Features 8 Casualties of the War on Poverty by Christopher Lingle

12 Scratching By: How Government Creates Poverty as We Know It by Charles Johnson

20 The Fear of Free Trade by Mark W. Hendrickson

26 Immigration Control, Circa A D 175 by Harold B.Jones,Jr.

Columns 4 From the President ~ Marching to Bismarck's Drummer: The Origins of the

Modern Welfare State by Richard M. Ebeling

10 Ideas and Consequences ~ In Praise o f an U n c o m m o n Woman by Lawrence W. Reed

18 The Therapeutic State ~ The Medicalization of Everyday Life by Thomas Szasz

24 Our Economic Past ~ The Real Argument about Government by Stephen Davies

31 Give Me a Break! ~ Medical Competition Works for Patients by John Stossel

40 The Pursuit of Happiness ~ The Lesson of Ebenezer Scrooge by David R. Henderson

Departments 2 Perspective ~ Bad Policy Drives Out Good by Sheldon Richman

6 Uneven Information Causes Market Failure? It Just Ain't So! by Joshua C. Hall

33 Capital Letters

Book Reviews

35 Who Controls the Internet? Illusions o f a Borderless World by Jack Goldsmith and T i m Wu Reviewed by Andrew P. Morriss

36 Econospinning: How to Read Between the Lines When the Media Manipulate the Numbers

by Gene Epstein Reviewed by Joseph Coletti

37 The Entrepreneurial Imperative: H o w America's Economic Miracle Will Reshape the World (and Change Your Life)

by Carl J. Schramm Reviewed by Frederic Sautet

38 The Green Wave: Environmentalist!! and Its Consequences

by Bonner Cohen Reviewed by George C. Leef

42 Index 2007

'• 1 T H E

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President Editor

Managing Editor Book Review Editor

R i c h a r d M . Ebeling She ldon R i c h m a n B e t h A. Hoffman G e o r g e C . Leef

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D o n a l d J. B o u d r e a u x S tephen Davies

R i c h a r d M . Ebe l i ng B u r t o n W. Fo l som,J r .

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Danie l B. Kle in

D w i g h t R . Lee W e n d y McEl roy T i b o r M a c h a n A n d r e w P. Morr i s s James L. Payne Wil l iam H . Pe terson Jane S. Shaw R i c h a r d H . T i m b e r l a k e Lawrence H . W h i t e

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I—Perspective

Bad Policy Drives Out Good

A ll public policies are related. Okay, that may be a slight overstatement, but there's a point here. A politician's credibility on one public issue—

and even the disposition of that issue—will often be determined by his or her position on other issues. Peo­ple will look at a politician's full program as a way oi judg ing good faith.

Case in point: President Bush's veto of the bill to expand the State Children's Health Insurance Program (SCHIP) to even more families that do not qualify for poverty programs because they make too much money. (A family of four with an income as much as three times the poverty level—$62,000—would have quali­fied.) H e opposes expansion of S C H I P because "when you expand eligibility . . . you're really beginning to open up an avenue for people to switch from private insurance to the government." (This in fact has hap­pened, according to the Congressional Budget Office.) Moving from private insurance to the government dole would undermine self-responsibility, he said.

Really, he said that—the same public official as the one w h o added universal drug coverage to Medicare. Back then he was undeterred by predictions that retired people would drop their private coverage in favor of the government program.

There's another level of hypocrisy, though. Given the existence of a federally financed state medical p ro ­gram for low- income families, it is surely wise not to enlarge the coverage to include middle- income people w h o have or can obtain private insurance. So in itself the veto is unobjectionable, even laudable. But the administration's action won' t be judged on its own merits. That may be regrettable, but it's a fact. In politics public opinion matters, and perceived intentions shape public opinion. Ignoring this is self-defeating. To put it bluntly: how can the Bush administration hope to per­suade people that the government should not subsidize middle-class children's medical care w h e n it is famously on record support ing billions of dollars in subsidies and other privileges for big corporations, including agribusinesses.

T H E F R E E M A N : I d e a s o n L i b e r t y 2

It can't. It has no credibility whatever in the matter. Non- ideological middle-of- the-road voters, w h o elect people to office, are likely to suspect the worst w h e n they see a politician push energy, "defense," and farm bills that transfer huge amounts of taxpayer money to wealthy individuals and companies while opposing health coverage for children in middle-class families.

And why shouldn't they suspect the worst? W h e n the President lectures work ing people about self-responsibility, might they not wonder why self-respon­sibility isn't also expected of energy companies that find privileges included in energy bills, "defense" contractors that make things of dubious value to the average per­son, and agribusiness and food-processing companies that get ethanol subsidies and other guarantees?

Don ' t get me wrong . S C H I P shouldn't have been created ten years ago (mind you, by a Republ ican Congress and President Cl inton) . And now that it exists, it shouldn't be expanded to cover more and more children. Tha t will indeed unde rmine parental self-responsibility and give government even more power over medicine. T h e government has wreaked enough havoc wi th this country's medical system.

But no politician w h o embraces corporate welfare in all its varieties can credibly oppose the S C H I P expan­sion. All he accomplishes is to make opposit ion to gov­e rnment health coverage look callous and cynical. W i t h friends like that, the free market hardly needs enemies.

There's a lesson here. W h e n a prominent figure holds a mixture of good and bad policy positions, the bad ones damage the good. It's a form of Gresham's Law. Inconsistent and seemingly insincere defenders of free­d o m ha rm the cause.

Keep this in mind w h e n picking political allies.

• • •

PERSPECTIVE: Bad Pol icy Dr ives O u t G o o d

3 DECEMBER 2007

T h e U.S. government has spent $10 trillion on the war on poverty, and what does it have to show for it? Precious little besides a bloated bureaucracy, says Chr is topher Lingle.

If the politicians really cared about the poor, they would have long ago figured out wha t they need to do: Get out of the way. Charles Johnson shows h o w the state creates poverty.

M u c h opposition to uncondi t ional free trade can be explained in a single word: fear. As Mark Hendr ickson demonstrates, even legitimate fears don' t justify pro tec­tionism.

Misunderstanding of the benefits of immigrat ion can be traced back at least to the R o m a n Empire, w h e n Marcus Aurelius mistook allies for enemies. Harold Jones, Jr., conducts the historical journey.

Here's what our columnists have been working on: Richard Ebeling remembers the father of the welfare state. Lawrence R e e d pauses to hono r an u n c o m m o n woman . Thomas Szasz exposes the medicalization of everyday life. Stephen Davies recaps the debate over the scope of government . John Stossel finds effective compet i t ion in medical services. David Henderson reconsiders Ebeneze r Scrooge. And Joshua Hall, encounter ing the argument that uneven information creates markets for " lemons," protests, "It Just Ain't So!"

Ivan Pongracic, Jr.'s September article about Mil ton Fr iedman and the Great Depression is the subject of a lively exchange in Capital Letters.

Books on the Internet , media mangling of eco­nomic statistics, entrepreneurship, and environmental-ism occupy our reviews this issue.

December is also the t ime for our year-end index, prepared by managing editor Beth Hoffman.

—Sheldon Richman srichman@fee.org

From the President

Marching to Bismarck's Drummer: The Origins of the Modern Welfare State B Y R i C H A R D M . E B E L I N G

Soviet-style socialism may now be a thing of the past, but there is one form of statism that still d o m ­inates the world, including the Uni ted States: the

modern welfare state. Its tentacles of paternalistic control reach into every corner of personal and social life. It has made all of us "children of the state," and weakened our desire and appreciation for self-responsibility.

O f course, things were no t always this way. And it is wor th recalling h o w this state of affairs came about. T h e m o d e r n welfare state had its birthplace in late n ine teenth-century Imperial Germany under Chancellor O t t o von Bismarck. In the 1870s the Social Democra t i c Party gained increasing support from the voters in elections to the par l iament , the Reichstag. Fearful that the socialists might w in a majority, Kaiser Wi lhe lm and the conservative parties resolved to thwart this dangerous challenge to their power and the existing order.

In the early 1880s the Kaiser agreed to support the first welfare-state legislation sponsored by Bismarck. A decade later, Bismarck explained to an American sym­pathizer the strategy behind these laws that guaranteed every G e r m a n national health insurance, a pension, a m i n i m u m wage and workplace regulation, vacation, and unemployment insurance. " M y idea was to bribe the working classes, or shall I say, to win them over, to regard the state as a social institution existing for their sake and interested in their welfare," he said.

But it would be a mistake to view the birth of the m o d e r n welfare state simply as a cynical political move to w in over the workers by preempt ing the appeal of the socialists. It was also argued for on the basis of a supposed higher "social g o o d " and a concept ion of h u m a n freedom superior to the " m e r e " protect ion of life, liberty, and property.

In 1915, an American admirer of the German wel­fare state, Frederic Howe, explained the nature of the system in a book called Socialized Germany:

The state has its finger on the pulse of the worker from the cradle to the grave. His education, his health, and his working efficiency are matters of constant concern. H e is carefully protected from accident by laws and regulation governing factories. H e is trained

i in his hand and in his brain to be a . . . . • • • >

good workman and is insured against accident, sickness, and old age. While idle through no fault of his own, work is frequently found for him. W h e n homeless, a lodging is offered so that he will not easily pass into the vagrant class.

H o w e admitted that under the German system, with its extensive controls and regulations, " T h e indi­

vidual exists for the state, not the state for the individ­ual." But he insisted that this did not mean a loss of freedom. "This paternalism does not necessarily mean less freedom to the individual than that which prevails in America or England," he argued. "[T]he German enjoys a freedom far greater than that which prevails in America or England. This freedom is of an economic sort. . . . It protects the defenseless classes from exploita­tion and abuse. It safeguards the weak."

If the state were to take on these new responsibili­ties, h o w far would the new powers extend? T h e answer was that there were no limits. T h e only rule was political expediency. H o w e explained this as well: " In the mind of the Germans the functions of the state are not susceptible to abstract, a priori deductions. Each

Richard Ebeling (rebeling@fee.org) is the president of FEE.

Otto von Bismarck (1815-1898)

T H E F R E E M A N : I d e a s o n L i b e r t y 4

March ing to Bismarck's Drummer: The O r i g i n s of the M o d e r n We l fa re State

proposal must be decided by the t ime and the cond i ­tions. If it seems advisable for the state to own an industry, it should proceed to o w n it; if it is wise to curb any class or interest, it should be curbed. Expedi ­ency or oppor tun ism is the rule of statesmanship, not abstraction as to the philosophical nature of the state."

In this n e w world there was n o place for universal and endur ing principles concerning the individual's rights to life, liberty, and property, or for constitutions to prevent governments from encroaching on freedom. Every policy issue was to be guided by the pragmatic interests of the day.

This G e r m a n concept ion of gov­e rnment and the welfare state slowly but surely made its way across the Atlantic to America. In the late n ine ­teenth century there were very few Amer i can universities that offered doctoral degrees. So an A m e r i c a n student wishing to earn one as a capstone to his education often had to go to Europe. Ge rman universities, in the land of poets, philosophers, composers , and m o d e r n progressive thinkers, were especially appealing. Hundreds of young American e c o n o ­mists, political scientists, historians, sociologists, and philosophers made the pilgrimage, many of t hem study­ing wi th leading members of the Ger ­man Historical School, advocates of "state socialism." T h e Americans re turned h o m e imbued wi th ideas about the paternalistic state and became leaders of the movement for "social reform" dur ing what is k n o w n as the Progressive Era in the early twentieth century.

These American converts to the Bismarckian welfare state believed they were an elite on a mission from God. O n e such influential person was Richard Ely, a professor of economics at the University of Wisconsin w h o had studied in Germany and then co-founded the American Economic Association in 1885 to advance the welfare-state agenda. In 1895 he expressed this view in a book on socialism: "Looking into the future we may con tem­plate a society with real, not merely nominal freedom,

T h e r e was n o place for universal and endu r ing principles conce rn ing the individual's rights to life, liberty, and property, or for consti tutions to prevent governments from encroaching o n freedom.

together for the c o m m o n purposes, and in which the wholesale cooperation shall take place largely through the government. . . .We have reason to believe that we shall yet see great national undertakings with the prop­erty of the nation, and managed by the nation, through agents w h o appreciate the glory of true public service, and feel that it is God's work they are doing, because church and state are as one."

N o t only would material interests be secured from cradle to grave, but so, too, the spiritual and intellectual

interests—education, art, literature. Here was the welfare statist's alter­native to bo th Marxian socialism and classical liberalism.

T Classical-Liberal Critique

he classical liberals and free-market economists of the n ine ­

teenth century were highly critical of state intervention in social and economic affairs. They doubted that the political authori ty had either the knowledge or the wisdom to m a n ­age the complex and ever-changing currents of social and commercial life. And they were suspicious of government 's having the power to regulate people's lives because while those powers may be couched in the language of the "public interest,"

they unders tood that the actual motive beh ind them was to serve some special interest at the expense of the rest of society.

T h o u g h no t as visually dramatic as the damage done in Eastern Europe, the ha rm wrought by the welfare state has nonetheless been destructive of our political, economic , and cultural life. It has been and is eating at us from the inside. Arid to a great extent its success has been due to the fact that, after several gen­erations, people do no t even k n o w it for wha t it is. T h e welfare state, for many, is a "just" and "car ing" society. It is the "Amer ican way."

O u r task in the 21st century is to reverse this trend and restore the ideal of liberty in the hearts and minds

to pursue the best; a society in which m e n shall work of our fellow citizens.

5 DECEMBER 2007

Uneven Information Causes Market Failure? It Just Ain't So!

BY J O S H U A C. H A L L

I n a famous 1970 paper, economics Nobe l Laureate George Akerlof used the market for used cars to show h o w differences in information be tween

buyers and sellers ("asymmetric information") could lead a market to shrink or collapse entirely. A large variety of markets have been said to fail because of asymmetric information, from all different types of insurance markets to the market for translators. In many cases these market-failure arguments have been used as a justification for government intervention. T h e problem wi th many, if not all, of these arguments, h o w ­ever, is that they fail to appreciate the incentives market participants have to find ways to overcome the infor­mat ion differences.

A good example of this tendency to see market failures everywhere is Phil Birnbaum's article, "Are Traded Players Lemons," in the 2005 issue of The Baseball Research Journal. B i rnbaum suggests that the trade market for major-league baseball players might suffer from asymmetr ic- informat ion problems. As evi­dence he presents data showing that "except ional" traded players seem to do worse than one would p re ­dict using their statistical records. C o m p a r i n g similar players w h o were traded and those w h o were not , he finds that non- t raded players were 2 - 3 times as likely to mee t their projected statistics as traded players. F rom this he concludes that traded players are often damaged goods and thus the player trade market might be a " l emon marke t" similar to the used-car market .

Whi le Bi rnbaum does not argue for government intervention in the market for baseball players, further examination of this argument is useful because it can tell us a lot about why asymmetric information is gen­

erally not a problem for other markets where govern­ment intervention is prevalent. To find out why, let's start by examining why the used-car market is not filled wi th lemons.

In his original article Akerlof noted that two out ­comes are possible in markets where sellers have more information than buyers. If buyers cannot distinguish between high-quality and low-quality cars, for exam­ple, they will only be willing to offer a price equal to the average quality of existing used cars on the market. A potential seller of a high-quality car then will not sell his car since he cannot receive a price commensu­rate with its value. Over t ime this information asym­metry could reduce the number of high-quality cars in the used-car market until the market fails because only " lemons" are left.

T h e second possible ou tcome is that buyers invest t ime and effort to reduce uncertainty over the quality of products. In the used-car market, this can be done in a variety of ways. For example, a few years ago I pur­chased a 20-year-old Mercedes at a garage sale. W h e n I asked the owner about the car's history, he showed me his original bill of sale and a detailed maintenance his­tory from a wel l -known local mechanic. Asymmetr ic-information problem overcome! More generally, war­ranties, brand names, and reputation help to mitigate car-buyer uncertainty over quality.

T h e important thing to note is that while some sell­ers have an incentive to try to use asymmetric informa­tion to their advantage, many sellers and all buyers have the incentive to find ways to overcome the asymmetry

Joshua Hall (joshua.c.hall@gmail.com) is an assistant professor of economics at Beloit College.

T H E F R E E M A N : I d e a s o n L i b e r t y 6

U n e v e n I n f o r m a t i o n Causes Market Fa i lu re?: IT JUST A I N ' T SO

problem. As a result, the market for used cars looks more like the second ou tcome than the first. It is not filled with lemons because sellers of high-quality used cars have an incentive to provide assurances such as war­ranties that their cars are of high quality. T h e lemons problem is mitigated because buyers and sellers want trades to happen and thus have the incentive to create institutional solutions that facilitate exchange. The p rob­lem disappears w h e n the buyers have assurance of the quality of a used car and thus the seller can charge a price high enough to make it worthwhile to sell. W h e n the used-car market is viewed from a market-process perspective, it is clearly not a lemons market.

Wha t about the market for baseball players? That market is also unlikely to be a market for lemons because it has several institutional mechanisms to provide buyers with assurance of player quality. First, data on the performance histories of play­ers, as well as their medical histories, is made available to trading partners at the t ime of the exchange. In addi­tion, physicals are a part of every baseball t rade—the baseball equiva­lent of taking a used car to your mechanic to verify the quality of the vehicle. Finally, in the market for baseball players sellers are also buyers. General managers need to be con­cerned about their reputation and the

ability to make future trades, thus they are more likely to make mutually beneficial trades than attempting to profit from asymmetric information. Given the high number of high- and low-quality players traded each year, it appears that these institutional mechanisms work quite well in facilitating exchange.

H o w do we reconcile this wi th Birnbaum's findings that traded players underper form projections at m u c h higher rates than non- t raded players? Assuming that Birnbaum's research is correct, is the only explanation that traded players must be lemons? T h e answer is no.

To see why, consider a car market wi th two types of individuals: those w h o do their own maintenance and those w h o cannot. Individuals w h o cannot do their

W h e n market participants have the incentive to exchange, they also have the incentive to create institutional mechanisms to facilitate that exchange.

begins to increase. O n the other hand, those w h o do their own maintenance prefer to buy used cars because they get them at a discount and can fix them cheaply. If traded and non- t raded cars in this market were ana­lyzed, it would appear that traded cars are lemons. T h e difference be tween groups, however, does not arise because of asymmetric information but from differ­ences in valuation.

More-Valued Bundle

This seems to fit both Birnbaum's description and the baseball-player market. Teams are exchanging a

bundle of players and their contracts for a bundle of play­ers and contracts they value more, even if the players they receive are going to decline in overall performance. The

fact that Birnbaum looks only at "excep­tional" players could be why he finds that most traded players decline in perform­ance. For example, in 1974 the Atlanta Braves traded Hank Aaron to the Mil­waukee Brewers. According to Bi rn­baum, Aaron was damaged goods in the sense that he underperformed after the trade. Does this mean that Aaron was a lemon? O f course not. The Brewers had just had their sixth straight losing season and wanted Aaron for his ability to draw fans to the ballpark as much as for his ability to hit home runs.

Even if a player's overall stats fall after the trade, he still might be more valuable because his mar­ginal contribution is higher. After Jeff Conine was traded from the Baltimore Orioles to the Florida Marlins for the stretch drive in 2003, he often batted seventh in the order or was used as a pinch hitter; with the Orioles he had reg­ularly batted cleanup. As a result, he averaged one fewer at bat per game and his overall stats were much lower. His contribution to winning was likely higher, however.

W h e n market participants have the incentive to exchange, they also have the incentive to create institu­tional mechanisms to facilitate that exchange. T h e failure to recognize and appreciate these private m e c h ­anisms for overcoming asymmetric informat ion—not the failure of actual markets—is often what leads to

own maintenance will sell their cars as maintenance mistaken calls for government regulation.

7 DECEMBER 2007

Casualties of the War on Poverty

BY C H R I S T O P H E R L I N G L E

Newspapers around the world recently carried a news i tem that seems to be a damning indic tment of the U.S. government and the

American people. T h e 2005 U.S. Census indicates that the percentage of poor Americans living in "severe" poverty was at a 32-year high. This put the propor­t ion of poor people in deep poverty at 43 percent of the total of 37 million.

As such, the number of severely poor Americans grew by 26 percent from 2000 to 2005, so that 16 million Americans were living in deep, or severe, poverty. This is defined as a family of four wi th two children and an annual income of less than $9,903, or o n e -half the federal poverty line.

O n their face, these figures sound ominous and suggest that the U.S. government and the American p e o ­ple have tu rned their backs on the weakest citizens. But t ruth and reality are m u c h more complex than the raw data suggest.

As it is, the U.S. government has spent close to $10 trillion (current dollars) on domestic welfare p r o ­grams since President Lyndon Johnson launched the "War on Poverty" in 1965.These include Aid to Fami­lies wi th Dependen t Children (now Temporary Assis­tance to N e e d y Fami l i es—TANF) ; food stamps; Medicaid; the Special Supplemental Food Program for W o m e n , Infants, and Chi ldren (WIC) ; utilities assis­tance under the Low- Income H o m e Energy Assistance Program (LIHEAP); housing assistance under a variety

T h e U.S. government has spent close to $10 trillion (current dollars) o n domestic welfare programs since President Lyndon Johnson launched the "War o n Pover ty" in 1965.

of programs, including public housing and Section 8 rental assistance; and the free commodities program. And then state and local governments engage in wel­fare spending that includes free medical care for the impoverished through charity hospitals.

Spending on all social programs is up by 22 percent (inflation-adjusted) since 2000. In 2004 total govern­ment spending on low- income families was $129 bil­lion, or $9,058 per poor family.

Besides all this publ ic-sector spending, private charities and reli­gious organizations offer considerable aid to the indigent, ranging from soup kitchens to housing and so forth.

N o w let's look at the official poverty rate for the Uni ted States as estimated by the Census Bureau from data on poverty and income collected in an annual survey and defined according to household size and makeup. For example, the average poverty threshold for a family of four was $18,392 in annual income in 2002.

T h e official rate combines the money income of individuals and

families before taxes with cash assistance received from government programs. That is compared with estab­lished pover ty thresholds. These thresholds vary according to the size of the family and are adjusted annually to account for the effects of inflation.

Christopher Lingle (dingle@ufm.edu. gt) is senior fellow at the Centre for Civil Society in New Delhi and visiting professor of economics at Universidad Francisco Marroquin in Guatemala.

THE FREEMAN: Ideas on L i b e r t y 8

C a s u a l t i e s o f t h e W a r o n P o v e r t y

But this official estimate does no t include noncash government benefits like public housing, Medicaid, free or subsidized medical care, or food stamps.

In all events, the financial resources of the " p o o r " in the Un i t ed States tend to be undercounted . For exam­ple, the poor tend to under repor t income to the C e n ­sus, perhaps because they fear it will be reported to the IRS. Consequently, Census figures on income relative to spending indicate that the poor spend $1.94 for every dollar of reported income.

Moreover, poverty measures ignore the value of household assets like housing. Data from 1995 indicate that 41 percent of all "poor" house­holds owned their own homes, with an average size of three bedrooms and one-and-a-half bathrooms—and most had a garage and a porch or patio. Among the poor, three-quarters of a million owned homes wor th over $150,000.

T h e average " p o o r " Amer ican lives wi th one- th i rd more living space than the average Japanese, 25 percent more than the average Frenchman, 40 per ­cent more than the average Greek, and four times more than the average Russian. In America 70 percent of " p o o r " households owned a car and 27 percent had two or more cars.

If absolute poverty is considered to be the lack of access to sufficient resources to satisfy basic needs, there is no t m u c h of this in the Un i t ed States. As in most countries, relative poverty is a bigger issue.

But relative poverty can never be fully resolved wi thou t implement ing an incentive-destroying policy of equal income regardless of effort or talent. History provides little evidence that forced income redistribu­t ion through taxation can alleviate mass poverty.

And so it is that despite massive amounts of spend­ing by governments , poverty remains at a high rate in the Un i t ed States. O r perhaps it is bet ter said that public-sector welfare and other aid programs are caus­ing poverty since the poor become dependent on

Relat ive poverty can never be fully resolved w i t h o u t imp lemen t ing an incentive-destroying policy of equal i n c o m e regardless of effort or talent.

handouts instead of looking for work or starting a business. (See Charles Johnson's article on page 12 to understand why the poor have trouble starting busi­nesses.)

Government officials w h o spend so m u c h of other people's money have weak incentives to see that it is spent well. Indeed, the so-called war on poverty has been no more effective than the war on drugs and probably less so than the war in Iraq.

Perhaps a bet ter response to poverty would be to reduce the reliance on governments . T h e slack could be made up by elements of civil society, such as p r i ­

vate charities, that are more effective than welfare programs in serving the poor .

As it is, 85 mil l ion Amer ican households give a total of $250 bi l­l ion to charities each year. Interest­ingly, private Americans gave more to the victims of the Asian tsunami than the federal government did.

Giving is not l imited to the very rich. T h e working poor give as large a percentage of their incomes as do the r ich and a lot more than does the American middle class.

Were it not for so many public policies that unde rmine private giv­

ing, this amoun t would almost certainly be larger. For example, private foundations face punitive regulation, and government subsidies to nonprofits crowd out charity. O n the one hand, subsidies reduce the incen­tive for those groups to seek voluntary contributions, and on the other they reduce the incentive for individ­uals to donate since they already "gave at the office" w h e n taxes were wi thheld from their paychecks. M o r e ­over, many policies reduce disposable incomes of major donors .

It is important to k n o w what lies behind the data on the extent of poverty and giving in America. It is wrong to think that Americans are shirking their obli­gations to needy neighbors or that the U S . govern­men t should do more . W

9 DECEMBER 2007

Ideas and Consequences

In Praise of an Uncommon Woman B Y L A W R E N C E W . R E E D

Popular literature is full of praises for " the c o m ­m o n man," but I am much more impressed by the m e n and w o m e n w h o stand apart from the

crowd. Some wise observer once said that only three kinds of people exist in the world: a very few w h o make things happen, a somewhat larger number w h o watch things happen, and then the vast majority w h o find out later what happened.

To be sure, some people are u n c o m m o n because of the ha rm they do, but the ones I 'm grateful for are those w h o are people of peace, character, initiative, and goodwil l—the exemplars w h o make change for the better. They are notable no t for what they take, but for what they inspire, create, build, and improve. They can be motivated entirely by material self-interest; or they may derive eno rmous personal satisfaction by simply mak ing others happy. T h e y inc lude inventors , en t repreneurs , and social activists. They often are dismissed at first as boat rockers and then acknowl­edged later to have been ahead of their t ime.

T h e u n c o m m o n person I want to tell you about is a humble black w o m a n from Philadelphia named Alberta Wilson, w h o m I've come to k n o w over the past two years. She saw a grievous problem firsthand—atrocious govern­men t schools—and is doing all in her power to help the victims escape. And she does it on a shoestring.

T h e "city of brotherly love" is one of the most v io­lent cities in the Un i t ed States. As of Oc tobe r there had been 339 murders this year. In such an environ­men t the safest school may not be the "free" one the government assigns you to because of your zip code.

Safety is a p r ime concern of Philadelphia parents, but educational quality can't be far behind. In Oc tobe r

Alberta Wilson

2006 Nathan Benefield of the Commonwea l th Foun­dation in Harrisburg authored a revealing commentary wi th the pithy title, "Is O u r Kids Learning?" Pennsyl­vania, he says, spends more on government - run educa­tion per-student than all but five other states (adjusting for cost-of-living differences) and ranks fourth in aver­age teacher salary. Taxpayers spent about $11,000 per government-school student in 2004 -05 , an increase of 46 percent in eight years. Yet in the state's inner-city schools, the results are appalling. In Philadelphia, only

33 percent of 11th graders are proficient in reading. For math the figure is a dismal 27 percent.

Alberta Wilson bears the scars of that urban environment and a tough family upbr ing ing to boot . As a child she received little affection or attention from an aloof father and an alcoholic mother. W h e n she reached j u n i o r high, her ne ighborhood was torn by race riots. She became a ringleader of a violent neigh­borhood gang. At 16 she was an unwed mother and dropped out of high school. H e r life was drenched in sex, alcohol, and drugs—exacerbated by dependency on government welfare. She wore a bracelet made from shotgun shells.

T h o u g h tough on the outside, Alberta on the inside was a troubled soul searching for a better way. In 1976 she attended a church at the invitation of a friend and became a born-again Christian. Four years later, on Christmas Eve 1980, she marr ied Woody Wilson. H e r life stabilized and her faith deepened. Woody's naval career took the couple to San Diego and then to Virginia Beach, where Alberta earned three degrees,

Lawrence Reed (Reed@mackinac.org) is president of the Mackinac Center for Public Policy (www.mackinac.org), a free-market research and educational organization in Midland, Michigan.

T H E F R E E M A N : I d e a s o n L i b e r t y 10

In P r a i s e o f an U n c o m m o n W o m a n

including a doctorate in religious education. By 1997 they were back in Philadelphia and Alberta was look­ing for a school-administrator position.

Tha t very au tumn Alberta was interviewed and offered the position of principal at the n e w Beulah Baptist Christ ian Day School. It started wi th just five children, but by the t ime she left five years later, the school boasted nearly a hundred, many of t hem from broken homes. Parents w h o wanted discipline and focus for their children found it at this school, just as Alberta had found purpose in her personal life. It was there that she came face to face wi th a stream of par­ents dissatisfied wi th government education yet unable to afford a private alternative. Want ing to tackle that problem head on, she decided to get involved in the school-choice movement by founding

Faith First Educational Assistance C o r -porat ion in 2002. In the five years since, it has provided private scholarship help to hundreds of chi ldren w h o would otherwise be forced into the failing Philadelphia school system.

Alberta's inspiration comes from an Old Testament proverb: "Train up a child in the way he should go and w h e n he is old he will not depart from it." She saw no way parents could abide by that a d m o ­nit ion wi th in the confines of government schooling. She sees herself as "allowing God to use m e to see that children be given a chance at a quality Christ ian edu­cation."

A Mackinac Cente r summer intern, Ben Stafford, notes in a recent essay that in Pennsylvania a business can donate to educational scholarship organizations and receive a tax credit of as m u c h as 90 percent, up to $200,000. W i t h the tax credit, almost $300 million has been donated by businesses to organizations similar to Faith First.

Faith First grants scholarships to low- income par­ents and then helps t hem make informed decisions about private schools and curricula. Alberta, wi th her husband often at her side, spends m u c h of her t ime raising the contr ibut ions that make it all happen. Faith First awarded more than 100 school-choice grants at

Watch ing Alberta Wi l son in action for any length of t ime leaves one breathless

an average of $500 each to low- income children in Pennsylvania and Virginia in 2006, and has provided nearly 400 scholarships since its inception.

Makes the Difference

A $500 scholarship may not seem like enough money to make a difference, but because tui t ion

at a private school can be as little as $3,000—still a steep challenge for a p o o r family—a scholarship from Faith First often tips the balance. T h e organization's volunteers build strong personal relationships wi th the recipient families. Educat ing for character, not only for knowledge, is a central feature of the program.

Watching Alberta Wilson in action for any length of t ime leaves one breathless. W h e n she's not holding a

"parent engagement mee t ing" in Philadelphia, Scranton, or nor the rn Virginia, she's work ing to open a new Faith First office in San Diego or sitting d o w n wi th anyone w h o will listen to her case for support ­ing private alternatives to govern­men t schools.

O t h e r local school-choice lead­ers are making a difference across the country: Virginia Walden-Ford

in Washington, D.C. , and Pilar Gomez in Milwaukee are two more good examples. Like Alberta, they under ­stand the value of a good education and strong charac­ter and have been willing to stand up for those values at no small expense to themselves.

Someday, w h e n entrenched interests and govern-ment -knows-bes t notions are finally swept aside, par­ents will be seen as customers, not captives, in the matter of educating children. Schools that fail t hem will shape up or go out of business. N o child will be left behind for the sake of keeping a bureaucracy well paid. We will all look back in puzzlement at h o w we could have ever expected government monopol ies , minions, and mandates to produce a quality product in a m o d e r n competit ive world. Alberta Wilson will be among the heroes we will thank for helping to pave the way w h e n it was clogged wi th daunting barriers. (M

11 DECEMBER 2007

Scratching By: H o w Government Creates Poverty as We Know It

BY C H A R L E S J O H N S O N

T h e experience of oppressed people is that the living of one's life is confined and shaped by forces and bar r i ­ers which are not accidental or occasional and hence avoidable, but are systematically related to each other in such a way as to catch one be tween and among them and restrict or penalize mo t ion in any direction. It is the experience of being caged in: all avenues, in every direction, are blocked or booby trapped.

—Mar i lyn Frye, "Oppression," in The Politics of Reality

Governments—loca l , state, and federal—spend a lot of t ime wr ing ing their hands

about the plight of the urban poor. Look around any gove rnmen t agency and you'll never fail to find some know-i t -al l wi th a suit and a nameplate on his desk w h o has just the right government program to eliminate or ameliorate, or at least contain, the worst aspects of g r ind­ing poverty in American cities— especially as experienced by black people, immigrants, people wi th disabilities, and everyone else marked for the special observation and solicitude of the state bureaucracy. Depend ing on the bureaucrat's frame of mind, his pet programs might focus on doling out con ­ditional charity to "deserving" poor people, or put t ing more "at-r isk" poor people under the surveillance of social workers and medical experts, or beating up recalcitrant poor people and locking them in cages for several years.

But the one thing that the government and its m a n -

Trie one th ing that the government and its managerial aid workers will never do is just get out of the way.

agerial aid workers will never do is just get out of the way and let poor people do the things that poor people naturally do, and always have done, to scratch by.

Government anti-poverty programs are a classic case of the therapeutic state setting out to treat disorders created by the state itself. Urban poverty as we know it is, in fact, exclusively a creature of state intervention in consensual economic dealings. This claim may seem bold, even to most libertarians. But a lot turns on the phrase "as we k n o w it." Even if absolute laissez faire reigned beginning tomorrow, there would still be p e o -

pie in big cities w h o are living pay­check to paycheck, heavily in debt, homeless, jobless, or otherwise at the bo t tom rungs of the socioeconomic ladder. These conditions may be per­sistent social problems, and it may be that free people in a free society will still have to come up with voluntary institutions and practices for addressing them. But in the s ta te- regimented market that dominates today, the mate -rial predicament that poor people find

themselves in—and the arrangements they must make wi thin that predicament—are battered into their famil­iar shape, as if by an invisible fist, through the diffuse effects of pervasive, interlocking interventions.

Consider the commonplace phenomena of urban poverty. Livelihoods in American inner cities are typi­cally extremely precarious: as Sudhir Alladi Venkatesh

Charles Johnson (feedback@radgeek.com) is a research fellow at the Molinari Institute and author of the Rad Geek People's Daily (Irttp: /Vradgeek.com/) weblog.

T H E F R E E M A N : I d e a s o n L i b e r t y 12

Scra tch ing By: How G o v e r n m e n t Creates P o v e r t y as We K n o w It

writes in Off the Books: "Condi t ions in neighborhoods of concentrated poverty can change quickly and in ways that can leave families unprepared and wi thou t m u c h recourse." Fixed costs of l iving—rent, food, clothing, and so o n — c o n s u m e most or all of a family's income, wi th little or no access to credit, savings, or insurance to safeguard them from unexpected disasters.

Dependent on Others

Their poverty often leaves t hem dependent on other people. It pervades the lives of the employed and

the unemployed alike: the jobless fall . back on charity or help from family; those w h o live paycheck to pay­check, wi th little chance of finding any work elsewhere, depend on the good graces of a select few bosses and brokers. O n e w o m a n quoted by Venkatesh explained w h y she cont in­ued to work through an exploitative labor shark rather than leaving for a steady j o b wi th a wel l - to-do family: "And what if that family gets rid of me? W h e r e am I going next? See, I can't take that chance, you know. . . . All I got is Johnnie and it took m e the longest just to get h im on my side."

T h e daily expe r i ence of the urban poor is shaped by geographical concentration in socially and culturally isolated ghet to ne ighborhoods wi th in the larger city, wh ich have their o w n characteristic features: housing is concentra ted in dilapidated apartments and housing projects, o w n e d by a select few absentee landlords; many abandoned buildings and vacant lots are scat­tered t h r o u g h the n e i g h b o r h o o d , w h i c h remain unused for years at a t ime; the use of outside spaces is affected by large numbers of unemployed or homeless people.

T h e favorite solutions of the welfare s tate—govern­men t doles and "urban renewal" projects—mark no real improvement . R a t h e r than freeing poor people from dependence on benefactors and bosses, they merely transfer the dependence to the state, leaving the

Every day and in every culture from t ime ou t of mind , p o o r people have repeatedly shown remarkable intelligence, courage, persistence, and creativity in finding ways to p u t food o n the table.

least politically connected people at the mercy of the political process.

But in a free market—a truly free market, where individual poor people are just as free as established for­mal -economy players to use their own property, their own labor, their own know-how, and the resources that are available to t h e m — t h e informal, enterpr is ing actions by poor people themselves would do far more to systematically undermine , or completely eliminate, each of the stereotypical conditions that welfare statists deplore. Every day and in every culture from time out

of mind, poor people have repeatedly shown remarkable intelligence, courage, persistence, and creativity in finding ways to put food on the table, save money, keep safe, raise families, live full lives, learn, enjoy themselves, and exper ience beauty, whenever , wherever, and to whatever degree they have been free to do so. T h e fault for despairing, dilapidated urban ghettoes lies not in the pressures of the market, nor in the character flaws of individual poor people, nor in the characteristics of ghetto subcultures. T h e fault lies in the state and its persistent interference wi th poor people's own efforts to get by through independent work, clever hustling, scratching together resources, and voluntary mutual aid.

Housing Crisis

Progressives routinely deplore the "affordable hous ­ing crisis" in American cities. In cities such as N e w

York and Los Angeles, about 20 to 25 percent of low-income renters are spending more than half their incomes just on housing. But it is the very laws that Progressives favor—land-use policies, zoning codes, and building codes—that ratchet up housing costs, stand in the way of alternative housing options, and confine p o o r people to ghet to neighborhoods . His tor i ­cally, w h e n they have been free to do so, poor people have happily disregarded the ideals of political h u m a n i ­tarians and found their own ways to cut housing costs, even in bustling cities wi th tight housing markets.

13 DECEMBER 2007

Char les J o h n s o n

V-4ir4fav.-.---.v,

O n e way was to get other families, or friends, or strangers, to move in and split the rent. Depend ing on the n u m b e r of people sharing a home , this might mean a less-comfortable living situation; it might even mean one that is unhealthy. But decisions about health and comfort are best made by the individual people w h o bear the costs and reap the benefits. Unfortunately today the decisions are made ahead of t ime by city governments through zoning laws that prohibit or restrict sharing a h o m e among people not related by b lood or marriage, and building codes that limit the number of residents in a building.

Those w h o cannot make enough m o n e y to cover the rent on their own, and cannot split the rent enough due to zoning and bui lding codes, are pr iced ou t of the hous ing market entirely. O n c e homeless, they are left exposed no t only to the elements, bu t also to harassment or arrest by the police for " loi ter­i ng" or "vagrancy," even on public property, in efforts to force t h e m into overcrowded and dangerous insti­tut ional shelters. But whi le government laws make living on the streets even harder than it already is,

Credit: Miami Independent Media Center

government in tervent ion also blocks homeless p e o ­ple's efforts to find themselves shelter outside the conventional housing market. O n e of the oldest and commones t survival strategies practiced by the urban poor is to find wild or abandoned land and build shanties on it out of salvageable scrap materials. Scrap materials are plentiful, and large por t ions of land in ghet to ne ighborhoods are typically left unused as c o n d e m n e d buildings or vacant lots. Formal title is very often seized by the city government or by quasi-governmenta l "deve lopment" corporat ions th rough the use of eminent domain . Lots are held out of use, often for years at a t ime, whi le they await government publ ic-works projects or developers willing to buy up the land for large-scale building.

Urban Homesteading

In a free market, vacant lots and abandoned bui ld­ings could eventually be homesteaded by anyone

will ing to do the work of occupying and using them. Poor people could use abandoned spaces wi th in their o w n communi t ies for setting up shop, for gardening,

T H E F R E E M A N : I d e a s o n L i b e r t y 14

Scratch ing By: How G o v e r n m e n t Creates P o v e r t y as We K n o w It

or for living space. In Miami , in O c t o b e r 2006, a g roup of c o m m u n i t y organizers and about 35 h o m e ­less people built U m o j a Village, a shanty town , on an inner-c i ty lot that the local government had kept vacant for years. T h e y publicly stated to the local gov­e r n m e n t that "We have only one demand . . . leave us alone."

Tha t wou ld be the end of the story in a free mar ­ket: there wou ld be n o eminen t domain , n o govern­men t ownership, and thus also no political process of seizure and redevelopment ; once-homeless people could establish proper ty rights to abandoned land th rough their o w n sweat equ i t y—wi thou t fear of the governmen t ' s demol i sh ing thei r work and selling their land out from under them. But back in Miami , the city a t torney and city counci l t ook about a m o n t h to begin legal efforts to destroy the residents ' homes and force t h e m off the lot. In April 2007 the city police took advantage of an accidental fire to enforce its pol i t i ­cally fabricated title to the land, clearing the lot, arresting 11 people , and erect ing a fence to safeguard the once-aga in vacant lot for profes­sional "affordable hous ing" develop­ers.

H a d the city g o v e r n m e n t no t made use of its supposed title to the abandoned land, it n o doub t could have made use of state and federal bui lding codes to ensure that resi­dents wou ld be forced back in to homelessness—for their o w n safety, of course. Tha t is in fact wha t a coun ty health c o m ­mission in Indiana did to a 93-year-old man named T h e l m o n Green, w h o lived in his '86 Chevrole t van, wh ich the local towing company allowed h im to keep on its lot. Many people th rown into poverty by a sud­den financial catastrophe live out of a car for weeks or months unt i l they get back on their feet. Living in a car is cramped, but it beats living on the streets: a car means a place you can have to yourself, wh ich holds

Pervasive gove rnmen t regulation, passed in the so-called "public interest" at the behest of comfortable midd l e - and uppe r -class Progressives, creates endless constraints o n p o o r people s ability to earn a living or make needed m o n e y o n the side.

your possessions, wi th doors you can lock, and s o m e ­times even air condi t ion ing and heating. But staying in a car over the long t e r m is m u c h harder to manage w i t h o u t runn ing afoul of the law. T h e l m o n Green got by well e n o u g h in his van for ten years, but w h e n the Indianapolis Star p r in ted a human- in te res t story on h im last December , the county health commission took not ice and prompt ly ordered Green evicted from his o w n van, in the n a m e of the local hous ing code.

Since government housing codes impose detailed requirements on the size, architecture, and building materials for n e w per ­manent housing, as well as on special­ized and extremely expensive contract work for electricity, p l u m b ­ing, and other luxuries, they effec­tively obstruct or destroy most efforts to create transitional, intermediate, or informal sorts of shelter that cost less than rented space in government -approved housing projects, but p r o ­vide more safety and comfort than living on the street.

T Constraints on Making Income

u r m n g from expenses to income , pervasive government

regulation, passed in the so-called "public interest" at the behest of comfortable middle- and upper-class Progressives, creates endless c o n ­straints on poor people's ability to earn a living or make needed money on the side.

T h e r e are, to start ou t , the trades that the state has m a d e ent i re ly illegal: selling drugs ou ts ide of a s t a t e - a u t h o r i z e d pharmacy , p ros t i t u t ion ou t s ide of the occasional s t a t e - au tho r i zed b ro the l " r anch , " or r u n n i n g smal l - t ime gambl ing o p e r a ­t ions o u t s i d e of a s t a t e - a u t h o r i z e d c o r p o r a t e casino. T h e s e trades are often p rac t i ced by w o m e n and m e n facing despera te pover ty ; the state's efforts add the danger of fines, forfeitures, and lost years in p r i son .

15 DECEMBER 2007

Char les J o h n s o n

Poor Shut Out

Beyond the government-created black market, there are also countless jobs that could be done above-

ground, but from which the poor are systematically shut out by arbitrary regulation and licensure require­ments . In principle, many w o m e n in black c o m m u n i ­ties could make money braiding hair, wi th only their o w n craft, word of mou th , and the living room of an apartment. But in many states, anyone found braiding hair w i thou t having put down hundreds of dollars and days of her life to apply for a government-fabricated cosmetology or hair-care license will

be fined hundreds or thousands of dollars.

In principle, anyone w h o knows h o w to cook can make money by laying ou t the cash for ingredients and some insulated containers, and taking the food from his own ki tchen to a stand set up on the sidewalk or, wi th the landlord's permission, in a parking lot. But then there are busi­ness licenses to pay for (often h u n ­dreds of dollars) and the costs of complying wi th hea l th -depar tment regulations and inspections. T h e latter make it practically impossible to run a food -o r i en t ed business w i t h o u t buying or leasing property dedicated to preparing the food, at which point you may as well forget about it unless you already have a lot of start-up capital sitting around.

Every m o d e r n urban center has a t remendous demand for taxi cabs. In principle, anyone w h o needed to make some extra money could start a par t - t ime "gypsy cab" service wi th a car she already has, a cell phone , and some word of m o u t h . She can make good money for honest labor, providing a useful service to willing customers—as a single independent worker, wi thou t needing to please a boss, w h o can set her own hours and pu t as m u c h or as little into it as she wants in order to make the money she needs.

But in the Un i t ed States, city governments rou-

T h e practical consequence is that p o o r people w h o might otherwise be able to make easy m o n e y o n their o w n are legally forced ou t of driving a taxi, or else forced to hire themselves ou t to an existing medal l ion-holder o n his o w n terms.

tinely impose massive constraints and controls on taxi service. T h e worst offenders are often the cities wi th the highest demand for cabs, like N e w York City, where the government enforces an arbitrary cap on the number of taxi cabs through a system of government-created licenses, or "medallions." T h e total number of medallion taxis is capped at about 13,000 cabs for the entire city, wi th occasional government auctions for a handful of new medallions. T h e system requires any­one w h o wants to become an independent cab driver to purchase a medallion at monopoly prices from an

existing holder or wait around for the

city to auction off new ones. At the auction last November a total of 63 new medallions were made available for auction wi th a minimum bidding price of $189,000.

Besides the cost of a medallion, cab owners are also legally required to pay an annual licensing fee of $550 and to pay for three inspections by the city government each year, at a total annual cost of $150. The city government enforces a single fare structure, enforces a c o m m o n paint job , and n o w is even forcing all city cabs to upgrade to high-cost, h igh­tech GPS and payment systems, whe ther or not the cabbie or her cus­tomer happens to want them. The primary beneficiary of this politically imposed squeeze on independen t cabbies isVeriFone Holdings, the first firm approved to sell the electronic

systems to a captive market. D o u g Bergeron, VeriFone's C E O , crows that

"Every year, we find a free ride on a new segment of the economy that is going electronic." In this case,Ver-iFone is enjoying a "free r ide" indeed.

T h e practical consequence is that poor people w h o might otherwise be able to make easy money on their own are legally forced out of driving a taxi, or else forced to hire themselves out to an existing medal l ion-holder on his own terms. Ei ther way, poor peop le are shoved ou t of flexible, i n d e p e n d e n t

THE FREEMAN: Ideas on L i b e r t y 16

Scratch ing By: How G o v e r n m e n t Creates P o v e r t y as We K n o w It

work , w h i c h many w o u l d be wil l ing and able to do using one of the few capital goods that they already have on hand. Lots of p o o r people have cars they could use; no t a lot have a couple h u n d r e d thousand dollars to spend on a gove rnmen t -c rea t ed license.

Government regimentat ion of land, housing, and labor creates and sustains the very structure of urban poverty. Govern-men t seizures create and reinforce the dilapidation of ghet to ne igh­borhoods by constricting the hous ­ing market to a few landlords and keeping marginal lands out of use. Government regulations create homelessness and artificially make it worse for the homeless by driving up housing costs and by obstructing or destroying any intermediate informal living solutions be tween renting an apartment and living on the street. And having made the ghetto, gov­e r n m e n t prohibi t ions keep p o o r people confined in it, by shutting them out of more affluent ne ighbor­hoods where many might be able to live if only they were able to share expenses.

Artificially l imiting the alternative options for housing ratchets u p the fixed costs of living for the urban poor . Artificially l imiting the alternative options for independen t w o r k ratchets d o w n the opportuni t ies for increasing income.

Ratcheting Costs Up and Opportunities Down

Artificially l imiting the alternative options for hous ­ing ratchets up the fixed costs of living for the

urban poor. Artificially l imiting the alternative options for independent work ratchets d o w n the opportunit ies for increasing income. And the squeeze makes poor people dependent o n — a n d thus vulnerable to negli­gent or unscrupulous treatment f rom—both landlords and bosses by constraining their ability to find other, better homes, or other, better livelihoods. T h e same

squeeze puts many more poor people into the position of living "one paycheck away" from homelessness and makes that position all the more precarious by harass­ing and coercing and imposing artificial destitution on those w h o do end up on the street.

Amer ican state corporat ism forcibly reshapes the world of work and business on the mode l of a c o m ­

mercial strip mall: sanitized, central-ized, r e g i m e n t e d , officious, and domina ted by a few powerful p rop r i ­etors and their short list of favored par tners , to w h o m everyone else relates as ei ther an employee or a consumer . A truly free market , w i t h ­out the pervasive control of state l icensure r equ i rement s , regula t ion , inspections, paperwork , taxes, "fees," and the rest, has m u c h more to do w i t h the t radi t ional image of a bazaar: messy, decentralized, diverse, informal, flexible, pervaded by hag­gling, and kept together by the spon­taneous order of countless small- t ime independen t operators , w h o quickly and easily shift be tween the roles of customer, merchant , contract laborer, and more . It is precisely because we have the strip mall rather than the bazaar that people living in poverty find themselves so often confined to ghet toes , caught in precarious situa­

tions, and dependen t on o thers—ei ther on the b u m or caught in jobs they hate but cannot leave, whi le barely keeping a barely tolerable roof over their heads.

T h e poorer you are, the more you need access to informal and flexible alternatives, and the more you need opportunit ies to apply some creative hustling. W h e n the state shuts that out , it shuts poor people into ghettoized poverty. @

17 DECEMBER 2007

The Therapeutic State

The Medicalization of Everyday Life B Y T H O M A S S Z A S Z

I n my Oc tobe r co lumn I discussed the concept of medicalization and its role in m o d e r n societies. In this co lumn I propose to answer the question: H o w

are we to understand the contemporary confusion about wha t counts as a disease?

Medica l classification—the l inguis t ic-conceptual order ing of phenomena we call "diseases" and of the interventions we call " treatments"—is a human activ­ity, governed by h u m a n interests. In the Uni ted States today, the forces of medicalization rule virtually u n o p ­posed, indeed unrecognized for the economic, moral, and political interests they represent. O u r drug policies are illustrative. For millennia, the regulation of drug use was a matter of self-control, custom, religion, and law. In part, this is still the case. M o r e importantly, however, drug use is regulated by laws and ostensibly scientific "facts," exemplified by a broadly based drug prohibi ­t ion consisting of prescription laws and criminalization of the trade in many drugs, such as opiates, cocaine, and marijuana. This is drug medicalization from above. D r u g medicalization from below is pursued no less zealously by individuals w h o , while ostensibly opposed to our drug laws, p romote so-called medical-marijuana initiatives, physician-assisted suicide, and similar schemes. T h e result is loss of self-ownership and the right to self-medication—the classical liberal/libertar­ian perspective on drug use.

Diseased Mind?

Because the mind is not an object like the body, it is a mistake to apply the predicate disease to it.

Hence , as I asserted half a century ago, the "diseased m i n d " is a metaphor , a mistake, a myth.

Actually, this idea is not as novel as it might seem. Emil Kraepelin (1856—1926), the creator of the first mode rn psychiatric nosology, acknowledged the funda­mental analytic t ruth that there are no mental illnesses. In his classic, Lectures on Clinical Psychiatry (1901), he

stated: " T h e subject of the following course of lectures will be the Science of Psychiatry, which, as its name [Seelenheilkunde] implies, is that of the treatment of men­tal disease. It is true that, in the strictest terms, we cannot speak of the mind as becoming diseased." Half a century earlier, the Viennese psychiatrist Ernst von Feuchters-leben (1806-1849) explicitly emphasized the analogical-metaphorical character of mental illnesses: " T h e maladies of the spirit alone, in abstracto, that is, error and sin, can be called diseases of the mind only per analogiam. They come not within the jurisdiction of the physician, but that of the teacher or clergyman, w h o again are called physicians of the mind/soul only per analogiamr

T h e transformation of religious explanations and controls of behavior into medical explanations and controls of behavior is one of the momen tous conse­quences of the Enl ightenment . T h e waning power of religion and the Church and the waxing power of sci­ence and the State are manifested, among other things, by the political control of medical practice and the drug laws that deny access to the layperson to drugs (except those classified as over- the-counter) .To legally obtain or possess a "prescription drug," the layperson must establish a professional relationship w i th a licensed physician and receive a diagnosis for an ill­ness; that is, he must be a patient w h o suffers from a proven or putative illness. For example, to receive a sleeping pill, the person must "suffer from insomnia." This charade contributes mightily to the medicaliza­t ion rampant in our society. In turn, medicalization is mindlessly equated, especially by the cognoscenti, wi th scientific, moral, and social progress, and contributes further to its popularity.

Thomas Szasz (tszasz@aol.com) is professor of psychiatry emeritus at SUNY Upstate Medical University in Syracuse. His latest books are Coerc ion as C u r e : A Crit ical His tory of Psychiatry (Transaction) and T h e Medical izat ion of Everyday Life: Selected Essays (Syracuse University Press).

T H E F R E E M A N : I d e a s o n L i b e r t y 18

Although medicalization encompasses more than psychiatry, we must be clear about one thing: Psychiatry is medicalization through and through. Whatever aspect of psychiatry psychiatrists claim is not medicalization, is not medicalization only if it deals wi th proven disease, in which case it belongs to neurology, neuroanatomy, neurophysiology, neurochemistry, neuropharmacology, or neurosurgery, not psychiatry.

Psychoanalysis is medical izat ion squared. It is important , in this connect ion, not to be fooled by lay analysis, clinical psychology, or social work. These and other nonmedical mental-heal th and counseling " p r o ­fessions" are medicalization cubed: as if to compensate for their lack of medical knowledge and qualifications, nonmedica l menta l -hea l th "professionals" are even more deeply commit ted than psychiatrists to their claim of special expertise in the diagnosis and treat­men t of mental illnesses.

Freud's Contribution

By the t ime Sigmund Freud (1856—1939) appeared on the historical stage, medicalization was in full

swing. T h e birth of psychoanalysis is, in fact, a manifes­tation of the increasing populari ty of this trend at the end of the n ine teenth century as well as a cause of its explosive growth dur ing the twentieth century. T h e gist of Freud's thesis was that the symptoms of mental illnesses are the "p roduc t s " of the same "menta l processes" that are responsible for the thoughts and actions of normal persons. In other words, Freud redis­covered that " there is me thod in madness," or as he preferred to put it, that sane and insane behaviors are subject to the same "psychological laws." To create his special brand of pseudoscience, he titled his book The Psychopathology of Everyday Life. H e could just as well have titled it The Everyday Normality of Psychopathologi-cal Life. There would, of course, have been neither fame nor fortune in that. Instead, he fanned the flames of medicalization and transformed a smoldering fire into an al l-consuming conflagration. At the same time, because he k n e w better, Freud's attitude toward m e d ­icalization was ambivalent and opportunist ic.

People do not have to be told that malaria and melanoma are diseases. They k n o w they are. But people

T h e M e d i c a l i z a t i o n o f E v e r y d a y L i f e

have to be told, and are told over and over again, that alcoholism and depression are diseases. Why? Because people k n o w that they are not diseases, that mental illnesses are not "like other illnesses," that mental hos­pitals are not like other hospitals, that the business of psychiatry is control and coercion, not care or cure. Accordingly, medicalizers engage in a never-ending task of " educa t ing" people that nondiseases are diseases.

Formerly, people felt depressed or were depressed. N o w they have depression. Formerly, some depressed persons killed themselves, but most did not . N o w p e o ­ple do not kill themselves, depression kills them, and (virtually) everyone w h o kills himself is said to have been depressed. And just as people can have cancer and not k n o w it, so they may have depression and not k n o w it, and hence need to be tested for it, lest " i t" kill them. O n its website, the Depression Is Rea l Coali t ion emphasizes: "Indisputable scientific evidence shows depression to be a biologically-based disease that destroys the connections be tween brain cells."

Cui bono? T h e peddlers of psychiatric snake oil w h o are unfailingly silent about two important risks inherent in every professional contact between an indi­vidual and a psychiatrist, namely, stigmatization by psy­chiatric diagnosis and loss of liberty by psychiatric incarceration. W h y do the promoters of psychiatric slav­ery regularly fail to ment ion the potential downside of "mental health services"? Because they self-servingly define psychiatric oppression of the patient as beneficial for him, much as the promoters of chattel slavery regarded oppression of the slave as beneficial for him. Lincoln's answer to this outrage remains relevant: "But, slavery is good for some people! As a good thing, slavery is strikingly peculiar, in this, that it is the only good thing which no man ever seeks the good of, for himself."

In short, medicalization is nei ther medicine nor sci­ence; it is a semantic-social strategy that benefits some persons and harms others.

" [T]he medical treatment of [mental] patients began wi th the infringement of their personal freedom," warned Karl Wernicke (1848—1905), the pioneer Ger ­man neuropathologist . It still begins wi th the infringe­men t of their personal freedom. (f|)

19 DECEMBER 2007

The Fear of Free Trade

BY M A R K W. H E N O R I C K S O N

I t's hard to think of an issue that is more polarized than the one be tween free traders and protect ion­ists. Those of us w h o favor free trade believe in the

ethical principle that people should be free to buy from whomever they choose, and in the economic t ruth that wealth and efficiency increase as prices fall.

We sometimes forget, however, h o w unrealistic and even heartless those positions seem to people on the other side of the issue—nice-sounding theories that would work in a perfect world, but totally impractical and harmful in light of the allegedly unfair trade prac­tices employed by foreign business competi tors and the governments in their h o m e countries.

Protectionists aren't interested in what they consider abstract intellec­tual notions. Thei r opposit ion to free trade is visceral and passionate. They are driven by two fears: that wi thou t government protect ion (tariffs, q u o ­tas, and the like) against unfair for­eign compet i t ion, they may lose their jobs—thei r l ivel ihood—and also that the country as a whole will go down the tubes. T h e first concern is justified, the second is not; however, bo th fears need to be addressed head on by the free-trade camp if we wish to allay suspicions that we don' t care about our country and compatriots and that we are not interested in justice.

Let's tackle first the issue of lost jobs . It is an eco­nomic fact of life that in a competit ive marketplace less efficient (higher cost) providers of goods and services are replaced by more efficient (lower cost) providers. Protectionists routinely concede this point . Thei r stan-

W e sometimes forget, however, h o w unrealistic and even heartless those positions seem to people on the other side of the issue.

dard line is that they have nothing against competi t ion, as long as it's fair competi t ion. Indeed, "fairness" is the pr imary (and often the only) issue on which protec­tionists rest their case, so we need to examine the rela­tive fairness of free trade and protectionism.

T h e first point that must be made is that American labor unions, which are some of the most vociferous advocates of protectionism, are being disingenuous at best if they pretend to welcome free and fair compet i ­tion. By their very nature, unions today are ant icom­petitive and by law are often able to extract

above-market wages from employers. In effect, labor unions have been the beneficiaries of domestic protect ion­ism—legal pro tec t ion from other American workers—so naturally they feel they also should be protected from foreign workers. O n e of the tragic ironies of unionism is that if unions hadn't forced wages unna tu­rally high, then American businesses would be in a much more compet i ­tive position vis-a-vis foreign compe-

t i t ion—that is, fewer American jobs would be in danger of being displaced by foreigners. In fact, what some American industries need to survive against foreign competi t ion isn't trade barriers, but simply for their own cost structure to be rationalized, such as by letting wages be determined by supply and demand and productivity, rather than by the monopoly bargaining power of unions.

Mark Hendrickson (hendricksonmw(i City College.

ga.edu) teaches economics at Grove

T H E F R E E M A N : I d e a s o n L i b e r t y 20

Business Favored Protection

Of course, major business leaders in Amer ica favored protec t ion from foreign compet i t ion

throughout the nineteenth century, w h e n unions had little influence.

Even if you agree that any clamor of labor unions for fair competi t ion rings hollow, most American work ­ers aren't unionized, so let's address their concerns about unfair foreign competi t ion. Some Americans have a legitimate concern that they may lose their jobs as a result of such "unfair" trade practices as dumping or subsidies.

D u m p i n g is one of those slippery concepts that is difficult to define and even more difficult to prove even w h e n adjudicated by a panel of experts . T h e lay­man's definition of d u m p i n g is: "sell­ing goods be low the i r cost of product ion ." This concept is p r o b ­lematical for several reasons. First, businesses do this all the t ime, and there is no th ing inherent ly sinister about it. T h i n k of loss-leaders and end-of - the-year clearance sales. In business the re is a p h e n o m e n o n k n o w n as "exper ience curve p r i c ­ing" whereby a company will set

prices low so as to accelerate sales • and move d o w n the learning curve as fast as possible. T h e issue is further complicated by uncer ta in ty about h o w to calculate the cost of p roduc t ion . Should a business's l o n g - t e r m fixed costs be amort ized over ten years, 20, 30? Yes, there are t imes w h e n a firm sacrifices profits for mar ­ket share in wha t some call "predatory p r i c ing" and laymen call d u m p i n g (either way, consumers reap a windfall from the discounted prices), bu t so what? T h e theory is that this is h o w one firm will gain a monopoly . In practice, there are those w h o claim that n o company has ever engaged in constant perennial dumping . I can't vouch for that assertion, bu t I chal­lenge those w h o cite " d u m p i n g " as a bogeyman to name one industry n o w domina ted by a m o n o p o l y as a result of dumping . D u m p i n g is no th ing more than a red he r r ing used by protectionists to d r u m up sup­por t .

D u m p i n g is no th ing m o r e than a red he r r i ng used by protectionists to d r u m u p support .

Foreign Subsidies to Industry

Unlike w i t h d u m p i n g , the viability of some Amer ican businesses and jobs is undoub ted ly

jeopardized w h e n foreign governments subsidize cer­tain industries. Let's overlook the fact that Unc l e Sam subsidizes many Amer ican businesses and assume that an Amer ican business about to be crushed by foreign compet i t ion isn't unionized, receives n o subsidies, and wou ld survive if it weren ' t be ing undersold by the subsidized foreign compet i tor . Clearly, this is an unfair situation. It isn't fair to the taxpayers of the foreign coun t ry whose gove rnmen t is conferr ing the subsidy on a favored enterprise, and it isn't fair to the i n n o ­cent Americans whose lives will be disrupted by the subsidies.

But look at what happens if the U.S. government erects trade barriers to reduce or eliminate the impor ta ­t ion of the subsidized products. Yes, this can help the domestic compet i tor and preserve those particular jobs , but is it fair for American consumers to have to pay more for things than for­eigners pay? At this junc ture , the p ro ­tectionists argue that jobs come first and consumers second. T h e problem

is, w h e n Americans have to pay a higher price than necessary for some­thing, they have less purchasing power

left to buy the product of o ther people's labor, and so employment elsewhere is less than it could be.

Protect ionism may indeed preserve specific A m e r i ­can jobs, but it often does so at the expense of other Amer ican jobs. This is particularly evident w h e n the protected good is used as a factor of product ion here. For example, w h e n the domest ic steel industry received tariff protect ion from lower-priced imports in the 1980s and in 2 0 0 2 - 0 3 , many more American jobs were lost in steel-consuming industries than were saved in the steel-producing companies. (This is predictable from an economic standpoint: if an American a u t o m o ­bile manufacturer has to pay more for steel than a Ger­man carmaker, then the Germans ' lower costs will give t h e m a competit ive advantage over the Americans.) W h a t is fair about the U.S. government saving the jobs

21 DECEMBER 2007

M a r k W. H e n d r i c k s o n

of some Americans, however innocent , by introducing policies that inflict j o b losses on other innocent Amer ­icans—especially w h e n the protectionist policies result in more jobs being lost than the absence of such pol i ­cies would produce?

Here is an analogy: a ship is about to sink; the only lifeboat is filled wi th 12 small passengers; then eight large passengers persuade the ship's officers to remove the 12 small passengers from the l ifeboat—dooming them—so that the eight large passengers may have their places. That is the reality of protectionism. I 'm not knocking the survival instinct, but let's drop the pre­tense that such actions restore "justice" or "fairness."

O n a more elementary level, what is fair about p ro ­tectionism in general w h e n the U.S. government stands by and allows millions of jobs to disappear every year (ou tnumbered , thankfully, by newly created jobs) and then inter­venes to save jobs for just certain Americans? Clearly, protect ionis t policies don ' t p roduce the "level playing field" that protectionists claim to favor. Protectionism, unlike free trade, is discriminatory and con ­fers a privileged political status on a minor i ty of workers, thereby violat­ing the first pr inciple of just ice: equality before the law.

In sum, protect ionism makes our coun t ry poorer , whi le free trade makes us richer; protectionism's inef­ficiencies reduce employment , while free trade's efficiencies increase employment ; protect ionism curtails individual liberty, whi le free trade is an expression of liberty; protect ion­ism corrupts justice, while free trade enshrines equality before the law.

Ah, but will free trade ruin the Un i t ed States of America? That is the other major reason why so many Americans are leery of it.

Unlimited Work

The not ion that free trade will gut any nation's econ­omy could only be valid in a zero-sum world with

Free trade doesn't reduce employment , bu t rearranges it to m o r e efficient applications, just as economic compet i t ion across town, across the state, or across the coun t ry causes some jobs to supplant others.

a fixed number of jobs, where one country's gain would be another's loss. In fact, though, the number of jobs, both at home and abroad, is locked into a clear uptrend. N e w businesses and industries continually emerge in the never-ending attempt to satisfy humankind's insatiable wants. We can never run out of jobs.

Free trade doesn't reduce employment, but rearranges it to more efficient applications, just as economic com­petition across town, across the state, or across the coun­try causes some jobs to supplant others. This process is natural and healthy, not sinister or harmful. Yes, as coun­terintuitive or perverse as it may seem, a healthy econ­omy is one that destroys jobs—by replacing them with new jobs. Just as a healthy human body undergoes a

constant process of renewal by shed­ding dead cells and replacing them with living cells, so a healthy economy is one in which more-efficient providers of goods and services dis­place less-efficient providers.

If that sounds cold and clinical, ask yourself if you would rather be part of the U.S. economy (as hampered as it is) or to have been a worker in the Soviet economy. T h e Soviet U n i o n had the most protectionist system possible—the government guaranteed everyone's j o b so that there was never any unemployment . T h e price for guaranteed employment was an econ­omy wi thout flexibility or adaptabil­ity. W i t h employment and the economy frozen in place, the Soviet planners in effect outlawed economic

progress, resulting in devastating stagnation and impov­erishment in the so-called "workers ' paradise."

By contrast the dynamic, relatively free U.S. econ­omy has always pushed people out of old jobs and into n e w ones. W hi l e challenging for the individuals affected, these are the inevitable growing pains associ­ated wi th progress for us all. Look at American agricul­ture, for example. Over the past 250 years, farm employment has shrunk from over 80 percent of the American population to less than 2 percent. We may sympathize with the anguish of millions of Americans

THE FREEMAN: Ideas on L i b e r t y 22

T h e F e a r o f F r e e T r a d e

w h o have had to abandon farming as their source of income, but our society is much richer today as a result of this shift. Because so few people are needed to p r o ­duce agricultural commodit ies , tens of millions of other Americans are n o w free to provide countless other goods and services that wouldn ' t even exist if their providers were still back on the farm.

T h e slogan "Buy Amer ican" resonates wi th in and appeals to our patriotism, but insofar as it means to shop for Amer ican-made products instead of the low­est-price, highest-quality products, it is a rejection of economic rationality. Economists going back to Adam Smith have unders tood that the t rue measure of " the wealth of nat ions" is h o w affordable is John Q. Public's cost of living. If the Uni ted States had been closed to foreign trade over the past 50 years, we might be paying $40,000 for a Ford Pinto IV, $15 for a gallon of gasoline, and $5 for a quart of orange juice. We would all be a lot poorer.

Richer Households

What actually has happened over the past 50 years is that protec­

tionist barriers have been lowered. It is estimated that the average American household's income is $10,000 a year higher as a result of tariff reductions in the past half-century ("A Case For Trade," Investor's Business Daily editorial, September 14, 2006).

In 1992, R e f o r m Party presidential candidate Ross Perot warned of "a giant sucking sound" from U.S. jobs moving to Mexico if the N o r t h America Free Trade Agreement (NAFTA) were adopted. Since N A F T A took effect in 1994, the Uni t ed States has enjoyed a net increase of nearly two million jobs per year, wi th c o m ­pensation in three-fourths of the new jobs above the national medians (U.S. Depar tmen t of Commerce , "A Profile of U.S. Expor t ing Companies , 2000-2001 ," February 2003).

Like generations of bankrup t farmers before t hem, the travail of some individuals necessarily accompanies general e c o n o m i c advancement .

What , then, in the face of all the evidence to the contrary, explains the persistent warnings about trade's alleged threat to the country? These cries are protests from those Americans whose jobs are most threatened by lower-cost foreign competi tors . Those workers will need to reinvent their careers as American product ion continues to evolve in the direction of higher value-added, digital- and knowledge-based goods and serv­ices, and away from low-tech or semiskilled physical labor. W h o can blame these Americans for being unhappy? But like generations of bankrupt farmers before them, the travail of some individuals necessarily

accompanies general e conomic advancement. Moreover, the need to adjust to change inspires people to grow and excel. As one w h o has suffered u n e m p l o y m e n t , I sympathize wi th those w h o are forced to change their jobs , but the overarching fact is that as long as our economy keeps generating new jobs, the country's economic future is bright .

There are two major risks to this bright future. O n e would be if Americans have lost the will, energy, and can-do spirit that enabled earlier generations to sur­

m o u n t prodigious challenges.The other is the "govern­men t disease"—the myriad government interventions, like burdensome taxation, hyper-regulation, business privileges, unfair labor laws, and more that are so many Lilliputian strings threatening to tie down the A m e r i ­can Gulliver. We need free trade if we are not to become global laggards, but we also need government to get out of the way so we can compete (and cooper ­ate) wi th the rest of the world wi thou t one arm tied behind our back. Great economic success awaits Amer ­ica's businesses and entrepreneurs unless the U.S. gov­ernment , by meddl ing in the economy, snatches defeat from the jaws of victory.

23 DECEMBER 2007

Our Economic Past

The Real Argument about Government B Y S T E P H E N D A V I E S

A lot of contemporary political debate centers on h o w big government should be. T h e debate tends to have two main features.

First, it uses measures such as government spending as a proport ion of G D P or the share of total income taken in taxation. Figures such as these show a dramatic rise in the size of government during the twentieth century.

T h e second element concerns h o w m u c h economic activity, broadly defined, the gove rnmen t should undertake, whe the r directly or indirectly. Here there has been a shift in focus in recent years. Unt i l the later 1980s it was often argued that a large part of actual product ion should be directly controlled by govern­men t through the "publ ic" ownership of productive assets. Tha t argument is n o w seldom heard. Instead we hear that government should intervene in the d is t r ibut ion of i n c o m e and should provide, or at least fund, key services such as health and education.

All this is very familiar. W h a t we may no t realize is that the c o n t e m p o ­rary debate concerned only a part of a larger, m o r e general a rgument . Moreover, while debates about the nature and appropriate role of gov­e rnmen t have been going on since at least the 1760s, the one described above, wi th its focus on measurable size and the gov­ernment 's economic role, has only really been a feature of the last 120 years or so. It began originally wi th the transformation of public administration dur ing the n ineteenth century and the rise of socialism and m o d ­ern theories of economic management toward the end of that century and dur ing the early twentieth century. Before then the debate was m u c h wider ranging and was concerned wi th more fundamental issues having to do wi th the very nature of government and the rela-

It is perfectly possible to have a government that is active and conce rned wi th a large part of h u m a n life and yet is small in terms of its share of GDP.

t ion between the individual and society. We may define this earlier and more fundamental debate as one between individualism and collectivism.

T h e crucial point is that the size of government, as defined above, is not the same thing as its scope or extent. T h e wider and more basic question is: what should the range or scope of government be? W h a t areas of life should be of interest to government and the subject of collective choice, and which areas should be purely private and a matter of individual, personal choice? It is perfectly possible to have a government that is active and concerned wi th a large part of human life and yet is small in terms of its share of GDP. T h e

main reason why contemporary gov­ernments are so large is not just because their scope has grown but also because the areas they have become involved in require employ­ing large numbers of people, which is costly. T h e fundamental choice is between a government that is con­cerned wi th only a small part of human affairs and one that is con­cerned with a large part. In the sec­ond case there is a further choice be tween an extensive government that is large in terms of the resources

it consumes and one that is extensive and active but small. (The fourth possibility, that of a government that is restricted yet large, is unlikely.)

Public as a Whole

The debate started wi th the appearance of a n e w way of th inking about government that appeared

in Europe following the Treaty of Westphalia in 1648

Stephen Davies (steve365@btinternet.com) is a senior lecturer in history at Manchester Metropolitan University in England.

T H E F R E E M A N : I d e a s o n L i b e r t y 24

and more particularly in the years after about 1740. Its main exponents came from the German-speak ing parts of Europe , a l though they also drew on the ideas of French thinkers. K n o w n collectively as Kameralists, their a rgument was that rulers and governments should be conce rned wi th the interests of the public as a who le rather than their o w n personal interest or that of a small group. T h e y saw gove rnmen t as having three main aspects. T h e first was public finance, the funding of the state. T h e second was "oeconomy," w h i c h meant more than wha t we n o w call " e c o n o m ­ics." It implied that the who l e political society was like one large household , w i th government a iming to run its affairs in an orderly m a n n e r and to maximize the wealth and prosperi ty of the w h o l e by direct action. T h e third was "polizei ," or public policy. This mean t that governments should be conce rned wi th anything and everything that had a bear ing on the wel l -being of the public, from health to educat ion to morals to security.

The All-Embracing State

The implications of this way of thinking were p r o ­found. It meant that in theory any part of life was

a proper concern of government , from the kinds of clothes people wore to the way they brought up their children. Above all this was a collectivist approach that saw society as a collective whole rather than seeing the individual as pr imary and society as the product of the interactions of individuals. This meant that h u m a n flourishing was a collective good rather than an indi ­vidual and personal one. It meant also that the whole (the nation or society) was an entity wi th a real exis­tence and real interests, wh ich were pr ior and superior to the existence or interests of the individuals w h o comprised that whole . T h e logical conclusion was that, if necessary, the interests and desires of individuals could be properly sacrificed to those of the whole .

T h e Kameralists and others did no t favor anything like socialism. In fact they were strong supporters of private proper ty and markets, but on the grounds that they served the collective interest.

These ideas became the or thodoxy in most parts of Europe dur ing the latter years of the Ancien Regime

The Real A r g u m e n t a b o u t G o v e r n m e n t

and, if anything, became even more influential after the French Revo lu t ion and the rule of Napoleon . H o w ­ever they also provoked a response from thinkers such as Adam Smith and Wi lhe lm von Humbold t . T h e lat-ter's major work, The Sphere and Duties of Government, was a direct response to Kameralist ideas as found in his native Prussia. (Paradoxically, in his capacity as a civil servant he was a major practit ioner of the ideas he opposed, particularly in the sphere of government - run education.) T h e ideas of the U.S. Declaration of Inde­pendence can also be read as an attack on this view of government . This alternative view, which was perhaps best expressed by John Stuart Mill, is that individuals were pr imary and were the best judges of their own interests, that each individual had to pursue his own personal and distinctive kind of happiness, that conse­quently government was the servant of individuals and should exist only to enable people to pursue happiness by providing a framework of impersonal rules, and that each individual should have a large and extensive sphere of personal autonomy. In other words, personal choice rather than collective choice should be the default position.

This division be tween a collectivist view that led to an extensive role for government (but not necessarily a large state) and an individualist one that led to a highly restricted and diminishing role was at the heart of political argument in most of the n ineteenth century. Both sides t r iumphed in some areas and lost in others. Thus religion was moved from the public to the p r i ­vate sphere, a huge victory for the individualists, while education became a central government responsibility. W i t h the rise of socialism the argument came to focus specifically on government 's role in narrowly defined economic matters.

Since 1989 we have reverted to the older argument . We are n o w bombarded wi th assertions that the lifestyles, diets, childrearing practices, and cultural choices of people are the proper concern of politics and government . T h e kinds of arguments made by Kameralists are once again the staple of many of our public intellectuals and politicians. T i m e to dust off those copies of H u m b o l d t and Mill and make the case for individuality and personal autonomy. (^)

25 DECEMBER 2007

Immigration Control, Circa AD 175

BY H A R O L D B. J O N E S , J R .

Last January the Wall Street Journal reported on the aftermath of federal agents' success in round­ing up Hispanics on charges of immigrat ion v io ­

lation. T h e Georgia company where these "illegals" had been employed sought to obtain replacements by pay­ing higher wages and offering free transportation. It was soon involved in a series of legal challenges that a company representative traced to the sentiments of people w h o were no t really interested in working. Turnover skyrocketed and productivity fell off. Seeking to justify the nat ive-born employees' poor atti­tudes and performance, a professor at a nearby university said the work was someth ing to w h i c h no Amer ican would ever aspire. She neglected to add that it was something to which the Hispanics did aspire and to which they gave their best, making them exactly the right people for the job . She neg­lected also to point out h o w regula­tions were standing in the way of personal freedom and economic effi­ciency.

T h e story is an old one. There has been more than one t ime in history w h e n the effort to restrict i m m i ­gration has hindered the progress bo th of those w h o were trying to improve themselves and of the civiliza­t ion that was trying to keep them out. It is wor th the t ime it takes to review a lesson from the late second century and the story of an emperor whose policies were not as wise as his philosophy.

Marcus Aurelius was bo rn in A D 121, at the high point of what Adam Smith's friend Edward Gibbon

said was the historical period dur ing which humanity enjoyed the greatest prosperity and happiness it had ever known. Aurelius was 15 when the Greek orator Aelius Aristides announced that it was time for the whole world to lay down its arms as if at a festival; the only tasks with which the cities of the Empire needed to concern themselves were those associated with the construction of public buildings—fountains, gymnasia,

temples, arches, schools, and w o r k ­shops.

It was in many respects a t ime like our own. T h e general population was more interested in athletic contests than in business or the affairs of state. Epictetus offers a vivid account of the R o m a n s ' love for gladiatorial contests and chariot races, the partisans of the whites, reds, blues, and greens debating endlessly the merits of their respective teams. "Freedom" had come to mean order, stability, regularity, and the main­tenance of ancient social distinctions. Plutarch said the R o m a n s had as much liberty as the government allowed

them and it was just as well that they were not given more. Like motivational speakers in mo d e rn America, "philosophers" (who were said to have been as c o m ­m o n as cobblers) toured the Empire offering easy answers to difficult questions. Two of the young Aure-lius's teachers, in fact, had become wealthy on the lec­ture circuit.

Harold Jones, Jr. (harold@personakharacter.com) is a professor of management at Dalton State College and the author of Personal Charac te r and Nat iona l Dest iny (Paragon House, 2002).

T H E F R E E M A N : I d e a s o n L i b e r t y 26

I m m i g r a t i o n C o n t r o l , Circa AD 175

T h e education of R o m a n children was for long centuries entrusted to private enterprise, but late in the first century Vespasian brought the more impor tant schools of rhetoric under imperial control by turn ing professors into government employees, complete wi th a pension after 20 years' service. Early in the second century, the financing of secondary education became a municipal responsibility. Aurelius records his gratitude for the fact that rather than sending h im to a govern­ment school, his father had decided to have h im h o m e -schooled.

Actually, this was his maternal grandfather, An ton i ­nus Pius, w h o had adopted th ree -month -o ld Marcus w h e n the boy's father died. T h e Emperor Hadrian, w h o was a frequent visitor in the home , took a liking to the child, and w h e n Antoninus Pius was selected to succeed Hadrian, it was wi th the specific provision that Marcus Aurelius would succeed Antoninus Pius. T h e tasks of government were mastered in a series of political appointments , the offices assigned carrying increas­ing authori ty as youth gave way to m a n h o o d and m a n h o o d became maturi ty. W h e n Aurelius became emperor in A D 161 he was almost as well prepared for the j o b as anyone could have been.

B u t on ly " a l m o s t " : t he n e w e m p e r o r had ga ined n o e x p e r i e n c e w i t h mi l i tary ac t ion , the necessi ty for w h i c h conf ron ted h i m as soon as he assumed the th rone . A half c e n t u r y of peace had encou raged R o m e ' s leaders to neglec t w h a t A d a m Smi th said was a gove rnmen t ' s p r i m a r y obl iga t ion , that of p r o ­tec t ing its society from mil i tary v io lence on the par t of o the r societies. A n at tack from Par th ia ( m o d e r n - d a y Iran) caugh t the R o m a n s off guard. T h e assets of the imper ia l h o u s e h o l d were a u c ­t i oned off to raise funds, an a rmy was fo rmed , and Aurelius 's adopt ive b r o t h e r Lucius Verus t o o k c o m ­m a n d of it.

Looking for Trade

Along the Empire's no r the rn borders, meanwhile , German tribes were on the move. T h e record of

T h e ideas conta ined in Aurelius's Meditations mark its au thor as a libertarian.

negotiations wi th them suggests that they were less interested in conquest than in opportunit ies for trade and land on which to settle. There had been a t ime in history w h e n they might have been welcomed, a time, Gibbon said, w h e n R o m e had been open to the con­tributions of every slave, stranger, or barbarian w h o was willing to play a part in making her great. By the self-indulgent second century that t ime had passed, and the tr ibesmen were treated as a threat to imperial security. Aurelius assembled another army and commanded it in a series of campaigns along the Danube . Between battles he entered his thoughts in a diary, which was found among his things after he died and published as Meditations.

Libertarian Author

The ideas contained in this small volume seem to mark its author as a libertarian. At one point , he

comes close to suggesting that the t r ibesmen have as m u c h r ight to occupy the land as the R o m a n s do to keep them off it. T h e spider that cap­tured a fly, he said, the man w h o trapped a boar, and the solider w h o killed a "Sarmat ian" (the generic t e rm for the peoples w h o lived along the Danube) might all be regarded as predatory thieves.

T h e philosophy of the Meditations ~ is part of an intellectual tradition

going back to the third century B C , to the city of Tar­sus, and to a man named Zeno . Aristotle's op in ion that people were from the h o u r of their bir th marked out either for subjection or for rule found no echo in the teaching of Zeno . H e believed that society should not be divided into classes, for all could b e c o m e wise. M e n and w o m e n might have different roles and different capacities, but they were equal as free moral agents. T h e ideal state would embrace the who le world, and its laws would be dictated by nature rather than con ­vent ion.

Called "Stoics" because of the porch (stoa) on which their teacher gave lessons in Athens, Zeno's followers believed that everything from the falling of a leaf to the rise of an empire could be explained in terms of a sin-

27 DECEMBER 2007

H a r o l d B. J o n e s , J r .

gle underlying principle, or logos. In The Economy in Mind, Warren Brookes grasps the essence of this con­cept w h e n he talks about h o w the natural ecosystem maintains its own balance. All of its elements, he says, are so closely interrelated that even the best-in tent ioned efforts at regulation br ing about reactions and distortions th roughout the system. T h e a c c o m m o ­dations by which the ecosystem moves toward equil ib­r ium are part of nature's tendency to preserve, protect, and strengthen itself. Such adjustments may entail some discomfort, but the results they lead to are better than anything that could be produced by means of in terven­tion from the outside.

T h e Stoics said the universe, as animated and directed by the logos, tends toward harmony, and the wise person seeks to live wi th this in mind. This meant , first of all, tending to one's own business. Aurelius said that each person should focus on his private concerns because these were his particular thread of the universal web. Such a focus might draw crit i­cism from external observers, but it was the only way to happiness and peace of mind. Your critics have rea­sons of their own, Aurelius told h i m ­self, but you cannot afford to concern yourself wi th those. D o not look around for praise or encouragement . Just keep your eyes fixed on your purposes.

Not Narrow Self-interest

Using a t e rm that was popular dur ing the eigh­teenth century, Adam Smith called this "self

interest." In Aurelius s mind it referred not to a narrow selfishness but to the simple t ruth that his own con­cerns are the only things about which a person can k n o w enough to be effective. And this, remember, was the opin ion of an emperor, a man whose authori ty reached so far that even the Chinese k n e w about him. His concerns included m u c h that was not strictly p r i ­vate. H e could oversee the management of imperial affairs and direct the operations of an army, but he refused to pry into other people's motives, and he

Detai led regulation o n the part of the state was counterproduct ive because of the unseen rationality already built in to the nature of things.

wished they would resist the temptat ion to pry into his.

Focus on the issues of your own life, Aurelius said, because that is h o w you can make the max imum possi­ble contr ibut ion to the good of the universe. To each individual thing Nature has assigned enough t ime and energy, and in the case of human beings enough intel­ligence, for a limited number of tasks. T h e wise person therefore concentrates his attention on what is actually in his power. T h e fig tree does a fig tree's work, a dog does a dog's work, and a bee does the work of a bee. T h e sun has one job , the wind another, s torm clouds a third, and all play a part in the final result. Just so, each human being has his own particular tasks, and no one knows more about h o w to do them than the person to

w h o m they have been assigned. This being true, it is not merely

foolish but barbarous, to deny a per­son the privilege of pursuing what he believes to be his proper concerns. A man is always justified in seeking what he imagines to be his own good. We are all working together for the same end, Aurelius insisted, some of us knowingly and others uncon ­sciously. Even the malcontent w h o is trying to stand in the way will be found in the end to have played an important part. T h e best of all possi­ble governments would therefore be concerned primarily wi th upholding

the liberty of the subject.

Detailed regulation on the part of the state was counterproductive because of the unseen rationality already built into the nature of things. Early in the fifth book of Meditations Aurelius said, "Look at the plants, sparrows, ants, spiders, bees, all busy with their own tasks, each doing his part towards a coherent world order." Adam Smith went into some length with a par­aphrase of these lines and the surrounding passages in The Theory of Moral Sentiments, wh ich was published 17 years before The Wealth of Nations. It seems probable that the not ion of an "invisible hand" was something he discovered in the writings of Marcus Aurelius.

This idea was destined to work a revolution first in

THE FREEMAN: Ideas on L iber ty 28

I m m i g r a t i o n C o n t r o l , Circa AD 175

the intellectual and then in the economic life of the eighteenth century. It had little impact on the life of the second. It is t rue that Aurelius initiated a systematic effort to reduce the extent of slavery, not quite a cam­paign for general emancipation, but a policy of grant­ing freedom whenever it was possible to do so. Again and again the surviving documents report that a slave had attained his freedom in accordance wi th the emperor's command . This policy may bear witness to an understanding of the relationship be tween eco­nomic efficiency and the Stoic insistence on personal liberty. Aurelius writes of having spent a long t ime wi th Cato's Agriculture, wh ich argues that cultivation could be accomplished more effectively by free m e n than by slaves.

Debasing the Currency

To the extent that liberation was carried on in defiance

of popular beliefs, it was the exception rather than the rule. In other respects, Aurelius's pol i ­cies paid homage to expecta­tions. R e t u r n i n g to R o m e after a military campaign, he granted the citizens' demand for eight gold coins per person. T h e old practice of paying the peasants to have chi ldren reached its widest expansion. Imper ia l extravagance was funded by debasing the currency. T h e

philosophic emperor's greatest downfall, though, came in the way he dealt wi th his problems on the no r the rn borders.

Repea t ing the sentiments of Zeno , he had described all the world's inhabitants as fellow citizens of a single city. A consistent application of this insight might have been the salvation of R o m e . T h e soldiers coming back from the war wi th Parthia carried wi th t hem a plague, which infected every area to wh ich they were later assigned. In R o m e itself, the death rate rose to over a thousand a day, and corpses were carried out of the city in heaps. W h o l e cities reverted to jungle or desert. For this depopulat ion the tribes of the nor th were a ready

T h e s i tuat ion facing the U n i t e d States at the d a w n o f the 21st century is similar t o the o n e Rome faced in the e v e n i n g o f the second . Credit : Denis Fuentes

solution, the very friends and allies of which Medi te r ­ranean civilization was desperately in need. Treated instead as enemies, they responded in kind, and years were wasted in expensive wars.

These wars, in turn , were a major cause of the mili­tary chaos that overtook R o m e dur ing the third cen­tury. Aurelius's son C o m m o d u s made a hasty treaty wi th the tribes along the Danube but retained the p re ­rogatives his father had assumed for the sake of military operations. Unresolved tensions along the no r the rn frontier and the hostility of Parthia led C o m m o d u s s successors to expand the army. W i t h additional legions came additional expenditures, and the compet i t ion for scarce resources p roduced n e w centers of power.

R o m a n generals began to direct their forces against each other rather than the "barbarians," and a once tightly-knit polity unrav­eled. T h e Empire of which D i o ­cletian assumed control in A D 285 was a mere shadow of what it had been a hundred years before.

T h e si tuation facing the Un i t ed States at the dawn of the 21st century is similar to the one R o m e faced in the evening of the second. There are on the one hand implacable enemies, w h o seem to be bent on the destruction of Western civiliza­tion. There are on the other

hand potential friends, w h o would like very m u c h to share in and contr ibute to the abundance they see just across the border. M o d e r n America is like ancient R o m e in that it seems to be incapable of distinguishing be tween its enemies and its friends.

Some may reply that the m e m b e r s of this latter g roup must be treated wi th hostili ty because crossing the borde r is a violat ion of o u r laws. Those w h o say this should consider the words of Aurelius's forebear in Stoicism, Cicero, as r epor ted by Wil l D u r a n t late in e igh teen th chapter of Caesar and Christ: " T r u e law is r ight reason in ag reement w i th nature , w o r l d - w i d e in scope, unchang ing , everlasting. . . . We may no t

29 D E C E M B E R 2 0 0 7

H a r o l d B. J o n e s , J r .

oppose or alter that law, we cannot abolish it, we cannot be freed of its obligations by any legislature, and we need no t look outside ourselves for an e x p o u n d e r of it."

Natural Order

There is a law that no legislation can rightfully at tempt to override. W h a t Adam Smith described

as every person's uninterrupted effort to improve his own condit ion is one expression of that law. It is as much a part of the natural order as the forces that br ing springtime and fall. Left to operate freely, such forces tend toward harmony, progress, and improve­ment . Hindered or bottled up, they may become destructive. Today's leaders might do well to consider the unfortunate example of Marcus Aurelius. (f|

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In t roduct ion by Richard M. Ebeling

Afterword by Milton Friedman

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T H E F R E E M A N : I d e a s o n L i b e r t y 30

Give Me a Break!

Medical Competition Works for Patients B Y J O H N S T 0 S S E L

Health-care costs overall have been rising faster than inflation, but not all medical costs are skyrocketing. In a few pockets of medicine,

costs are d o w n while quality is up. Dr. Brian Bonanni has an unusual medical practice.

His office is o p e n Saturdays. H e e-mails his patients and gives t hem his cel l -phone number .

"I need to be available 24 hours a day," he says. "I want to be there w h e n a patient has questions, and I want to be reachable."

I'll bet your doctor doesn't say that. Bonanni knows he has to please his patients, no t some insurance c o m ­pany or the government , because he's paid by his patients. He's a laser eye surgeon. Insurance rarely covers wha t he does: reshaping eyes so people can see wi thou t glasses.

His patients shop around before coming to h im. They ask a question that peop le relying on insurance don ' t ask: " H o w m u c h will that cost?"

"I can't get away wi th not telling the patient h o w m u c h exactly it's going to cost," Bonanni says. " N o one would put up wi th it. And the differ­ence of a hundred dollars sometimes makes their decision for them."

Medical clinics are p o p p i n g up in Wal -Mar t stores and in o ther similar markets. T h e clinics offer people w i t h simple problems like sore throats and ear infections relatively hassle-free care cheap. Almost everything costs $59 or less. A n d the clinics are typically o p e n seven days a week .

medical fields where most people pay for care t h e m ­selves, like cosmetic surgery. Consumer power works— even in medicine.

W h e n government and insurance companies are kept away from the transaction, good new things happen.

A doctor in Tennessee I talked to publishes his low prices, such as $40 for an office visit.

Most doctors would say you can't make m o n e y this way. Bu t Dr. R o b e r t Berry told me you can. "Last year, I made about the average of what a pr imary-care physician makes in this country," he said.

Ber ry doesn't accept insurance. Tha t saves h im money because he doesn't have to hire a staff to process insurance claims, and he never has to fight wi th companies to get paid.

H:

Lower Prices, Higher Quality

He has to compete for his patients ' business. O n e result of that is lower prices. And while the p r o ­

cedure got cheaper, it also got better. Today's lasers are faster and more precise.

Prices have fallen and quality has risen in other

Uninsured Patients is mostly uninsured patients save money, too. Unl ike doctors

trapped in the insurance maze, Berry works with his patients to find ways to save them money.

"It's coming out of their pockets. And they're afraid. They don ' t k n o w h o w m u c h it's going to cost. So I can tell them, ' O K , you have hear tburn. Let's start out wi th generic Zantac,

which costs around five dollars a month. ' " W h e n his patients ask about expensive prescription medicines

John Stossel is co-anchor of ABC News' "20/20" and die author of M y t h , Lies, and D o w n r i g h t Stupidity: G e t O u t the Shove l— W h y Eve ry th ing You K n o w is W r o n g , recently released in paperback. Copyright 2007 by JFS Productions, Inc. Distributed by Creators Syndicate, Inc.

31 DECEMBER 2007

J o h n S t o s s e l

they see advertised on television, he tells them, "They ' re great medicines, but why don' t you try this one first and see if it works?"

Sometimes the $4 pills from Wal-Mart are just as good as the $100 ones.

Speaking of Wal-Mart , medical clinics are popping up in Wal-Mart stores and in other similar markets. T h e clinics offer people wi th simple problems like sore throats and ear infections relatively hassle-free care cheap. Almost everything costs $59 or less. And the clinics are typically open seven days a week.

Grace-Mar ie Turner, president of the Galen Insti­tute, a health-policy research organization, explains h o w these clinics thrive: "They ' re figuring h o w to do

something faster, better, cheaper! They're responding to consumer demand because they see that they might make some money on this."

W h e n consumers pay for medicine themselves, sav­ing insurance for the big things, and doctors deal directly wi th consumers, doctors begin to compete. They start posting prices and work to keep them low.

And consumers gain more control of their health care. Instead of governments and insurance companies deciding for patients, patients decide.

Compet i t ion gives consumers more choices. And choice gives them power. R e m e m b e r that w h e n you hear a politician promise to make health case accessible and affordable through the force of government. (f|

Coming in the January-February 2008 | 1 THE

issue of FREEMAN

Wildfires and State-Worship by Steven Green hut

Prosecutorial Indiscretion in Durham County by Wendy McElroy

Free-Market Money: A Key to Peace by Steven Horwitz

T H E F R E E M A N : I d e a s o n L i b e r t y 32

Capital Letters

D i d Mi l ton Fr iedman Fully Unders tand the Great Depression?

Thanks to Mil ton Friedman's brilliance, charisma, and diplomacy he became an ardent spokesman for many free-market reforms in this country. And n o w Ivan Pongracic, Jr. ("The Great Depression According to Mil ton Friedman," September 2007) gives h im credit for accomplishing what seems miraculous—convincing Fed officials that the Fed itself was responsible for pre­cipitating the crash and the 1929—1933 monetary con­tractions that followed. But the contractions were only the spark that brought the b o o m to an end. Contrary to bo th Keynes and Friedman, the seeds of the depression were sown in the preceding boom. In fact, the seeds were inherent in the very principles on which the Fed was founded.

T h e Fed was established in 1913 in the hope of avoiding the banking crises that had periodically occurred because of a shortage of funds. T h e Fed was to create a "flexible" money supply to satisfy the "needs of busi­ness" and to serve as the lender of last resort to banks in crisis. Thus its very purpose was inflationary. It fos­tered "easy m o n e y " by making loans available at relatively low interest rates. T h e n e w "easy m o n e y " lured businessmen to under take en te r ­prises they would not have consid­ered profitable at market interest rates. Thus business b o o m e d . T h e

stock market flourished. If there had been no b o o m , there would have been no monetary contract ion. Thus the Fed's responsibility for the depression extends to the preceding b o o m .

Ludwig von Mises laid the g roundwork for this Austrian theory of the business cycle in his first book , The Theory of Money and Credit, in 1912. H e showed

Cont ra ry to b o t h Keynes and Fr iedman, the seeds of the depression were sown in the preceding b o o m . In fact, the seeds were inherent in the very principles o n w h i c h the Fed was founded.

wi thou t apparent end (threatening runaway inflation), a crisis is inevitable.

As far as I know, Fr iedman gave n o indication that he realized that the choice be tween runaway inflation and depression was inherent in the very principle on which the Fed was based. But then he was an inflation­ist; he believed that only by constantly and steadily increasing the m o n e y supply, to keep abreast of increases in product ion and populat ion size, can an economy prosper.

— B E T T I N A B I E N G R E A V E S by e-mail

Ivan Pongracic, Jr., replies: Thanks to Mrs . Greaves for these interesting and

impor tant points regarding the long-r u n n i n g Monetar i s t -versus-Aus t r ian debate over the business-cycle theory. This topic was outside the confines of my piece, but it certainly bears closer attention.

T h e cause of the speculative bubble that led to the stock market crash is an unresolved and somewhat controver­sial topic. Whereas Mi l ton Fr iedman and Anna Schwartz accepted that the bubble was caused by investors, seem­ingly endorsing—at least par t ly—the Keynesian "animal spirits" explana­tion, Austrian economists have argued otherwise , beg inn ing w i t h Ludwig von Mises, F. A. Hayek, and Lionel

R o b b i n s in the 1930s. Following in the Austrian tradition, Murray R o t h ­

bard in his 1963 book America's Great Depression col­lected his own monetary data showing that the Fed engaged in a highly expansionary policy in the 1920s, contradicting Fr iedman and Schwartz, w h o claim that the Fed engaged in a basically stable monetary policy

that because under inflation prices would rise sharply dur ing that period.

33 DECEMBER 2007

C a p i t a l L e t t e r s

In the Austrian account, the Fed's expansionary po l ­icy created an unsustainable b o o m , with the over-expansion of credit distorting interest rates and making it impossible for investors to correctly judge the valid­ity of different business projects, thus leading to the mistakes that manifested themselves in the s tock-mar­ket crash of 1929. (Note that the Austrian explanation was not at odds wi th the rest of Fr iedman and Schwartz's s tory—in fact they are quite complemen­tary. T h e Austrians argue that poor Fed policy led to the bust of 1929, while Fr iedman and Schwartz explain h o w the Fed went on to magnify that bust many times over.) Fr iedman and Schwartz relied on conventional measures of the money supply to come to the conclu­sion that the pre-crash per iod was not inflationary, whereas R o t h b a r d used an unconventionally broad measure to come to the opposite conclusion.

This issue has no t been conclusively settled one way or another. The Freeman in fact ran an exchange several years ago be tween Richa rd Timber lake and Joe Salerno arguing over this very point , wi th Timberlake arguing p ro -Fr iedman and Salerno arguing p r o - R o t h -bard (April, May, June , and Oc tobe r 1999 and Septem­ber 2000, all online at www.fee.org). See also Richard Ebeling's " F r o m the President" co lumn in the D e c e m ­ber 2006 Freeman, where he claims that Friedman's failure to fully grasp the causes of the crash were due to his "aggregate" analysis, wh ich prevented h im from seeing the distortions created by the Fed on the

microeconomic level. More work is necessary on this debate, though I remain sympathetic to the Austrian argument .

I will take issue wi th Mrs. Greaves's letter over one point: I think it is highly unchari table—and ult i­mately inaccurate—to refer to Friedman as an "infla­tionist." For most of his life he believed that the benefits of a commodi ty money (which he recognized as providing a greater check on inflation than fiat money) were outweighed by its costs (digging the metal out of the ground as well as removing it from industrial and ornamental use). H e proposed his con­stant money-g rowth rule exactly to check the Fed's inflationary power, which came with control over fiat money. But he eventually realized that that power is highly unlikely to be checked by such a rule and therefore changed his mind on this issue. Fr iedman was an honest intellectual, willing to admit w h e n he was wrong. We do h i m—a nd ourselves—a disservice w h e n we apply labels to h im that question his dedica­t ion to liberty. (f|

W e will p r in t the mos t interest ing and provocative letters w e receive regarding articles in The Freeman and the issues they raise. Brevi ty is encouraged ; longer letters may be edi ted because of space l imitat ions. Address your letters to : The Free­man, FEE, 30 S. Broadway, I r v i n g t o n - o n - H u d s o n , N Y 10533; e-mail : f reeman@fee.org; fax: 9 1 4 - 5 9 1 - 8 9 1 0 .

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T H E F R E E M A N : I d e a s o n L i b e r t y 34

Book Reviews

Who Controls the Internet? Illusions of a Borderless World by Jack Goldsmith and Tim Wu Oxford University Press • 2006 • 226 pages • $28.00

Reviewed by Andrew P. Morriss

"ho Controls the Internet? is a thoughtful , clear, and

engaging b o o k wr i t ten by two dis­t inguished law professors. T h e authors do a major service to dis­cussions of the In te rne t by debunking the 1990s " information just wants to be free" m e m e wi th their lucid account of h o w gov­

ernments fought back to restrict the Internet 's impact. Along the way Goldsmith and W u give a thorough

crit ique of the Principality of Sealand, a World War II antiaircraft platform off the coast of England declared an independent count ry by its self-proclaimed Pr ince Roy. Sealand is revealed as a silly idea, but the larger story of governments ' response to technologies that threaten them is depressing reading for those con­cerned wi th liberty.

Professors Goldsmith and Wu, w h o teach at Harvard and Columbia law schools, respectively, provide a good history of the Internet and describe the technol ­ogy beh ind government s ' response. In particular, the authors focus on governments ' use of commercial technologies that enable websites to identify the loca­tion of visitors. D o i n g so makes the website more valu­able to users (information can be customized to your location and helps prevent fraud) and to advertisers (ads can be bought for specific geographic areas). Unfo r tu ­nately, it also offers governments an oppor tuni ty to censor and monitor . T h e technology isn't perfect, but as the authors note, location identification need not be perfect to be effective.

Anothe r vulnerability of the Internet that govern­ments can exploit is the payment system. So long as payments are made through a few large systems (VISA,

MasterCard, American Express, Discover, PayPal), a lot of control can be obtained by regulating just a few chokepoints . T h e Internet gaming industry discovered this, as did sites selling cigarettes online to avoid state tobacco taxes.

T h e strongest, and most depressing, por t ion of the book is its thorough description of the evolution of the Internet in China. Goldsmith and W u detail h o w American Internet companies like Cisco, Yahoo, and Google have assisted the Chinese government in its efforts to censor information it does not want Chinese citizens to see.

But if they debunk the idea that the In ternet would allow "rout ing around censorship," Goldsmith and W u fall into the opposite trap of imagining that the c o n ­test be tween freedom and coercion is a simple t w o -p e r i o d contest : I n t e rne t p ioneers innovate , t hen governments respond. Governments w in because they move last. But the battle for liberty has no end—ete r ­nal vigilance has been called the price of liberty for precisely that reason.

T h e b o o k would also have benefited from analysis more explicitly based on Public Choice principles. Looking at the course of copyright- infr ingement liti­gation and legislation, the authors persuasively argue that nei ther the lack of quick congressional action to enhance legal protections for copyright holders nor the lower-cour t Grokster decisions that rejected music-industry positions against file sharing reflected "an absence of power." Instead they were the result of "an intragovernmental discussion over h o w to balance con­flicting interests in technological innovation and the protect ion of authors ' rights." But it wasn't really a "discussion" in any intellectual sense of the word; what went on was a battle of interest groups that took t ime to play out . T h e authors note that "[m]any believe" that the Sonny B o n o Term Extension Act, which extended existing copyrights, "aided the highly organized and ailing recording industry at the public's expense." This is accurate only in the sense that "many believe" that gravity causes things to fall to the earth w h e n dropped. There is no plausible alternative explanation for the blatant rent-seeking of the Sonny B o n o Act. M o r e attention to interest groups ' roles would have strength­ened the b o o k considerably.

35 DECEMBER 2007

B o o k R e v i e w s

Perhaps the most frustrating aspect of the book is its excessively state-centered view of law. For example, the authors label government-provided law as "real law" in contrast to customary legal systems. But they've actu­ally got it backwards, and familiarity wi th the work of F. A. Hayek or B r u n o Leoni—nei ther of w h o m are men t ioned in the b o o k or cited in the index—would have been a great help to the authors.

T h e efforts to make the book more accessible for a popular audience also led to some odd illustrations. There are a few excellent diagrams that enhance the discussion and clarify descriptions, but these are ou t ­numbered by the various photographs that add noth ing to the book . Despite these flaws, however, Who Controls the Internet? is an impor tant contr ibut ion to the debate over the role of technology in advancing (or harming) the cause of liberty. (^)

Andrew Morriss (morriss@law.uiuc.edu) is H. Ross & Helen Workman Professor of Law at the University of Illinois.

Econospinning: How to Read Between the Lines When the Media Manipulate the Numbers hy Gene Epstein

John Wiley & Sons • 2006 • 246 pages • $24.95

Reviewed by Joseph Coletti

ta* to Rn< tttwm Uw U m i MM lilt Mrili Hsnlputata tin HumMri

GENS EPSTEIN

2

A s a columnist for the New York .Times, Paul K r u g m a n has

sometimes invented his own statis­tics or tor tured real ones to make his point . W h e t h e r it is the fiscal heal th of Social Securi ty and Medicare , h o w we coun t the unemployed, or the general condi ­t ion of the economy, Krugman has

often tried to drive readers to accept his conclusions wi th questionable data.

Gene Epstein's book on the misuse and abuse of economics and statistics, Econospinning, devotes a lot of at tention to Krugman, but the author's crit ique of the media expands to include the Wall Street Journal, the Economist, and M S N B C ' s Squawkbox. Epstein also gives special at tention to Barbara Ehrenreich's Nickel and Dimed, Steven Levitt and Stephen Dubner 's Freakonom-

ics, and the populist silliness of Lou Dobbs. Epstein is the economics editor for Barron's and author of the "Economic Beat" column for that weekly sibling of the Wall Street Journal. H e really knows his subject.

Former Congressional Budget Director Douglas Hol tz-Eakin said, "Every dollar of federal spending has a cost. It makes no difference if the payment is charged to the general fund, a trust fund, or an enterprise fund." Epstein's intent wi th this book is to show that every badly used economic statistic also has a cost. H e defines econospinning as " the sort of journalism that shapes the data around a predetermined story, rather than the story around the discoverable data."

To make his points Epstein includes long quotes from the sources, italicizes the troublesome parts, and often dissects them bad idea by bad idea. H e provides his own calculations to show what was wrong in the original and describes how to properly interpret the economic statistics under discussion.

Half the book is dedicated to employment statistics and their misuse. This focus is necessary, he writes, because these statistics are "of great concern to policy makers, traders, investors, and humanists." His wri t ing here is illuminating, as he explains the differences between statistics available from the establishment and household surveys, and h o w they can be usefully c o m ­pared. In doing so, he undermines both Krugman's claims about long- te rm unemployment and the Jour­nal's claims about the extent of self-employment.

Epstein attributes the increase in long- te rm u n e m ­ployment to changing demographics in the workforce. W o m e n are becoming more career-oriented, which means they are becoming unemployed less often, but take longer to find work w h e n they do. Meanwhile , the self-employed are more likely to show up in employment statistics than the Journal suggests.

Such statistical insights can help make for better consumers of economic news, even if it does not improve the quality of economic reporting. Given the difficulty of such reporting, however, Epstein would like to see less frequent output from government data gatherers. They look at the size of the economy only once a quarter and often revise that twice, but they report employment and unemployment statistics each mon th . Repor te rs just report the change in the u n e m -

T H E F R E E M A N : I d e a s o n L i b e r t y 36

B o o k R e v i e w s

ployment rate, however, and pay little at tention to the previous upward or downward revisions in the n u m ­bers and what those revisions mean for the actual state of employment in the country.

Epstein's sharp analysis is also useful in his chapters on corporate profits and workers ' returns from p roduc ­tivity gains. H e shows, for example, that changes in compensat ion over t ime have moved nearly in tandem wi th the tightness of the labor market. Tha t shouldn't surprise readers of The Freeman, but confounds e c o n o ­mists such as Krugman and Berkeley's Brad DeLong .

T h e increase in corporate profits turns out to be a story similar to long- te rm unemployment : it reflects a structural change in the economy rather than higher profits at individual companies. There are more c o r p o ­rations in the economy, and more of t h e m are finan­cial-service companies, wh ich tend to have higher profit margins. C o m b i n e those trends and the result is corporate profits making up a larger por t ion of G D P than ever before. Cont ra ry to the writers w h o claim to see rising profits as a danger, Epstein observes that this does no ha rm to anyone. Scare stories about corporate profits are a staple in many publications, but after read­ing Econospinning, the reader will be able to sort out fact from fantasy.

Given the populari ty of Freakonomics, it is not sur­prising that Epstein devotes a chapter to refuting two of the more provocative claims from that book: legal abort ion reduced the cr ime rate and real-estate agents do not negotiate well for their clients.

T h e demoli t ion j o b Epstein does on Ehrenreich is utterly devastating. Lou Dobbs fares no better.

Econospinning is wor th reading for the clarity of thought Epstein brings to his subject. T h e book is a much-needed volume on the ways economic j o u r n a l ­ists can lead people astray wi th the misuse of data. ^

Joseph Coletti (jcoletti@johnlocke.org) is a fiscal policy analyst at the John Locke Foundation.

The Entrepreneurial Imperative: How America's Economic Miracle Will Reshape the World (and Change Your Life) by Carl J. Schramm HarperCollins • 2006 • 195 pages • $24.95

Reviewed by Frederic Sautet

Carl Schramm is president and C E O of the Kauff-

Entrepreneurial man Foundat ion, an organiza-Impordtive ti°n that sees itself as the

main center for the p r o m o -H IA ! ™ * , ' * LwLic Mi™rie t ion of entrepreneurship in

wiiiRrsh^-thrWorid : \ w Un i ted States. The Entre-.i:t'l - '•lAUtfr- \t.<r tit-

* * * • « « * preneurial Imperative aims at spreading this message: ent re­

preneurship is America's "comparative advantage," and the economic model that fosters it needs to be better k n o w n and adopted everywhere. Whi l e having a c o m ­parative advantage in entrepreneurship is not an ade­quate description of America's situation, the author is correct in saying that entrepreneurship has been crucial to economic growth and progress in the Un i t ed States.

Schramm's b o o k covers four main areas regarding entrepreneurship: personal ethics, politics, economics, and policy. Al though the general thesis of the book is well argued, the analysis that supports the message is less convincing. Moreover, the author's policy ideas are disappointing.

Anyone versed in classical liberalism will agree wi th Schramm's view of ethics and politics. H e defends indi­vidual freedom, responsibility, personal achievement, and economic independence. W i t h o u t a well-defined personal ethos, as Schramm recommends, entrepreneur­ial activities are unlikely to succeed. H e also strongly urges Americans not to fall prey to the critics of big businesses because the interest of businesses is, most of the time, to serve customers as well as they can, not to defraud them. Schramm correctly sees economic free­d o m as the main reason for America's success.

Difficulties arise, however, w h e n one looks at the economic analysis behind his ethical and political views. Whi le Schramm undoubtedly believes that free markets by and large work best, some readers may be less comfortable wi th his theoretical understanding of

37 DECEMBER 2007

B o o k R e v i e w s

entrepreneurship. Basically, there are two different views of entrepreneurship in the literature. O n the one hand, some writers define entrepreneurship as any action related to starting a business—this is the behav­ioral approach. O n the other hand, it can be defined as the recogni t ion of an oppor tun i ty—the cognitive approach. It is not clear where Schramm stands in this debate, as he borrows from both approaches. However, it is difficult to subscribe to bo th explanations because they're arguably mutually exclusive. Moreover, the pol ­icy implications that stem from each of these views are opposed. T h e behavioral approach leads to "active" government policies (such as guaranteed loans for small businesses), while the cognitive one leads to "passive" policies (such as better enforcement of contracts).

This theoret ical confusion can be found in Schramm's policy recommendat ions , where education is his main focus. T h e central difficulty I have with his emphasis can be put simply: one cannot learn to become an entrepreneur. T h e problem is that Schramm sees entre­preneurship as being mostly about starting up and managing a business rather than discovering n e w opportunit ies for profit. T h e former can be taught, but wi thou t discovery first, there cannot be entrepreneur-ship in its t rue sense. Exper ience and knowledge help someone to notice opportunit ies others have missed, but nobody can k n o w in advance what knowledge and experience will be needed. It follows that, contra Schramm, it is impossible to k n o w what education is needed to become entrepreneurial .

To be fair to the author's analysis, he argues that uni ­versities don't provide the right education to help people become entrepreneurs. Instead of providing highly career-oriented courses, as they do now, he contends that they should provide classes that teach general problem-solving capacity. There is some merit to this, but teaching them problem solving isn't going to change students into people w h o identify and seize opportunities.

Another implication of his theoretical confusion is that Schramm dedicates only a few pages to what really matters for entrepreneurship—the role of institutions. This is unfortunate considering the policy mess exist­ing at the local and federal level in the Un i t ed States. T h e way to foster entrepreneurship is not by trying to teach it, but rather by making sure the institutional

conditions for its emergence are as good as possible. W i t h economic freedom, where barriers to entry into business are low (such as low taxes and flexible labor markets), a great deal of entrepreneurship will sponta­neously arise.

Whi le Schramm correctly states that freedom is the key to an entrepreneurial economy, he doesn't fully grasp what this means in practice. H e only briefly m e n ­tions taxation and barely touches on the role of p rop­erty rights and regulation, where bad policy can and does strangle entrepreneurship. Worse still, he favors active government policy, proposing an increase in tax money allocated to seed new entrepreneurial projects. That is a recipe for wasted investment. In view of what he says elsewhere on the problems of bureaucracy, it is hard to believe that Schramm seriously considers public financing for entrepreneurs a beneficial policy.

Schramm's central message is important: entrepreneur-ship matters a great deal to prosperity. Unfortunately, his ideas for promoting it are mostly off target. ( | |

Frederic Sautet (fsautet( Mercatus Center.

Tmu.edu) is a senior research fellow at the

The Green Wave: Environmentalism and Its Consequences by Bonner Cohen Capital Research Center • 2006 • 209 pages • $14.95 paperback

Reviewed by George C. Leef

Environmentalists like to be portrayed as kindly, con ­

cerned people w h o just want to make sure that earth will remain a pleasant h o m e for all living things. For the most part, they get their wish. Stories in the main­

stream media that question their motives, call attention to their often nasty tactics, or point out that environ­mentalist policies frequently have harmful effects are as rare as manatees in Montana .

Fortunately, Bonner Cohen's book The Green Wave is at hand to show that there are a lot of "inconvenient t ru ths" about the environmental movement . H e argues

T H E F R E E M A N : I d e a s o n L i b e r t y 38

convincingly that the environmental movement should be unders tood as just the most recent front in the war that authoritarians have long waged against private property and free enterprise. C o h e n writes, "Along wi th more traditional goals like redistr ibution of income to secure 'equality,' activists seized on the envi­ronment as an issue wi th enormous potential to influ­ence young educated urbanites w h o felt guilty about their affluence. The i r aim: to br ing about the reorder­ing of national and global priorities." T h e "greens" talk about saving the planet, but what is really at issue is plain old power. They want it to control a wide array of h u m a n activities.

Just as Marxism used simple-minded but emotionally appealing catch-phrases to win converts, environmental­ists try to sway people with similar notions. Instead of "exploitation of labor," the greens talk about "the pre­cautionary principle." According to that "principle," the government should prevent people from doing anything (such as introducing a new technology) until we are absolutely certain that it won't have any adverse impact on the environment. Cohen shows how the environ­mental movement has employed this superficially reason­able idea to oppose many innovations. (As he points out, it really is extremely unreasonable since if we waited for proof of absolute safety before acting, we would never be able to do anything.) Genetically modified crops are a pr ime example. H o w do we know, green activists demand, that gene-spliced tomatoes won't wreak havoc among insects that might feed on the foliage?

By using their well-rehearsed playbook of media, political, and judicial tactics, the greens have managed to delay and even prevent the use of genetically m o d i ­fied crops and other innovations. They prefer the reality of human hunger to any threat to "biodiversity," no matter h o w speculative.

C o h e n shows h o w environmental activists resort to j u n k science over and over in their quest to frighten the public and governmental officials into acceding to their demands. They recognize the t ru th in the adage that bad news sells and never hesitate to t rumpet any scientific research, n o matter h o w dubious, that pu r ­ports to demonstrate that disaster will occur unless people are prevented from do ing X . Compl i an t reporters oblige by incorpora t ing environmentalist

B o o k R e v i e w s

press releases into their scare stories, hardly ever b o t h ­ering to assess the reliability of the information. Even if it later turns out that the research is completely bogus, no mat te r—the public will r emember the frightening headlines and few will ever read about the refutation of the research behind them.

Something that we really should be frightened about, C o h e n argues, are the various plans to put America increasingly under the environmentalists ' con ­trol. Perhaps the most menacing is the Wildlands P r o ­ject , wh ich would use federal regulations to transform the country "from a place where 4.7 percent of the land is wilderness to an archipelago of h u m a n -inhabited islands surrounded by natural areas," he writes. This plan is the brainchild of Earth First! zealots w h o regard human beings as an affront to the beauty of the natural world and want to greatly decrease our impact on the world. U n d e r Wildlands, large areas of the Un i t ed States would be off-limits to any but the most primitive kinds of human activity. Sure, it sounds crazy. O u r standard of living would plunge, and the populat ion would decline greatly, but the animals and trees would supposedly be happier. And of course the environmentalists would be happier if they could get the government to exercise its power to br ing about their vision of paradise.

C o h e n reports that a bill to start Wildlands has been introduced in the House of Representatives and has substantial bipartisan support . T h e whole monstrous project won ' t become law any t ime soon, but after reading The Green Wave, you k n o w that it's a mistake to underestimate the patience and deviousness of the environmental lobby.

Environmental protect ion and preservation are pos­sible under a system of private property and individual freedom, but the powerful people and organizations wi th in the green movement are not interested in that. They don' t want to have to persuade people to go along wi th their wishes. They want the government to force t hem to. That's why they're just as dangerous as all the other coercive Utopians w h o have trod u p o n people for millennia. Thanks to Bonner C o h e n for making that clear. f|

George Leef (georgeleef@aol.com) is book review editor of T h e Freeman .

39 DECEMBER 2007

The Pursuit of Happiness

The Lesson of Ebenezer Scrooge B Y D A V I D R . H E N D E R S O N

I n 2003 I co-led a successful fight against Measure Q , wh ich would have increased the Monterey County, Calif, sales tax to fund a failing govern­

men t hospital. O n e proponent of the tax labeled me a Scrooge. She was referring, of course, to Ebenezer Scrooge, the protagonist of Charles Dickens's famous novel A Christmas Carol—and of the film by the same name.

She wasn't alone in this usage. Many people use the word "Scrooge" to refer to someone w h o opposes gov­e rnmen t programs. Tha t usage puzzles me. I wonde r if these people and I watched the same movie. Because, at least the way I unders tood the story, it was about opening your heart and being generous to those in need, and it had little to do wi th government . In fact, to the extent that government welfare programs were ment ioned, the "good guys" in the film put t hem down.Yet many people today talk as if they think A Christmas Carol advocates higher taxes to fund more government programs. Who ' s right? To figure it out , we need to consider what hap­pens in the novel and movie. T h e quotes below are taken from the novel, and the scenes I describe are from the 1951 movie starring Alastair Sim.

T h e movie opens wi th Scrooge as a wealthy but lonely man w h o is stingy wi th everyone, including himself. His narrow selfishness has made h im bereft of love and friends. W h e n two portly gent lemen approach h im on Christmas Eve to make a contr ibut ion to help " the Poor and Desti tute," the following dialogue ensues.

"Are there no prisons?" asked Scrooge. "Plenty of prisons," said the gentleman, laying d o w n

the pen again.

"And the U n i o n workhouses?" demanded Scrooge. "Are they still in operation?"

"They are. Still," returned the gentleman, "I wish I could say they were not."

" T h e Treadmill and the Poor Law are in full vigour, then?" said Scrooge.

"Both very busy, sir." " O h ! I was afraid, from what you said at first, that

something had occurred to stop them in their useful course," said Scrooge. " I ' m very glad to hear it."

T h e treadmill, poor law, and IP u n i o n workhouses to wh ich • j Scrooge refers were all punitive

government ways of either help­ing the poor or of giving the poor an incentive not to be poor. So, for example, anyone finding himself in poverty could enter a workhouse where he would work hard and receive some small amount of food in return. T h e two men w h o ask Scrooge for aid are not asking for higher amounts of food to be handed out by government agencies. Instead, they are asking

for private, voluntary charity to those they deem wor ­thy.

After turning them down, Scrooge goes h o m e and to bed. In the middle of the night he sees, in turn, the ghosts of Christmas past, present, and future. H e sees h o w he has turned gradually from a loving brother

David Henderson (davidrhendersonL950@gmail.com) is a research fellow with the Hoover Institution and an economics professor at the Graduate School of Business and Public Policy at the Naval Postgraduate School. He is coauthor, with Charles L. Hooper, of M a k i n g Great Decisions in Business and Life (Chicago Park Press, 2006.) His latest book is T h e Conc i se Encyclopedia of Economics , 2nd ed. (Liberty Fund, 2008).

T H E F R E E M A N : I d e a s o n L i b e r t y 40

The Lesson of E b e n e z e r Scrooge

into a bitter, stingy old man. H e also sees h o w u n m o u r n e d he will be in death if he fails to be gener­ous, wi th himself and others, in life. W h e n Scrooge wakes up, he realizes that indeed he can change. In my favorite scene in the movie, Scrooge dances around in his nightshirt like a kid in a candy store, celebrating his power to change. And what is the change? Does he say, " O h , boy, n o w I'll support a politician w h o will tax me, as well as other people less r ich than me, to help poor people?" O f course not . An author or a movie producer w h o tried to set up such a scene would have produced a m u c h less compell ing novel or movie. Scrooge is excited because n o w he can change, n o w he can get pleasure from helping others w h o are worse off. In o ther words, the lesson of A Christmas Carol is the impor tance of being generous, not the impor tance of support ing higher taxes on oneself and others.

Indeed , the m o d e r n Scrooge, instead of asking, "Are there n o pr is­ons?" would ask, "Is there no M e d i c -

The failure to distinguish between

aid? Are there no food stamps?" T h e Compassion and coercion is all around us.

m o d e r n Scrooges, in short, are those w h o advocate government programs for the poor rather than charity for the poor.

But aren't government programs for the poor a form of charity? That issue came up in the sales-tax controversy. T h e short answer is no. But the longer answer is wor th stating also. Dur ing the campaign over the measure to increase the sales tax, my co-leader, Lawrence Samuels, and I were in a debate wi th two doctors from Natividad Hospital, which was to receive the large subsidy if the sales tax measure passed. T h e 200-person audience was composed almost entirely of Natividad workers and their families and friends. As you might expect, they were fairly hostile to Lawrence and me. At one point Melissa Larsen, one of the doctors on the other side, said that increasing the tax and giving the money to the hospital was " the compassionate thing to do." I ignored her gall in calling "compassionate" a tax that would clearly have b e n e ­fited her personally. Instead I responded, " N o , it's not . It has no th ing to do wi th compassion. If you gave your own money to the hospital, that would be compassion­

ate. But taking other people's money wi thou t their consent is no t compassion; it's coercion."

W h e n I said that, there was a o n e - or two-second silence rather than the usual jeer ing. I think the silence happened for two reasons. First, probably 90 percent of the audience thought the tax increase was compassion­ate, and I had given them something n e w to think about. Second, probably 90 percent of the audience thought their pro-tax side had the moral high ground and I had just cut it out from under them. M y point ing out the distinction be tween compassion and coercion, in short, had a powerful effect.

T h e failure to distinguish be tween compassion and coercion is all around us. It's a failure that people on many parts of the political spectrum exhibit. Take, for example, the recent controversy about the difficulty

subpr ime mor tgagors are having. O n e can certainly feel compassion for them, especially for those w h o were lied to or misled by mortgage brokers. But what are we to make of the following? Andrew Samwick, a D a r t m o u t h Universi ty economics professor and former chief economist of President Bush's Counci l of E c o -

nomic Advisers, said he felt more than a "pang of sympathy" for people

w h o were misled. D id he then go on to say that he would send some of his own high income to help them? N o t at all. Instead, Samwick supported a p ro ­posal to change the bankruptcy laws so that owners of houses w h o lost their homes could stay in the homes by paying a " fa i r -market" rent . In o the r words , Samwick's "pangs of sympathy" led h im to support retroactive law-making to undercut the property rights of the lenders—even if those lenders had not misled the borrowers at all. W h a t does this violation of p rop ­erty rights have to do wi th sympathy?

So here's my modest suggestion. Nex t t ime you hear someone advocating a coercively financed government program to help those in need, call h im a "Scrooge." I guarantee that you'll catch h im off guard. Moreover, he'll likely ask why you called h im that. T h e n you can tell h im the truth about Ebenezer Scrooge and A Christmas Carol. (W)

41 DECEMBER 2007

I n d e x

INDEX: THE FREEMAN: IDEAS ON LIBERTY VOLUME 57 JANUARY-DECEMBER 2007

Prepared by Beth A. Hoffman

N O T E : In page references, the number preceding the colon designates the month, the numbers following refer to the pages. For example, 1/2:47-48 refers to pages 47-48 of the January—February issue. Articles have at least three entries—author, title, and subject—except in cases when the title and subject coincide. Books reviewed are listed alphabetically by author on page 48.

A A B O L I S H I N G the F D A (van H e e r d e n )

3 : 2 7 - 3 1 A F R I C A

Aid, trade, and inst i tut ional quality in Africa (Hall and Hisr ich) 1 / 2 : 2 1 - 2 3

A G R I C U L T U R E D e a d m e n fa rming (Stossel) 1 1 : 3 7 - 3 8

AID, trade, and inst i tut ional quality in Africa (Hall and Hisr ich) 1 / 2 : 2 1 - 2 3

A K E R S , Becky Lee's l eg ion of lessons. 9:34—39 Paving the road to serfdom. 1 1 : 1 8 - 2 2 P u t t i n g securi ty back o n track. 5:8—10

A M E R I C A N history A m e r i c a n spirit of enterpr ise (Ebeling)

1 1 : 2 - 3 Great Depress ion accord ing to M i l t o n

F r i e d m a n (Pongracic) 9 : 2 1 - 2 7 Lost articles ( R i c h m a n ) 6 : 1 9 - 2 0 Sovereign presidency: is this w h a t the

framers had in mind? (Stromberg) 1 / 2 : 3 4 - 3 9

See also Akers; Folsom; Higgs A M E R I C A N spirit of enterpr ise (Ebeling)

1 0 : 2 - 3 A M E R I C A N I Z A T I O N of Japan (Barry)

5 : 3 2 - 3 3 A M E R I C A ' S role in end ing the slave trade:

a second l o o k (Van Cot t ) 7 / 8 : 2 4 - 2 5 A R E high taxes the basis of f reedom and

prosperi ty? (Shenoy) 1 0 : 2 4 - 2 8 A R T I C L E S of Confede ra t i on

Lost articles ( R i c h m a n ) 6 : 1 9 - 2 0 A S T R O N A U T libertarian? (Keating)

7 / 8 : 3 1 - 3 2 A T the in tersect ion of the m i n i m u m wage

and illegal i m m i g r a t i o n (Baetjer) 3 : 8 - 1 0

A T H L E T E S ' salaries too high? sports fans, b lame yourselves (Callahan) 7 / 8 : 8 - 1 0

A U T O M O B I L E S Paving the road to serfdom (Akers)

11 :18-22 T h a n k you, in t e rna l - combus t ion engine ,

for cleaning up the env i ronmen t (Lee) 1 0 : 1 2 - 1 3

T r u e pr ice of a hybr id (Cwik) 9 : 1 3 - 1 5

B B A D policy drives ou t g o o d (R ichman)

1 2 : 2 - 3 B A E T J E R , Howard , Jr.

At the in tersect ion of the m i n i m u m wage and illegal immigra t ion . 3 : 8 - 1 0

S o m e t h i n g besides m o n e y g rowth causes inflation? It jus t ain't so! 7 / 8 : 6 - 7

B A I R D , Charles W. The pursuit of happiness co lumn: Clos ing a malevolent circle: the employee

free choice act. 7 / 8 : 4 7 - 4 8 Hayek on closed shops and yel low dogs.

4 : 4 7 - 4 8 Paycheck pro tec t ion : m u c h less than

meets the eye. 11 :47 -48 B A R R Y , N o r m a n

T h e Amer ican iza t ion of Japan. 5 :32 -33 E u r o p e : still a laggard economy. 3 :34 -37

B A T E M A R C O , R o b e r t . See B o o k reviews (Fridson)

B I G g o v e r n m e n t — b i g risk (Henderson) 1 /2 :47 -48

B I O G R A P H Y , t r ibute Mi l ton Fr iedman: a personal t r ibute

(Henderson) 5 : 4 7 - 4 8 M u r r a y Ro thba rd ' s phi losophy of

f reedom (Gordon) 11 :33 -36 Hans F. Sennholz , 1 9 2 2 - 2 0 0 7 (Reed)

1 0 : 1 4 - 1 5 Hans F. Sennholz: champion of freedom

and Austrian economics (Ebeling) 6 :2-3 R e m e m b e r i n g Julian S i m o n (Cleveland

and Hager t ) 1 /2 :11 -12 Tr ibu te to a Polish hero—Stanis law L e m

(Reed) 3 : 1 1 - 1 2 Alberta Wi lson: in praise of an

u n c o m m o n w o m a n (Reed) 12:10—11 B L A N C H E T T E , J u d e

G o v e r n m e n t is be t te r than the market at p r o d u c i n g h u m a n capital? It jus t ain't so! 9 :6 -7

T h e shor tcomings of g o v e r n m e n t charity. 5 :16 -20

T h e stock market is a swindle? It jus t ain't so! 4 : 6 - 7

W e have e n o u g h globalization? It jus t ain't so! 6:6—7

See also B o o k reviews (Sachs)

B O L D R I N , Miche le (coauthor wi th David K. Levine)

O p e n - s o u r c e software: w h o needs intellectual property? 1 /2 :26 -28

B O R D E R S , M a x Cl imate change: wha t if they're right?

1 /2 :8 -10 B O U D R E A U X , D o n a l d J.

Thoughts on freedom co lumn: C o o l on the idea of cool ing global

wa rming . 4 : 1 3 - 1 4 T h e Fed's po ten t power. 1 /2 :13-14 Hayek, Coase, and Buchanan on the

market process. 6 :11 -12 T h e nat ion is no t a house. 9 :19 -20 So you want government - suppl ied health

care? 11 :16 -17 B O V A R D , James

"Deliberat ive d e m o c r a c y " dement ia . 5 :26-31

c CABLE-franchise reform: deregulat ion or

jus t n e w regulators? (Summers) 4 : 3 1 - 3 4

C A L L A H A N , G e n e Athletes ' salaries too high? sports fans,

b lame yourselves. 7 / 8 : 8 - 1 0 H o w a free society could solve global

wa rming . 10 :8 -11 See also B o o k reviews (Peart and Levy)

C A N w e be free if reason is the slave of the passions? (van D u n ) 10 :31 -38

C A P I T A L letters 3 :38 -39 ; 6 :39 -40 ; 7 /8 :40 ; 11 :39-40 ; 12 :33 -34

C A P I T A L I S M and the family (Horwitz) 7 / 8 : 2 6 - 3 0

C A R B O N tax will fix global warming? It jus t ain't so! (Cordato) 5 :6 -7

C A R S O N , Kevin A. E c o n o m i c calculation in the corpora te

c o m m o n w e a l t h . 6:13—18 C A S U A L T I E S of the war o n pover ty

(Lingle) 12 :8 -9 C H A R I T Y

Freedom and benevolence go together (Stossel) 10 :39 -40

Lesson of Ebenezer Scrooge (Henderson) 12 :40 -41

Shor tcomings of gove rnmen t chari ty (Blanchette) 5 :16 -20

C H I N A A d a m Smith in Ch ina (Dorn) 5 :11 -13 M a d e everywhere (R ichman) 7 / 8 : 4 - 5

C H R I S T M A S Carol : lesson of Ebeneze r Scrooge (Henderson) 12:40—41

C L E V E L A N D , Paul A. (coauthor wi th Er in Hagert)

R e m e m b e r i n g Julian S imon. 1 /2 :11-12 C L I M A T E change: wha t if they're right?

(Borders) 1 /2 :8 -10

T H E F R E E M A N : I d e a s o n L i b e r t y 42

I n d e x

C L O S I N G a malevolent circle: the employee free cho ice act (Baird) 7 / 8 : 4 7 - 4 8

C O L E T T I , Joseph. See B o o k reviews (Epstein)

C O M M U N I C A T I O N S regulat ion Cable-franchise reform: deregula t ion or

jus t n e w regulators? (Summers) 4 : 3 1 - 3 4

C O N E R L Y , Wi l l i am B. See B o o k reviews (Bartlett)

" C O N G R E S S I O N A L generos i ty" ( R i c h m a n ) 4 : 2 3 - 2 4

C O N S T I T U T I O N wi th in ( R i c h m a n ) 9 : 2 8 - 2 9

C O O L o n the idea of coo l ing global w a r m i n g (Boudreaux) 4:13—14

C O R D A T O , R o y E. A carbon tax will fix global wa rming? It

jus t ain't so! 5:6—7 C O R P O R A T E welfare

Welfare for the r i ch (Murphy) 4 : 1 5 - 2 0 C O S T of the federal g o v e r n m e n t in a freer

Amer i ca (Ebeling) 3:2—3 C U L T U R A L c o m p e t e n c e and y o u r child

(McElroy) 9 : 3 0 - 3 3 C U N D I F F , Kirby R .

M o n e t a r y pol icy disasters o f the twen t i e th century. 1 /2 :29 -30

C W I K , Paul T h e t rue pr ice of a hybr id . 9 : 1 3 - 1 5

D DAVIES, S t ephen

Our economic past c o l u m n : A different story. 1 / 2 : 3 2 - 3 3 T h e real a r g u m e n t abou t g o v e r n m e n t .

1 2 : 2 4 - 2 5 T i m e to revive " individual ism"? 9 : 4 0 - 4 1 Trade and diversity. 5 : 3 4 - 3 5

D e J A S A Y , A n t h o n y T h e struggle to subdue luck. 4 : 2 1 - 2 2

D E A T H by publ ic works (Folsom) 3:32—33 D E F I N I N G psychiatry (Szasz) 7 / 8 : 2 2 - 2 3 " D E L I B E R A T I V E d e m o c r a c y " dement i a

(Bovard) 5 :26 -31 D E M O C R A C Y or republic? (Williams)

6 : 4 7 - 4 8 D E N U Y L , Douglas J. ( coau thor w i t h

Douglas B. Rasmussen) Visible and invisible hands. 4 : 3 7 - 4 0

D E N S O N , J o h n V . See B o o k reviews (Powell)

D E V E L O P M E N T , foreign aid Aid, trade, and inst i tut ional quality in

Africa (Hall and Hisr ich) 1 / 2 : 2 1 - 2 3 D I C K I N S O N , C . L.

Free m e n for be t te r j o b pe r fo rmance , Part I. 6 : 2 1 - 2 6

Free m e n for be t t e r j o b pe r fo rmance , Part 11 .7 :16-21

D I F F E R E N T story (Davies) 1 / 2 : 3 2 - 3 3 D O N W A Y , R o g e r

T h e obs t ruc t ion of jus t ice d e p a r t m e n t 1 1 : 2 7 - 3 0

D O R N , James A. A d a m Smi th in Ch ina . 5 : 1 1 - 1 3

D R I V E R ' S licenses Paving the road to serfdom (Akers) 11:18-22

E E B E L I N G , R i c h a r d M .

From the president c o l u m n : T h e A m e r i c a n spirit of enterpr ise . 1 0 : 2 - 3 T h e cost of the federal g o v e r n m e n t in a

freer Amer ica . 3:2—3 E n d i n g the welfare state t h r o u g h the

p o w e r of private act ion. 4:2—3 T h e euro versus cur rency compe t i t i on .

1 /2 :2 -3 F r e e d o m and the role of gove rnmen t .

5 : 2 - 3 T h e great French inflation. 7/8:2—3 Marching to Bismarck's d rummer : the origin

of the m o d e r n welfare state. 12:4—5 M e n a g e r i e of happy m e n : the ancient

Incas and the bureaucrat ic state. 9:2—3 Hans F. Sennholz : c h a m p i o n of f reedom

and Aust r ian economics . 6:2—3 T h e Soviet c h a m b e r of hor rors :

r eminders on the n ine t ie th anniversary of the Bolshevik R e v o l u t i o n . 11:4—5

See also B o o k reviews (Aly; Burczak; Fried; Gellately; Legrain; Schivelbusch; Tanner ; Viola; Wer th)

E C O N O M I C calculation in the co rpora te c o m m o n w e a l t h (Carson) 6:13—18

E C O N O M I C history See Davies; Folsom; Higgs

E C O N O M I C S G o v e r n m e n t is be t te r than the marke t at

p r o d u c i n g h u m a n capital? It jus t ain't so! (Blanchette) 9 :6 -7

Great F rench inflation (Ebeling) 7/8:2—3 Hayek, Coase , and B u c h a n a n o n the

marke t process (Boudreaux) 6:11—12 Hans F. Sennholz: champion of freedom

and Austrian economics (Ebeling) 6 :2-3 U n e v e n in fo rmat ion causes marke t

failure? It jus t ain't so! (Hall) 12: 6 - 7 E C O N O M I C S of p roper ty rights (Morriss)

3 : 1 3 - 1 8 E D U C A T I O N

Cul tura l c o m p e t e n c e and y o u r child (McElroy) 9 : 3 0 - 3 3

In praise of an u n c o m m o n w o m a n (Reed) 1 2 : 1 0 - 1 1

M o r e college graduates the better? It jus t ain't so! (Leef) 1 /2 :6 -7

E M I N E N T d o m a i n E x t o r t i o n in Por t Ches te r (R ichman)

3 : 4 - 5

E N D I N G the welfare state t h r o u g h the p o w e r of private act ion (Ebeling) 4 : 2 - 3

E N E R G Y policy: w i s d o m or waste? (McKinney) 5 : 3 6 - 4 0

E N E R G Y E thano l versus the p o o r (Goldsmith)

7 / 8 : 1 1 - 1 3 Pu t t i ng a bureaucra t in y o u r tank:

gasoline markets and regulat ion (Morriss) 1 0 : 1 6 - 2 1

T r u e p r ice of a hybr id (Cwik) 9:13—15 E N V I R O N M E N T

C a r b o n tax will fix global wa rming? It jus t ain't so! (Cordato) 5 :6 -7

Cl ima te change: w h a t if they're right? (Borders) 1 / 2 : 8 - 1 0

C o o l o n the idea of coo l ing global w a r m i n g (Boudreaux) 4:13—14

F r e e d o m is the envi ronment ' s best friend (Semmens) 4:10—12

Global w a r m i n g and the layman ( R i c h m a n ) 1 / 2 : 2 4 - 2 5

H o w a free society could solve global w a r m i n g (Callahan) 10:8—11

Sprawl versus coastal beau ty (Terrell) 6 :8 -10

T h a n k you , i n t e rna l - combus t ion engine , for c leaning up the env i ronmen t (Lee) 1 0 : 1 2 - 1 3

E T H A N O L versus the p o o r (Goldsmith) 7 / 8 : 1 1 - 1 3

E T H I C S Visible and invisible hands (Den U y l and

Rasmussen) 4 : 3 7 - 4 0 E U R O versus cur rency compe t i t i on

(Ebeling) 1 /2 :2 -3 E U R O P E : still a laggard e c o n o m y (Barry)

3 : 3 4 - 3 7 E U R O P E meets Amer ica : p rope r ty rights

in the n e w wor ld (Morriss) 1/2:15—20 E U R O P E A N history. See Davies, Ebe l ing E X T O R T I O N in Por t Ches te r (R ichman)

3 : 4 - 5

F F D A

Abol ish ing the F D A (van H e e r d e n ) 3 : 2 7 - 3 1

F E A R of free trade (Hendr ickson) 1 2 : 2 0 - 2 3

F E D E R A L reserve Fed's p o t e n t p o w e r (Boudreaux)

1 / 2 : 1 3 - 1 4 S u b p r i m e m o n e t a r y pol icy (O'Driscol l )

11 :8 -12 F I N A N C E

T h e stock marke t is a swindle? It jus t ain't so! (Blanchette) 4 : 6 - 7

See also M o n e y

43 DECEMBER 2007

I n d e x

F I S C A L force ( R i c h m a n ) 4 : 4 - 5 FOLEY, R i d g w a y K . J r .

Int rusions great and small. 5 : 2 1 - 2 3 F O L S O M , B u r t o n W.

Our economic past c o l u m n : D e a t h by publ ic works . 3:32—33 Subsidies h u r t recipients too . 10:29—30 T w o presidents, t w o phi losophies , and

t w o different o u t c o m e s . 6:32—33 See also B o o k reviews (Higgs; R o s e n )

F O U L K E S , A r t h u r E . M i l t o n F r i e d m a n is to b l ame for unsafe

food? It jus t ain't so! 1 0 : 6 - 7 F O U R mistakes of nonl iber tar ians (Leef)

6 : 3 4 - 3 8 F R E E m e n for be t te r j o b pe r fo rmance

(Dickinson) Part I, 6 : 2 1 - 2 6 ; Part II, 7 / 8 : 1 6 - 2 1

F R E E D O M and benevo lence go toge ther (Stossel) 1 0 : 3 9 - 4 0

F R E E D O M and the role of g o v e r n m e n t (Ebeling) 5 : 2 - 3

F R E E D O M is the envi ronment ' s best friend (Semmens) 4 : 1 0 - 1 2

F R I E D M A N , Mi l t on , ideas of M i l t o n F r i e d m a n is to b l ame for unsafe

food? It jus t ain't so! (Foulkes) 1 0 : 6 - 7

Great Depress ion accord ing to M i l t o n F r i e d m a n (Pongracic) 9 : 2 1 - 2 7

F R I E D M A N , Mi l ton : a personal t r ibu te (Henderson) 5 : 4 7 - 4 8

F R O M the President . See Ebe l ing

G O V E R N M E N T Cos t o f the federal g o v e r n m e n t in a freer

Amer i ca (Ebeling) 3:2—3 F r e e d o m and the role of g o v e r n m e n t

(Ebeling) 5 :2 -3 Intrusions great and small (Foley)

5 : 2 1 - 2 3 N e e d and publ ic policy: handle w i th care

(Galles) 1 1 : 2 3 - 2 4 Trans-fat tened g o v e r n m e n t (R ichman)

1 /2 :4 -5 W e w i n o n e (so far) (R ichman) 9 :4 -5

G O V E R N M E N T , g rowth of B ig g o v e r n m e n t — b i g risk (Henderson)

1 / 2 : 4 7 - 4 8 Sovereign presidency: is this wha t the

framers had in mind? (Stromberg) 1 / 2 : 3 4 - 4 0

G O V E R N M E N T jobs programs D e a t h by public works (Folsom) 3 : 3 2 - 3 3

G O V E R N M E N T , p rope r role R e a l a r g u m e n t abou t g o v e r n m e n t

(Davies) 1 2 : 2 4 - 2 5 G R E A T Depress ion according to M i l t o n

F r i e d m a n (Pongracic) 9 : 2 1 - 2 9 G R E A T D E P R E S S I O N

Great Con t r ac t ion , 1 9 2 9 - 3 3 (Higgs) 4 : 3 5 - 3 6

Great Dura t i on , 1 9 2 9 - 4 1 (Higgs) 7 / 8 : 3 3 - 3 4

D e a t h by public works (Folsom) 3:32—33 Subsidies hu r t recipients t o o (Folsom)

1 0 : 2 9 - 3 0 G R E A T French inflation (Ebeling) 7 / 8 : 2 - 3

HENDERSON, David R., continued Pharmaceut ica l profits and health are

inconsistent? It jus t ain't so! (Henderson) 11 :6 -7

H E N D R I C K S O N , M a r k W. T h e fear of free trade. 12 :20 -23

H I G G S , R o b e r t Our economic past co lumn: T h e Great Con t rac t ion , 1929—33.

4 : 3 5 - 3 6 T h e Great Dura t ion , 1 9 2 9 - 4 1 . 7 / 8 : 3 3 - 3 4 War t ime origins of m o d e r n i ncome- t ax

wi thho ld ing . 11 :31 -32 H I S R I C H , M a t t h e w (coauthor w i th Joshua

C. Hall) Aid, trade, and insti tutional quality in

Africa. 1 /2 :21 -23 H I S T O R Y . See Amer i can history, European

history H O R W I T Z , Steven

Capitalism and the family. 7 / 8 : 2 6 - 3 0 H O W a free society could solve global

w a r m i n g (Callahan) 10 :8 -11 H U E B E R T , J .H. See B o o k reviews (Edwards) H U M E , David, ideas of

C a n we be free if reason is the slave of the passions? (van D u n ) 10 :31 -38

H U N T E R , Barbara Involuntary munic ipal annexat ion: the

ugly t ru th . 9 :16 -18 Punish ing the innocen t : the Sarbanes-

Oxley Act. 3 :23 -26 See also B o o k reviews (But le r /Ribs te in

and Taylor)

G H I GALLES, Gary

N e e d and publ ic pol icy: handle w i t h care. 11 : 2 3 - 2 4

G A S O L I N E . See Ene rgy G I V E m e a break! See Stossel G L O B A L w a r m i n g and the layman

( R i c h m a n ) 1 / 2 : 2 4 - 2 5 G L O B A L w a r m i n g

C a r b o n tax will fix global wa rming? It jus t ain't so! (Cordato) 5 :6 -7

Cl ima te change : w h a t if they're r ight? (Borders) 1 / 2 : 8 - 1 0

C o o l o n the idea of cool ing global w a r m i n g (Boudreaux) 4:13—14

See also E n v i r o n m e n t G L O B A L I Z A T I O N . See Trade G O L D S M I T H , P. Gardner

E thano l versus the poor . 7 / 8 : 1 1 - 1 3 G O R D O N , Dav id

M u r r a y Ro thba rd ' s ph i losophy of f reedom 11:33—36

G O V E R N M E N T is be t te r than the marke t at p r o d u c i n g h u m a n capital? It jus t ain't so! (Blanchette) 9 :6 -7

H A G E R T , E r in (coauthor w i t h Paul Cleveland)

R e m e m b e r i n g Jul ian S imon . 1 /2 :11 -12 H A L L , Joshua C .

U n e v e n in format ion causes marke t failure? It jus t ain't so! 12: 6 - 7

H A L L , Joshua C . (coauthor w i th M a t t h e w Hisrich)

Aid, trade, and inst i tut ional quality in Africa. 1 / 2 : 2 1 - 2 3

H A Y E K o n closed shops and yellow dogs (Baird) 4 : 4 7 - 4 8

H A Y E K , Coase, and B u c h a n a n o n the marke t process (Boudreaux) 6:11—12

H E A L T H , heal th care. See M e d i c i n e H E N D E R S O N , David R .

The pursuit of happiness co lumn : Big g o v e r n m e n t — b i g risk. 1 / 2 : 4 7 - 4 8 M i l t o n Fr iedman: a personal t r ibute .

5 : 4 7 - 4 8 T h e lesson of Ebeneze r Scrooge.

12 :40-41 O u r skyrocket ing living standards.

9 : 4 7 - 4 8

I D E A S and consequences . See R e e d IDEAS, ideology

T h e four mistakes of nonl iber tar ians (Leef) 6 :34 -38

Free m e n for be t te r j o b per formance (Dickinson) Part I, 6 :21-26 ; Part II, 7 / 8 : 1 6 - 2 1

Libertar ian paternalism: a test (Lee) 7 / 8 : 3 5 - 3 9

Love of p o w e r vs. the p o w e r o f l ove (Reed) 5 :14 -15

O n no t admi t t ing error (Szasz) 3 :23 -24 IKEDA, Sandy. See B o o k reviews (Nelson) I M M I G R A T I O N control , circa A D 175

(Jones) 12 :26 -30 I M M I G R A T I O N

At the intersection of the m i n i m u m wage and illegal immigrat ion (Baetjer) 3 :8-10

T h e nat ion is no t a house (Boudreaux) 9 :19 -20

I M P O R T S , exports , and nonsense (R ichman) 6 :4 -5

I N praise of an u n c o m m o n w o m a n (Reed) 12 :10 -11

T H E F R E E M A N : I d e a s o n L i b e r t y 44

I n d e x

I N C A empi re M e n a g e r i e of happy m e n : the ancient

Incas and the bureaucra t ic state (Ebeling) 9 : 2 - 3

I N C O M E , weal th Athle tes ' salaries t o o high? sports fans,

b lame yourselves (Callahan) 7 / 8 : 8 - 1 0 Inequal i ty mat ters ( R i c h m a n ) 5 :4 -5 O u r skyrocket ing l iving standards

(Henderson) 9 : 4 7 - 4 8 P u n d i t in w o n d e r l a n d ( R i c h m a n ) 1 1 : 2 - 3 Struggle to subdue luck (de Jasay)

4 : 2 1 - 2 2 I N D I V I D U A L rights, individual ism

A m e r i c a n spirit of en terpr i se (Ebeling) 1 0 : 2 - 3

T i m e to revive " individual ism"? (Davies) 9 : 4 0 - 4 1

W e w i n o n e (so far) ( R i c h m a n ) 9 : 4 - 5 I N E Q U A L I T Y mat ters ( R i c h m a n ) 5 :4 -5 I N G D A H L . W a l d e m a r

T h e n e w Sweden . 3 : 1 9 - 2 0 I N T E L L E C T U A L defense of l iberty

(Williams) 1 0 : 4 7 - 4 8 I N T E L L E C T U A L p rope r ty

O p e n - s o u r c e software: w h o needs intellectual proper ty? (Boldr in and Levine) 1 / 2 : 2 6 - 2 8

I N T R U S I O N S great and small (Foley) 5 : 2 1 - 2 3

I N V O L U N T A R Y munic ipa l annexa t ion : the ugly t ru th (Hunte r ) 9 : 1 6 - 1 8

I T jus t ain't so! A ca rbon tax will fix global warming?

(Cordato) 5 :6 -7 M i l t o n F r i e d m a n is to b l ame for unsafe

food? (Foulkes) 1 0 : 6 - 7 G o v e r n m e n t is be t te r than the marke t at

p r o d u c i n g h u m a n capital? (Blanchette) 9 : 6 - 7

T h e m o r e college graduates the bet ter? (Leef) 1 /2 :6 -7

Pharmaceu t i ca l profits and heal th are inconsistent? (Henderson) 1 1 : 6 - 7

Ra is ing the m i n i m u m wage will do n o h a r m ? (McKenzie) 3 : 6 - 7

S o m e t h i n g besides m o n e y g r o w t h causes inflation? (Baetjer) 7 / 8 : 6 - 7

T h e stock marke t is a swindle? (Blanchette) 4 : 6 - 7

U n e v e n in fo rmat ion causes marke t failure? It jus t ain't so! (Hall) 12: 6 - 7

W e have e n o u g h globalization? (Blanchette) 6 : 6 - 7

J-K J A P A N

Amer ican iza t ion of Japan (Barry) 5 : 3 2 - 3 3

J O H N S O N , Charles Scratching by: h o w g o v e r n m e n t creates

pover ty as w e k n o w it. 1 2 : 1 2 - 1 7 J O N E S , Haro ld B. ,Jr .

I m m i g r a t i o n control , circa A D 175 . 1 2 : 2 6 - 3 0

K E A T I N G , R a y m o n d J. T h e astronaut l ibertarian? 7/8:31—32

L L A B O R , e m p l o y m e n t

Clos ing a malevolent circle: the employee free cho ice act (Baird) 7 / 8 : 4 7 - 4 8

Free m e n for be t t e r j o b pe r fo rmance (Dickinson) Part I, 6 : 2 1 - 2 6 ; Part II, 7 / 8 : 1 6 - 2 1

Hayek o n closed shops and yel low dogs (Baird) 4 : 4 7 - 4 8

Paycheck pro tec t ion : m u c h less than meets the eye (Baird) 1 1 : 4 7 - 4 8

L A N D use E x t o r t i o n in Por t Ches te r ( R i c h m a n )

3 : 4 - 5 Sprawl versus coastal beau ty (Terrell)

6 : 8 - 1 0 L A S T taxpayer s tanding ( R i c h m a n ) 10:4—5 LEE, D w i g h t R .

Liber tar ian paternal ism: a test. 7/8:35—39 T h a n k you, i n t e rna l - combus t ion engine ,

for c leaning u p the env i ronmen t . 1 0 : 1 2 - 1 3

LEE 'S leg ion of lessons (Akers) 9 : 3 4 - 3 9 LEEF, G e o r g e C .

T h e four mistakes of nonl iber tar ians . 6 : 3 4 - 3 8

T h e m o r e college graduates the bet ter? It jus t ain't so! 1/2:6—7

See also B o o k reviews (Booth ; C o h e n ; Kleiner; Michaels ; M o r e n o ; R e i c h ; R e y n o l d s ; Sandefur; Walden; Wooster )

L E V I N E , Dav id K. (coau thor w i t h Miche l e Boldr in)

O p e n - s o u r c e software: w h o needs intel lectual proper ty? 1 / 2 : 2 6 - 2 8

L I B E R T A R I A N paternal ism: a test (Lee) 7 / 8 : 3 5 - 3 9

L I B E R T A R I A N I S M T h e astronaut l ibertarian? (Keating)

7 / 8 : 3 1 - 3 2 T h e four mistakes of nonl iber tar ians

(Leef) 6 : 3 4 - 3 8 M u r r a y R o t h b a r d ' s ph i losophy of

f reedom (Gordon) 11:33—36 L I B E R T Y , intellectual defense of

(Williams) 1 0 : 4 7 - 4 8 L I N G L E , C h r i s t o p h e r

Casualties o f the war o n poverty. 12 :8 -9 L O S T articles ( R i c h m a n ) 6 : 1 9 - 2 0 L O V E of p o w e r vs. the p o w e r of love

(Reed) 5 : 1 4 - 1 5

M M A C H A N , T i b o r . See B o o k reviews (Otteson) M A C K E N Z I E , D . W

Tolls o n the road to serfdom. 4 : 8 - 9 M A D E everywhere ( R i c h m a n ) 7 / 8 : 4 - 5 MALTSEV, Yuri . See B o o k reviews (Service) M A N D A T E D heal th-care socialism (Seiler)

9 : 8 - 1 2 M A R C H I N G to Bismarck's d r u m m e r : the

o r ig in of the m o d e r n welfare state (Ebeling) 1 2 : 4 - 5

M A R K E T S Hayek, Coase , and B u c h a n a n o n the

marke t process (Boudreaux) 6:11—12 U n e v e n in fo rmat ion causes marke t

failure? It jus t ain't so! (Hall) 12: 6 - 7 M c E L R O Y , W e n d y

Cul tura l c o m p e t e n c e and y o u r child. 9 : 3 0 - 3 3

M c K E N Z I E , R i c h a r d B. Ra i s ing the m i n i m u m wage will do n o

h a r m ? It jus t ain't so! 3:6—7 M c K I N N E Y , R o g e r D.

Ene rgy policy: w i s d o m or waste? 5 : 3 6 - 4 0 M E D I C A L c o m p e t i t i o n works for patients

(Stossel) 1 2 : 3 1 - 3 2 M E D I C A L I Z A T I O N of everyday life

(Szasz) 1 2 : 1 8 - 1 9 M E D I C A L I Z I N G quackery (Szasz)

1 0 : 2 2 - 2 3 M E D I C I N E , drugs, heal th

Abol ish ing the F D A (van H e e r d e n ) 3 : 2 7 - 3 1

Def in ing psychiatry (Szasz) 7/8:22—23 M a n d a t e d heal th-care socialism (Seiler)

9 : 8 - 1 2 O n n o t admi t t ing er ror (Szasz) 3:21—22 Pharmaceut ical profits and health are

inconsistent? It jus t ain't so! (Henderson) 11 :6 -7

R a n k i n g the U.S. heal th-care system (Peron) 1 1 : 1 3 - 1 5

So you w a n t gove rnmen t - supp l i ed heal th care? (Boudreaux) 1 1 : 1 6 - 1 7

The rapeu t i c censorship (Szasz) 5:24—25 Trans-fat tened g o v e r n m e n t ( R i c h m a n )

1 /2 :4 -5 M E N A G E R I E of happy m e n : the ancient

Incas and the bureaucrat ic state (Ebeling) 9 : 2 - 3

M I N E R S , vigilantes, and ca t t lemen: p rope r ty rights o n the wes te rn frontier (Morriss) 4 : 2 5 - 3 0

M I N I M U M wage, m a x i m u m folly (Williams) 3 : 4 7 - 4 8

M I N I M U M W A G E At the in tersect ion of the m i n i m u m wage

and illegal i m m i g r a t i o n (Baetjer) 3 : 8 - 1 0

Raising the m i n i m u m wage will do no harm? It just ain't so! (McKenzie) 3:6-7

45 DECEMBER 2007

I n d e x

M O N E T A R Y policy disasters of the twen t i e th cen tu ry (Cundiff) 1 / 2 : 2 9 - 3 0

M O N E Y E u r o versus cur rency compe t i t i on

(Ebeling) 1 /2 :2 -3 Fed's p o t e n t p o w e r (Boudreaux)

1 / 2 : 1 3 - 1 4 Great French inflation (Ebeling)

7 / 8 : 2 - 3 M o n e t a r y pol icy disasters of the

twen t i e th cen tu ry (Cundiff) 1 / 2 : 2 9 - 3 0 S o m e t h i n g besides m o n e y g r o w t h causes

inflation? It jus t ain't so! (Baetjer) 7 / 8 : 6 - 7

S u b p r i m e m o n e t a r y pol icy (O'Driscol l ) 1 1 : 8 - 1 2

M O R E college graduates the better? It jus t ain't so! (Leef) 1 /2 :6 -7

M O R R I S S , A n d r e w P. T h e economics of p roper ty r ights.

3 : 1 3 - 1 8 E u r o p e meets Amer ica : p rope r ty rights in

the n e w wor ld . 1 / 2 : 1 5 - 2 0 Mine r s , vigilantes, and ca t t lemen:

p rope r ty rights on the wes te rn frontier. 4 : 2 5 - 3 0

P u t t i n g a bureaucra t in y o u r tank: gasoline markets and regulat ion. 1 0 : 1 6 - 2 1

See also B o o k reviews (Goldsmi th and Wu)

M U R P H Y , R o b e r t P. Welfare for the r ich. 4 : 1 5 - 2 0

N N A T I O N is n o t a house (Boudreaux)

9 : 1 9 - 2 0 N E E D and publ ic policy: handle w i t h care

(Galles) 1 1 : 2 3 - 2 4 N E W D E A L . See Great Depress ion N E W Sweden (Ingdahl) 3 : 1 9 - 2 0

O O B S T R U C T I O N of jus t ice d e p a r t m e n t

(Donway) 1 1 : 2 7 - 3 0 O ' D R I S C O L L , Jr., Gerald P.

S u b p r i m e m o n e t a r y policy. 11:8—12 O N n o t admi t t ing er ror (Szasz) 3 : 2 1 - 2 2 O P E N - s o u r c e software: w h o needs

intel lectual proper ty? (Boldr in and Levine) 1 / 2 : 2 6 - 2 8

O U R e c o n o m i c past. See Davies; Folsom; Higgs

O U R skyrocket ing l iving standards (Henderson) 9 : 4 7 - 4 8

P P A V I N G the road to serfdom (Akers)

1 1 : 1 8 - 2 2 P A Y C H E C K protec t ion : m u c h less than

meets the eye (Baird) 11 :47 -48 P E R I P A T E T I C S . See R i c h m a n P E R O N J i m

R a n k i n g the U.S. heal th-care system. 1 1 : 1 3 - 1 5

P E R S P E C T I V E . See R i c h m a n P H A R M A C E U T I C A L profits and health

are inconsistent? It jus t ain't so! (Henderson) 11:6—7

P O N G R A C I C , Ivan, Jr. T h e Great Depress ion according to

M i l t o n Fr i edman . 9 : 2 1 - 2 7 P O V E R T Y

Casualties of the war o n pover ty (Lingle) 12 :8 -9

Scratching by: h o w g o v e r n m e n t creates pover ty as w e k n o w it (Johnson) 1 2 : 1 2 - 1 7

P O W E R , love of, vs. the p o w e r o f l o v e (Reed) 5 :14 -15

P R E S I D E N T I A L p o w e r Sovereign presidency: is this w h a t the

framers had in mind? (Stromberg) 1 /2 :34 -39

P R O P E R T Y rights E c o n o m i c s of p rope r ty rights (Morriss)

3 : 1 3 - 1 8 E u r o p e mee t s Amer i ca : p rope r ty r ights

in the n e w wor ld (Morriss) 1 / 2 : 1 5 - 2 0

Involuntary munic ipa l annexa t ion : the ugly t ru th (Hunter ) 9 : 1 6 - 1 8

Miners , vigilantes, and cat t lemen: p roper ty rights o n the wes te rn frontier (Morriss) 4 : 2 5 - 3 0

P R O P H E T S of p roper ty (Reed) 7 / 8 : 1 4 - 1 5 P U B L I C policy

Bad policy drives ou t g o o d (R ichman) 1 2 : 2 - 3

Casualties of the war o n pover ty (Lingle) 12 :8 -9

N e e d and public policy: handle w i th care (Galles) 1 1 : 2 3 - 2 4

Scratching by: h o w g o v e r n m e n t creates pover ty as w e k n o w it (Johnson) 12 :12 -17

P U N I S H I N G the innocen t : the Sarbanes-Ox ley Act (Hunter ) 3 : 2 3 - 2 6

P U N D I T in w o n d e r l a n d ( R i c h m a n ) 1 1 : 2 - 3

P U S R S U I T of happiness. See Baird; H enderson; Wil l iams

P U T T I N G a bureaucrat in your tank: gasoline markets and regulat ion (Morriss) 10 :16 -21

P U T T I N G securi ty back o n track (Akers) 5 :8 -10

R R A I S I N G the m i n i m u m wage will do no

harm? It just ain't so! (McKenzie) 3 :6-7 R A N K I N G the U.S. heal th-care system

(Peron) 11 :13 -15 R A S M U S S E N , Douglas B. (coauthor w i th

Douglas J. D e n Uyl) Visible and invisible hands. 4 : 3 7 - 4 0

R E A L a rgumen t abou t gove rnmen t (Davies) 12 :24-25

R E E D , Lawrence W. Ideas and consequences co lumn: In praise of an u n c o m m o n w o m a n .

12 :10 -11 T h e love of power vs. the power of love.

5 :14 -15 Prophets of property. 7 / 8 : 1 4 - 1 5 Hans F. Sennholz , 1 9 2 2 - 2 0 0 7 . 1 0 : 1 4 - 1 5 A t r ibute to a Polish hero. 3 :11 -12

R E G U L A T I O N Abolishing the FDA (van Heerden)

3 :27-31 Clos ing a malevolent circle: the employee

free choice act (Baird) 7 / 8 : 4 7 - 4 8 R E M E M B E R I N G Julian S imon

(Cleveland and Hagert) 1 /2 :11-12 R I C H M A N , Sheldon

Peripatetics co lumn: "Congress ional generosity." 4 : 2 3 - 2 4 T h e Cons t i tu t ion wi th in . 9 :28-29 A democracy of dunces? 11 : 2 5 - 2 6 Global w a r m i n g and the layman.

1 /2 :24-25 Lost articles. 6 :19 -20 Perspective Bad policy drives ou t good. 1 2 : 2 - 3 Ex to r t i on in Por t Chester . 3 :4 -5 Fiscal force. 4 : 4 - 5 Impor ts , exports , and nonsense. 6 :4 -5 Inequali ty matters . 5 :4 -5 Last taxpayer standing. 10 :4 -5 M a d e everywhere . 7 / 8 : 4 - 5 Pund i t in wonder land . 11 :2 -3 Trans-fat tened government . 1 /2 :4-5 W e w i n o n e (so far). 9 :4 -5 See also B o o k reviews (Carney)

R O M E Immigra t ion control , circa A D 175

(Jones) 12 :26 -30 R O T H B A R D ' S phi losophy of f reedom

(Gordon) 11 :33 -36

s S A N E R A , Michael . See B o o k reviews

(Higgs and Close) S A R B A N E S - O X L E Y Act

Pun ish ing the innocen t : the Sarbanes-Oxley Act (Hunter ) 3 :23 -26

T H E F R E E M A N : I d e a s o n L i b e r t y 46

I n d e x

SAUTET, Frederic. See Book reviews (Schramm) S C A N D I N A V I A

Are h igh taxes the basis o f f reedom and prosperi ty? (Shenoy) 1 0 : 2 4 - 2 8

N e w Sweden (Ingdahl) 3 : 1 9 - 2 0 S C R A T C H I N G by: h o w g o v e r n m e n t

creates pover ty as w e k n o w it (Johnson) 1 2 : 1 2 - 1 7

S C R O O G E , Ebenezer , lesson of (Henderson) 1 2 : 4 0 - 4 1

S E C U R I T Y Pu t t i ng securi ty back o n track (Akers)

5 : 8 - 1 0 S E I L E R , J o h n

M a n d a t e d heal th-care socialism. 9 : 8 - 1 2 S E M M E N S , J o h n

F r e e d o m is the envi ronment ' s best friend. 4 : 1 0 - 1 2

S E N N H O L Z H ans F. (FEE president emeri tus)

Hans F. Sennholz , 1 9 2 2 - 2 0 0 7 (Reed) 1 0 : 1 4 - 1 5

Hans F. Sennholz: champion of freedom and Austr ian economics (Ebeling) 6 :2 -3

Sennholz sampler 6:27—31 S H E N O Y , Sudha R .

Are high taxes the basis of f reedom and prosperi ty? 1 0 : 2 4 - 2 8

S H O R T C O M I N G S of g o v e r n m e n t char i ty (Blanchette) 5 :16 -20

SKOBLE,Aeon J. See B o o k reviews (Schmidtz) S I M O N , Jul ian

R e m e m b e r i n g Jul ian S i m o n (Cleveland and Hager t ) 1 / 2 : 1 1 - 1 2

SLAVERY, America 's role in e n d i n g the slave trade: a second look (Van Cot t ) 7 / 8 : 2 4 - 2 5

S M I T H , A d a m , in C h i n a (Dorn) 5 : 1 1 - 1 3 " S O C I A L ju s t i c e "

Struggle to subdue luck (de Jasay) 4 :21 -22 S O M E T H I N G besides m o n e y g r o w t h

causes inflation? It jus t ain't so! (Baetjer) 7 / 8 : 6 - 7

S O V E R E I G N presidency: is this w h a t the framers had in mind? (Stromberg) 1 / 2 : 3 4 - 4 0

S O V I E T c h a m b e r of hor rors : reminders o n the n ine t ie th anniversary of the Bolshevik R e v o l u t i o n (Ebeling) 11 :4 -5

S P R A W L versus coastal beau ty (Terrell) 6 :8 -10

S T O C K marke t is a swindle? It jus t ain't so! (Blanchette) 4 : 6 - 7

S T O O P S , Terry. See B o o k reviews (Edmondson)

S T O S S E L , J o h n Give me a break! c o l u m n : D e a d m e n farming. 11:37—38 F r e e d o m and benevo lence go together .

1 0 : 3 9 - 4 0 Medica l compe t i t i on works for patients .

1 2 : 3 1 - 3 2

S T R O M B E R G , Joseph R . T h e sovereign presidency: is this w h a t the

framers had in mind? 1/2:34—40 S T R U G G L E to subdue luck (de Jasay)

4 : 2 1 - 2 2 S U B P R I M E m o n e t a r y pol icy (O'Driscol l )

1 1 : 8 - 1 2 S U B S I D I E S h u r t recipients t oo (Folsom)

1 0 : 2 9 - 3 0 S U M M E R S , A d a m B.

Cable-franchise reform: deregula t ion or jus t n e w regulators? 4:31—34

S W E D E N . See Scandinavia S Z A S Z , T h o m a s

The therapeutic state c o l u m n : Def in ing psychiatry. 7 / 8 : 2 2 - 2 3 T h e medical izat ion of everyday life.

1 2 : 1 8 - 1 9 Medica l iz ing quackery. 10:22—23 O n no t admi t t ing error. 3 : 2 1 - 2 2 The rapeu t i c censorship. 5:24—25

T T A N N E R , Michae l . See B o o k reviews

(Murray) T A X A T I O N , taxes

Are h igh taxes the basis o f f reedom and prosperi ty? (Shenoy) 1 0 : 2 4 - 2 8

"Congress iona l generos i ty" (R ichman) 4 : 2 3 - 2 4

Fiscal force ( R i c h m a n ) 4 : 4 - 5 Last taxpayer s tanding ( R i c h m a n )

1 0 : 4 - 5 Tolls o n the road to serfdom

(MacKenzie) 4 : 8 - 9 W a r t i m e origins of m o d e r n i n c o m e - t a x

w i t h h o l d i n g (Higgs) 1 1 : 3 1 - 3 2 T E R R E L L , T i m o t h y D.

Sprawl versus coastal beauty. 6:8—10 T H A N K you, i n t e rna l - combus t ion eng ine ,

for c leaning up the env i ronmen t (Lee) 1 0 : 1 2 - 1 3

T H E R A P E U T I C censorship (Szasz) 5 : 2 4 - 2 5

T H E R A P E U T I C state. See Szasz T H O U G H T S o n f reedom. See B o u d r e a u x T I M E to revive " individual ism"? (Davies)

9 :40 -41 T O L L S o n the road to serfdom

(MacKenzie) 4 : 8 - 9 T R A D E and diversity (Davies) 5 :34 -35 T R A D E

Aid, trade, and inst i tut ional quality in Africa (Hall and Hisr ich) 1 / 2 : 2 1 - 2 3

Fear of free trade (Hendrickson) 12:20—23 Impor t s , expor ts , and nonsense

( R i c h m a n ) 6 :4 -5 M a d e eve rywhere ( R i c h m a n ) 7 / 8 : 4 - 5 Trade and diversity (Davies) 5 :34 -35 W e have e n o u g h globalization? It jus t

ain't so! (Blanchette) 6:6—7

T R A N S - f a t t e n e d g o v e r n m e n t ( R i c h m a n ) 1 /2 :4 -5

T R A N S P O R T A T I O N Paving the road to serfdom (Akers)

1 1 : 1 8 - 2 2 Pu t t i ng securi ty back o n track (Akers)

5 :8 -10 T R I B U T E to a Polish he ro (Reed) 3 : 1 1 - 1 2 T R U E pr ice of a hybr id (Cwik) 9 : 1 3 - 1 5 T W O presidents, two phi losophies , and t w o

different o u t c o m e s (Folsom) 6:32—33

U-V U.S. Presidents

Two presidents, t w o philosophies, and t w o different ou t comes (Folsom) 6:32—33

U.S. C O N S T I T U T I O N Cons t i t u t i on w i th in ( R i c h m a n ) 9 : 2 8 - 2 9 D e m o c r a c y or republic? (Williams)

6 : 4 7 - 4 8 U N E V E N in fo rmat ion causes marke t

failure? It jus t ain't so! (Hall) 12: 6 - 7 V A N C O T T , T . N o r m a n

America 's role in e n d i n g the slave trade: a second look . 7 / 8 : 2 4 - 2 5

V A N D U N , Frank C a n w e be free if reason is the slave of

the passions? 10 :31 -38 V A N H E E R D E N , Larry

Abol ish ing the FDA. 3 : 2 7 - 3 1 VISIBLE and invisible hands (Den U y l and

Rasmussen) 4:37—40

W W A R T I M E origins of m o d e r n i n c o m e - t a x

w i t h h o l d i n g (Higgs) 1 1 : 3 1 - 3 2 W E have e n o u g h globalization? It jus t ain't

so! (Blanchette) 6 :6 -7 W E w i n o n e (so far) (R ichman) 9 : 4 - 5 W E A L T H . See I n c o m e , weal th W E L F A R E for the r ich (Murphy) 4 : 1 5 - 2 0 W E L F A R E state

E n d i n g the welfare state th rough the p o w e r of private act ion (Ebeling) 4 : 2 - 3

M a r c h i n g to Bismarck's d r u m m e r : the o r ig in of the m o d e r n welfare state (Ebeling) 12 :4 -5

W I L L I A M S , Walter E. The pursuit of happiness co lumn : D e m o c r a c y or republic? 6 : 4 7 - 4 8 T h e intellectual defense of liberty.

1 0 : 4 7 - 4 8 M i n i m u m wage, m a x i m u m folly. 3:47—48

W O O S T E R , M a r t i n M o r s e . See B o o k reviews (Goulden)

47 DECEMBER 2007

I n d e x

BOOKS (Reviewer's name in parentheses)

ALY, G o e t z Hitler 's beneficiaries: p lunder , racial war,

and the N a z i welfare state (Ebeling) 6 : 4 1 - 4 2

B A R T L E T T , B r u c e Impos to r : h o w G e o r g e W. Bush

b a n k r u p t e d A m e r i c a and betrayed the R e a g a n legacy (Coner ly) 5 : 4 3 - 4 4

B O O T H , Philip, ed i tor Towards a liberal Utopia? (Leef)

5 : 4 4 - 4 5 B U R C Z A K , T h e o d o r e A.

Socialism after Hayek (Ebeling) 7 / 8 : 4 1 - 4 2

B U T L E R , H e n r y N . and Larry E. R ibs t e in T h e Sarbanes-Oxley debacle (Hunte r )

6 : 4 5 - 4 6 C A R N E Y , T i m o t h y P.

T h e b ig ripoff: h o w b ig business and big g o v e r n m e n t steal y o u r m o n e y ( R i c h m a n ) 6 : 4 2 - 4 3

C O H E N , B o n n e r T h e g reen wave: env i ronmenta l i sm

and its consequences (Leef) 1 2 : 3 8 - 3 9

E D M O N D S O N , H e n r y T. I l l J o h n D e w e y and the decl ine of A m e r i c a n

educa t ion (Stoops) 7 / 8 : 4 5 - 4 6 E D W A R D S , Chr i s

D o w n s i z i n g the federal g o v e r n m e n t (Hueber t ) 5 : 4 5 - 4 6

E P S T E I N , G e n e Econosp i nn i n g : h o w to read b e t w e e n the

lines w h e n the med ia manipu la te the n u m b e r s (Colett i) 12:36—37

F R I D S O N , M a r t i n U n w a r r a n t e d intrusions: the case

against g o v e r n m e n t in te rven t ion in the marketp lace (Batemarco) 1 0 : 4 2 - 4 3

F R I E D , Char les M o d e r n l iberty and the limits of

g o v e r n m e n t (Ebeling) 4:41—42 GELLATELY, R o b e r t

Lenin , Stalin, and Hi t ler : the age of social catastrophe (Ebeling) 1 1 : 4 1 - 4 2

G O L D S M I T H , Jack and T i m W u W h o cont ro ls t h e I n t e r n e t ? i l lusions of

a border less w o r l d (Morr iss) 1 2 : 3 5 - 3 6

G O U L D E N , Joseph C . T h e m o n e y lawyers: the no -ho lds -ba r r ed

wor ld of today's r ichest and mos t powerful lawyers (Wooster) 4 : 4 5 - 4 6

H I G G S , R o b e r t Depress ion, war, and cold war (Folsom)

1 1 : 4 2 - 4 3 H I G G S , R o b e r t and Carl P. Close

(co-editors) R e - t h i n k i n g green: alternatives to

env i ronmenta l bureaucracy (Sanera) 3 : 4 2 - 4 3

K L E I N E R , M o r r i s M . Licensing occupat ions : ensur ing quality

or restr ict ing compet i t ion? (Leef) 7 / 8 : 4 3 - 4 4

L E G R A I N , Phi l ippe Immigran ts : your c o u n t r y needs t h e m

(Ebeling) 5 :41 -42 M I C H A E L S , Walter B e n n

T h e t rouble w i t h diversity: h o w w e learned to love ident i ty and ignore inequali ty (Leef) 4 : 4 3 - 4 4

M O R E N O , Paul Black Amer icans and organized labor: a

n e w his tory (Leef) 9 :45 -46 M U R R A Y , Charles

In o u r hands: a plan to replace the welfare state (Tanner) 9 : 4 3 - 4 4

N E L S O N , R o b e r t H . Private n e i g h b o r h o o d s and the

t ransformat ion of local g o v e r n m e n t (Ikeda) 1 / 2 : 4 2 - 4 3

O T T E S O N , James R . Actual ethics (Machan) 9 : 4 4 - 4 5

P E A R T , Sandra J. and David M . Levy T h e "vanity of the ph i losopher" :

from equality to hierarchy in post-classical economics (Callahan) 4 : 4 4 - 4 5

P O W E L L , J i m Bully boy: the t ru th abou t T h e o d o r e

Roosevel t ' s legacy (Denson) 1 0 : 4 4 - 4 5

R E I C H , R o b e r t R e a s o n : w h y liberals will w i n the batt le

for Amer i ca (Leef) 3 : 4 5 - 4 6 R E Y N O L D S , Alan

I n c o m e and weal th (Leef) 6 :44 -45

R O S E N , Elliot A. Roosevel t , the Great Depress ion, and the

economics of recovery (Folsom) 7 / 8 : 4 4 - 4 5

S A C H S , Jeffrey D. T h e end of poverty: e c o n o m i c

possibilities for ou r t ime (Blanchette) 3 :44 - 45

S A N D E F U R , T i m o t h y C o r n e r s t o n e of l iberty: p roper ty rights in

21s t -cen tury Amer ica (Leef) 11:43—44 S C H I V E L B U S C H , Wolfgang

T h r e e n e w deals: reflections o n Roosevel t ' s Amer ica , Mussolini 's Italy, and Hitler 's G e r m a n y (Ebeling) 1 /2 :41 -42

S C H M I D T Z , David E lements of just ice (Skoble) 11 :45 -46

S C H R A M M , Carl J. T h e entrepreneur ia l imperat ive: h o w

America 's e c o n o m i c miracle will reshape the wor ld (and change your life) (Sautet) 12 :37 -38

S E R V I C E , R o b e r t Stalin: a b iography (Maltsev) 1 /2 :45 -46

T A N N E R , Michae l D. Leviathan o n the r ight: h o w b i g -

gove rnmen t conservatism b r o u g h t d o w n the R e p u b l i c a n revolut ion (Ebeling) 3 : 4 1 - 4 2

T A Y L O R , H u g h T h e j o y of S O X : w h y Sarbanes-Oxley

and serv ice-or iented architecture may be the best th ing that ever h a p p e n e d to you (Hunter) 6 :45 -46

V I O L A , Lynne T h e u n k n o w n gulag: the lost wor ld of

Stalin's special sett lements (Ebeling) 9 : 4 2 - 4 3

W A L D E N , Michae l Smar t economics : c o m m o n s e n s e answers

to 50 quest ions about gove rnmen t , taxes, business, and households (Leef) 1 /2 :44 -45

W E R T H , Nicolas Canniba l Island: death in a Siberian

Gulag (Ebeling) 10 :41 -42 W O O S T E R , M a r t i n M o r s e

Great phi lanthropic mistakes (Leef) 10 :45 -46

THE FREEMAN: Ideas on L i b e r t y 48