (Kirzner) 7:25-26 Imperfect opponents. 10:2-3 Two radicalisms (Boudreaux) 11:4-5 No dog in that fight. 2:2-3 POLITICS Redundancy. 4:2-3 Campaign-finance reform will end Q They don't make revolutions like they pp Iv oh fd used to. 11:2— STP? it just ain’t so! (Richman) Unworry of dhe name. 53-3 , . : : : 0’s to blame? 9:2 It : about power—period (Clites) Rr Species (Morriss and See also book revives (Shizes) RIDDLE, Wesley Allen. See book reviews (Gregg) RIGHT of resistance (Bovard) 8:34-36 ROBERTS, Russell The pursuit of happiness column Don’t fear deficits. 12:53-54 Nothing left to buy? 6:63—64 Will campaign finance reform enhance the power of the people? 9:63-64 They can afford it, can’t they? 3:63—64 ROBERTS, Ted Markets, politics, and civility (Boudreaux) 7:4-5 They don’t make revolutions like they R used to (Richman) 11:2-3 Will campaign-finance reform enhance the power of the people? (R. Roberts) RAPPARD, William E.: An international 9:63-64 man in the age of nationalism PONY Express (Ebeling) 1:33-41 Downsizing, 1860s-style: lessons from REDUNDANCY (Richman) 4:2-3 the Pony Express (Schweikart) 8:39-45 REED, Lawrence W. POOLE, Robert W. Jr. Ideas and consequences column . Another reason for airport privatization. A camera reaches 100. 2:15-16 How the theory of comparative advantage 6:8-9 The census: inquiring minds want to RUNDYee my mamage. 113738 (Lee) POPULATION know a lot. 5:17-18 Taads Food, famine, and free trade (Peron) Don’t tax the Internet. 6:12—-13 ’ 4:45-47 End the farm dole once and for all. 9:16-17 POTOMAC principles column. See Bandow Government deposit insurance: a dumb S POTTER, Harry, series of books idea. 10:13-14 Why classical liberals should love Harry Guns, gun laws, and liberty. 8:14-15 Potter (Morriss) 12:12-14 Hospital food and socialized medicine. SACRIFICING lives for profits (Lee) PRESCRIPTION drugs 3:15-16 11:39-40 Bipartisan drug entitlement (Bandow) Incentives and disincentives: they really SAFETY 9:24-25 do matter! 11:16-17 Death by government protection PRICE of resistance (Richman) 4:34-35 Internet access should be left to the free (Richman) 12:28-29 PRICES, pricing market. 4:19-20 How government prevents us from Butter monopoly? (Keating) 8:19-20 An open letter to statists everywhere. buying safety (Lee) 12:32-33 Freedom of the price (Lee) 5:46-47 12:15-16 Sacrificing lives for profits (Lee) High gasoline prices your fault? Save us from great ideas. 7:19-20 11:39-40 (Cordato) 11:6-7 A tribute to the jitney. 1:17-18 SALERNO, Joseph PRIVACY REGULATION, government Antitrust protects competition? it just It can’t happen here? (Richman) 8:29-30 Breach of public trust (Hopper) 5:29-30 ain’t so! 4:6-7 Trust and privacy on the Net (Klein) Clinton regulatory miasma (Bandow) Inflation and money: a reply to 5:14-16 11:24-25 Timberlake. 9:43-47 ===== PAGE 62 ===== 62 IDEAS ON LIBERTY ® DECEMBER 2000 SANDEFUR, Timothy SMOKING Plunder gets a boost. 2:25-26 Why the war on smoking will fail T The starship private enterprise. (Yates) 7:10-11 5:39-41 SOCIAL Security SANDERS, Jon Myth of the Social Security “trust fund” TAKE this job and shove it, at the margin “I support coercion and I vote.” (Attarian) 3:17-21 (Lee) 9:49-50 11:8-9 Private investment is more risky than TAXATION, taxes SAVE us from great ideas (Reed) Social Security? it just ain’t so! Cut taxes, not the debt (Bandow) 7:19-20 (Biggs) 8:6-7 430-31 SAVING money by taking lives (Krauss) Who's to blame? (Richman) 9:2-3 Death tax is fair? it just ain’t so! 2:41 SOCIALISM (Holcombe) 10:6-7 SAVING, savings Drifting in and out of socialism: the case ~~ DOM! fear deficits (R. Roberts) 12:53-54 Having their cake (Skousen) 10:53-54 of Ireland (Payne) 4:38-42 Don’t tax the Internet (Reed) 6:12-13 High savings rates and Asia’s economic Whole language: emancipatory pedagogy Harmful tax practices? (Laband) crises (Lingle) 12:30-31 or socialist nonsense? (Groff) 7:40-43 10:40-42. . Will the savings crisis lead to SOMMER, Jack. See book reviews Hidden cost of taxation (Lee) 3:43-44 stagnation? (Skousen) 3:51-52 (Kernan; Savage) Internet and the death of the sales tax SCHMIDTZ, David SOURCES of pro-union sentimentality (Ault and Laband) 5:19-20 Economic mobility is a sham? it just (Baird) 3:45-47 Internet commerce should be taxed? It ain’t so! 7:67 SPAM, spam, spam, and spam (McGath) just ain’t so! (Shughart) 6:6-7 SCHWEIKART, Larry 3-28-30 Save us from great ideas (Reed) 7:19-20 Downsizing, 1860s-style: lessons from ~~ SPORTS Unworthy of the name (Richman) 5:2-3 the Pony Express. 8:39-45 Government's assault on golf (Keating) TECHNOLOGY, progress, and freedom SECHREST, Larry, See book reviews 11:20-23 (Younkins) 1:28-30 (Cochran and Glahe; Morris) If you build it—privately—they will TECHNOLOGY, invention, progress SECOND Amendment. See Guns, gun come (Skousen) 8:51-52 Camera reaches 100 (Reed) 2:15-16 control In praise of athletes’ high salaries Cleaned by capitalism (Boudreaux) SELF-government (Boudreaux) 9:4-5 (Anderson) 8:8-11 24-5 SELF-IMPOSED poverty of economics SPREADING the work to create more jobs Downsizing, 1360s-s1yle: lessons from (Machan and Brown) 12:38—41 (Lee) 2:36-37 fhe Pony Express (Schweikart) SELFISHNESS of the unselfish STAKEHOLDER fallacy (Barry) 3:33-36 8:39-45 : (Boudreaux) 6:4-5 STAMPUL, Charles. See book reviews Economic growth and freedom in the SELICK, Karen (Thornton) coming millennium (Lingle) 4:36-37 They're just dying to be rescued. STANDING to gain from tattling (Terrell) Nothing left to buy? (R. Roberts) 12:17-18 12:34-37 6:63-64 SEMMENS, John. See book reviews STARSHIP private enterprise (Sandefur) Sp am, spam, spam, and spam (McGath) (Winston and Shirley) 5:39-41 3:28-30 SHAMELESS in California (Baird) STATISM, statists. See government TERRELL, Timothy D. 11:63-64 STEALING from ATM machines Standing to gain from tattling. 12:34-37 SHIPS. See Transportation (Bandow) 3:26-27 THERAPEUTIC state column. See Szasz SHUGHART, William F. II STEELMAN, Aaron. See book reviews THEY can afford it, can’t they? (R. Barbarians at Bill Gates. 4:23-29 (Gray) Roberts) 3:63-64 Internet commerce should be taxed? it STEPHENSON, E. Frank. See co-author THEY don’t make revolutions like they just aint so! 6:6-7 (Alban) used to (Richman) 11:2-3 SIERRA Leone STEVENS, Richard W. THEY'RE just dying to be rescued (Selick) End of U.N. peacekeeping (Bandow) Just dial 911? The myth of police 12:17-18 10:22-23 protection. 4:12-15 THOMAS, Stacie SILLY talking (Williams) 7:63-64 STICK to the facts, please (Larsson) 7:21-22 The Cuyahoga revisited. 5:37-38 SKOUSEN, Mark STIX, Nicholas. See book reviews (Stotsky) ~~ | HOUGHTS on freedom column. See Economics on trial column STOCK market Boudreaux } The anti-capitalistic mentality, updated. An enemy hath done this (Skousen) TIMBERLAKE, Richard H. 11:53-54 9:53-54 Austrian “inflation,” Austrian “money,” Economics for the 21st century. Regulatory extortion (DiLorenzo) and federal reserve policy. 9:38-43 1:49~50 3:37-42 Final comment on Salerno’s monetary “An enemy hath done this.” 9:53-54 STROMBERG, Joseph R. program. 9:47-48 Having their cake. 10:53-54 Mere “isolationism”: the foreign policy TOWARD an Austrian critique of How many of you are on food stamps? of the Old Right. 2:29-32 governmental economic policy 12:43-44 : See also book reviews (Gottfried) (Kirzner) 4:16-18 If you build it—privately—they will STROUP, Richard L. See co-author TRADE and freedom in China: a reality come. 8:51-52 (Morriss) check (Lingle) 9:22-23 In defense of the rich. 6:50-51 SUPPLY and demand TRADE and the rise of freedom Is greed good? 5:51--52 Law of supply and demand (Kirzner) (DiLorenzo) 6:23-29 A much-deserved triumph in supply-side 1:19-21 TRANSPORTATION economics. 2:48-49 SWEATSHOPS: look for the INS label Across the sea of commerce (Young) Neither left nor right. 7:52-53 (McElroy) 7:29-32 1:8-11 What it takes to be an objective scholar. SZASZ, Thomas Another reason for airport privatization 4:52-53 The therapeutic state column (Poole) 6:8-9 Will the savings crisis lead to Chemical straightjackets for children. Enemies of the automobile (Clark) stagnation? 3:51-52 7:38-39 11:10-13 See also book reviews (Buchanan and Creativity and criminality: the two faces Freeing the freeways (Jenco) 11:14-15 Musgrave) of responsibility. 11:31-32 Heart over mind: the death of JFK, Jr. SLAVERY Does insanity “cause” crime? 3:31-32 (Nolte) 2:45-47 150 years and still dismal! (Levy) Progress in pain relief. 9:33-34 How to sink a car ferry (Morriss) 3:8-10 Remembering Krafft-Ebing. 1:31-32 1:12-16 SMITH, Adam: moral philosopher Remembering masturbatory insanity. Tribute to the jitney (Reed) 1:17-18 (Otteson) 11:46-51 5:35-36 TRIBUTE to the jitney (Reed) 1:17-18 ===== PAGE 63 ===== INDEX 63 TRUST and privacy on the Net (Klein) VAN TASSELL, Royce. See book reviews WILL campaign finance reform enhance 5:14-16 (Edwards) the power of the people? (R. Roberts) TWIGHT, Charlotte VASQUEZ, [an 9:63-64 A Constitutional counterrevolution. The return to a global economy. WILL the savings crisis lead to stagnation? 10:15-21 11:41-45 (Skousen) 3:51-52 TWO radicalisms (Boudreaux) 11:4-5 VISITING the killing fields (Bandow) WILLIAMS, Walter E. TWO indispensable lessons (Boudreaux) 8:21-22 The pursuit of happiness column 1:4-5 Capitalism and the common man. 1:63-64 Greed versus compassion. 10:63-64 WwW Silly talking. 7:63-64 | - V Who may harm whom? 4:63-64 WOEHLKE, James A. See book reviews WADE, Keith (Levite) UNIONS and antitrust: governmental The Internet: parental guidance WOMEN hypocrisy (Baird) 2:63-64 preferred. 2:33-35 Does rape violate the commerce clause? UNITED NATIONS WAR (Bastiat) 6:30-36 (McElroy) 10:36-39 End of U.N. peacekeeping (Bandow) WAR against drug-speech (P. Armentano) Female-parent wage gap requires action? 10:22-23 6:19-20 it just ain’t so! (Palasek) 9:6-7 Stick to the facts, please (Larsson) WEALTH. See Incomes WOODS, Thomas E., Jr. 7:21-22 WELFARE The colonial origins of American liberty. WHOQ’s hidden agenda (Brase) 12:8-11 How many of you are on food stamps? 9:26-32 U.S. CONSTITUTION (Skousen) 12:43-44 WTO Big one? (Richman) 10:34-35 Incentives and disincentives: they really No dog in that fight (Richman) 2:2-3 Constitutional counterrevolution do matter! (Reed) 11:16-17 (Twight) 10:15-21 WHAT aint broke: the renewed call for Constitutional intentions (McElroy) conscription (Bandow) 2:23-24 Y- Z 6:14-18 WHAT it takes to be an objective scholar - Constitutional protection of economic (Skousen) 4:52-53 liberty (Barry) 11:26-30 WHITE, Lawrence H. YANDLE, Bruce. See book reviews Does rape violate the commerce clause? A competitor for the Fed? 7:14-18 (Goklany) (McElroy) 10:36-39 See also book reviews (Rahn) YATES, Steven Quartering species (Morriss and Stroup) WHO may harm whom? (Williams) The dangers of growing up comfortable. 10:48-50 4:63-64 5:8-13 Silly talking (Williams) 7:63—64 WHO's hidden agenda (Brase) 12:8-11 Why the war on smoking will fail. See also Guns, gun control WHO'S to blame? (Richman) 9:2-3 7:10-11 UNIVERSAL values (Boudreaux) 12:4-5 WHOLE language: emancipatory YEAR at the movies (Keating) 12:19-20 UNWORTHY of the name (Richman) 5:2-3 pedagogy or socialist nonsense? YOUNG, Anthony UPHAM, David. See book reviews (Rosen) (Groff) 7:40-43 Across the sea of commerce. 1:8-11 UPLIFTERS try it again (Mencken) WHY classical liberals should love Harry YOUNKINS, Edward W. 10:10-12 Potter (Morriss) 12:12-14 The common good demystified. 5:48-49 USEC WHY crime declines (Benson) 1:22-25 Technology, progress, and freedom. Privatization story (Mayer) 5:42-45 WHY medicine is slowly dying in America 1:28-30 UTOPIA (Hurd) 2:38-40 ZERO, concept of Two indispensable lessons (Boudreaux) WHY the war on smoking will fail (Yates) Capitalism and the zero (Hood) 1:4-5 7:10-11 12:23-27 BOOKS (Reviewer’s name in parentheses) ACKERMAN, Bruce and Alstott, Anne. BOROVOY, A. Alan. The new anti- COCHRAN, John P. and Glahe, Fred R. The stakeholder society (Baird) liberals (Bertonneau) 12:45-46 The Hayek-Keynes debate: lessons for 4:55-56 BOVARD, James. Freedom in chains: the current business cycle research ALM, Richard (co-author). See Cox rise of the state and the demise of the (Sechrest) 4:59-60 ALSTOTT, Anne (co-author). See citizen (Batemarco) 5:54-55 CONQUEST, Robert. Reflections Ackerman BRYAN, Samuel. The letters of Centinel: on a ravaged century (Leef) ANDERSON, Eric and Moss, Jr., Alfred A. attacks on the U.S. Constitution, 9:56-57 Dangerous donations (Leef) 6:55-56 1787-1788 (Gamble) 1:58-59 CONRAD, Chris (co-author). See Norris ATKINSON, A. B. The economic BUCHANAN, James M. and Musgrave, and Resner consequences of rolling back the Richard A. Public finance and public COX, Stephen. The Titanic story: hard welfare state (Littmann) 9:57-58 choice: two contrasting visions of the choices, dangerous decisions (Leef) BARRY, Norman. Limited government, state (Skousen) 11:60-61 11:57-58 individual liberty and the rule of law: BUCHANAN, Patrick. A republic, not an COX, Michael W. and Alm, Richard. selected works of Arthur Asher empire: reclaiming America’s destiny Myths of rich and poor: why we're Shenfield (Peterson) 1:60—61 (Bandow) 6:53 better off than we think (Boudreaux) BLAU, Joel. lllusions of prosperity: BUCKLEY, F. H. The fall and rise of 1:56-58 America’s working families in an age freedom of contract (Leef) 10:57-58 DEN UYL, Douglas J. The Fountainhead: of economic insecurity (Boudreaux) BURCKHARDT, Jacob. Judgments on an American novel (Machan) 11:55-56 history and historians (Curl) 7:55-56 3:58-59 ===== PAGE 64 ===== 64 IDEAS ON LIBERTY ® DECEMBER 2000 EDWARDS, James Rolph. Regulation, the KOSTERS, Marvin H. Financing college ROTH, William V. and Nixon, William H. Constitution, and the economy: the tuition: government policies and The power to destroy (Attarian) regulatory road to serfdom (Van educational priorities (Leef) 3:56-57 10:55-56 Tassell) 2:58—60 LESSIG, Lawrence. Code and other laws ROTHMAN, Stanley (co-author). See FERGUSON, Niall. The pity of war of cyberspace (Morriss) 8:58-59 Lichter (Denson) 5:55-56 LEVITE, Allan. Guilt, blame, and politics SAVAGE, James D. Funding science in FERRARA, Peter and Tanner, Michael. A (Woehlke) 3:60-61 America: Congress, universities, and new deal for Social Security (Attarian) ~~ LICHTER, S. Robert and Rothman, the politics of the academic pork 1:55-56 Stanley. Environmental cancer: a barrel (Sommer) 11:61-62 FINGLETON, Eamonn. In praise of hard political disease (Meier) 6:56-57 SEN, Amartya. Development as freedom industries (Leef) 8:55-57 LIEBERMAN, Myron. Teachers evaluating (Matheson) 5:60-61 FRIEDMAN, Thomas L. The Lexus and teachers: peer review and the new SHIRLEY, Chad (co-author). See the olive tree: understanding unionism (Brouillette) 2:56-57 Winston globalization (Lawson) 8:57-58 LIEBOWITZ, Stan and Margolis, Stephen. - SHLAES, Amity. The greedy hand: how GALINSKY, Ellen. Ask the children: what Winners, losers and Microsoft taxes drive Americans crazy and what America’s children really think about (Gattuso) 6:54-55 to do about it (Richman) 7:60-61 working parents (Olsen) 7:59-60 LUTTWAK, Edward. Turbo-capitalism: SIMON. Julian. Hoodwinking the nation GERBER, Scott Douglas. First principles: winners and losers in the global (Leef) 2:60-61 the jurisprudence of Clarence Thomas economy (Littmann) 5:59-60 SOWELL, Thomas. The quest for cosmic (Knipprath) 5:56-57 MARGOLIS, Stephen (co-author). See justice (Boudreaux) 7:54-55 GIDDENS, Anthony. The third way: the Liebowitz SPERBER, Murray. Bread and circus: how renewal of social democracy (Flew) McKENZIE, Richard B. Rethinking big-time college sports is crippling 3:61-62 orphanages for the 215! century undergraduate education (Leef) GLAHE, Fred R. (co-author). See Cochran (Oliver) 6:57-58 12:49-50 GOKLANY, Indur M. Clearing the air: the MOQ, G. Gregory. Power grab: how the STINNETT, Robert B. The day of deceit: real story of the war on air pollution national education association is the truth about FDR and Pearl Harbor (Yandle) 10:61-62 betraying our children (Kendrick) (Greaves) 12:46-47 GOTTFRIED, Paul Edward. After 12:47-48 STOTSKY, Sandra. Losing our language: liberalism: mass democracy in the MORRIS, Charles R. Money, greed, and how multicultural classroom managerial state (Stromberg) 10:58-59 risk: why financial crises and crashes instruction is undermining our GRAGLIA, F. Carolyn. Domestic happen (Sechrest) 11:58-60 children’s ability to read, write, and tranquility: a brief against feminism MOSS, Ir., Alfred A. (co-author). See reason (Stix) 4:60-61 (Allen) 2:54-55 Anderson TANNER, Michael (co-author). See GRAY, John. False dawn: the delusions of MUSGRAVE, Richard A. (co-author). See Ferrara . global capitalism (Steelman) 6:58—-60 Buchanan THORNTON, Bruce S. Plagues of the GRAY, William Moore III. Experiment in NIXON, William H. (co-author). See Roth mind: the new epidemic of false liberty (Folsom) 2:57-58 NORRIS, Mikki; Conrad, Chris; and knowledge (Stampul) 9:59-61 GREGG, Gary L. Vital remnants: Resner, Virginia. Shattered lives: TOOLEY, James. The global education America’s founding and the Western portraits from America’s drug war industry: lessons from private tradition (Riddle) 12:51-52 (P. Armentano) 2:55-56 education in developing countries GREVE, Michael S. Real federalism: why O'SHEA, M. Lester. A cure worse than the (Flew) 9:55-56 it matters, how it could happen (Leef) disease: fighting discrimination TROY, Leo. Beyond unions and collective 7:56-57 through government control (Peterson) bargaining (Leef) 5:57-58 HOLCOMBE, Randall C. 15 great Austrian 12:50-51 VAROUFAKIS, Yanis. Foundations of economists (Batemarco) 8:53-54 OVERBEEK, Johannes. Free trade versus economics: a beginner’s companion HUNT, Morton M. The new know- protectionism: a source book of essays (Heyne) 1:59-60 nothings: the political foes of the and readings (Edwards) 8:54-55 WILLIAMS, Walter E. Our founders knew scientific study of human nature (Leef) PIPES, Richard. Property and freedom this well (Peterson) 8:59-61 1:54-55 (Maltsev) 9:58-59 WINSTON, Clifford and Shirley, Chad. KENNEDY, David. Freedom from fear: the PROCTOR, Robert N. The Nazi war on Alternate route: toward efficient American people in depression and cancer (Faria) 10:56-57 urban transportation (Semmens) war, 1929-1945 (Folsom) 11:56-57 RAHN, Richard W. The end of money and 3:59-60 KERNAN, Alvin. In Plato’s cave the struggle for financial privacy YOUNG, Cathy. Ceasefire! Why women (Sommer) 5:61-62 (White) 10:60-61 and men must join forces to achieve KLEIN, Daniel B. What do economists RESNER. Virginia (co-author). See Norris true equality (Paul) 4:57-58 contribute? (Murray) 7:57-58 and Conrad ZIMBALIST, Andrew. Unpaid KLICKA, Christopher J. The right to home ROSEN, Gary. American compact: James professionals: commercialism and school: a guide to the law on parents’ Madison and the problem of founding conflict in big-time college sports rights in education (Palasek) 3:57-58 (Upham) 9:61-62 (Leef) 4:56-57