THE NEWSLETTER OF THE MACKINAC CENTER FOR PUBLIC POLICY • SUMMER 1998 Contents: President’s Message ...... 2 Educational Choice Champions of Freedom ... 8 Training ...... 5 Bold Men Receive High Capitalism and Morality .. 9 Honor ...... 3 Schools Can Earn Voters’ Trust...... 5 Bookstore .. 10 Media Impact ...... 4 Celebrating a Decade of Upcoming Events ...... 11 Weekend Economists and Impact ...... 6, 7 Historians ...... 4 New Education Staff ..... 12

Gala Marks Decade of Impact

he Mackinac Center for the same for Public Policy services. celebrated its first Forbes called decade of policy the Center’s impactT on June 5 with an exposure of open house of its new $2.4 the MEA’s million headquarters and a hypocrisy “a black-tie gala headlined by public service.” publisher and 1996 presiden- tial candidate Steve Forbes. Supreme Forbes praised the Mackinac Court justice Center before the sellout and master of Forbes credited the work of the Mackinac Center and institutions crowd of hundreds of friends ceremonies like it with the rebirth of American civil society ideals. and supporters for the Clifford W. institute’s decade of “great Taylor joined Mackinac Champions of Freedom work,” especially in advanc- Center Chairman of the awards. ing school choice, worker Board Richard Antonini in rights, and privatization. He acknowledging the Center’s During the afternoon open delighted the gathering by unique ability to shift public house, celebrants crossed recounting how the Center opinion—and thereby the Main Street from the Ashman discovered and publicized political climate—toward Court Hotel ballroom to greet that the Michigan Education sound public policy based on the Mackinac Center staff free markets and tour the new headquar- and indi- ters building. The open vidual house was continued for the liberty. public on Saturday, June 6.

The Board Many did not wait until the of Directors open house for their tour. honored B. The Center enjoyed earlier Frank visits by scores of friends in Webster, government and the media Thomas F. including Governor John Bertonneau, Engler and Fox News Sunday and Orville anchor Tony Snow. A 17,000-square-foot former department store is the new D. and Ruth Mackinac Center headquarters. A. Merillat See pages 6 and 7 for more for outstand- anniversary news and Association contracted with ing contributions to advanc- photographs.! outside firms for custodial, ing Michigan’s culture and food, security, and mailing prosperity. See pages 3 and services while the union 8 for complete coverage of simultaneously opposed the first-ever Lives, Fortunes, allowing schools to contract and Sacred Honor, and

“Public opinion is stronger than the legislature. . . .” — Charles Dudley Warner, Associate Editor, Hartford Courant 1870 PRESIDENT’SPRESIDENT’S MESSAGEMESSAGE

Board of Directors Richard Antonini, Chairman Lawrence Reed, President William Allen Bruce Maguire, Jr. Peter Cook Richard McLellan Let the Political Chips Fall Hon. Paul Gadola Richard Merillat Todd Herrick D. Joseph Olson Mara Letica James Rodney Edward Levy, Jr. Linda Shinkle Rodney Lockwood, Jr. he economist, said , one of the Board of Scholars greatest economic thinkers of this century, will never Lawrence Reed be popular with most politicians. It is the economist Dr. Donald Alexander David Littmann President Western Michigan University Comerica Bank who must bring the politician down to earth and show Dr. John Attarian Dr. Dale Matcheck The Social Critic Magazine him how promises Tare one thing but reality may be quite another. The econo- Dr. Thomas Bertonneau Dr. Paul McCracken mist reminds the politician that there is a cost to everything. Many politicians Central Michigan University University of Michigan would prefer compliant yes-men who forsake principles, ignore evidence, and Dr. Prof. Charles Milliken schedule the next photo-op. New York University Siena Heights College Dr. John Bornhofen Dr. George Nastas III Grand Valley State University Marketing Consultants One of the many reasons I am proud of the Mackinac Center for Public Policy’s Dr. William Browne Dr. John Pafford first decade of achievement is that we have fulfilled that role of the economist Central Michigan University Northwood University faithfully and effectively. Our many supporters recognize that Michigan would Dr. Stephen Colarelli Dr. Mark Perry Central Michigan University University of Michigan - Flint be the loser if the Mackinac Center ever let politics and personalities interfere Dr. Keith Crocker Dr. Karen Potter-Witter with the timely presentation of sound . The integrity of our work University of Michigan Michigan State University depends upon calling the shots as we see them, presenting innovative ideas for Dr. Robert Crowner Gregory Rehmke Eastern Michigan University Free Enterprise Institute moving the state forward, and letting the political chips fall where they may. Dr. Richard Cutler Dr. Steve Safranek Michigan Association of Scholars University of Detroit Law School The Mackinac Center’s work has often enjoyed the endorsement and support of Robert Daddow Louis Schimmel, Jr. Oakland County Executive Municipal Advisory Council of prominent public officials. Some of the policies of state government today have Michigan their roots in ideas that we originated or advanced in some way. But we have Dr. Stephen Dresch Jhéön & Associates James Sheehan not hesitated to offer constructive criticisms—even of policies promoted by Competitive Enterprise Institute Prof. Richard Ebeling friends—whenever we have felt that remaining true to our mission or sticking to Hillsdale College Fr. Robert Sirico Acton Institute for the Study of the evidence required it. In the long run, our friends in government should Prof. Greg Fleckenstein Religion and Liberty Baker College understand that we would have no credibility when we praise them if we didn’t Bradley Smith Dr. Wayland Gardner Capital University Law and speak out when we disagree with them. Western Michigan University Graduate Center Dr. Dale Haywood David Sowerby Northwood University Beacon Investment Company When state government in 1995 imple- Dr. Ormand Hook Dr. John Taylor mented new programs involving discrimina- “...our friends in Michigan Resource Center for Wayne State University Charter Schools tory tax treatment and subsidies for selected government should Prof. Harry Veryser, Jr. Prof. Harry Hutchison Walsh College businesses, we explained forcefully why that University of Detroit Law School understand that we Dr. William Wilson was poor policy. Every year, when politi- Dr. David Janda Comerica Bank cians are loathe to cut spending, we tell them would have no Institute for Preventative Sports Medicine Dr. Martin Wing where to cut and why doing so will enhance credibility when we GMI Engineering & Mrs. Russell Kirk Management Institute both our pocketbooks and our liberties. I’ve Author, Lecturer praise them if we Dr. Gary Wolfram always appreciated the fact that never once has Dr. Robert Kleiman Hillsdale College didn’t speak out when Oakland University a single Mackinac Center supporter indicated to Dr. George Leef me that his or her support was contingent upon we disagree with Patrick Henry Associates what any public official thinks of our work. them.”

Being independent sometimes means we’re on the cutting edge of public discussion, helping to generate new debate and IMPACT! pushing the politicians in directions they don’t want to go. School choice, for Joseph Lehman Editor instance, is a cause that will prosper in 2000 because of what the Mackinac David Bardallis Daniel Montgomery Center boldly did in 1997: We presented Michigan’s first comprehensive pro- Assistant Editor Graphic Designer posal for constitutional change (our Universal Tuition Tax Credit plan). IMPACT! is a quarterly publication of the Mackinac Center for Public Policy, a nonprofit, nonpartisan, tax-exempt research and educational organization classified under section 501(c)(3) of the IRS code. With the Mackinac Center, what you see is what you get—a decade of consistent application of sound economic principles. That’s what economists—and all Mackinac Center for Public Policy 140 West Main Street • P.O. Box 568 independent thinkers—are supposed to be all about.! Midland, Michigan 48640 (517) 631-0900 • Fax (517) 631-0964 Internet: http://www.mackinac.org [email protected] Bold Men Honored for Risking Personal Interests

n 1776, 56 principled to improve education at men boldly risked Michigan universities. He everything they had by wrote the 1996 Mackinac affixing their names to a Center study Declining Idocument that challenged Standards at Michigan Public the authority of the world’s Universities while he was an greatest power. Their English instructor in Central courage sparked a revolution Michigan University’s College that secured political free- of Extended Learning. His dom for millions, while study analyzed and criticized costing most of the signers weak curricula and teaching their positions, property, and at public universities— in some cases their lives. including CMU—and made They resolutely accepted recommendations for im- that cost the moment they B. Frank Webster Thomas F. Bertonneau provement. CMU President signed the Declaration of Leonard Plachta later sought Independence under these Center’s 10th-anniversary union’s misuse of funds. The Bertonneau’s advice for improv- words: “[W]e mutually celebration in Midland. 1993 Center study Michigan ing education at CMU and pledge to each other our Education Special Services convened a public forum to Lives, our Fortunes, and our Webster was chosen for the Association: The MEA’s consider the recommendations. sacred Honor.” award to recognize his Money Machine showed how invaluable contribution to the union used public money The Mackinac Center confers B. Frank Webster and Tho- better education for Michigan for political purposes. The Lives, Fortunes, and Sacred mas F. Bertonneau embody children. After leaving his study led to legislation that Honor Awards from time to that courageous spirit in post as executive director of curtailed the union’s abuses time to honor individuals Michigan today. The men the health insurance subsid- and saved school districts who conspicuously risk were presented with the iary of the state’s largest millions of dollars. personal interests to advance Mackinac Center for Public teacher’s union, Webster sound economics and indi- Policy’s first-ever Lives, risked his personal interests Bertonneau earned the vidual liberty in Michigan.! Fortunes, and Sacred Honor by assisting the Mackinac award for courageously Awards on June 5 at the Center’s investigation of the risking his personal interests Leadership Conference Multiplies Mackinac Center Impact Nationwide

n May 7, leaders nationally representing a based re- dozen free-market search, educa- institutes from tional, and Oeight states and Washington, legal institutes D. C. learned how to make with intensive their organizations more training on the effective at advancing sound management, policy at the three-day marketing, Sixteen executives from a dozen institutes gain insight on Mackinac Center Leadership project, and how to more effectively advance policies that promote free Conference in Midland. development markets and individual liberty. Heritage Foundation Resource Bank ideas that have Senior members of the Director Tom Atwood describes how his helped the Mackinac Center Leaders from the following Mackinac Center for Public organization assists state-focused become the nation’s largest institutes were energized research institutes on national policy Policy staff provided the 16 issues. state-focused policy research executives of state- and institute. See “Leadership” on page 10

Mackinac Center for Public Policy IMPACT! Summer 1998 3 1997 Print Media Coverage Worth Over $700,000

ome organizations lauded the plan for creating • Urban sprawl expert and Overton challenged the have to purchase incentives to support private Adjunct Scholar Samuel R. effectiveness of selective tax advertising space to scholarships. Staley argued in separate credits equivalent to $153,000 get their messages Detroit Free Press and The per job granted to General Sin print, but Mackinac • also Detroit News op-eds that the Motors by a politically Center for Public Policy ideas printed Senior Fellow in growth of new cities is a appointed board. are newsworthy in their own Economic Education Burton benefit to families and the right. Each month last year, Folsom’s commentary economy and recommended • Statewide reporting of the newspapers alone devoted explaining how America’s ways for central cities to Center’s ten-year anniversary space to our commentaries first minimum wage law was attract residents. gala and open house included and research findings equiva- not passed to help poor live broadcasts by WSGW lent to an average of more workers; it was a political • The ’s Dean radio in Saginaw and front- than $60,000 worth of ploy to protect Northern Stansel explained in an page coverage in The Saginaw advertising. A small sample textile manufacturers from Investor’s Business Daily essay News and other Booth news- of spring 1998’s media Southern competitors whom the benefits of the Mackinac papers, as well as the Midland exposures is below. the law forced to pay artifi- Center’s innovative Right To Daily News. cially high wages. Know Payroll Form, which • The Wall Street Journal reveals to workers the • President Lawrence Reed’s printed an essay by Hillsdale • Folsom also recounted in a hidden, government-man- commentary arguing for a College’s Ron Trowbridge Grand Rapids Press op-ed dated costs of keeping them legislative resolution to permit that praised the Mackinac Michigan Senator Arthur on the payroll. Michigan to opt out of Social Center’s Universal Tuition Vandenberg’s principled Security generated several Tax Credit as the most opposition to federal New • In a front-page Detroit Free radio interviews and was effective way to advance Deal policies that stifled Press story reprinted in reprinted in papers including school choice. An Investor’s economic freedom during dozens of papers statewide, the The Oakland Press.! Business Daily editorial also the 1930s. Senior Vice President Joseph

Weekend Economists and Historians Learn What Their Teachers Never Told Them

tudents whose markets. Cornerstone abolished in the college memories of College, a private, four-year, West. Michigan State Archives Michigan State economics and Christian institution, helped history classes may host the event at its campus. Attendees also Shave included dozing off learned lessons were energetic and eager Curriculum topics were from the history learners at the Mackinac selected to provide insights of taxation in Center for Public Policy’s that the participants may not America; inspir- Economic History Weekend have received in their ing stories of the conducted in Grand Rapids traditional history and lives of America’s Participants learned how government policies led to the April 17-18. economics classes. Reed and greatest entrepre- and how New Deal jobs programs, such as the one pictured above, prolonged it. Folsom explained in a series neurs, including More than thirty students, of nine lectures how the Ford, Kellogg, Rockefeller, June 19-20 in the Norval K. parents, and interested Roman welfare state led to and Dow; the nineteenth- Morey Conference Room at citizens learned from the fall of its empire, the true century history of money and the Mackinac Center’s new Mackinac Center President causes of the Great Depres- banking; and the promising Midland headquarters. The Lawrence Reed and Senior sion, which American future prospect of free $100 cost includes meals. Fellow in Economic Educa- president tried to create markets around the globe. Call (517) 631-0900 soon to tion Burton Folsom the prosperity by raising the top register.! historical importance of tax rate to 99.5 percent, and The next Economic History economic forces and free how slavery came to be Weekend will take place

4 IMPACT! Summer 1998 Mackinac Center for Public Policy Intensive Grass-Roots Training Increases School Choice Momentum

articipants in the than two dozen have already schools. Mackinac Center An independent citizens’ Mackinac Center for been trained in two sessions. education policy department group called School Choice Public Policy’s Small classes foster in-depth, personnel explain where, YES! is working to place the Freedom in Educa- interactive instruction. why, and how school choice UTTC on the 2000 ballot for Ption Training Seminars come is working to improve voter approval. with a desire to improve the Trainees are instructed in the education; identify those in quality of education for moral, historical, and practi- Michigan who support or Democratic party activist and Michigan’s children and cal arguments for allowing oppose school choice and seminar trainee Anita Nelam leave with the why; and provide powerful said the training “provides a facts and argu- responses to common valuable analysis of the ments they need arguments made by school forces that have shaped to translate that choice opponents. education in America, and desire into action. how school choice—a true Participants become part of a civil right—gives us a road The free, one-day statewide network of citizens map to the future.” seminars held at working to improve educa- the Center’s new tion through competition and The next Freedom in Educa- Midland headquar- parental choice. tion Training Seminar is ters building scheduled for November 14. attract parents, A library of intellectual Please call (517) 631-0900 to teachers, policy ammunition including the register.! makers, commu- pathbreaking Universal nity leaders, and Public school guidance counselor and seminar trainee Tuition Tax Credit (UTTC), others interested Joe Nekvasil shares his observations on the need for the Mackinac Center’s plan in learning how to systemic change in education. for expanding parental advance market-based school parents greater freedom to choice in Michigan, is reforms in Michigan. More choose their children’s provided to every attendee. Report Helps Schools Earn Voters’ Trust on Bond Issues

n the heels of a Most schools lack formal debt The report recommends 15 state police and policies that help them avoid elements of sound debt FBI investigation bond-related problems includ- policy that each school of the mishan- ing excessive borrowing, district should adopt to help dlingO of $162 million in mishandling of bond fund meet legal requirements and Detroit Public Schools bond surpluses, improper accounting, wisely manage bond monies. money, the Mackinac Center negative perception by voters Recommendations include for Public Policy has pro- and taxpayers, and conflict of avoidance of the use of bond posed safeguards to help interest in debt issuance. monies to pay for operations, public schools better manage limits on total indebtedness, the bonding process. Prosecutors found in the competitive bidding for debt Detroit Public Schools underwriters, enforcing the The 17-page report, The Need investigation that bond funds prohibition against the use of for Debt Policy in Michigan were used illegally to pay for public funds to influence Public Schools, helps school general operations and ballot questions, and full officials earn the trust of the generate interest income. disclosure by financial voters and taxpayers they Earlier audits found that advisors and bond counsel. ask to approve new bond millions of dollars were also Michigan’s nearly 5,000 issues. The amount of bond- spent on unapproved School officials are request- superintendents and school financed K-12 school con- projects. Publicity over these ing copies of the report and board members were con- struction jumped 152 percent problems makes it harder for accessing it at no charge via tacted when the report was to $6.3 billion between 1990 all public schools to raise the Center’s Web page, released in May.! and 1996. needed capital. www.mackinac.org. All of

Mackinac Center for Public Policy IMPACT! Summer 1998 5 Why We Celebrate Our First Decade of Impact

he Mackinac Center Through vigorous promotion compulsory dues money for privatizing services. Now, not for Public Policy was of its ideas, the Mackinac political purposes, the Center a day goes by without news founded ten years ago Center has chalked up scores made a convincing case for stories on privatization. by a group of citizens of policy victories on dozens reform. New Michigan law whoT shared an interest in of issues over the years, but now restricts unions’ ability The Center has not been promoting ideas that would perhaps its most important to take PAC contributions alone in its promotion of make Michigan a better successes have been in the from members without their sound policy, but it has been place to live and work. The strategic areas of education, express permission. Michigan’s most consistent Center opened its doors with labor law, and privatization. and influential voice for free a small office in Midland and • “Privatization” hardly, if ever, markets, limited government, a broad base of public • School choice, considered appeared in print ten years and individual liberty. With support. radical ten years ago, is now ago. After a decade of the momentum of the last a mainstream idea. The Center research showing the decade under our belt and the Today, the Mackinac Center Mackinac Center’s research potential benefits of faithful support of hundreds is an influential, respected showing the benefits of privatization, hundreds of of contributors, our 20th voice in public policy and is competition and parental Michigan schools and mu- anniversary is bound to be an the largest of the nearly 40 choice set the stage for nicipalities now save money unparalleled celebration of state-focused policy research today’s intra-district school and improve quality by success!! and educational institutes. choice and helped to make Michigan a national leader in The Center has always charter schools. The Center’s focused on advancing sound comprehensive school choice policy through research, plan, the Universal Tuition education, and ideas—not Tax Credit, is slated to go on politics. The best way to the general election ballot in make a lasting policy impact 2000. is to change public opinion. When the beliefs of the • Citing labor unions’ unique people change, politicians ability to distort the demo- change with them. cratic process by using

Free-market economists show they have a sense of humor by laughing at Justice Taylor’s couplet: “The world would not be in such a snarl, if Marx had been Groucho instead of Karl.”

The Board Room boasts a 360-degree panoramic photo of Mackinac Island, after which the Mackinac Center was named.

6 IMPACT! Summer 1998 Mackinac Center for Public Policy Tenth-AnniversaryGalaandOpenHouse

Open offices bathed in natural light adjoin the Center’s economics and public policy library, shown in backgound.

The Norval K. Morey Conference Room accommodates eighty or more students, teachers, elected officials, community leaders, and citizens for workshops, lectures, training, and seminars.

Frequent guests from schools, communities, research institutes, and governments are welcomed in the spacious lobby.

Father Robert Sirico, president of the Acton Institute for the Study of Religion and Liberty, delivers the invocation and reminds celebrants of the moral foundations of commerce.

At a Mackinac Center news conference, Steve Forbes explains that unemployed accountants would not be a problem under a flat income tax because they would be busy keeping the books for all the new and growing businesses energized by tax simplification. During a pre-open-house tour on February 16, President Lawrence Reed explains to Governor Engler and Supreme Court Justice Taylor the educational events that can now be held at the new headquarters.

Mackinac Center for Public Policy IMPACT! Summer 1998 7 DEVELOPMENTDEVELOPMENT IMPACTIMPACT

Merillats Win First-Ever Champions of Freedom Award

ong-time Mackinac Merillat Industries, Inc., initiatives, and recent In accepting the award, the Center for Public through which they ulti- building campaign. Merillats joined in saying, Policy supporters mately created thousands of “We’ve been financially Orville D. and Ruth A. jobs that in turn provide blessed and we’ve always LMerillat were awarded the livelihoods for thousands of made donations where our first-ever Champions of families. hearts are. The Mackinac Freedom Award at the Center defends the values Center’s 10th-anniversary gala Among a large number of and promotes the policies we on June 5. charities generously sup- believe are most beneficial to ported by the Merillats is the Michigan workers, students, The Champions of Freedom Lenawee Christian School in and families.” Award honors individuals who Adrian, for which they demonstrate a lifetime of provided all the start-up Richard Merillat, son of accomplishment and dedication funding and continue to Orville D. and Ruth A. to the principles of freedom provide operational support. Merillat and chairman of the and self-reliance through their board of Merillat Industries, exceptional entrepreneurship, The Merillats’ Mackinac has been a member of the philanthropy, and Mackinac Center support goes back Mackinac Center’s board of Center support. over eight years and includes directors since 1996.! substantial sums given to The Merillats founded high support the Center’s general Ruth A. and Orville D. Merillat quality cabinet manufacturer operations, major policy Is the Mackinac Center Too Successful?

sk Bill Gates at succeeded in outgrowing it. With a head start of 75 per- Microsoft if you We put our minds to secur- cent of the funds, we launched can be “too suc- ing major relocation funds the $400,000 western Michi- cessful.” At the from new sources—money gan component of the cam- zenithA of his success, Gates is that would not be diverted paign, which succeeded in now decried as being “too big” from other Mackinac Center generating more one-time by many of the same people projects and would not contributions that also would and institutions who benefit otherwise come to us at all. not have been available to us daily from his products. for other projects. In just With the help of campaign over one year, we are less After completing our most co-chairs Ranny Riecker and than $45,000 away from successful year ever, some of Alan Ott of Midland, we completing the campaign. our friends perceive the asked four Midland founda- Mackinac Center for Public tions to fund the lion’s share We’re inspired by our beauti- Policy as too successful. I’ve of buying and renovating an ful and functional new been asked a couple of James E. Kostrava, Vice President abandoned downtown headquarters, but the questions that translate for Development department store building. Mackinac Center needs roughly as, “Isn’t your new 18 people crammed into less The foundations saw the funding more than ever to $2.4 million building proof than 3,500 total square feet renovation as a great eco- maintain our momentum in that you no longer need of scattered, rented offices nomic development project advancing free markets, financial support?” and with almost no storage or and a way to keep the limited government, and “Couldn’t the $2.4 million meeting room, no place to Mackinac Center in Midland, individual liberty. I hope our have been spent on other, host educational events, and so they provided the lead decade of success makes you more worthwhile projects?” inadequate space for the gifts. We could not walk even more determined to extensive library that is so away from their $1.8 million support the Mackinac Center.! Let me explain why the crucial to our research. The in “new money” that would answer to both questions is space served us well for not have been available to us “no.” Two years ago, we were nearly a decade, but we for other purposes.

8 IMPACT! Summer 1998 Mackinac Center for Public Policy FREEFREE MARKETMARKET FUNDAMENTALSFUNDAMENTALS

Capitalism and Morality by Edward W. Younkins

ew would deny that without the arbitrary inter- that individuals be free to be Living up to these virtues capitalism is the most vention of others. And this immoral and of bad charac- will aid businessmen in the productive and freedom is necessary for ter. Only when an individual pursuit of profit. The free efficient economic individual morality. has choice and bears respon- market rewards polite, Fsystem, especially after the sibility for his actions can he cooperative, tolerant, open, collapse of Soviet Commu- There can be no morality be moral. Capitalism, more honest, realistic, trustworthy, nism. But some critics still without responsibility and no than other economic sys- discerning, creative, fair contend that capitalism is not responsibility without self- tems, allows the exercise of businessmen. Lying to and a moral system. determination. Responsible individual free will. Thus, cheating other businesses, self-determination implies though capitalism cannot misleading consumers, and Yet morality is impossible rationality, honesty, self- guarantee a moral society, it mistreating workers all have unless one is free to choose control, productiveness, and is necessary for one. serious adverse conse- between alternatives without perseverance. In order to quences. In the long run, outside coercion. Since provide the maximum self- Human development usually profitable businesses tend to capitalism is based on free- determination for each requires more than material be operated in accordance dom of choice, it provides the individual, the state should wealth. However, prosperity with the basic ethical prin- best environment for moral- be limited to maintaining enables individuals to ciples most people hold dear. ity and character develop- justice and defending against cultivate their talents, ment. In addition, business internal or external coercion, abilities, and virtues. Thus, Under capitalism a business success not only requires but thus protecting life, liberty, capitalism, the best system transaction takes place by also rewards virtuous behav- and property. for wealth creation, permits mutual agreement for ior by participants in the individuals to spend less perceived mutual advantage. market. A social system such as time on physical concerns, Through voluntary exchange capitalism is a system of leaving them more time to buyers and sellers can Morality Requires Freedom relationships and cannot be engage in higher pursuits. promote their own interests moral or immoral in the only by serving the interests All human beings have sense that a person can be— Voluntary Exchange of others. By protecting natural rights—either en- only individuals can be moral Encourages Moral Behavior individual choice, capitalism dowed by their Creator or agents. However, a social not only generates enormous inherent in their nature, system can be moral in its At the same time, the wealth, but also creates an depending on whom you effects if it promotes the achievement of prosperity environment in which virtue ask—and have a moral possibility and likelihood of tends to reward moral can flourish. In the end, obligation to respect the moral behavior by individu- behavior. Businesses—more capitalism is not only the rights of others. Natural als who act within it. It particularly, their owners, most productive and efficient rights impose the negative follows, then, that there is a managers, and other employ- economic system. It is also obligation not to interfere moral imperative to create a ees—have moral obligations. the most moral economic with someone else’s liberty. political and economic They must respect the system.! Thus, it is morally illegiti- system that permits the natural rights of other mate to use coercion against greatest possibility for self- individuals, which includes Adapted and reprinted from an someone who does not first determination and moral honoring contracts, not article in the November 1997 undertake the use of force. agency. Capitalism is that engaging in fraud, not using issue of with The role of government, as system. coercion against others, and permission from the Founda- recognized by America’s honoring representations tion for Economic Education. founders, is to protect man’s Capitalism is itself only a made to the local commu- natural rights. means and requires its nity. Moreover, businessmen individual participants to should not support govern- This kind of freedom in- decide on the ends to be ment economic interven- volves far more than simple pursued. No economic tions, such as price supports, democracy. It demands a system can make people tariffs, and subsidies, even protected private sphere good. The best that an though doing so might result within which an individual economic system can do is to in higher profits. To do so can pursue his freely chosen allow people to be good. But would involve the use of norms, actions, and ends morality and virtue require coercion, one step removed.

Mackinac Center for Public Policy IMPACT! Summer 1998 9 FREEFREE MARKETMARKET BOOKSTOREBOOKSTORE

“Leadership” from page 3 Viewpoint Commentaries with new ideas to put to Senator Arthur Michigan to Washing- Do Dollars Equal work in their organizations: Vandenberg: A Profile ton: Privatize Social Scholars? Pacific Research Institute in Courage Security or Let Us Opt (California), Cascade Policy Out! June 1998 VP 98-18 Institute (Oregon), Texas April 1998 VP 98-10 Eighty-three percent of all Public Policy Foundation, While 1930s Washington was May 1998 VP 98-14 spending on public education Yankee Institute (Connecti- abuzz with interventionist The looming bankruptcy of goes toward employee cut), Buckeye Institute for bureaucrats and politicians, Social Security threatens the salaries and benefits, but over Public Policy Solutions Michigan Senator Arthur retirement security of half of Michigan school (Ohio), Independence Vandenberg championed the millions of workers. Michi- employees never set foot in a Institute (Colorado), The free-market economy and gan lawmakers should call classroom. Commonwealth Foundation was rewarded—by being on Congress to either priva- (Pennsylvania), Hillsdale elected to four terms. tize the system or let states College (Michigan), and the design alternate plans. Time to Change Heritage Foundation, Com- Michigan’s Revenue petitive Enterprise Institute, A Tax Credit Is Not a Sharing Program James M. Buchanan Center Voucher! Property Doesn’t for Political Economy, and Commit Crimes, June 1998 VP 98-19 Institute for Justice (Wash- April 1998 VP 98-11 People Do Each year, over one billion ington, D. C. area). Opponents of school choice dollars in state sales taxes are for Michigan’s children are May 1998 VP 98-15 divided among Michigan “[W]e are better prepared as misrepresenting tuition tax American citizens are municipalities. Why are managers, communicators, credits in order to recycle presumed innocent until cities with the highest tax and leaders, thanks to their shopworn anti-voucher proven guilty, but when rates rewarded with the lion’s Mackinac’s instruction,” said arguments. government accuses their share? Institute for Justice Vice property of criminal activity, President for Marketing and it’s a whole new ball game. Development John Keppler. Pay Up, Michigan: Using Tax Credits to Journals The conference was the first Subsidize the Sunbelt Government’s Hidden of two planned this year. Bite out of Michigan Privatization Representatives from groups April 1998 VP 98-12 Michiganians’ Take- Report in the U. S., Europe, Canada, President Clinton wants to Home Pay MPR98-02 $3.00 and South America are curb “greenhouse gas” expected to attend the next emissions by encouraging June 1998 VP 98-16 Privatiza- conference in October. solar energy use through tax Hidden payroll taxes are one tion takes credits. Those in sunny reason Michigan ranks twelfth off in a “We are pleased to assist so states would enjoy blue skies from the bottom nationwide special many other fine organiza- and lower taxes as in take-home pay. Workers transpor- tions,” said Mackinac Center Michiganians went without should be informed of the full tation President Lawrence Reed. both. cost that government imposes issue, “The leadership conference on their pocketbooks. including isn’t just one-way mentoring. feature It provides tremendous Greenhouse Gas articles on opportunities for cross- Reduction Is No Minimum Wage privatiz- fertilization of ideas.” Simple Task Causes Maximum Pain ing the nation’s airports and air traffic control system, The Atlas Economic Re- May 1998 VP 98-13 June 1998 VP 98-17 privatization and Detroit’s search Foundation supported President Clinton is telling The minimum wage hurts port authority, and private the event with a generous Americans they must reduce low-skilled workers by pricing driver’s education. Other contribution.! carbon dioxide emissions to them out of the labor market. features discuss competi- comply with the unratified Sixty years ago, New England tively contracted transit Kyoto treaty, but he has yet textile workers afraid of services, ending Amtrak to say how this will be done Southern competition were subsidies, and the new book without sacrificing jobs. counting on just this fact. Curb Rights. 20 pages.

10 IMPACT! Summer 1998 Mackinac Center for Public Policy UPCOMINGUPCOMING EVENTSEVENTS

concludes that development given a false account of the Studies & Reports of formal debt policies can Great Depression of 1929- How to Order help schools earn essential 1941 that condemns free- voter trust by managing bond market VIEWPOINTS: Viewpoints on The Need for Debt monies in the most efficient capital- Public Issues are two-page Policy in Michigan and effective manner. ism as commentaries on current Public Schools the cause Michigan policy issues. The report recommends of, and Three or four are published S98-02 fifteen elements for a sound govern- each month. Individual $5.00 debt policy that school ment Viewpoints are 50¢ each. Public districts should adopt to interven- Please call for bulk discounts. school avoid common pitfalls and tion the construc- problems in bonding, includ- solution For telephone orders, please tion is ing excessive borrowing, to, the call the Mackinac Center at booming improper accounting, and economic hardships of the (517) 631-0900. The Center across conflict of interest in debt era. In this essay based on a accepts Visa or Mastercard for Michigan, issuance. 17 pages. popular lecture, Mackinac your convenience. Please but due to Center for Public Policy have your card and item citizens’ negative percep- Monographs President Lawrence Reed title(s) handy when calling. If tions, many districts are debunks the conventional you do not have the Mackinac finding it harder and harder Great Myths of the view and traces the central Center for Public Policy’s to gain voter approval for Great Depression role that poor government current Publications catalog bond proposals to fund policy played in fostering with a complete listing of all needed projects. by Lawrence W. Reed this legendary tragedy. 12 Mackinac Center publications, pages. please request your free copy This analysis of Michigan ST98-01 $5.00 when ordering. public school bonding Students today are often

UPCOMING

EVENTS

Economic History Weekend June 19-20 Midland

President’s Council featuring Indianapolis Mayor Steve Goldsmith October 1 Grand Rapids

Freedom in Education Training Seminar November 14 Midland

Call (517) 631-0900 for more details.

Mackinac Center for Public Policy IMPACT! Summer 1998 11 Brouillette Leaves Classroom to Advance Educational Freedom

ormer teacher Mat- Brouillette helps train par- Brouillette earned his master thew J. Brouillette is ents, teachers, and commu- of arts degree in education the Mackinac Center nity leaders to advance from Azusa Pacific Univer- for Public Policy’s new market-based reforms and sity in California and taught Feducation research assistant. school choice through the U. S. history at the middle- Center’s Freedom in Educa- and high-school levels for Brouillette works in the tion Training Seminars. This over six years. He is cur- education department where fall he will coordinate the rently writing a study about he analyzes Michigan K-12 launch of a new quarterly school choice in Michigan to education policy and tracks publication called Michigan complete a second master of national school reform Education Report which will arts degree from the Univer- trends. His research is used inform and connect educa- sity of San Diego.! to develop and promote tion reform advocates reforms that improve educa- throughout Michigan and the tional opportunity and school country. quality for Michigan students. Matthew J. Brouillette Former White House and U. S. Department of Education Official Joins Staff

ormer U. S. Depart- Cassidy directs the free, full- and comprehensive ment of Education day Freedom in Education education reform. appointee and Bush Training Seminars that equip White House official policy makers and grass roots In June, he is coordinat- FDaniel J. Cassidy is the activists with strategies to ing the National Summit Mackinac Center for Public advance educational choice of Teachers for Educa- Policy’s new director of plans including the Universal tion Reform, hosted by education policy. Tuition Tax Credit. the Mackinac Center in Midland. At the sum- Cassidy heads the Mackinac After his White House and mit, some of the Center’s education depart- U. S. Department of Educa- nation’s most gifted and ment, where he oversees tion assignments, Cassidy acclaimed teachers will research and initiatives that served on the staff of na- issue a boldly worded help parents, teachers, elected tional school reform figure letter to the American officials, and community and Jersey City Mayor Bret people calling for At the Center’s February Issues and Ideas luncheon in Lansing, Cassidy explains to state leaders apply market-based Schundler where he coordi- systemic change in legislators and policy makers the lessons reforms to improve education nated the Mayor’s statewide education.! Michigan can learn from New Jersey’s for Michigan’s children. campaign for school choice education reform successes.

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