THEFREE IDEAS ON LIBERTY

460 My Family Life as a Socialist CONTENTS Thomas J. Bray DECEMBER Lessons from under the Christmas tree. 1989 VOL. 39 462 Hurricane Hugo: Price Controls Hinder Recovery NO. 12 Russell Shannon The market can harness the forces of self-interest to alleviate suffering caused by nature. 464 Women and the Market: Are They Made for Each Other? Jean L. Baker Economic freedom, not coercive legislation, is a woman's best friend. 470 Will More Dollars Save the World? William H. Peterson Four decades after its first enunciation, the question is still valid. 472 Religion in China Geoffrey Kain What's behind the apparent openness and tolerance? 477 China's Great Leap Backward Diane D. Pikcunas Political power can defeat the most spectacular economic advances. 481 Ecorse's Grand Experiment Greg Kaza Privatization saves a city teetering on the brink of bankruptcy. 483 The Artificial Inftation ofNatural Rights Antony Flew Option rights and welfare rights. 485 Basic Rights and Meta-Rights William B. Irvine Waiving and transferring our basic rights. 487 "I'm Here to Help You" Stu Pritchard Some reflections on prior restraint. 488 Argent!na at the Crossroads Richard A. Cooper A return to classical liberalism or venturing further down the road to serfdom? 492 Book Reviews John Chamberlain reviews The Survival of the Adversary Culture by Paul Hollander. Also featured: Prosperity and Poverty: The Compassionate Use of Resources in a World of Scarcity by E. Calvin Beisner, Economics: Between Predictive Science and Moral Philosophy by James M. Buchanan, and Liberty, Property, and the Foundations of the American Constitution edited by Ellen Frankel Paul and Howard Dickman. 498 Index for 1989 Compiled by Bettina Bien Greaves THEFREEMAN IDEAS ON LIBERTY PERSPECTIVE

Published by The Foundation for Economic Education Letter from China Irvington-on-Hudson, NY 10533 Editors' Note: President of The following letter was received from a student The Board: Bruce M. Evans at The People's University of China in Beijing. Vice-President: Robert G. Anderson Senior Editors: Beth A. Hoffman In light of current conditions in China, we are Brian Summers withholding the student's name. Contributing Editors: Bettina Bien Greaves August 3, 1989 Edmund A. Opitz Paul L. Poirot Copy Editor: Deane M. Brasfield Dear Sir: As a postgraduate student specializing in histo­ The Freeman is the monthly publication of The ry of economic thought, I have been devoting my Foundation for Economic Education, Inc., mind to the causes and development of various Irvington-on-Hudson, NY 10533 (914) 591­ schools of thought for several years; especially 7230. FEE, founded in 1946 by Leonard E. Read, is a nonpolitical educational champion of concentrating my attention on development of private property, the free market, and limited thought of the Austrian school, from the great government. FEE is classified as a 26 USC 501 founder, Carl Menger (1840-1921), to the promi­ (c) (3) tax-exempt organization. Other officers of FEE's Board of Trustees are: Thomas C. nent thinker, Friedrich A. Hayek (1899-). The Stevens, chairman; Ridgway K. Foley, Jr., vice­ extensive and profound thought of the Austrian chairman; Paul L. Poirot, secretary; Don L. school is a great contribution to the world of hu­ Foote, Treasurer. man thought in general. The costs of Foundation projects and services It is for me the greatest pleasure that I recently are met through donations. Donations are have learned that your foundation is enthusiastic invited in any amount. Subscriptions to The Freeman are available to any interested person in promoting the study and propagation of liber­ in the United States for the asking. Additional alism economics [free market economics], espe­ single copies $1.00; 10 or more, 50 cents each. cially the economic thought of the Austrian For foreign delivery, a donation of $15.00 a year is required to cover direct mailing costs. school. So I am writing to you to ask your advice. I should be greatly obliged if you could send me Copyright © 1989 by the Foundation for Eco­ some recent books or materials on the study of nomic Education, Inc. Printed in the U.S.A. Permission is granted to reprint any article in liberalism economics or the thought of the Aus­ this issue, except "My Family Life as a Social­ trian school and give me further information ist," provided appropriate credit is given and about your foundation. two copies of the reprinted material are sent to The Foundation. Thank you very much. I look forward to hear­ ing from you soon. Bound volumes of The Freeman are available Sincerely yours, from The Foundation for calendar years 1969 to date. Earlier volumes as well as current is­ sues are available on microfilm from University We responded by letter and sent a packet of ma­ Microfilms, 300 North Zeeb Road, Ann Arbor, terials. MI48106.

The Freeman considers unsolicited editorial submissions, but they must beaccompanied by Our Friends in Argentina a stamped, self-addressed envelope. Our au­ thor's guide is available on request. For more than 30 years, FEE has worked closely with leading classical liberals in Argenti­ FAX: (914) 591-8910 na. FEE staff members and Trustees have spo­ ken before Argentine audiences, and Argentine students travel to Irvington to attend FEE semi­ nars. Thus, we are especially pleased to present Richard Cooper's article, "Argentina at the PERSPECTIVE

Crossroads" (p. 488), which describes the work of Every person has the right to create, acquire, many of our Argentine colleagues. hold, use, and dispose of his property, limited only by the prohibition against infringing the Fetix Morley Prize Wmners rights of others. People have the right to form governments Six young Freeman authors have been hon­ whose only responsibility and authority is to pro­ ored in the 1989 Felix Morley Memorial Writing tect the rights of individuals against violence, Competition sponsored by the Institute for Hu­ threats, and fraud. mane Studies. Congratulations to David Bern­ Governments have no right to violate the in­ stein, Christopher L. Culp, Matthew Hoffman, herent rights of individuals through majority David Hood, John Hood, and Greg Kaza. vote, legislative power, or other means. Individuals have the right to produce and trade The Freedom Philosophy goods and services throughout the world, unen­ cumbered by government intervention, subject Every person has an inherent right to life and only to the prohibition against violating the rights liberty, and to the self-enrichment of his life com­ of others. mensurate with his aspirations, dedication, and -G. F: MAUGHMER abilities. Escondido, California 460 THEFREEMAN IDEAS ON LIBERTY My Family Life as a Socialist by Thomas J. Bray

he Christmas season always reminds me has been able to get any of its subjects to do any that I am something of a socialist. work at all is through liberal doses of fear. If you T No, I am not a fan of Karl, Vladimir, don't work, you get five to ten in the Gulag. Mao, and Mikhail. Socialism, and particularly its But that's not a very effective way of getting virulent communist form, is crackpot stuff. When people to do good work. The family contains a it comes to family, however, most of us exhibit far more powerful motivational tool: love. Not distinctly socialist tendencies. that abstraction known as love of mankind, in Think about it when you're divvying up the whose name crimes against humanity are fre­ presents under the tree on Christmas morning. quently committed. I speak of real love, which is The kids, who usually have contributed least to possible only among individuals and attaches family income, usually wind up getting the most most powerfully to families. Love between par­ packages. Mom and Dad usually come out about ents' love of parents for children, love of children equal with each other, even if one has contribut­ for their parents. ed more to family income than the other. Rela­ Families are a complex, self-reinforcing web of tives and in-laws all get their fair sh~re. relationships: conjugal relations, parent-child In other words: From each according to his bonding, moral example, shared experiences, and ability, to each according to his need-just as so on. It's within the family that love has the best Karl Marx advocated. Marx proposed a system in chance of thriving. It doesn't always turn out that which national income would be distributed ac­ way, unfortunately, but family is still the best in­ cording to need rather than status. He believed cubator of love known to man. that by eliminating the gap between "rich" and Oh sure, when our kids were little we some­ "poor," communism would remove the sources of times invoked the fearsome ritual known as a class conflict that supposedly lead to oppression spanking. Force has a role in family, too, at least and war. when the kids don't seem to be getting the mes­ So if communism or socialism is OK at the sage about busting up the furniture, marking on family level, why not at the community level, the the walls and sassing the teacher. state level or the national level? But a spanking was intended not so much to The problem is motivation. In a system where hurt physically as drive home a message: You dis­ all share equally, irrespective. of their input, no­ appointed us. The symbolic, temporary with­ body has an incentive to do much work. That's drawal of love was what gave the message its why the Soviet Union, 70 years after the revolu­ power-and made discipline, when properly ap­ tion, is such a basket case. The only way Moscow plied, a loving act in its own right. This love and discipline is one reason that Mr. Bray is the Editorial Page Editor of the Detroit mothers and fathers can provide large amounts News. This article originally appeared in the December 18, 1988, issue of the Detroit News and is reprinted of "welfare" to their children without making the here with permission. children dependent. When the government pro- 461

vides welfare, the outcome is frequently the op­ independent? He knows little if anything about posite-as our large and growing "underclass" the welfare cases he is handling, and receives lit­ attests. tle if any feedback from the individuals involved. Within the family, parents possess the authori­ Christmas is the time that Christians celebrate ty, built on love, to compel their children to be­ the Christ child, the ultimate family story. Chris­ come independent-which parents know is the tianity has often been misunderstood as a fable of only way their children can find true happiness communal sharing, a sort of mandate for social­ and fulfillment. And children, to retain the love ism. But Christmas is most directly a story of the and respect of their parents, are usually just as transforming and redeeming power of love, eager to fly the nest and prove themselves. which is why it is natural for families-the basic The family is also a much more efficient mech­ units of love-to gather together at this time of anism than the state in figuring out what each lit­ the year. tle "welfare recipient" requires to make him or Love can't be measured by the social scientists, her independent. As any parent knows, raising which is one reason the family has received such children is, shall we say, a challenging task. Even short shrift in 20th-century social policy, with dis­ when we work at it more or less full time, we still astrous consequences. But love is there-under often botch the job. the family Christmas tree. And that's why I don't What chance, then, does a bureaucrat behind worry about those socialist tendencies that well some far-off government desk have to structure up in me from time to time. Family is the proper people's lives in ways that will help them become place for them. D 462

Hurricane Hugo: Price Controls Hinder Recovery by Russell Shannon

Editors' Note: The Foundation for Economic just have to do without until more supplies can be Education sent this Freeman op-ed to the na­ brought in. tions press shortly after Hurricane Hugo struck Yet while letting prices go up does have the un­ Charleston, South Carolina, in September. fortunate effect ofputting poorer people at a spe­ cial disadvantage, these higher prices might cause n Charleston, South carolin.a, many people some people to use their ingenuity and seek out struggling to recover from the havoc suitable substitutes: some can resort to bicycles, I wrought by Hurricane Hugo discovered to others might have neighbors willing to lend a their dismay something apparently even more chain saw, others still could be more careful evil: price gougers. about using the food supplies they already have. In the face of shortages of food, fuel, and des­ Then others in greater need could buy the goods. perately needed tools such as chain saws, many Admittedly, these measures may offer only store owners of questionable scruples jacked up meager help in such an extraordinary crisis, but the prices of these needed provisions, some re­ they are not apt to be totally negligible. portedly as much as 300 or 400 percent. Of far greater impact is the effect of prices on Responding quickly to the crisis, political au­ supply. Given that prices did soar upward, one thorities proclaimed that persons found guilty of suspects that not all the greedy vendors are in such heinous crimes would be dealt with swiftly Charleston and nearby areas. Knowing that they and harshly. The tedious delay so common to po­ might reap large rewards, people with en­ litical actions was notably absent in this crucial trepreneurial spirits in Augusta, Greenville, and situation. Raleigh might well stock up their pickups and To paraphrase a line from a play by Congreve, truck on down the interstate highways, thereby however, while these politicians "married in helping not only themselves but also the sad citi­ haste, they may repent at leisure." For once zens of Charleston. And thus the shortages would again, as happens so many times, the advantages shrink. of the free market process they stifled have been In short, it's all pure Adam Smith, who wrote sadly ignored. back in 1776: "It is not from the benevolence of First of all, repressing price increases will obvi­ the butcher, the brewer, or the baker, that we ex­ ously not eliminate the main problem at hand, pect our dinner, but from their regard to their which is that there is simply not enough of these own interest." The simple wonder of the price needed items to go around. So many people will system is that it enlists the efforts of self-interest­ Professor Shannon teaches in the Economics Depart­ ed people in the services of humanity. ment, Clemson University. Nor is this the end of the favorable supply re- 463

Destruction in Charleston in the wake ofHugo. sponses that have been thwarted by the price cious forces of nature. But if we will only allow controls. Knowing that the storm was on its way, the power of the free market to work, it can many store owners may have brought in extra rapidly harness the forces of self-interest to alle­ provisions, at extra expense, anticipating that viate the suffering that nature has caused. Be­ they could make enough extra money to compen­ cause they failed to understand these fundamen­ sate them for their troubles. tal facts of elementary economics, the political Yet what will happen on future occasions, leaders who are imposing price controls as a hu­ when Hurricane Jonathan or Hurricane Saman­ manitarian gesture may actually be serving as En­ tha comes roaring across the waters? Remember­ emies of the People! ing the thankless response to their efforts to pre­ Is all this idle speculation? Definitely not! pare for Hurricane Hugo, these store owners may We've had experience with price controls ranging simply greet the news with a yawn. back in history to the ancient Code of Hammura­ There is a saying to the effect that it isn't nice bi right up to those established during the Nixon to mess with Mother Nature. The results of mess­ Administration of the 1970s. No doubt many ing with market forces are apt to be equally dire. people still recall the long lines and frustrations Surely the people devastated by the storm de­ at our service stations which were the result of serve our concern and our charity. But imposing price controls on gasoline. price controls, rather than helping those people Economic theory and historical experience out, seems more likely to be adding to their mis­ converge, then, to suggest that patience rather ery. than political responses would be the best policy We have not yet learned how to harness the vi- to deal with pricing problems in Charleston. 0 464

Women and the Market: Are They Made for Each Other?

by Jean L. Baker

e live in an exciting time for women. prejudice hurts, psychologically and as a barrier More than ever before, they are to progress. It yields two victims: the one who is W achieving their goals, from fulfillment discriminated against and the one who discrimi­ in the home to the apex in business, the sciences, nates. In the long run, it is bad business, whether and the professions, and many successfully com­ that is immediately obvious or not. bine family and careers. The denial of legal rights, along with the force It is beginning to be understood why qualified of tradition, once made virtual slaves of women. women who are so inclined need to have careers They couldn't own property, couldn't enter the instead of being confined exclusively to their tra­ professions, couldn't vote, and sometimes weren't ditional roles. Women whose creative impulses even accountable for their offenses against oth­ impel them to follow professional or business ca­ ers, which were, instead, referred to their "own­ reers should have a chance to seek a place in the ers." Categorical discrimination was institutional­ sun outside the home, and society needs them ized by the power of law, and reflected the there. prejudice, if not arrogance, of the \awmakers. Three general problem areas must be ad­ Through the ages, this prejudice resulted in hu­ dressed if women who want that chance are to man tragedies, injuring the self-image and mental have it. These concern discrimination, the need health of those affected, and depriving the hu­ for satisfactory maternity and child care arrange­ man race of almost half the available, but un­ ments, and our dwindling economic freedoms. tapped, human creativity. It is still believed by many diehards that wom­ Discrimination en are not equipped physically, mentally, or tem­ peramentally to be anything other than help­ Discrimination is not necessarily always bad. mates to men, whether as wives or in occupations To discriminate is to select from among many cri­ that, worthwhile as' they may be, are not always teria, to make wise choices based on fine distinc­ consistent with either their abilities or their ambi­ tions. It is an art that women themselves can tions. profitably cultivate. Making choices is what free­ This is not meant to disparage those women dom is all about. and men who voluntarily choose to be house­ However, arbitrary discrimination based on wives and househusbands, are happy in that role, and are well suited to it. It is unfortunate that Ms. Baker writes regularly for national and local trade, travel, and business publications·based in the Chicago some of the rhetoric coming out of the women's area. movement has made many homebody types feel 465 they are undervalued. It can't be emphasized too and operated institution, in contrast to the wom­ strongly that homemaking and child nurturing en's colleges of the last century which were pri­ rank high in societal importance. But, they are marily founded and operated by men. not appropriate jobs for everyone. Opportunities still exist for entrepreneurs, and There's no denying that some women are un­ women are no longer barred from the market­ able to do some jobs that are thought of as place. However, the marketplace is less accessible "men's jobs." Some men can't either. Humans, re­ and less free than it once was because of govern­ gardless of sex, are as varied in their capacities ment's expanded role in the economy, and wom­ and their ambitions as the design patterns of en, as well as men, are the victims. The hin­ snow crystals. There have always been women drances are well known to freedom champions: who dig ditches and men who knit; women who oppressively high taxes, excessive regulation, and are heads of state and men who rock the cradle. restrictive licensing, among others. Economic Each of us has to find his or her niche, discover­ freedom is surely womankind's greatest need. ing and taking into account our individual abili­ ties and limitations. Old and New Approaches Women who defy convention and follow ca­ reers traditionally reserved for men often must Through necessity, women have been brilliant­ either give up marriage and children altogether, 1y resourceful in the face of barriers, and their so­ or they must contend with a host of problems re­ lutions have been as individual as themselves. lated to what are considered their sole responsi­ "Individual" is a key word, for it is as individu­ bilities as wives and mothers. Unless they receive als that women have gained their greatest suc­ the help of devoted husbands, friends, or rela­ cesses. History is replete with stories of women tives, and the cooperation of their employers, who have distinguished themselves in what were they carry the burden of two full-time jobs. for their times unconventional endeavors. The Many of today's wonder women are valiantly facts of history prove what women can do, indi­ coping with this situation, but it takes a heavy vidually and in groups. toll. Women who work at outside jobs when Banding and working together, and aided by they'd rather be at home, but feel their help is men for whom the denial of woman's genius and needed for the family to survive, are usually espe­ her humanity were anathema, women have ad­ cially hard hit by these problems. vanced themselves by removing the most flagrant violations of their human rights. In the process, Economic Issues and Women they have changed minds because while some women expend huge amounts of time and energy One ofthe avenues of advancement for victims proclaiming their equality, others spend their of discrimination has been the opportunity for time proving it. They ignore discrimination or them to form their own businesses and institu­ they circumvent it, following the example of gen­ tions when they were barred from the existing erations of ethnic group members and others ones. Negro- and Jewish-owned and operated who have succeeded, and continue to succeed, in colleges, hospitals, and businesses come to mind, spite of discrimination. such as Tuskegee Institute in Alabama, Provident Acknowledging the premise that the innate Ho~pital in Chicago, Brandeis University in Mas­ abilities of men and women are equal, what sachusetts, and Johnson Enterprises in Chicago, about those women who are effectively shut out to name a few. Ironically, or perhaps it would be of, or denied advancement in, occupations in more accurate to say "predictably," many of which they could make important contributions? these have failed even though they've received Those with brains and talent do not necessarily government help, while others have been enor­ also have the stamina, courage, and aggressive­ mously successful far beyond the dreams of their ness to forge ahead in the face of discrimination. founders, without ever asking for or receiving These are the people who usually turn to political state aid. In recent years, womeR~OO 'have begun solutions. But, let's consider a few of the reasons to take this route. The Women's Bank in Denver, why legislation against discrimination creates Colorado, is an example of a women-founded more problems than it solves. 466 THE FREEMAN • DECEMBER 1989

The very sound of the phrase"Affirmative Ac­ continue the hypocrisy. To rectify past wrongs by tion" falls on the ear as a not-so-veiled threat. It's turning to the quick fix of discriminatory legisla­ the sound of a stem school teacher lecturing a re­ tion is to flirt with totalitarianism. Ultimately, calcitrant student. (It happens that the phrase that means an exploitation that is all-encompass­ was coined by ex-teacher Lyndon Johnson.) Af­ ing and unalterable for everyone. As Milton and firmative Action is also the angry stamp of impa­ Rose Friedman have so aptly put it: "A society tient feet, and a brandished fist that smacks too that puts equality-in the sense of equality of much ofrevenge. outcome-ahead of freedom will end up with Affirmative Action stigmatizes women be­ neither equality nor freedom. The use of force to cause it gives the sanction of law to the myths achieve equality will destroy freedom, and the about women which have been so damaging to force, introduced for good purposes, will end up them. It denies that women are capable of com­ in the hands of people who use it to promote peting on an equal basis and, therefore, they their own interests."2 must have a "handicap," an artificial advantage to make up for what they lack. Even those women Who Needs It? who are indisputably highly qualified must, nev­ ertheless, wear not one scarlet letter, like Hester, Women don't need Affirmative Action, or set­ but two AAs upon their breasts proclaiming the asides, or any of the laws that demand special inferiority that Affirmative Action (AA) implies. privileges for them. They're not in their present straits because they've been denied special privi­ Robbing Peter to Pay Paula leges, but because others have had special privi­ leges over them. Victory gained at the expense of Affirmative Action focuses on results rather others is no victory at all. Recent gains for wom­ than on the equal right to compete. It demands en have come about more from the propagation that unqualified people be hired if, as in the area of ideas and a reasoned call for justice than from of our concern, they happen to be women, while discriminatory legislation. And yet, at the first highly qualified candidates for jobs are rejected. signs of progress in human affairs, a clamor arises In other words, it amounts to reverse discrimina­ for laws to speed the process. tion. Men have every reason to feel bitter about In the case of women, statistics are trotted out laws that favor women, and women should un­ that show there are only so many women Nobel derstand that bitterness very well. Prize winners compared to men, or only so many Barry R. Gross, who discusses reverse discrim­ women symphony conductors, lawyers, bricklay­ ination from a philosophical point of view, suc­ ers, truck drivers, or whatever, compared to the cinctly states the essence of the case against re­ number of men in these positions, and this be­ verse discrimination as it applies to blacks. It is, comes a justification for "action." They miss the he says, "an attempt to correct one sort of injus­ point. The wonder of it is that there are any tice by producing another."1 He rightly points out women at all who fit into these categories in a that those who are to benefit from such a policy world that has placed every conceivable obstacle are not the original victims, and those who will before them. It is a wonder and a cause for opti­ suffer from it are not the original perpetrators of mism. Passing laws which favor women has not the crime. In seeming contradiction, however, caused, and cannot cause fully-formed female ge­ Gross views reverse discrimination as an abuse of niuses to erupt spontaneously into being like Hy­ an otherwise well-intentioned policy. Well-inten­ dra's heads. tioned it undoubtedly is, but surely any policy How ironic, and even tragic, that women have that mandates a double standard is an abuse in it­ released themselves from bondage to their fa­ self. thers, brothers, husbands, and sons only to find Finally, and most important, Affirmative Ac­ themselves in bondage to the state. And in the tion opposes our national commitment to free­ latter, they find common ground with men, for dom. Women's place in the United States has sel­ the enemy that stands in the way· of both sexes is dom been consistent with the principles on which Congress, and Congress' counterparts on the lo­ our country was founded, but that's no excuse to cal scene. WOMEN AND THE MARKET 467

Too many members of Congress are spiritual ic routines must be followed; and much more. descendents of those who once gave husbands Regulations multiply, more people are needed to the power to control women's lives and posses­ enforce them, day care operators give up, and in sions. Today, we have thousands of state and Fed­ many cases children are then left home alone in eral programs and regulatory agencies, and hun­ spite of the regulators' declared concern for child dreds of thousands of government workers welfare. The larger day care centers also find it whose primary responsibility is to tell other difficult to hang on under these conditions, and Americans, men and women alike, what their fees rise accordingly. When this happens, it Congress and/or state and local governments is then proclaimed that there is a shortage of day have said they mayor may not do. As a result, we care, and we end up with government filling the have become polarized into self-seeking factions void. We all know what that means. that, like jealous children, clamor for the atten­ In the meantime, the unlicensed homes go un­ tion and favor of an all-powerful parent, pushing derground, perhaps accepting fewer children, their brothers and sisters out of the way as they which deprives those who need them. There is no grab at the apron strings of the state. need to go into all the ramifications of this famil­ How much better to unite in a fight for free­ iar series of events common to many of our en­ dom instead of fighting each other. Wise women, deavors, except to answer the frequently ex­ like wise men, perceive that to the extent that we pressed fear that unlicensed homes are unsafe. have become a collectivist society with inefficient There is no more reason to fear unlicensed and wasteful central planning, we are less free. A homes than licensed ones. Experience has shown look at just a few of the ways in which collec­ that sacrosanct governmental agencies cannot be tivism adversely affects us, as human beings and relied upon to verify the safety of a day care as men and women, should convince us that we home. Only a caring, responsible parent can do must not wait until we hit rock bottom before we that to his or her own satisfaction, unless we are dig out the root cause of our discontent. to become like children ourselves, unable to in­ vestigate and make judgments. The State vs. the Free Market Resourceful women who want to start busi­ nesses in their homes-computer technicians, One woman's need for child care is another seamstresses, caterers, hairdressers, and oth­ woman's opportunity. That's a simple truth, until ers-face the same problems as day care opera­ government enters the picture. What could be tors. If the government finds out about that one­ more efficient and mutually advantageous than chair beauty shop in your basement, you're for the woman who elects to stay home with her doomed. offspring also to take care of the working wom­ Robert L. Woodson, president of the National an's child for a fee? It's a proven system that is Center for Neighborhood Enterprise, concerned entered into voluntarily by both parties. Every­ about the situation as it affects black Americans, one is satisfied, or the deal's off. Although there says, "Home occupation ordinances are playing are no statistics available, it is believed that very an increasingly significant role in keeping blacks large numbers of small-scale versions of th~s sys­ poor."3 Woodson also addresses the subject of tem exist. Others who need day care depend on high licensing costs which in some areas keep relatives, and some couples work split schedules blacks out of certain occupations. He cites the so that one or the other is always home to care $70,000 price of a taxicab medallion in New York for the children. City, one example out of many that affect anyone Licensed day care centers are another story. who can't afford the price of admission to the Restrictions vary across the country, but their trade or vocation of his or her choice. grand design seems to be to put day care en­ Humble beginnings have had a way of bur­ trepreneurs out of business. Typically, permits are geoning into empires, as Mrs. Fields of Mrs. costly and complicated; one's house and yard Fields' Cookies can tell you. But, larger capital­ must be a certain size according to the number of ists, men and women who've built their enterpris­ children; health and safety rules are unreason­ es from the ground up, assuming all the risks and able, exceeding what exists in most homes; specif- responsibilities, hard work, and long hours that 468 THE FREEMAN • DECEMBER 1989 are involved, discover sooner or later that they're matically. Women will become captains of indus­ not operating profit-making enterprises for them­ try and leaders in the sciences, taking their places selves, their employees, and stockholders so side by side with men, and we will no longer trav­ much as they have become an arm of the govern­ el in this world like a jetliner with half its engines ment, and are operating social agencies to pro­ blown out. mote the general welfare. They must serve as the government's accountants and tax collectors, not Equality Begins at Home only contributing monetarily to their employees' social security, but also taking care of the paper­ As long as men and women freely unite in work at their own expense. They must contend marriage or any other association, women will in­ with OSHA, EPA, DOE, FTC, ICC, and on and creasingly insist upon equality in their private on endlessly in a veritable minefield. lives. They will respect themselves, and they will Jerry Pournelle, writing in Infoworld about demand respect from others. The extent of peace the effects of protectionism and regulation on and harmony that is achieved in any union is de­ the computer industry, says that FCC regulators termined by the qualities of character each per­ "... have created a byzantine obstacle course of son, regardless of gender, brings to it, and those paperwork and delays that start-up companies who achieve mutually satisfying relationships must negotiate before they can do business. The serve as an example for others to emulate. result is that if Steve Wozniak and Steve Jobs In freedom, ideas change and conditions wanted to start Apple Computer today, they change. Freedom releases human creative energy. wouldn't be able to do it." Referring to the costs It fosters diversity and cooperation. It gives indi­ of the required testing and certification, he says, viduals the best possible, chance of realizing their "They wouldn't have the capital to pay the trib­ ambitions, and it results in greater levels of pros­ ute demanded by the FCC."4 This should give perity for the general population. It does all this uneasy pause to ambitious women everywhere. for people, not just for men or just for women, or just for those of a particular race or ethnic back­ Women and the Free Market ground. Making choices and assuming responsibility Economic freedom is the crux of the matter. for our lives, while often difficult, are the privi­ Assure economic freedom for women, and with leges of a free people. The outcomes of our brains, hard work, determination, and imagina­ choices, good or bad, enable us to grow and ma­ tion women will catch up. But, not overnight. ture. We become stronger and wiser because of Their victories will be the building blocks of re­ them. form, leading to a renovation in many hearts and Women have everything to gain from focusing minds that will gradually overcome the preju­ their efforts on reforms that emphasize freedom, dices of centuries. rather than on legislation that restricts others. Women will become tough enough to face dis­ Shall they waste their energies and their re­ crimination with the dignity and courage of free sources calling upon Congress to rectify every people who know their own worth. They will face real or imagined wrong to themselves when their the fact that some people will never give up their precious liberty is at stake? Why not go for the prejudices, but they will know that the power of grand prize instead? discrimination to injure is lessened in a climate of At the same time, we must not presume that freedom. And, they will understand that we can't achieving a truly free society will bring about all be leaders and successful entrepreneurs no utopia. Utopia is unattainable because it cannot matter how smart we are. These are facts of life exist in this imperfect world. Tradeoffs come with for men as well. freedom: some succeed and others fail; social Working in a market that is free, career wom­ progress is slow; disappointments are inevitable; en will more easily find safe, dependable, afford­ personal sacrifices are called for at times; corrup­ able child care; the equal pay for equal work situ­ tion is possible; and some exploitation can and ation will resolve itself; and.imbalances according will exist. However, these scourges of the human to race, sex, and national origin will adjust auto- condition can more successfully be combatted in WOMEN AND THE MARKET 469 a free society. It is not so easy, however, to break than to wait until we no longer have the right the chains of oppressive governments, in which even to voice our concerns. D these conditions exist in abundance. 1. Barry R. Gross, Discrimination In Reverse: Is Turnabout It is better to reaffirm and give new meaning Fair Play? (New York: New York University Press, 1978), p. 93. to the traditional values of self-reliance and indi­ 2. Milton and Rose Friedman, Free to Choose (New York: Har­ court Brace Jovanovich, 1980), p.148. vidualism now, asserting our willingness to accept 3. Robert L. Woodson, "Building a New Base for Black Pros­ responsibility for our destinies and resist govern­ perity," The Atlanta Constitution, July 31,1988. 4. Jerry Pournelle, "Be Prepared for Government to Block Pre­ ment's invasion into our private and public lives, dicted Megatrends," Infoworld, April 24, 1989, p. 50.

THE FOUNDATION FOR ECONOMIC EDUCATION, INC. Irvington-on-Hudson, New York 10533

- ~j 1989-90 f~ ­ ESSAY CONTEST

HIGH SCHOOL DIVISION COLLEGE DIVISION First prize - $1,500 First prize - $1,500 Second prize - $1,000 Second prize - $1,000 Third prize - $500 Third prize - $500

Essaysshould present the positive moral case for a free society. To assist contestants, we have prepared a packet that includes literature, bibliography, and essay guidelines.

Sponsor: The Foundation for Economic Education is publisher of The Freeman, a monthly journal of ideas on liberty. Founded in 1946, FEE is a nonprofit, nonpolitical educational and research organization offering books, lectures, and seminars that promote an understanding of the free market, private property, limited government philosophy.

Eligibility: Any high school student may enter the high school division. The college division is open to college students 23 years old or younger. Essays may not exceed 2,500 words in length and must be postmarked on or before January 15, 1990. 470

Will More Dollars Save the World? by William H. Peterson

,, Stingy" is the word critics hurl at Pres­ tionism, inflation, rationing, exchange rate con­ ident Bush's initial foreign aid offer trols, huge public spending, deficit financing, of $100 million to Poland and $25 heavy taxation, and wage and price controls. He million to Hungary. Some critics go further and wondered if dollar aid would hence but tempo­ invoke the idea of a new Marshall Plan-this rize the thick jungle of interventionism and not time including the support of Japan and the West get at the root causes of postwar European stag­ generally-for Eastern Europe and, perhaps, an­ nation. other for the Third World as well. The idea brings Hazlitt contended, long before the advent of to mind a variation on an old question: Will hard­ the supply-siders, that purchasing power grows currency transfers save the world? out of production, that production is frustrated The old question: "Will Dollars Save the by government controls, that it thrives on free World?" That was the title of a 1947 Foundation markets and stable currencies, that the great pro­ for Economic Education study, later condensed ducing nations are perforce the great consuming in Reader's Digest, by Newsweek economic nations, that, in essence, supply creates demand. columnist Henry Hazlitt. Hazlitt questioned the This basic economic truth, the perception of premises of foreign aid in responding to a speech 19th-century French economist Jean-Baptiste on June 5, 1947, at Harvard University by Secre­ Say, had been challenged, at first rather success­ tary of State George Marshall. Marshall had fully, by John Maynard Keynes. In his The Gen­ called for vast, coordinated dollar transfers to eral Theory of Employment, Interest and Money stagnating war-torn Europe (which was already (1936), Keynes promoted his own idea of de­ receiving substantial U.S. war relief). Declared mand management, mainly through government Secretary Marshall: spending, to achieve "full employment." The "The truth of the matter is that Europe's re­ 1940s (and, indeed, the 1950s and 1960s) were the quirements, for the next three or four years, of heyday of Keynesianism, it should be noted, and foreign· food and other essential products-prin­ Marshall's speech and the ensuing era of foreign cipally from America-are so much greater than aid had this going for it. her present ability to pay that she must have sub­ In any event, after the enactment of the Mar­ stantial additional help, or face economic, social shall Plan, the Hazlitt contention was soon put to and political deterioration of a very grave charac­ the test. In 1948, on a June Sunday, without the ter." knowledge or approval of the Allied military oc­ Hazlitt wondered about Marshall's "ability to cupation authorities (who were of course away­ pay" perspective on Europe. He took note of the from their offices), West German Economics Keynesian pattern of postwar European protec- Minister Ludwig Erhard unilaterally and bravely issued a decree wiping out rationing and wage­ Dr. Peterson, an adjunct scholar at the Heritage Foun­ dation, is the Lundy Professor of Business Philosophy price controls and introducing a new hard curren­ at Campbell University, Buies Creek, North Carolina. cy, the Deutsche-mark. The decree was effective 471 immediately. Said Erhard to the stunned German multilateral support of international agencies like people: "Now your only ration coupon is the the World Bank and the International Monetary mark." Fund, act as a net drag on a goodly number of re­ The American, British, and French authorities, cipient countries-some of which lack even a ba­ who had appointed Erhard to his post, were sic system of private property rights let alone a aghast. Some charged that he had exceeded his capital market? defined powers, that he should be removed. But Such support often does a disservice both to the deed was done. Said U.S. Commanding Gen­ the donor and to recipient countries as the inter­ eral Lucius Clay: "Herr Erhard, my advisers tell ventionist status quo is preserved and precious me you're making a terrible mistake." "Don't lis­ time and financial resources are wasted. National ten to them, General," Erhard replied, "my ad­ examples of that waste on all five continents are visers tell me the same thing." legion, as Peter Bauer has long demonstrated. The advisers were wrong. The German people Even politicians occasionally spot the waste. rolled up their sleeves as never before, and the As Secretary of State James Baker observed at a decontrol action brought about what has since press conference in Warsaw last June: "In the been called "the German Economic Miracle." 1970s, we and our allies and Polish people made The moribund, ravaged West German economy a mistake. We shoveled a lot of money into this snapped back to life, a phoenix soon becoming, country with no requirement for economic re­ ironically, the most prosperous in Europe. form." Erhard, who had earned a doctorate in eco­ So notwithstanding more than four decades nomics from the University of Frankfurt in 1924, since its first enunciation, the Hazlitt question is who had witnessed the catastrophe of the Ger­ still relevant: Will dollars save the world? man super-inflation of the early 1920s, and who An answer may lie in a further quotation from followed Adenauer as West Germany's chancellor the Erhard book: "If the German example has in 1963, conceded that Marshall Plan dollars any value beyond the frontiers of this country, it helped the German recovery but held that the can only be that of proving to the world at large greater factor by far was the introduction of the blessings of both personal and economic free­ sound money and the deregulation of the econo­ dom." D my. As he wrote in his Prosperity Through Com­ petition (1958), a book describing West Ger­ Countries Getting 10 Biggest Shares many's rather radical system of Soziaie Mark­ ofu.s. Bilateral twirtschaft (Responsible Free Market Economy): Economic and Military Aid "What has taken place in Germany ... is anything (estimates in millions of dollars in fiscal 1989) but a miracle. It is the result of the honest efforts of a whole people who, in keeping with the princi­ 1. Israel $3,000 ples ofliberty, were given the opportunity of using 2. Egypt $2,400 personal initiative and human energy." 3. Pakistan $627 With the further successful examples of Japan 4. Thrkey $624 and the "four tigers" of Singapore, Hong Kong, 5. EI Salvador $389 Taiwan, and South Korea, are not other econom­ 6. Greece $351 ic miracles in Eastern Europe and the Third 7. Philippines $270 World awaiting non-dependency on foreign aid 8. Honduras $209 and a return to freedom and free enterprise? 9. Portugal $163 In this light, does foreign aid really aid? Can it 10. Guatemala $146 be that U.S. bilateral economic and military sup­ Source: Congressional Research Service, port (see accompanying table), along with U.S. House Foreign Affairs Committee 472

Religion in China

by Geoffrey Kain

hile playing with our son Julian at a Buddhism in the south. They had visited several small park in our "home" city of Xia­ temples in the Fujian cities of Xiamen, W men one January day, my wife Lisa Quanzhou, and Fuzhou, and they were startled to and I met an American couple in their late 30s see the number of people who came to the tem­ and their child who had come to the balmy south ples and worshipped openly. They were not sure from their home in Beijing. Larry was a profes­ whether to ascribe this to a traditionally stronger sional photographer and a painter, and his wife Buddhism in the south, a less stringent political Marilyn had been a teacher of English as a Sec­ control in the south, or some combination of the ond Language on a California campus. They had two. Whatever the causes, the temples of the a 9-year-old son, Max, and no plans to return to north are typically almost devoid of worshippers, California or to move anywhere else, for that and there are far fewer Chinese who visit the matter. northern temples as tourists or apparent tourists. Max was being educated at home, his mother They simply stay away. acting as teacher. Max looked unhappy. His fa­ Without question, the temples of the north ther was painting, hoping to sell some of his work generally suffered more devastating damage dur­ in Hong Kong soon, and his mother was teaching ing the most violent years of the Cultural Revolu­ English at a Beijing college, receiving grant mon­ tion (1966-76) than did the temples in the south, ey from her California school. They claimed to and many of the northern temples remain gutted, have sold their California home and nearly all of even if their fac;ades have been renovated in the their belongings. Larry had quit his lucrative job past several years. Nevertheless, it would be a se­ and here they were-an American family in Chi­ rious mistake to assume that a great many of the na. China had its own problems, they admitted, southern temples somehow escaped the ravages but at least in China you didn't have to worry of the late 19608. They did not. about having your child abducted from a· shop­ Temple renovation in China is widespread and ping mall. This remark caused Lisa and me to just one manifestation of the building and repara­ look again at the apparently lonely 9-year-old in tion boom that has turned much of the nation the California Angels baseball cap. into a vast construction site. I recall the extensive As we shared with them our motivations for repairs underway on the Lichee Garden Temple living a third year in China and offered some re­ in Fuzhou, next to Fuzhou University, when we flections on various places we had traveled, we arrived there to teach in 1984. The temple was in came to discuss some distinctions between life in many ways typical. A large monastery, it housed the south and life in the north. One of the aspects more than 100 monks and had a large library of of our lush Fujian Province that had struck the valuable texts. It had stood on this ground for California couple as being strikingly different more than 1,000 years. from life in dry, dusty Beijing and some other During the Cultural Revolution, this temple northern cities was the obvious prominence of was battered by Red Guards, swept out, and then converted into a transistor radio factory. On its Professor Kain teaches English at Embry-Riddle Aero­ nautical University, Daytona Beach, Florida. grounds was constructed a scrap iron salvage 473

yard, distinguished by its nondescript gray brick less Buddha had become the pride of the temple, chimney rising above the red temple walls and and a new pavilion was being constructed just to churning thick black smoke over the swarms of house it. bicyclists moving slowly along Industrial Road. Shortly after the white jade reclining Buddha The monks from this temple, and from several had arrived, Lisa and Julian and I strolled over to other smaller temples in and around the city, fled the temple to have a look at it. The pavilion was to the enormous monastery atop Drum Moun­ still under construction and we had to yell to the tain several miles outside of the city. They re­ laborers on the roof so that they wouldn't shower mained there for 10 years before returning (at us with debris, evidence of which lay all about the least some of them) to their old home, now a de­ base of the building. The pavilion itself was made crepit shell. entirely of concrete, though the roof was made to look as if it were covered with slate tiles, and the Lichee Garden Temple columns painted red so they might pass for tradi­ tional red-painted wooden pillars. Here and Since 1979 the government and many Over­ there, concrete was formed to look like bamboo. seas Chinese have appropriated an enormous The jade Buddha was held in an upstairs room amount of money, materials, and skilled labor for and was still in its shipping crate. The cover and the refurbishing of temples like this one. Skilled front panel were pried off so that the curious stonecutters (some as young as 14 or 15) and car­ might have an early peek. The jade was startling­ penters repair ruined statuary, elaborate doors ly beautiful, but the Buddha wore a very loud and beams, and whatever else is in need of work. yellow synthetic cape and had bright red lips and Repairs were in full swing when we entered fingernails. the Lichee Garden Temple. New statues were be­ The temple was not only under repair, but was ing molded in clay over large wood and straw expanding, and the monks who once had to flee frames, some of them as tall as 20 feet. New roof to safety now had enough influence to insist that beams and decorative corner posts were being the scrap iron facility be torn down because it cut·and planed and carved, and the smell of stood on ground under control of the temple. freshly sawed pine permeated the grounds. Walls The monks also managed to have another build­ were being whitewashed and ceiling beams paint­ ing demolished so that they could build a gate on ed brilliant red, green, yellow, and blue in intri­ the other side of their circular pond, facing south cately detailed patterns. The temple had received as it should to absorb the best possible energies. a large bronze incense burner from a wealthy As work progressed, the temple attracted an Overseas Chinese from Burma, while another increasing number of visitors. Eventually, the wealthier Overseas Chinese Buddhist from Thai­ monks began charging admission (10 fen, or land had presented a large white jade reclining about the equivalent of three American pennies) Buddha. White jade is most precious. This price- and opened a small shop near the center of the 474 THE FREEMAN • DECEMBER 1989 temple next to the drum tower, selling everything a political failing may well be cause for suffering from handmade black cloth monk shoes, porce­ one day-not only for themselves, but for their lain figurines, incense, and prayer beads to or­ families, as well. The purges following the "Hun­ ange soda, sea shells, and flour-coated peanuts. dred Flowers Movement" of the late 1950s (call­ Pasted on the wall not far from the entry to the ing for free and open criticism of the Party, then souvenir shop was a poster of a Red Army offi­ fiercely retaliating against the critics) and the cer, saluting a distant flag. outrageous violence of the Cultural Revolution Despite all the renovation and increased remain very fresh and bitter memories in the col­ tourism, the temple was a peaceful place. Monks, lective Chinese consciousness. some very old and some as young as 12, moved During our two and a half years in the south of slowly about the grounds or quietly tended to China, we met a number of "underground" (that chores such as sweeping a set of stone stairs or is, not officially registered) Christians, many of tending the altars. A couple of expansive gardens whom automatically assumed that because we contained a profusion of flowers and other were Westerners we were Christians, and then plants, healthy and well cared for. made it a point to inform us in confidence, with There was always a commingling at the tem­ signs of both elation and hesitation, that they ples of the quiet, slow-moving monks themselves, were Christian also. The admissions made to me a large number of Chinese tourists who seemed were always private and unsolicited. unfamiliar with and amused by the sacred world Christianity is the "Foreigners' Religion." (judging from their accents and their facial fea­ Buddhism is generally regarded as the supersti­ tures, many of these visitors were from the tion of the peasants and the uneducated workers, north), and the smaller number of Chinese who and is a vestige of "feudal society." The Party came to worship. The worshippers will un­ holds that much work remains to be done to fully abashedly drop to their knees in a crowd, hold up educate these people and liberate them from the a cluster of smoking joss sticks, and kowtow be­ bondage of the fanciful and absurd. Human fore a statue of a holy figure. Some enter the progress-that is, material progress-is retarded, temples with commitment; many enter with per­ says the Party, by those who stubbornly cling to haps a shade of embarrassment and guilt, after outmoded ideas and illusions. paYing a small fee. There are Christian churches in China, but not The Communist Party continues to discourage many. The first I came across was in an especially religious worship in all forms, of course, and to old street in Fuzhou (the 2,400-year-old capital propagate atheism. That the government is re­ city of Fujian Province). It is a small brick struc­ sponsible for repairing many churches and tem­ ture with a characteristic steeple, stereotypical ples is consistent with its professed practice of al­ gothic windows, and a Latin inscription over the lowing religious freedom, but the burst of repair main entrance. I was startled when I saw it be­ work is also without question part of the govern­ cause it looked so strangely out of place ... like a ment's overall effort to promote tourism and to mosque in a Midwest town. Right in the middle give itself a face-lift by offering this most obvious of the usual squalor of food stalls, endless lean­ show of its new openness and increased toler­ tos, a street swarming with people on foot and bi­ ance. China thirsts after foreign capital, which it cycle, there it stood, nearly engulfed in the profu­ badly needs to fuel its modernization (to which sion of the city so that you could conceivably everything is subordinated) and, until the recent overlook it in the midst of all this busy detail. I atrocities in Beijing, the central government has wanted to go in and have a look, but it stood be­ exhibited some surprising (though generally su­ hind a locked black iron gate. No hours posted. perficial) leniency in order to stimulate increased No one I talked to was willing or able to get any tourism and foreign investment. information about when it might be open for ser­ vices or otherwise. Every time I passed it, it was Memories and Fears locked. We heard of another Christian church in the Religious belief itself is not in accord with the city, just which denomination no one was certain. principles ofcommunism, and most fear that such We made arrangements to go to the Christmas RELIGION IN CHINA 475 service, Christmas Eve 1984. One acquaintance The Churches ofChina of ours said, "Oh, you would like to go to church. I know of a church and I have met its director. I Not all Christian churches in China are so elu­ will ask him when the service is and inform him sive, however. After our initially frustrating close that you are coming." We were not especially encounters in Fuzhou, we found our way into a comfortable with the formality, but we had no number of churches in various cities. In idea where the place was-and that year in Guangzhou (Canton) in 1986 we visited the large Fuzhou, a city of about two million souls, we almost cathedral-size Catholic church famed were the sum of the foreign population (the city throughout the country. This church has a strik­ having "reopened to the outside world" in 1982), ing light-colored stone facade, a lofty spire, a so in situations like this we were dependent upon large rose window, and a number of stained glass the efforts of our Chinese hosts. windows-or what used to be stained glass win­ This man booked a university car for us, had dows but are now clear glass windows since the told us the service would be at 7:30 P.M., and stained glass was all smashed or shot out during planned to accompany. us. By mid-afternoon on the Cultural Revolution. Only small fragments of Christmas Eve, however, he decided that he colored glass remain in a couple of the windows. would not come with us; he felt that he was step­ The pews had apparently all been destroyed and ping in where only our assigned guide/interpreter had been replaced by rickety benches. We could should tread and told us that he had better retreat see where the lights had once hung from the ceil­ before he stirred up any animosity. Something ing, but they were gone too. The altar area was had apparently been said to him. "I'll leave in­ cleaned out and the altar itself was nothing more structions with the driver and see whether or not than a large table with a white linen cloth draped your interpreter is available to accompany you." over it. There were a few people here and there, When the time came, our interpreter, Yan Li, praying. appeared to guide us to the church. We told him We came upon a very attractive dark brick that as long as the driver knew where to go, it church in Shanghai in 1987 and decided to have a wasn't necessary for him to come along. He look inside since the iron gate was unlocked. A claimed that the driver probably didn't know ex­ few passersby stopped and stared as we entered actly where the church was, but that he knew ev­ the church. We were met by the Chinese pastor ery square inch of the city, his hometown. So we who gave us a brief and muted tour, pointing out walked together to the car garage, met our driver, what had been repaired, what was currently un­ and rolled off to church. dergoing repair, and what was still in need of re­ Somewhere in the heart of the teeming city, we pair. His church, too, had been almost completely turned into a narrow lane or alleyway and pulled destroyed by Red Guards during the Cultural up in front of a doorway that looked like it might Revolution. The pointed arches which capped lead anywhere but into a church. Yan Li hopped the ends of pews had been knocked off and out, ran to the door, opened.it and entered. After burned. The altar, the colored windows, and the a couple of minutes he returned, claiming that statuary had all been smashed. The entire interi­ the service was over. Sorry. "But it's only 7:15. or of the church had been ruined. Now there was When did it start?" "Five o'clock." "Are you sure a beautiful new wood floor; the pews had not this is the right church?" "Of course this is the been replaced, but the ends had been sanded and right church. The other man was just confused varnished to conceal the damage; the colored about the time." "Is there another church?" "Not glass had been replaced with clear. The altar was that I know of." We sighed, rolled our eyes, and still under construction, and there was a series of headed toward home. new lights hanging on long chains from the ceil­ Several days later we met the fellow who had ing. The pastor briefly mentioned the fear and made the arrangements, and he asked whether sadness he experienced when the church was we had enjoyed the Christmas service. We ex­ sacked and expressed his firm hope that it would plained what had happened and he was aston­ not happen again. ished, certain that we had gone to the wrong Another apparent sign of religious resurgence place. We left it at that. in China is the surprising appearance of a host of 476 THE FREEMAN • DECEMBER 1989 new missionaries. A number of religious organi­ practices-like true freedom of religion, demo­ zations, primarily fundamentalist and almost ex­ cratic elections, and more student freedom in de­ clusively American, are sending groups or termining what courses to take, and what instruc­ "teams" to China to work as teachers (since mis­ tor to have for a particular course. This appeal sionaries as missionaries are forbidden). There is was offered with innocent exuberance, but it a surprising number of these teams throughout came at a bad time-during the student protests the country. in Beijing and Shanghai in early 1987 calling for At first I wondered how an authority that many of the same things. Students at Xiamen propagates atheism could turn around and invite University, as at other universities, had been groups of a dozen or more evangelical Christians warned not to organize any protests, and openly to enter the universities and high schools to expressing views sympathetic with those es­ teach. I realized before long that the government poused by the protesters could result in expulsion is fully aware that the groups are Christian, but from the university and a political labeling which contracting with groups like these simplifies the would prove troublesome for a lifetime. hiring process. The department heads at the By the time of his classroom oration, he was schools don't have to weary themselves with as beginning to attend the church services provided many screening processes or have to carry on as by a group of foreign students. On a couple of oc­ many correspondences with independent instruc­ casions when I met him he was carrying a Bible. tors coming to China to teach. By contracting He was a diligent student, well liked by his class­ with a group, the Chinese get a package of hard­ mates. Although he did not speak openly to working, well-behaved native English-speaking groups of Chinese about his conversion, it was models willing to work for relatively low wages. well known that he was a Christian. Intervention Although the missionaries/teachers are forbid­ finally came in June, during the strongest wave of den to proselytize, they do incorporate some bib­ "anti-bourgeois" activity in the south, during the lical material into their courses. But, since En­ "Campaign Against Bourgeois Liberalism" of glish competence is deemed necessary for 1987. national modernization and because the authori­ As he passed down a staircase one morning, a ties clearly feel that the impact of this relative Party official at the university called him into his handful of religious teachers is negated by the office. The official explained to him briefly and political instruction and social coercion that every simply that while he was free to worship as a student is subjected to, no one bothers to inter­ Christian if he chose, the Chinese Christian fere with their teaching methods. church and the foreign Christian church were to The new missionaries do manage to convert remain separate. No Chinese student would be some of the students. Most of the converts remain allowed to attend church services on campus with discreet about their religious conversion, but foreign friends and, further, Chinese students there are always some who make no attempt to were no longer being allowed to visit the foreign conceal their new faith. One example should suf­ Christian students in their dormitory rooms with­ fice. I recall in particular one very likable young out first registering their names in a guest book man who had befriended several of the Christian left with a receptionist at the entrance. foreign students at Xiamen University, had em­ The message was clear, and its impli­ braced the Christian faith, and had become an ad­ cations-though powerful then-have become vocate of many Western ideas, Western styles (he much more poignant to me now, following the had his hair curled and liked to wear bell bottoms, brutal assault on dissidents in Beijing. Those who T- shirts with messages printed in English, and know China are aware that there is a rigid dis­ dark glasses) and, less vociferously, Christianity. tinction between what the foreigners may think We were concerned about him. and do and what the Chinese citizens will be al­ In my class one day he had given a presenta­ lowed to say and do. Nominal freedom has tion on Western manners and English customs, proven to be desirable and even profitable, to a then extended his discussion to conclude with point. But no people, I think, are so often and so some forceful remarks about how wise the Chi­ vividly reminded of the disparity between the nese would be to adopt more Western ideas and nominal and the actual as are the Chinese. D 477

China's Great Leap Backward by Diane D. Pikcunas

hina is a fascinating country, and many all opposition. Chinese by the thousands were ar­ . remnants of the age-old Chinese civiliza- rested, subjected to public trials, jailed, and some C. tion still remain despite 40 years of Com- were executed. Businessmen and large landown­ munist control. I visited this land in December ers were particular targets for persecution. The 1988, six months before the Tiananmen Square government took over businesses and land, and massacre. abolished the right of private ownership. As I walked along the streets of Beijing and Mao aimed to transform China into an indus­ Shanghai, I noticed the many shops-ranging trial nation overnight, despite the human costs. In from noodle stands to bicycle parts shops to cam­ the "Great Leap Forward," begun in 1958, he era stores-lining the streets with entrepreneurs pushed for rapid development, and encouraged busily selling their wares. Deng Xiaoping's "Four Chinese citizens to make steel in backyard fur­ Modernizations," aimed at improving agriculture, naces. After a few years, it became clear that this industry, the military, and science and technology, policy was a failure, and China's industrial pro­ had clearly helped propel the Chinese people to­ duction fell. Mao's agricultural communes also ward a market economy. failed to increase output. The centralized econo­ The taste of economic freedom, however, my helped Mao gain absolute control over the whetted the Chinese appetite for political free­ populace, but brought disaster to the Chinese dom-the right to speak out against individuals people and crippled the nation's economy. and programs hampering China's development. Mao's death in 1976 led to a struggle for suc­ In 1988 the central bureaucracy began limiting cession that brought Deng Xiaoping to power. the market incentives, with resulting backlogs, Though a Marxist-Leninist, Deng witnessed the shortages of raw materials, unemployment, and failures of Mao's centralized economy and saw inflation. The link between economic and politi­ the need for economic revitalization. Even Lenin cal freedom was becoming clear. had recognized the failure of War Communism (1918-1921) and initiated some market incentives New Economic Policy in his New Economic Policy of 1921-1928. Deng tried a similar 'approach, introducing some mar­ The shift in China's economic policy is a major ket incentives as part of his Four Modernizations, turning point in the country's recent history. which were designed to make China a great eco­ When Mao Zedong's troops conquered China nomic power by the early 21st century. in 1949, he set about to build a Marxist-Leninist Mao's Great Leap Forward proved a disaster society. One of his first priorities was to eliminate for China, and Deng now envisioned a Great Leap Outward. While Mao had shut out foreign Dr. Diane D. Pikcunas is Principal of Komensky Ele­ influences, Deng opened China's doors to coop­ mentary School in Berwyn, Illinois, and adjunct profes­ sor of education. at the National College of Education eration with capitalist nations, welcoming joint in Lombard, Illinois. ventures and foreign investment. Tourism was 478 THE FREEMAN • DECEMBER 1989

Dr. Diane Pikcunas visited Tiananmen Square in December of1988, six months before the brutal suppression ofChinese students by the Chinese Communist militaryforces. encouraged. Economic incentives were added to took a hostile attitude toward customers-"buy it attract foreign capital. Industrial decision-making or leave it." The private businesses encouraged was decentralized, giving a reduced role to Bei­ under the Four Modernizations, in contrast, have jing bureaucrats and more autonomy to provin­ to compete for consumers. Their owners operate cial and local officials. Farmers were allowed to as their own bosses freed from the "work unit" cultivate "side-line" plots and to sell their crops which dominates almost every aspect of Chinese for their own profit. So successful was this latter life. Under Deng's rule, the number of indepen­ experiment that, despite the small amount of dent Chinese businesses has risen from 1 million land involved, the side-line plots were soon ac­ in 1980 to almost 15 million in 1989.2 counting for 25 percent of agricultural produc­ The free market brought prosperity to rural ar­ tion.l eas as well. Guangdong Province in southern China registered an economic growth between Free Market Brings Prosperity 1984-1987 of 23.5 percent while the rest of China recorded an impressive national average of 16.8 Deng's reforms brought prosperity for both ru­ percent. Guangdong freed 80 percent of its com­ ral and urban Chinese. One of his most successful modities from central government control. New reforms made businesses responsible for their markets were created in labor, real estate, and a own profits and losses. The result is a familiar large number of commodities. Hundreds of new one in all free market economies-production of factories were built in the Pearl River Delta, the more goods and services. heart of the province's economic boom. An im­ Throughout history, the Chinese have been portant link has been made to a neighbor and great entrepreneurs, and Deng's market reforms model of free enterprise-Hong Kong. Hong allowed Chinese merchants and shopkeepers Kong investors account for 90 percent of the for­ once again to demonstrate their skills. Prior to eign investment in Guangdong Province and re­ Deng, state-run shops offered limited variety, ceive60 percent ofits exports.3 poor quality, and government employees who Even in rural and isolated areas such as CHINA'S GREAT LEAP BACKWARD 479

Zhuozi, located in Inner Mongolia, the free mar­ mier and later as the Communist Party Secretary ket has operated successfully, as the economic and was architect of much of Deng's economic re­ role of the central government has been reduced. form. He pointed to Guangdong Province as a Commodity prices were freed from government model area and urged more economic and politi­ control. The economic commission that con­ cal liberalization. Li Peng, who succeeded him as trolled investment was abolished. All urban Premier, was trained in the Soviet Union and is housing was privatized, and most state enterpris­ viewed as a technocrat; he has been less enthusi­ es were dismantled. The farmers experienced a astic about these reforms and favors more cen­ new prosperity, as they no longer were required tralization. In the political crisis in June, Zhao to sell their grain and oilseed to the state at a lost power and was purged; Li emerged in a fixed price. Zhuozi has become a model of the stronger position. success of free enterprise. While much of the at­ In light of these events, Li Peng's report to the tention on economic reform in China has focused National People's Congress in the spring of 1989 on coastal and suburban areas, the impressive na­ takes on a greater importance. ture of the success in Zhuozi is that the free mar­ The "austerity program" Li announced gave a ket has proved an amazing success in an area greater role to central planning and imposed new considered poor in a poor region.4 taxes on the more productive sectors of the Chi­ This remarkable success encouraged Chinese nese economy. Chief among the new program's economists to take a closer look at what was hap­ victims are the rural enterprises which have pening. They were able to report their findings in demonstrated the success of decentralization. The a political atmosphere freer than in the days of new budget placed a tight squeeze on these enter­ Mao. For example, three young economists prises. While the rural enterprises have been -Hua Sheng, Zhang Xuejun, and Luo Xiao­ growing at an annual rate of 30 percent, the new ping-have urged a major restructuring of the program limited annual growth to 15 percent. Chinese economy with an emphasis on individual The new tax program was designed also to tar­ property rights rather than on collective owner­ get the farmers who proved the success of the ship. They have criticized policies such as the free market-farmers who raised fruit and veg­ government's "price reform" which leave in place etables and sold them for profit would now have many of the elements of a centralized economy. to pay new taxes ranging from 5 to 15 percent. They also have advocated a dismantling of the And in a reverse of incentives, the proposed state-controlled assets, and charge that the re­ national budget would increase the salaries of forms have been so limited that the preconditions government workers and employees in the less­ for truly independent profit-maximizing enter­ productive, state-owned enterprises. A surcharge prises have not been created. They have pointed would be levied on those enterprises that were to the success of the rural enterprises which have not state-owned-those owned privately or by operated outside the government's economic collectives.6 plan and have consistently outperformed the The increased centralization is sure to hurt the state-owned enterprises. The enlargement of the economic performance of the model province for private sector, they have stressed, will enable economic development-Guangdong Province, China's economic growth to continue.5 China's biggest exporter. The cutback on con­ sumer goods nationwide especially hits this Economic Retrenchment province whose prosperity has been largely built on the production of these goods. The move to­ The economic crisis in China came before the ward centralization of raw materials also will deal political crisis. Partial repeal of the economic re­ a blow to Guangdong's economy, which will have forms under the name of an "austerity program" greater difficulty purchasing the coal needed to appeared in September 1988 and were officially keep its factories running.7 confirmed at the meeting of the National Peo­ The political crackdown in June has made for­ ple's Congress in March and April of 1989. eign investors wary of the Chinese government's The leadership struggle has taken its toll on promises and its commitment to further reforms. economic reforms. Zhao Ziyang served as Pre- The Special Economic Zones, which China creat- 480 THE FREEMAN • DECEMBER 1989 ed to attract foreign investment, are especially central planning and toward something that vulnerable as foreign businesses withdraw and looks like a market economy. The conclusion other nations consider a cutoff of trade or sanc­ of these analysts is that if it looks like capital­ tions against China. In an economic zone such as ism it will surely work well for the Chinese, Shenzhen, which during the past decade has seen and all that is really required to transform a so­ an enormous growth in the value of the goods cialist, centrally planned less developed coun­ and services it has processed, the government's try is the introduction of a system of reliably alteration of foreign exchange rules in late 1988 price-cued transactions among entities that has created particularly vexing problems, cutting look like autonomous producing and consum­ exports and reducing 1989 investment by as much ing units.... It is inconsistent with almost ev­ as 30 percent. The uncertain investment climate erything we know about the requirements for will create additional difficulties. The Special and the course of economic development. ... Economic Zones, where the Chinese have devel­ Whether or not China can modernize econom­ oped model arrangements for the operation of ically is an interesting and debatable question. free enterprise companies, may soon experience But the answer is certainly not as simple as a serious decline.8 Deng Xiaoping and his colleagues turning a "capitalist" face to the outside world.ll Conclusion The Chinese people have proved that they can The Chinese free market experiment has suf­ make the free market work if they are unham­ fered an enormous setback since late 1988. And pered by government controls. In the months the experience serves to remind us of the dangers since I left China, I have thought about the lesson of political power exercised over an economy, for that China offers for other nations, as well as for great economic benefits may fall victim to politi­ individuals who feel they can turn economic and cal considerations. A number of experts have political freedom on and off like water from a warned us of such developments. Arch Pudding­ spigot. The lessons of the free market work well ton notes that even when they experiment with for all people, but centralized control can retard free market mechanisms, Communist nations are even the most promising prosperity and bring a usually drawn to restrict entrepreneurial activity, nation back to economic bankruptcy. D since capitalism represents a humiliating refuta­ 1. Immanuel C. Y. Hsu, China Without Mao: The Search for a tion of the promise of abundance made by Com­ New Order (Oxford and New York: Oxford University Press, 9 1983), pp. 91-118; Donald J. Senese, Sweet and Sour Capitalism: munist officials. An Analysis of "Socialism with Chinese Characteristics," (Wash­ The Chinese economy is proving that political ington, D.C.: The Council for Social and Economic Studies, 1985). 2. Michael Weisskopf, "Chinese Entrepreneurs Expect Cus­ power can defeat even the most spectacular ad­ tomers to Return," The Washington Post, June 18, 1989. vances of an economy based on free market prin­ 3. Louise do Rosario, "Asia's Fifth Dragon," Far Eastern Economic Review, December 8, 1988, p. 62; Daniel Southerland, ciples. In 1988, Milton Friedman warned then "In South China, Profits Keep Their Lure," The Washington Post, Party Secretary Zhao that China would not con­ June 29,1989. 4. Robert Delfs, "County Capitalism," Far Eastern Economic tinue to succeed economically if it attempted to Review, April 27, 1989, pp. 27-28. organize its economy from the top down. He 5. Robert Delfs, "Property to the People," Far Eastern Eco­ nomic Review, December 20,1988, pp.12-13. stressed to Zhao that government is organized 6. Daniel Southerland, "China Seeks To Rein in Economy," from the top down, while the free market is orga­ The Washington Post, March 22,1989. 7. Louise do Rosario, "Business as Usual," Far Eastern nized from the bottom up.lo Economic Review, December 8; 1988, pp. 60-61; Southerland, "In And perhaps one of the more perceptive ob­ South China, Profits Keep Their Lure." 8. John Burgess, "China's Economic Zone Innovators Reassess servations came from political scientists James T. After Beijing Thrmoil," The Washington Post, June 29,1989. Myers and Donald J. Puchala, who assessed eco­ 9. Arch Puddington, Failed Utopias: Methods of Coercion in Communist Regimes (San Francisco: ICS Press, 1988), p. 15. nomic development in China and concluded: 10. "Friedman Says Mainland Needs Freedom," Ching Ming Monthly (Hong Kong), February 1989, p. 42; reprinted in Inside China Mainland, April 1989, p. 24. Some analysts base their positive projections 11. James T. Myers and Donald J. Puchala, "Some Demographic regarding Chinese modernization on the pre­ Constraints on Chinese Economic Modernization." Paper presented at the Seventeenth Sino-American Conference on Mainland China, sumption that Deng Xiaoping and his col­ June 5-11, 1988, Institute of International Relations, National leagues are moving China away from socialist Chengchi University, Taipei, Republic ofChina on Taiwan, p. 2. 481

Ecorse's Grand ExperiDlent by Greg Kaza

t first glance, Ecorse, Michigan, appears Ecorse was unique before Schimmel's appear­ an unlikely place for a grand experi­ ance on the scene. It was the first Michigan com­ A ment. munity to be placed in receivership. Chief Wayne Aging steel mills dominate the landscape in County Circuit Court Judge Richard Dunn ap­ the 2.2- square-mile community of 11,000, located pointed Schimmel receiver for the troubled com­ in a region known as Downriver Detroit. Down­ munity on December 3, 1986, after city officials river is typical of many of the "Rust Bowl" areas failed to comply with repeated court orders to that dominate America's once-great industrial balance the budget. heartland. Row after row of small, wood-frame Symbolic of the budget crisis was Ecorse's ani­ houses stand in the shadows of the mills, home to mal control officer, paid $45,000 annually. "That's three generations of steelworkers. Along West an awful lot for collecting dead dogs," Schimmel Jefferson Avenue, the bars and fast-food estab­ said. "I told Judge Dunn 1 didn't want the [re­ lishments are fighting a battle against creeping ceiver's] job if 1 had to do what the typical politi­ blight. Crack cocaine dealers have invaded from cian has to do, which is make promises and then Detroit, decimating several surrounding neigh­ chase the taxpayer's money to keep them. That's borhoods. how Ecorse got in the mess that it is in today in But look beneath the surface and you will find the first place." evidence of a grand experiment unique in recent Schimmel's first act as receiver was to dis­ American history. Three years ago, Ecorse charge 40 paid political employees from the teetered on the brink of economic bankruptcy, Ecorse payroll. "Cost was not important in the result of a $6 million budget deficit caused by Ecorse even though they were near-bankrupt. wasteful local spending. Having their political buddies, cronies, relatives, Today, the deficit has virtually disappeared, and friends on the city payroll had become more along with most of the Ecorse city government, important than the taxpayers," he said. Schim­ which has been privatized to the point of near-ex­ mel's second step was privatizing the 34-member tinction. "We have created a model city that no­ Department of Public Works. Motor vehicle body else in the country has," explains Louis maintenance, snow removal, street and sidewalk Schimmel, the man responsible for Ecorse's repairs, tree trimming, water meter reading, weed grand experiment. "Some communities have pri­ cutting, and a myriad of other activities are now vatized certain functions. I've privatized just performed by the private sector. For an encore, about everything. Everything that I could legal­ Schimmel sold the DPW building and the depart­ ly." ment's equipment. "They're gone. It's going to be difficult if not impossible to resurrect them from Greg Kaza is Vice President for Policy Research at the Mackinac Center, a Midland, Michigan, public policy the dead," he said. think tank. Garbage collection was already handled pri- 482 THE FREEMAN • DECEMBER 1989

Downtown Ecorse.

vately, but Schimmel renegotiated the contract at River Rouge. "We pay half their costs and both a savings of $120,000. "It is important that con­ of us save money," Schimmel said. tracts. are monitored on a regular basis," he said. Privatization is frequently characterized as a The city boat-launching facility was privatized. "Sun Belt" or "Republican" idea. The Ecorse ex­ The city lost money under government control ample proves otherwise. Downriver is synony­ but is now turning a profit. Surplus buildings and mous with the so-called "Rust Belt," and Michi­ abandoned city lots were sold to reduce the bud­ gan Treasurer Robert Bowman, a Democrat, is get deficit, which has been cut to $1 million. among those supporting Schimmel. Bowman and Michigan law prevented Schimmel from alter­ Governor James Blanchard may turn to Schim­ ing Ecorse's police department, but he privatized mel to resolve a $4.4 million budget deficit in the pension fund, restoring fiscal sanity to a sys­ River Rouge. "There isn't a community Down­ tem once underfunded by $15 million. Under the river where I wouldn't use privatization," Schim­ fire union contract Schimmel renegotiated, the mel said. "That includes River Rouge." current full-time force will become a part-time Not everyone is impressed with Ecorse's grand and volunteer department through attrition. "We experiment. Labor unions representing former have a long list of applicants for the new posi­ city employees have criticized the receivership, tions. They don't seem to mind that it's not full­ portraying Schimmel as an economic czar with an time. They just want to work," Schimmel said. abrasive personality. Officials responsible for the Few Ecorse departments have escaped Schim­ $6 million deficit contend the privatization of city mel's budget-cutting. The city's work force, once services has gone too far. 140, has been reduced by more than 60 percent For his critics, Schimmel has a ready response. through privatization. There have been excep­ "They knew bankruptcy was coming with that tions. The duties of the $45,000 animal control of­ kind of spending, but they didn't do a damn thing ficer were contracted to the neighboring city of about it. We did." D 483

The Artificial Inflation ofNatural Rights

by Antony Flew

ike other currencies, the currency of shall be free, at least in the elementary and fun­ • rights has in recent years been subject to damental stages. Elementary education shall be L inflation. And just as money tends to lose compulsory," and so on through an oddly intru­ value the more of it that governments print, so sive clause specifying that all education must the more that is said to be a matter of natural or "further the activities of the United Nations," to universal human right, the less force any such the incongruous and inconsistent, even if wel­ particular claim will have. In the good old days of come, conclusion that "Parents have a prior right the American Declaration of Independence the to choose the kind of education that shall be giv­ Founding Fathers of the United States men­ en to their children." tioned only three such universal, unalienable, There is no good reason why such a list should supposedly self-evident, and necessarily equal ever end, no rationale either provided or avail­ rights-to "life, liberty and the pursuit of happi­ able for including in it one claim and not others, ness." and hence no justification for-to reclaim a re­ But since World War II such declarations cently misappropriated phrase-Taking Rights -more frequent and much less eloquently writ­ Seriously. For those of us who do take rights seri­ ten, as well as (on the part of so many of the new ously, the first need is to distinguish option rights signers) totally insincere-have embraced ever­ from welfare rights. Option rights are claims not lengthening lists. In the most notorious, adopted to be harmed and to be left alone; welfare rights in 1948 by the UN General Assembly, the table are claims to be supplied with various goods. of specification covers, not one modest clause in The rights to "life, liberty and the pursuit of a single world-shaking sentence but six printed happiness" are all three of the first kind. A clear pages. In what would have appeared to the statement of liberty is provided by the 1945 con­ American Founding Fathers a crescendo of ab­ stitution of Kemalist Thrkey: "Every Thrk is born surdity we are told: (Article 22) "Everyone ... free and lives free. He has liberty to do anything has a right to social security"; (Article 24) "Ev­ which does not harm other persons. The natural eryone has the right to ... periodic holidays with right of the individual to liberty is limited only by pay"; (Article 25) "Everyone has the right to a the liberties enjoyed by his fellow citizens." The standard of living adequate for the health and practice, of course, presents every kind of prob­ well-being of himself and his family...."; and lem. But the principle is luminous. About happi­ then-for the moment-finally (Article 26): "Ev­ ness the only thing to be said is that it is, of eryone has the right to education. Education course, a claim to be left free to pursue happi­ ness, not to be supplied with the means to Antony Flew is Distinguished Research Fellow of the achieve it. Social Philosophy and Policy Center, Bowling Green The right to life also should be similarly under­ State University. This article is from Vera Lex (Vol. VIII, No.2 [1988]), published by the Natural Law So­ stood. It is the right of individuals not to be killed ciety. against their wills. It is not a right to be supplied 484 THE FREEMAN • DECEMBER 1989 either with a subsistence income or even with an by, or any obligations which must be laid upon, opportunity to earn an adequate wage. Neither beings such as we. However, to borrow another Nature herself nor the rest of mankind owes any characteristic concept from Kant, "as legislating of us either a living or even an opportunity to members of the Kingdom of Ends," as creatures, make one; and everyone still needs to remember that is, prescribing laws to apply to all creatures this before bringing children into the world.! adopting and pursuing ends for themselves, we Again, just as any right of free association is at ourselves can lay it down that all rational agents the same time and necessarily a right not to join, are to be respected in their pursuit of their own so any right to life must at the same time and nec­ chosen ends. Indeed, if we are committed to pre­ essarily be a right to end life if and when that is scribing principles to apply equally to all such be­ the right-bearer's own wish. ings, principles which as ourselves such beings we could will to become universal law, then it would The Right to Be Left Alone seem that we can scarcely fail to prescribe the fol­ lowing: individuals must have the right to pursue All option rights really reduce to one, the right their own ends, save in so far as this pursuit vio­ to be left alone and unharmed. If any claim to lates the equal rights of others; and everyone any natural right can be made out, then this one must be under the reciprocal and corresponding certainly can. Consider "The Formula of the End obligation to respect those equal rights of every­ in Itself" under which Kant's Categorical Impera­ one else. The notions of equality and of reciproci­ tive becomes: "Act in such a way that you always ty enter here because no one can consistently treat humanity, whether in your own person or in claim such universal human rights for themselves the person of any other, never simply as a means, except in so far as they concede to others the but always at the same time as an end."2 same rights, the same liberties. These formulations as they stand will, of course, not do. One sufficient reason why they At Whose Expense? will not do was urged by Kant's admiring critic Schopenhauer. It is, strictly, incoherent to speak Now contrast with these option rights claims to of "ends in themselves." There can no more be welfare rights. All such claims should be chal­ "ends in themselves" unrelated to the persons lenged by putting a crucial question, followed by whose ends they are, than there can be sisters in a more philosophical supplementary: "At whose themselves, unrelated to any siblings of whom expense?"; and, "What is the basis of the obliga­ they are the sisters.3 tion supposedly falling upon the unspecified Again, Kant's talk of "rational natures" and of providers of all these desired and desirable bene­ "rational beings" is likely to suggest creatures factions?" who are rational as opposed to irrational, or who Again, natural or universal rights must, as are intellectual and unemotional as opposed to such, be equally valid at all times and in all lowbrow and emotional. But the rational beings places. If, however, ought presupposes can, then to all of whom the imperatives of morality apply, there are no such rights to what is not, and can­ and "whose existence" might be said to have "in not be made, universally available. While every­ itself an absolute value," are not an exclusive one everywhere and always could have enjoyed band of Platonic dialecticians. Nor are they, what the option right to liberty, if only the others had nothing could be, ends in themselves. What they been willing to respect these claims, there have are, are the very creatures we all are: creatures been many periods, and there have been and are which are able to, and cannot but, form ends for many places, where the total available resources themselves; creatures which in giving to them­ could not satisfy even half of these fashionably selves or to others their reasons for acting this proliferating welfare claims. And, furthermore, way but not that way, however irrational or non­ both the number of such less happy lands and the rational those reasons, are rational beings. numbers of their poor inhabitants would surely From these familiar non-moral facts of our hu­ tend to increase exponentially if a guarantee of man nature nothing can·be immediately deduced generous welfare provision for all were to re­ about either any rights which must be possessed move every prudential check upon human multi- 485 plication, thus automatically devaluing that guar­ might be embodied in a single word. The Master antee.4 replied, "Is not 'reciprocity' the word?"5 D The questions put and objections raised in the previous two paragraphs bring out the hopeless­ 1. For an examination of an Aristotelean source of the always ness of attempting to construct a coherent and more popular, contrary doctrine, see my The Politics of Procrustes persuasive doctrine of welfare rights. But with (London and Buffalo: Temple Smith and Prometheus, 1981), chap­ terVI,3. option rights it is different. There the obligations 2. Immanuel Kant, Groundwork ofthe Metaphysics of Morals, rest as equally and fairly on everyone as the in The Moral Law, trans, H. J. Paton (London: Hutchinson, 1948), pp. 90 and 91. rights: everyone equally ought to, and can, re­ 3. Arthur Schopenhauer, On the Basis ofMorality, trans. E. R. spect everyone else's equal rights to liberty and J. Payne (Indianapolis, IN: Bobbs-Merrill, 1965), p. 95. 4. Compare, perhaps, my Introduction to Malthus: An Essay against injury. on the Principle of Population (Harmondsworth and Baltimore: We conclude by quoting from a Sage. A disciple Penguin Books, 1971). 5. The Analects, trans. W. Soothill (Taiyuanfu, Shansi: Soothill, once asked Confucius whether his rule of conduct 1910), XV; 23g487

Basic Rights and Meta-Rights by William B. Irvine

eople are generally familiar with what property right in the car for a property right in a might be called our basic rights. These in­ new car; in so doing, I am exercising my meta­ P clude our economic rights, such as our right to transfer my property right in my car. Sim­ right to own property and our right to start a busi­ ilarly, when I apply for a job, my prospective em­ ness, and our political rights, such as our right to ployer might tell me that he will hire me only if I free speech and our right to life. Fewer people are sign a document stating that I won't divulge a aware of what might be called our meta-rights. trade secret. What this employer is asking me to These are rights we have with respect to our basic do is to waive certain aspects of my right of free rights; they include, most importantly, our right to speech; and if I accept the employment offer, I waive or transfer our basic rights. will be exercising my meta-right to waive the ba­ Suppose, for example, that I own a car, but sic right in question. that I am no longer satisfied with it. If I trade it in Although these meta-rights are less well on a new model, I am voluntarily exchanging my known than our basic rights, a case can be made Professor Irvine teaches philosophy at Wright State that the preservation of our meta-rights is vital to University in Dayton, Ohio. our economic and political well-being; for unless 486 THE FREEMAN • DECEMBER 1989 we have the meta-right to waive or transfer our This is a point that many people-and in par­ basic rights, then these basic rights are much less ticular, many politicians-fail to realize. These valuable than they otherwise would be. politicians may stand firm in their support of our To see why I say this, imagine for a moment a basic rights (our basic. political rights, if not our world without the meta-rights described above. basic economic rights), while at the same time Imagine a world in which you could own things, chiseling away at our meta-rights. but could never waive or transfer your owner­ Thus, a politician who would never dream of ship. In such a world, it is not at all clear how I taking away someone's apartment building (and could come to own a car (unless I built it my­ thus violating his basic right to own property) self-but where would I obtain the materials might nevertheless advocate passing laws that from which to build it?). And once I had a car, I limit the amount of rent the building owner can would be stuck with it for life. I could never trade charge or laws that prevent the building owner it in. I couldn't give it away. I couldn't even from converting his apartments into condomini­ "junk" it. ums. Such laws do not deprive the building own­ It is clear that my ownership right in a car is er of his property, but they do restrict what he much more valuable if, besides this basic right, I can do with it; and because they interfere with also possess the meta-right to trade or sell the car the owner's ability to waive and transfer his prop­ to others. For then my car, besides having value erty rights, they interfere with his meta-rights. in terms of the transportation it provides me, has In the above example, we see how by depriv­ value in terms of the other things (e.g., other cars ing a person of his meta-rights, we lessen the val­ or cash) that I can trade it for. In having the ue of his basic rights: Once laws are passed re­ meta-right to transfer ownership of my car, I gain stricting what the building owner may do with his the potential ownership rights to any number of property, the market value of his apartment useful things. building is likely to fall. Or imagine a world in which I could not waive Along these same lines, when politicians place any of my political rights. In such a world I would limits on my ability to enter into contracts with presumably become unemployable, for as soon as others, they are depriving me of some of my my boss tried to tell me what to do, wouldn't he meta-rights since they are interfering with my be infringing upon my right to self-determination, ability to contract away my basic rights. And a basic right which, in the world described, I when politicians impose restrictions on interna­ couldn't waive? tional trade, they are depriving me of some of my Even my right to life is more valuable if I have meta-rights since they are making it harder for the meta-right to waive this basic right. Those me to exchange property with people in other who would deprive me of my meta-right to waive countries. my right to life have done me a great disservice: Anyone who values rights, then, will not want They have transformed my right to live into a his list of most valued rights to end where it tradi­ duty to remain alive. tionally does, viz., with basic economic and politi­ Few people, one assumes, would be willing to cal rights. For these rights, although valuable, de­ live in a world in which people possessed the full rive much of their value from the meta-rights we complement of basic rights, butlacked the above­ have with respect to them. Furthermore, anyone described meta-rights. It sounds a bit paradoxi­ who values his rights will defend his meta-rights cal, but one of the things that contributes most to at least as vigorously as he defends his basic the value of our basic rights is our ability to waive rights; for he will realize that a basic right which and transfer them. In short, basic rights are worth cannot be relinquished is in many cases a right having largely because we can relinquish them. not worth having. D 487

port from Thurston County Health Department that you did some plowing last summer." "I'm Here to "Yes," said I. "That's why more than 100 geese fly in frequently to nibble at the oats I planted. They are undisturbed by 13 deer who also like Help You" the feast." "Well," she persisted, "we're concerned about by Stu Pritchard pollution in Oyster Bay." "I am, too, but 1 don't think this valley that's been a farm for more than 90 years contributes much pollution. Better to concentrate on human sources of pollution and contagion." Wo time-honored professions, among Public-spirited, energetic regulators are sin­ others over the millennia, have been cerely motivated and increasingly "enabled" by T• revered in history and extolled in poetry. politicians in legislative assembly. Although in "Medicine," exclaimed Voltaire, "that most es­ both state and Federal constitutions, government timable of professions." Longfellow wrote of is prohibited from using prior restraint to restrict farmers' lives "darkened by shadows of earth, but freedom of speech and press, that same doctrine reflecting an image of heaven." appears to be the method used by powerful bu­ These two professions are among those now reaucrats to impose their views upon the citizen­ being throttled by bureaucratic government. "It's ry. insanity," said a radiologist to me recently about "Your actions," they seem to say, "might, even trying to cope. "They're taking away my liveli­ by a long stretch of the imagination, cause harm hood," lamented a farmer. to others. There is no proof you have, but it is our But how to explain? How can others in differ­ supposition that you might cause harm. There­ ent professions, who see only their own oxen be­ fore, you're guilty, and we won't allow you to ing gored, understand my problems as a physi­ prove yourself innocent of any wrongdoing." cian and a farmer? Prior restraint-a doctrinaire signpost on "The On one day alone, eight missives arrived by Road to Serfdom," to quote the title of the fa­ mail from Medicare. Page after computer-printed mous book by Nobel Laureate Friedrich Hay­ page added and deleted five-digit codes for myri­ ek-can regulate to the point of non-production, ad medical procedures and diagnoses. Cited were destroy incentive and entrepreneurship, and en­ "violative procedures/, each be"aring a possible feeble the industrious. $2,000 fine. A clerk demanded copies of all my My local newspaper reports that every 100 office notes and records for the past two years public-sector jobs create 75 private-sector jobs. from my personal file on·a long-standing heart But wouldn't it be more realistic to say that 75 of patient. Ofcourse, I refused. the latter create 100 of the former? After all, Meanwhile, back at the farm, a young lady which sector supports the other? drove past the barn and stopped at the farm­ Which is the sector that is mired down in li­ house. The legend, "Department of Agriculture," cense and permit fees, taxes, inquisitorial reports, on the side of her pickup caught my eye. and unannounced inspections on private proper­ "I'm here to help you," she announced, and ty? And if employees in the public sector wail then, "I see you have two cows in your pasture." that they, too, pay taxes, ask the source of the ("Heifers," 1 corrected.) "And we've had a re- money used to pay those taxes. Yes, many who have loved their doctoring, Stu Pritchard, M.D., ofTumwater, Washington, divides their farming, and their other peaceful pursuits his time between practicing medicine and farming. An earlier version of this article appeared in The might pause to reflect: "Don't let bureaucracy Olympian, published in Olympia, Washington. dim freedom's light." 0 488

Argentina at the Crossroads by Richard A. Cooper

tatism has promised much to the Argen­ dent and politically connected parts of a statist tine people. But over the past 50 years, it political machine. Although Peronism directs its Shas brought violence, corruption, unem­ appeal to the masses with heavy doses of envy, it ployment, soaring inflation, and bitter disap­ does not ignore businessmen, whom it supports pointment. There is, however, a vibrant and with protectionist trade policies and state subsi­ growing Argentine movement that offers another dies. Thus, there were and are Peronist business­ choice-a classical liberal/libertarian movement men. Unlike Mexico, however, Peronism relies dedicated to free markets and individual liberty. on the charismatic personality of the leader to For approximately 90 years, from 1853 to 1943, whip up enthusiasm against foreign and domestic the classical liberal system of constitutional gov­ enemies, especially Britain. ernment, private property, and free trade held After the disgrace of the military junta in their sway in Argentina. The country prospered. But failed 1982 invasion of the Falkland Islands, Ar­ not all Argentines were satisfied. Many of the ur­ gentina returned to democracy. The Radicals sur­ ban masses felt cheated by the system. As time prisingly defeated the Peronists and elected Raul went by, their feelings of resentment and nation­ Alfonsin, barred from re-election by the Consti­ alism grew and merged. Different groups and tution. The Radicals talked about privatization, leaders came and went, speaking for the disaf­ but did little about it. The country has continued fected Argentines. Then, in 1943, while Commu­ its slide, and the military is restive because of low nism and Fascism menaced Europe, came the pay and the trials of officers for their role in the man whose legacy still haunts Argentina-Juan "dirty war" of 1976-1983 in which thousands of Per6n. leftists disappeared. Peronism as a doctrine is very vague, although Argentina's economic malaise is plain for all to Per6n wrote many books and speeches. In see. While the country's standard of living was essence, it is statist, protectionist, nationalist, and comparable to Canada before World War II, Ar­ corporatist. Per6n himself admired Franco and gentina is now slipping into the ranks of the Mussolini. In 1949, Per6n promulgated a consti­ Third World. Inflation is so high that advertise­ tution modeled after Fascist Italy, which en­ ments for houses and cars quote prices in Ameri­ hanced presidential powers, increased central can dollars. control, and contained corporatist features, espe­ What went wrong? Per6n and his successors, cially regarding unions. military or civilian, Peronist or Radical, built up a The Peronist system resembles that of PRI­ massive state apparatus and a private industrial dominated Mexico, seeking to integrate business sector sheltered by a rigidly protectionist system. and labor unions into a network of state-depen- There are 353 state enterprises, including those owned by_ the military. One such enterprise is Mr. Cooper is an export/import manager in New York. LADE, offering airline service to civilians, but He visited Argentina in November 1988. owned by the armed forces. 489

When Argentina was rich, it built railroads, strongly opposed nationalism and Communism. I subways, and phone systems. Since statism took had the pleasure of seeing a talk by Borges taped control, these have deteriorated. The Argentines at ESEADE (a post-graduate business school have public services that don't serve. Three mil­ emphasizing Austrian economic principles). lion dollars a day are lost on a rail system which Borges was asked by an unidentified American should be visited by antique railroad buffs. YPF, why he did not write more on politics and indi­ the state oil monopoly, manages to lose money. vidualism. Borges replied, "I am a mere story­ Worst of all is the phone system, ENTEL, which teller, not a politician." has more employees than Nippon Telephone and Telegraph in a country with less than one-third UCeDe the people. Twenty year waits for phones are nor­ mal. Journalist Bernardo Neustadt, a convert to The Argentine individualists take political ac­ the free market philosophy, proposed privatizing tion principally through the Union del Centro the phone system. Two hundred ENTEL union­ Democnitico (Union of the Democratic Center, ists came to the radio station to physically attack usually referred to as UCeDe), which together him. with other "liberal" parties, regionalist parties, Pervasive state control and corruption go hand and some conservatives form the Alianza de in hand. In frontier San Juan province, the for­ Centro (Alliance of the Center). The UCeDe mer governor Leopoldo Bravo purged some in­ was founded by Alvaro Alsogaray, who was the dependent-minded legislators from his Bloquista Alianza's candidate for president in 1989. The party. The newspaper El Diario de Hoy support­ UCeDe's strength is growing, and although AI­ ed the legislators and their corruption charges. sogaray received only 6 percent of the popular The newspaper's owners soon found themselves vote in the May 1989 elections, the party did in­ being pressured by the provincial tax bureau and crease its seats in the Congress. other state agencies. The paper, however, still The UCeDe actively seeks new supporters. survives. Literature tables selling the magazine Tiempo de Who speaks out against the statism that has ru­ Acci6n Liberal ("Time of Liberal Action") and ined Argentina? The liberales (liberals) repre­ campaign paraphernalia attract passers-by in sent the individualist, free market alternative to Calle Florida and elsewhere. The UCeDe and its the dominant statist ideologies. Argentina pos­ partners organize "Centros Civicos" (civic cen­ sesses an individualist movement that is impres­ ters) to promote individualism and democracy. A sive in its activism and dedication. Like their cook named Carlos Villalba formed the Centro American counterparts in the libertarian move­ Civico "Obrero Liberal" (Liberal Worker) in a ment, the Argentines have pursued three paths: slum neighborhood and signed up 630 families political, academic, and popular education. out of 1200 for the.UCeDe. Villalba is one of the Argentine individualists point to many nation­ many converts to classical liberalism won by al heroes as their forerunners, just as Americans Adelina de Viola, the successful UCeDe candi­ do to the Revolutionary War heroes. Manuel date for Congresswoman from the federal district Belgrano (1770-1820) and Mariano Moreno of Buenos Aires. (1778-1811) fought to gain independence from The Argentines are fond of clubs and social Spain. Juan Bautista Alberdi (1810-1884) and gatherings. Tiempo de Acci6n Liberal runs a col­ Domingo R Sarmiento (1811- 1888) were admir­ umn by Susana Herrera reporting on local ers of the British classical liberals and the United UCeDe activities, such as the pasta parties ("No­ States. They helped to overthrow the Rosas dic­ quis Liberales"-"Noquis" means "gnocchi") of tatorship in 1852. Alberdi drafted the 1853 Con­ the Movimiento de Acci6n Liberal (Movement stitution, modeled after that of the United States. of Liberal Action). These pasta parties feature More recently, there was the writer Jorge Luis political leaders, dancing, food, drink, and even a Borges (1899-1986). raffle. Two popular education groups of individu­ Borges declared himself an individualist and alists, the Escuela de Educaci6n Econ6mica y "an anarchist in the Spencerian sense." Borges Filosoffa de la Libertad (School of Economic Ed­ vigorously denounced Per6n as a Fascist, and ucation and Philosophy of Liberty) and the Cir- 490 THE FREEMAN • DECEMBER 1989 culo de la Libertad (Circle of Liberty, a sort ofin­ expressed high hopes for the future as the com­ dividualist social club), both meet at the head­ peting brands of statism have all been discredit­ quarters of the Movimiento de Acci6n Liberal in ed. He is cheered that young people are turning Buenos Aires. to free market individualism. Some of this shift The Argentine classicalliberals/libertarians at­ can be attributed to Dr. Benegas Lynch and the tract noticeably more women to their ranks of ac­ Centro de Estudios Sobre la Libertad program of tivists than seems common in the United States. scholarships for study in the United States for Women participate actively in the Centros Cfvi­ many of the key professors of law and social sci­ cos and the youth arm of the UCeDe, Juventud ences who are contributing to Argentine individ­ Ucedeista (Young UCeDe's). The UCeDe's can­ ualism today. Their efforts show in student elec­ didate for Senator from Buenos Aires was Maria tions at the University of Buenos Aires (UBA) Julia Alsogaray, a Congresswoman and daughter where the liberales won in the faculty of law and of Alvaro Alsogaray. And there is the highly pop­ three others. ular Congresswoman Adelina de Viola. The Centro de Estudios Sobre la Libertad pre­ The Argentine liberales rally to defend the sents seminars and lectures on free markets and 1853 Constitution against the changes proposed individual liberty throughout Argentina. This by the Peronists and Radicals, who seek to ex­ program is directed by Dr. Eduardo Marty, pro­ pand the government's (and their own) power. fessor of law and economics at UBA, with help Although imperfect, the 1853 charter (which was from UBA law and accounting student, Alejan­ brought back into force in 1957) is a brake on dra Rojo. statism, according to Enrique Cerda Omiste of the Fundaci6n Carlos Pellegrini (Carlos Pellegri­ ESEADE: An Emphasis on ni Foundation, named after the President who re­ Austrian Economics stored Argentina to solvency in the 1890s). Fun­ daci6n Carlos Pellegrini is an educational group The Escuela Superior de Economia y Admin­ concerned with foreign affairs, values, and educa­ istraci6n de Empresas (ESEADE, meaning tion, trying to combat the debasement ofcivic life Higher·School of Economics and Business Ad­ inherent in statism. ministration) is a graduate business school em­ The Centro de Estudios Sobre la Libertad phasizing the Austrian school of economics. It (Center for Studies on Liberty) works diligently publishes the journal Libertas, conducts a pro­ to propagate the ideals of individual liberty, pri­ gram of lectures taped on video (such as the one vate property, and free markets in Argentina. with Borges), and runs short seminars on eco­ Founded by Alberto Benegas Lynch Sr. and some nomics and liberty for the general public. The friends in 1957 under the name "Centro de Di­ president is Dr. Alberto Benegas Lynch Jr., one fusi6n de la Economfa Libre," the Centro is per­ of the first students that the Centro de Estudios haps the most important single classical Sobre la Libertad sent to the United States. liberalllibertarian organization in Argentina. The Instituto de la Economfa Social de Merca­ Still headed by Dr. Benegas Lynch, the Centro do (Institute of the Social Market Economy) was de Estudios Sobre la Libertad is modeled after founded by UCeDe leader Alvaro Alsogaray. Dr. the Foundation for Economic Education. Like Martin Krause, their Director of Programs, ex­ FEE, the Centro publishes pamphlets, books, plained to me that they focus on human rights and a magazine like The Freeman named Ideas (including human rights violations in Cuba), pri­ Sobre La Libertad (Ideas on Liberty). Dr. Bene­ vatization, and free trade. They publish a maga­ gas Lynch brought Ludwig von Mises, Friedrich zine and run essay contests for students with Hayek, Leonard Read, and other free market lu­ prizes of study in the United States. Their most minaries to lecture in Argentina. The Mises lec­ recent winner, Dr. Alfredo A. A. Solari, professor tures are now available in print, in both English of law at the University of Buenos Aires, studied and Spanish. (English title: Economic Policy: at FEE in June and July of1989. Thoughts for Today and Tomorrow) The Instituto de Estudios Contemponineos Alberto Benegas Lynch graciously received me (Institute of Contemporary Studies) was founded in his home in Buenos Aires. Dr. Benegas Lynch by Marcos Victorica as a think tank like the Cato ARGENTINA AT THE CROSSROADS 491

a:: If § o ~ o a:

Centro de Estudios Sobre III Libertad: From I-r: Rogelio Marty, Alejandra Rojo, Senora Marty, and Eduardo Marty.

Institute in Washington, D.C., with a public poli­ iar stereotypes (the Japanese laundryman and cy focus. It studies the informal economy, deregu­ the Galician Spanish bar owner). Juan Garcia, lation, and privatization. Most notably, it spon­ the story's taxi-driver, is Everyman, struggling to sored the book, EI Estado y Yo por Juan Garcia get by and lead his family to a better life. With (taxista) (The State and Me by Juan Garcia, facts and figures, Garcia shows the elephantine taxi-driver), written by Faustino A. Fernandez size of the state and its mammoth inefficiency. Sasso. One memorable remark was "The country is full I attended the presentation of the book at EI of functionaries, but nothing functions." Ateneo bookstore in Buenos Aires. About 160 The Argentine classical liberal/libertarian people came to hear about a book they had never movement is gaining ground. Over 50 percent of seen. People stood about 20 deep in the rear to the public favor some privatization. Monica Mat­ listen to the four panelists (Sasso, Adelina de Vi­ urano of the Instituto de Estudios Contemponi­ ola, Marcos Victorica, and journalist Bernardo neos stresses how Argentines of her genera­ Neustadt) discuss the book. tion-in their 20s and 30s-have been EI Estado y Yo presents a forceful and funny disillusioned with statism, which simply doesn't case for limiting the state in the interests of the work. The Argentine movement for liberty, like people. Sasso writes in a popular style with famil- the nation itself, stands at a crossroads. D 492

A REVIEWER1S NOTEBOOK The Survival ofthe Adversary Culture by John Chamberlain

aul Hollander was Hungarian-born, but er's magazine says "we believe that something educated in sociology in a "somewhat ca­ unprecedented in Central America is happening P sual and unpremeditated manner" in Eng­ in Nicaragua." Hollander "wonders if it would land, in Illinois, and at Princeton. He is less inter- have made any difference had they known that ested, he says in The Survival of the Adversary many similarly hopeful travellers also believed Culture (New Brunswick, N.J.: Transaction that something unprecedented was happening in Books, 299 pp., $27.95), in exploring the injus­ the Soviet Union, China, Cuba, Albania, Bulgar­ tices and defects of American society than he is ia, Mozambique or many other countries of a in studying the injustices and deformities of other similar political inspiration." political systems, namely, those of the Soviet vari­ The behavior of intellectuals on political pil­ ety. He still manages to retain over the years "a grimage to Managua or Havana taxes one's naive astonishment and occasional indignation credulity. The Reverend Jesse Jackson visited over the fact that Western intellectuals, including what he was told was a "model prison." The in­ perhaps most American social scientists, show so mates played baseball. But "as soon as Jackson little appreciation of or support for the institu­ had left the balls and bats were taken away and tions which sustain them." the prisoners returned to their cells." He accepts it as a given fact that most people In Nicaragua the Sandinistas' Tomas Borg has need a "Mecca," and if they can't find it in a reli­ two different offices. One is for meetings with re­ gion they will find it on this earth. He quotes ligious delegations and delegations from demo­ British novelist Doris Lessing with approval. Says cratic political parties. Before Borg meets with a Lessing, "it's fairly common among socialists religious delegation he memorizes Bible passages [that] they are in fact God-seekers, looking for for quotation. But in his "real office" there are no the kingdom of God on earth, trying to abolish crucifixes or Bibles-only Marxist literature and the present in favor of some better future. If you "posters of Marx, Engels, and Lenin." don't believe in heaven you believe in socialism." Borg, of course, is the Marxist who said the Hollander's curiosity led him to make an ex­ Central American revolution recognizes no tended study of "political pilgrimage" among in­ boundaries. tellectuals. Currently they are turning to The palpable effort in Managua is to repro­ Nicaragua in default of anything better. They duce in Central America the atmosphere of the went al~ng with Soviet Russia until Stalin made it American college campuses of the 1960s. A San­ impossible for them to deny their eyes and ears. dinista network in the U.S. funnels tour groups to Then they turned to China. But Mao, killing his Nicaragua. Hollywood types are welcomed. millions in the name of culture, was no better George Kennan's changing views are thor­ than Stalin. oughly analyzed by Hollander. Kennan's famous That left Cuba, with Fidel Castro, and 1947 article that set forth the policy of contain­ Nicaragua, with Ortega. So an issue of Sojourn- ment is no longer considered relevant. In 1981 493

Kennan had come to believe that the negative the owner of all things, and from that flows the image of the Soviet Union is "a monster of our responsibility to act appropriately in economic own creation." The Soviet leaders, says the matters. He argues that we must not act wasteful­ "new" Kennan, are "ordinary men who share the ly and that the creation of wealth is very much a horror of major war." part of good stewardship. However, he also rec­ Hollander says that "perhaps we can share" ognizes the dangers of wealth, clearly laying out Mr. Kennan's concern for the earth's limited re­ where the allegiance of the Christian must lie. sources, "but it is hard to see why tackling that Beisner also does a thorough job of developing problem and keeping the Soviet Union from ex­ the concepts of work and rest as they relate to panding its influence should be mutually exclu­ economic activity. sive." 0 It is the second part of the book that many readers will find the most interesting. In it the au­ thor puts forth his standard of economic justice, PROSPERITY AND POVERTY: THE COM­ and he departs considerably from most Christian PASSIONATE USE OF RESOURCES IN A ethicists on this issue. He argues that biblical jus­ WORLD OF SCARCITY tice does not demand equality, and, in fact, re­ by E. Calvin Beisner quires very unequal results in many cases. Crossway Books, 9825 W. Roosevelt Road, Westchester, Illinois A major part of Beisner's analysis deals with 60153 -1988 - 304 pages - $9.95 paperback. the controversial Jubilee Year provision of Leviti­ cus 25, and he concludes that the passage does Reviewed by Peter J. Hill not require a radical equalizing of property or in­ comes. He does recognize that the text implies a espite protestations to the contrary by significant constraint on the ability of people to some economists, issues involving eco­ alienate their productive capital, and it is in this D nomic policy are extremely value laden. sense that the passage has the most interesting Questions of economic justice, appropriate levels implications for modern society. Although Beis­ of redistribution, and the moral foundations of ner acknowledges the importance of translating rights continually arise. Hence it is not surprising biblical concepts to the modern setting, a fuller that people who have a well-developed moral exposition of just what the injunction against the and religious framework attempt to integrate that permanent sale of land would prohibit in today's value structure with their views on economic pol­ society would have been appreciated. icy. Calvin Beisner fits very well in this genre as Parts III and IV of the book give a fairly ade­ he has written a book that uses a biblical perspec­ quate explanation of how an economy functions tive to look at the world of economics. with appropriate attention to issues of property Beisner's analysis is thoroughly Christian in the rights, prices, and markets. Considerable atten­ sense that he sees the Bible as the ultimate stan­ tion is given to the questions of money and infla­ dard of truth by which all things must be mea­ tion, with the careful development of the argu­ sured, but he is also conversant with much of the ment that a decrease in the purchasing power of recent scholarship in economics. Thus his work money represents both bad stewardship and represents a careful attempt to integrate the two theft. On the basis of the biblical injunctions pro­ perspectives. He recognizes the need for compas­ tecting property rights, Beisner concludes that sionate people to address the problems of pover­ the government should have no positive role in ty, but he is also aware that one must couple bib­ the provision of money; in other words free mar­ lical concern with a careful understanding of how ket money represents the only truly moral form the world works. Beisner avoids the trap that of currency. many Christians fall into of thinking that good in­ The author reaches an equally radical conclu­ tentions are all that matters, and that appropriate sion with regard to coercive redistribution of Christian concern will automatically lead to ef­ wealth, namely that, by biblical standards, none fective policy measures. should occur. A strong emphasis on the sanctity Beisner begins with the concept of steward­ of property rights is at the basis of this conclu­ ship, arguing that the believer must see God as sion. Fairly standard arguments against subsidies, 494 THE FREEMAN- DECEMBER 1989 price controls, and import restrictions are also made. ECONOMICS: BETWEEN PREDICTIVE The last section of the book presents Beisner's SCIENCE AND MORAL PHILOSOPHY views on what should be done to alleviate pover­ by James M. Buchanan ty. He recognizes a clear biblical imperative to Compiled with a preface by Robert D. Tollison and Viktor J. Van~ care for the deserving poor, but argues that the berg. Texas A&M University Press, College Station, Texas 77843~ 4354 -1987 - 413 pages - $48.50 cloth. government should have no role in doing that other than preventing fraud and the violation of property rights. Therefore he proposes alterna­ Reviewed by Matthew B. Kibbe tive anti-poverty measures involving church and personal voluntary action. Beisner calculates the good economist will make one impor­ number of poor people in the United States ac­ tant theoretical contribution to his field cording to the biblical concept of poverty, which A in a lifetime of work. There are few in­ he argues is much more restrictive than the offi­ dividuals of this intellectual caliber. Far rarer is cial government definition. Using rough esti­ the economist who has written extensively and mates for per capita income of church members, productively on a broad range of theoretical and he concludes that about one percent of their in­ practical issues, often crossing official boundaries come, or one-tenth of the expected tithe, would into other academic disciplines. James Buchanan be sufficient to eliminate poverty. Of course any is such an economist. such calculations are subject to numerous In his distinguished career, Professor caveats, but the point is well taken; appropriate Buchanan has written extensively on the eco­ Christian concern could voluntarily solve most of nomics of public finance, welfare economics, the America's poverty problem. economics of cost and individual choice, econom­ Of course Christians do not devote anywhere ic methodology, and political philosophy. In 1986, near this amount to poverty reduction, a short­ he was awarded the Nobel Prize in Economics coming of which Beisner is appropriately critical. for his pioneering work in the field of "public He also recognizes that his call for reduction of choice," which revolutionized the way main­ government involvement in income redistribu­ stream economists look at and evaluate the polit­ tion must be accompanied by a dramatic alter­ ical decision-making process. ation in the attitude of many Christians toward For the serious student interested in learning voluntary measures. more about Buchanan's work, this book is a great Beisner's book is well worth reading. He takes place to start. It is a collection of previously pub­ his standard of justice and truth, the Bible, seri­ lished essays and journal articles that brings to­ ously and doesn't shirk from attempting to apply gether a broad, well-rounded sampling of it to some of society's most vexing economic Buchanan's most important contributions to eco­ problems. He also is careful not to argue that the nomics and political philosophy. prevailing ethos of our capitalist society is bibli­ A student and protege of Frank Knight at the cal, while at the same time avoiding a utopian University of Chicago, Buchanan reflects an fascinatioJ;l with alter~ative institutional arrange­ eclectic mix of ideas borrowed from Ludwig von ments. One may wonder if the strength of his Mises, F. A. Hayek, G. L. S. Shackle, and others. conclusions is fully warranted on some issues. For Austrian economists in particular will find them­ instance, is only free market money truly biblical, selves sympathetic with Buchanan's primary goal and·can no coercive redistribution of income be of reviving and extending the study of political considered legitimate from a Christian perspec­ economy in the tradition of the 18th-century tive? Nevertheless, Beisner develops well-rea­ Scottish moral philosophers. soned positions grounded in a careful reading of But Buchanan is still a neoclassical economist Scripture to support these positions, and the who often defends the orthodox tendencies to reader who wishes to disagree must be ready to test, measur.e, and· predict empirically. For exam­ confront his arguments head-on. D ple, he maintains that there is a strict dichotomy between the realm of "reactive" choice, where he Dr. Hill is George F. Bennett Professor of Economics, Wheaton College, Wheaton, Illinois. views man's actions as analogous to the reactions OTHER BOOKS 495 of rats, and the realm of true creative choice in the first Supreme Court cases, Justice Samuel the Austrian sense. He argues: ". . .Misesian Chase stated that a law exceeds its legislative au­ praxeology, as I understand it, would seem to in­ thority if it takes property from A and gives it to clude both examples within the realm of human B. Today, such laws are commonplace, and very action that theory seeks to analyze and to ex­ few people question their validity or even their plain. I submit, however, that they are categori­ propriety. How things have changed in 200 years. cally distinct. [Reactive] action need not reflect Michael Kammen writes about the rights of conscious, active, or creative choice; it can be in­ property and the property in rights. One of the terpreted as an animal-like response to a change primary functions of government is to protect in the external environment. It is. .. behavior property. The new Constitution aimed at protect­ that might have been scientifically predicted." ing these rights, as did the various state constitu­ Always challenging, often frustrating, it is this tions. Liberty and property were thought to exist essential tension, the rift "between predictive sci­ side by side. People couldn't have one without ence and moral philosophy," that drives the other. The best way to safeguard liberty was Buchanan's system of thought. All the same, the to safeguard property. While some patriots wor­ reader will enjoy being introduced to one of the ried that a free society would produce inequality, few truly original thinkers in economics today. D wealth, luxury, extravagance, vice, and folly, curb­ ing property rights to prevent these possible evils Matthew Kibbe is a doctoral student in economics at wasn't seriously considered by most theorists of George Mason University and a fellow at the Center for the Study ofMarket Processes. the day. Madison pointed out that property rights developed from the diversity in the faculties of men and that attempting to distribute property LIBERTY, PROPERTY, AND THE evenly is a wicked idea. Jefferson wanted to give FOUNDATIONS OF THE AMERICAN 50 acres of land to every adult male who lacked CONSTITUTION property, so that a broad segment of the popula~ Edited by Ellen Frankel Paul and Howard Dick­ tion would have a stake in the society. With the man spread of property goes the spread of liberty. State University of New York Press, State University Plaza, Andrew J. Reck's chapter discusses moral phi­ Albany, NY 12246 - 1989 -181 pages - $39.50 cloth, $12.95 paper losophy and the framing of the Constitution. Two influential works of political philosophy appeared Reviewed by Robert W McGee between 1776 and 1789, John Adams' Defence of the Constitutions of Government of the Unit­ his book consists of eight essays, written ed States ofAmerica and the Federalist Papers . by eight different scholars, and edited by by Hamilton, Madison, and Jay. By far the more

T.. Ellen Frankel Paul and Howard Dickman influential of the two was the Federalist Papers, of the Social Philosophy and Policy Center in which argued for ratification of the Constitution Bowling Green, Ohio. The unifying theme is the in a series of essays that first appeared in newspa­ interrelationship between liberty and property, pers. Reck outlines the origins of these two docu­ with special emphasis on how liberty and proper­ ments, portions of which can be traced back to ty were viewed by America's Founding Fathers. the ancient Greeks and Romans. Other sections In the preface, Gordon S. Wood discusses the of this chapter focus on the convention debates, intellectual atmosphere that existed in the Forrest McDonald's comprehensive study of the Colonies at the time of the Revolution. Property intellectual origins of the Constitution, the rela­ was seen not so much as a way to aggrandize tionship between liberty and property, the com­ profits, but as a source of personal independence. promise by which states retained equal represen­ Property consisted not only of tangible goods but tation in the Senate and representation .by also of skills and anything else that made a per­ population in the House, and Hamilton's speech son independent. At least some of the Constitu­ at the convention. At the time of the convention, tion's framers were very much aware of the dan­ moral philosophy focused on the relationship of ger posed by a legislative majority benton special interests to the general good, a relation­ usurping a minority's property rights. In one of ship that the Public Choice School and others still 496 THE FREEMAN • DECEMBER 1989 are studying today. The framers' moral philoso­ United States of America, so he built in checks phy synthesizes the extremes of virtue and inter­ and balances to protect minorities and to prevent est. any branch of government from being able to Edward J. Erler's chapter compares the pre­ seize too much power. Virtue was needed to sus­ sent view of property rights, as expounded by tain republican government, and Madison be­ Justice William Brennan, with the view of the lieved that virtue was best protected in an agrari­ Founding Fathers. According to Brennan, the an society, where individuals could remain Fourteenth Amendment is perhaps as important independent and need not rely on others for sus­ as the original Constitution itself because it up­ tenance. grades the importance of protecting life and lib­ Bernard H. Siegan writes about the limitations erty, and places property rights in a secondary po­ placed on Federal and state economic powers by sition. The Founding Fathers, on the other hand, the Co~stitution. The Constitution protects prop­ saw no inherent conflict between the right to erty rights and a capitalist economic system. Hav­ property and the rights to life and liberty. Secur­ ing experienced the abuse of economic rights by ing the right to property was the means by which state legislatures, the framers provided more spe­ the rights to life and liberty could be achieved. cific protection against the Federal abuse of eco­ John Locke and the natural rights theorists nomic rights. States were not to interfere with played a very influential·role in shaping the contracts, although that clause has since withered framers' view of property rights. Many docu­ away almost to the point of nonexistence. A com­ ments of the Colonial era, such as the various mon market between the states prevents jealous state bills of rights, are Lockean in structure and special interests within the states from using the content. power of government to protect their interests at Jean Yarbrough focuses on Thomas Jefferson's the expense ofeveryone else. view of property rights. One long-running dis­ William Letwin expands on this theme when pute has been Jefferson's failure specifically to in­ he addresses the Constitution's economic poli­ clude property among the inalienable rights enu­ cies. While the term "capitalism" wasn't used in merated in the Declaration of Independence. 1789, the concept of capitalism-that the means Rather than life, liberty, and property (as per of production should be privately owned and Locke), Jefferson used life, liberty, and the pur­ controlled-was very much a part of the suit of happiness. Yarbrough points out that founders' philosophy. The due process, takings, property is not inalienable, since it can be alienat­ commerce, and contract clauses all provide evi­ ed-traded or given away. Inalienable rights are a dence that the founders intended individuals to special category of natural rights that cannot be own and control the means of production. Con­ transferred to another. Property can be trans­ temporary writings, such as the Federalist Papers, ferred, so it is not inalienable, although it is a nat­ other writings of Madison and Hamilton, and the ural right. Other sections discuss the origin, writings of others during the period, all provide meaning, and status of property and the place of substantial evidence that the founders intended property in a republican government. The final to protect a free enterprise system. However, it section presents an overview of Jefferson's agrari­ cannot be said that the framers intended to found an republicanism. a laissez faire system. Indeed, as a group, they Charles R Hobson's chapter discusses republi­ had no concept of such an idea. Their experience canism, commerce, and private rights from a had been of mercantilism, and while the framers Madisonian perspective. Madison was committed abhorred certain aspects of mercantilism, they to republicanism, the belief that government is did not come out in favor of a laissez faire sys­ derived from the consent of the governed. He tem. But the Constitution did not say anything to was a believer in majority rule but worried that prevent such a system either. the majority would violate minority rights if not In the concluding chapter, Michael W. Mc­ held in check by the chains of the Constitution. Connell provides a case study in the relationship Throughout history, republics inevitably had de­ between individual liberties and Constitutional clined into despotisms. Madison was determined structure, focusing on contract and property that this fate would not befall the newly created rights. He goes into some of the history behind OTHER BOOKS 497 contract, including a discussion of the Northwest All in all, this book provides an adequate, Ordinance, the Treaty of Paris, the contract though brief, introduction to the prevailing view clause and the just compensation clause. He also of liberty and property at the time of the found­ discusses some possible explanations for the dif­ ing of the American republic. D ferent treatments of contract rights and property rights, focusing primarily on the Hamiltonian and Professor McGee teaches accounting at Seton Hall Univer­ Madisonian views. sity.

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