November 1990 Vol 4, No 2

''rJ1te, fiistory of Li6erty is tlie fiistory of{imitations ofgovernment power. 11 - Woodrow Wi[son of one his experiments, possibly the same one Hospers describes so glowing- ly, indicates that he altered his target [ L etters ] numbers after he got a look at the guess- ~======~ es of his "psychic" subjects, to produce as many matches as he desired. Specifi- Job's Jobs commercial speech, nor are so-called cally, he changed the numeral 1, which It seems to me, a Christian, that liber­ "fighting words." These last are words he wrote with a short stroke, into a 4 or tarians and classical liberals could take a which according to the court are "likely 5, as needed. different view ofJob than the angry cyni­ to provoke the average person to retalia­ Taras Wolansky cism of David Starkey's poem ("The Sub­ tion." This might include racial, ethnic or Jersey City, N.J. mission ofJob," September 1990). Job religious slurs and perhaps just calling Final Determinations ended up doubling his wealth (Job 42: someone an S.O.B. Ifin fact Gregory Hospers was very sloppy in his dis­ 12, 1: 2-3), surely a respectable reward Johnson's flag burning was "speech," it cussion of determinism; if determinism for his suffering. Job was a political lead­ was certainly "fighting words"-ifthe is true, then doing something because er (1: 3, 29: 7-25), but he probably spent outrage of vast numbers of Americans is one wants to (i.e. one wills it) is impossi­ as much time running his ranch as run­ any indication. Indeed, the whole pur­ ble because antecedent causes have pre­ ning his country (judging by his ranch­ pose of the burning was to outrage, to determined what one "wants" (which in­ ing success); ruling wasn't a full-time job provoke, otherwise why bother? As cludes not only the choices available but even for 1:3's "greatest man ... of the fighting words, this "speech" is not pro­ also what one will choose). The falseness East" (New International Version). No tected. Simple, huh? of determinism can be revealed when welfare program tried to help him in his Or, try this. The burning of the sym­ one realizes that one can truly change distress, and no regulations kept him bol ofThe United States of America is one's mind, in spite of powerful existen­ from regaining prosperity (with Yah­ obviously the symbolic means of calling tial factors; it is easy to ignore that "val­ weh's blessing) after his family and for the violent overthrow of the govern­ ues" can only have meaning to beings friends got him venture capital (42:11). ment thereof. This adheres to our ene­ who can freely choose them. (I find it What libertarian wouldn't prefer Uz to mies (who also burn American flags), hard tobelieve that it took Ayn Rand so the U.S.? giving them aid and comfort. In short, long to change her mind about Mr. Hos­ The Job ofStarkey's poem reminds this is an act of treason as recognized by pers and his "Green Party" intuitions.) me ofVan Til's little girl who must sit on Article III, section 3 of the Constitution Alexander N. Knight the Father's lap in order to slap His face. and is clearly not constitutionally pro­ Rochester, N.Y. Complaints about justice presuppose the tected. Rand Derailed Freedom's Train On the bright side, it is comforting to universal and just God of the Bible; a John Hospers didn't mention it in his know that ifI were to "moon" the Hon­ lesser deity or none at all reduces com­ last article about his relationship with plaints to personal pique, and no binding orable Justices as a demonstration of my Ayn Rand, butyears after their last meet­ standard makes one person's pique bind­ political displeasure with their decisions, ing when he was running for president ing on another. Tactical prudence might they'd understand and even support my in 1972 as the candidate of the newly elicit compliance, but what god (and I right to do so. formed Libertarian Party, Rand was too am on my Father's lap) would be Warren Michelsen asked at a Ford Hall Forum what she pleased with submission asStarkey'sJob Page, Ariz. thought about Hospers's candidacy. Her offered? Better submit to the Bible's God Randiana qua Libertariana reply was something to the effect that in His way. Maybe Starkey could write Hospers's article on Rand ("Conver­ Hospers was nothing but a publicity­ eloquent poetry about submission to Sta­ sations with Ayn Rand," July 1990) was seeking crank, and that the best candi­ lin or Social Security, or even (with a dif­ the best piece of Randiana I've read and date to vote for was Richard M. Nixon, ferent tone) to Yahweh. the best thing I've seen in Liberty. Every for to do otherwise would be to risk Andrew Lohr sentence had the ring of truth, and he sending our nation down the track Lookout Mountain, Ga. was careful to stop where his memory aboard George McGovern's hell-bound stopped. train. Oh Say Can't You See? Like many libertarians, I had been Chester Alan Arthur asserts that the Thomas Porter Reseda, Calif. greatly influenced and inspired by Supreme Court"can't figure a way to Rand's books and articles, but 1also had make flag burning exempt from the very Dotting the I's, Crossing the T's, grown increasingly uneasy with Rand's plain meaning of the First Amendment" Changing the Numbers public inconsistencies-such as when ("Lip-reading," September 1990). Allow John Hospers' approach to philoso­ she said anti-Vietnam War draft resistors me to offer two. For purposes of this ex­ phy may be superior to Rand's ("Con­ should be shipped off to Russia-so her ercise I'll even stipulate that flag burning versations with Ayn Rand [part 2]," Sep­ flippant rejection of the Libertarian Party is "speech," OK? tember 1990), bUtabout parapsychology was the last straw for me. I also wasn't Not all speech is protected by the she was right and he was wrong. much impressed with her shabby treat­ First Amendment. There is considerable We now know that S. G. Soal, co­ ment of Hospers, whom I had met at the (U.S. Supreme Court) precedence hold­ author of Experiments in Parapsychology, Libertarian Party's founding convention ing that obsce~ty is not protected. Nor is was a fraud. Careful statistical analysis continued on page 4 2 Liberty ed Leb . November 1990 lnSI e 1 erty Volume 4,Number2

2 Letters on Job, John Hospers, Ayn Rand, Ron Paul, and other people. 7 Reflections on things not being what they seem-in particular, Pravda, patriotic thieves, Caucasian Eurasians, friendly ferrets, and (of course) "free market" Republicans. Features 15 Opportunities on Freedom's Frontier Ronald Lipp explores the realities of Eastern Europe and its prospects for liberty. 21 The Search for Home of Truth R. W. Bradford visits the ruins of two failed utopias, one of which died a natural death, and the other of which was murdered. 29 You. Too, Can Be a Junior G-Man David Hudson explains how the War on Drugs has led to the conscription of ordinary people. 33 Smokes. But No Peace Pipe Scott Reid explains how the black market in cigarettes on Canada's Indian reservations has led to a new French and Indian War. 37 Meanwhile. Back at the Farm Leslie Fleming, a farmer from Oklahoma, tells the tale of how the State bought off the farmers. They weren't cheap, but they were easy. 41 How to Profit In an Unfree World Douglas Casey, R. W. Bradford, Richard Stroup and David Friedman tell us how to invest-and how to think about investment advice. 48 Why is Anyone Virtuous? David Friedman gives a positive explanation of why so many people behave morally, even when it would seem to be in their interest to lie, cheat, and steal. 51 Death In the Sands Sheldon Richman kicks sand into the bullies' faces; Stephen Cox, Robert Higgs, and Leland Yeager stir up a little action of their own. 54 Ed Crane An interview with the controversial libertarian activist who brought competence as well as vision to a movement sorely lacking in the former, if not the latter. Reviews 65 Up from Armageddonism Stephen Cox makes the case for optimism by making fun of the pessimists. 68 Sex. Drugs and the Goldberg Variations Richard Kostelanetz explains what went wrong with a biography of Glenn Gould, the late master of the keyboard. 70 The Microcosmic Mind of George Glider Alexander Tabarrok reconsiders George Gilder's obsession with quantum physics, microchips, and God. 73 Rational Man and All the Rest Robert Higgs says eminently reasonable things about irrationality. .75 Classified Ads 77 Notes on Contributors 78 Terra Incognita Volume 4, Number 2 Letters (continued from page 2) in Denver, and whom I considered a cou­ rageous, generous man for offering to carry the party's banner its first time out. Mark Coleman Honolulu, Hawaii Stimulate Up the Hatch There is a world of good reading in Liberty ... and there has been Everything Brian Doherty wrote in ever since Liberty began publishing! Whether you want to catch up on what "Down the hatch" (September 1990) is you missed, stimulate your mind, or complete your collection, now is a wrong. The attempt to reform the Hatch good time to buy. Enjoy! Act has nothing to do with on-duty polit­ ical activity. Rather, it is an attempt to re­ Back Issues of Liberty store the privacy and First Amendment rights of federal employees on their own ~ volume one ~ time only. August 1987 The reality of the existing Hatch Act •"The Films ofAyn Rand," by Stephen Cox is that individual federal employees are •"Witch-Bashing, Book Burning, and Professor Harold Hill's Lessons in Practical Politics," reprimanded, embarrassed and fired for by Butler Shaffer the most minuscule acts committed in Plus reviews and articles by Ben Best, Ross Overbeek, Murray Rothbard, David Sheldon, their own private lives. While I was a Timothy Virkkala, Ida Walters and others; and a short story by Jo McIntyre. (48 pages) October1987 federal employee, I was ordered to go to account to the head of personnel. My ·"The Sociology ofLibertarians," by John C. Green and James L. Guth •"The Rise of the Statism," by Murray N. Rothbard crime? I had signed a petition to get Plus reviews and articles by Mike Holmes, Tibor Machan, William Moulton, Jonathan some candidates for office on the ballot. Saville, and others; and a short story by Franklin Sanders. (48 pages) A friend of mine was fired because he December 1987 helped out a friend making a bank de­ •"Libertarians ina State Run World," by Murray N. Rothbard posit of the proceeds of a fund-raising •"The Most Unforgettable Libertarian I Ever Knew," by Karl Hess dinner. The dinner was to raise funds for Plus essays and reviews by Stephen Cox, .Walter Block, Mike Holmes, Erika Holzer, Timo­ a third party presidential candidate. The thy Henderson, Mark Skousen and others; and a short story by David Galland. (56 pages) hapless employee did not even attend March 1988 the dinner; he merely helped out by de­ ·"Libertarians and Conservatives: Allies or Enemies?" by John Dentinger and Murray Roth­ positing the proceeds in the bank. bard ·"Free Speech and the Future of Medicine," by Sandy Shaw & Durk Pearson Furthermore, federal employees in Plus reviews and articles by R. W. Bradford, William Cate, Ross Overbeek, Stephen Cox, and general are more sympathetic to libertar­ others; and a short story by Raul Santana. (64 pages) ian ideas than is the public at large. That May 1988 is because federal employees know first­ •"The ACLU: Suspicious Principles, Salutary Effects," by William P. Moulton hand the incredible stupidity_and waste­ ·"Nicaragua: A Front Line Report," by Gary Alexander fulness of so many federal programs. It is Plus reviews and articles by Nathaniel Branden, Jeffrey Rogers Hummel, Sheldon Richman, stupid for libertarian publications to dis­ David Ramsay Steele, David Brown, Ethan o. Waters and others. (64 pages) count the support of federal employees. July 1988 Richard Winger ·"Rebel Without a Clue: Lessons from the Mecham Experience," by Matt Kessler San Francisco, Calif. ·"Nicaragua: An End to Intervention," by William Kelsey ·"Confessions ofan Intractable Individualist," by Jerome Tuccille Self-Medication and Diverse Plus reviews and articles by Stephen Cox, Ross Overbeek, Murray Rothbard, Tibor Machan, Values William Moulton and others; and an interview with L. Neil Smith. (80 pages) Ron Paul's "RU486 and Legal Wis­ ~ ~ dom," (September 1990) was rather cou­ volume two rageous, considering Dr Paul's anti­ September 1988 abortion beliefs and the controversy sur­ •"Scrooge McDuck and His Creator," by Phillip Salin •"Liberty and Ecology," by John Hospers rounding RU486. •"My Dinner with Gus Hall," by William P. Moulton He mentions the dangers of a "slip­ • "The Ultimate Justification ofthe Private Property Ethic," by Hans-Hermann Hoppe pery slope" that surrounds the issue of Plus reviews and articles by Douglas Casey, David Friedman, Stephen Cox, Douglas ~asmus­ deciding when an infant, born or un­ sen, Murray Rothbard and others; and a short story by Erika Holzer. (80 pages) born, acquires human rights. Where do November 1988 we draw the line? This is similar to the • "Taking Over the Roads," by John Semmens problem of determining when an adult • "The Search for We The Living," by R. W. Bradford ceases to be human (and loses his or her Plus a symposium on Hoppe's Argumentation Ethics featuring Murray Rothbard, TiborMa­ chan, Leland Yeager and others; and writings by John Dentinger, Walter Block, Stephen human rights) because of irreversible (at Cox, Jane Shaw, James Robbins and others. (80 pages) least, with present technology) brain January 1989 continued on page 6 • "Public Choice: A Useful Tool," byJane S. Shaw 4 Liberty Your ind! ·"High Noon for the Libertarian Party?" by Chester Alan Arthur James Robbins, George Smith, Leland Yeager and others. (80 Plus writings by Leland Yeager, William Niskanen, John Hospers pages) and others; and a short story by Jeffrey Olson. (72 pages) May 1990 March 1989 ."The Decadence ofConservativism," by William P. Moulton ·"Ronald Reagan: An Autopsy," by Murray N. Rothbard ."A Population Crisis?" by Jane S. Shaw ·"WhatifEverything We Know About Safety Is Wrong?" by John ."Of Smokestacks and Rhinos," by Robert Higgs Semmens and Dianne Kresich Plus articles and reviews by R. W. Bradford, Karl Hess, Bill Kauff­ ·"The Wonderful Wizard ofLiberty," by Ethan Waters man, Richard Kostelanetz, Bart Kosko, Loren Lomasky, Leland Plus articles and reviews by Stephen Cox, Jeffrey Friedman, Tibor Yeager and others; and poetry by Brett Rutherford. (72 pages) Machan, David Steele, Michael Krauss, and others. (72 pages) July 1990 May 1989 •"The Orwellian University," by Charles Thorne ·"Man, Nature, and State," by Karl Hess, Jr ·"Conversations with Ayn Rand (part 1)," by John Hospers ·"A Conspiracy of Silence: Uncovering the Media's Election Night -"The Conservation ofResentment," by Robert A. Sheaffer 'Coverage' Policy," by Margaret M. Fries Plus articles and reviews by John Baden, Brian Doherty, David •"Public Choice: A Misshapen Tool," by Murray Rothbard Friedman, Bill Kauffman, Sheldon Richman, James S. Robbins, •"Ayn Rand: The Voice of Bitterness," by Justin Raimondo Mark Skousen, Terree Wasley and others. (72 pages) Plus articles and reviews by Stephen Cox, David Gordon, Jane Shaw and others; and a short story by Jeffrey Olson. (72 pages) ~ volume four ~ July 1989 September 1990 • "Viking Iceland: Anarchy That Worked," by David Friedman •"Is Environmental Press Coverage Biased?" by Jane Shaw • "The Myth of the Rights of Mental Patients," by Thomas Szasz •"Conversations with Ayn Rand (part 2)," by John Hospers • "Nude Dancing in Memphis," by Michael Williams •"RU 486 and Legal Wisdom," by Dr. Ron Paul Plus articles and reviews by Tibor Machan, John Hospers, R. W. Plus articles and reviews by Michael Krauss, Stephen Cox, Richard Bradford, Murray Rothbard, Jane Shaw, Leland Yeager and oth­ Kostelanetz and others; and ajicci6n by Harvey Segal. (72 pages) ers. (80 pages) , ~ volume three ~ r-- .. ------send me the back issues of Liberty I September1989 I Please have marked. I • "The Taboo Against the Truth: Holocausts and the Historians," by (foreign orders, add 50¢ per issue) RalphRaico I Aug. '87, $4.00 __ May '89, $4.00 __ I • "My Break With Branden and the Rand Cult," by Murray Rothbard Oct. '87, $4.50 __ July '89, $4.00 __ • "Indefming the Future," by Richard Kostelanetz I Dec. '87, $3.00 __ Sept. '89, $5.00 __ I • "The Theology ofEcology," by Robert Formaini Mar. '88, $4.00 __ Nov. '89, $4.00 __ Plus articles and reviews by David Friedman, Loren Lomasky, Gary I May '88, $4.00 __ Jan. '90, $4.00 __ I North, Jeffrey Tucker, Timothy Virkkala, and others. (72 pages) July '88, $4.00 __ Mar. '90, $4.00 __._ November 1989 I I Sept. '88, $5.50 __ May '90, $4.00 __ • "The Lost War on Drugs," by Joseph Miranda • "Goodbye, Galactic Empire," by J.R. Dunn I Nov. '88, $4.00 __ July '90, $4.00 __ I • "Beyond Philosophy," by Loren Lomasky Jan. '89, $4.00 __ Sept. '90, $4.00 __ • "Life With (and Without) Ayn Rand," by Tibor Machan I Mar. '89, $4.00 __ Shipping: $1.00 I Plus articles and reviews by Mnrray Rothbard, Michael Christian Total: and others; and an interview with Russell Means. (72 pages) I o My check is enclosed (payable to Liberty) I January 1990 o Charge my 0 VISA 0 Mastercard Exp _ • "The Death of Socialism: What it Means," by R.W. Bradford, Ste- I I phen Cox, Sheldon Richman, and William P. Moulton Account # _ • "The Greenhouse Effect: Myth or Danger?" by Patrick J. Michaels I I • "The Case for Paleolibertarianism," by Llewellyn Rockwell Signature • "How Rockefeller Soaked the Poor," by Richard Kostelanetz I I Plus articles and reviews by Charles K. Rowley, Richard E. Wagner, David Gordon and others; and an interview with Barbara Branden. I Name I (80 pages) I March 1990 Address I • "Humanity vs Nature," by John Hospers I I • "Isolating the Error of Isolationism," by Stephen Cox City • "Capitalism without Democracy, Hong Kong without Hope," by R. I I K.Lamb State Zip _ • "Mencken: The Man vs the State of Opinion," by R. W. Bradford Plus articles and reviews by Richard Kostelanetz, Loren Lomasky, I Liberty, Dept. B20, PO Box 1167, Port Townsend, WA 98368 I 1._------.I Volume 4, Number 2 November 1990 Letters (continued from page 4) cally crammed into each andevery child and letting him or her die before im­ damage. These issues will always repre-:­ sperm cell, Pope Innocent XI ruled in plantation or doing so afterwards. sent potential slippery slopes because 1679 that "no abortion is homicide/l be­ Doris Gordon they involve values, rather than scientif­ cause "the fetus ... lacks a rational soul Wheaton, Md. ic/technological determinations of fact, and begins first to have one when it is By Right and by Golly born./I (The present ban on abortion by and there is substantial human disagree­ Allow me to answer Robert A. Mark­ ment on these values. the Catholic Church dates only from ley's letter ("Benefit of Academe," Sep­ 1869.) In free markets, different value sys­ tember 1990) in which it is suggested that The belief that fertilized eggs and tems can coexist; with legal systems, they I contradict myself when I claim both that their early products are human persons cannot. Laws such as those punishing I have no right to benefit from stolen is clearly and unquestionalby a religious murder, burglary, rape, and assault are property and that I have not sold out by one. The political process, therefore, can­ widely accepted by most people in the working for a state university. not fairly resolve disagreements about West. Most other laws probably are not. I do not consider it my basic, natural such a proposition. For the same reason, Increasing tensions are being produced right to receive the salary I get from the it cannot be fairly said that those not in our society from enforcement of laws state university. That is not inconsistent sharing such a belief "are the ones who with which considerable numbers of with my accepting itand living off it. Sim­ water down libetariansim./I On the con­ people are in disagreement. ilarly, I do not consider it my natural right trary, to infuse libertarianism with relig­ All the articles on RU486 that I have to drive on public roads, to use the U.S. ious sectarianism is what will weaken its seen, including those in scientific jour­ mails to send letters to Liberty, to enjoy position most. nals, agree that a black market in the police protection, etc.-in short to benefit Dr Paul appears to have taken a little drug is inevitable. It may already exist. from stolen goods and conscripted servic­ step towards being pro-choice. I invite RU486 is the final nail in the coffin of es. But neither do I consider it my duty to him to take a few more. government control of abortion.It may refuse these in each case when I benefit Tim Gorski, M.D. also help bring down the "war on drugs" from them. Arlington, Texas and the FDA by involving millions more There are many things from which people in the process of making biomedi­ Does He or Doesn't He? one benefits without this benefit being cal decisions for themselves. Dr Paul argues that RU486 and other one's "by right." Unfortunately we live in Sandy Shaw abortifacients can make prenatal homi­ a community in which fewer and fewer Los Angeles, Calif. cide virtually impossible to prove with­ things can be claimed to be one's own "by Steps on the Slippery Slope out intrusive police action. Yes, prevent­ right." I am pretty sure this applies to Mr I completely agree with Dr Ron Paul ing prenatal homicide is a problem. The Markley and Mr Smith, not just to liber­ when he says that those who oppose womb is the most dangerous place in the tarians and others who teach at state insti­ abortion "must accept the fact that a soci­ world for a child to be. Some postnatal tutions. ety free of abortion ... can come only homicides pass undetected, too. What if Tibor Machan, through moral persuasion./I the wonders of science facilitated such Auburn, Ala. Dr Paul correctly points out that en­ activity, and each of us had a little list of people we would not miss? Ifan abor­ The Superficiality of the Is/Ought forcement of strict anti-abortion laws Identity would pose a real threat to liberty. One tion-type mentality were the norm, what Should we not say that "2 = 3"? Two has only to look at Ceausescu's ban in ­ kind of world would we have made? does not equal three, but is it wrong to Romania to appreciate this. And Dr Paul Dr Paul defended one use of abortifa­ say that it does? is right again whenhe cites the potential cients. "I believe the presence of ovum Itmay appear so. We use ethical short­ benefits of this drug. Indeed, he barely that is fertilized through the act of rape hand to instruct children, "you should not scratched the surface of possible non­ prior to implantation," he said, "should write '2 = 3' because it is false," or to in­ abortifacient uses for such an agent, in­ not preclude the woman's right to alter struct undergraduates, ~ryou should not cluding its use as a research tool. But her own endometrium." (Implantation write'2 3' unless it ends your proof by what is particularly apt is Dr Paul's im­ begins about a week after fertilization. = contradiction." plicit recognition of the essentially relig­ By then the new human being is, actual­ ious nature of differences of opinion con­ ly, at the blastocyst stage and has about continued on page 27 cerning the rnattter ofabortion. 150 cells). Once conception occurs, the Even Saint Thomas Aquinas, proba­ child is in the mother's power and is Letters Policy bly the greatest theologian of the Catho­ propelled by her fallopian tube into her We invite readers to comment on womb. By altering her endometrium, lic Church, summarily rejected the mate­ articles that have appeared in Liberty. rialism of a fertilized egg/person she prevents implantation and causes We reserve the right to edit for length equivalence and affirmed the Church her child to fall out and die. Dr Paul be­ and clarity. All letters are assumed to doctrine of his day "ithat the body alone came pro-life when he was shocked by be intended for publication unless twp o is begotten by sexual procreation, and the sight of a pound child lifted out otherwise stated. Succinct, typewrit­ that after the formation of the body the of the womb and left to die in a late term ten letters are preferred. Please in­ soul is created and infused.11I And, in an abortion. What if that child had been clude your phone number so that we age when scientists were willing to be­ conceived by rape? I don't see any prin­ can verify your identity. lieve that tiny human forms were physi- cipled difference between evicting the ~ ~ 6 Liberty To live and die in LA. - Los Angeles Police from Washington. Chief Daryl F. Gates told a Senate Hearing on Sept 5 that casu­ We note this month an actually stirring defense of funda­ al drug users "ought to be taken out and shot." His recom­ mental principles. A New York actors' union has resolutely mendation, he said, was aimed at those "who blast some pot voted not to let British actor Jonathan Pryce reprise on on a casual basis," not those who are addicted to illegal drugs. Broadway his London role as a Eurasian brothel owner in the 'We are in a war," he said, and casual drug use "is treason." hit play "Miss Saigon." So, despite an advance sale of $25 mil­ That same day, the Partnership for a Drug Free America lion, the show will not open this year. Those who allege that released a survey that showed that marijuana use in 1989 was labor unions have become supinely bourgeois will have to re­ down to 30% among teenagers and 14% among adults­ thInk in the light of this heartening blow against racism, capi­ which means, I suppose, that if Chief Gates has his way and talist exploitation, and frivolous foreign imports. kills 30% of the teenage population and 14% of the adults, The clear message is that we no longer are willing to toler­ there will be all the more reason to call L.A. the "City of ate so-called creative types offending against social justice. Angels." And it will help solve the problem of urban sprawl Artistic license is one thing, but violating the right to glamor­ as well. -RWB ous leading roles of Asian-American members of Actors' Equity is another. As I write, Senator Helms has not yet issued Just (Ku)wait a minute - When the Pentagon a public comment on the incident. Nor, for that matter, has announced its contract awards on September 4, the list includ­ Werner Oland. -LEL ed a $140 million contract for McDonnell Douglas to begin building 40 FIA 18 fighter attack planes for sale to the govern­ They've got rhythm - On September 16, an enor­ ment of Kuwait. You remember, the government that fled mous crowd, led by the mayor of Moscow, demonstrated in Kuwait on August 2 just ahead of invading Iraqi troops. At that city, calling for the resignation of Soviet Prime Minister the time of this writing (September 17), prospects look good Nikolai Ryzhkov and for implementation of the "500 Days" for a government without a country but with a hell of an air proposal, a "radical" program for selling off government as­ force. sets, eliminating subsidies, and, in general, transforming the A Pentagon official explained that the sale, which had USSR into a market economy during the next year and a half. been in the works for several years, was proceeding normally The day before the demonstration, Ryzhkov appeared on because "the government of Kuwait still exists." Yes, and so nationwide television to forecast dire results from any sudden does the Albanian monarchy. freeing of the economy. 'We must not," he said, "give in to This deal could get complicated should the Kuwaiti gov­ the shock therapy spoken about so much; we should advance ernment have the funds but not the territory to take delivery more rhythmically." Rhythm, to Ryzhkov, apparently means a when the aircraft are ready in September 1993. But fear not. constant alternation between advancing and withdrawing There's always an active resale market for military hardware. modest proposals for reform. So far, Ryzhkov's rhythm meth­ -RH od has succeeded better than such methods ordinarily do: it has effectually prevented any new birth of prosperity. The East is pink - A new newspaper has hit the Two things can happen: either the SOD-day marketization streets-Gay Pravda! The layout is just like the regular Pravda, proposal will be adopted, and the old economic system will be except for the three medals in the upper left-hand corner of swept away, or it will not be adopted, and the old system will the front page-the profiles of Lenin have been replaced with die somewhat more slowly, but much more painfully. In ei­ the word "Gay" in Russian. The paper covers gay issues from ther case, Leningrad will not be named Leningrad 500 days a Soviet perspective, but because authorities frown on this from now. particular manifestation of glasnost, it has to be printed in the On the same day in which Ryzhkov was making what Netherlands. It is smuggled into the USSR and distributed for seems to be his last stand against capitalism, former President free. Can Vegetarian Izvestia be far behind? -JSR Reagan showed up in Gdansk, Poland, where he was met by crowds chanting, with a healthier rhythm than Ryzhkov's, No more Charlie Chans! - News on the art ''Thank you, thank you!" A friend of Lech Walesa presented front continues to be heartening. In the previous issue of Reagan with a saber, in honor of his having helped the Poles Liberty I reported on the efforts of American art folk to combat "chop off the head of communism." the censorship crusade of the antediluvian Jesse Helms and I didn't like a lot of things-maybe most things-about his odious cronies. Rather than sign a form attesting that their Reagan. But there's something to be said for calling an evil work, when taken as a whole, has serious literary or artistic empire an evil empire, and for doing what one can to hasten merit, organizations actually chose to refuse cash benefactions its end. The Polish crowds confirmed the rest of the world's Liberty 7 Volume 4, Number 2 November 1990 impression that the empire didn't simply fall; it was also Reality, however,has a habit of coasting along according to pushed. -SC its own rules, and the economic strength of Taiwan has waxed by leaps and bounds while the mainland colossus has stagnat­ One man's pet is another man's buzz ed. Recently several nations have, for completely non­ saw- Although it has been illegal to own a pet ferret since ideological and non-symbolic reasons, reestablished formal re­ 1933 in California, the Golden State has only recently begun to lations with Taipei. In each case, Beijing immediately and an­ enforce the law by selectively arresting a few of the owners of grily broke ties with the offending country. The nations which the estimated 1 million pet ferrets residing there. "Owning a made the switch-Grenada, Liberia, Lesotho and Belize, with a ferret is like having a buzz saw for a pet," said Lt. AI Stegall of few more about to follow-are not politicalgiants. Their mo­ the California Fish and Game Department, after arresting a 54­ tive, however, is interesting. Each has pointed out that Taiwan year-old woman on charges of keeping a pet ferret. According simply has more to offer, in terms of trade, technology and, to a study cited by California officials, there have been 425 at­ where needed, foreign aid. The foreign reserves and technical tacks by pet ferrets in California, Arizona and Oregon during a know-how of the ROC dwarf those of Beijing. The recent dip­ ten-year period, or about one attack per year for each 29,000 lomatic moves are simply one more sign that the era of totali­ pet ferrets. (Ferrets are legal as pets in Arizona, Oregon and 42 tarian nations getting by on exports of bluster, bombast, and other states.) bankruptcy is over. -WPM California establishes cultural trends that are felt around the world. A few days after I read about California's attack on With friends like this - According to a front­ ferrets, I came across a UPI story from Beijing, where city offi­ page article in The Wall Street Journal (April 27 1990), the Bush cials have called for "a resolute undertaking of the 'wipe out administration contains a "powerful blocking coalition" of dogs campaign,'" urging owners to "beat and eliminate" their dedicated free-marketeers, to wit, Sununu, Darman and pets. Dog owners were criticized for "disturbing social order Boskin. The three high-level apparatchiks are said to regard and endangering people's health." - RWB free markets, economic growth, and free trade with religious reverence. If only it were so. Game point- Most of us probably remember the lioni­ The article goes on to explain that the three stalwarts are zation of Red China-excuse me, People's China-which be­ not "reflexively anti-government." They favor various "selec­ gan in 1970 with Henry Kissinger's ping-pong diplomacy and tive" government interventions, including government fund­ never completely died out, although the true believers have ing of child care. They want more government funding of grown less confident after the passing of the Great Helmsman research and development that is "too esoteric or expensive for in 1976. Many foolish things were said about the mainland the private sector." In the words of Deborah Steelman, a Chinese regime during those years, and of course there was Washington lawyer and former Bush campaign adviser, plenty of negative response as well. One point on which nearly ''These are people who believe problems can be fixed and be­ everyone was in accord, however, was the complete irrele­ lieve government can be brought to bear to fix them ... that all vance of the Republic of China, or Taiwan. At best it was seen it takes is the right brains and right political skills." as an embarrassing anachronism, a stumbling block fencing us If these guys are what passes for free-marketeers nowa­ off from a natural rapport with the real China. Certainly the days, the collectivists have very little to worry about. -RH keeping up of diplomatic relations with the ROC was seen as a quaint romanticism, to be indulged in only by those countries Linguistic harassment - In mid-September, the with no serious stake in Chinese affairs. news media gave considerable publicity to a Pentagon report which stated that over half the women in the U.S. armed Mlddle East-landofopportunlb'.•. services had reported instances of sexual harassment (/) ~------from male military personnel. I can easily imagine such YOU'RE SPt:NC>JNG WHERE AAR. YOU .. LX PRETTY FREELY' MAKtNGALL harassment in an environment which has historically W L.A~ BONG. iHlS MONEY? I: 1HOLGHI 'ft)U KNEWL.~881.ES. been overwhelmingly dominated by men, so my initial a EASY COME:, rMA~FENSE thought upon reading the headline was that this must be EASY GO. (fJ- ) iM ~. a serious problem. z df "-00 However, after reading the articles in question, I had -- to conclude that a lot of shaky concepts were being used to hype the figures. Sexual harassment was character­ ized, at least in the published reports, by example rather than by definition. What were some of the actions re­ ferred to as being in the forbidden zone? Telling jokes of I \1VST GOT A BI~ WHArf)O YOU MAKE? NEW CONTRAC7: IT~ BQt1BSI' BUL.LElS? a sexual nature while a female was within hearing. A RUSH ORDER R>R 'THE. MIDDLE EAST." Making "sexist" remarks while in a woman's presence. I£j/ ~\:; Referring to a woman or to women in general in a "sug­ ~ gestive manner." Ogling. Leering. Brushing against a "-00 female. Of course, instances of harassment up to and includ­ ~fl rl ~ ~ ing rape were also noted. But this merely muddies the *H waters further and makes it more difficult to deal with 8 Liberty Volume 4, Number 2 November 1990

real problem cases. It is the equivalent of stating that a racist is to institutionalize day care is a way of dealing with guilt someone who opposes affirmative action, or who doesn't care about leaving children in the hands of others. I suspect that for Bill Cosby, or who lynches black people. In both cases, no Quindlen advocates government-supported day care because useful concept is being utilized. Cases of actual wrongdoing it creates the soothing feeling that the fundamental problem are lost in a fuzzy glop of words. lies outside oneself. Such is the result of the politicization of thought and lan- Since so much of politics is perception, not reality, this guage that has bedevilled this century. -WPM self-delusion may work. Thousands, perhaps millions, of women have probably been convinced that they are "owed" While the mom's away the Feds will pay good day care. Rhetoric of that sort will pass day care legisla­ tion. It will also lead to disappointment for children and - Some months ago, Anna Quindlen, a New York Times col­ mothers, but when that happens, as with HUD, there will be umnist, argued in favor of government-supported day care. plenty of villains to castigate. -ISS She called day care "the superstructure upon which working mothers build every bit of the rest of their lives" and deplored Innovation in government - Those who the failure of corporations, the government, and men generally argue that government employees lack creativity in solving to alleviate this burden. problems will have to re-evaluate their hidebound opinions in Of course, I have no objection to day care voluntarily pro­ the light of u.s. Attorney General Richard Thornburgh's re­ vided by companies; but as for government-provided day cent approach to a problem that had vexed him and other care, the points made in recent articles in Liberty are absolutely Administration officals for some time. correct. Americans are about to bring down on themselves an­ The problem was that a mail-order firm in North Carolina other HUD (to adopt a useful analogy offered by The Wall was selling condoms, frilly nightwear, explicit videotapes and Street Journal)-a rigid, costly system that will worsen the other "marital aids" with impunity. It had been charged with problem that it is designed to solve. It will raise the cost of day obscenity in a North Carolina court-but thanks no doubt to a care by excessive bureaucracy and credentialism, and remove resurgence of liberalism in the bailiwick of Jesse Helms-had freedom by establishing tight controls on the kinds of day care been exonerated. that can be provided. Yet the operation poses a clear and present danger to the I'm bothered by the attitude of the professional women like public welfare. If allowed to flourish-who knows?-people Quindlen, who bolstered her argument with stories about sit­ in Gouge Eye, Oregon, or Shallow Water, Kansas, might find ters who leave for vacation and never return or sitters who themselves inundated in the raw sexual licentiousness that en- quit without notice after a second baby is born. If professionals gulfs North Carolina. _ can't find good care for their children, or are unwilling to pay Obviously, the business must be closed down. But how? for it, why do they think that government intervention will Eureka! In a moment of inspiration, Thornburgh came up provide it? The only possible reason is their faith that the high­ with a solution: simultaneously indict it in two different juris­ er cost will be spread among so many taxpayers and workers dictions thousands of miles apart, jurisdictions carefully cho­ that they won't have to shoulder the burden they are carrying sen so that extremely intolerant juries and judges may be now. In other words, these women believe that they ought to expected. be subsidized by people who don't have young children. And so, the Justice Department charged the firm in courts I wish, instead, that professional women had the courage in Utah and Kentucky with trafficking in pornography. Now or insight to admit that problems with day care stem from the firm must again defend itself against the charges it was ac­ choices that they make. Once a woman decides to have a ca­ quitted of in North Carolina. It must hire two separate teams reer and also have children, trade-offs are inevitable. Whether of attorneys at great expense. And it must win both cases to children suffer from day care is a question the experts are try­ stay in business! ing to answer; however it's pretty certain that children severe­ The beauty of the Attorney General's approach is that it ly hamper a woman's career, for a few years at least and succeeds even if it fails. If the firm mounts two separate de­ possibly forever. Why not accept the fact? fenses in Utah and Kentucky and manages to be acquitted, it The mother's dilemma is easy to understand, of course. can do so only at tremendous expense to itself. And the Motherhood isn't the career it used to be. Merely a century ago, mothers had large numbers of children and daunting tasks (they did appalling things like scrubbing clothes by hand on metal washboards and hanging them in the sun, not to Coff~e mention cooking chickens after slaughtering and plucking "~,osa I:JSO,fJD them, and tending vegetable gardens to put food on the table.) fi) Today, homes can be kept clean with a few hours' work (pref­ erably by someone who comes in); food preparation is com­ paratively easy; and husbands are more cooperative than ever before (even if surveys show that their contribution is far from the feminists' ideal). At the same time, professional careers are exciting and rewarding, and for many educated women, stay­ ing home all day with illiterate and often unintelligible tod­ dlers is a sacrifice. But leaving is difficult, too. Frankly, I suspect that the push "I'm putting in for a transfer-I can't afford to work at the Pentagon." Liberty 9 Volume 4, Number 2 November 1990

Attorney General can follow up with indictments in the courts ed to recite the pledge of allegiance every day, though the of Guam, Puerto Rico and Alaska. -RWB teacher never explained what it is or why she should say it. The latest presumption was a special assembly about'the My daughter Jennifer has been seized by coming war in the Middle East. She was informed that the the state. - She entered first grade in the local govern­ United States was defending Saudi Arabia and would never ment school in northern Virginia, and the program to mold start a war. She will also be subjected to a counseling pro­ her into a good citizen began immediately. First, she was com­ gram, whose objective is to instill proper community values. pelled to sign a form notifying her that distributing drugs at We can keep her out of that, but possibly at the cost of mak­ the school was grounds for expulsion. Then she was instruct- ing her an outcast among her classmates. Obviously, much of my time in the next several years will be spent keeping Jennifer from learning her Fantasy civics lessons too well. When will we get tuition tax credits so that someone besides the rich can avoid this good-citizenship in­ A place -much like our own doctrination? -SLR

"But Mr. Freeman, how could private industry possibly provide tele­ E.A.R.T.H. Farce When the phone service the way it provides national defense? After all, with the de­ latest round of the ecology craze broke, velopment of the Doolittle strategy, the hypersonic seeker, and Taft executives at CBS must have collected diplomacy, we have successfully defended freedom for decades with their best creative minds and asked them 100,000 troops! But with eight million operators, we still can't get decent how to make some green out of Green. phone service. The Post Office Phone System will never be privatized." The result is E.A.R.T.H. Force, a television Solomon Freeman looked east over Puget Sound at the distant lights of show that premiered September 16. The Seattle. The first Liberty conference had filled the new Port Townsend premise of the show is simple: assemble Convention Center with hundreds of curious individuals, all with ques­ "a doctor, a physicist, a dolphin-chaser tions like this one. They were afraid of their new world, even as they and a guy who hangs out with gorillas," gloried in its arrival. What would happen to their lives when President add a mercenary for flavor, and loose Paul carried through his promise to privatize the phone system, the way them on the bad white men who are pol­ he had already given the national parks to the Sierra Club? Port luting the planet. Sounds reasonable. And Townsend, on the edge of the newly created Olympic Conservancy, was because it's a private sector initiative, the booming with the influx of nature-lovers attracted to this beautiful and E.A.R.T.H. Force doesn't have to worry well-managed preserve. But would that which worked so well for trees about bureaucracy or laws. and animals, work with switchboards and hand-cranked telephones? ''The Parthenon is in ruins, but plastic Ever since Michael Faraday had invented the telephone in Britain, gov­ is forever," the "nature boy who is too ernments had built giant, showy telephone systems, each trying to outdo radical even for Greenpeace" exclaims. the others with the mightiness of their networks. Elaborate palaces of The "dolphin-chaser," a female marine bi­ communication adorned world capitals. Massive cables with millions of ologist, called away from her work says "I wires carried signals across the country to those congressional districts can't leave here, I have a whole school of fortunate enough to have one of the giant National Telephone Bases. yellowtail contaminated with PCB!" In an­ Border translation stations, staffed with thousands of bilingual specialists, other scene, a young American armed hummed with the commerce of the planet, moving vital data between fi­ with a bolo defeats gringo surveyors who nancial nerve centers in mere hours. It would be hard to imagine private are planning the destruction of a section of firms running a massive system such as this! rainforest, presumably to allow the locals Solomon thought a minute, then spoke: to slash-and-burn it in more traditional "I don't know exactly how American business will rebuild the phone ways. And this is only a sampling of the system. Perhaps radio signals will be used, or those transistors that kind of shameless stereotypes and cliches Lockheed Labs came up with. I'm an economist, not an engineer; all I around which E.A.R.T.H. Force revolves. know is that market incentives tend to stimulate solutions that are both The force is assembled by a capitalist unpredictable and attractive. If I were smart.enough to solve the phone whose nuclear power plant has been sabo­ problem, I would be out getting rich, not sitting here talking to you. taged by a CIA rogue elephant who plans "My job is to be smart about markets, and markets are the tools that to build an A-bomb. They scorn the capi­ non-specialists like you and I use to procure the best efforts of specialists talist for not cleaning up the environment for our needs. I can plausibly show that markets are the best way to do it." unless he can "make a buck on it," but ''Well,'' said the questioner, "1 guess I'm not convinced. Private corpo­ work for him anyway for the good of the rations can obviously provide services like defense and issuing money, planet. The Force is so sanctimonious that but how can they provide national-sized goods without national invest­ I was tempted to root for the nuke plant to ments? That doesn't make sense!" blow them up. The most sympathetic "By the way," he added after a moment's silence, "can I borrow a $50 characters in the show are the supporting gold piece from you, so I can make a call?" -Keith Lofstrom cast who have to put llP with the green idealists. The Force members don't like 10 Liberty The Liberty Editors' Conference Share the Excitementl

Intellectual sparks flew in Seattle at the Liberty Editors' seminars Conference. The best minds in the libertarian movement The Economic Case For and Against Anarchy, by David met to discuss the future of liberty and of the libertarian Friedman with comments by Richard Kostelanetz. (Video: movement and to thrash out controversial points in liber­ Vl09; Audio: Al09) tarian theory, strategy, and worldview. Did the Libertarian Movement Really Start in Murray The reviews are in ... Rothbard's Living Room? by R.W. Bradford, with We surveyed those attending the Liberty Editors' Con­ comments by Stephen Cox. (Video: V110; Audio: AllO) ference: The Politics ofthe Avant Garde, by Richard Kostelanetz, with comments by Stephen Cox. (Video: Vlll; Audio: Alll) • 100% of respondents said they "got their money's worth"! Does Economics Make Sense? by David Friedman with comments by Robert Higgs. (Video: Vl12; Audio: A112) • 96% said they plan to come again next year! Children's Rights by Loren Lomasky with comments by Here are some of the comments that people volunteered Timothy Virkkala. (Video: Vl13; Audio: Al13) on the survey: The Poverty of Libertarian Fiction by Stephen Cox with "The intellectual event of 1990" comments by Douglas Casey. (Video: Vl14; Audio: All4) "Best, most exciting conference ever" Game Theory, Evolution, and Freedom, by Ross Overbeek with "Intellectual stimulation to last all year" comments by David Ramsay Steele. (Video: Vl1S; Audio: "This was a lot of fun!" AllS) You can experience the excitement! War and Prosperity: Did World War IICure the Great Now you can witness the proceedings for yourself! All Depression? by Robert Higgs. (Video: V116; Audio: Al16) sessions are available on both VHS Videotape and cassette Agent or Victim: Reconsidering the Insanity Plea byJohn audiotape: Hospers. (Video: Vll7; Audio: All7) Complete Conference: $195 VHS Workshop 99 Audiocassette How to Write Op-Ed Pieces and Get Them Published, by Jane S. 250 Both Shaw. (Video: VIIS; Audio: AIlS) Individual Sessions: $19.50 VHS 7.50 Audiocassette r------.,Please send me the tapes of the Liberty I Panels I eS. Editors' Conference I have marked. Liberty in the Post-Socialist World, with Sheldon Richman, Y David Friedman, Robert Higgs, Stephen Cox and R.W. I_ Complete Set Video @ $195.00 = I Bradford. (Video: VlOl; Audio: AlOl) ' I- Complete Set Audio @ $ 99.00 = I Spending the Peace Dividend, with Robert Higgs, Sheldon Richman, James Robbins and Richard Stroup. (Video: I- Complete Set VHS + Cassette @ $250.00 = I V102; Audio: Al02) Individual Sessions (list by number) Beyond MADness: foreign policy without the "Evil Empire" with Stephen Cox, Robert Higgs, Sheldon Richman and I I James Robbins. (Video: Vl03; Audio: Al03) I I The Revolution in Eastern Europe. with Ron Lipp and James Total Audio Cassettes @ $ 7.50 = Robbins. (Video: Vl04; Audio: A104) I Total Video Cassettes @ $ 19.50 = I Right and Wrong in an Unfree World, with R.W. Bradford, David Friedman,John Hospers, Loren Lomasky and I Postage & Handling ($5 per order It) I Sheldon Richman. (Video: VlOS; Audio: AlOS) I It $2.50 per tape, foreign I Heroes of Liberty: Chodorov, Paterson, Mencken, Conan the Total Barbarian, Tannehill, Cage, others, with R.W. Bradford, Doug Casey, Richard Kostelanetz, Sheldon Richman I 0 My check is enclosed (payable to Liberty) I and Stephen Cox. (Video: V106; Audio: A106) I a Charge: a VISA a MjC Card # I Liberty and the Environment, with Jane Shaw, Richard Stroup, John Hospers, R.W. Bradford and David I Exp -- Signature I Friedman. (Video: V107i Audio: A107) Name Do Rights Make Sense? with David Friedman, Timothy I Address I Virkkala, John Hospers, R.W. Bradford, David Ramsay Steele, and Loren Lomasky. (Video: VIOS; Audio: AlOS) I City State -- Zip I a.Liberty------Publishing, PO Box 1167, Port Townsend, WA 98368 .- Volume 4, Number 2 , November 1990 each other much either. In one scene, "nature boy" tries to Kuwait has been atrocious, will we be making the world a bet­ show how much of a man he is to the skeptical physicist by ter place by mowing these poor people down in batches of a bragging that he has "two PhD's, and an honorary from hundred thousand, or (if our war never escalates beyond the Oxford." This was obviously written by someone who thinks current level of "interdiction") by subjecting them to a regime that multiple academic credentials are an indication of special of slow starvation? Fighting a war that seals up the Persian gifts which the audience will admire and respect. I found the Gulf or creating a blockade that cuts off 20% of the world's oil scene hysterical. supply is not going to have a salutary effect upon the price of In the end, the two-hour pilot becomes just another shoot­ crude. Transforming Kuwait into another Gallipoli is not go­ em-up because the real stuff of environmentalism, like labora­ ing to liberate these unfortunate people. tory testing and litigation, is pretty dull for TV. But the hilarity So, on the off chance that George Bush is still open to solu­ was relentless. In order to halt the CIA man's tugboat, the tions that smack of wimpdom, here's my suggestion: forget force had to drop bombs around it. "You want me to throw Kuwait. It's gone. History. Saddam wants oil money and we these into the river?" Dolphin-chaser says. "What about the want oil, so let's do business. Leave enough of a token force in fish?" Luckily, pollution had done them in years earlier. The Saudi Arabia that it is clear to all that if Iraq ever attacks, it show ends happily, with Green triumphant and the capital­ will be engaging itself in combat with u.s. forces, with all that ist-who meets Nature's justice by dying of cancer contracted this entails. Withdraw the rest of the soldiers. If Saddam tries during his career-bequeathing the Force an "unlimited" en­ again to build a nuclear reactor, let the Israelis flatten it, like dowment to pursue eco-justice. they did in 1981. And if you really want to help a small coun­ Presumably, if this show lasts, we will be treated to further try which has been occupied by a tyrannical neighbor, try giv­ agitation as the Force rights wrongs and works out its ego ing something other than the cold shoulder to the legitimate problems. It's the kind of program that could set back environ­ representatives of the people of Lithuania. -SJR mentalism for years, but the odds are that it won't outlast the ozone layer. -JSR Beggar thy neighbor - In recent months, mayors in several large cities have led widely publicized campaigns to The Sensible White North - When countries increase the number of their citizens counted by the census, in around the world are turning away from socialism but the the hope of increasing their share of federal aid and congres­ United States is going the other way, Americans easily become sional representation. Such campaigns routinely appea~ to discouraged. Now come the Canadians to cheer us up by ideals of civic duty, social responsibility, and the like. proving that they, not we, are the farthest behind the times. The odd thing is the degree to which local and national me­ Ontario, that most reliably sensible of the country's provinces, dia play along with this nonsense, treating each such cam­ has actually elected an avowedly socialist government. The paign as a noble and public-spirited cause. I have not yet seen New Democratic Party (NDP) won 74 of the 130 seats in the a single article pointing out that the mayors are engaged in a Provincial Parliament. large and expensive game of beggar-thy-neighbor. Every extra Aside from showing that goofy things can happen any­ head counted in Chicago does indeed mean extra money for where and anytime,. this election demonstrates the inherent in­ Chicago-but it is money that would otherwise go to New stability of a three party system. The NDP got only 38 percent York, or Boston, or Mississippi, or.... Similarly, every extra of the popular vote but elected a strong majority of the legisla­ head counted in New York means less money for Chicago. If tors. Liberals got 32 percent, Conservatives 23 percent, and all of the politicians succeeded, by herculean efforts, in increas­ fringe parties-including the Libertarians,.-the remaining 7 ing their official populations by ten percent, the net effect percent. In situations like this, tiny parties can sometimes ex­ would be zero, since the relative populations would be ercise great leverage, so Ontario's libertarians can still hope. unchanged. Meanwhile the future looks grim. The NDP is committed It is tempting to put the media attitude down to cowardice to a long list of destructive and unjust policies ranging from and corruption, on the theory that no Chicago newspaper is stricter enforcement of rent controls and expansion of the eager to stick pins in Mayor Daley. But that does not explain province's comparable-worth wage regulations to a confiscato­ the failure of New York newspapers-better yet, newspapers ry tax on short-term real estate capital gains and a government in some city that is not campaigning to swell its official popu- takeover of auto insurance. Even under the Conservatives and the Liberals, Canadians have been suffering for decades from oppressive welfare-state measures. It now appears that even worse policies are in store. Will Canada have to reach Poland's depths before its people wakeup? -RH

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It is hard to believe that our reporters have actually plot north of Manson, a 25-acre plot near Guthrie Center, and reached the point where it does not occur to them that new "most of" a 160-acre plot west of Lake Okoboji have never Federal dollars-and congressional seats-do not fall like been plowed or grazed; another 240 acres near Lime Springs manna from heaven. -DF have been grazed but never plowed. But in Washington State alone, National Parks protect a to­ tal of 1,654,761 acres, nearly all consisting of old-growth forest, Comparable w~rth? - Millions of Americans and more is protected by other entities. who enjoy our forests vicariously from their homes in the cit­ Every day environmentally sensitive Americans bewail the ies by means of PBS television shows of cavorting furryani­ loss of old-growth forest. But how many protest the much mals, majestic trees and babbling brooks object to the notion more widespread loss of old-growth grassland? Why the dis- that parts of the National Forests might from time to time be harvested. In fact, substantial numbers of Americans object to the harvesting of timber on privately owned land. The idea Are forests more environmentally sound that forests might be cut down for land for human habitation is downright sacrilegious. than grasslands? Are forests more important But how many Americans are worried about the fate of to the ecology of the planet? Has God, or some grasslands? How many Americans plan their vacations to in­ Mega-Biologist, declared forest superior to clude trips through the National Grasslands? How many ob­ ject to the plowing of prairie for agriculture or habitation? grassland? When loggers enter a National Forest to harvest the trees growing there, they are sometimes confronted by radical envi­ parity between the treatment of forest and the treatment of ronmentalists. When ranchers drive their cattle onto a grassland? Are forests more enVironmentally sound than National Grassland to harvest the grass growing there, who is grasslands? Are forests more important to the ecology of the there to confront them? How many Americans even know that planet? Has God, or some Mega-Biologist, declared forest su­ National Grasslands exist? perior to grassland? From an economic perspective, the most desirable forest The difference, I believe, is sentimentalism. Millions get vi­ land in the U.S. lies along the Pacific Coast. Those who seek to carious pleasure from forests. But nobody enjoys a grassland harvest trees in these forests are opposed by many on the enviro-fantasy. A tree is a majestic and lovely thing; forests of­ grounds that what they do is "harmful to the environment." ten are situated on land that is rugged and beautiful. As a result, thousands of square miles of "old-growth" forest Grasslands tend to be flat; in the spring they are soggy; in the are protected from harvest. summer they grow so thick one cannot walk through them; in From an economic perspective, the most desirable grass­ the fall they die. To most people, they are not very pretty. land in the U.S. lies between the Mississippi and Missouri Why don't we all get honest and admit that the real rea­ Rivers, centering on the state of Iowa. Before the white man sons we want to save the Pacific forest are aesthetic? There's came, virtually all of Iowa aside from its river valleys was tall nothing wrong with haVing an aesthetic or sentimental hu­ grass prairie. Today, it is the richest agricultural land on earth. man-centered ideology of conservation-especially because an In the entire state, comprising some 36,019,000 acres, how honest appreciation of our real motives for desiring conserva­ much land has been preserved as tall grass prairie? How tion will allow us to consider sensible means of conservation Feels move n, have states license tobacco retaIlers... in the future. CI) I love forests and mountains as much as anyone; I WE/~ Cl'ME UP W/TU AW4Y WE2.L HAVE. tHE. STAiES love them so much that I have chosen to live among tx 7lJ KEEP -ro8ACCO our OF LfC£.NSE. RETA IL-ERS them. But I recognize that this is an aesthetic response. It W THE HANDS OF CHI LOREN. OF70BACCO. I-IoWJt?LL is not an ecological, metaphysical or religious principle. THATU£LP? Just as I cannot rationally object to the sod-busting our (I)- ~T\ "Z ( ancestors did in Iowa, I cannot rationally object to the (_~ harvesting of "our" forests. --IJJ ~~ ~ 6J )- Of course, some old-growth forests ought to be pre­ J: ~ 6l UI €a ffi served, just as some tall grass prairie ought to be pre­ served. Because people seem to love the forest more I-~-----" than the grassland, it makes sense that more forest be 'T~L TE.LL RETAIL.EQS.. preserved. But we must recognize that this decision, like "SELL 7'0 MlpJORS ~ LOSE YOUR LICENSE.!' other economic decisions, is made to satisfy the wants of consumers, and that the forests preserved for our enjoy­ 6 ( AND 71Ikr Will REbJCE ment are consumer goods. 6LU~? Most of all we must realize that the notion, implicit ; _ in so much environmental longing, that all remaining forests must be preserved makes no more sense than e ffi would a decision to preserve all of Iowa a century and a half ago. -RWB 14 Liberty Exploration

Opportunities on Freedom's Frontier by Ronald F. Lipp

Will Eastern Europe stumble from Communism to the subtler tyranny of the pater­ nalistic welfare state? Or will Eastern Europeans seize the opportunity to create a genuinely liberal society? Ronald Lipp explores the realities of Eastern Europe. I recently spent three weeks in Czechoslovakia and Poland, meeting with gov­ ernment officials, politicians, academics, students, businessmen, and workers. What I saw, heard, and learned there led me to realize that we face a unique opportunity to advance the cause of liberty and of human progress, but that the task before us is an extraordinarily chal­ lenging one. The death of socialism The stunning and still unbelievable been intellectually bankrupt since at has left an ideological vacuum in East­ events of this annus mirabilis are cause least the 1940s-(some would say since ern Europe, and a genuine interest in for celebration almost without regard Lenin's introduction of the New Eco­ liberal ideas. But progress toward lib­ for what is yet to come. But it is still nomic Policy in 1921) and democratic erty is always difficult, and the stuggle quite uncertain what is to come or socialism lost the moral and economic has hardly begun. what we can do to influence the next high ground a generation ago. None­ A scant year ago, the world was course of events. It is now time not theless, after more than a decade of suspended between anticipation and only for some very hard thinking, but Reaganite conservatism on one side of disbelief as the Soviet monolith shud­ also a revival of the habit-largely the Atlantic and the Thatcherite ver­ dered and trembled and wearily dormant since at least the late 1940s­ sion on the other, neither the U.S. nor sloughed off its outer armor, an iron of assessing the six former Soviet satel­ the U.K. give the slightest hint of curtain grown too heavy to bear and lites as separate cultures, and not being ready to abandon the basic fea­ too rusted to carry its own weight. some amorphous mass of agony and tures of the welfare state in exchange In August, 1989, by dint of a re­ longing. for the gains in economic well-being, born Solidarity, Poland became the personal freedom, and enhanced mo­ first country to divest ruling power Opportunities For Liberty rality promised by laissez-faire capital­ from a Communist party by democrat­ In the aftermath of World War IT, ism. At least in the United States, the ic means. Within a few months, even the United States and other Western growing wave of public risk-aversion byzantine Bulgaria was in upheaval powers successfully infused a large and ecological hysteria is likely to give and cries of rebellion emanated from measure of democracy and capitalism the health and safety fascists an irresis­ the black hole of Albania. into Germany and Japan, notwith­ tible weapon to increase the scope of Soviet hegemony in Eastern and standing pre-war German and Japa­ state intervention and coercion over Central Europe is now wrecked be­ nese hostility to liberal values. This the next few years. None of the other yond repair. The Warsaw Pact is fin­ was achieved in part because of the major nations of the West seems likely ished as a military force and great loss of capacity and legitimacy to counter that trend in fundamental COMECON is nearly so as an econom­ that the institutions of both countries ways. ic one. The principal showcase of So­ suffered during the war. And so it should be no surprise viet-style socialism as an export Stable societies, on the other hand, that in the 1990s, the principal oppor­ commodity has turned into the most resist radical innovation, no matter tunities for expanding human liberty transparent demonstration of its phys­ how efficacious its promised benefits and for providing a practical demon­ ical, social, and moral bankruptcy. or compelling its logic. Marxism has stration of the benefits of a liberal soci- Liberty 15 Volume 4, Number 2 November 1990

ety lie instead in the newly emerging tory of the Silesian coal fields and the the Baltics, they have already made countries of Eastern Europe. These surrounding industrial district in their break from Soviet hegemony. countries have borne fifty years of inti­ southern Poland and northern Mora­ They look West. For better or worse, mate, daily exposure to the blessings of via, half the newborn infants are under­ they lie more within the cultural orbit unvarnished state compulsion and co­ weight, premature, or deformed. One of Berlin than Moscow. Their religious ercion. They have experienced an ever­ study found heavy metals contamina­ tradition is Catholic and Protestant, not growing gap between their well-being tion in one hundred percent of the pla­ Orthodox or Muslim. Whatever their and that of the West. They have en­ centa from new mothers. The Polish internal dissens'ions and rivalries, they dured the humiliation of queues, con­ press recently reported that 400 of the are largely free of the tribal blood trols, and petty bureaucrats at every 1000 buildings in the village of Jachy­ thirsts of the Balkans and the depths of turn, the demoralization of dead-end mov, Czechoslovakia, near the urani­ mysticism and collectivism in the soul jobs in dead-end lives, and the bitter­ um mines, are to be torn down because of Russian culture. ness of subjugation to a regime that no of radiation levels as much as 25 times But even among these three, Poland the government-permitted standard. and Czechoslovakia seem best pre­ It is also clear that the revolt of pared by history for this moment. By These countries are caught these countries was not only a protest perverse irony, the Hungarians, who like grist between the great against poverty or foreign domination began the exit from socialism first, re­ tectonic plates of a collapsing or a reflection of native temperament. sorting to the clever half-measures of For it took place not only among desti­ Hungary's Goulash Communism, may Soviet state and a reunified tute Poles, but more-or-Iess affluent need to fall back and undo these steps Germany preparing its ascent East Germans. Not only among mercu­ before things can yet be done right. to European dominion. rial Bulgars, but among phlegmatic Czechs and relatively comfortable But Why Should We Care? Magyars. Not only among Poles and Even if the possibilities described above are true, should we care, or care longer even believed its own incanta­ Czechs suffering a sense of Soviet dom­ ination, but among Romanians suffer­ enough to help potentiality become ac­ tions about the moral necessity for self­ tuality? We have, after all, an aversion sacrifice in the name of a proletarian ing largely from home-grown tyranny, and even among Bulgarians who re­ to utopian crusades and a strong disin­ utopia or for the sake of a struggle clination to be officious intermeddlers. against an imperialist enemy that gave gard the Russians with esteem. The single common currency that denomi­ Even so, there are at least three reasons its masses both more bread and more prospects·~ nated all these uprisings was the im­ why the sketched above freedom. These societies need no map should matter to us very much. to chart the road to serfdom. pulse to throw off the yoke of First, liberty in any country serves These countries may also be inocu­ oppression: the passion to be free. our interest. And these are not just any lated to some degree against the chief And yet these revolts were not alike country. Their heritage is Copernicus temptation of our day: the reliance on and not all these countries have the and Chopin; Dvorak, Capek, and Mah­ the state to save society from environ­ same aspirations or potentialities. ler; Pulaski and Mme. Curie; Liszt and mental depredation attributed to indi­ Among them, three stand as the most Bartok-which is to say: our own. The vidual greed. No Western country has fertile prospects for our hopes: Poland, most confirmed advocate of non­ suffered the kind of environmental Czechoslovakia, and Hungary. The interventionist foreign policy and the damage inflicted by the socialist re­ partisans of other East Bloc nations, as most committed opponent of altruism gimes whose avowed goal was the well as of the various Soviet nationali­ as a moral principle must recognize the creation of a workers' paradise. In Po­ ties may make impassioned and attrac­ virtue of voluntary assistance to the ad­ land, it is reported that a quarter of the tive claims for their own candidates, vocates of liberty in these countries as farmland is seriously contaminated but we should place our capital accord­ an affirmation of our own highest with toxins.* In Czechoslovakia, half ing to the odds, and these three surely values. the drinking water may be unfit for have the inside track. human consumption and the water in Together with some rivers apparently is unsuited the Baltic states; even for industrial use. According to Poland, Czechoslo­ some reports, emanating from the terri- vakia and Hun­ gary represent the * Reliable and verifiable statistical and other eastern edge of information is very hard to come by in Western culture, these countries and a certain degree of the place where skepticism needs to be applied. In some in­ the traditions of EJ stances, authorities obviously have a strong the Renaissance E incentive to hide or obscure evidence of misdeeds or shortcomings. In other cases, and the Enlighten­ parties have a similar interest in exaggerat­ ment confront the ing evidence of distress. Oriental. Unlike "How did the peace talks go, dear?" 16 Liberty Volume 4, Number 2 November 1990

Second, these countries occupy a and intellectuals in Eastern Europe ad­ plenty of socialists who have only just vital geopolitical position. Their re­ vocating the replacement of socialism replaced a hammer and sickle with a emergence as independent nations is with a market economy. The Society rose, as well as social democrats who part of a larger rearrangement of the has advanced the idea of establishing a point to the Swedish and the German European scene now under way. These free enterprise zone comprising the en­ models and whisper in the ear of a countries are caught like grist between tire province of Krakow. Its members tremulous electorate about the hard the great tectonic plates of a collapsing have a wide entrepreneurial vision, in­ times ahead and the evils of capitalism. Soviet state and a reunified Germany c!uding formation of the region's first preparing its ascent to European do­ private bank. On the political front, a minion. It is of some import whether number of parties support varying The residents of a Czech vil­ these Central European nations free-market agendas. One of them, the lage are reported to have said present a free and democratic counter­ Conservative-Ubertarian party, is weight to those developments. headed by Janus-Korwin Mikke, a li­ that capitalism is wonderful. Finally, these countries possess an bertarian, who has published transla­ But how could they be so importance, all out of proportion to tions of Ayn Rand's works. sure? Well, they had read that their size, as bellwethers for the next In Czechoslovakia, the transforma­ generation. In the 1960s and 70s, victo­ tion was sudden and largely unexpect­ with capitalism, each business ries in such obscure places as Angola, ed. After the long suppression of must make a profit. They Ethiopia, Mozambique, Nicaragua, and Czech liberals, the strength of their in­ would like very much a system South Yemen buttressed the Marxists' fluence is surprising. Vac1av Klaus, where everybody makes a self-confidence in their role as the inev­ Czechoslovakia's free-market Minister itable beneficiaries of history, and thus of Finance and a darling of the media, prOfit! contributed mightily to Western pessi­ is an unabashed admirer of F.A. Hayek mism~ The adoption by Poland, Czech­ and Milton Friedman. He is outspoken oslovakia, and Hungary of genuinely There are also Christian-Democrats, in his advocacy of an uncompromised Peasant parties, and Catholic parties, liberal-and not social democratic, il­ market economy for his country, his liberally "liberal"-models could have trade union-based organizations and belief in the importance of demonopol­ others whose programs are anything a similar (though more beneficial) im­ ization and privatization, and his rejec­ pact in our time. but laissez faire. tion of foreign aid as an inflationary And, at least in Poland, conserva­ Turmoil Within influence and a deterrent to bold inno­ tive parties that may claim to be With the collapse of the Commu­ vation. His chief economic advisor, Dr. friends of free markets are far from li­ nist regimes, Poles, Czechs, and Slo­ Tomas Jezek, counts among his proud­ bertarian, and are sometimes identified vaks have been faced with the est achievements his translation of one with fascistic and antisemitic elements. immediate issue of what political and of Hayek's works into Czech. Liberals Thus, the Polish press reported and economic system is to follow. In Po­ have also assumed senior positions in even emphasized that the Congress of land, the ten-year struggle of Solidarity the leading law and economics facul­ the Right, held in Warsaw on May I, has provided considerable opportunity ties in Prague. And entrepreneurial so­ was protected by young skinheads em­ to debate that issue. It is therefore of cieties have sprung up in both Prague blazoned with swastikas and brandish­ some moment that the new govern­ and Bratislava. ing truncheons. ment opted for a cold plunge from so­ But for all this, the ranks of liberals Beyond politics is the problem of cialism to free-market capitalism, and entrepreneurs are thin in both the nomenklatura. Neither country has adopting the plan identified with Fi­ countries and their opposition is nu­ yet ousted the bureaucracy that was at nance Minister Leszek Balcerowicz. merous and diverse. There is, in fact, the heart of the old system and neither Since the beginning of the year, Poland good reason for pessimism about their is likely to do so soon. In some ways, has moved rapidly to liberate prices prospects. democratization has aggravated the and wages, supplant state monopolies Opinion polls in Poland have problem. In Czechoslovakia, the col­ with plans for privatization, create a shown the popularity of free-market lapse of the old regime liberated the convertible currency, and invite for­ Finance Minister Balcerowicz plum­ university faculties from the Ministry eign investment. While it is not yet meting, while that of Minister of Labor of Education, giving the established­ clear how far the Ba1cerowicz forces Kuron, who is associated with state and very largely Marxist-faculty a would like to move toward laissez controls, is on the rise. In Czechoslova­ kind of tenure Western academics can faire, the plan does not seem to envi­ kia, gradualist political forces around only fantasize. One liberal Czech pro­ sion the "middle way" of democratic Vice Premier Komareck have deflected fessor has so despaired of reforming socialism as its goal. many of Kiaus's efforts. the university faculties from within Other powerful free-market and li­ In both countries, a wide range of that he is attempting to establish an en­ bertarian forces are also at work in political parties vie for public favor. tirely new school and is seeking West­ Polish society. In 1985 the Krakow In­ There are no more communists, of ern help to launch it. dustrial Society emerged as apparently course. 'We are all democrats now," This swirl of conflicting and com­ the first association of businessmen one apparatchik observed. But there are peting interests is the natural and per- Liberty 17 Volume 4, Number 2 November 1990

haps unavoidable consequence of soci­ ly perplexed by the concepts of "return their own. Driven perhaps by these eties in upheaval. Compounding the on equity" and "retained earnings." strains and the individual ambitions of difficulty that confronts liberals in A Warsaw businessman capsulized its leaders, Solidarity celebrated its broadcasting their message in the the problem. 'We have lived under the 10th anniversary by fracturing into midst of this cacophony is the funda­ Communists so long we have forgotten two hostile camps-the Centrum Alli­ mental confusion in these countries how to work. If things had kept on ance of Lech Walesa and the Citizens about the meaning of that message. A much longer, we might have forgotten Movement, which supports Prime how to think." Minister Mazowiecki. Liberals are confronted with two Other strains have appeared as Increased freedom has given tasks. In the short run, they must con­ well. Anti-semitism appears to be Warsaw seven sex shops vend­ vince the Polish and Czechoslovak Widespread. Anti-German sentiments peoples to opt for freedom and free are also commonplace and, in view of ing paraphernalia imported markets almost as a matter of faith. In Poland's history, more understandable from Germany, a problematic the long run, they must begin an edu­ than the anti-semitism. Increased free­ development in a traditional, cational process from the ground up so dom has given Warsaw seven sex that faith may be replaced by informed shops vending paraphernalia import­ intensely Catholic country. conviction in sustaining a free society. ed from Germany, presumably a prob­ This daunting task will be aggra­ lematic development in a traditional, vated by the worsening conditions in intensely Catholic country. The news meeting was convened at the Prague these countries. Poland has embarked media now contain sensational reports School of Economics between a group on an audacious austerity program. In of burgeoning crime, including gangs of Czech students and the owners of an virtually taking over Warsaw's central American retailer of libertarian books January, subsidies on food items were removed and restrictions on the pric­ train station. The media also reported intent on bringing their wares to another dubious development of in­ Prague. The room was pregnant with ing decisions of many retailers lifted. Food prices doubled. Sugar rose nearly creased freedom and opportunity anticipation. What books would which will no doubt be charged to Czechs buy? threefold and coal, the most important fuel for heating homes, rose several capitalism-Poland's first Ponzi "Well, nothing about socialism." scheme. A local entrepreneur, promis­ "How about A Critical Examination hundred percent. Overall, prices rose by 60 percent while real wages fell per­ ing Poles 60 to 150 per cent interest of Socialism?" rates on their savings, allegedly man­ "No, nothing with the words 'so­ haps 40 percent. For the average Polish worker, whose wages of about 900,000 aged to bilk them of 50 billion zloty cialism' or 'communism' in it, no mat:­ (some $6 million) before taking off for ter what it has to say." zloty per month equate to perhaps $95, the pain was real. Triple digit inflation foreign climes. "How about 'freedom' or Last winter was one of the mildest 'democracy'?" has now subsided to single digit, but a sharp recession is in progress, with in recent Polish memory-an auspi­ "Oh, yes, anything like that." cious setting for introduction of the "Or 'capitalism'?" production down by perhaps 30 per cent. As subsidies and shelters from Balcerowicz plan. It would be too Silence. much to expect such good fortune to "It has been a bad word for so competition continue to be lifted, the misery must increase and unemploy­ be repeated; good fortune has never many years, we're not sure how people been a Polish trait. The coming snows ment is likely to become a particular will react." of '91 may test the fortitude of the problem. Most socialist enterprises The residents of a Czech village had Polish people to stay the course. seem vastly overstaffed. A Polish less doubt how to react. Capitalism, The contrast with Czechoslovakia newspaper reports that the state televi­ they are reported to have said, is won­ could hardly be greater. The students sion station in Wroclaw employs a staff derful. But how could they be so sure? seem to be optimistic and eager, if a We~l, of 430 to produce a single half-hour they had read that with capital­ bit frightened, to get on with their program each day! ism, each business must make a profit. future. And Vlaclav Havel, the whim­ These developments seem to have They would like very much a system sical playwright-turned-President, re­ resulted thus far in relatively little civil where everybody makes a profit! mains a popular folk hero. But Slovak unrest, limited mainly to union pro­ Such confusions are not limited to separatists are becoming increasingly students or rustics. An esteemed Czech tests, boycotts by farmers, and anxiety vocal (a development that may not be economist has asserted, "there are 100 among pensioners. But popular discon­ inconsistent with the advancement of professors of economics in Prague. Per­ tent with economic developments and liberty) and other tensions simm~r just haps six have more than a rudimentary the pace of democratization has result­ below the surface. It is early days for understanding of price theory." Such ed in serious erosion of Solidarity's the Czechs and the Slovaks. The time things are not taught or studied in popularity. of testing has only just begun. good Marxist schools. And a business University students, always a ba­ consultant in Poland admits that he rometer of discontent, seem remarka­ What Now Should We Do? finds American financial statements bly cynical about Solidarity and In this stew of confusion, compet­ quite difficult to read. He is particular- pessimistic about Poland's future and ing claims, and economic turmoil, 18 Liberty Volume 4, Number 2 November 1990

Central European liberals hope to Its specifics should be tailored to Perhaps one of the most useful early make their case while neither being its targets and limited on!y by its re­ tasks is simply to coordinate and in­ drowned out nor drowned. They are sources. It might include supplying crease the flow of information to our struggling with antagonistic parties books, teachers, scholarships, semi­ colleagues about the various programs and rival social theories, with the Old nars, and teaching exchanges, financ­ and activities already under way. World's long tradition of collectivism ing translations, financing joint Above all, it should constitute a and native rivalries, and with their ventures, and formation of joint ef­ long-term commitment, intended to own fears and fatigue. It is impossible forts to tailor privatization studies to endure after the media pundits and to overstate the urgency of their situa­ local conditions. Part of the effort other opportunists of the moment tion or the scope of their needs. The should be to prOVide our colleagues in have moved on to other scenes, and be opportunities that these countries the East with information and access a core effort, not a sideshow to other present may be historic, but they are to useful programs by organizations undertakings. The point of the pro­ also highly perishable. that are not driven by our agenda. gram should be as much to provide A flood of Western governmental and private organizations have en­ tered the fray to provide technical sup­ port and advice, from Peace Corps Sowing the Seeds of Free Enterprise: workers teaching English to financial The Politics of U.S. Economic Aid in Africa consultants advising how to establish by Richard Sincere a stock exchange. A number of gov­ ernment aid programs have been created, with their usual prospect for Recent events in Eastern Europe mixed blessings, but, in any event, the and Central America have amounts appropriated seem quite reignitedthedebateonforeignaid. modest by comparison with the tasks Does U.S. foreign aid help (including recreating the entire infra­ developing countries build structure). A number of American and economic prosperity? Or does it Western European universities have, just entrench the forces of begun efforts to bolster their eastern socialism? counterparts. The newly inaugurated American Bar Association Central and Long-time Africa observer Eastern European Legal Initiative has RichardSincerehasjustcompleted been formulated to' provide technical an in-depth study of the assistance in instituting legal regimes effectiveness of U.S. foreign aid to replace Marxist models of non-law. programs in Africa. Sowing the Most of these efforts are probably Seeds of Free Enterprise presents good things. Even better will be the in­ crease in numbers of American busi­ sevencase studiesofthe successes nesses and investors into Central and failures of programs· in Europe. It may be that the best way to Botswana, Ivory Coast, Ghana, advocate capitalism is to do cap­ Kenya, Senegal, South Africa, and italism. Swaziland. But in general, these efforts are not directed by liberals or in support of "A valuable argument for the importance liberals and they could just as well of free markets in ending poverty."_ produce something like the German or David Boaz, Executive Vice President, Cato Institute Scandinavian social model as they could a laissez faire system. "This slender, well-written volume is worth more than a whole shelf What is required is a program con­ of traditional foreign aid books. It emphasizes initiative and sciously created by American advo­ productivity rather than empty charity."- cates of liberty, directed at and for the Ernest W. Lefever, Founding President, benefit of their East Bloc counterparts, Ethics and Public Policy Center to prOVide them with aid and comfort, ammunition and moral support-an International Freedom Foundation effort to build linkages amounting to a 200 G Street, N.E., Suite 300 network. Its reach should extend to Washington, D.C. 20002 those in government, academia, the business community, the professions, (202) 546·5788 and beyond. 153 pp., $12 paper (shipping and handling included) VISA and Mastercard Accepted. Phone Orders. November 1990

moral support and to create a commu­ outside the pale as a political force. The THE VOLUNTARYIST nity of shared values and effort as it essential operative features of the wel­ ''If one takes care of the means, would be to impart specific informa­ fare state remain in place and are ex­ the end will take care of itself. " tion. Only a long-term, substantial en­ panding, and governance is a more terprise will fill that bill. openly manipulative process of grab­ Recent issues include: Pieces of the puzzle are now being the-goodies pressure politics than ever filled by various organizations. Policy before. Increasingly, pressure groups Voluntaryism in the groups like the Cato Institute, the Rea­ don't even bother with the ideological English Language son Foundation, and the National window-dressing considered indis­ Forum Foundation are making an im­ Weights & Measures: pensable a generation ago. State or Market? portant contribution through seminars In consequence, we live in a society and other efforts, but these are beset by cynicism about the character War Making & State Making generally limited aspects of their much of the political process, distress about As Organized Crime broader and more diverse policy agen­ the vitality of American culture, and das. The Hudson Institute is engaged Voluntaryism on the pessimism about the pOSSibility of Western Frontier in a major reform effort in Hungary. doing much about either. Yet the same The Institute of Humane Studies has American public was captivated by the The Fundamentals of established a permanent presence in triumph of Solidarity, the breach of the Voluntaryism Prague and appears to be engaged in Berlin Wall, Vaclav Havel's impish the kind of sustained program that is The Case Against Democracy charm, and-above all-the electrify­ needed, but its efforts are, of course, ing hunger for freedom across the East limited to its specific focus on student Write for the issue ofyour choice. Bloc. Given half a chance, Americans Please include name, address, programs. still want to believe. In sum, the objective is to build and a first-class postage stamp. Building societies is neither as dra­ upon these valuable beginnings, to 6 issues yearly - $15. matic nor as photogenic as tearing perform the larger task that no organi­ down concrete walls and barbed wire. Box 1275 zation appears to have yet undertaken, But if the hunger for freedom demon­ Gramling, S.C. 29.348 and to enlist American supporters of strated in 1989 can be focused to create liberty whose energies and talents Editor: Carl Watner liberal societies in the east, perhaps it have not yet been engaged. may, in fact, be refocused to capture Is all this really worth it? Can it the American imagination as well. make a difference to us? I think so. At It may also represent the best op­ Introducing ... a minimum, the opportunities to create liberal societies in Czechoslovakia, Po­ portunity, by combining libertarian ef­ Objectivity land, and Hungary maybe beneficial forts with those of other advocates of there and may serve as springboards to personal freedom, capitalism, and lim­ ited government, to reintegrate liber­ -A journal of metaphysics, increase freedom in the remainder of the region, including, in time, the Bal­ tarian thinking into the mainstream of epistemology, and -theory of the intellectual community. This may value informed by modern tics and perhaps even the other Soviet Republics. But the real pay-off for us be possible because foreign programs science. may be here at home. do not create the same intramural terri­ torial complications as domestic ones Topics There is something paradoxical about the current state of American do, and perhaps also because the is­ Ontology ofRelations and Theory of sues in the East are so fundamental Universals - Categories, Language, and public life. Over the past generation, Abstraction - Infinities - Remediation conservatives and libertarians, pursu­ they are not yet partisan. ofStolen Concepts in AppliedMathe­ ing their separate, but often congruent, As we furnish aid and comfort to matics-Identities andInvariants - Ob­ agendas, have made substantial in­ our eastern friends in the fight that lies servers in Relativity and in Quantum roads in reducing government intru­ ahead, we may find that they have Measurements - Reality ofSpacetime sions in specific areas of American life. something valuable to give us in re­ Geometry - Chaos - Causality ­ turn. There is more to the life of liberty Representationalism and Computa­ In the same period, philosophical and tional Minds - Psychology ofHumor ­ economic arguments for personalliber­ than theory and analysis. Perhaps our Hierarchies ofNature, Cognition, and ty and free markets clearly have cap­ friends in Warsaw and Prague, in Bu­ Value - From Fact to Value - Or­ tured the high ground intellectually dapest and Bucharest, and in other ganism, Machine, and Value - and-though it is less commonly rec­ places can enrich our understanding ognized-morally. by teaching us about resistance to tyr­ SUbscription$18 byvolume (6issues). Yet conservatives enter the 1990s anny and oppression, about things en­ Free· sample issue upon request. dured and overcome and moral Write: with their energy flagging and the Objectivity, 3023 N. Clark St. movement perplexed over the end of choices made. Let us give them the Suite 238, Chicago, 11, 60657. the Cold War, and libertarians are still chance. 0 Stephen C. Boydstun, editor. Political ArcheologY-

The Search for HOllle of Truth by R. W. Bradford

Home of Truth, Utah -The description in my guidebook, a 1940 WPA guide to Utah, was intriguing: "Home of Truth Colony is a religious community founded in 1935 by Mrs Marie M. Ogden, formerly a prominent welfare worker in New Jersey ... members are required to transfer ownership of all prop­ erty to the leader for use of the entire group, and thereafter are entitled to In exchange for electricity, Home of ing that underlies the principles of wel­ food, clothing, and shelter. Mrs Ogden Truth promised peace: Mrs Ogden fare, did they find the harmony and claims that she founded the colony "has prophesied that the grazing land prosperity that they sought? Whatever under divine guidance and that she al­ beyond the gap will eventually be pop- became of Mrs Marie M. Ogden and lows members no her devoted disciples? meat, except fish and My guidebook said chicken, and forbids that Home of Truth Col­ the use of tobacco and ony was located on a alcohol." dirt road 1.7 miles west Wow! A charismat­ of an oil-surfaced road ic leader who talks at a point 11.6 north of with God and imposes Monticello, Utah. This a utopian social order point, my road atlas ad­ on the initiates-her vised was a scant 1,200 Home of Truth Colony miles southeast of my sounded like a cross home in Port Town­ between Jonestown, send, Washington. The Guyana, and Big atlas also showed that Water, Utah, with a lib­ the road running north eral dose of the fiction­ from Monticello was al Starnesville of Ayn now paved. Assuming Rand's Atlas Shrugged. Ivy Starnes may have lived here. that the road was still Especially Starnesville, where it was in 1940, I where Ivy Starnes mixed oriental relig­ ulated by thousands of Home of Truth could certainly get myself there; if ion and food faddism with collectivism colonists, and that the faithful will live Home of Truth survived as a prosper­ and low-tech to create a utopia. Like in peace and prosperity while the rest ous community, it would be easy to Ivy Starnes, Mrs Ogden was apparent­ of the world is caught in the destruc­ spot in the desert. I packed my camera lya person of some means: "She owns tion and misery of war." and a thermos of lemonade, got on my the county's only newspaper, the San I wondered: did Home of Truth de­ motorcycle, and set out to find it. Juan Record, printed in Monticello." liver on its promise? Did thousands of Southeastern Utah, for those of you And Home of Truth was a back-to-the­ colonists find good grazing land be­ who have not had the pleasure, is a land movement, decrying the wasteful yond the gap in the mountains? Did lonely and beautiful place. It is desert consumption of modern civilization: they prosper while the world suffered country, and like desert country every­ "The colony has no electrical nor sani­ from the carnage of World War II? where few people live there, and those tary conveniences; light is provided by Filled with religious fervor, apprecia­ that do are a little strange. But in this candles and oil-lamps, and water is ob­ tion of the simple, low-tech life, and an part of Utah, it is the land that grabs tained from outdoor handpumps." understanding of the compulsory shar- your attention and holds it. Scrawny Liberty 21 Volume 4, Number 2 November 1990

rivers flow through magnificent can­ group of buildings that must have been dilapidated cattle guard made of yons. Vast flows of lava bake in the "the Outer Portal" identified by the wood. I pass the rockpile foundation sun alongside towering spires of sand­ guidebook. This was the most devel­ of the cobblestone church that was stone. There are more national parks oped part of the colony, the home of never completed. Ahead lies a house than decent restaurants. Mrs Ogden and her elect. that appears to be covered with tar To the south-the direction I am It lay north of the road only a few paper. Does someone live here? Am I heading-there are ominous clouds. hundred feet. I park my motorcycle trespassing? There are no vehicles To my left is a huge natural arch, more and walk up a sandy track to the main about, but I park the bike and walk to­ spectacular than any in Natural Arch­ group of houses. There is a deep gully ward the house. "Hello? Is anybody es National Park. My map has a tiny in the track, where water runs during home?" No one answers. red square marked "Wilson Arch." I rainstorms. Anthills rise six inches high I soon discover why: through a have never heard of it. Why is there no and a foot across. Four-wheel-drive window I see that the house is full of national park here, I wonder, no mag­ trucks have been here since the last hay. I hear the sound of an animal: I net for America's subsidized geriatrics rain; tracks are all around. have startled a jackrabbit, which runs luxuriating in behemoth Winnebagos It is easy to spot which house was from one sagebrush to another. Then and suburban families packed into Mrs Ogden's. It's the two-story one the whisper of the desert breeze is in­ tiny sedans? Perhaps its closeness to with several rooms and a long porch terrupted by a sound that seems out of the highway accounts for its obscurity. facing Shay Mountain to the south­ place: a quiet mechanical sound. I look If people can see it from the window west. "During the summer," the guide­ about and discover that the ramshack­ of their car on U.S. 160, how can it book says, lithe colonists make le windmill to the west is turning. It is qualify as a "natural wonder" worth a frequent trips to this mountain, re­ pumping water from a well and $5 per carload admission? maining at its base while their leader dumping it on the ground. There are I speed by. I reach the point where ascends to the summit to receive reve­ no animals here to drink it. Has this I calculate that I must leave the high­ lations." Israelites at the base of Sinai windmill been quietly pumping water way. The road I select is paved now. I while Moses ascends. onto the thankless desert for fifty drive up it .6 miles and look to my left: But there were no colonists at the years? could that rundown shack be all that is base of Shay Mountain today, no Mrs But of course, this land is being Ogden at its summit talking to God. used. There are cowpies everywhere, Neither were there happy colonists in and someone has filled the house with the Outer Portal, and grazing land hay and is probably caring for the filled with the flocks of sheep and har­ windmill. This field is used for cattle, monious colonists beyond the gap. The probably during the winter. Real pro­ houses are falling apart. H they were duction in the debris of utopia. ever painted, there is no hint today. The clouds to the south look threat­ Every piece of glass is gone, every door ening. I mount my motorcycle and is open, the only signs of twentieth­ drive past the rockpile church to the century occupation are the scraps of li­ paved road and back toward the Out­ noleum on the edges of floors. Litter is ermost Point. everywhere-the sort of Iitter that isn't At a weatherbeaten shack, I dis­ completely broken down by 40 years of mount, startling another jackrabbit. the desert: fragments of rusty, metal, The shack has no doors, no glass. bits of barbed wire, leprous tin cans, Nearby is a collapsed building. weathered boards torn from buildings. It is anti-climactic. After you've I look in vain for the ruins of an electric seen the Middle Section, how can you motor. be impressed by the Outermost Point? In front of one building is a length The sky is dark now-the clouds are A current resident relaxes in his home. of concrete sidewalk; by another is fearsome. I am taking photographs left of "the Outermost Point," identi­ some rockwork. Between two build­ when the first giant drops of water hit fied in my guidebook as "a group of ings I come upon two trash barrels, one me. I head for the paved road, and it is frame buildings for the use of non­ labeled, "Keep Utah Beautiful." They raining hard when I reach it. I dis­ memb~rs and visitors?" Another 1.1 are about half-filled with beer cans, mount and put on my jacket to protect miles down the road I look for lithe and more beer cans are strewn about. me and my camera. I am in what in Middle Section," which I quickly iden­ The Outer Portal has become a these parts is called a "gully washer." tify by the low, Mesopotamian-style place for local teen-agers to drink. Yes, the gullies are washing: brown pile of rocks that I take to be "the un­ To the south the clouds grow dark­ rivers of mud rush alongside the road, fini'shed cobblestone church" men­ er. I walk back to my motorcycle and and I am back on the highway, racing tioned in the guidebook. return to the Middle Section. There is a through a downpour away from Uto­ I continue down the road another dirt track into it, passing through a gap pia, leaving Home of Truth to jackrab­ 1.3 miles. Sure enough, I come across a in a barbed wire fence. I cross over a bits, lizards and ants. 22 Liberty Volume 4, Number 2 November 1990

only about 18 miles from Rajneeshpu­ ram. It is late afternoon; I check my odometer as I turn east on SR-218. Ac­ cording to my map, the road to Raj­ Ashram in the Desert neeshpuram is 4 miles from the intersection. I wonder: will I be able to distinguish it from other dirt roads? I have forgotten that this is the high Rajneeshpuram, Oregon - Like Home of Truth, Rajneesh­ desert, where mountains, winter snows, puram was founded in the desert as a religious community centered and freezing weather make road main­ around a charismatic leader. tenance a real job. It is not the desert of But the the similarity doesn't go on road maps. But you can find it if you Utah or Nevada, where a road can be very far. Rajneeshpuram was large; want to. plowed in the earth and remain in good Home of Truth small. Rajneeshpuram shape for years. Roads are few in these was famous; Home of Truth almost un­ I drive south on•U.S. 97 to Shaniko. parts. The first dirt track off the pave­ known. Rajneeshpuram was rich; In the early part of this century, as ment I come to is about four miles up Home of Truth poor. And ironically, much as five million pounds of wool the road. This must be the place. I turn. while obscure Home of Truth is easy to were shipped from Shaniko each year, The road undulates and twists get to, located only a few hundred but overgrazing turned the land to sharply as it climbs and falls. The only yards from a paved road, sign of civilization is a long­ well-known Rajneeshpu­ abandoned barn, left un­ ram is hard to find, a travel­ painted for decades, now ler's challenge. the color of charcoal. On its In the early 1980s, Raj­ side a white sign in block neeshpuram was the center letters proclaims, "BELIEVE of attention. Ted Koppel ON THE LORD JESUS did live interviews with its CHRIST AND YE SHALL officials, and the motels of BE SAVED." This, clearly, nearby towns were filled was not the ashram. About with reporters from around three miles up the road I the world. Its story was come to an intersection. This widely known: a guru, who seems too close to the high­ went by the name Bhagwan way. I continue. The road Shree Rajneesh had left his worsens. The turns get ashram in India and moved sharper, the potholes bigger, to the United States. Bhag­ the grades steeper. It is hard wan's religious teaching work maneuvering my mo­ combined ideas and tech­ torcycle, but I proceed. niques from the Western Baghwan lived here. Where is the road to Raj- human potential movement neeshpuram? Should I have with those of the Eastern tantric tradi­ desert, and in the 1940 census, its popu­ turned at the last road? Finally, I come tion of sexual mysticism, a doctrine that lation had fallen to 55. My map lists it to an intersection: an arrow to the left found a market among well-off Ameri­ as a ghost town. points to "Ashwood." From my map I cans. Bhagwan ("God") moved to a I stop at its only remaining commer­ see that I am south of the road to Raj· ranch in central Oregon that had been cial building, a gas station. How many neeshpuram. I backtrack, and turn purchased by his disciples, and estab­ people live in Shaniko, I ask. Less than down the road I had passed earlier. lished a religious community, which he ten, I am told. I note the billboard an­ It rises sharply, but the roadbed is called Rajneeshpuram. nouncing in red, white, and blue letters better. I cross a cattle guard. There is a At its peak, somewhere between a huge federal grant to improve its mu­ huge sign, "PRIVATE PROPERTY AB­ 2,000 and 5,000 people lived in Raj­ nicipal water system. The paint on the SOLUTELY NO TRESPASSING, VIO­ neeshpuram, and at one point another sign has peeled away in patches; it LATORS WILL BE PROSECUTED TO 15,QOO or so visited to attend a religious dates from the 1960s, when the town THE FULLEST EXTENT OF THE LAW, festival. In the early 1980s, it appeared boasted a population in the 30s. Today, CONNECTICUT GENERAL LIFE IN­ on road maps, a foreign sounding name its few remaining buildings bake in the SURANCE CO., CO-OWNER." on the southern border of Wasco sun, decaying. Grass grows tall in what I am in Rajneeshpuram, or more County, about 50 miles northeast of appears to have been a park. precisely, I have entered the ranch the Madras, a metropolis of 2260 souls in I turn south on a paved county Rajneeshees purchased to build their the high desert of central Oregon. road, passing through Antelope, the home in the wilderness. But the ranch is Rajneeshpuram no longer appears town of some 30 or 40 people that lies huge-over 100 square miles-and it is Liberty 23 Volume 4, Number 2 November 1990

another 8 or 9 miles to the city proper. I drive past a shopping mall. The property and lived a communal life. Smoke rises somewhere in the dis­ road makes a large "5" curve. I drive Their neighbors in Monticello didn't tance. The air is fairly clear, but it burns on, past more bus stops, more build­ care much for the colony ten miles my nasal passages and inflames my ings. An overgrown soccer field. A north of town, but they didn't do much eyes. It is very hot and I grow appre­ huge wall-less structure of the sort that about their dislike. Eventually, as the hensive. Is Rajneeshpuram on fire? The prosperous ranches use to store hay, colonists realized that their religion only signs of man are the road and but it can't be for hay storage: the Raj­ was bogus, they abandoned Home of barbed wire fence and utility poles neeshees were vegetarians, and had no Truth. And today Home of Truth is along its sides. Then I see a large con­ use for animal feed. More bus stops, dead, rotting in the wind and sun of crete cube. On its front it says, City of more streets, all barricaded. It is impos­ Rajneeshpuram. It is chipped, and sible to see most of the town from the parts are missing. county road, and all the sidestreets are Before long, the local cafe The road ascends sharply: myaltim­ protected by barricades and no tres­ was painted red and renamed eter indicates I am more than 3000 feet passing signs. "Zorba the Buddha," the town above sea level. The road twists and Then the town gives out. I turn falls. The scenery grows more spectacu­ around and return to the center of renamed Rajneesh, and old­ lar, with pillars of rock rising alongside town. I park my motorcycle and take a time residents of Antelope the hills of muted greys, greens, and good look at a large green building found out what it was like to browns, covered with scrub. The land across from the mall. It is "L" shaped, is unkempt. with several bay windows and a cov­ be treated as they had treated And then I see a lake, sitting incon­ ered walkway. Signs on the windows the Rajneeshees. gruously alongside the road. As I reach say "New Releases, Photographs, Pa­ it I discover that it is a reservoir backed perbacks, Bhagwan Magazine, Bhag­ the Utah desert. up behind a small earthen dam. Around wan Audio & Video." A wooden sign Bhagwan brought his flock to the another curve I see further signs of man. on the side of the building warns, "Ab­ desert of Oregon to establish their own Buildings. An asphalt airstrip parallel to solutely No Trespassing, All Violators Promised Land. The ranch they pur­ the dirt road. An apartment complex Will Be Prosecuted To The Fullest Ex­ chased in July 1981 was 18 miles over a lies in a narrow ravine. It looks like it tent Of The Law, Connecticult General rutted, single lane dirt track from their could be in a suburb of Denver. Or L.A. Life Insurance Co." Aside from a rain nearest neighbors, 50 miles from the Or any other city. But not here, no­ gutter swinging in the breeze, the build­ nearest city. They got the water for where. On my left is a garage entitled ing appears to be in good repair. I peer their colony by damming up the tiny "Siddartha." Modern street lights. Yel- in through the windows. Empty. I take creeks that result when the snow melts some photographs, careful to walk only in the spring, and by tapping the small on the county road. A ghostly town, but there is aquifer that lies under their own prop­ I walk toward the shopping mall. It erty. It is impossible to imagine a more none of the decrepitude of a is a two story structure, with four sets remote site for a colony, or one which of french doors at intervals on either impinged on its neighbors less. ghost town. It is a complete side of its main entrance in the center. I city, waiting in the desert for Like the colonists at Home of Truth, pace it off: it is 300 feet wide. A large, they sought to make the desert bloom. someone to live in it. Every­ slightly weather-beaten sign over the Like the colonists at Home of Truth, thing is new, modern. And main entrance says, "Devareeth Mall" their main assets were their own labor in elaborate lettering. One of the doors and the money they brought with empty. has" AIR SA ON" written on it: not them. Today, only traces remain of some strange oriental institution but a Home of Truth. Today, Rajneeshpuram low poles labeled "Bus Stop" at inter­ hair salon. Part of the roofing material is a city without people, waiting in the vals along the road. A bus station. is missing near one end. Otherwise the desert. Waiting for nobody. The road curves. On the left is a Vic­ building is in good shape. It too is Home of Truth died a natural empty. torian house, an incongruity within an death. Rajneeshpuram was murdered. A ghostly town, but there is none of incongruity. It is lovely, and beautifully In order to live on the land they situated, surrounded by a creek and the decrepitude of a ghost town. It is a had purchased, the Rajneeshees had to complete city, waiting in the desert for trees. The creek gurgles, four ducks get the permission of the politicians in someone to live in it. Everything is new, swim in it, a breeze rustles the leaves of The Dalles, the seat of Wasco County, a modern. And empty. the trees. It looks like a nice place to resort city on the Columbia River, lo­ live. And someone lives in it, a caretak­ cated some 90 miles to the north. er, I surmise. Next to it a street leads • Thanks to the land-use regulations of down a valley. There are many build­ Mrs Ogden brought her flock to the the State of Oregon and of Wasco ings down the street, but my view is desert of Utah, some 700 miles south­ County, the Rajneeshees had to limit blocked by trees along the stream; I east of Rajneeshpuram and 45 years ear­ settlers to agricultural workers. But the cannot tell what they are. Like all the lier, to establish their own Promised Rajneeshees didn't want to use the other side streets, it is barricaded. Land. Her followers gave her all their land as a cattle ranch, populated by a 24 Liberty Volume 4, Number 2 November 1990

single family and one steer per hun­ moved to town, and disincorporation ing the Rajneeshees at every oppo­ dred acres. They wanted to capture the failed. rtunity. land's scarce water and use their own The next city council election What would have happened had labor to cultivate the desert. This re­ brought a Rajneeshee majority. Before not the people of Oregon used the quired far more workers than does a long, the local cafe was painted red and power of their government to destroy ranch. renamed "Zorba the Buddha," Main Rajneeshpuram? Eventually Rajneesh­ So in October, 1981, three months Street renamed Melvana Bhagwan puram might have suffered the fate of after purchasing the ranch, they ap­ Street, the town renamed Rajneesh, and Home of Truth: members would have plied to the politicians in The Dalles for old-time residents of Antelope found learned that subjugation to Bhagwan permission to hold an election to orga­ out what it was like to be treated as provided no more long-term satisfac- nize a city on their land. tion and happiness than The politicians granted the Home of Truth cult­ them permission and the ists got from subjugating City of Rajneeshpuram themselves to Mrs was created. Ogden, and they would But their neighbors have abandoned the called on a group of colony. wealthy city-dwellers in More likely, the Raj­ Portland-150 miles and neeshees would have fal­ a world away-a group len gradually from their with the money and faith but remained in legal resources to fight their community for eco­ the Rajneeshees. In nomic reasons (they had December 1981, 1000 millions of dollars invest­ Friends of Oregon filed ed there), as the members a lawsuit, arguing that of the Amana commune the city was not in har­ of Iowa did a century mony with Oregon's ago, eventually convert- comprehensive land-use Illegal to occupy. ing the communal prop­ program. When the Rajneeshees want­ they had treated the Rajneeshees. They erty into indiyidual property by a dis­ ed to operate a printing press to complained loudly, and found sympa­ tribution of stock and land. produce pamphlets and books about thy with most of the people of Oregon. Either development would have de­ their religion, 1000 Friends of Oregon When Bhagwan drove the 50 miles nied the media a circus and the Ameri­ reminded them that all buildings and to Madras, his car was surrounded by can public the entertainment prOVided operations not directly related to farm angry demonstrators shouting "Bhag­ by the Rajneeshee episode. And either use were prohibited at the ranch, and wan out of Madras!" "Repent your would have proved less expensive to suggested they locate their printing sins!" and "America will be free!" the people of Oregon, who had to pay press in Antelope. Moreover, 1000 A siege mentality developed. Tem­ the bill for the legal war against the Raj­ Friends warned them that they "may pers flared. Before it was over, wild neeshees-and who continue paying not rely on the hostility of Antelope charges and crazy actions were taken the bill today: they must live in a socie­ residents" as an excuse for establishing by both sides. By 1985, the Rajneeshees ty that cannot tolerate diversity. "Amer- , their printing operation on their own were finished: their city had been de­ ica will be free!" they shouted at land at the ranch. clared illegal, their leaders put in jail, Bhagwan. Yes, Americans will be free. So the Rajneeshees purchased a plot their treasury depleted by a huge num­ But only so long as they choose not to of land in Antelope and applied for a li­ ber of legal battles and tax judgments. follow your religion, Bhagwan-only cense to operate their printing press The Rajneeshees reacted to their per­ so long as they do not wish to live in there. The city council of Antelope de­ secution in a bizarre, paranoid and vi­ their own city on their own land. nied them permission. It occurred to cious way, plotting to set fire to the someone on the city council that with county planning office, to assassinate • fewer than 20 registered voters in the the prosecutor and to poison a county As I kneel and focus my camera on city, Antelope's city council could easi­ commissioner. But the reaction of the the shopping mall I hear a voice: ly be taken over by the Rajneeshees­ people of Oregon to the arrival of the "Hello! What're you doin'? You better all they needed to do was to move a Rajneeshees was crazier: it dropped all not trespass." A middle aged man handful of people to their property in pretense of tolerance and civilized be­ walks toward me. I stand up and say, "I town. So the city council decided to havior and engaged in an orgy of nati­ am on the county right of way." I am abolish the city. The disincorporation vist witchhunting: setting fire to a apprehensive. measure passed the council, but it had Rajneesh-owned hotel, arbitrarily But once I convince him I do not in­ to be approved by the voters. During changing the voter-registration proce­ tend to trespass, the man is friendly the month between the council action dures a few days before an election to and loquacious, like many who live in and the election, more Rajneeshees prevent a Rajneesh victory, and harrass- the desert. "The reason I cannot trust Liberty 25 Volume 4, Number 2 November 1990

everybody, I'ye tried to and I can't. I've How many tourists come here, I ask. ''Were you ever down here in their let people come in here and walk ''We had a helicopter come in here yes­ heyday? It had the third largest bus ser­ around ... I don't check these build­ terday at 8 o'clock in the morning, peo­ vice in the state of Oregon, teetering on ings daily, but I do weekly, and I find a ple land their planes, hit the damn the brink of being the second. There is a goddam door busted back here runway, touch down and are gone ... if 170 room motel, you can see it through somebody's gotten in, they think they it was snowing I'd probably have 15 the trees. can get into the mall, but there's noth­ cars, if it was 95 degrees, I'd have one. "It was the biggest city in Oregon ing in the mall. You can look through You just can't predict who's coming east of the mountains. Except for Bend. the windows and see there's nothing in through or when.... I told the guy up Bend is the fastest growing city in Ore­ there. But they think gon right now. People are there's gold in here ... flocking in from Califor­ "1 feel fortunate that I nia and I wish to fuck haven't had vandals. I've they'd stay in California. been here 2 years ... well ''Well what happens is make that 20 months. The they come in here long city came to a screeching enough to establish resi­ halt in 1985, approxi­ dency. And then they go mately October or No­ back to California. They vember of 1985, there use this as their summer were still people here be­ place or their winter place cause it still belonged to to ski or what the hell the Rajneeshees. The Raj­ they do. They got homes neesh got out of here, tak­ all over this goddam ing his money with him place and they don't live and what have you. Shee­ in 'em half the time. And la went the other way, then if I go down to the went to jail over here in local bank and I want to California for two years The last bus left in 1986. get a fucking loan down in one of those federal prisons where at the store, the cafe in Antelope, 'Tell there and all the money is loaned out to you can't play golf but once a week or everybody the place got rained out, or these people cause its cheap, taxes are tennis but once a day or some goddam the roads are bad.'" cheap, and like one guy said in the cafe thing you know and you can't have What's going to happen to this one day, it was years ago, and a truck beer but once a week ... " place? It's been sold, he said, to an out­ driver came through and says, 'What I tell him I am writing a magazine fit called the Hanover Corporation, do you guys got against Californians?' article. He does not want his name which will make it a resort. They paid and he says 'If you want to move up used, he says. "A guy came out here $300,000 down on the deal. They won't here move, but bring your fucking and I didn't realize he was writing stuff walk away from that kind of down money out of the bank, sell your house in the back of a truck when I was talk­ payment. The purchase price is be­ and move up here. Don't tell me what ing he had a travel-all one of those large tween $5 million and $6 million. you did in L.A.' We're getting too fuck­ Chevy trucks and so when I got over "Can they use it as a resort?" I ask. ing many board members there from here you know and I started to pile out "1 read that it was emptied out of peo­ L.A. I moved up to Bend in 1974 and it and you know I saw the yellow pad ple because of a violation of Oregon's used to be the nicest little city, polite and I said, 'What're you doin?' and he state-wide land-use regulation, after a people, you know, you'd drive down said, 1 just writing down what we're lawsuit from an environmental group." the street and stuff and they'd stop and talking about' and I said 'you're going "Oh, no" he said. "It was closed let you out of the side street and wave to have to clear that with the insurance down because Bhagwan was an illegal at you and stuff. I'm at the bank. Now company.' 'I will, I promise you that.' I immigrant, and because he was flying I'm this way, I get in the fucking car said, 'Okay, if you don't I'm going to in immigrants from Mexico and land­ and I raise hell. Now I'm at the bank look you up.' And so he called the insu­ ing them on the strip." and I'm waiting while the goddam peo­ rance company and the insurance com­ It was repossessed by the insurance ple pile up in front of the bank at the pany said, 'We won't talk to you.' So he company in 1985. ''They've had a gold­ entrance and exit and I'm trying to get went ahead and printed the fucking mine dumped in their lap and they out and cars are lined up down the story and it wasn't 3 ... 4 days later, don't know what to do with it. These street a half a block and do you think goddam if I didn't get a call. We told developers told me this fucking place is those fuckers could leave enough space you not to talk to anybody.' I said, Well worth 50 million, it's worth a hundred so I could get out? I get out of the fuck­ what the ... there's nothing in the paper million. There are computer line trunks ing car and I says to this guy, "Didn't that's·derogatory.' He said, '1 know under the ground here that will make you see me trying to get out of this that. But they know how many people your head spin. I mean this fucking goddam driveway?" And he says, "Oh, are there, they know this, they know place was computerized. It had the latest no. I didn't see you. I was just looking that.' See what I'm saying, it's touchy." IBM computers in it. straight ahead." 26 Liberty Volume 4, Number 2 November 1990

The sun is low in the sky. It gets I state this formalism for two rea­ LettersI continued from page 6 cold in the desert when the sun goes sons. First, it makes the discussion rig­ These statements are ethical because down, and I want to take more photo­ orous and helps cut through the "should" occurs in them. But they are graphs. I excuse myself, finish my roll natural-language tangles of ethical superficially ethical statements. The long­ of film and leave. The sun is near the shorthand and longhand. This helps hand version removes the ethical term. horizon, and I have 15 miles of dirt avoid category errors like "Value­ For instance, '1/2 = 3' is false and, in fact, roads ahead of me. Again I smell freedom refutes itself by valuing the your parents and I believe that we smoke. It gives an odd color to the air, valueless" and the like. Talk within ethi­ should pursue truth not falsehood." and burns my eyes and nasal passages. cal systems differs from talk about them. Statements about ethical utterances Second, I feel (note the verb) that I had forgotten about it while concen­ can be true or false. The sentence ,I/Sin is trating on the road driving in, but pay­ most libertarians need a sharp rap on wrong' contains three words" is ~ue ing more attention to the smoke I see the nose when it comes to logic, espe­ and not an ethical statement. EthIcal that it comes from north and west of cially two-valued logic, and what it statements themselves are not true or Rajneeshpuram. does and does not imply. Some libertar­ false. To refute this hypothesis you need I stop at the Antelope Cafe, and buy ians still try to logically prove the truth produce only a single true or false ethi­ of axioms, rather than simply stipulate a paper cup of orange soda and copy of cal statement. So far no one has. them. Others believe, as Ayn Rand did, The Rajneesh Chronicles, a book that the Sheldon Richman ("Bart Kosko and caretaker had recommended to me. I that we must or should believe in Aris­ the close of his system," July 1990) states totle's two-valued logical "laws" of ei­ ask the man working the counter falsely that the statement "One ought to throu~h ther-or and noncontradiction. In fact whether many people come accept as true a conclusion reasoned ~e ~lt­ these bivalent laws lead to bivalent con­ looking for Rajneeshpuram. has properly from true premises" is a true tradictions-reflect on the set of all sets tle interest in talking to outsiders hke ethical statement. I agree with him that not members of themselves or the politi­ me. He points to a hand-lettered piece the shorthand ethical statement pro­ of cardboard. "I wrote that four months vides good advice (except when our en­ cian who says that all politicians are liars-and they represent a (measure­ ago." joyment of, say, fantasy or film or zero) special case of all possible like re­ poetry depends on willful suspension.of lationships. I do not claim uncondition­ belief). It certainly provides good adVIce "I wish they'd stay in Cali­ ally that you should advance from to students ifthey want to construct der­ fornia. They got homes all over ivations correctly, if they want to pass logical bivalence to fuzziness: from this goddam place and :hey exams, if ultimately, they want to in­ black and white to gray. I claIm that co~sis-. don't live in 'em half the tlme. crease their chances to survive and re­ you can fuzzify with rigor and. produce in this environment in.this tency, and that you cannot maintain bi­ And then if I go down to the galaxy in this universe. The ethical or valence without self-contradiction. local bank and I want to get a evaluative question is whether they S<> even the "certainty" ofbivalent fucking loan, all the money is should want these ends, not what pro­ logic goes the way of ethical certainty. It vides efficient means to them. reduces to pragmatic choices of systems loaned out to these people." I do not claim unconditionally that and internal system consistency. In gen­ you should believe the conclusi.on of a eral you cannot utter "not- (A and not­ A)" and "A or not-A" for sure, with "To Guru Ranch. From store 18 valid argument with true premIses. I unity truth value. These relations hold miles. Take road to Fossil, turn right 4 claim only that if true premises logic~lly miles, from here on Cold Camp Road imply a conclusion, then the conclUSion with partial truth values in more cases go 4 miles, turn left on Mud~y Roa~ is true. I omit the proof. than there are real numbers. and continue to ranch. Leave thIS here. Medieval scholars sloganized this as So far no one has produced a true or The cardboard is soiled and a bit "Truth should never imply falsehood." false ethical statement. We do not have frayed from handling; I guess a few Today in multi-valued or fuzzy logic, tolike that fact. But we do have to take it, even ifour presumed bedrock evapo­ people had been through during the where the truth value t(A) of statement previous four months. A can be any number in [0,1], we rates. It hurts. But emotions do not add In Madras, I find a room at the Royal translate this slogan as "The truth value up to truth. Appeals to God, philoso­ phy, and wordplay only delay Dutch Inn. I mention to the proprietor t(A ~ B) of the implication A ~ B that I had visited Rajneeshpuram. "That decreases as the antecedent truth value reckoning. was the best thing that ever happened t(A) exceeds the consequent truth value Ethics manipulates behavior. We around here," he says. "In small towns t(B)." For instance, utter ethical statements like "You did everybody loves to hate somebody, t(A ~B) = minimum (1,1- t(A) + t (B». the right thing" and "You should tell they hate the Japanese, and they hate Ifthe truth values t(A) and t(B) as­ the truth" to express our feelings and, the Chinese, and they hate the Scots, sume only the bivalent truth values 0 most of all, to change the probabilities and they hate the Spanish, and they (false) and 1 (true), this equation gives of our listener's future actions. We com- hate the Italians and they hate the Poles, back the truth-table definition of logical . mand as we commend. The two differ but when the Rajneeshees came to town implication taught in 10th grade. Then by only a vowel. they all put their arms around each t(A ~ B) = 0 if and only if 1 = t(A) > t(B) Bart Kosko other and hated the Rajneeshees." 0 =0, when "truth implies falsehood." Los Angeles, Calif. Liberty 27 Un- comm.on policysense.

Privatization and Educational Choice by The Crisis in Drug Prohibition edited by Myron Lieberman. The author argues that conven­ David Boaz. The contributors to this book argue tional approaches to educational reform will fail that, as did the prohibition of alcohol in the 1920s, because of the bureaucratic structure of the public drug prohibition- not drug use- is causing today's schools and the interest groups that block reform. alarming crime rates, as well as corruption, the Only by fostering private and even profit-making spread of AIDS, and abuses of civil liberties. The schools that compete with public schools, he con­ contributors, including Baltimore mayor Kurt tends, will we achieve lasting improvements in Schmoke, Princeton professor Ethan Nadelmann, American education. 1989/386 pp.!$35.00 cloth! and attorney James Ostrowski, agree that some $12.95 paper form of decriminalization is in order. 1990/134 pp.!$8.00 paper NATO at 40 edited by Ted Galen Carpen­ ter. In this volume 17 distinguished policymakers, The Excluded Americans by William scholars, and policy analysts assess the value of Tucker. Tucker examines the problem of homeless­ the NATO alliance after 40 years. They question ness as a true investigative reporter should- both continuation of the U. S. financial drain in the face by camping out with the homeless in Grand Cen­ of federal budget deficits and changing circum­ tral Station and by analyzing the data of the social stances in Europe. 1990/274 pp.!$39.95 cloth! scientists. He concludes that homelessness is largely $14.95 paper the result of rent control and zoning policies. A Regnery Gateway b

Cato Institute, Dept. L ~ lrN.·~~·~~TTl'~. 224 Second Street, S.E. ..' !. Washington, D.C. 20003 11 .~ ! .111 lu .!.L.!!:I EXQose You, Too, Can Be a Junior G-Man by David Hudson

The 'War on Drugs" has had many casualties, and one of them is financial pri­ vacy. And to win their war on privacy, the Feds have conscripted private busi­ ness people and workers.

Are you an officer or employee of a bank or other financial institution? Are y~u a "person engaged in a trade or a business"? If so, congratulations; you are a junior G-man in the war on drugs, money laundering and tax evasion. Surely you know, by now, of your obligation to report, on IRS Form 8300, any transaction involving $10,000 or A major concern of the IRS is the deem this transaction "suspicious," more in cash. As a 1988 IRS news re­ crime of "structuring," which involves and call the IRS toll-free. lease says, "Since 1985, the law re­ making multiple or sequential curren­ The under!ying presumption is that quires any person engaged in a trade cy transactions, each less than $10,000, one is guilty of something whenever or business, who receives more than to avoid triggering the required cur­ one pays cash. The statutory $10,000 $10,000 in cash for one business trans­ rency transaction report. Here is where threshhold means Iittle: since "persons action, or two or more related transac­ the law-abiding American who prefers engaged in a trade or business" are re­ tions, to report these cash payments to to use cash in his or her everyday quired to aggregate related purchases the IRS." If you work for a bank, this transactions needs to watch out. and report them if they ever total more obligation-and many related obliga­ Anything Can Be Suspicious than $10,000, every cash transaction tions-has no doubt been drummed must be viewed as suspicious. If the Suppose, for example, you pur­ into your head in formal training ses­ person "engaged in a trade or busi­ chase a car for $12,()()(), and pay for it sions, through written policy state­ ness" fails to do so, he can be charged in three monthly cash installments of ments and procedure manuals, and by with the crime of assisting money $4,000 each. Must this transaction be reading the trade press. But whether laundering. reported to the IRS? According to an you work in a bank or another "trade "Suspicious" activity can involve IRS press release it must: or business," you face the same obliga­ any "unusual activity." The ABA tells tions and suffer the same penalties for For example, someone engaged in its members that "identifying this the trade or business of selling auto­ failure to comply. symptom requires a knowledge of the mobiles sells a $12,000 car to be paid customer's account history. Any large You are not to worry, though: it's for in three $4,000 monthly cash in­ so easy to be a junior G-man. The IRS stallments. If the seller receives pay­ currency transactions that do not fit even gives you a toll-free number to ment of each installment in cash, that the pattern of the account should be call. If you think that someone is disre­ tradesperson would have to file the suspect." This, of course, could mean garding his obligation to report the im­ form within 15 days of receipt of the that if I never deposit or withdraw port or export of $10,000 in cash, just third installment. more than, say, $100 in cash to or from diaI1-8oo-BE-ALERT. Worse still, you run the risk of my account at one time, my depositing But considering who the victims being accused (and convicted) of $1,000 from a successful trip to Las of these new laws and regulations "structuring" your purchase to avoid a Vegas could result in the IRS investi­ often are, it seems that everyone must Currency Transaction Report (CTR). In gating me. keep alert. any event, the car dealer is expected to Suspicious activity can even in- Liberty 29 Volume 4, Number 2 November 1990

volve non-financial dealings with your drug profits. It is the crime of using required to submit a criminal referral bank. The Florida Bankers' Association cash-including your own honestly­ form to its primary federal warns its members that "warning signs owned cash that you have paid taxes supervisor.... of illegal activity can be spotted from on-without filling out a government On October 31, 1989, the ABA Bank­ the time a customer opens a new ac­ form. ers' Weekly had a four-page "Special Re­ count," and suggests that its junior G­ And with the Bush Administration, port on Money Laundering: The the worldwide attack on cash has men-excuse me, customer service rep­ Banking Industry's Response." An arti­ gone into high gear.... resentatives-should look out for: cle entitled "On the front line" gives Paul writes about an Indiana resi­ several examples of bank employees • Lack of sufficient pieces of iden­ dent who "was indicted by a grand jury acting for the government, including: tification. for structuring because he had with­ Tellers stay alert • The customer lives and works on drawn large sums of his own money one side of town and is opening an over a period of weeks, but each trans­ Puget Sound Bank of Tacoma, account on the other side of town. Wash., cannot say enough about its action was under the official limit of tellers. • The customer is an older person $10,000. As hard as it tried, the govern­ After noticing the purchase of four having a relatively high Social Securi­ ment couldn't find any criminality." ty number or vice-versa. $9,000 cashier's checks at different Despite the government's failure to branches over a three-day period, • The customer wants his new alert tellers reported the suspicious checks and deposit slips sent to a post transactions to the Internal Revenue office box. It's so easy to be ajunior G­ Service.... I am not making this up; I wish I Query draws heat were. Consider the case of a 60-year­ man. The IRS gives you a toll­ old refugee from Castro's Cuba who An attorney's call to a customer ser­ free number to call. If you vice representative with Signet Bank has just legally arrived in the United think that someone is disre­ in Virginia began innocently enough. States. His Social Security number garding his obligation to re­ But when the questions turned to the might just as easily have been issued to threshold level for currency­ a five-year old; any child over five who port the import or export of transaction reporting, the employee is claimed as a tax deduction by his $10,000 in cash, just dial 1­ alertly notified her boss.... parents must have his or her own Social BOO-BE-ALERT. The article goes on to say that the Security number. His only identifica­ Washington case led to the arrest of two tion is his Social Security card, and his men "on conspiracy, money-laundering address is a post office box because he even allege an underlying criminal act, and firearms offenses/' and in the Vir­ lives in an unsafe neighborhood. That's the defendant was convicted. ginia case "a search of the attorney's of­ three out of four, and he might just get This is paranoia. A paranoid gov­ fice produced records exposing a major a knock on the door that reminds him ernment has, in effect, partially priva­ rural narcotics-distribution ring." But of the old country. tized law enforcement by conscripting we can be sure that if these examples of Paranoid Government Runs the services of bank employees and Vigilance, instead of resulting in a businessmen. "happy" ending, had resulted in the ha­ Amok rassment and embarrassment, or worse, The problem with this war on cash Bank Tellers Target Customers of a customer engaged in a wholly legal is that it flouts the tried and true con­ The American Banking Association transaction, they would never have cept of probable cause. Politicians and is especially anxious for employees of been written up in Bankers' Weekly. bureaucrats are passing laws and regu­ its member banks to be good junior G­ lations that have the potential to crimi­ men. In the November 1989 ABA Bank­ Worried Bankers nalize every cash transaction. One who ing Journal, an article in question-and­ Despite their officially-stated com­ spends $100 per week, in cash, at the answer form called "Bank Secrecy Re­ mitment to cooperating with the bu­ supermarket, spends $10,000 in less visited" had the following exchange: reaucracy, bankers are worried. Miami than two years. Is he guilty of "struc­ attorney Gerald J. Houlihan, who spe­ Q You've mentioned suspicious trans­ cializes in banking issues, addressed turing" his grocery expenses? The law actions. What must a bank do when it is deliberately vague. believes someone is intentionally some of his clients' concerns in a Former Rep. Ron Paul (R-Texas), in structuring transactions to avoid re­ speech last October: his Ron Paul Investment Letter, wrote. porting, or engaging in transactions We recognize that drugs represent that that may involve illegal activity such the No. 1 foreign and domestic crisis all during the Reagan administration, as drug trafficking or money ... Indeed, in order to assist in the under the special guidance of Ed laundering? war on drugs, our Congress and our Meese and the ''Justice'' Department, A: Treasury Administrative Ruling 88­ courts have willingly sacrificed indi­ we saw a war on cash. Anyone using 1 states that the bank should immedi­ vidual rights otherwise guaranteed by cash was portrayed as a criminal, and ately teleph6ne the local IRS office the U.S. Constitution.... the money laundering statutes and and speak to a special agent in the Money-laundering prosecutions rep­ regulations sought to suppress cash Criminal Investigative Division. Alter­ resent the new hope for abolishing the use and privacy. Remember: money natively, the bank can call l-800-BSA­ drug industry. Unfortunately, al­ laundering is not the crime of hiding CTRS. In addition, the bank may be though the policy has intuitive ap- 30 Liberty "I see sweeping change underway in the marketplace-out of financial assets and into hard assets. Those who think they're getting value with stocks are about five years too late ... Likewise, people who have some savings and are cOWlting on mutual funds, passbook accounts or the equity in their homes are going to be in for a most unpleasant sur­ prise. "Those who recognize this, and change their investment strategies accordingly, should make a great deal of money in the next few years, at the very time when most people are losing." - Douglas Casey, author Crisis Investing, the most widely read financial book ever written

"A hundred years from now, should mankind survive that long, Doug Casey may well be remembered as one ofthe greatprophets, and financial geniuses, ofour time." -Robert J. Ringer, business author We live in an era when the federal government has grown so large that its actions now dominate every financial and investment market. Though many brokers and advisors seem to ignore this fact, the reality is that government ac­ tions are a major influence on every financial decision you make. Ifyou don't acknowledge this and arrange your affairs accordingly, you will always be among those who lose money by sudden shifts in the economy and business cycle, trig­ gered by a government that has its own financial priorities at stake. Crisis Investing is the only major advisory service whose whole strategy is to help you simultaneously to profit and to be protected from government actions that trigger predictable consequences in the investment markets. It recom­ mends specific investments, high-potential speculative opportunities, tax avoidance methods, all:.d tactics for increasing your financial privacy, all ofwhich take advantage ofthe foreseeable actions ofbig government. Special HalfPrice Offer One Year-12 Monthly Issues-$97.50 (Halfoffthe regular rate of$195. Available to new subscribers only.) Special to Readers ofLiberty- Five Free Reports Voodoo Revenge-special report detailing how the Bush Administration is caught in a fiscal nightmare . .. a prisoner of financial circumstances ... powerless to prevent an enormous, and potentially devastating, financial debacle ... one that could wipe you out ... or be the biggest investment opportunity ofyour lifetime. Speculative Profit: How to Make 1000% Profits Without Taking Unnecessary RiskS-Doug Casey's classic es- say explaining why calculated risks are not only your best hope ofprofit, but your best hope ofprotecting what you have. Better than Bonds- A special report on how you can realize greater safety and higher yields than bonds. Gold-A special white paper telling about the new bull market in gold Crumbling Real Estate-A special report explaining why a bust in real estate is almost guaranteed.

~iYes, , Money Back r please enter my trial subscription to Doug Casey's monthly advisory Guarantee ------letter, Crisis Investing for one year for only $97.50 (regularly $195). Then When you subscribe for I send me all of my Free Bonus Reports. I one year, you are pro- 0 My payment is enclosed. 0 Please charge: 0 Mastercard 0 Visa Expires __ tected by this guarantee. Cancel for any reason I Card No. Signature _ I during the first 90 days Name _ and you'll receive a full refund. Thereafter you'll I Address _ receive a refund for the I City _ undelivered portion of I your subscription. The State Zip Phone Number _ free bonuses are yours I Crisis Investing· 824 E. Baltimore 8t • Baltimore, MD 21202 • (301) 234-0515 to keep in any event. L 1591iii L!=====:::=J ------Volume 4, Number 2 November 1990

peal, its application has been some­ by the same customer at different what unrealistic. The government has times in the same day. The only meth­ underfunded our law-enforcement ef­ od Federal National has-short of a How to forts. To compensate for this under­ customer going to the same teller, funding, it has constructed a which would be doubtful if they were complicated system of regulations up to something-is running teller sta­ Subscribe which have unfairly shifted the bur­ tion tapes ... [he] is going to recom­ den of law enforcement onto the fi­ mend that the bank try harder by nancial institutions. There is a having tellers write down any unusual to perceived need to "force" our transactions-say over a given dollar business community to join in this amount-and reporting them to the task. ... head teller at the end of the day. This Liberty Financial institutions have been could enable them to do some manual forcefully deputized as law­ aggregation of multiple transactions. enforcement agents, at great expense, At the conclusion of the exam we Liberty celebrates the and without appropriate guidelines or are told that "The bank's composite rat­ diversity of libertarian assistance from the Department of ing for the entire examination was a thought! Justice, the Department of Treasury, 'l'-the highest." No doubt "Federal the comptroller of the Currency and Liberty tackles the tough problems. National" had sent out some junior G­ the host of other regulatory and en­ Every issue of Liberty presents es­ forcement agencies. men to verify customer addresses, and says studying current trends in po­ Houlihan was especially concerned stepped up informing on cash transac­ litical and social thought; that "assets of legitimate banks are tions below the reporting threshold. discussions of the strategy and tac­ jeopardized by liberalized criminal and tics of social change; analyses of Privacy For Money civil forfeiture laws," and by the possi­ current events and challenges to Launderers? ble "forfeiture of bank assets, whether popular beliefs. Liberty also offers Time magazine, in its December 18, capital-based or security interests, lively book reviews, fiction and 1989, cover story on money laundering, humor. based on technical legal fictions that ig­ noted that launderers rely heavily on nore practical and economic realities of You won't want to miss a single electronic fund transfer networks: the financial industry." issue! The system depends on the collabo­ The January, 1990 ABA Banking Jour­ ration, or often just the negligence, of Money-Back Guarantee nal's cover story was "Inside an acc bankers and other moneymen who At any time during your subscrip­ Compliance Exam." This article, writ­ can use electronic-funds networks and tion, we will guarantee a full pro­ ten in cooperation with the Office of the secrecy laws of tax havens to shuf­ rated refund for any unmailed is­ the Comptroller of the Currency and 1/a fle assets with alacrity. The very insti­ sues. No questions asked! mid-sized institution we'll call Federal tutions that could do the most to stop money laundering have the least in­ Act Today! National Bank," covered all aspects of a bank's compliance with various laws centive to do so. According to police Liberty offers you the best in liber­ and regulations. Executive Editor Steve and launderers, the basic fee for recy­ cling money of dubious origin is 4%, tarian thinking and writing. So Cocheo demonstrates that Bank Secrecy don't hesitate. With our guarantee, while the rate for drug cash and other Act compliance can cause headaches: you have nothing to lose, and the hot money is 7% to 10%.... One trouble spot is the exempt list. fruits of Liberty to gain! Even IRS agents are largely unpre­ In a number of cases only post office pared for the task of tracking transac­ boxes are listed, rather than full street tions that can involve four or five ... ------,,Please enter my subscription addresses, as the law requires.... An­ banks, several shell companies and YeS• to Liberty immediately! other problem appears on some CTR's two or more currencies. [currency transaction reports]-post Few agents can be spared because o One Full Year (6 issues) $19.50 office box numbers are listed in the IRS employees are working overtime o Two Full years (12 issues) $35.00 address section. This is incorrect here to contain an explosion of smaller­ Add $5 per year for foreign subscriptions. also. time money-laundering cases involv­ The exempt list is those customers, ing car salesmen, ordinary investors, name like supermarkets and department real estate agents and other stores, that regularly make cash entrepreneurs.... address deposits of over $10,000 per day; the Time, of course, is just confirming city, state, zip bank need not file CTRs on these what many libertarians have known all o I enclose my check (payable to Liberty) customers. along: the hidden purpose of any o Charge my 0 VISA 0 Mastercard But the examiner is worried about "crackdown" on money laundering is more than technical violations, like in­ to increase the regulation and control correctly filled-out forms. The article of ordinary Americans. You know: signature said that the author "car salesmen, ordinary investors, real account # expires [is] concerned by the bank's inability estate agents and other entre­ Send to: Liberty, Dept. L20, L ..I to track multiple currency transactions preneurs." 0 Box 1167, Port Townsend, WA 98368 ReQort

Smokes, but No Peace Pipe by Scott Reid

Jobs in the underground economy rarely provide the best security-as Cana­ da's Indian population has recently discovered. Of course, security isn't everything.

December 1990 marks the 100th anniversary of the Battle of Wounded Knee which ended the Indian wars in the United States. In Canada, however, the wars are far from over. During the past few months, worldwide attention has been focused upon the unexpected outbreaks of armed violence on two Indian reserves in Quebec. The dispute first made the news in July, when residents of the Ka­ which forms the main link between treated to, among other sights, the nesatake reserve near the small town that city-like Manhattan, Montreal is spectacle of mobs of peeved commut­ of Oka just west of Montreal refused to on an island-and its suburbs to the ers pelting Indian women and chil­ vacate a piece of land they had seized south. This was an openly illegal and dren with stones and bottles. A final in March, after it had been slated for political action, designed to make life insult was added when Bishop Des­ development as part of a golf course. unpleasant for thousands of com­ mond Tutu of South Africa arrived to The Indians claimed that they owned muters. discuss the parallels between Canada's the land, since it had never been Since that time, the situation in treatment of its Native populatio~ and signed over to anybody by treaty. The Canada has turned into something of a his country's policy of apartheid. unusual measure of seizing the land three-ring circus. Indians across the One reason for the Indians' sudden by armed force was partly a response country have taken a variety of illegal willingness to use illegal tactics has al­ to frustration with the court system, actions. In the West, a favorite tactic ready been mentioned: the Indians which they felt was ignoring their has been to block railroad tracks have discovered that the use of vio­ claims. It was also partly a result of which run through land that they lence is the best, and perhaps the only, their frustration with the media, which claim. One band in Alberta has started way of directing media attention to the had been totally unresponsive to their to dig a large trench through which issues that they consider to be previous non-violent protests. they intend to reroute a river on the important. On July 11, a force of 100 officers of basis that a dam being constructed by More to the point, however, Cana­ the Quebec provincial police attempt­ the provincial authorities will flood sa­ da's Indians have a lot of grievances, ed, with the aid of assault rifles, tear cred sites. Robert Bourassa, the pre­ some real and others imagined. Many gas, and concussion grenades, to extri­ mier of Quebec and a supporter of de Indian bands have never signed trea­ cate the Indians. The Indians fought facto independence for his province, ties. Having been denied the benefits back and one policeman was shot and saw no irony in asking the federal gov­ granted to treaty signatories, they feel killed. The police backed off. ernment to send in troops to beat back with some justice that they should at In the wake of this confrontation, Natives seeking de facto independence least have the benefit of the use of the Indians elsewhere protested the deci­ from Quebec. International observers land which they never signed away. sion by the provincial authorities to re­ were dispatched to watch the crisis in Unfortunately, it is only a small step spond to force with force. On the same the heart of the country that probably from this eminently reasonable posi­ day, the residents of the Kahnawake exports more UN observers per capita tion to one in which every piece of real reserve, located just south of Montreal, to other peoples' crises than any other estate in the country seems to be the closed off access to the Mercier Bridge, nation on earth. The observers were subject of one claim or another. At Liberty 33 Volume 4, Number 2 November 1990

present, for example, 85% of the land­ ago. The Act gives the bureaucrats who has worked in a retail store in mass of British Columbia is the subject wide powers to interfere in the daily Canada will be familiar with the sight of Native claims. During the course of lives of the Indians. It is perfectly legal, of Indians pulling out the little cards the armed negotiations at the two re­ for example, for some bureaucrat in Ot­ that certify their tax immunity, thereby serves in Quebec, the province's deputy tawa to lease out chunks of a reserve getting what amounts to a discount of minister of Native Affairs revealed to without the approval of the residents, 8% (Ontario), 9% (Quebec), or 13% the press that he had been informed by or to veto a similar sale or lease by a (Newfoundland). Naturally, there is some of the Mohawk negotiators that band council. Profits earned by bands more than a little temptation for Indi­ their land claims would henceforth in­ from the sale of land or natural resourc­ ans to take the discount even if the clude the island of Montreal, a good es are held by the Crown, for the osten­ merchandise is likely to be consumed chunk ofthe rest ofQuebec, and parts of sible benefit of the band. The off-reserve, or even if the real consumer Ontario, NewYork State and Vermont. bureaucrats, not the Indians, get to de­ will not be the Indian himself, but, say, cide how to spend this money. The Act a white friend or in-law. This is the key empowers the Department to disallow to understanding the recent violence, Observers were treated to, laws passed by band councils. "Wel­ and the reason why it is almost certain among other sights, the spec­ fare" is dispensed in plenty by the De­ to continue. tacle of mobs of peeved com­ partment ($5000 per Indian in 1983), Imagine that the level of sales tax but little of it goes into the hands of in­ was not 8 or 9 percent, but 85%. Would muters pelting Indian women dividuals; most of it is distributed via the temptation to take that discount go and children with stones and the sort of in-kind programs most like­ up? This is the level at which cigarettes bottles. ly to destroy individual initiative, or are taxed in most of Canada (the exact into the hands of the band councils, percentage varies from province to which are sometimes corrupt. If these province). This means that the price for For some reason, the Federal Gov­ sound like the kind of policiesthat a package of cigarettes, legally pur­ ernment has a policy of footing the In­ have turned American welfare and chased at the least expensive retail to­ dians' legal bill for these land claims, public housing into nightmares, that's bacco outlet in Quebec, is over $4.50 many of which it must then oppose in because they are. There is considerable Canadian. In New York State, just forty court. Legitimate or not, the claims are justice in the Indians' complaints about miles from Montreal and the Kanesa­ the source of tremendous frustration to the "colonialism" of the Department of take and Kahnawake reservations, the the Indians, especially when they are Indian and Northern Affairs. price of cigarettes is less than half that. held up for years in the hopelessly On the other hand, the Indians This disparity creates an opportunity backlogged court system. The land­ haven't complained much about the claim subsidy has had the effect of radi­ special privileges that they are accord­ calizing Indian leaders, who can afford ed under other provisions of the Indian The bureaucrats seem to to launch even the most frivolous legal Act. They are not required to pay tax govern the Indians based on battles with impunity. Indeed, Indian on any income earned on a reserve; the philosophy that they are a leaders must pursue each land claim welfare is also tax-free, of course. This with equal vigor, or they will be tax-free status ends when an Indian nation of retarded but malevo­ charged by rivals with the crime of sell­ leaves the reserve to seek employment lent children, in need of re­ ing out to the White authorities. elsewhere. The difficulties facing the peated spankings but An even greater source of frustra­ Indian who attempts to assert his inde­ tion and desperation for the Indians is pendence and leave the reserve are controllable only through the the high-handed and frankly offensive heightened further by the extraordinar­ frequent application of tooth­ behavior of the bureaucrats of the fed­ ily low quality of the education he has rotting sweets. eral Department of Indian and North­ likely received. Most reserves have a ern Affairs, who seem to govern the single school, and schooling generally Indians based on the philosophy that ends before high school has been com­ for Indians to profit, and the Indians they are a nation of retarded but malev­ pleted. The disincentives to work that take advantage of it. olent children, in need of repeated are embodied in welfare plans every­ Cigarettes are/an ideal commodity spankings but controllable only where are therefore greatly magnified for smuggling. They are small and through the frequent application of for the Indians. It is not really surpris­ light, and therefore easy to transport. tooth-rotting sweets. The department, ing, under these circumstances, that un­ Individual packs are usually placed by widely regarded as the least responsive employment among the Indians ranges the manufacturers in cartons of eight, and most bloated in the entire corpu­ as high as 90% in some locales. which in turn are packed in groups of lent Canadian civil service, is governed One of the most important privileg­ 25 in cardboard cases of an easily lug­ by the·Indian Act, a piece of legislation es open to the Indians under the Indian gable size and weight. In Canada, one penned long before it became fashiona­ Act is legal exemption from provincial of these cases is worth roughly $900, ble to regard Indians as members of the sales taxation of any product that they nearly $800 of which is tax revenue. human race, and last amended 40 years plan to consume on a reserve. Anybody The Akwasasne reserve, also in- 34 Liberty Volume 4, Number 2 November 1990

habited by Indians of the Mohawk na­ eral and provincial authorities are not it had been losing. I know of at least tion, straddles the Canada-U.S. border, happy about the fact that the Indians two Montreal-area tobacco outlets that and serves as the main gateway for the have chosen this particular road up have experienced sales increases of smuggling of cigarettes into Canada. from poverty, rather than one of the $50,000 per week over the past few many sanitized and impassable routes months. Almost all of this increased laid outbygovernmentadministrators. revenue is destined for government The illegal trade in tobacco The police have pushed hard to sup­ coffers, of course. press this trade; for example the RCMP The authorities have discovered by has given the Indians some­ conducted a 200-man raid on the tobac­ happy accident that what started as a thing that the bureaucrats at co outlets at Kahnawake in 1988 that re­ dispute over the ownership of a golf the Department of Indian and sulted in an armed stand-off that lasted course has given them the tools to cut 27 hours. Beginning in May of this year, off the illegal tobacco trade. Northern Affairs and the end­ police have been conducting customs­ Once the troops have gone, the in­ less .intrusive regulations of type searches of persons leaving the centives to smuggle will be as great as the Indian Act have always Akwasasne reserve in order to cut off ever, since none of the root causes of the flow of illegal tobacco. This appears the crisis have been addressed. On the kept from them: a genuine to have been at least partially effective, other hand, white politicians have dis­ earned income and an alterna­ since between May and July, 50 or covered that the use of force against the tive to the humiliations and more of the 65 retail outlets on the Kah­ Indians is popular, and will remain nawake reserve shut their doors, popular as long as the Indians are frustrations of welfare and dumping hundreds of store employees identified by the public as gun-toting poverty. back onto the welfare rolls. thugs. Since the military blockade of the The Mohawk Warriors will be dis­ reserves began, sales of cigarettes at armed this time, but as long as the cig­ The reserve is large and the Indians are legal outlets in the surrounding region arette trade remains profitable, they well-distributed on both sides of the have soared. A huge p~rt of the under­ will rearm themselves for future con­ border, so smuggling is an easy matter. ground economy has now been forced frontations with the police. As the risk Once in Canada, the cigarettes are dis­ to the surface, and at l~st the state can to life and limb of engaging in the trade tributed to corner stores and tobacco rake in some part of ~he hundreds of goes up, it is unlikely that the number shops across the nation, where they are millions of dollars in tax revenue which sold to the retailers at prices well continued on page 76 below those of legal wholesalers. Some direct sales to smokers take place at re­ tail outlets on the reserves. In total, the business is said to be worth $500 mil­ lion annually. It has been estimated Help Remember that half the cigarettes sold in Nova Scotia are contraband, despite the fact General Eisenhower that this province is hundreds of miles from the main international inlet for on his smuggled cigarettes. The results of tobacco smuggling lOOth Birthday. are not much different than those of smuggling illegal drugs. Since no smuggler has recourse to the law if a rival cheats him or steals from him, the smugglers have learned to arm them­ General Eisenhower served as President of the United States from 1953 ­ selves well. This accounts for the re­ 1961. While in ithe White House the general pursued his two hobbies, markable array of automatic weapons golf and being an artist. that the army has come up against on In August of 1953 Eisenhower signed one of the most"artistic" pieces of the reserves. legislation ever to make its way through Congress. Find out how General The illegal trade in tobacco has Eisenhower's signature on this bold, wicked and cunning legislation gave given the Indians something that the the Internal Revenue Service the "green light" to become America's bureaucrats at the Department of Indi­ number one Mail fraud operation. an and Northern Affairs and the endless Send $1.00 cash to: intrusive regulations of the Indian Act The Civil Disobedience Library have always kept from them: a genuine Suite 410 earned income and an alternative to the 2010 Crown Plaza Dr. humiliations and frustrations of welfare Columbus, Ohio 43235 and poverty. Naturally, the various fed- ALIENATION AND AGRICULTURE AND THE SOVIET ECONOMY THE STATE The Collapse of the Socialist Era Market Processes and Bureaucracy PAUL CRAIG ROBERTS ERNEST C. PASOUR, JR. Foreword by AARON WILDAVSKY Foreword by BRUCE L. GARDNER When Alienation and the Soviet Economy Analyzing the direct and indirect effects of first appeared in 1971, it argued that all u.S. farm programs, including price socialism was a catastrophic failure already. supports, marketing orders, food distribution, Now today, the cascade of current events has credit and export subsidies, and conservation fully vindicated every one of Paul Craig of natural resources, Ernest C. Pasour, Jr., Roberts's most controversial insights into shows in Agriculture and the State that these Marxist theory and Soviet economy. programs have conflicting objectives, only "Professor Roberts's explanation ofSoviet economic hurt the small farmer, and most importantly, development is timely . .. The book is beneficial victimize the public-at-large. This compre­ reading for experts and non-experts alike who wish to hensive book exposes current government understand the theoretical Marxianframework within farm policies as harmfully anachronistic in an which the Soviet economy grew and declined." -ZBIGNIEW BRZEZINSKI increasingly interdependent world. Former National Security Adviser "Pasour presents an exhaustive, articulate, and well­ "The uncritical acceptance by Western observers of written analysis offarm price and income programs." the supposed achievements brought about by central -D. GALE JOHNSON planning in the Soviet Union is subjected to a devas­ Professor ofEconomics, University of Chicago tating critique in this short but powerful book. ... a "The time has come for Pasour's easy-to-read book ." gem ofa book." -THEODORE W. SCHULTZ -NATIONAL REVIEW Nobel Laureate in Economic Science 13 Figures • 1 Table • Index • 145 pages • Paperback • Item #1340 42 Figures • 9 Tables • Index • 279 pages • Paperback • Item #6071 $14.95 plus postage ($2.00/book) CA residents add sales tax $19.95 plus postage ($2.00/book), CA residents add sales tax The ~ INDEPENDENT ,INSflTUTE

The Independent Institute, Dept. AE5, 134 Ninety-Eighth Avenue, Oakland, CA 94603 Testimony

Meanvvhile, Back at the Farm. by Leslie Fleming

Life on the farm is not very much like the Hollywood version. Nor is it much like you think it is.

JJFarmers are the backbone of America," everybody seems to agree. I say uNo." I am a third generation farmer liv­ ing outside Hitchcock, Oklahoma, on place of our own, for the farmhouse what I raise." Needless to say, most the farm that my grandfather home­ had room' for only one family. We all farmers went for the wheat con­ steaded. (Okay, you want proof? I rented a house and small pasture for trols, and my neighboring vertebrae­ have in my possession Homestead $5 a month. We owned two cows and including my Dad-told me they Certificate #7856 for 160 acres sent to a few chickens, I helped my Dad on were glad I couldn't vote. That's my grandfather, Henry J. Fleming on his farm, and I did artificial insemina­ backbone. April 3, 1905, signed by one Theodore tion of dairy cows. The GI bill for sending ex-soldiers Roosevelt.) A year later we bought 40 acres on to college was popular then, and it I came into this world in June which we raised chickens and dairy was thought that the GIs returning to 1921, shortly before my Dad went cattle, and I worked as a Dairy Herd the farm needed formal education too. broke farming wheat in Oklahoma Improvement Specialist (a record­ An evening course in agriculture was when wheat prices collapsed after keeper of the productivity and profit­ set up in our local high school, where World War I. The collapse resulted ability of individual cows.) we GIs could go to night school once when the war demand for wheat In 1948 I experienced my first a week and receive a $97 a month fed­ ceased after armistice. My Dad was brush with socialism. The Agriculture eral allowance (if you were married one of several from this area who left Stabilization Committee-a federal with 1 child) for 4 years of for California during that depressing agency set up as a truss to support the participation. time. backbone of America-began collect­ It was a mess. The teacher seldom We moved to Riverside, where we ing data so the individual vertebrae knew more than the students. Often lived among the orange groves until could vote on the proposal for federal he was just a local with a couple of World War II. I have done agricultu­ price and acreage controls on wheat. I years of college. During the four years ral work since my high school days in received three postcards demanding the program was in operation, most the Future Farmers of America. When to know how many acres of wheat I members of the backbone used it as World War II began, I went into the intended to plant on farm B78. I ig­ extra income to make things a little army and my parents moved back to nored them. One day a young man in easier. I saw little evidence of anyone Oklaho1l1a to take over Granddad's a new pickup arrived to find out the actually learning anything useful farm as he got ready to retire. wheat acreage on farm B78. I asked from the class. After World War IT, I returned to what crops were excluded from con­ My wife and I were getting along the family farm. I married a small­ trols and, puzzled, he asked why. okay now. I had a large egg route, and town girl, which meant finding a "Put those down," I said, "that's we milked cows and sold the milk to a Liberty 37 Volume 4, Number 2 November 1990

processing plant. I still worked part­ provemerit Association until, in 1956, a 50% penalty and interest charged. time as a Dairy Herd Improvement dairy herd I had been testing came up It was this inquiry into Social Se­ Specialist. for sale. I made a deal to lease the land curity that showed me its true colors. It The year was 1952. The price of and buy the herd and equipment. was not an insurance program but a milk fell because of overproduction. A However1 I had to secure a loan. universal welfare scheme for the elder­ prominent dairyman in our marketing I found more federal help for the ly. The tax could be raised or lowered area began to agitate for a federal milk backbone. The local bank wouldn't at the whim of Congress. In fact, the marketing order to secure a govern­ grant the loan without my selling the IRS enforcer told me they didn't know ment mandated "fair" price. Under mortgage I held on the place in Okla­ there were so many of us out there this scheme the bottled milk consump­ homa, something I wouldn't do. The until the 70-year-old self-employed tion pie was divided up among us dai­ bank loan officer enthusiastically told were eligible to draw Social Security rymen with any surplus made into me to go to the local Farmers Home after 18 months of tax payments. Seems cheese or dried milk which the federal Administration office. He was sure I a lot of old-timers began paying in­ government would buy at a federally could get one of the low interest loans come taxes for the first time to get in available for poor, worthy vertebrae. on the gravy train. In fact the farmers He was right. I filled out all the pa­ had another advantage over city work­ One day- a young man in a pers and was approved. One of the re­ ers: they could inflate their yearly in­ new pickup arrived to find out quirements was that the family had to come so their social security checks keep a budget and estimate the needs I I would be bigger. what crops was growing. for the coming year. These needs But that wasn't enough for the asked what crops were exclud­ would be discussed with the local ad­ backbone of America during the Eisen­ ed from controls and, puzzled, ministrator of the loan program. My hower Administration. The govern­ he asked why. wife was particularly irritated because ment set up something called the Soil she had to estimate even the amount of Bank. This was an arrangement in "Put those down," I said, toothpaste needed for the coming year. which farmers could get paid for not "that's what I raise." Once a month the local administra­ farming part or all of their land. A lot tor would visit our dairy. His pitch of what we members of the backbone was that now that I had qualified for a supported price. It was a federally run basic loan, he could loan more money two-tier pricing system with each dai­ for improvements with only his signa­ My refusal to pay social se­ ryman getting a daily milk production ture. His constant theme was to go curity taxes brought a visit quota (a highly marketable item to deeper in debt, buy more cows, a new other dairymen). tractor, etc. When we paid off our loan from an IRS enforcer who I voted against it. The other local in two years, he said, "This has never calmly told me to payor dairymen were for it. Interestingly happened to me before." "they" would make an exam­ enough, the big dairyman responsible It was during this period that the for the push for the milk marketing Eisenhower Administration brought ple out of me and ... well, I order (rumor had it he was about to go the self-employed under the Social Se­ wouldn't want anything to broke) sold his herd and quota imme­ curity Act. They were collecting 3% on happen to my family, would I, diately thereafter while retaining his the first $4,200 of income. I needed the job at a fat salary as head of the Milk money to improve my operation, so I as he nodded to my wife and Producers Association. refused to pay. I wrote letters to the son sitting across the room. Fate intervened. Our third child de­ Oregon Congressmen and Senators veloped baby eczema, an allergy that and also to President Eisenhower. All is terrible to witness and about which of them gave me the run-around about called "no account land" became farm little could be done at that time. A spe­ why no one should be exempt from land and put in the Soil Bank to be not cialist said that an allergy that seems this wonderful program. farmed for a government check. to be caused by dry weather can often My refusal brought a visit from an All this government "help" made be alleviated by moving to a wet IRS enforcer who calmly told me to me wonder if voters really wanted this climate. payor "they" would make an example much government. Surely not. I I wrote to the Agricultural Colleges out of me and ... well, I wouldn't thought maybe I could do something. I of wet-climate states looking for a po­ want anything to happen to my fami­ had read Income Tax-Root of All Evil sition as a Dairy Herd Improvement ly, would I, as he nodded to my wife by Frank Chodorov. When I heard of a Specialist. Oregon State College re­ and son sitting across the room. He statewide group in Oregon called Vol­ spondedand we sold out, packed into added, "If you are opposed to social­ unteers for Constitutional Govern­ a·car and trailer and arrived in Oregon ism, yo~ haven't seen anything yet." I ment working for the repeal of the in 1955. (The ·baby eczema disap­ visited a lawyer in Portland, who con­ 16th amendment to the U.S. Constitu­ peared in 6 months.) vinced me of the futility of any appeal tion, it made sense to me. My wife and I worked for the Dairy Herd Im- to the courts. I paid the assessment, I joined. We were encouraged. 38 Liberty '1111 1 1 • WHY SHOULD YOU BE READING FREEDOM DAILY?* NOVEMBER 1990 FREEDOM DAILY "The Vietnam War" by Jacob G. Hornberger "Foreign Policy and Foreign Wars" by Richard M. Ebeling "Conscription" by Daniel Webster

"THE VIETNAM WAR TORE THIS NATION APART. Those who supported the war were accused of being warmongers. Those who resisted the war were accused of being unpatriotic. Who were the patriots and who were the traitors? The American people who supported the war, and the American people who resisted the war, were the patriots. So who were the traitors? The traitors were the American politicians and bureaucrats who waged the war." Jacob G. Hornberger, Founder and President, Future of Freedom Foundation, NOVEMBER 1990 FREEDOM DAILY

"THE GLOBAL SOCIAL ENGINEERS IN WASHINGTON ARE BUSY SCRAMBLING for some way to maintain Washington's political control over international affairs and guarantee that America will remain "in harm's way," potentially drawn into numerous conflicts around the world. But to follow the path of attempting to set the world straight can lead to nothing but perpetual intervention and war in the name of world peace and global welfare." Richard M. Ebeling, Ludwig von Mises Professor of Economics, Hillsdale College, and Academic Vice-President, Future of Freedom Foundation NOVEMBER 1990 FREEDOM DAILY

"IF, WHILE READY TO OBEY EVERY RIGHTFUL COMMAND OF GOVERNMENT, he is forced from home against right, not to contend for the defense of his country, but to prosecute a miserable and detestable project of invasion, and in that strife he fall, 'tis murder. It may stalk above the cognizance of human law, but in the sight of Heaven it is murder. ... May God, in his compassion, shield me from any participation in the enormity ofthis guilt." Daniel Webster (1782-1852) American statesman NOVEMBER 1990 FREEDOM DAILY *WE • P.O. Box 9752 $10 per year DON'T Denver, CO 80209 ($15 foreign) COMPROMISE. 303-777-3588 12 issues

FREE BONUSES: Mention Liberty and receive "War for Peace in the Middle East" by Jacob G. Hornberger AND "Down a Slippery Slope of Kuwaiti Oil: American Intervention in the Middle East" by Richard M. Ebeling. D Enclosed is $10 for my one-year subscription to FREEDOM DAILY. o Please charge my: Visa # _ MC # Exp. _ NAME _ ADDRESS _ CITY/STATE/ZIP _

Mail to: FFF, P.O. Box 9752, Denver, CO 80209; (303) 777-3588. Volume 4, Number 2 November 1990

It was 1960 and even though I was federal income tax rates 25%. U.S. Soil Conservation Service, the happy dairying, I decided I could do Thus Ronald Reagan singlehanded­ County Agricultural Agent and the more if I ran for Congress from the 4th ly stopped our movement, at least in County Home Economics Agent. They District in Oregon. As I traveled about Oregon. And to my knowledge no are all dedicated to help us pieces of the district I soon discovered there other state has even come close to America's backbone to stand up passing the resolution to repeal the straight. You see, as everyone knows, federal income tax. I think maybe he we of the backbone are fiercely Once a month the local ad­ did a similar job across the country. independent. ministrator would visit our (Needless to say, I never voted for Ro­ Many farmers live in town. The nald Reagan; I knew where he stood.) family farm is history. The vertebrae dairy. He said he could loan I continued to promote less govern­ now eat breakfast at the restaurant-­ more money for improvements ment through education, but much of and often lunch too, since the wife is with only his signature. He the fire was gone. The year was 1972. so busy. It's a new pickup, golf games, Our last child had graduated from hunting, fishing, ski trips, an ocean constantly recommended high school. With my mother now cruise or two and some even do a little going deeper in debt to buy widowed in Oklahoma, but still man­ gamblingin Las Vegas. A wheat crop more cows, a new tractor, etc. aging the farm, we decided to move only requires 3 months work out of closer to her and try something new. the year. A cattle herd adds 2 to 3 total When we paid off our loan in We packed up and left Oregon to settle months more of 8-hour days depend­ two years, he said, "This has near Marshall, Arkansas, some 350 ing on the size of the herd. never happened to me before." miles from the family farm in Many a third-generation vertabra Hitchcock. wants to play the rest of year. Those We bought an abandoned farm. It going broke around here do so for the were many special interest groups in­ was an attempt to duplicate home­ same reason spenders in the city do: terested in more government, not less. steading. We lived without electricity extravagance, poor judgment and the Needless to say my pitch for less gov­ or telephone for eight months while I philosophy of "enjoy it now, pay for it ernment fell on deaf ears. I lost. The built a house. Soon our neighbors were later." voters' lack of knowledge was appar­ dropping in for a look-see. They imme­ I'm not saying there aren't a lot of ent. Education must be the key, I diately advised us on how to get feder­ good farmers who make a living in thought. al money to construct a stock pond, spite of adverse weather or other con­ At that time fate intervened again. federal assistance payment for plant­ ditions. But still, there is no warrant The owner of the land I was leasing ing a pasture, and free federal fish to for calling all farmers part of Ameri­ died suddenly. The Oregon Highway stock the pond. ca,s backbone. In the end, this mislead­ Department proposed an access road We stayed in Arkansas ten years. In ing rhetoric and misplaced sympathy through the land. I realized that it was 1982, my mother, now 80, wanted us only give further support to a multi­ probably best to get out of farming for back, so we returned to the farm near tude of federal socialistic agriculture now, so I sold out and became State Hitchcock. The area has changed. programs, funded in the foolish and Coordinator for the John Birch Society. Gone are most of the houses on each vain attempt to save individual verte­ The purpose of the organization was to quarter of land. Farming is large scale. brae from the poor judgment that al­ promote . less government through Diversification isn't practiced any ways gets them in the end, anyway. education. longer. It used to be that a typical Worse yet, it further disables the real During this period we seemed to be farmer raised cows, hogs, chickens, backbone, and puts America out of 'making good progress toward getting and turkeys, and grew wheat, oats, al­ joint. 0 the Oregon State Legislature to pass falfa and had a gar­ the resolution for repeal of the federal den. Today ours is income tax. Seven other states already largely a two crop had. area-eattle and Then an actor by the name of Ro­ wheat. Wheat is plant­ nald Reagan, lecturing under the spon­ ed for the government sorship· of General Electric, made the and cattle are raised Oregon service club circuit. His speech, for· Big Macs. "Losing Freedom on the Installment Agriculture bu- Plan" was a heartstopper for conserva­ reaucrats are every­ tives. But when he was asked about re­ where. There is the peal of the federal income tax, his Agricultural Stabiliza­ ~=====~­ response was, don't waste time on that. tion and Conservation He encouraged us, instead, to support County Committee, ~oJlc) the Hurlong-Baker bill before Con­ The Farmers Home "This year's budget will balance perfectly, Your Majesty, if you gress. It' was a proposed bill to lower Administration, the switch to the Gregorian calendar!" 40 Liberty Volume 4, Number 2 November 1990 Seminar

How to Profit in an Unfree World

Are we on the verge of a depression? What investments make sense today? What good is investment advice, anyway? Real world economics clashed with the theoretical economics at the Liberty Editors' Conference, when two leading economists squared off against two promi­ nent investment advisors.

Douglas Casey is one of the nation's foremost in­ tervention, and it has been especially evident over the past vestment advisors, author of Crisis Investing, the best­ twenty years, with recessions in 1970, 1974-75, and 1980­ selling investment book in history, and editor of a '82. Now we're right on the cusp again, in much the same widely-read investment advisory newsletter. economic situation which we faced at the brink of these re­ Besides editing Liberty, R. W. Bradford has for twen­ cessions. Each of these recessions was characterized by ty years published a monthly investment advisory higher inflation, higher interest rates, higher unemploy­ newsletter, which focuses on gold, silver and rare coins. ment, a lower real stock market, more business failures, During the 1970s, Bradford was also a dealer in rare and bigger business failures. You remember back in 1971 coins and precious metals. when Lockheed was about to fail, it was a major scandal David Friedman is an Olin Fellow in Law and that the government decided to bail them out for Economics at the Law School of the University of $250,000,000. That's walking-around money today. Since Chicago, and is the author of Price Theory: An the boom of the past seven or eight years has been largely Intermediate Text, currently in its second edition. He has debt-financed and in many ways has been as artificial as the inflationary booms before it, I expect that this coming also written numerous scholarly and popular articles recession could be the big one that we've all been waiting and reviews, as well as his introduction to libertarian for. I'm sure fond visions will pop up into many of your ideas, The Machinery of Freedom. minds of libertrogs running around the countryside, grub­ Richard L. Stroup is one of the leading figures in the bing for roots and berries and shooting statists with their growing field of property rights economics (or New AK-47s. There's an excellent chance that that's going to Resource Economics), and has produced many articles happen this time, if it's ever going to happen. So, that's the exploring environmental and political problems, as bad news, I guess. well as offering many private-property solutions to The good news is that people will continue to accumulate these problems. He is co-author of a widely-used eco­ capital, and that technology will continue to improve, nomics text, Economics: Private and Public Choice. which is the sort of thing that increases everybody's stan­ dard of living. We're halfway through an industrial revolu­ Casey: I always preface anything I'm going to say about in­ tion which started in the late 1700s, and by the time it's vesting with a caveat that my opinions plus ten dollars will over, people all over the world will have gone from a state get you a cup of coffee in Tokyo. You just can't guess what where life is solitary, poor, nasty, brutish and short to a five billion people are going to do or buy and sell tomor­ state where people are numerous, healthy, wealthy and row morning. However, that having been said, I can give generally in control of the forces of nature. Unfortunately, you my opinions. by the time that happens, it is unlikely that anybody now There is a certain cyclical nature to the economy. There is in this room will still be alive. such a thing as a business cycle, because of government in- A lot of what you want to do when you're investing de- Liberty 41 Volume 4, Number 2 November 1990

pends upon your time-frame-whether you're looking they're still an excellent hedge against the collapse of the over the next couple of years, which I think will be ex­ Japanese market, which is still the most likely market to tremely turbulent from a financial point of view, or if collapse anywhere around the world. you're looking long-range, in which case I think. you want Sixth, for a speculation, would be the short sale of fraudu­ to bet on prosperity. How do I handle this in particular? In lent companies and promotions, because you can have the my newsletter, which never purports to be more than just a best business plan in the world, with the best people and running commentary on what I'm doing, I make no outra­ adequate capital, and the chances still are that the company geous claims for my predictive ability-although my pub­ you form is going to go to zero. But, if you get borderline lisher does. criminals running the company, and most of the capital is In portfolio-making, there are many paths up the moun­ spent on Learjet rides, and business plans are made only to tain. I prefer one particular path; I'm a bit of a plunger. I incite greed in the hearts of the credulous, then it's a cinch see the ideal portfolio as being divided into ten separate that the company's going to zero. and unrelated areas, each of which has the potential to rise Those are all easy things to do, for anybody who wants ten times in value over the course of the business cycle. to. Other things that I like, as interesting speculations, are certain types of Third World real estate, where I'm interest­ ed in forming a partnership. There's a castle available in "I expect that this coming recession could be Mozambique that you can pick up for $70,000. Along with the big one that we've all been waiting for. I'm this 30-room, nearly indestructible castle is about 2000 sure fond visions will pop up into many of your acres of beachfront. It's outside of the capital, and people minds of libertrogs running around the country­ don't want to be outside the capital, because it's dangerous. But you pay your money, you take your chances. You can side, grubbing for roots and berries and shooting buy a townhouse along the sea in one of the Baltic states for statists with their AK-47s. There's an excellent about $5000. That's an excellent value, since it's between chance that that's going to happen this time, ifit's one and five percent of the cost of comparables in other Baltic countries. I think that now would be the time to buy ever going to happen." something in Argentina or Brazil for ten-to-one returns. But, you've got to realize that this is pretty time and capital This doesn't mean going out and buying ten separate and intensive, unless it's a limited partnership. unrelated junior gold-mining stocks. Periodically I get wiped out on investments, so I need Here are some investments I would put in my theoretical something ten-to-one to make me even. The reason I put portfolio at the moment-I say theoretical, because it's a lot the portfolio together in that way is that let's suppose that easier to give advice than it is to follow it. you get ten areas and you allocate your money into all of First, I would put in silver, that traditional religious icon them. And suppose, in the way things usually go, that of the hard money movement, because, at a price under $5, you're dead wrong on 90% of them. That's probably a little it's cheaper in real terms than it was in 1971. You've got to worse than average, but still, you've kept capital together. ask yourself, "If I'd known in 1971 what I know today, That's more than most people are going to do in the next would I have bought silver at $1.29 an ounce?" Of course couple of years. But chances are, realistically, that you'll do you would have, because it went forty to one by the time it better than ten-to-one. You'll get three or four total wipe­ reached its peak. So silver is the first thing. outs, you'll get a couple that stay the same, a couple that go Next, I'd take a few junior gold-mining stocks, because down 50%, and a couple that increase fivefold. And that they've had a few ten-to-one runs in the sun over the past sure beats 6% at a savings and loan, the way I see it. decade, and the quality ones are better values than they've Anyway, that's the way I plan to play the game. ever been. I think they're going to have another, and per­ haps final, ten-to-one run. Bradford: The reason that people buy investment advice is Third are the junior oil stocks, which, unlike the junior because of what I call "the market for nonsense." Unlike golds, have fallen out of bed and have just kept falling. Doug, I suffer from the handicap that I publish my own They look like a flat-iron thrown from a bomber over the newsletter, so I can't have my publisher say wonderful last ten years, if you were to draw a chart of their perfor­ things about me without embarrassing myself. mance. They also have a ten-to-one potential. Consequently, nobody says anything extravagant about Fourth would probably be a TED-spread, going long a me. million dollars worth of T-bills, short a million dollars It seems to me that almost all investment advice is smoke. worth of Eurodollars. Why? Because T-bills are the most se­ There's a tremendous demand for nonsense-for someone cure and liquid form of short-term paper, whereas to tell you that "the price of gold's going through the roof Eurodollars are the unsecured liabilities of international tomorrow," or "the Dow's going to drop to 2000 by the end banks. That spread narrows and widens tremendously, and of the year," or any other type of specific investment ad­ right now for some reason it's near its historic low. r vice. I believe that there are two reasons for this. One is that Number five are Nikkei-Dow puts. I've been recommend­ people tend to assume that the economy is very similar to ing them for the last year, since they've started to be trad­ the physical environment in which they live. They perceive ed. Most of them have tripled in the last few months, so it as some sort of mechanism, and they think that if they they don't have the potential which they used to, but can learn enough about how the mechanism works, they'll 42 Liberty Volume 4, Number 2 November 1990

be able to predict the future perfectly. They also realize that lars-paper dollars-for use on black markets in such plac­ while they personally don't understand how the physical es as Argentina and the Soviet Union. world works, they can always go to a professor of some­ But also, dollars are used for financing worldwide enter­ thing-or-other who will tell them. This is true of most as­ prises, so-called Eurodollars. The fact that the United St~tes pects of our daily lives. I doubt that most of us here really has been replaced by Japan as the world's pre-eminent fi­ know how an automobile works, in any significant detail. nancial power leaves us in, I think, a very dangerous posi­ Yet most of us can drive one, and we all know to go to a tion. The last time that this happened was when the Pound mechanic when we have problems. So most people go to an Sterling was displaced. Britain was the world's leading fi­ investment advisor under the mistaken apprehension that nancial power in the late 19th century. Depending upon they are experts. I believe that, by and large, however, your interpretation, sometime early in this century, it came there's a larger, much more important mistake that people under fire from both the United States and Germany. It make when they go to people like Doug and me for advice. took care of Germany in World War I, and so instead of the I think that they want to avoid responsibility for their own Pound being replaced by the German Mark, it was replaced actions. From 1970 to 1980 I was a full-time dealer in rare by the U.S. Dollar. coins and precious metals. During that time I got to know What I want you to consider is what life was like in an awful lot ofinvestors, many of whom invested foolishly Europe during the interregnum between the two World and came to me for help liquidating their holdings at great Wars. Americans went to Europe and couldn't believe how loss. I discovered that a great many people do this over and cheap everything was. William Randolph Hearst went over over again. I observed that many such people blamed their and bought entire monasteries and brought them back to advisors for their own mistakes. I also noticed that many in­ use as toys for his guests in San Simeon. This is when the vestors will only act on the advice of their advisors. I devel­ notion of the "ugly American" arose, because Americans oped the idea that they don't want to be responsible for went over and stayed at the finest hotels in Paris, and could their own actions. When they follow someone else's advice, live like kings.We see the same thing today with the and they lose, they don't have to feel bad about it. They're Japanese, particularly here on the west coast, where sorry they lost their money, but the "reason" they lost their Japanese tourists are common, and even more in Hawaii. In money is because of what Doug Casey or Bill Bradford told Hawaii there are complaints about the Japanese "buying up them. the state." What they're actually doing is buying up real es­ Most investment advisors tend to be market "gurus," to tate and raising the prices. They're buying hotels and pretend that they have some sort of mystical understand­ tripling the prices of rooms, because to a Japanese tourist, ing of the market process. After a while, their egos tend to paying $300 a night for a room seems like a pretty reasona­ get a little inflated, and they start to believe what their pub­ ble deal. To an American, $300 seems outrageous. Japanese lishers write about them. Maybe it's a public choice eco­ nomics kind of thing: they realize that if they couch their advice with the kind of qualifiers that I use, they will not liThe one good thing about silver is that there's sell many newsletters. My goal is basically capital preservation, rather than sub­ little enough of it in the world that it is feasible for stantial capital gains. That's an important difference be­ a group of wealthy individuals to corner the mar­ tween Doug and me. I'm not looking for ten-to-one shots. ket, as they did in 1979. You can't do that with To me, the essence of investing is risk management. Most very many commodities. But still, I don't think people would be better off putting their time into earning a living or haVing fun, and using their investment portfolio that the prospects for it happening are very good. as a means of preserving capital and minimizing risk in a The last people to try it are having their assets dangerous world. I was astonished to hear Doug say that sold off at bankruptcy auction right now." he was looking for some ten-to-one shots to make him even. I'm happy to say that I'm already ahead of even, and I'm looking for one-to-ten shots to keep me even and may­ find American prices to be too cheap to be true. I remember be put me a little bit further ahead. seeing Japanese tourists at Waikiki lined up to buy $700 In the world today I think that there are a few economic Louis Vuitton purses and other ephemera of the good life. observations that are both overwhelmingly likely and im­ Now I realize that part of the reason for this phenomenon is portant to investors. I'm going to talk about one of them that America has somewhat lower tariffs on luxury goods that will affect everyone of us that's in this room. The than does Japan, but nonetheless it is instructive that there United States is no longer the world's pre-eminent financial are few Americans buying luxury goods as casually as these power. This is of fundamental importance to us. The reason Japanese tourists. is that the U.S. dollar has, since World War II, enjoyed an I think that Americans can look forward to a generally de­ incredible demand as a commodity outside the U.S. The dol­ clining standard of living the next thirty or forty years. I lar has served basically the same role as a reserve currency don't think that this is something that we'll have to face as that gold served from, say, 1815 to the end of the 19th cen­ individuals, but I think that it's something that we'll all tury, and then decreasingly from the beginning to the mid­ have to pay attention to. I think that right now, investing in dle of the 20th century. As the world's most liquid, easy-to­ America is something like investing in Britain in 1920. Now, use commodity, there's a tremendous demand for dol- it's not that there were no good investments in the U.K. in Liberty 43 Volume 4, Number 2 November 1990

1920, it's just that the economy in general was going down feasible for a group of wealthy individuals to corner the the toilet, and continued to go down until around 1980, market, as they did in 1979. There's only something like since that time there's been something of a revival. We're 700,000,000 ounces on the New York Comex, so simple going to face the same sort of problem here. Long-term in­ arithmetic says that at $5 an ounce, 3.5 billion dollars vestments of the fundamental sort, in real estate, stocks, would buy every bit of silver that could be delivered on the etc, are not going to be as good as they have been in the exchange. You can't do that with very many commodities. past. But still, I don't think that the prospects for it happening I don't have any really good advice to give you, especial­ are very good. The last people to try it are having their as­ ly because making investments denominated in other cur­ sets sold off at bankruptcy auction right now. rencies is never easy for Americans. It's been legalized for Gold I see as a pretty safe investment at the moment. I American banks to deal in securities denominated in other don't see it as a way of making big money. My recommen­ currencies-in other words, you can buy CDs in dation historically has been to tell people to put 10% of Deutschmarks and Japanese Yen now, but I know from his­ their assets into gold, more as an insurance policy than as tory that countries that do this because they're in economic an investment. You might want to up that to 15% right now, partly because gold is a good way of internationaliz­ ing your holdings without leaving the United States or go­ H Almost all investment advice is nonsense. ing to a lot of trouble. Also, when you open a foreign bank But there's a tremendous demand for nonsense. account you have to report it to the IRS. This is obnoxious, There are two reasons for this. People tend to per­ and I suspect that when the IRS reviews your return fbr audit potential, this is one of the factors they look at. ceive the market as a mechanism, and think that if I do want to mention the one aspect of real estate that I they can learn enough about how it works, they'll do think has potential, although it's awfully expensive to be able to predict the future perfectly. And people get into. This is Hawaiian real estate, since the Hawaiian want to avoid responsibility for their own actions, real estate market is driven almost entirely by the strength of the Japanese economy. Buying land in Hawaii is there­ to blame someone else when things go wrong." fore more akin to buying land in Tokyo than buying it in the U.S. So far, the Japanese have limited themselves to decline have a tendency to confiscate these investments buying land on Oahu, and a few hotels elsewhere. I think from their citizens, so I don't consider these to be low risk there's a potential for profits there, although I don't expect investments. I remember during the '60s and '70s, when spectacular profits. the Mexican Peso was kept on a par with the U.S. dollar at I'd like to close with a quick question for Doug. Doug, a ratio of 12 to 1, Mexican banks offered accounts in both you recommend that we sell short fraudulent enterprises. I dollars and pesos. The pesos paid higher yields, and wonder if you can tell us how we can sell short the United Americans would go down there and buy pesos so that States government. they would get 12% return. Mexicans frequently put their Casey: You know, they say the common stock of the United money in dollars, where they could get 4 or 5%. Then, States is its currency, so as a speculation over the long term, when the peso collapsed, the Mexican government put a if you're not too leveraged, I'd recommend going short moratorium on withdrawals from dollar accounts, and con­ Treasury bonds. verted them back to pesos at the old official rate, so that the Stroup: Bill said that I'd been added to the panel to harass accounts that you had put money into at roughly one peso the investment advisors, so I'll do my best. It does seem to to every 8 cents American were converted back at a value me that investment advice, if it's explained-in other of about two tenths of a cent. Mexicans with foresight were words, if the kind of thinking that went into it is explained rewarded with a lower rate of interest plus the devaluation to you-might actually be useful, in the same way that of the peso. Now, Mexicans who came to the United States arithmetic might be valuable to the investor. Accounting, and opened bank accounts here didn't suffer from this, economics, all these things might be valuable tools. They which means that rich Mexicans didn't suffer, just poor might not be very valuable in terms of telling you what to ones, and especially the poor who were inclined to save. do, but they would help you to understand the world a lit­ . I'm not suggesting that everybody should rush off and tle better. The kind of thinking that both these guys do get a Swiss bank account, but I do think that you should might be useful and might have some sort ofinsight. Other consider a little bit of international diversification. than that his caveats were well stated. My special area of expertise is gold, silver, and rare coins, Unlike Doug Casey, I don't worry about the problem of and I will say very briefly that I consider rare coins to be an figuring out what five billion people are going to do tomor­ extremelyrisky, highly leveraged venture. I would recom­ row. Only if you're trying to figure out some retail trend mend that people put no more than 5% of their portfolio would five billion people count that much. Almost all stock into rare coins, and I don't consider rare coins to be an es­ prices, it seems to me, are determined by what the most op­ sential component in any portfolio. timistic tiny percentage of all investors think about that I disagree with Doug about silver. I think that the supply particular market. In other words, any particular gold stock situation on silver has changed radicallyenough that the is held by that minute fraction of all investors who are most outlook for silver is not good. The one good thing about sil­ optimistic about that particular gold stock. The real prob- ver is that there's little enough of it in the world that it is 44 Liberty Volume 4, Number 2 November 1990

lem is to figure out what that tiny percentage is going to do the assumption that it's too simple-minded to limit one's over the next day, week, or year. Now that does relate back definition of the dollar to paper currency. I thought I was eventually to what five billion people want to do at retail, making a concession to people like David who are profes­ but the connection is a little tenuous. A question every sional economists. It's my understanding that dollars in economist might be asked is, if you're so smart, then why bank accounts are also a part of the money supply. ain't you rich? Most economists aren't all that smart. At The immediate thought comes to my mind when David least I'm not, and that's probably why I'm not rich. says that only paper dollars count is that we'd all better The Casey theory, the AK-47 theory of investment, I have hope that the war on drugs is a failure, because right now to question that a bit. I mean, even if Lee Iacocca or some the biggest demandfor U.S. paper dollars comes out of the other fascistic type person becomes President, it seems to international drug market. There was a time, before the me that it takes years to run down the infrastructure of a government put restrictions on money-laundering, that the country so badly as to send us grubbing for roots and ber­ net outflow of paper dollars in the Miami Federal Reserve ries. That seems pretty unlikely, except in the event of nu­ subdistrict was greater than all the rest of the United States clear war, or if Louis Farrakhan gets the bomb, or put together. Nowadays, because of legal harassment of something of that sort. people who deal in cash, money laundering activity is scat- The discussion of Third World real estate was one of the more interesting things that was talked about. I'm tempted to say, "Would you buy Third World real estate from this liThe environmental problem is getting very man?" Futures on Third World real estate do strike me as a much more serious, I think-not that the environ­ fairly chancy investment. Bill Bradford's advice struck me as so honest and straight­ ment itself is getting worse, but that environmen­ forward that, well, what can you say? He doesn't pretend to tal policy is getting so much worse. That could much, so he doesn't make much of a target. The fact that screw things up for the standard of living." Bill has found out, through the publication of his newsletter and Liberty that appealing to the aquisitive instincts of in­ tered across the country, and we don't have that conven­ vestors is more profitable than appealing to the taste for lib­ ient figure to measure the effect of the drug trade on de­ erty on the part of readers does not strike me as overly mand for paper dollars. surprising. Would that it were the other way around. I dare say that most of the people in this room have all Friedman: I do have a couple of comments on what Bill said. the paper dollars they own in their pocket, and they proba­ First, Eurodollars are not part of the demand for dollars. bly don't add up to more than $100 each. There is a very They are things denominated in dollars, but it does not take large amount of U.S. paper money in places where it's actu­ any paper dollars or deposits with the Fed to keep them in ally illegal. I know that historically the value of a $100 dol­ existence, so whether or not there are lots of Eurodollars lar bill in the Soviet black markets fluctuates between 105 out there does not affect the exchange rate. How many and 125 $1 bills, on the simple theory that it's easier to hide paper dollars foreigners choose to hold does affect the ex­ a $100 bill than 100 $1 bills. This was more or less the case change rate. all over Eastern Europe. H may be true that the dollar is going to cease to be the in­ Friedman: Explaining the economics of exchange rates ternational currency, but I think that we can overestimate would take more time than we have available, so I will go the importance of that, I do not know how many paper dol­ on to another issue. Rick posed the question to economists, lars are out there. Obviously there would be some shift in "If you're so smart, why aren't you rich?" One of the nice the exchange rate if people who were holding paper dollars things about being an economist is that it's one of the few started sending them back, because thatwould enter into professions that has an answer to that question. the supply and demand for dollars on the currency market, Bill commented earlier that in investing you can't just go which is where the exchange rate is determined, but I find it to an advisor and get all the answers. Ifyou actually go to hard to believe that the effect would be large enough to an expert, a reputable academic economist, and ask him matter for more than a few years. about investing, the answer you will get will be some vari­ Of course, if the country is run into the ground, that will ant of the "random-walk" theory of the stock market. What lower the demand for U.S. assets, but whether the country the economist will tell you is that there aren't any things is well run is not the same question as whether the dollar is out there that cost $10 and are obviously going to be worth the major international currency. Consider Belgium. The $20 next month, because if something was obviously going Belgian franc is not a major international currency, but to be worth $20 next month, the guy who has it wouldn't Belgium is still a nice place to live and probably a good sell it to you for $10. That is a very abbreviated version of place to invest. If the U.S. follows reasonably sensible poli­ the efficient-market theory, which holds that all publicly­ cies, the only effect on most of us of the dollar ceasing to be available information is embodied in existing prices. One the world currency will be that if we are travelling abroad implication of that is that when an advisor tells you that and plan to trade on the black market, we'll have to carry something is going to go up a lot you should not believe yen instead of dollars. him. Bradford: I'm embarrassed to admit that my inclusion of Let me give you an example. The form of the advisor's electronic dollars as opposed to paper dollars comes from argument is usually the following: something, say silver, Liberty 45 Volume 4, Number 2 November 1990

sells for $5. Here are the obvious reasons why it should be very carefully. It should consist almost entirely of very worth more than that. Since it should be it will be, so buy it bland advice that isn't going to be very right or very now. wrong--except for one thing. You pick one very risky One example is an argument that was given by Doug: sil­ thing -let's say the Peso, which might or might not be de­ ver should be worth more than it now is because it has been valued this month. In five hundred of your newslette.rs, worth more for almost all of the past ten or fifteen years; it you say very confidently it's going to go up, with lots of is hard to believe that when it has usually been that high, it good reasons-and in the other five hundred you say it's can continue to be this low. Another example, another way going to go down, again very confidently and with lots of of arguing for the same conclusion, is to argue from the fun­ good reasons. You keep track of who you mail out these damentals, the factors determining production and con­ newsletters to. sumption, and to say "Look, with silver at only $5 an ounce After a month or so it either goes up or it goes down, and you throwaway half the names. You then prepare another newsletter (only five hundred copies this time), and in this "Rick posed the question to economists, 'If edition you pick another very risky investment that you're you're so smart, why aren't you rich?' One of the pretty sure will go either up or down this month and you nice things about being an economist is that it's repeat the procedure, this time throwing away 250 names. After you have done this three times, there are 125 peo­ one of the few professions that has an answer to ple out there who know that you have called three long that question. The economist's answer is, simply shots with perfect accuracy. You now sell them subscrip­ put, 'Economic theory tells you that there are no tions for $300 a year for the next several years and get easy ways of making lots of money on the stock yourself another list of a thousand people. Bradford: I did see an Alfred Hitchcock television show in market.'" which that exact method was used, except that instead of conventional investments, it used bets on horse-races. not very many mines will produce, consumption is increas­ All this talk about the issue of "If you're so smart why ing, so at this price supply will be less than demand, so the aren't you rich?" reminds me of a comic book I read as a price is about to go up." kid. Huey, Dewey and Louie have bought a book entitled The problem with these arguments is that everybody else How to Get Rich Collecting Clam Shells or something like in the market also knows what the price of silver used to be, that. They follow all the advice in the book and make no and lots of other people in the market also know that at the money. They go to Uncle Scrooge and he explains that the current price some mines will shut down. There has to be way you get rich collecting clam shells is to write the book. something missing from your analysis or silver wouldn't be Friedman: Economists can give some useful investment ad­ selling for $5 an ounce. You have to put on one side of the Vice-just not advice about how to get rich fast. The first balance the various bits of evidence that silver ought to be standard piece of investment advice from any economist is worth more than and then say ''Yes, but the fact that it's at to hedge. Let me give you a simple example from my life $5 is not just random error, it's very strong evidence that I that you can apply to yours. am missing something." For six years my wife was an oil geologist for Shell. Once Casey: That's why straw hats cost less in the winter than it was clear that she was going to be that for a while, we they do in the summer. It's the same way with many invest­ sold all our oil stocks. Why? Because, like most people, I ments. You just have to figure out when it's winter and am risk-averse. when it's summer. I would rather have a certainty of a $50,000 income than a 50% chance of$100,000 and a 50% chance ofzero. Given that Friedman: Silver has a rather low cost of storage compared she was an oil geologist, if the oil business in America was to hats. Ifyou can prove that it costs this much today and booming she would have a high income and we would have that it's going to be worth much more tomorrow, it doesn't cost very much to buy some today and hold on to it until a high family income and oil stocks would go up. Ifthe oil tomorrow. business wasdoing badly, she would have a low income and oil stocks would go down. We did not want to be over­ What I am getting to is that the economist's answer to "If invested in oil by havingboth halfofour human capital and you're so smart why aren't you rich?" is "Economic theory a chunkofour financial capital in oil. I wasn't Willing to tells you that there aren't easy ways of making lots of mon­ hedge by getting rid of my wife, so we sold the stocks ey on the stock market. Economic theory tells you that the instead. prices out there on the market already reflect all the easy in­ The circumstances will vary with each one of you, but the formation, and therefore even if you are quite smart, there trick is to ask "What are the events that would make me are no easy ways of getting rich on the stock market." short of money, due to the nature of my own professional Well, actually there is one way, but it's fraudulent. Here's activities?" and then to say, "Fine, what are the stocks that how you do it. Of course, I'm only telling you this because I will go up if that sort of event takes place?" When things know that nobody in this room would ever engage in such are happening that will make me rich on my regular in­ an activity. come, I'm Willing to tolerate having my stocks go down. First, get a list of a thousand people who are interested in That was the first piece of investment advice from an investing. Second, write up a newsletter. You write it up 46 Liberty Volume 4, Number 2 November 1990

economist. The second is, when you're playing the stock capita per year. Let's also suppose for convenience that the market, use inside information. Inside information is not relevant interest rate is 5%. That means that the increase in limited to the sort of information that it is illegal to use. It our national income due to foreigners holding our money includes any kind of special information or expertise that comes to $10 per capita. I do not believe that removing that you have and most people don't that gives you a basis for will have a significant effect on the U.S. GNP. disagreeing with the market. Bradford: IfI said that American standards of living were My favorite example is that when the Macintosh comput­ going to decline, I certainly didn't mean it. The parallel I er came out, I had been using a microcomputer happily for drew was with Britain, and I certainly don't mean to sug­ two years. It seemed clear to me, looking at the first gest that the average person in Britain in 1970 had a lower Macintosh computer, that it represented a major improve­ standard of living than the average person in Britain in ment in microcomputers. It was also pretty clear, reading 1910. What I meant was that relative to the rest of the The Wall Street Journal and other papers, that the market world, the average person in Britain lived better in 1910 didn't agree with me. There were a few people like me who thought it was a great invention but most of the market was pooh-poohing it. So I bought stock in Apple Computer. "[ think the standard of living is going to go IfI had been braver I would have bought more when it down in absolute terms over the next couple of fell to a little more than half of what I'd bought it for, but I years. We're in for a depression-a period of time did hang on to what I had, and I think that my stock is now about three, maybe four times what I bought it for. That in which most peoples' standard of living drops was an investment based on something that was not inside significantly." information in the legal sense, but was a kind of expertise or special knowledge that I happened to have. than later. I seem to recall that around 1980 there was From the audience: I'd like to know if the other panelists some fear that the British standard of living had fallen be­ agree with Bill Bradford that we're going to see declining low that of Italy, and was something like 17th on the conti- liVing standards in the U.S. over the next 40 years. nent of Europe. . Stroup: Given the technology trends, it's hard for me to be­ Casey: I'd agree with what Bill said, but I'd go further. I lieve that living standards will go down, but one exception think that it's going to go down in absolute terms over the here, one thing that strikes me is that it may be that next couple of years as well. I think we're in for a depres­ Bradford's right and Friedman's wrong about the value of sion. One definition of a depression is a period of time in the dollar and the value of the dollar to foreigners. David which most peoples' standard of living drops significantly. gave the example of Belgium. Without any seigniorage, There are other definitions, but that's a good one. without any use of their currency abroad, to speak of, Friedman: I'd like to say that the [original] title of this pan­ they're doing okay. That's fine, but if we go from a situa­ el-"Investing in Liberty"-seems to be somewhat differ­ tion of very heavy seigniorage where huge numbers of ent from what we have been talking about. There is a people, drug dealers and others, are holding paper dollars, broader sense in which you could talk about investing in to a situation where they have less faith in the U.S. and liberty. That is, you can talk about spending your time and more faith in other currencies, and those dollars come energy and money on things that you think will not only home, you get two bad effects. One is a temporary effect, a produce financial returns, but which you think will nudge tremendous havoc and inflationary pressure. The second is the world in the right direction. a long-term permanent effect-a loss of what amounted to To give one example, one of my current projects isa com­ interest-free loans. When people hold dollars abroad, it's puter game. I hope that it will bring me money and fame like they're giving us an interest-free loan of the amount and such, but one of the nice things about it is that it teaches held. some economic lessons, and perhaps even some libertarian Then, as well, we've got the environmental problem, lessons, since one of the ideas implicit in the game is that co­ which is getting very much more serious, I think-not that ercion is not the only foundation upon which organizations the environment itself is getting worse, but that environ­ can be built. They can also be founded on mutual consent. mental policy is getting so much worse. That could screw I think it is good for libertarian investors to ask them­ things up for the standard of living for sure. selves, "Ofall the things which I might do and which Friedman: I think it unlikely that standards of living will might make me money, are there any which might also go down-not impossible, but unlikely. nudge the world in what I consider to be the right With regard to the comment Rick just made, I suggest a direction?" simple calculation. The present currency stock is in the hun­ Casey: I agree with that, but what has constrained me from dreds of dollars per capita for the U.S. population. I don't talking about it is that, to my mind, you have to separate know the exact figure, so I'll make a very rough guess and ideology from investment. If you make this or that invest­ say it's $200 per capita. Let us take the most favorable possi­ ment because it's a good Christian investment or because ble assumption for Rick's argument about who holds the it's a good libertarian investment, you're looking at factors money-assume that every single one of those paper dol­ other than its investment potential, and that will tend to re­ lars is held abroad. duce its potential to make money, which is, after all, the In that case we are getting an interest-free loan of $200 per whole point. 0 Liberty 47 Explanation

Why Is Anyone Virtuous? by David Friedman

Some people will steal if faced with an opportunity to do so with only a negligi­ ble chance of being found out. Yet the vast majority will not. Why are they hon­ est? Is there any explanation aside from altruism?

One fundamental question in moral philosophy is why people should act virtu­ ously. Another is why they do. One answer occasionally offered to one or both of these ques­ tions is that virtue is in the (enlightened) self-interest of the virtuous. We survive, after all, as part of a complicated network of human inter- actions. If I lie, cheat, and steal when dealing with others, they may do the employee, employer, spouse, business to their meetings-giving me the dis­ same when dealing with me, making partner, or friend. If my behavior is tinction of having been purged from all of us worse off. seen to impose costs (or benefits) on an organization of which I was not a As stated, the argument does not those who associate with me, other member. carry us very far. In a large society, people will take that into account in I think I may have have found the my behavior has very little effect on deciding whether to do so. Honest answer they couldn't. It is an entirely the behavior of others, so unless my employees are more valuable for most amoral answer-it does not tell us gains from cheating others are very jobs than dishonest ones, hence likely what one ought to do, what acts are small or my losses from being cheated to make more money. In this situa­ virtuous or why one should act virtu­ by others are enormous, my decision tion, at least, it would seem that hon­ ously. It does, however, provide a to cheat should make me, on net, bet­ esty pays. plausible explanation of why people ter off. I can make that even more like­ This argument implies that quite a do act virtuously-why, for instance, ly by adding hypocrisy to the list of lot of virtuous behavior follows from many people will decline an opportu­ my sins-preaching virtue, in the rational self interest; a lot, but not all. nity to steal even if they are confident hope of persuading other people to be Suppose I have an opportunity to they will not be caught. virtuous, while quietly practicing cheat or steal, can receive a considera­ To put it a little differently, it is an vice. ble benefit from doing so, and believe explanation of why the sort of behav­ A number of more or less meta­ that I am very unlikely to be caught. ior that we usually describe as virtu­ physical solutions to this dilemma The argument seems to imply that ous is, for many people, a result of have been proposed, based on con­ each such situation should be evaluat­ acting in their individual interest, nar­ cepts such as "the categorical impera­ ed on its merits. rowly defined. Still more precisely, it tive" or "man qua man." An Many years ago, when I was a col­ explains why and in what sense it is alternative approach, and one that I lege student arguing with Objectivist in my interest to behave, even when find more interesting, is to observe friends, I took considerable pleasure nobody is watching, in a way that that most human interactions are, to a in pointing this out to them. They makes it in other people's interest to considerable extent, voluntary. My firmly believed that in such a situa­ associate with me. dishonesty may have a very small ef­ tion I should n6t steal, but they never I start with two observations about fect on the moral tone of the society in came up with a justification for that human beings. The first is that there is which I live, but it has a large effect belief that I found satisfactory. Even­ a substantial connection between on how attractive I am as a potential tuaUy they asked me to stop coming what goes on inside and outside of 48 Liberty Volume 4, Number 2 November 1990

their heads. Facial expressions, body twice as many calculations, it slows people-people who do not steal even positions, and a variety of other signs down. So does a human. Most of us when they are sure that nobody is give us at least some idea of our are not very good liars. watching. I have not, in doing so, an­ friends' thoughts and emotions. The H this argument is correct, it im­ swered any normative questions. In second is that we have limited intellec­ plies that I may be better off in nar­ particular, I have not shown that you tual ability-we cannot, in the time rowly material terms-have, for should not steal-to do that, I would available to make a decision, consider instance, a higher income-if I am first have to show that you should all options. We are, in the jargon of really honest (and kind and ...) than if pursue your self-interest narrowly de- computer science, machines of limited I am only pretending to be, simply be­ computing power operating in real cause real virtues are more convincing time. than pretend ones. It follows that, if I No doubt a human being Suppose I wish people to believe were a narrowly selfish individual, I could be designed with no fa­ that I have certain characteristics-that might, for purely selfish reasons, want I am honest, kind, helpful to my to make myself a better person-more cial expressions at all-but friends. If I really do have those char­ virtuous in those ways that others who would do business with acteristics, projecting them is easy-I value. him? Who would marry him? merely do and say what seems natu­ The final stage in the argument is ral, without paying much attention to to observe that we can be made bet­ how I appear to outside observers. ter-by ourselves, by our parents, per­ fined. But I have given a possible an­ They will observe my words, my ac­ haps even by our genes. People can swer for the positive version of the tions, my facial expressions, and draw and do try to train themselves into question-an explanation for the exis­ reasonably accurate conclusions. good habits-including the habits of tence of virtue. Suppose, however, that I do not automatically telling the truth, not It may occur to some readers that have those characteristics. I am not stealing, and being kind to their virtue is not all that exists. My friends. With enough training, such argument seems, at first glance, to habits become tastes-doing "bad" imply that everyone should be virtu­ My Objectivist friends things makes one uncomfortable, even ous, which does not fit casual firmly believed that I should if nobody is watching, so one does not observation. not steal-even when I could do them. After a while, one does not In fact, that is not what it implies; if even have to decide not to do them. my analysis is correct, we would ex­ not get caught-but they You might describe the process as syn­ pect to observe a world where many never came up with ajustifica­ thesizing a conscience. people were virtuous, but not all. To tion for that belief that I found This is probably easier when we see why, consider the situation not are younger. Parents who want their from my standpoint but from that of satisfactory. Eventually they children to be happy and who believe, my potential friends, employers, asked me to stop coming to for purely practical reasons, that hon­ spouses, et. al. It is in my interest to be their meetings-giving me the esty is the best policy, may choose to honest only if they are watching-not train them to be honest. If some vir­ merely watching my individual acts to distinction of having been tues are behavior patterns hardwired see if I act honestly, but watching my purged from an organization into us by our genes, the same process face, listening to my voice, observing of which I was not a member. may take place at an even earlier in a thousand ways whether I am actu­ stage. If honesty pays, people who are ally honest, whether I am the sort of genetically inclined to be honest will person who would act honestly even if (for example) honest. I usually act be more likely to survive and repro­ nobody were watching. honestly because acting honestly is duce, and genes for honesty will All of that watching is costly-it usually in my interest, but I am al­ increase. consumes some of the time and atten­ ways willing to make an exception if I The genetic explanation also sug­ tion that they might otherwise spend can gain by doing so. I must now, in gests why people show their thoughts on other things. In a society where many actual decisions, do a double and feelings on their faces. No doubt a everyone is honest, it is also unneces­ calculation. First, I must decide how to human being could be designed with sary. So in a society where everyone act-whether, for example, this is a no facial expressions at all-but who was honest, nobody would bother to good opportunity to steal and not be would do business with him? Who watch people to see whether they caught. Second, I must decide how I would marry him? Just as honesty is were honest-making dishonesty very would be thinking and acting, what valuable in our associates, so is being a profitable. expressions would be going across my bad liar. The answer to this apparent para­ face, whether I would be feeling I believe that I have now answered dox, as to similar problems in game happy or sad, if I really were the per­ my initial question. I have shown how, theory and evolutionary biology, is a son I am pretending to be. starting with rational self interest nar­ mixed solution. Some people are dis­ H you require a computer to do rowly defined, one gets to virtuous honest, suffer the costs of being (some- Liberty 49 Volume 4, Number 2 November 1990

times) recognized as such, and re­ produce just enough monitoring to thought along these lines. The ceive the benefits of sometimes suc­ make it in the interest of everyone argument I have sketched here is ceeding in their dishonesty. Because else to be honest. Extend the argu­ worked out in much greater detail by some people are dishonest, most peo­ ment to all virtues-more precisely, Robert H. Frank in Passions Within ple spend time and effort monitoring to all of the patterns of behavior that Reason CVV. W. Norton, 1988). those they deal with-trying to deter­ are valuable to our associates and The kind of outline I have de­ mine both whether they are acting sometimes costly to ourselves-and scribed is called an Evolutionarily honestly and whether they are honest you have a plausible explanation of Stable Strategy in the context of sociob­ people. Because of that, many other the world we see around us. iology and a Nash Equilibrium in game people find it in their interest to be Before ending this discussion, theory. honest. The outcome is an equilibri­ there are two more points to be made. My second point is that a similar um in which just enough people (se­ The first is that although I have pre­ analysis can explain some apparently lected from those best qualified-the sented these ideas as my own, I am irrational vices as well as some appar­ most skillful liars) are dishonest to far from being the only one to have ently irrational virtues. Consider, for example, what a psychiatrist would describe as an aggressive personali­ ty-someone who picks a fight with anyone who does not treat him with adequate respect and deference. In the short run this seems like a losing strategy, since the stakes are rarely worth the cost of the fight. ------A Journal ofInterdisciplinary Normative Studies In the long run, however, the re­ sults may be more attractive. The ag­ gressive personality is someone who Essays to Commemorate the 2S0th Anniversary has trained himself to behave in a cer­ of the Completion of David Home's tain way-and that fact can be ob­ A Treatise ofHuman Nature served by others. Since, in most cases, Edited by Stuart D. Warner the things at stake are not worth a fight, the other people usually back Articles down and the bully gets his way Hume on the Origin and Evolution of Religious without having to fight for it-which and Philosophical Consciousness Donald w: Livingston 3 makes his strategy a profitable one. The Virtue of Political Skepticism James T. King 25 Why are we not all bullies? For much the same reason that we are not Hume's Account of Property Nicholas Capaldi 49 all virtuous. The more bullies there David Hume on the Public Interest Stuart D. Warner 77 are the more often one bully encoun­ Spinoza and Hume on Individuals Douglas Den Uyl and Lee Rice 94 ters another-and, since they are both Natural Rights, Philosophical Realism, and Hume's following the same strategy, must Theory of Common Life Douglas B. Rasmussen 122 fight him. As the number of bullies in­ creases, being a bully becomes less at­ Discussion Notes tractive, until we reach a point where In Defense of Moore's "Proof of an External World" John O. Nelson 141 the gain of usually getting your own Race Isn't Merit Eugene Sapadin 145 way is just balanced by the cost of sometimes having to fight for it. In Book Reviews sociobiology, this is called a hawk/ William G. Scott and David K. Hart's Organizational dove equilibrium-named after the Values in America DavidL Norton 153 hawks and doves one finds in politics, Hans-Hermann Hoppe's A Theory ofSocialism not the kinds one finds in the and Capitalism Daniel Shapiro 158 wilderness. Readers interested in a somewhat REASON PAPERS is published at the Department of Philosophy, more lengthy treatment of the eco­ Auburn University, AL 36849. Send orders ($7.00 per copy in US and nomics/ game theory of the aggres­ sive personality will find it in the Canada, $8.00 elsewhere; make checks payable to Reason Papers) to Professor Tibor R. Machan, Reason Papers, Department ofPhilosophy, game theory chapter (Chapter 11) of the second edition of my book Price Auburn University, AL 36849. Manuscriptsshouldbe accompaniedwith Theory: An Intermediate Text. That return postage and envelope. Copyright©1990 by the Department of chapter is not in the first edition, Philosophy, Auburn University. All rights reserved. which is also still being sold. 0 No. 15 SUMMER 1990 Polemic Death in the Sands by Sheldon L. Richman

The U.S. sent its army to Saudi Arabia out of the best of motives: to prevent fur­ ther aggression by a power-mad dictator. What could be wrong with that?

At this writing in mid-September, there is no telling how many parents will lose children, and children parents, in the savage sands of the Middle East. All we can say is that the chances are very good that Americans and Arabs will die. As bad as Saddam Hussein is, he cannot hurt the American people. As Joseph Sobran has pointed out, it of the economists' range of estimates of kept the price of oil down: as a matter makes no sense to argue that Saddam elasticity, a 6.7% cut in world produc­ of fact, as I write these words, the cost wants oil so he can sell it to the oil­ tion would cause a 33% rise in price, to of a barrel of oil is $30.95 per barrel­ consuming West so he can get money about $27 per barrel from the pre-crisis higher than it would be if we had done to buy nuclear weapons so he can de­ price of $20." Now if the United States nothing. Add the higher cost of oil to stroy the oil-consuming West. The were to continue importing 8 million the military expenses and the cost of term madman is being thrown around barrels a day, without substituting do­ forgiving debts to our "allies" and you fairly promiscuously, but nobody is mestic oil or reducing consumption, get a total of $58.7 billion. using it that literally. we would pay an additional $56 mil­ So the cost of the worst-case scenario As a matter of fact, people seem un­ lion a day, or $20.5 billion a year. That for doing nothing-$20.5 billion-is far decided about which would be worse: is less than one-half of 1% of the Unit­ less than half the best-case scenario for Saddam's selling the oil or not selling ed States' $4 trillion GNP. This is a Bush's plan. And this does not include the oil. But there's nothing to worry threat to our way of life? (Henderson the proposed aid to "front line about here. According to economist estimates that the pump price of gaso­ countries." David R. Henderson, even under the line, under the worst conditions, worst assumptions, which are most un­ would increase by 17 cents, or less than Defending the Undefendable likely to transpire, Saddam could bare­ $80 per year per American.) What about the protection of Amer­ ly touch the U.S. economy. Imagine, Since the $20.5 billion cost of doing icans abroad? This is Reason magazine's Henderson wrote in The Wall Street nothing is based on a worst-case sce­ defense of Bush's policy. There is the Journal, that Saddam holds Kuwait and nario, the actual cost will almost cer­ inconvenient detail, however, that our takes Saudi Arabia and the United tainly be considerably less. Compare intervention is what endangers the Arab Emirates. That would give him this to the cost of Bush's adventurism. Americans in Iraq and Kuwait. Sad­ most of the Middle East oil. Total Mid­ Defense Secretary Dick Cheney says it dam's refusal to let the'American men dle East production per day before the will cost about $15 billion for the next go (let's not forget that the women and invasion was 12.3 million barrels. The fiscal year, assuming that open warfare children have been getting out) is revenue-maximizing level of output in doesn't break out. In other words, this wrong, but so is the obvious American the Persian gulf fields is 8.3 million is his best-case scenario. And that figure threat to the Iraqis, a threat the Ameri­ barrels a day-"a 4 million barrels per does not include the $7 billion in loans can hostages are intended to deter. day production cut," Henderson to Egypt that the U.S. will forgive in There is a difference between taking writes. This may sound like a lot, but exchange for Egypt's support, nor the hostages to deter an aggressor and tak­ the world's daily output is 60 million $4.5 billion in loans to Israel that it ing them to facilitate aggression. Re­ barrels. So the cut is only 6.7%. For the now appears will also be forgiven. garding the Reason editorial, one short run, "adopting the grimmest end In addition, the Bush action has not cannot coherently advocate limited Liberty 51 Volume 4, Number 2 November 1990

government while granting the state tear for the legitimate government new era .... A world quite different the power to defend citizens abroad. (read: feudal monarchy) of Kuwait had from the one we've known." Right. Americans are free to travel, and there been no oil there or in neighbor­ Washington, D.C., which has such a they are everywhere. The power to de­ ing Saudi Arabia? sparkling record of creating economic fend citizens abroad logically requires Second, an awesome threat was and social order within our borders, worldwide police powers with all the looming-to the U.S. military budget. domestic intervention that implies. A House committee had just cut $24 billion from the budget, including The cost of the worst-case Laws and Threats money for the Stealth bomber and the When Bush prattles about interna­ strategic defense initiative. The Senate scenario for doing nothing­ tionaI law, it is hard to keep a straight had threatened cuts too. The Iraqi inva­ $20.5 billion-is far less than face. Nothing undermines internation­ sion came not a moment too soon to half the best-case scenario for allaw more than a policy of invoking save the military-industrial complex it only when convenient and flouting it from those who thought history had Bush's plan. at all other times. Bush did not seem ended. It's enough to make one think terribly interested in international law that Saddam Hussein is on the CIA when he invaded Panama and when payroll. will now proceed to impose order on Ronald Reagan was trying to covertly the whole world in partnership with overthrow the Sandinistas in Nicara­ New Garrisons for Old the Soviet Union-another master of gua. Our devotion to international law Our newest ally in the Middle East domestic order! With the cold war in the Middle East is laughable. is Syria's Hafez Assad. His army has over, the U.S.-led United Nations can When Israel occupied Palestinian, been in Lebanon for years. No Ameri­ finally realize its ambition. A friend Egyptian, and Syrian territory, it was can sanctions. No American deploy­ wryly suggested that the most horrible okay with us. When Israel invaded ment. Are there fine distinctions here nightmare of the John Birch Society Lebanon (remaining there to this day), or simply evidence of hypocrisy? You'll seems to be coming true: a Rockefeller it was okay with us. When Syria went recall that American policy favored Republican allied with the Soviet into Lebanon, it was okay with us. Saddam during the Iran-Iraq war. That Union is setting out to run the world. was when Saddam was the bulwark against Muslim fundamentalism. Days When Israel occupied Pales­ before the invasion of Kuwait, the ad­ In your heart you know who's tinian, Egyptian, and Syrian ministration was pushing food credits right - It will be interesting to hear territory, it was okay with us. for Saddam's country. Now he's Hitler, and we're urged by the neo­ what will be said about the Kuwait af­ When Israel invaded Lebanon conservatives, Israel and others to de­ fair by the various groups of intellectu­ (remaining there to this day), stroy his regime and military power als who believe that an isolationist it was okay with us. When with a starvation blockade-an act of foreign policy is essential to the pursuit war under international law (inciden­ of liberty. Which action will they think Syria went into Lebanon, it tally, it was a starvation blockade dur­ more evil, and more likely to be pro­ was okay with us. When Iraq ing and after World War I that helped ductive of future evils: Iraq's interven­ invaded Iran, it was okay with create the original Hitler.) Having med­ tion in a neighboring country, to which dled in the balance of power before, Iraq happened to be heavily in debt, us. But when Iraq invades Ku­ thereby building up Saddam, we are for the purpose of looting its public wait, suddenly it ain't okay now at it again-building up Assad in and private property and annihilating with ·us. the process. Is there a drunk driver run­ its existence as a country; or the inter­ ning the government? In a few years vention of the United States and nu­ we will be told that we must intervene merous other nations, at the invitation When Iraq invaded Iran, it was okay to stop Assad from threatening our of the invaded country's exiled govern­ with us. But when Iraq invades Kuwait, way of life. Or we will have to oppose ment, for the purpose of making Iraq suddenly it ain't okay with us. On the an Iraqi Ayatollah Khomeini. The return to the status quo ante? contrary, we organize a worldwide em­ Shi'ites in Iran have already picked a -Stephen Cox bargo, put up a unilateral blockade, fundamentalist successor to Saddam if and send troops to Saudi Arabia, al­ the U.S. kicks him out. Does anyone The first victim - Those who have though this all endangers the lives of (besides Henry Kissinger, I mean) seri­ read the Constitution know that it 3800 American civilians. ously think the U.S. government can gives Congress the power to declare What's the difference? Two things manage conflict in the Middle East? war. Those who have observed events are worth mentioning: first, the invad­ President Bush actually mentioned during the past 45 years know that this ed state is a compliant oil sheikdom the real reason for the intervention provision of our fundamental law is a that deferred to the United States in all when he said before a joint session of dead letter. Although the United States important things. So is the next possi­ Congress, "Out of these troubled times, has been involved in two major wars ble victim. Would there have been a a new world order ... can emerge: A and scores of lesser engagements, not 52 Liberty Volume 4, Number 2 November 1990

When you cut through the non­ other officials engaging in this sorry venture. Nothing has been learned sense, you discover what Bush has in display want to be superpower big from the 1970s, when price controls mind. From now on, change must be shots, but they snivel that our former and other intervention created the last approved by the United States. This conquests (Japan and Germany, whose energy crisis. puts the country with the most revolu­ American-imposed constitutions pre­ tionary heritage in the world on the clude militarism) won't help foot the side of the status quo. Unless we say so, bill. The only good thing that can come A friend wryly suggested borders arbitrarily drawn by presump­ of this is the removal of American that the most horrible night­ tuous colonial powers will remain un­ troops from Europe and Japan-the mare of the John Birch Society changed and feudal monarchs will stay sooner the better. in power. In a sense, Saddam Hussein But I don't expect it to happen. On seems to be coming true: a did threaten Saudi Arabia, but not mili­ the contrary, what we will get is an ad­ Rockefeller Republican allied tarily. His unseating of Kuwait's Sabah ditional permanent foreign garrison. with the Soviet Union is set­ dynasty imperiled by example the pro­ U.S. troops will be in the Middle East ting out to run the world. American feudal and authoritarian re­ for a long time. Even if Saddam leaves gimes in the other Gulf states, as well Kuwait, he will always be seen as a as in Egypt and Jordan. That was con­ threat. It's his "backyard." And even if Finally, let's hear it for "isolation­ trary to the interests of the American we knock him off, there will be other ism." In a tribute to the power of ideas, government, though not of the Ameri­ threats. The ratchet of expanding gov­ the warmongers among us are quaking can people. An imperial power cannot ernment power will work in this in­ at the threat posed by the few people allow satellite states to leave their or­ stance as it does in all others. who object on principle to our inter­ bits without emasculating itself. If you want to know what else vention in the Middle East. No smear is By the way, there is something un­ drives our policy, listen to the renewed too extreme; for some neo­ attractive in all the bellyaching about talk of the need for an energy policy conservatives, opposition is evidence our allies not sharing the burden of the and control of prices. This is the long­ of anti-semitism. They indict them­ Gulf operation. The congressmen and term domestic threat of the Bush ad- selves by their hysteria. 0

once has Congress declared war since I, too, want a world safe for isola­ The United States cannot simply walk World War n. In fact, increasingly the tionism. But we must begin from cur­ away from such outrages without President and his inner circle refuse rent realities. Rightly or wrongly, the sending a signal that will impair chanc­ even to inform the Congress of a fait ac­ United States over many years has es for a peaceful world order. compli in committing troops to foreign drifted into a position that imposes spe­ Worry about defending unelected conflicts. cial responsibilities. If we are to shed monarchies seems more a rationaliza­ When the Bush administration de­ them, we should work for a safe tion than a valid reason for copping cided to send a massive force to Saudi transition. out. Democracy is not an ultimate end Arabia and its environs, Congress was Already, among themselves, many in itself, not something worth making a out of town for the August recess. No countries have now achieved a position fetish of. It is a political method, more matter. The legislators would have been that offers a lesson for the whole suitable for certain countries or stages by-passed in any event. Eventually con­ world. War is nowadays almost incon­ of development than for others. What gressionalleaders were informed of the ceivable among Norway, Sweden, Den­ libertarians value more highly is the administration's decision, but, as The mark, Iceland, Finland, the United right of individual persons to live their Wall Street Journal reported, they "were Kingdom, Germany, Belgium, the own lives and seek their own fulfill­ not asked for their views." Netherlands, Luxembourg, France, ment in peaceful cooperation with one Insofar as the commitment of mili­ Switzerland, Austria, Spain, Italy, Can­ another at home and abroad. tary force abroad is concerned, the U.S. ada, the United States, Australia, New Oil is no more the real issue than is government is as much a military dic­ Zealand, and perhaps a few other democracy. The issue is peaceful rela­ tatorship as any government on earth. countries. They must be doing some­ tions versus predatory aggression. -Robert Higgs thing right. If the United States still carries a The Iraqi regime stands in glaring special burden of leading collective ac­ Doing something right - Events contrast. It has occupied Kuwait by tion now, so be it. We can work toward in the Near East stir up the isolationist armed force and has kidnapped for­ lightening the burden and sharing it instincts of libertarians. What business eigners innocently living there. The vic­ more fairly in the future. Meanwhile, do we Americans have playing world tims even include passengers on an action against the aggressor regime is policeman? Why are we defending airliner making an intermediate stop justified precisely on libertarian kings and emirs? Why should Ameri­ there at just the wrong time. The invad­ grounds-an economic embargo if it cans risk their lives for Oil-company ers have forcibly cut the U.S. embassy will work rapidly enough, military ac­ profits? off from electricity, food, and water. tion otherwise. -Leland B. Yeager Liberty 53 Volume 4, Number 2 November 1990 The Liberty Interview

Ed Crane

From 1976 to 1983, Edward H. Crane III was in effect Chief Executive of the libertarian movement. Many give him the lion's share of credit for the growth of the libertarian move­ ment during those years, but some blame him for some of its current problems, and he was repudiated by the Libertarian Party in 1983. For the first time in nearly a decade, Ed Crane speaks to libertarians: explaining what hap­ pened, settling old scores, sharing his strategic ideas, and explaining what he has been up to.

Liberty: To what extent, if any, do you think that this is a re­ Ed Crane was national chairman of the Libertarian Party from sult of libertarian activities? 1974 to 1977 and helped manage Roger MacBride's 1976 Crane: The collapse of Communism is not the result of liber­ Presidential campaign. In 1977, he founded Cato Institute, which tarian activities, but it is an advance for liberty. The grOWing quickly became the most important libertarian think tank. As Cato's sophistication of classical liberal and libertarian ideas can president, he set policies that helped shape the direction of libertarian playa very important part in both eastern Europe and the thinking. In 1980, he managed Ed Clark's Presidential campaign, the Third World by providing a framework for a society to re­ high water mark for the Libertarian Party. place their current societies. I think there's a growing respect But all was not peaceful in Crane's libertarian kingdom. About for the ideas in Great·Britain. The Atlas Foundation has a 1979, personal and ideological differences between Crane and network of classical liberal think tanks all around the world. Murray Rothbard, the leading libertarian idealogue, began to surface. They are not conservative think tanks. The growth of ideas Crane purged Cato of Rothbard and his allies in 1981. His grip on internationally has been phenomenal. The situation within the LP began to loosen partly as a result of this falling out with the United States is more problematic. I believe that there Rothbard, partly because of the growing perception by party members has been an underlying growth in libertarian ideas in this that Crane was overly concerned with personal control, and partly country, but that they don't manifest themselves in the polit­ because he seemed to be losing interest in the LP. ical parties any more. At the same time, Crane was changing the Cato Institute from an The applicants for internships and our summer programs academic think tank to a public policy think tank. In 1981 he moved here at Cato are really remarkable young people who are its headquarters from San Francisco to Washington, D.C., where to­ fully committed to a libertarian world. The Institute for day it is a respected member of the policy community. Humane Studies has done such a good job in identifying Ed Crane remains a passionate advocate of liberty with strong young libertarian scholars and placing them, and it gets opinions on a wide variety of subjects. He was interviewed by R. W. more applications for its scholarships from hard-core liber­ Bradford on August 27. tarians every year. There are libertarian think tanks around Liberty: You've been involved with virtually every aspect of li­ the country-the Pacific Institute, Reason, Heartland, bertarian or classical liberal activity in the last 20 years. You Manhattan-there's been a real growth of the infrastructure. were involved in the foundation of the Libertarian Party and The political situation is very complex in this country, but I very much with its management, you've been involved with think our ideas are gaining ground. Everybody talks about the Cato Institute, which began as an academic think tank how contemporary liberalism in America is a bankrupt ide­ and became a public policy institute. You published Inquiry, ology, but I think that conservatism is also bankrupt. I mean, a major outreach magazine, and Libertarian Review, a move­ what do conservatives stand for anymore? Nothing. So it's ment magazine. Based on your experience, what kind of almost as if it's the classical liberal/libertarian opportunity progress do you think we've had? Is liberty better off today to go to the plate. We have the world view that has weath­ than it was twenty years ago, and is the libertarian move­ ered the course of events. We know how the world works ment today better off than it was twenty years ago? and why. There's a lot of work ahead of us, but conditions Crane: Well, I think liberty is clearly better off than it was around the world are improving. I think, as George Gilder twenty Ytars ago. I mean, when you have the collapse of says, for instance, that technological developments are mak­ Communism and the liberation of hundreds of millions of ing it harder and harder for governments to control world people from that domination, then liberty is a net gainer. events and to control people. Technology is on the side of 54 Liberty Volume 4, Number 2 The Liberty Interview November 1990 liberty. late, as had been my habit, I wound up spending my lunches Liberty: When did you first become interested in libertarian at the LP, leaving at 5:00 to go to the LP office, and going into ideas? the LP offices on the weekend. I finally came to realize that Crane: Oh, I guess it was when I was in high school, which you couldn't do this thing unless you were doing it full time, was a few years ago. and so one morning I just woke up and decided that I was quitting my job, packed everybody up, moved to Liberty: When you were an undergraduate at Berkeley, were Washington DC, and wound up running Roger MacBride's you involved in libertarian activities? campaign in 1976. Crane: I ran for student government at Berkeley. Liberty: You were his campaign manager also? Liberty: How does this relate to your maxim.that you should Crane: Well, Bob Meier was the national chairman. Bob and I never trust anyone who ran for student government? ran the campaign. That's all the national party did, then, Crane: I ran on the platform of abolishing student aside from trying to build the state parties. I spent a lot of government. time making enemies in every state in America. Liberty: I gather you didn't win. Liberty: I remember your memorable appearance as an actor Crane: No, I gotbeaten by Bettina Aptheker, actually. She in a spot for MacBride. pulled out her Communist Party card, which in 1964 or 1965 Crane: I was a reporter. was a sure means to victory. I had always assumed that I Liberty: Right. would never be involved in politics because I was so out of step with the world. Then in 1972 I heard about the Crane: We ran six--or maybe only five-network 5-minute Libertarian Party convention in Denver, and I said what the spots. You know, we got a lot of inquiries from them. It heck, I'll go to it. As a libertarian, I had always valued diver­ helped build up the mailing list. And you know, we beat sity and the right to an alternative lifestyle, but until I Gene McCarthy. We didn't get more votes than he did, but walked in that room I had no idea just how many alterna­ tives there really were. "I voted for Ed Clark, but only with the knowl­ Liberty: How many people were there? edge that he was unelectable. My position was Crane: Eighty-five, I think. that I was going to get out of the country if he Liberty: What role did you play at that meeting? Crane: It wasn't a very high-profile role. I helped with the were elected President. I was afraid Alicia might statement of principles. I was in a room with John Hospers blow in his ear and that might be the end of the and a bunch of other people, and I participated in a floor de­ world./I bate over bringing the troops home from Vietnam. It was surprising the number of libertarians who favored staying we got on the ballot in more states than he did. Whatever and winning the war. you want to say about Libertarians, they're damned good at Liberty: Even in '72? getting on the ballot. I think we were on the ballot in 31 Crane: Yes. states. We got more votes than the American Party, so we Liberty: That was a rather implausible position by that time. were the third largest party in 1976. Crane: Yeah, it was. But in those early days it was kind of a Liberty: After the 1976 campaign, according to press accounts,

right-wing spin-off. David Nolan ran the thing, and he was you started what amounted to an 1/Anybody But MacBride" what I would call a right-wing libertarian. campaign for the 1980 nomination. Liberty: Your role in the Libertarian Party escalated rather Crane: Roger did a hell of a job in 1976. He put a lot of money quickly. You played a role in the '76 campaign.... into the campaign, he had credentials, he was a lawyer, but Crane: Actually, I played a role in the '72 campaign. Ifyou are his views continued to rest on this tripod of issues: a strict ever a player in a trivia game and you're asked who was the non-intervention in foreign policy, respect for civil liberties, campaign manager of the first woman in U.S. history to re­ and a free-market economy. But when you went beyond ceive an Electoral College vote, the answer is me. I ran Tonie that, he wasn't really interested. There's no reason, perhaps, Nathan's campaign. Then I became vice-chairman in south­ why he should be, but he wasn't interested in talking about ern California, in '72 I think. I flipped a coin with Bill Susel the specific issues of the day, and I thought that if the party and I lost. I spent a lot of time driving around to all the 12 re­ was going to be able to grow, it needed somebody who gions we had, going to meetings-I worked real hard. I re­ would be ready to debate public policy issues in a more so­ member John Hospers got 980 write-in votes for President in phisticated manner than Roger wanted to-I don't want to 1972, and I was real impressed by that. I said hell, ifthere are say than he couldn't have done so, but he just didn't want to 980 people out there willing to go to the trouble of writing in approach it that way and I thought that the party needed a name, maybe we can make a go of it. that. That's why we went with Ed Clark. Liberty: When did you quit your job in the investment indus­ Liberty: Were you involved in the Clark '78 campaign in try and get involved full time? California? Crane: I was elected national chairman at the Dallas conven­ Crane: Yes. I was a kind of unofficial advisor to David Boaz tion in 1974, and shortly thereafter I was made a vice­ and Bob Costello and some of the people who were doing president of Alliance Capital Management in San Francisco. I the nitty-gritty work. That was the campaign that really es­ opened up our first national office (it had previously been in tablished the potential of the party. I had come back from the David Nolan's living room). We rented some space across '76 campaign in early '77 to San Francisco, and I had sort of from my office at the investment firm. Instead of working done my thing for the Libertarian Party, but I was appalled Liberty 55 Volume 4, Number 2 The Liberty Interview November 1990 to find out that after getting MacBride on the ballot in success. California in '76, they were talking about a write-in cam­ Then came the Anderson candidacy. It was like a body­ paign for governor in '78. I thought if the California party blow to all of us. When John Anderson, this dithering didn't continue to grow, the whole thing was going to col­ Congressman who didn't have any idea what he stood for­ lapse. So rather than step out of it-I had just become head of other than, it turned out, big govemment-opted to run as an the Cato Institute-I got involved again. I talked Ed into run­ independent (primarily, I think, because Gary Trudeau had ning for governor, we got him on the ballot and he got called him "the lonely candidate") it was devastating for 357,000 votes, which was 5.6% of the total. In some counties those of us who had spent years building up the party. he got into double digits. It was a very serious, high-profile Between 1972 and 1980, I had gone to every single national campaign. committee meeting the party had held. I spent a lot of time Liberty: It was an independent campaign, not a Libertarian Party campaign. liThe Anderson candidacy was like a body-blow Crane: No, it was independent, that's right, on the ballot, but all the literature said Libertarian. to all of us. When John Anderson-this dithering Liberty: Ifhe had been on the ballot as a Libertarian Party can­ Congressman who didn't have any idea what he didate, do you think he would have done worse, and if so, stood for-opted to run as an independent, it was how much worse? devastating for those of us who had spent years Crane: My guess is he would have gotten 3.5% instead of 5.5%, something like that. building up the party." Liberty: It seems that in most of the races in the 1970s in which libertarians got good numbers, they were running as inde­ and money trying to build it into a viable force. There were pendents. I'm thinking of Kay Harroff's race in Ohio for internal disputes between me and other people in the cam­ example.* paign, but they were just a minor irritation. The Anderson Crane: Yeah, Kay was a woman and an independent and she candidacy was devastating. did a good job of campaigning. Liberty: You did manage to get on the ballot in alISO states and Liberty: What sort of problems did you have to face in the '80 the District of Columbia. campaign? Crane: That was a phenomenal achievement. I had gone into Crane: Oh Lord, that's a tall order. the convention in '79 realizing that we had an opportunity Liberty: OK, what were the biggest problems? and a problem. The problem was fundraising. There was the Crane: First, I'll give you the background of the campaign. All Federal Election Campaign Act, passed almost explicitly to the people who were associated with me in the Libertarian shore up the two-party system at a time, after Watergate, Party will tell you that I had said from the beginning that we when there was a lot of dissatisfaction with the two major either accelerate or we throw in the towel, that once the party parties, and particularly with the Reagan-Carter race. But stagnates, the media loses interest because you're no longer a anyway, the contribution limitation meant that we needed to serious deal, you're just another gadfly third party, around get a wealthy person on the ticket, and that's where the idea to pick up your two or three percent of the vote. But, as long of David Koch came up. We got him on the ticket, and he as you are growing, they've got to keep an eye on you. committed to spend quite a bit of money on the campaign. We knew that the odds were obviously against our contin­ The opportunity was that the networks provided 5 minutes uing to grow, but that it was a highly leveraged opportunity, of prime time television space-not commercial time-which and that we ought to give itour best shot. Clark's campaign they sold for about $25,000 each. The regular cost of that time in 1978 gave us hope that we could do something serious in would have been more than a million dollars, so it was an in­ 1980. There were 2000 people at the 1979 convention in Los credible opportunity to really get the word out to a lot of peo­ ple, and we took advantage of it. The LP had an opportunity in 1980 to really establish itself as a viable alternative-to liMy thought all along was that this was a draw in the kinds of people who were going to make the long-shot strategy that would come to an end the thing work. day the growth levelled off. So after the Clark Liberty: What kind of people did you have in mind? campaign when it became evident that the party Crane: One of the paradoxes of third parties is that the obsta­ cles they face are so overwhelming that the only kind of peo­ wasn't going to go anywhere, I stepped away from ple you can get to get a third party off the ground are it." ideologues, people who believe so fiercely that they are will­ ing to put up with the problems, and get only one or two per­ Angeles. The Los Angeles Times, one of the four or five most cent of the vote. At the same time, once you actually do get it important papers in the country, ran three front page stories off the ground, it's the same ideologues who assume an ex­ on the convention while it was in progress. There was a real clusionary attitude. You can't be a Libertarian unless you're a sense that the Libertarians, who had just received nearly 6% LIBERTARIAN. It's like being pregnant-you either are or in the gubernatorial race, and who were nominating the you aren't, and if you endorse 98% of our platform and reject same guy to run for president, were really going to have an 2%, to hell with you, go vote for one of those other guys. In impact. To this day, I believe that we were on the verge of the other parties, ifyou reject 98% ofour platform and accept * LP activist Kay Harroff ran as an independent for the Senate from 2%, come on in, you're one of us. There's a happy medium Ohio in 1972. She got 80,000 votes. somewhere, which would have allowed the party a broader 56 Liberty Volume 4, Number 2 The Liberty Interview November 1990 outreach than there was. vention and said, "Why are you opposing Gene Burns for the Liberty: I gather you don't think the Libertarian Party has ever nomination of the Libertarian Party?" I said, "I'm not in­ found that happy medium. volved any more with the Libertarian Party." So they said, "Who will you vote for for President?" and I said ''Well, I as­ Crane: No, and I think it's a moot question right now. But we sume I'll vote for Gene Bums. He's clearly better than any­ were really geared to take it to the world in 1980. We had se­ thing the Republicans or Democrats are going to nominate." rious, dedicated people working in every state, and then And I think that Bums had been sold a bill of goods by his Anderson came along. I believe that the media would have handlers that Crane was going to launch a sneak attack at the been hard pressed to ignore Ed Clark, who's an articulate convention, when in fact I liked everything I had ever heard guy, a very knowledgeable guy, Harvard Law School, senior about Gene Bums. But the people who had opposed me dur­ lawyer at Area, a terrific candidate. You had this very large ing my long tenure in the party were so used to having me percentage of the population that thought the choice be­ be the villain that they continued to keep me a subject of tween Reagan and Carter was less than good. We figured their newsletters-and, I suspect, a subject of their pep talks that as we ran 47 prime-time TV spots, the media would find itself in a position where they have to start reporting on the campaign. But they never did. In that entire campaign, there "Too many libertarians assume an exclusion­ were only two network TV spots, which I think were human ary attitude. You can't be a Libertarian unless interest spots, and not one hard-news story of what Ed Clark you're a LIBERTARIAN. It's like being preg­ said that day, because John Anderson filled that role as the nant-you either are or you aren't, and if you en­ Alternative Candidate. Liberty: In light of the fact that exogenous factors sabotaged dorse 98% of our platform and reject 2%, to hell the campaign, were you satisfied with the total that Clark with you, go vote for one of those other guys." got? Crane: I was unhappy with it. We knew what it was going to to Gene Burns. So maybe he just said "to hell with it." But be, from state and national polls. Ed insisted on going then I got a call from somebody saying that Gene Burns around saying that he was going to get several million votes, wasn't coming. A lot of us had been involved in the party for which is one reason why people were disappointed when he a long time, trying to build it in the way that seemed the best only got 920,000. He justified that by looking up "several" in to us, and even though we hadn't been involved in party ac­ the dictionary, where it said "two or more." He said ''We can tivities at the national level since '81, we got Earl to run. I get two million," and in theory we could have. We were think that was a mistake. I think Bergland ran a terrible carn­ thinking that we were going to get 1.2 million. The reason it paign, but I don't think that a good campaign would have was less than that was that we did very poorly in California. made any difference. There was no money, and Earl was a If you do an overlay of Anderson's vote in 1980 and of scholar, so it wouldn't have done his career any good. It was Clark's in 1978, you find that they were the same people. just a sort of knee-jerk reaction. I regret that whole episode. Anderson got Clark's votes in California. Liberty: That was your last involvement in the Libertarian Liberty: As I understand it, you played an active role in the Party at the national level? Randolph campaign in 1982 for the governorship of Alaska. Crane: It really was at the '81 convention. Crane: I went up there a couple of times to help him. They did Liberty: Was there a falling-out between you and the Clarks? a heck of a job. What did they wind up with, 16%? Crane: Well, Alicia and I never got along. Ed decided--or she Liberty: Something like that. However, people's expectations decided, I don't know which-that his wife would be the were that he'd do much better. The Republican candidate, best national chair, and we had a lot of problems during the Tom Fink, was reported in the press as having said that had campaign, a lot of it involving Alicia, so Ed kind of turned he lost the primaries he would have jumped ship to his back on the people who had worked on his campaign for Randolph. Rumors were rampant that a deal had been made the last couple of years. so that after Fink lost the Republican primary, which it was I always felt, too, that Clark didn't acknowledge the role presumed he would do, he would endorse Randolph, and that the people who ran that campaign had played. I mean, we wrote the speeches for him, we got the press lined up for Randolph would give him the LP lieutenant governor nomi­ him, we got him on the ballot, told him what to say, and real­ nation. Do you know if such an arrangement was in fact ly worked our butts off against enormous odds, realizing made? that Anderson was taking all this away from us anyway. The Crane: I don't know about about that. men and women on his campaign worked seven days a Liberty: In the 1983 LP convention, people arrived expecting week, late into the night. It was incredible, the effort, yet Gene Burns to have a lock on the Presidential nomination. there was never any acknowledgement on Ed's part. Even But Burns didn't show up. Then came one of those bitter the book we put out as part of his campaign.* He took all the fights that seems to characterize LP activities. The people in credit for that, even though he didn't write a word of it. the party coalesced around two candidates: Earl Ravenal, Liberty: Who did write that? who was associated with you, and David Bergland, who was Crane: Oh, several people. I think David Boaz wrote the bulk associated with everyone else, or at least with everyone who of it, but there were half a dozen people who had input into was unhappy with the leadership that you had provided to it. It was almost as if being a candidate for President got to the Libertarian Party. him. He started thinking that he was someone terribly im- Crane: It's an interesting story. I was on a radio show in Orlando-they called me up about two weeks before the con- * A New Beginning, Caroline House, 1980. ------Liberty 57 Volume 4, Number 2 The Liberty Interview November 1990 portant because he was a Presidential candidate. I guess it's a on howyou present your ideas. My idea is that the true radi­ corrupting thing, to have people put microphones in your cal is the one who is the most effective in bringing about face all the time. I certainly think it's one of the reasons that change in society. Waving a black flag, going up on a hill, all these people inside the Beltway are so self-infatuated. But and waving signs that say "Smash the State" isn't radical. It's anyway, it was one thing not to acknowledge all these peo­ just silly. ple who had worked so hard for him, but then when he You've got to look at society rationally and say "How the wanted Alicia to run the thing-and Alicia was not a compe­ heck do we do it?" I'm not saying that I have the best strate­ tent administrator and had no vision other than that she gy, or that there's only one proper strategy. But I think that wanted to contact the "grass roots," which meant God those in the Libertarian Party who felt that it must demand knows what-I think the party fell apart fairly rapidly. Then 100% compliance with every "T" crossed and every "1" dot­ there was the unseemly firing ofEric O'Keefe and all that ted are wrong. That was counterproductive and very off­ nonsense. It was through Ed that all this happened, so I putting. Ifyou believe that the ideology is as strong as I be­ guess you could say we had a falling-out. lieve it is, then what you want to do is draw people in who Liberty: There were rumors at the '87 convention that because are fundamentally sympathetic to these ideas. But a political the party had come to its senses and nominated a real-world party is not the institution to radicalize people. Ifyou have a person like Ron Paul, you were about to return. Was there political party, it should say, "Look: if you're a Republican any substance to these rumors? you believe in the free market. That's your most fundamental Crane: No. concern. You shouldn't have to sign off on militarism and Liberty: You know, you have kind of a mythic status in the this obsessive compulsion to conformity in the social area. Libertarian Party. Similarly, if you are a liberal and you are very concerned Crane: I have tremendous respect for people who want to stay with civil liberties and the arms race, why should you have with the Libertarian Party. I beat my head against that wall to be a Democrat and sign off on all this income redistribu­ for a long time and I know what's involved. I know that the tion and national economic planning? Why can'tyou have a people in the party are passionately con1mitted to liberty. I party that's for free enterprise and peace and a tolerant atti­ just decided that it's not the strategy for me. It wasn't that I tude on social issues?" decided it on a certain day. My thought all along was that Liberty: Whom did you vote for in '88? this was a long-shot strategy that would come to an end the Crane: I don't vote. It only encourages them. day the growth levelled off. So after the Clark campaign, Liberty: Whom did you vote for in 1980? when Alicia became chair and it became evident that the par­ Crane: I voted for Ed Clark, but only with the knowledge that ty wasn't going to go anywhere, I stepped away from it. I he was unelectable. My position was that I was going to get never had any intention of going back to it. As for the Ron out of the country if he were elected President. I was afraid Paul thing ... I think Ron Paul's got the wrong image for the Alicia might blow in his ear and that might be the end of the Libertarian Party anyway. world. Liberty: What do you mean? Liberty: There's a lot more to what you do at Cato than just ec­ Crane: I think he's got a right-wing image. You know, a lot of onomics or even applied economics. Your op-ed program New-York-bankers-controlling-the-world, conspiracy stuff. I seems to deal, for instance, with a broad range of issues. What other disciplines does the Institute do scholarly work UThe true radical is the one who is the most ef- in? fective in bringing about change in society. Crane: Well, of course foreign policy. You were tweaking us Waving a black flag, going up on a hill, and wav­ for not being radical enough, but if you look in the op-ed pages or on the TV, the only people who are opposed to the ing signs that say 'smash the state' isn't radical. U.S. intervention in the Middle East are from the Cato It's just silly." Institute. We had an op-ed in the New York Times, U.S.A Today, we've been on C-Span, The Oprah Winfrey Show . .. think the constituent element for the Libertarian Party is the Liberty: Wow, who did you have there? independent element, which he turns off. Crane: Doug Bandow. The other night Ted [Galen Carpenter] Liberty: You were accused of turning the Libertarian Party to was on The Larry King TV Show, Good Morning America called a "low-tax liberal" party. Is that what you believe in? this morning for Ted ... Crane: In the classical sense of liberal. You know, I was at­ Liberty: Do you have a monopoly on opposition at this point? tacked from all sides. The right-wingers thought I was a com­ Crane: I don't know of anyone else. One of the interesting mie because I was a very strong non-interventionist and things aboutthe other libertarian think tanks, is that they're wanted to end the arms race. The radical caucus thought that not saying anything about this. A lot of them don't do any­ I was a sell-out because I wanted to present ideas in a way thing in foreign policy at all. I don't see how you can be in fa­ that the public could accept. That's one of the problems with vor of human liberty and seek to promote it if you don't the libertarian movement: there's a sense of alienation to­ address the issue of war and peace. Randolph Bourne rightly ward the very culture and society that we're trying to win characterized war as "the health of the state." Foreign policy over. There needs to be a greater respect for people whose is a serious issue, involving the deprivation of liberty. ideas we don't agree with, an acknowledgement that most Liberty: What are the most important policy issues with which people who have different ideas hold them with the best of Cato is involved today? intentions. You need to have a calmer, more mature outlook Crane: One primary concern is entitlements. We have tried to 58 Liberty Volume 4, Number 2 The Liberty Interview November 1990 develop alternatives to social security and medicare, by pub­ tionally limited government. The problem with democracy is lishing the work of Peter Ferrara and others. We are working not the right to vote. The problem is that we get to vote on to develop policy options that would allow at least younger things we should never vote on. It's all very nice to talk people to opt out of social security-to try to bleed the sys­ about the flaws of democracy, and certainly one is not in fa­ tem at one end. vor of the tyranny of the majority, but on the other hand, for The second major focus of our attention is the military people who have lived under authoritarian regimes and un­ spending. We came out with a white paper on the military der communism, the idea of the right to vote is very impor­ just when this Mid-East stuff started that called for a 62% de­ tant. Particularly in the Third World, democracy is perceived crease in military spending over time. as a vehicle of liberation. The emphasis in democratic capital­ We also are very concerned about regulation. We publish ism needs to be on capitalism. I think that one of the prob­ Regulation magazine, which for years had been published by lems with our government is that when it talks about international trends or what's happening in Eastern Europe, it doesn't even mention capitalism. liThe problem with democracy is not the right Liberty: What do you think ofLudwig von Mises' argument in to vote. The problem is that we get to vote on favor of democracy as a way of avoiding social violence? things we should never vote on." Crane: Democracy, itcould be argued, is violence itself. The question is not whether people should be able to vote, it's what they should be allowed to vote for. the American Enterprise Institute. Catherine England is our Liberty: Allowed by whom? After all, sovereignty is vested in director of regulatory studies and we're trying to demon­ the people. strate why all sorts of government regulation is harmful to Crane: In terms of dealing with the world as it exists today, economic growth (not to mention human liberties). the anarchist approach seems less than viable. We have a center for Constitutional studies that Roger Liberty: Are your objections to anarchy based on its theoret­ Pilon works on. This is an area where libertarians have not cial impractibility or on its political inexpediency in our I spent a lot of time, mostly think because many have the atti­ culture? tude that the Constitution is an illegitimate document to be­ Crane: It's based on the theoretical case as I understand it. I gin with, so why worry about it? However, it seems to us have always felt that anbarchists from Rothbard on down that the Constitution is a much better document than one have been have not taken seriously the responsibility they might think having observed the way it has been abused have to deal with criminal torts in a society without govern­ over the years. We're trying to demonstrate that there are ec­ ment. And in a nuclear age, the idea of neighborhood ICBMs onomic liberties in the Constitution that need to be enforced, that there is a right to privacy, and that individual liberty is the philosophical underpinning of the Constitution. liThe Advisory Neighborhood Council said that We also have a project on global economic liberty that is drawing on the kind of economic analyses that Peter Bauer our building was 'too arrogant.' It was like and others have developed on Third World development. In straight out of The Fountainhead." the post-Cold War era, we're trying to point out that the great threat to the Third World is no longer that of being pawns of the superpowers, but ofbeing pawns of the IMF that anarchists will casually joke about strikes me as a prob­ and the World Bank. Private property and democratic capi­ lem that anarchists have not dealt with adequately. I think talism are the answers to the problems of the Third World. that the troubling points of anarchism have not been taken I just got back from Russia. It was so refreshing to be seriously enough by the proponents of anarchy. So I don't around bright people who care about first principles. It is find it a compelling theoretical framework. stimulating to be in an intellectual environment in which Liberty: What do you see as the proper role of government? people who make a difference in society care about the na­ Crane: Government should be limited to providing a national ture of a free society. Then I came back to Washington, to this defense against outside aggressors, a court system to adjudi­ swamp, where you can't even say these things. Really, the cate disputes (although a large number of the court cases that contrast is incredible. Dick Randolph has said that if it hadn't are taken by government today could be done by the private been for Seward's Folly, they'd be in a a free country today. sector), and a police function and that's what I would limit it In Russia, I awarded a beautiful bronze bust of Hayek to to. Yevgeny Primakov, Chairman of the Council of the Union of Liberty: You said that you favor a limited government. What the Supreme Soviet. He's one of Gorbachev's top guys. In the limits it? presentation ntral Committee. I said, '1t is Cato Institute's Crane: Well in theory it's limited by a constitution, but in prac­ sincere hope that this bust of F. A. Hayek will rest in a prom­ tice it's limited by an educated populace. It's an on-going inent place in the Kremlin where it will remind Mr process of education of convincing people that individuals Gorbachev and other leaders of the Soviet Union that there have rights and that government should not infringe on are answers readily at hand for the problems of the U.S.s.R." those rights. And it's not an easy task. We don't live in a per­ That was really a great experience. fect society, or world, and until I'm convinced otherwise, I Liberty: Many libertarians view democracy as just another believe there is a legitimate·role for government to protect form of statism. Is C(ito committed to democracy, and if so, rights that people bring into society before government. why? Liberty: What rights do people bring into society? Crane: Cato is committed to private property and a constitu- Crane: Rights to life, liberty and property. Liberty 59 Volume 4, Number 2 The Liberty Interview November 1990 Liberty: Where do these rights come from? Cato is usually seen as a gradualist, piecemeal sort of ap­ Crane: Oh, come on, Bill. proach, proposing policies that are more libertarian than the Liberty: I don't want you to get too philosophical, but ... policies that are currently in effect but that don't reflect the Crane: Some people say they come from God, some people radical thinking characteristic of most libertarians. Has your say they are natural rights. I think intuitively that these are strategic vision changed? the rights of man. I don't find natural rights arguments par­ Crane: There's a difference between gradualism and compro­ ticularly compelling. I don't think that anyone has been able mise. Compromise is giving something to the state in return to prove that these rights come from anywhere. I'm an ad­ for something else. At the Cato Institute, we are as radical as ministrator in the movement and maybe an entrepreneur. we can be on the issues and still be part of the debate. You But I'm not the person to try to define rights. You know, I've can say that is selling out, or that is compromising. I don't be­ always found the Austrian concept ofunarticulated knowl­ lieve it is. I think that we have put a libertarian perspective edge to be appealing. I think one can have an appreciation on the table of national debate, through very hard work, seri­ for a concept like rights and believe that it's correct and not ous scholarship, and sophisticated packaging. There is no­ have the slightest idea of how to prove it or defend it on a body in the policy community who has come close to our call theoretical basis. for reductions in military spending. There is nobody who has Liberty: Libertarians tend to believe in rights but often have done more to challenge the social security system. There is the same qualms about anarchism that you have. Yet rights nobody who has done more to promote the legalization of thinking seems to lead to anarchism. Ifyou have an absolute drugs. Our positions are not motivated by considerations of right to life, liberty and property, what is a government there what they are going to do to our funding possibilities. I'll for? What can it do without violating those rights? guarantee you that taking strong anti-war, anti-military posi­ tions doesn't help you get money from foundations. The #There is nobody in the policy community who same is true of our position on drugs. So I think we've done a good job of maintaining the radical edge for an institution has come close to Cato's call for reductions in mili­ that is strategically based to be part of the policy debate in tary spending. There is nobody who has done more America. to challenge the social security system. There is Liberty: Was Cato a public policy think tank from the start, or nobody who has done more to promote the legali­ did this develop later? Crane: In my mind it was. As it turned out, we had Inquiry zation of drugs." magazine and we had a project called Academic Affairs, that took up the bulk of our budget in the early years, but as we Crane: There is one school of thought that claims that the dif­ jettisoned those projects, we just increased the amount of fernence between limited-government libertarians-and I public policy work we did. I was impressed when I worked mean real libertarians-and anarchists, is a semantic differ­ on the MacBride campaign with the success of the American ence, that anarchists don't say that there shouldn't be gov­ Enterprise Institute and Brookings, and I thought that what ernment, they just don't call it government. That there would we needed was a libertarian think tank. That's always what be a means of enforcing the protection of these rights, that a my view has been. private police force and private court system and a private Liberty: How did Inquiry fit into your overall game-plan? defence system-I mean a means of keeping invaders out­ Crane: The early thinking was that "think" magazines were a it's all private, but it's still government. highly leveraged way to get the ideas out there. It turned out One problem with the word anarchy is that people think to be an enormously expensive undertaking, and there were that anyone can do anything they want and that the person problems with the strategic approach we should take with with the most muscle prevails in an anarchist system. In a the magazine. It just was absorbing too high a percentage of certain interpretation of that word that is correct, which is our resources. why you form these mutual defense organizations. And that Liberty: Inquiry was primarily marketed to the left, is that is a problem with democracy toO. It's not a questions of the correct? right to vote, it's a question of what you can vote on. When Crane: In the early going it was, and then in about 1981 we democracy gets to the point-as it has today-where people tried to shift it to be just a straightforward libertarian maga­ vote on how much their neighbor can keep of what he earns, zine without any sort of slant one way or the other. then obviously democracy is an evil institution. But if it's Liberty: This was at the time that it subsumed Libertarian limited to who's going to administer the legitimate functions of institutions that protect these rights, then it's a legitimate Review and became a monthly? institution. Crane: Yes. We renamed it Inquiry: a Libertarian Review. Liberty: Probably the greatest debate among libertarians has Liberty: When Inquiry was still a biweekly, what kind ofre­ been gradualism versus radicalism. During the '70s you were newal rates did you get? a major advocate of radicalism as a strategy. You told Reason Crane: I really don't recall. They weren't that great. I think in an interview in 1974, ''The real threat to the Libertarian around 40%, something like that. Party lies in the temptation to make the big time through Liberty: I imagine that was one of the discouraging things. compromise of our principles to gain votes immediately. The Crane: That was attributable, I think, to the left spin that was fact is that the only hope we have for continued success is to on the magazine, which was probably a strategic error. stick to our principles and never compromise. If we do that, Liberty: What was the purpose in acquiring Libertarian Review there's nothing we can't accomplish." Yet the strategy at in 1978? 60 Liberty Volume 4, Number 2 The Liberty Interview November 1990 Crane: That was going to be a movement magazine, some­ simply the creature of Charles Koch, that he's responsible, thing like Liberty. practically alone, for funding the operation.* Liberty: Why did you stop publishing it? Crane: The vast majority offunding comes from sources unre­ Crane: Cost again. I didn't want to, but the funders wanted to, lated to Charles Koch. There are, for example, 40 individuals so we shut it down. on our Finance Committee, which requires a five-figure Liberty: Do you get a significant amount of your funding from contribution. foundations? Liberty: Early on, Cato played a fairly important role in Crane: Yes. Austrian economics and lately it seems it has de-emphasized this, I guess as a part of de-emphasizing non-public policy Liberty: Do you do a significant amount of fundraising with scholarship in general. Is Cato doing anything with regard to individuals? Austrian economics right now? Crane: Yes. Crane: Our summer seminar brings in an Austrian economist Liberty: What percentage of your budget comes from to explain Austrian economics from an Austrian perspective. individuals? Crane: Oh, I don't know. The smallest amount comes from corporations. I'd say it's around 50% foundations, 40% indi­ HI just got back from Russia. It was so refresh­ viduals, and 10% corporations. ing to be around bright people who care about first Liberty: In 1987, in your interview with Bob Chitester you said that Cato was a "small two million dollar public policy insti­ principles. It is stimulating to be in an intellectual tute." Was that a reference to your annual budget? environment in which people who make a differ­ Crane: Yes. ence in society care about the nature of a free soci­ Liberty: Is it significantly different today? ety. They I came back to Washington, to this Crane: My budget for this year is $3.1 million, but it will prob­ ably be a little higher than that. swamp, where you can't even say these things." Liberty: Does that include a new building? Crane: We're in the middle of a capital campaign for a new But if you are in the public policy business and you are rely­ building. No, that is not included. ing on Austrians to provide you with public policy analysis, Liberty: How is that going? you're out of luck. I'm interested in people who will analyze Crane: We've raised about three million dollars. problems with government involvement in the economy, Liberty: What's your target? and I'd rather have a prolific, intelligent critic who was a Crane: Ten million dollars. The fundraising has beenquite sat­ non-Austrian than an Austrian who refuses to deal with the isfactory although we really haven'tbeen out there aggres­ policy issue at hand or to learn the facts behind it. Austrians sively trying to do it yetbecause we'vebeen dealing with the are so focused on theory that it is very difficult for them to write about the real world. And that's, I think, a failing of Austrian economics. There are other problems with Austrian HIf you are in the public policy business and you economics. For instance, I think their business cycle theory is are relying on Austrians to provide you with pub­ almost non-Austrian in its mechanistic approach to the struc­ lic policy analysis, you're out of luck. Austrians ture of production. The Austrians have been too much of an exclusive club in any case. I remember one time there was an are so focused on theory that it is very difficult for Austrian conference up at NYU early on in the mid­ them to write about the real world. And that's, I seventies, and Harold Demsetz had come to the conference. think, a failing of Austrian economics." Now, Demsetz is a big-name economist. He's not an Austrian, he's a Chicagoite. Teaches at UCLA. But it was good for Austrian economics that this guy was there, partici­ District ofColumbia Board ofZoning Adjustment and pating and debating and therefore implicitly recognizing the Advisory Neighborhood Council and Office of Planning and importance of the Austrian ideas. There was a reception that various other people who have more of a proprietary interest first night, and Demsetz walked up to Rothbard and put his in the building than one might think appropriate. It's taking hand on his arm and said, "Rothbard, I have a bone to pick forever for us to geteverything through, and only now have with you," in an obviously friendly and convivial way. we got all the zoning permits and approvals. The first time Rothbard grabbed his arm away and stalked off to the other we ran through our building, the Advisory Neighborhood side of the room. This was a social cocktail party-it was Council said that our buildingwas "too arrogant." It was like very embarrassing. Later, I came to view this event as sym­ straight out of The Fountainhead. And so we had to go back. bolic of some of the problems involVing the Austrians. The Finally our lawyers wouldn't let me go to the meetings any­ unwillingness to pay any respect to people who disagree more, because they thought that the people on the other side with them. of the table didn't like me. I was ready to leap across the table, Liberty: Do you have an explanation for Rothbard's extremely so I was happy to let somebodyelse go instead. But we'vegot hostile reaction to what he refers to as the "hermeneutics in- that all done now. Construction should begin before the end of the year if everything goes according to plan. Knock on * Charles Koch, president of Koch Industries, has long prOVided wood. substantial financial support to a variety of libertarian organiza­ Liberty: Murray Rothbard has charged that Cato is purely and tions, especially those with which Crane has been involved. Liberty 61 Volume 4, Number 2 The Liberty Interview November 1990 vasion" of Austrian economics? Crane: I'm a big fan. I admire both Jim Davidson and David Crane: I hate to sound like I'm on Murray's side on this, but­ Keating. You know, they've been very good about criticizing and I'm no scholar-I don't think it makes much sense from the military. Most anti-tax groups stick to welfare stuff. what I understand of it. I think it's almost nihilistic. I know They've been a credible source of information for the media some of the guys over at George Mason University who are for a long time. They worked on the balanced budget amend­ interested in it, and it seems to me yet one step further re­ ment, and almost got that thing through. I think they're a moved from Austrian economics itself. good group. Liberty: I've heard a theory that the hermeneutics "invasion" Liberty: Are there any other-I don't know if libertarian is the is purely and simply your handiwork; that you in a conspira­ right word, but maybe libertarianist-reasonably effective cy with Roy Childs * imported it to take the hard uncompro­ groups that are engaged in the public policy debate in mising edge off Austrianism as a means of eliminating Washington besides NTU and Cato? Murray Rothbard from any importance at the Cato Institute Crane: The Competitive Enterprise Institute, headed by Fred and the libertarian movement. Is there any truth to this? Smith, is very libertarian and very effective: a lot of energy, Crane: [laughs] I think that hermeneutics sounds like silly hard-core. They do a terrific job. stuff. I'm disappointed that the Austrians are moving in Liberty: Anyone else? what I think is the wrong direction to the extent that they're Crane: Well, there are groups that are certainly forces for good: interested in that. Bill Bartley wrote a great book, Unfathomed the Institute for Research on the Economics of Taxation that Knowledge, Unmeasured Wealth. He's a Popperian and a 'Hayekian and he's very critical of hermeneutics. I've become a big fan of Bartley's now. His death was a tremendous loss "I think George Bush is going to go down in for libertarians. history as one of the worst presidents ever. The Liberty: Yes, I think so too. He had an advantage over some of the other more-or-Iess Austrians in that he was a fine writer. irony is that he's treated as a strong president I really think you can see his influence in The Fatal Conceit, when in fact it takes a strong person not to use the which is far and away the most readable thing coming from levers of power. He's an extremely weak person." Friedrich Hayek. Crane: I reviewed that for The Wall Street Journal and was mild­ ly critical of it, and Bartley told me that he agreed with my Norman Ture runs. Roy Cordado is on their staff, he's a hard­ criticism. I think he felt that Hayek went a little too far with core libertarian, and Norman's pretty damned good himself. his cultural evolution stuff. There's Citizens for a Sound Economy. Wayne Gable runs Liberty: Murray Rothbard once told me that a lot of people that, with Paul Beckner, and they've got a lot of young liber­ were attracted to Austrian economics because they didn't tarian people who work with them. I'm very keen, from kind of a political strategy standpoint, on circumventing the par­ ties by using initiatives. Proposition 140 in California to limit UReagan didn't understand the significance of terms is very important. The initiative in Oregon on educa­ his own rhetoric. His lack of interest in appoint­ tional choice is very important too. Liberty: I'd like to know your view of Charles Murray's work. ments was legendary-he had people working for Crane: The work Murray did with Losing Ground, and even In him who were essentially big government types. Pursuit of Happiness and Good Government, is pathbreaking, As a result, nothing fundamentally changed." radical work, even though it's not hardcore libertarianism. It is a very valuable tool in helping to combat the welfare state. I think a so-called more "radical" book would not be as effec­ have to learn any math. tive in changing the terms of debate. I think those books are Crane: [laughs] Well, that's certainly what attracted me to it. very radical tools, even though they are not very radicalliber­ Liberty: What Austrians now do you think are doing interest­ tarianism. You don't buy that argument, do you? ing work, if any? Liberty: Actually, I sympathize with it. It seems to me there's a Crane: Oh, God. I don't really feel I'm up to speed on the work parallel between that and something that's happening in the the Austrians are doing. I know thatJerry O'Driscoll and libertarian movement, at least as it's reflected in the pages of Genie Short are doing interesting work on financial service Liberty: the debate between the consequentialists and the regulation, and they're two good Austrians, but they're en­ hard-core natural rights advocates. They differ in their reason gaged in the real world. I think that the guys over at George for supporting libertarian ideas. The consequentialists believe Mason at the Center for the Study of Market Processes are that the world would be a better place if libertarian ideas pre­ vailed. The natural rights advocates, in contrast, support li­ doing a good job of recruiting young Austrian types. I don't bertarian ideas because they believe that human beings have know what research they're doing, particularly. a moral imperative to act in accordance with them. Murray is Liberty: What about the work the Mises Institute is doing? Are addressing those who, like the consequentialists, don't buy you keeping up on that? the "metaphysics" oflibertarianism. Crane: I'm not, really, I don't see a lot of what they do. Crane: Exactly. Liberty: What do you think of the National Taxpayers' Union? Liberty: Murray's arguments can mean something to people * Long-time libertarian writer, Roy Childs was Foreign Policy who are not members of the libertarian "church" ... Analyst at Cato Institute in the late 1970s and early '80s. Crane: And induce them to accept policies that are consistent 62 Liberty Volume 4, Number 2 The Liberty Interview November 1990 with the libertarian "church." rate. I don't think that it would bother Bush to do that, but Liberty: And also to induce them to reconsider some of their there are a lot of egos involved with the reform in the person­ fundamental precepts, to consider some of the broader liber­ al tax rate. Also, the prospect of war in the Middle East has tarian propositions and arguments. Sometimes it's easier to made people sensitive to the prospect of a recession. As a re­ argue from the specific to the general than from the general sult of this the likelihood of a tax increase is reduced. Newt to the specific. Most libertarians of the natural rights school Gingrich has called for a tax cut to stave off the danger of a see natural rights as a sort of trump card, one that you can recession. I think that some of the steam has gone out of the play in any argument, and then walk away, having won the movement for a tax increase. That's the silver lining in the trick. Unfortunately, nobody but your brethren in the church stupidity of this intervention. will respect the fact that you've won. Everybody else just Liberty: But do you think we're likely to see increases in the thinks you're a nut. rates of personal income taxes in the next few years? Crane: And it's the lazy way to do it anyway. It means you Crane: Yes. don't really have to learn the arguments of the other side, Liberty: What do you think of the chances for the capital gains you don't have to learn the facts ... cut? Crane: Good. It's the one thing the Republicans still believe in. If there is a recession-and I think there is a good chance I'd rather have a prolific, intelligent critic who we'll have one---that there will be a strong momentum for a was a non-Austrian than an Austrian who refus­ capital gains tax cut. But I think on net that taxes will go up es to deal with the policy issue at hand or to learn over the next few years. so Liberty: Does Cato support the capital gains cut? the facts behind it. Austrians are focused on Crane: Cato doesn't have a stand one way or the other. Our re­ theory that it is very difficult for them to write search indicates to us that the economy will be better off with lower taxes. Liberty: To change directions, what's the U.S. Army doing in Liberty: How do you compare Bush to Reagan? Saudi Arabia? Crane: Although Reagan deserves credit for having brought Crane: Well you'll have to ask George Bush. I'm appalled. It some backbone to the Republican Party-he talked about re­ makes no sense from the standpoint of geopolitics. From the ducing taxes and limited government and so on-he turned standpoint of American interests it is a horrible mistake. I out to be very uninterested in the process of government. I think George Bush is going to go down in history as one of don't think he understood the significance of his rhetoric. the worst presidents ever-everything from the S&L bailout His lack of interest in appointments was legendary-he had to the Clean Air Act. And now he's a war president. The ~ro­ people working for him who were essentially big govern­ ny is that he's treated as a strong president when in fact it ment types. As a result, nothing fundamentally changed in takes a strong person not to use the levers of power. He's an Washington. extremely weak person. When he sent our troops to Saudi George Bush doesn't even have the rhetoric. He is a very Arabia, it was a knee-jerk cold-war reaction to a regional con­ weak president. When you have a president like Reagan who flict of minimal concern to the United States. takes his time, going to bed early, not really caring what his Liberty: In 1987 you said that Americans opposed the Vietnam aides are doing, or a president like Bush who is a weak per- War because there was no perceptible national interest in our being there. I gather that you don't believe that the availabili­ ty of relatively inexpensive oil from Iraq, Kuwait, the "I don't think an alliance with the paleocons is Emirates and so on constitutes a vital national interest. a good idea. Liberty is a seamless web, and you Crane: Well, oil is a commodity, and it's always going to be available at a price. I don't think that Saddam Hussein con­ don't achieve it by promoting this element of quered Kuwait so he could sit on its oil. intolerance." Liberty: What about the theory that he would act against Saudi Arabia and the United Arab Emirates? son then the process of government inside the Beltway takes Crane: Look, I recognize that this man is evil. But there is a his­ over, and it is a process that is continually justifying expan­ torical claim that Iraq has had on Kuwait. There is no such sion and growth. I don't think as a practical matter you see a claim against Saudi Arabia. To invade Saudi Arabia would major distinction between one administration and the next-I be expanding too far south. There are limits to what Iraq can mean there's a lot of talk about Carter as the malaise period do. It is after all a Third World country in very poor condi­ and so on, but the trend line ofgovernment growth is pretty tion following the Iranian war. I would have been surprised steady. Ifyou didn't know who was a Republican and who if he had invaded Saudi Arabia. But even then it would not was a Democrat, there would be no way to tell from the trend have been in the U.S. interest to have taken a military pos­ line. On the other hand, I think that Bush may turn out to be ture against him. the worst president in a long time because he's going to be a Liberty: OK. Do you think that we'll see an increase in the tax and a war president. marginal income tax rates this year? Liberty: But Reagan certainly promoted military spending. Crane: You mean personal or corporate? Crane: Everybody in the Republican Party says that it was the Liberty: Either one. buildup in the military that broke the back of socialism in the Crane: I don't think so. I think we'll see sin taxes, oil taxes, but East. I don't believe that. I think it was just that contradictions I don't think they'll tamper with the personal income tax of the socialist economies led ultimately to a meltdown and it Liberty 63 Volume 4, Number 2 The Liberty Interview November 1990 collapsed of its own weight. What military build-up did and Crane: No. the bellicose attitude towards the East did was to increase Liberty: Someone sent me clippings of Rockwell's Orange the risk of some conflict leading to thermonuclear war. I County Register column, and it appears that Rockwell is doing think that that sort of bellicose attitude in international af­ whatever he can on Buchanan's behalf. A couple of days ago fairs is exceedingly dangerous'and Reagan got a lot of credit Murray Rothbard told me that he is enthusiastic about for something where he deserves a lot of critioism. Buchanan's campaign. Maybe this indicates a retreat from Undoubtedly the fact that so many economic resources purism for Rothbard. went into the Soviet military did exacerbate their economic Crane: Well, you've got to stay on your toes to know what the decline. But not to the e~tent that it justified the risk of war. party line is with Murray. He wrote one column recently You know, the conservatives were always saying that we un­ about how they met with the' Paleocons out in Rockford, at derestimated the percentage of the Soviet economy being de­ the Rockford Institute. Who did this? Was it the s(;,!ll-out Cato voted to'military spending, and it turnsout that we did. But Institute? No, it was the hard-core libertarians, he and it also turns out that we had overestimated the size of the Rockwell and whoever is in their inner circle right now. I Soviet economy so greatly that the absolute amount of Soviet thought, "My God!" There was no explanation or anything, spending on the military was less than we had thought. The just that they had done it. I mean, if we had done that, all hell CIA in the early 1980s was estimating that the Soviet econo­ would have broken loose. "See, we told you these people are my was 65% percent of the U.S. Gross National Product. I horrible ..." So, they've formed an alliance with the paleo­ went to the Soviet Union in 1981, and I told my friends that I cons. I think Chronicles* has got some good stuff in it. It's had estimated it to be 15% of the U.S. GNP. That turns out to be some radical anti-state articles in it these days. But these peo­ ple are neo-fascist in the social area. Some of it's just horrible "There's always been a kind of intolerant atti­ stuff. I don't think an alliance with the paleocons is a good idea. Liberty is a seamless web, and you don't achieve it by tude among people like Rothbard and Rockwell, promoting this element of intolerance. on ethnic and cultural matters, and e11en on the You know, this idea that there has to be a certain kind of question of sexual diversity. I mean, gay-baiting cultural view, that's one of the problems I have with Pat Buchanan. He wrote a horrible column on how the U.S. and racial comments, what kind of stupidity in should give serious consideration to inviting some of the this day and age?" northeastern Canadian provinces into the United States be­ cause that would reinforce our Euro-ethnic heritage. That's what the KGB estimate was. The disparity between realitY borderline racist to talk that way. There's always been a kind and the CIA figure was there for everyone to see. There was of-~ don't want to say racist-a very intolerant attitude no GNP in the Soviet Union. They don't produce anything. among people like Rothbard and Rockwell, on ethnic and cul­ Literally. It was interesting reading in the,Washington Post tural matters, and even on the question of sexual diversity. when this whole Middle East nonsense got started that what That's the way Murray was in the old days. It's silliness. It is had convinced Bush of the need for military intervention was so unnecessary, and it's like an insecurity has made them fo­ CIA economists' estimates of the impact on the world econo­ cus on that stuff; I mean, gay-baiting and racial comments, my of a potential cut-off of oil. So, these guys, who are de­ what kind of stupidity in this day and age? What kind of ma­ monstrably inept economists, are getting the U.S. into a war. turity does that reflect? A true commitment to human liberty? ­ Liberty: You have referred several times to the Gross National It's kind of sad, really. It certainly is unfair to the libertarian Product. How meaningfula concept do you think GNP is? movement to have so-called leaders who are openly seen as Crane: It is a meaningless concept. The GNP number is a non­ having those views. sequitur-it doesn't mean anything. Liberty: In his long and bitter attack on you in Libertarian Liberty: On another subject, what do you think of Patrick Vanguard in September 1981, Rothbard said that you had Buchanan's apparent Presidential aspirations? been one of his closest friends for many years. Earlier on, you Crane: For Buchanan to run and point out that Bush lied to the had said that you considered Rothbard to be a leading eco­ American people about taxes, and that this war is insane, nomic thinker. Obviously, Rothbard's view of you has would be a nice thing. The problem with Pat Buchanan is changed, and your view of him has in some sense changed, that he's fundamentally a conservative, and he has terrible since he's no longer affiliated with Cato. Has your view of views on social issues, and he's not even good on free trade, Rothbard as an economist changed? but at least the son of a gun is willing to challenge the status Crane: You know, David Friedman tells the story of how he quo. He says that the emperor has no clothes. While the peo­ was talking with an historian and a philosopher. They were ple over at the Heritage Foundation are fawning over George all talking about how much they admired Murray. At one Bush, Pat Buchanan is saying "This guy's a disaster." I ad­ point the philosopher said, "Except in the area of philosophy. mire him for that.. In philosophy, he really doesn't know what he's talking Liberty: Have you seen Lew Rockwell's endorsement of about." Then the historian said, "Well, he's a real sloppy his­ Buchanan in his syndicated column? * ' torian." And David said, "Well, I'm not real keen on his economics." * Llewellyn H. Rockwell, Jr, is president of the Ludwig von Mises I don't know. I'm a little disappointed that Murray seems to Institute and a close associate of Murray Rothbard. His liThe be so motivated by hatred of all the enemies that he sees out Case for Paleolibertarianism," in which he argued that libertari­ i there. I don't advise anybody to get on his wrong side. 0 ans should ally themselves with paieoconservatives, appeared in the January 1990 issue of Liberty. * Chronicles is the monthly magazine of the Rockford Institute. 64 Liberty The Sign ofthe Last Days-When?, a book that merits a wider readership by Carl 010£ Jonsson and Wolfgang Herbst. than it will probably achieve. Non­ Commentary Press, 1987, 287 pp., $7.95. religious as well as religious readers should enjoy it, despite its origins in the age-old debate within Christian cir­ cles about Jesus' prophecies regarding the "end-time," the time of his second coming or "advent." When Jesus' followers asked him, Up from Armageddonism "What shall be the sign of thy coming, and of the end of the world?", Jesus an­ swered (in part) "Nation shall rise against nation, and kingdom against kingdom: and there shall be famines, Stephen Cox among blacks and whites, among liber­ and pestilences, and earthquakes, in als, conservatives, and libertarians. divers places" (Matthew 24:3, 7). Apoc­ People believe or disbelieve in threats alyptic forecasters as various as Billy When I sit down to breakfast and of apocalypse because they want to be­ Graham, the Watchtower Society, open the Los Angeles I prepare Times, lieve or disbelieve. Seventh Day Adventists, the World­ myself to discover the latest urgent Notice what a small role evidence wide Church of God, and Hal Lindsey, warnings about the destruction of "civ­ seems to play in the formation of the author of the ubiquitous The Late Great ilization as we know it." I prepare my­ two mentalities. As a member in good Planet Earth, have discovered in such self to read that the world is in standing of the complacent club, I have words a prophetic "sign" pointing di­ imminent danger of death by pollution, often attempted to console people who rectly at the twentieth century. Didn't disease, famine, warfare, economic col­ spend their time lamenting the bad nation rise against nation in the two lapse, or a terminal crisis in moral condition and worse prospects of the world wars? Isn't there famine in values. current age. Never has evep. one of Ethiopia? Isn't AIDS a pestilence? I begin to recover from the visceral these people permitted himself to be Doesn't California have earthquakes? effect of these predictable predictions consoled. No triumph of science, no im­ As the authors of The Sign of the Last only when I recall that, fifty years ago, provement in material well-being, no Days observe, however, the rest of W. B. Yeats heard the same apocalyptic evidence of moral improvement can Jesus' remarks shows that he was warn­ tone in the self-assured voices of his produce a happy tremor in the apoca­ ing against a desire to forecast exactly contemporaries: lyptic heart. And, to be fair, I'm sure when his second coming would be, For everybody knows or else should that I have often grieved my apocalyp­ rather than providing such a forecast: know tic friends by refusing to draw the obvi­ "And ye shall hear of wars and ru­ That if nothing drastic is done ous conclusion from the symptoms of mours of wars: see that ye be not trou­ Aeroplane and zeppelin will come out, catastrophe that they constantly point bled: for all these things must come to Pitch like King Billy bomb-balls in out to me. pass, but the end is not yet." Jesus Until the town lie beaten flat. I therefore recommend Jonsson and warned specifically against false and What I know is that there are two Herbst's The Sign of the Last Days only "deceitful" prophecies of his coming types of people in this world: people to my fellow complacents. It would (Matthew 24:5, 6, II, 23-27). who imagine that things are heading never convert the apocalyptic folk; it To debunk the modern prophets for the final catastrophe, and people would only sadden them. But compla­ who have appropriated Jesus' sayings, who imagine that things are not. The cent people-to find a nicer word, let's Jonsson and Herbst assemble armfuls two groups are divided not by back­ call them optimists--can find in this of evidence indicating that the twenti­ ground or ideology but by temper­ book copious confirmation of their SllS- eth century is less, not more, disaster­ ament. 'picion that things are better than prone than previous centuries. We now The apocalyptic mentality and the they've ever been, and show no signs of live in "a world where 99 percent of complacent mentality are equally at a catastrophic change. mankind do not starve, and 75 percent home among the religious and the non­ The Sign of the 1..J.lst Days, which is are not even malnourished" (p. 41). religious, among men and women, published by a small, Christian press, is "Mortality at all ages has steadily de- Liberty 65 Volume 4, Number 2 November 1990 dined during the whole twentieth cen­ dence that puts in doubt certain com­ a simple test for determining if unfa­ tury in almost every country" (38-39). mon impressions of its horrors. Often vorable. comparisons of the present And if you think that warfare in the the authors' data are surprising; at oth­ with the past have any general validity. twentieth century has killed unprece­ er times, they remind us of things we To quote our authors: "Is your life or dented numbers of people, consider the know but take too much for granted. I that of people in general more plagued wars of the past, many of which you am thinking, for instance, of the remin­ than was the case in [for instance] the may never have heard of. Consider the der that "with the exception of certain fourteenth century? Given a choice, Manchu-Chinese War of 1644, which American Indian communities, such as would we choose conditions then ... as may have killed 25 million people, or the Pueblo Indians," North America preferable to those in this century?" the Taiping Rebellion of 1850-1864, has never suffered an extensive famine (185). I have met only one person will­ which is thought to have killed 20-30 since the days of Columbus (33). ing to answer this question with a Occasionally, I believe, Jonsson and straightforward "yes"-an academic Herbst color their picture of the past a who informed me that he would enjoy Rare is the healthy, well­ little too dark. I think they are misled himself more by eating roots and ber­ educated, mortgage-bearing, by their sources when they suggest that ries among the California Indians of, retirement-plan-subscribing, the "Justinian plague" of the fifth cen­ say, 1350, than by living in modern tury A.D. killed 100 million people (96). California and purchasing his daily gra­ newspaper-reading citizen who I wish that they did not accept so un­ nola at the supermarket. has resisted the temptation to critically the assertion of one of their But despite the existential obvious­ describe the nation or the world sources that "from 1860 to 1880, there ness of the superiority of life in the as trembling at the edge of the was not one night along the Barbary present, Jonsson and Herbst provide a Coast [in San Francisco] withoutat service by acquainting us with the de­ abyss. least one murder and innumerable rob­ gree to which present conditions dem­ beries" (171). Not even one night? In onstrate humankind's ability to learn million, many more than were killed such cases, "innumerable" does seem some lessons. True, we haven't learned directly in World War I, which histori­ to be the operative word: we just can't how to control earthquakes. But we ans have covered with so many grim quantify the phenomena. But the great­ have learned how to eliminate small­ superlatives (145-47). est part of Jonsson and Herbst's infor­ pox, how to feed the vast majority of The point is not, of course, to mation is reliable and judiciously the population, and how to settle the present the twentieth century as some analyzed. Their comparison of various vast majority of disputes without re­ kind of utopia, to turn people's eyes kinds of statistics bearing on the effects sorting to war. away from the crimes of Nazism, com­ of famine and warfare is especially im­ Even our ignorance of certain things munism, and other varieties of militar­ pressive. Their presentation of evidence can be attributed to our knowledge of ism, or to convince people not to try to is everywhere clear and to the point. do something about the serious prob­ Much to be appreciated, also, is The apocalyptic view of life lems that afflict them. The point is to their inclusion of many hilarious exam­ encourage people to gain a realistic ples of the apocalyptic pronouncements is far from harmless when it perspective on human experience, in­ that they are attempting to discount. I becomes the tool of religious, cluding human progress. am very fond of a passage quoted from political, or social activism. Every reader will be gripped by the Billy Graham's book Approaching authors' dramatic evocation of the dis­ Hoofbeats: The Four Horsemen of the And in these times, it's an easy asters and chronic miseries of the past, Apocalypse: tool to use; one thing that is and every reader who is curious about The terrible hooves of the four horse­ bad about the twentieth centu­ the history of the present century will men will finally trample across the ry is its congeniality to every be interested by their review of evi- stage of human history with an un­ precedented intensity, bringing in kind of apocalyptic expectation. their wake deception, war, hunger and death on a scale that staggers the others. People in the more-or-Iess capi­ imagination.... New and classic books, talist nations of the world have discov­ * How near are the horsemen right now? unabridged audio books, ered how to ensure their supplies of videos, games, & collectibles. I do not know! All I can say with cer­ * History & biography, food, leisure, and basic freedom. They literature, philosophy, eco­ tainty is that every sign points to one nomics, privacy & personal fact: the hoofbeats of the four horsemen now have the resources necessary to la­ finance, humor & political satire, self-defense, war & are approaching, sounding louder every ment those ills from which they still peace, the family, children's day. (7) suffer as if those ills were more serious books, and much more. III.Call for EBEE. Catalog! In their Qwn arguments Jonsson and than the nearly forgotten evils of small­ Herbst provide detailed empirical evi­ pox, chronic famine, and all­ LibertVfree dence for what cheerful optimists nor­ slaughtering invaders. They have the Review and Catalogue AE5 mally discover merely by consulting resources necessary to act, in their self­ 134 Ninety,.Eighth Avenue, Oakland, CA 94603 their own experience. There is, after all, imposed ignorance, as if we were los- •II Volume 4, Number 2 November 1990 ing rather than gaining control over the tion that the Pope is the Antichrist, trouble accepting the claim that any par­ various possible threats to our scheming to destroy Christendom, than ticular country is approaching an eco­ existence. it is to deny that the "population explo­ logical Armageddon. Jonsson and Herbst present numer­ sion" in the Third World will lead to a And such visions, emanating from ous examples of what might be called worldwide holocaust unless the politi­ secular as well as religious sources, can the press-agentry of disaster. I particu­ cal and economic system of the world lead to both comic and tragic excesses of larly like their quotation of a study of bad judgment. Occasionally the excesses crime which reports that "in a period become so remarkably excessive that when the incidence of violent crime de­ Our acquaintance with they are exposed even by the media, clined by 2.4 per cent, newspaper cov­ change has reduced our ac­ which ordinariIy work so hard to propa­ erage of violent crime increased by 11.1 gate an apocalyptic mind-set. The LA per cent." Jonsson and Herbst com­ quaintance with history. The Times, the whipping-boy of my first par­ ment: "Lawlessness, then, often in­ thinness of our knowledge of agraph, reported recently on a "catas­ creases only in the newspapers" (175­ the past is indicated by the trophe that never came" in Nepal. 76). According to Bob Drogin, writing in the To some degree, the apocalyptic credulous acceptance, even Times on September 4, "The World Bank view of life is harmless enough; it's among "experts," of wildly ex­ warned in 1980 that Nepal would run merely a way of giving a dramatic aggerated claims about the out of trees by 1995. The so-called 'eco­ catastrophe' made headlines around the flourish to otherwise dull events. But evils of the present. it's far from harmless when it becomes world." Western experts, and Western the tool of religious, political, or social money, flooded into Nepal in an elev­ activism. And in these times, it's an enth-hour attempt to do something dras­ is drastically revised. To discount the tic to "save the Himalayas." easy tool to use; one thing that is bad former, you have to know a few Bible about the twentieth century is its con­ In fact, however, overcutting of fo­ verses and a few biographical facts rests afflicted only a small part of the geniality to every kind of apocalyptic about John Paul n. To discount the lat­ expectation. Repeated revolutions of country. Elsewhere, apparently, forests ter, you may need to know something were being successfully conserved by modern capitalism, science, and tech­ about the history and sociology of large the native people who depended on nology have established an expectation areas of the globe, something about eco­ them for wood. "Indeed," as the Times of continued radical change. They have nomics, something about agricultural reported, "satellite photos and ground 'so effectively demonstrated the special­ technology, something about social­ surveys show Nepal's mountains may ness of the modern world as to under­ ism's effect on the production of grains, have more trees today than 30 years mine people's interest in the worlds etc., etc. ago." Drastic action, in the form of for­ that existed before it. Our acquaintance I probably don't need to drag out eign advice and aid, was unnecessary, to with change has reduced our acquain­ any more examples of apocalyptic say the least: "In the Kabhre Palanchok tance with history. The thinness of our prophecies designed to serve political district east of Katmandu, workers knowledge of the past is indicated by ends. We hear them constantly; we may couldn't find a barren area for their tree the credulous acceptance, even among even make them ourselves. Rare is the nursery. So they cut down a small forest "experts," of wildly exaggerated claims healthy, well-educated, mortgage­ to make room." about the evils of the present. People bearing, retirement-plan-subscribing, In other words, if catastrophe isn't who think that the AIDS epidemic pos­ newspaper-reading citizen who has re­ coming, manufacture it, either in fact or es a specially dangerous threat to the sisted the temptation to describe the na­ in imagination. Against this modern ten­ existence of the race are remarkably ig­ tion or the world as trembling at the dency Jonsson and Herbst offer a useful norant about the threats posed by epi­ edge of the abyss. Listeners may even and entertaining argument. 0 demics even as recent as those of the expect apocalyptic threats last two generations. as a sign of political Once created, modern expectations seriousness. of apocalypse can be especially hard to But general apocalyptic argue out of people's heads. Remember expectations can lend credi­ the predictions, in best sellers of the bility to almost any specifiC early 1970s, about global famine and a claim. People who have ab­ nearly universal proliferation of nucle­ sorbed the routine and gen­ ar weapons? These predictions relied eral assertions of the 6 on a popular impression that unprece­ o'clock news about "the dented and virtually uncontrollable world ecology" entering events were taking place--an impres­ "an unprecedented crisis" sion that could be dispelled only by a because of "catastrophic careful study of very complex population increase" or phenomena. "the effects of uncontrolled It's much easier to deny the asser- technology" will have little UI'm afraid it's 'Picasso's Syndrome.'" Liberty 67 Volume 4, Number 2 November 1990

Glenn Gould: A Life and Variations, cent biography of Jean-Paul Sartre not­ by Otto Friedrich. Random House, 1989, 441 pp., $24.95. ed how much of the practice and even the style of his writing depended upon amphetamines, while Allen Ginsberg has often remarked what drugs in­ formed different poems of his. With these examples in mind, it is not unex­ Sex, Drugs, and the ceptional to wonder if psychotopic pills can radically affect acts of performance, Goldberg Variations even the performance of classical music. The music critic Tim Page is quoted as discovering Gould "definitely drugged in his later years," and others speak of Richard Kostelanetz Miltown, a time when the newly dis­ the kinds of visible physical deteriora­ covered tranquilizers and energizers tion that could have come from an ex­ When I wrote a profile of the musi­ seemed to provide everyone with a cess of uppers. Nonetheless, in the final cian Glenn Gould for Esquire some two harmless method of dealing with the year of his life Gould recorded, not at decades ago, I opened by quoting his stresses of life." Friedrich continues by Columbia Records but in the privacy of "'two stipulations. You shan't inter­ citing a letter Gould wrote at the time, his own studio, a second Goldberg view any of my family or friends. They recommending that another pianist Variations no less brilliantly than before. won't honor your request. Second, that consider Nembutal, Luminal and, at With those facts in mind, it is reasona­ we do as much of this as possible over times, Bevutal. And that's it. ble to ask whether Gould's ability to the phone.'" I opened with this ac­ Hold on, you say, this scarcely ac­ perform under adverse circumstances knowledgement of his conditions not counts for those three trays! Perhaps depended upon new medications or the only to explain how my interviewing because I'm a decade younger than ones he used before. Hthese hypotheses was done, mostly over the telephone, Friedrich and first met Gould in the late are credible, then it could be said that but to protect myself. There were some 196Os, it always seemed to me that he Friedrich has blown the chance to ana­ secrets he wanted to keep, and it did was "a head," as we said at the time, lyze the professional metabolism of the not take me too long to find out that and that much of the superhuman ener­ first truly contemporary classical they revolved around those two tradi­ gy displayed not only in his perfor­ musician. tional taboos-sex and drugs. Since I mances but in his conversations stemmed from the use of uppers. I have was writing a seven-thousand-word I piece that concentrated upon his pro­ no more visible evidence than skeptical Perhaps because first met fessional achievements, it wasn't neces­ observations (including my own report Gould in the late 1960s, it al­ sary for me to deal with these hidden of his "glassy-eyed demeanor" and ways seemed to me that he was dimensions; but since Otto Friedrich now the record of Gould's auto acci­ H a head," as we said at the has written a book-length biography, dents reported in Friedrich's book). the first to appear since Gould's 1982 When the sprint champion Carl Lewis time, and that much of the su­ death, from his research he should commented upon the erratic perfor­ perhuman energy displayed have discovered more than I did. mance of his competitor Ben Johnson, not only in his p~rformances However, he didn't. Of Gould in the the Canadian who was able to beat him middle 1950s, Friedrich writes in his only some of the time (when he took but in his conversations own voice. "[Gould] brought a bulky drugs>, I thought of his fellow stemmed from his use of collection of sweaters and scarves in Canadian Gould, whose basic interpre­ uppers. even the warmest weather, and he tive devices involved radically shifting brought a large assortment of pills. The tempos-to play pieces either much scarves and pills all reflected a justifia­ faster or much slower than they had Finally, in sharing the pianist's ble anxiety about his uncertain health." ever been done before. Though symptoms with doctors who did not A few pages later, Friedrich quotes Friedrich explains how Gould died just know Gould's identity, Friedrich re­ Martin Mayer's testimony about inter­ after his fiftieth birthday-from a small ports their conclusions that he '''was ex­ viewing Gould at the time: "He went to stroke followed by a massive one, both perimenting on himself in a pseudo­ the bathroom and opened an attache probably caused by high blood pres­ scientific way,'" while ignoring the full case, which opened up into a triple sure-he does not consider what any implications of that attitude. Simply by layer of. medications." What were all pathologist or pharmacologist could failing to consider such possibilities for those pills? Rather than investigate have told him: a principal cause of ter­ Gould, I wonder whether Friedrich dis­ medical or pharmacological records, minal strokes in younger people is ex­ covered more than he's telling or per­ Friedrich initially resorts to specula­ cessive amphetamines or cocaine. haps his text was changed between tion: "As for Gould's use of pills, it is These questions about drugs are original draft and final copy. (What sug­ worth recalling that this was the era of neither frivolous nor scurrilous. A re- gests the latter possibility is the publish- 68 Liberty Volume 4, Number 2 November 1990 er's publicity sheet, which is sometimes women found Gould attractive, espe­ semi-annual Boulevard in spring 1987. written prior to typesetting-it speaks cially in Canada where he was a celeb­ Though Friedrich quotes from my earli­ of Gould as "addicted to a wide variety rity, but admits to finding no one who er profile (more often than he explicitly of pills." However, in the book the epi­ actually slept with him. The option that acknowledges) and then recommends it thet "addicted" is used not by Friedrich does not occur to Friedrich, though it in his bibliography, he seemed not to but only by someone he quotes.) After seems obvious to me, is that no one know about these more recent exposure of Ben Johnson's drug use a did. considerations. In contrast to most commentators Glenn Gould: A Life and Variations is on Gould, Friedrich acknowledges the described as an authorized biography, Friedrich suggests that radio programs that Gould produced which is to say that Friedrich was cho­ many women found Gould at­ initially for the CBC. Extraordinary sen by attorneys who required him to tractive, especially in Canada montages of speech and sound (includ­ sign an agreement. ing music), mostly about other musi­ The Glenn Gould Estate also prom­ where he was a celebrity, but cians or isolation in Canada, these ised to help open whatever doors need admits to finding no one who features rank among the best of their to be opened to whatever friends and actually slept with him. The kind, even though they are rarely relatives I wanted to interview. broadcast down here and are largely Despite the estate's involvement, how­ option that is not mentioned, unavailable on record. (The only one ever, [the attorney's] contract prom­ ised me that this would be my book, though it seems obvious to me, currently available appeared initially and that all the judgments in it would is that no one did. on the 1980 Glenn Gould Jubilee Album be my judgments. 'Subject to the fore­ [CBS]. Perhaps because of its different going,' as the document declares, 'it is origins, Friedrich does not connect it to understood that the final decision on friend suggested that there should be the others.) However, because his the content of the Biography will be two Olympics---one for those taking knowledge of contemporary music yours....' The contract called for my additives, and another for those with­ composition is so limited, Friedrich is manuscript to be sent to [the attorney] out. Need we have two art worlds as blissfully ignorant of their importance. for his inspection, it gave him the right to point out anything he considered in­ well? As I've pointed out elsewhere, in accurate or defamatory, and it re­ About sex, the truth was opposite the last fifteen years of his life Gould quired that I 'act reasonably in but no less hidden. It seemed to me devoted as much attention to those considering any-such notice.' That is quite clear that Gould was an ascetic intricate audiotapes as he did to his pia­ the extent of our agreement. who resisted touching people perhaps nistic recordings, because they re­ Perhaps, but perhaps not, the origins of out of a neurotic fear of contaminating presented a peculiarly contemporary this book account for why certain se­ his body. (How did he deal with the way of realizing the kind of composing crets were left for later biographers to perspiration, and smell, that must have career he always envisioned for him­ expose. 0 accompanied his preference for heavy self. As no less an authority than John clothing? There is nothing in this biog­ Cage put it, Up from libertarianism raphy about his odor.) Friedrich quotes I can distinguish three ways of com­ his mother's gratification that even in posing music nowadays. The first is by D. G. Lesvic his young twenties Gould hadn't dis­ well-known-that of writing music, covered girls and then adds that this as I do. A new way has developed only child lived with his parents until through electronic music and the con­ struction of new sound sources for his late twenties. Gould spoke to me of ...answers the Austrian School economists making music by performing it, rather a special relationship with a woman he with their own words! thought to be psychic but didn't say than writing it. And a third way has developed in recording studios, anything about sex. It was not difficult which is similar to the way artists The Political Economy Club of Los Angeles for me two decades ago to discover 5668 Cahuenga Blvd., #313 work in their studio to make painting. North Hollywood, CA 91601 who she was-the wife of a fellow mu­ Music can be built up layer by layer sician. When I met the woman in pass­ on recording tape, not to give a per­ $4.00 ppd. ing, she acknowledged the relationship formance or to write music, but to ap­ but coyly refused to speak about it. pear on a record. Though Friedrich does not identify her By this last route, Gould was drawing Internships Available by name, he adds what I did not know upon all the competences he developed before (and don't entirely believe) ­ from editing audiotapes of his own pia­ Liberty offers full-time internships that "she rented a place near his apart­ no performances, plus his growing in­ to students of all majors interested in ment on St. Clair Avenue, and she lived terest in language composition. All this journalism, writing, political philoso­ phy or public policy. Positions are there for four years. ... Gould wanted was discussed in a radio feature on available at all times of the year. very much to marry her, she recalls, but "Glenn Gould als Horspielmacher" that For further information, write: she finally decided against it." I did for Westdeutscher Rundfunk in Liberty, PO Box 1167 Friedrich then suggests that many 1984; some of my text appeared in the Port Townsend, WA 98368. Volume 4, Number 2 November 1990 Microcosm: The Quantum Revolution in Economics and Technology, microcosm." by George Gilder. Simon & Schuster, 1989, 426 pp., $19.95. Gilder argues that "the logic of technology, the logic of the micro­ cosm, ... is becoming the logic of histo­ ry" (369). This sounds a bit odd coming from a philosophical idealist. In this context "the logic of technology" The Microcosmic Mind sounds a lot like the "laws of produc­ tion." Is Gilder a crypto-Marxist? He ofGeorge Gilder claims not, because the "logic of tech­ nology" is not materialistic. The logic of technology, he argues, is dependent upon the logic of the microcosm which Alexander Tabarrok revolution has replaced the materialist is dependent upon the logic of the quan­ view of Newton with one of immaterial tum world. And the quantum world is waves of probability interconnecting governed not by interactions of bits of Reading George Gilder's Microcosm throughout the universe. matter but by waves of probability. is frustrating. Like a Shakespearean If physics, once thought to be mate­ This view is still materialistic, but­ hero, it is tragically flawed; yet its vir­ and this is where God enters the pic­ tues are so great that we wish it were rialism's greatest achievement, no long­ er supports materialism, it's not ture-the quantum world is one of not so. thought. "Quantum physics" makes Although George Gilder is often surprising that the life sciences don't ei­ ther. Gilder discusses the work of neu­ sense, Gilder 'argues, only if "it is treat­ original and insightful, he is no great ed in part as a domain of ideas, gov­ theorist; his great skill is as a populariz­ roscientist Wilder Penfield, who explored the brain with electrical erned less by the laws of matter than er and expositor of ideas, much like the laws of mind." While mass "is al­ Isaac Asimov. Among his better known probes. By stimulating different parts of the brain he could cause a subject to ways conserved, opposing thoughts can books are Men and Marriage, which in­ cancel each other out; sympathetic ideas furiated feminists by arguing that patri­ turn his head, blink his eyes, move his limbs and a host of other things. But can resonate together in the mind. The archy was a requisite for a stable paradoxical stuff of the microcosm ... society, and Wealth and Poverty, a moral though he could make the patient's hand move he could never make the seem[s] to represent the still mysterious and economic defense of laissez-faire domain between matter and mind, capitalism. Wealth and Poverty was a patient feel that he had willed the hand to move. "Penfield found that the con­ where matter evanesces into probability bestseller that influenced public policy fields of information and mind assumes tent of consciousness could be selective­ and rhetoric during the Reagan years. the physical forms of waves and ly altered by outside manipulation. But In Microcosm, Gilder argues that the particles" (29). however much he probed, he could not computer chip is ushering in a new era In the final pages it becomes clear enter consciousness itself. He could not of freedom. This thesis was presaged in that this thought in quantum physics is find the mind and invade its autono­ the speeches of Ronald Reagan, per­ the thought of God. In quantum physics my" (p. 372). haps because Joshua Gilder, George and the microcosm, says Gilder, "is the Gilder's son, was a presidential speech Those in the Aristotelian realist tra­ secret of reconciliation of science with writer. Since the publication of dition in particular will find useful religion. The quantum vision finds at Microcosm, Gilder's thesis has become leads to works in the new science of the very foundations of the material the stuff of newspaper and magazine mind. Unfortunately, Gilder never de­ world a cross of light ... In this light, commentaries. It looks like Microcosm velops a realist view of consciousness we can comprehend the paradox of the will enjoy the success and influence of as an emergent order. Instead, he re­ brain and the mind, the temporal and Wealth and Poverty. places Marx's materialism with a the divine, flesh and the word, freedom Microcosm is a peculiar book, partic­ Hegelian Idealism, theorizing that reali­ and fatality" etc. ularly in its first and last chapters, ty consists ultimately of thought and Frankly, quantum physics may be where Gilder attempts to delineate a re­ mind. strange but it's not that strange. Physics lationship between quantum mechan­ Gilder's idealism seems clear. He is still science and, Gilder's rhapsodies ics, the microcosm, the computer chip, writes, for example, of the "primal to the contrary, the quark is no cross of and God. He begins with the "over­ power of mind and spirit" (382). And light. Quasi-theologians of all kinds throw of matter" and what he calls the he argues that "At the root of all the have often attempted to find God in a "superstition of materialism." Science, cascading changes of modern life ... is microscope. Gilder's attempts are no he argues, no longer supports the mate­ the overthrow of matter" (12). better than those "Newtonians" who rialist dogma that everything from the "Thoughftts paramount," he continues, claimed, in exact opposition to Gilder, orbits of the planets to the thoughts in "even at the heart of matter itself" (13). that the extreme order and lack of uncer­ one's head are reducible to the deter­ This thought at the root of the universe tainty in the universe was proof of ministic laws of matter and its motion. guides what Gilder calls the "logic of God's wisdom and powers of design. In physics, for example, the quantum technology" and the "logic of the Gilder's mysticism may save him 70 Liberty Volume 4, Number 2 November 1990 from the charge of naive materialism, The geniuses who created and ex­ probability analysis of entropy, Von but it does not save him from determi­ ploited the microcosm are, as they Neumann vs Mead computer architec­ nism. He and Marx are, in this respect, should be, the focusing element in ture, and analog vs digital systems. He two sides of the same coin. Marx, the Gilder's book. But along the way there makes these arcane subjects intelligible materialist, denies the human mind in are some well placed attacks on govern­ to the lay reader, building understand­ favor of the eternal logic of production. ment, which has tended to slow the ing developed in earlier sections to fore­ Gilder, the idealist, denies the human revolution by interference and inepti­ cast the revolutionary effect microcosm mind in favor of the eternal logic of the tude. In the late 1950s and early 1960s, technologies will have on business, soci­ mind of God. This is not an Fairchild and Texas Instruments were ety and politics. But one need only un­ improvement. leading the way into the microcosm. derstand the broader themes, not the They had virtually no government as­ intricate details, to appreciate these sistance but their competitors who con­ chapters. Marx, the materialist, denies tinued to try to improve the dead These forecasts, which range from the human mind in favor of the technology of vacuum tubes had mil­ geopolitics to SDI to music, are delight­ eternal logic of production. lions of dollars in subsidies and grants. ful. Gilder's destruction of the HDTV If semiconductors had not been far su­ myth, for example, is powerful and riv­ Gilder, the idealist, denies the perior to vacuum tubes, the new and eting. Television, Gilder prophesies, is human mind in favor of the superior technology might have lost the dead and HDTV stillborn. Since the tele­ eternal logic of the mind of battle to the inferior-but-subsidized vision was introduced it has changed technology. Semi-conductors were far remarkably little. We now have more God. This is not an improve­ superior; "when the government need­ television channels, color, and better ment. ed a way to miniaturize the circuitry picture quality: but television is still the for its Minuteman missiles and its same passive, couch-potato medium that it was forty years ago. The micro­ Happily, except for one or two is­ space flights, it did not use micromod­ ules or any of the other exotic technolo­ cosm will change all this. The cost of sues, Gilder's mysticism does not inter­ computing power, speed, and memory fere with the great body of his work. gies it had subsidized. It turned first to Fairchild ..." (80) is plummeting while the quality contin­ The best part of Microcosm is an excit­ ues to grow at an enormous pace. Soon, ing and beautifully written history of A similar story is told of the Japanese microcosm pioneers. The he­ this revolution will create the reasona­ the microchip and its creators. What bly priced technology necessary to Gilder did for entrepreneurs in The roes this time were three Tom's: Tom Kubo, Tom Kamo, and Tom Kodaka, transform television into a dynamic me­ Spi71!t of Enterprise he does here for dium. Fast chips and large memories ph~sicists, electrical engineers, comput­ who built Tokyo Electron Laboratories-destined to become mean that television pictures can be ma­ er s¢ientists (and, of course, more entre­ nipulated by computers. This means not pre~eurs). His prose sparkles as he tells Japan's fastest growing company and the Istories, the ambitions, and the lives the key capital supplier for Japan's mi­ of t~ese fascinating people. crocosm revolution-with hindrance, Quasi-theologians of all fie tells of Andrew Graf "lying face not help, from Ministry for dO\fn in the wet furrows of a muddy International Trade and Industry kinds have often attempted to fie14 somewhere near the boundary be­ (MITD, the much eulogized "central find God in a microscope. twe~n Hungary and Austria." Graf is planners" ofJapan. Gilder's attempts are no better har«l of hearing but he remembers "the MITI officials, writes Gilder, "wax yel* of dogs, the tromp of soldiers on a warm and expansive to the American than those "Newtonians" who neatby road, the maundered words of a intellectuals and politicians who come claimed, in exact opposition to hu~chbacked smuggler who had taken to learn of the marvels achieved in Japan simply by giving power to intel­ Gilder, that the extreme order his tnoney in exchange for directions to and lack of uncertainty in the the I border. He cannot turn back; in lectuals and politicians," but such poli­ Budapest, they are arresting his cies have little to do with the growth universe was proof of God's friends" (83). Graf escapes as the sup­ and dynamism of the Japanese wisdom and powers of design. pression of the 1956 Hungarian revolu­ economy. tion swallows his country; he comes to In loving detail, Gilder explains the America and becomes Andrew Grove, science behind the function and evolu­ only a much higher picture quality than president of Intel Corp., perhaps the tion of transistors, semiconductors, in­ HDTV, but also real-time interaction. most important company in the history tegrated circuits, parallel computers, To illustrate this, consider a play of American microelectronics. As artificial intelligence and much more. that is currently popular in Los Gilder notes, Grove's rise to the top is He also explains the fundamental ideas Angeles. The play takes place in an old one of the "implausible yet regularly re­ that have allowed us to explore and ex­ house, but instead of passively watch­ peated sagas of individual achievement ploit the power of the microcosm. ing the action, the audience follows a which explain-in all cold realism-the Among the skillfully handled subjects character throughout the house. triumphs ofSilicon Valley..."(85) are information theory, Boltzman's Audience members may follow any Liberty 71 Volume 4, Number 2 November 1990 character they choose and they can fol­ ment is ludicrous, but it has been taken "Quantum technology exalts the low different characters whenever they up by otherwise-perceptive writers. one domain the state can never finally want. By the time the play ends it's pos­ Tom Bethell and Warren Brookes have reach or even read: mind," Gilder sible for everyone to have viewed what already adopted this new vision as writes. "Thus the move from the indus­ is, in effect, a different play. The real gospel. trial era to the quantum era takes the television revolution is not HDTV, but Brookes has written that totalitarian world from a technology of control to a this type of dynamismand interaction nations "cannot survive in the informa­ technology of freedom" (353-354). This that computers will soon make tion age." Going even further than confidence that microtechonology will possible. Gilder, Brookes compares the breaching free entrepreneurs from interference by A government industrial policy de­ of the Berlin wall with electron tunnel- states and bureaucrats is naive, to say signed to compete with the Japanese on the least. Technology has little to do HDTV will not only fail (the Japanese with the prospects for liberty. Freedom are at least 10 years ahead on HDTV Technology does not shape and tyranny have existed side by side technology), but may also distort and the state of liberty; liberty in pre-industrial ages (Athens and slow the eventual triumph of dynamic Sparta), in the industrial age (Great television. shapes technology. In the Britain and Tsarist Russia), and in all Some of the changes in society that Soviet Union the internal com­ likelihood will exist in the post­ Gilder sees as emanating from the mi­ bustion engine was used to industrial age. It may be true, as Gilder crocosm revolution, however, are exag­ puts it, that if the state were to expro­ gerated. He repeatedly speaks about create tanks and limousines for priate the means of production in an in­ the "great divide" that the "overthrow the apparatchiki who oppressed formation age, most of what they of matter" represents. Before the micro­ the masses. In the United would get would be sand. But there are cosm revolution, he asserts, wealth States, the same technology be­ other ways to shackle enterprise-the came from the ''brute force of things" state is already regulating international while today the "ascendant nations and came the American automobile, finance even though the tools of this corporations are masters not of land the most liberating and indi­ trade are computers and information and material resources but of ideas and vidualist product of the materi­ flying at the speed of lightdown fiber technologies" (17). optic lines. The trouble with all this is that al age. Gilder's sanguineness has its origin, wealth has always been a product of the I suspect, in his philosophical presup­ human mind. Gilder writes about oil positions. Because he believes he has a ling. The true credit for the demise of and iron and steel as though they were hold upon the "logic of history," he can socialism must go, he asserts, to physi­ simply given to us, but, as Sheldon cists like Richard Feynman. Surely write without qualification that "The Richman has noted, "Nature, strictly you're joking, Mr. Brookes! Bethell is global microcosm has permanently speaking, does not provide resources: it slightly more reserved, but he too gush­ shifted the world balance of power in provides materials. A resource is a es about finally understanding why so­ favor of entrepreneurs" (358). But men product of man's mind; a material cialism is crumbling around the world. have free will, and are not determined stamped with man's purpose." Gilder What Gilder and these other writers or predestined to accept liberty or tyr­ seems to think that if you can touch fail to see is that socialism was tried for rany. As Ludwig von Mises put it, something it isn't a product of the hu­ 70 years and didn't work. Socialism did "Everything that men do is the result of man mind because you can't touch the not produce the cars, trucks and other the theories, doctrines, creeds, and mind. He is plainly wrong: the intangi­ material goods the citizenry wanted. mentalities governing their minds. ble mind produces many tangible prod­ Even though the Soviet Union has more Nothing is real and material in human ucts. If one is to take Gilder at his word, raw materials than any other country history but mind" (Money, Method, and iron, steel and locomotives are not on the globe, the average Soviet citizen the Market Process, Kluwer, forthcom­ products of the human mind, while lived and continues to live an impover­ ing, p. 289). How could Gilder, who computer software is. ished existence. The battle cry of peres­ writes of the "primacy of mind and Gilder's mind/matter dichotomy troika is not "give me silicon chips, spirit," disagree with this? Recall that abandons economics for technological semiconductors and artificial intelli­ in Gilder's system it is not the human determinism. His argument suggests gence systems," it's still "give me mind that has primacy and efficacy but that the Soviet Union and other peace, land and bread." Centralized God's mind, as manifested in quantum planned economies did (and can con­ economies don't work because they physics and the microcosmic technolo­ tinue to) function reasonably well as lack two essential elements: free minds gies quantum physics makes possible. long as all that is being produced is ma­ and free markets. Without these, inno­ But worse yet, his view of the rela­ terial goods like trucks, steel, and rail­ vation, gr6wth and progress are impos­ tionship between technology and liber­ ways. Socialism is now crumbling, he sible. Indeed, as Ludwig von Mises ty is not only wrong-it completely argues, because such material goods proved in the early 1920s, rational eco­ reverses the true causal connection. are no longer as important in the world nomic planning of any sort is impossi­ Technology does not shape the state of economy as they used to be. This argu- ble under socialism. liberty; liberty shapes technology. In 72 Liberty Volume 4, Number 2 November 1990 the Soviet Union the internal combus­ metaphysics, science and religion, histo­ Although this theme is recurrent, tion engine was used to create tanks ry and forecast. One has to admire the the book has a much wider scope. and limousines for the apparatchiki who scope, if not always the content, of Elster's ambition, which he achieves to oppressed the masses. In the United Gilder's vision. Early on in the book he a remarkable degree for such a short States, the same technology became the describes Carver Mead, the prophet of volume, is to survey and criticize the American automobile, the most liberat­ the microcosm. Mead's approach, he major explanatory mechanisms em­ ing and individualist product of the writes, was "a lifelong effort to escape ployed by social scientists-not the material age. In closed societies the the momentary claims and crises of his technical details but the logic. ability to store immense amounts of field and to see the thing whole: to tran­ So, for example, when Elster ex­ data in a compact form is used to scend the common sense of the day, the plains the rational choice model, he document and control thousands of dense traffic of convention, the ways of tells us that "what explains the action is people. In open societies, the same the wealthy wisemen of the Valley, and the person's desires together with his technology has created the compact uncover the deeper meanings ..." (39) beliefs about the opportunities" (20), disc walkman. Gilder has approached his writing the and the beliefs may be mistaken. He Despite these problems, Microcosm same way, from Men and Marriage to moves quickly to indicate that prefer­ is a fascinating panoply of physics and Wealth and Poverty to Microcosm. 0 ence orderings can be converted into utility functions, then to re-express the Nuts and Bolts for the Social Sciences, model as one of utility-maximizing ac­ tion, and finally to conclude that be­ by Jon Elster. Cambridge University Press, 1989, 184 pp., $11.95. cause "all factual beliefs are a matter of probabilities" (26), the model becomes one of action aimed at maximizing mathematically expected utility, per­ haps using subjective probabilities to Rational Man arrive at the expected values. Next comes a presentation of the basic game theory setup, an explication of the and All the Rest Prisoner's Dilemma, and the conclusion that "rational choice is defined for an individual, not for a collectivity of two or more individuals" (29). All this is presented clearly and satisfactorily in a added that "the choice of ultimate ends Robert Higgs mere 17 pages. is in this sense always irrational." Mises We might have expected such mas­ warned, however, that "error, ineffi­ Do people act rationally? And if we tery from Elster, who could be de­ ciency, and failure must not be con­ say either that they do or that they do scribed either as a philosophically fused with irrationality. . .. The farmer not, what exactly do we mean? minded social scientist or as a philoso­ Differing answers to these questions who in earlier ages tried to increase his pher interested in the methods of the establish the foundations of competing crops by resorting to magic rites acted social sciences. Since bursting onto the explanatory paradigms in the social no less rationally than the modern intellectual scene in the late 1970s, he sciences. farmer who applies more fertilizer. He has been a virtual whirling dervish as a One approach is to say that every­ did what according to his­ writer. A recent catalog of the body always acts rationally. Some peo­ erroneous-opinion was appropriate to Cambridge University Press lists thir­ ple may look as if they are crazy, but if his purpose." In Mises's judgment, "the teen books with Elster as author or edi­ you could get inside their own (twist­ fundamental thesis of rationalism is un­ tor-and Cambridge is not the only ed) minds, you would see that, given assailable" . (Theory and History, 267­ publisher he has dealt with. Not just an their beliefs, they are choosing the 269). author, he has occupied research and means best suited for the attainment of Near the beginning of Nuts and Bolts teaching positions in Norway and at their chosen ends. This approach re­ for the Social Sciences, Jon Elster seems to the University of Chicago. The range of gards the idea of irrational action as embrace this point of view when he em­ his interests and the acuteness of his in­ self-contradictory. If I stamp my feet phasizes that "the·rational person can tellect are impressive. and shriek upon entering my house to choose only what he believes to be the Nuts and Bolts, which he suggests ward off evil spirits, well, who are you best means" (25). It soon becomes ap­ might be subtitled "Elementary ?ocial to say I'm acting irrationally? It works parent, however, that Elster is con­ Science from an Advanced Standpoint," for me. vinced that people may act irrationally reflects his command of diverse sub­ Ludwig von ,Mises took this posi­ and they may do so in many distinct jects. Besides the materials on rationali­ tion, maintaining that rationality re­ fashions. Irrational action is not just ty and irrationality, the book includes lates "only to the suitability of means random; it can be modeled as systemat­ discussions of altruism, emotions, social chosen for attaining ultimate ends." He ic inits own (suboptimal) ways. selection, and reinforcement, all under Liberty 73 Volume 4, Number 2 November 1990 the heading of human action. Under sonal experience and current events, at refusing to smoke and thereby sticking the rubric of interaction we find discus­ the expense of impersonal sources and to the commitment, made on Monday, sions of unintended consequences, past events" (38), and hence to act irra­ to refrain from smoking until equilibrium, social norms, collective ac­ tionally. No doubt. Wednesday. tion, bargaining, social institutions, I balk, however, when he makes his Elster is juggling three distinct con­ and social change. Each topic receives argument about weakness of will. This cepts: preference, intention, and action, consideration in a chapter of about ten is one of his favorite topics; he has dis­ especially the action of choosing pages of clear prose aided by a few cussed it in previous books and among current alternatives. We can see simple diagrams. Anyone who wants lectures. I accept that something we more clearly what is at stake by recon­ to find out how social scientists explain might agree to call weakness of will sidering a statement quoted above, human action in society could do much does exist, but cannot accept his ac­ placing the emphasis differently so that worse than to start here. Even readers count of it. the verbs rather than the adverbs are already familiar with the social scienc­ Weakness of will, in Elster's view, es can enjoy Elster's expository skills gives rise to irrational action, lithe frus­ and his succinct evaluations of the trating experience of doing what, all Intentions are uncon- strengths and weaknesses of different things considered, [one] would rather strained: nothing precludes my models. not do." It "arises when the discounting intending to slay all my ene­ For me, the most interesting chap­ of the future takes a special form, ters are the fourth, 'When Rationality which prevents us from holding consis­ mies in the year 2000. Fails," and the fifth, "Myopia and tently to past decisions" (45). For exam­ Intentions are solely mental Foresight." There Elster argues that ple, I resolve to become a nonsmoker commitments, futures con­ people frequently act irrationally and, because I believe that over the long in particular, go astray because of term, all things considered, I'll be tracts with oneself, so when we what he calls "weakness of will." With happier-in social science argot, I ex­ adopt them we bear no cost by respect to irrationality in general, my pect to get more utility-as a non­ foregoing a valued alterna­ own position is similar to Lincoln's on smoker. Notice that my decision fooling the people: I believe that some amounts to a commitment to a series tive-surely that's why the people act irrationally (almost) all the of actions: not to smoke tomorrow, not road to hell is paved as it is. time, and all people act irrationally to smoke the day after tomorrow, and some of the time. so forth throughout an indefinitely highlighted: the person now to So Elster gets no disagreement intends long future. If, when tomorrow comes, do then what he now prefers. from me when he observes, for exam- I should fail to keep my commitment, Notice that to intend something is Elster would view my action as irra­ not an action at all, at least not an ac­ tional and as illustrative of weakness tion in the same sense as doing some­ One approach regards the of will because I was "unable to stick" thing. Intentions are unconstrained: to my decision (45). nothing precludes my intending to slay idea of irrational action as self­ 'The explanation of this inconsis­ all my enemies in the year 2000. contradictory. If I stamp my tent behavior," according to Elster (fol­ Intentions are solely mental commit­ feet and shriek upon entering lowing the psychologist George ments, futures contracts with oneself, Ainslie), "is that the future does not so when we adopt them we bear no my house to ward off evil spir­ decay-that is, lose its value, from the cost by foregoing a valued alterna­ its, well, who are you to say point of view of the present-at a con­ tive-surely that's why the road to hell I'm acting irrationally? It stant rate as it moves away from the is paved as it is. Likewise, we get no present. Rather, it first decays very benefit from our intentions except the works for me. rapidly and then more slowly" (46). expectation that we shall get utility lat­ "The person's preferences at a given er when we act according to our (previ­ time are derived from a comparison of ouslyadopted) intentions. pIe, that "beliefs can be subverted by the present values of the options at Instead of saying that a person "pre­ the passions they are supposed to that time: he prefers the one that has fers the [future option] that has the serve" (37), as happens when people the largest present value. His intention largest present value," Elster should indulge in wishful thinking. Nor do I at that. time about what to choose later have said that a person now expects to object to the claim that "especially is based on that preference: he intends later prefer the future option that has when dealing with statistical matters, now to do then what he now prefers the largest present expected value. The our minds are subject to cognitive illu­ most" (46-47). Weakness of will mani­ actual costs associated with an action sions and fallacies" (38)-indeed, this fests itself when the person subse­ must coincide in time with the act of has been pretty well documented by quently experiences "preference choice among options. Preferences can experimental psychologists. Elster reversal" (47). This means, for exam­ apply only to one's ranking of the op­ thinks it is not unusual for people to ple, that when Tuesday comes, having tions from which one is currently "attach excessive importance to per- a smoke offers him greater utility than choosing. Preferences divorced from 74 Liberty Volume 4, Number 2 November 1990

actual choice have no substance, be­ yealrs ago. But present actions arise ness with regard to the choice of ends. cause such free-floating valuations, al­ froro present evaluations of benefits Wavering between various incompati­ though they may give rise to and costs. Weakness of will signifies ble goals, the actor vacillates in his con­ intentions, have no necessary conse­ nothing more than the dominance of duct of affairs. Indecision prevents him quences. For them, so to speak, there is the present as. we make our choices from marching straight toward one no price to pay. frorn moment to moment. goal." Mises appealed to Freudian no­ Of course, we make many choices, :Mises characterized such behavior­ tions, especially rationalization, to ac­ in a sense all of them, prospectively. al fJluctuations as reflecting "irresolute- count for the apparent "irresolute- The point is that we do so in view of the benefits and costs we anticipate we will attach in the future to the objects of our current choice. When tomorrow comes, we may evaluate the benefits [ Classified Advertisements and costs differently than we previous­ ly expected that we would. This altera­ Classified Advertising is available for $0.25 per word, plus $1.00 per insertion. 10% off for tion of valuations, in my view, reflects six or more insertions. Payment must accompany order. Please specify classification. no inconsistency, no weakness of will, no irrationality. People learn, they Books Looking for good strong independent think­ change their minds-no problem.* ers to read and challenge a bright new American Frete list of used books for sale. Subjects in­ As I see it, weakness of will occurs philosophy. Please ask for Announcement letter. clude Ayn Rand and H. L. Mencken, First Bill Copeland, 95 Peaceful Way, Tiverton, RI when we violate a plan for a long-term Editions, Anarchism, Atheism and Capitalism. 02878. course of action, a plan that seemed op­ Lists issued irregularly. Dunn's Libertarian timal when we embarked on it and, as Books, 251 Baldwin Ave, Meriden, CT 06450. Merchandise such, continued to seem optimal at eve­ Strategic Action. New book reveals powerful "READ OUR LIPS" -Yellow Vinyl Bumper ry subsequent time. Our deviation moves to keep you winning. Effective tactics Stickers: $2.00 ea, $1.75 5-9, $1.50 over 10. work anytime, anywhere: business, politics, war, arises not because peculiarities in our Check/money order. M Davies, 3434 Burch Ave, sports, games, general life. Nothing else like it. Cincinnati, OH 45208. discounting of future options give rise indispensable! Written by successful corporate Christmas 1990 Gift for the man who has dirE~ctor, West Pointer, libertarian. Makes pro­ to preference reversal. Our deviation everything. Definitely not a gag gift, genuine, represents nothing more than a present tecting yourself supereasy. $10. Moneyback documented Berlin Wall artifacts handsomely guarantee. Bahr, 1196-L1 Citrus, Palmbay, FL plaque-mounted, suitable for office, den, or choice with respect to one (present) 32905. element in a sequence of imaginatively study. Call (214) 699-8913 or send SASE for pho­ COlmpetitive co-existing governments, wave of to and more information to: DOW Enterprises, linked actions, but this choice just hap­ the future (Multi-governments, many chiefs, PO Box 516021, Dallas, Texas, 75251. pens to break the mental chain. PaI1larchy, etc). The Primer LeGrand Day's A Suppose I set out to be a nonsmoker New Dimension of Freedom now in paperback: Organizations $6.00. MG Publications, Box 2108, Reseda, CA ten years ago. Day after day I adhered 91337-21-8. Always looking for good libertarian fiction? to my commitment faithfully. Now, to­ Join the Libertarian Futurist Society and help us day, I light up. My action has nothing Literature choose the annual Prometheus and Hall of Fame to do with anticipations of the future. It awards. Subscription to Prometheus, $8/yr. Don't Procrastinate! Stop the anti-drug insan­ Basic memberships $10/yr. LFS, 89 Gebhardt has everything to do with the net ity now! The 10 page personal freedom report Road, Penfield, NY 14526. benefit, as I perceive it, of a smoke that shows you how is now only $2. Meyer's-7 right now. When I choose to have a Box 166979, Irving, TX 75016-6979. Periodicals FI'E~e-Market Environmentalism offers ways cigarette now, I am not choosing Bigger print now in The (Libertarian) to protect the environment without adding to among long-term plans. H I were mak­ Connection, open-forum magazine since 1968. the power of the state. To learn more about it, Subscribers may insert one page/issue free, un­ ing a prospecpvely inescapable com­ write Jane Shaw, Political Economy Research edited. Lots of stimulating conversation. Eight is­ mitment, I might prefer the Center, 502 S. 19th Avenue, Bozeman, MT 59715. sues (one year) $20. Strauss, Box 3343Z, Fairfax, nonsmoking plan just as I did before. Libertarian Anti-Abortion arguments: $3.00. VA 22038. Of course, having a single smoke now anformation only: SASE) Libertarians for Life, From New Age Technology to Islamic 134124 Hathaway Drive, #22, Wheaton, MD Fundamentalism - Religion Watch objec­ effectively sets aside the long-term 20906. plan to which I committed myself ten tively monitors over 1,000 U.s. and foreign peri­ Directory of Libertarian Periodicals, up­ odicals for trends in religion. "... packed with dated latest edition, lists around 150 titles, all be­ information vital for people watching new cur­ lieved to be presently publishing, all with rents in American culture."-Utne Reader. * New evidence: in an article on ''Preference addresses, much other information. Includes Money back guaranteed if dissatisfied. Free sub­ Reversals," Journal of Economic Perspectives lists of organizations and persons. $3.00 post­ ject index included. Send $17.50 (11 issues) or [Spring 1990], Amos Tversky and Richard paid, $4.00 overseas. Jim Stumm, Box 29-LB, $8.75 (5 issues)- to: Religion Watch, PO Box 652, H. Thaler report the results of experiments Hiller Branch, Buffalo, NY 14223. North Bellmore, NY 11710. indicating that "people do not possess a Inside the Men's Club: Secrets of the set of well-defineP preferences for every Patriarchy. Ruling class sex & violence in secret Personals contingency. Rather, preferences are con­ sodeties (56p.) $5.00. AND/OR FREE ruling Pro-life, pro-animal-rights Libertarian would structed in the process of making a choice class research catalog. A-A, Box 20273, Ferndale, like to exchange ideas with Iikeminded persons. or judgement." MI 48220. PO Box 254, Calpella, CA 95418. Liberty 75 Volume 4, Number 2 November 1990 ness." He observed that because the hu­ rationality. He supposes that an action importance he attaches to the deci­ man actor is so often "a victim of illu­ cannot be rational unless it arises from sion-and on his beliefs about the costs sions and wishful thinking," human three optimal decisions: "First, it must and benefits of gathering more history is "by and large a series of er­ be the best means of realizing a per- information" (30). rors and frustration" (Theory and Like Mises, most people who define History, 280-282). rationality require only the first of In my view, avoiding this sort of With respect to irrationality, these conditions. Adding the other two weakness requires that we attach great­ my own position is similar to creates all sorts of trouble, not the least er value to what becomes in our own of which is the indeterminacy created minds a commodity in its own right, Lincoln's on fooling the people: by the mutual interdependence of opti­ namely, sticking to the long-term plan. I believe that some people act mal beliefs and optimal evidence. No That so many people routinely stick to irrationally (almost) all the wonder Elster finds so many types of such plans in so many ways testifies, I irrationality loose in the world. think, to the power of personal identity time, and all people act lrra­ Still, his observations and argu­ maintenance in determining people's tionally some of the time. ments challenge us to reconsider the behavior. One does not refuse a cigar­ nature of rationality and irrationality. ette now because one would not enjoy This is more complicated stuff than it, all (present) things considered, but son's desire, given his beliefs. Next, many of us appreciate. Nuts and Bolts, because one still wants to be the kind of these beliefs must themselves be opti­ with its excellent bibliographic essay, person who does not smoke. mal, given the evidence available to provides a provocative point of Elster's allegation of irrationality in him. Finally, the person must collect an departure for those who would like to connection with weakness of will illus­ optimal amount of evidence--neither think more deeply about how we can trates the difficulties inherent in his un­ too much nor too little. That amount understand human action and usually stringent conception of depends both on his desires-on the interaction. 0

Reid, "Smokes, but No Peace Pipe," continued from 35 of smugglers will go down. After all, These have traditionally been regarded ulation as a whole? If individual life is cheap on the reserves. The Indian as relatively painless "sin taxes," and Indians judge that it is to their advan­ community as a whole has the highest have been a favorite target of cash­ tage to pursue specific claims, they will rates of alcoholism, drug abuse, and starved governments. Now that the real be free to do so. This would bring to an suicide in the country, to say nothing costs are more evident, they should be end most of the plainly silly claims of the worst educational and health­ rolled back to more realistic levels presently being launched on govern­ care systems. The average Indian dies (there is, of course, no hope of ment by leaders who know that their eight years younger than the average abolishing them). While they're at it, the political futures rest on being per­ White Canadian. Infant mortality rates politicians might want to consider alter­ ceived as the radical pursuers of even rival those of Third World countries. natives to paternalism. If the bulk of the most tenuous claim. That this Under such conditions, it is questiona­ the aid which the. Indians presently re­ would be a critically important reform ble whether the increasing risks of in­ ceive .were delivered to individuals is demonstrated by the fact that the volvement in cigarette smuggling will rather than to bureaucrats and band claim of the Kanesatake Mohawks to have the same discouraging effects that leaders, individual Indians would gain the Oka golf course, pursued with such they would on a comfortable suburb­ a great deal of much-needed indepen­ vigor, has been thrown out of court re­ anite. dence. peatedly in a string of decisions that If the federal and provincial govern­ Along the same lines, why not take date back to 1912. So, in one sense, the ments really want to do something to the money currently being donated to whole mess has been for nothing. But improve the situation, they could start Indian leaders for use in land claims, it would be nice to avoid future by drastically cutting 'tobacco taxes. and divide it up among the Indian pop- messes. 0 The Liberty Poll Moving? What Libertarians Think Be sure to leave a Paper Trail . The only detailed study of what libertarians think about life, Please notify us at least 4 weeks in advance. Be sure to in­ government, God, sex, heroes ... and how they would deal clude both your old address (a copy of your mailing label with some serious moral problems. Now complete with data would be appreciated) and your new address, including from the original survey of Liberty subscribers and the survey your zip code. of Libertarian Party members. $4.00 each, postpaid; $3.00 each for five or more copies Send address changes to: Liberty, Circulation Department, Liberty Publishing, PO Box 1167, Port Townsend, WA 98368 PO Box 1167, Port Townsend, WA 98368. Thank you. 76 Liberty Notes on Contributors

R. W. Bradford is editor of Liberty. Rex F. May is the real name of "Baloo," the nom de plume trademarking his cartoons that appear in The Wall Street Douglas Casey is an active investor and the author of Investing in Crisis, the best-selling investment book of all Journal and other publications. time. William P. Moulton is a journalist and historian, with a Stephen Cox is Associate Professor of Literature, special interest in modern conservatism. University of California, San Diego. Bob Ortin lives in southern Oregon, where he moved Leslie Fleming is a farmer living in Hitchcock, Oklahoma. sometime back to get away from the "insiders" of the state.

David Friedman is an economist, philosopher, poet, and Scott Reid is editorial assistant at Liberty and a non­ the author of The Machinery of Freedom. smoker. Robert Higgs is Thomas F. Gleed Professor of Business Sheldon Richman is senior editor at the Institute for Administration in the Albers School of Business, Seattle University, and the author of Crisis and Leviathan. Humane Studies at George Mason University. David Hudson is a free-lance writer who lives in Hilo, James S. Robbins has received only one doctorate from Hawaii. the Fletcher School of Law and Diplomacy, Tufts University. Richard Kostelanetz has written extensively on music and the arts. His most recent books include On Innovative Music Jane S. Shaw is a writer and former Economics Editor of (ian)s and Conversing With Cage. Business Week, now living in Bozeman, Montana.

Ronald F. Lipp is an author and lawyer residing in Richard Stroup is professor of Economics at Montana Sacramento. State University and a senior associate at the Political Keith Lofstrom is an engineer living in Oregon. He re­ Economy Research Center. cently attended the Liberty Editors' Conference, which took place in Seattle, not Port Townsend. Alexander Tabarrok is contributing editor to the Austrian Economics Newsletter. Loren E. Lomasky is Professor of Philosophy at Bowling Green University, and author of Persons, Rights, and the Leland B. Yeager is the Ludwig von Mises Distinguished Moral Community. Professor of Economics at Auburn University.

Coming in Liberty - In Search for the Historical,Gorbochev - Jim Robbins digs into Gorby's life before he became the darling of the news media and politicians and learns that ... well ... that Gorby is not a very nice man. - Wall Street Revisited - Douglas Casey stands Wall Street wisdom on its head: in his view, Mike Milken's a hero, corrupt management is in bed with regulators, and White Knights wear the black hats. - On-Line Education - David Friedman shows how computers can be more than ex­ pensive, bulky books. -Murray Rothbard and His Critics - Chris Sciabarra considers criticisms of Rothbard's thought from socialists, conservatives, Objectivists and Hayekians, and finds surprising commonality among them. Plus: The influence·of Ayn Rand on Gilligan's Island and Mr Ed, two startling views of Robert Anton Wilson, dancing with Emma Goldman, and Karl Hess on teaching. r

America Omaha, Nebr. Novel way to protect the nation's wild stream beds, as Evidence that neither death nor taxes is as certain as widely reported inAudubon magazine: believed, as reported in the Minneapolis-St Paul Star Tribune: Members of the Water Too! subsidiary of Earth First! have pro­ The U.S. attorney's office announced that it may request that the posed planting Claymore mines in creek beds to discourage hikers body ofEhsanolla Motaghed be exhumed so that it can verify that he from disturbing the natural flow of creeks. is actually dead. According to the IRS, Mr Motaghed owes $156,000 in back taxes, and may have died to avoid paying them. Detroit, Mich. Suggested prerequisite for Supreme Court justices, from A. Lansing, Mich. Hughes in the Detroit Free Press: The new zoology, by a resident of America's Heartland, as "I oppose President Bush's appointment of David Souter to the reported by the Detroit News: U.S. Supreme Court. The American people cannot expect an impar­ A lawsuit was filed against Lansing Police and the Ingham tial position or decision to support or uphold legislation that bene­ County Sheriff by "I am the Beast Six Six Six of the Lord of Hosts fits American workers. Driving a foreign car creates a tendency to in Edmund Frank MacGillivray Jr. Now, I am the Beast Six Six Six defend your purchase and certainly not to react to preserving jobs of the Lord of Hosts. I am the BeastSassotlohiefmjn. I am the Beast for America's work force." Six Six Six Lord," who had changed his name from Edmund Frank MacGillivray Jr. Kansas City, Mo. 16,000 points of light in Kansas City, as reported in The National City, Calif Arizona Republic: Professional ethics of law enforcement officers, as reported by Volunteerism has been made mandatory for the 16,000 students the Los Angeles Times: in the North Kansas City School District. All students will be re­ Eleven National City police officers were caught cheating on a quired to complete 36 hours of"community service." promotion exam. No disciplinary action was taken against them, a "It's time to put the 'me' generation behind us," said Superin­ city official said, because they were never instructed not to cheat tendent Gene Denisar when he announced the mandatory volunteer­ ism on August 28. Washington, D. C. Impressive track record of the agency responsible by law for Dublin, Calif protecting our nation's natural treasures, as reported in the Detroit Progress in the War on Ugliness in the Golden State, as Free Press: reported by the Chicago Tribune: Twenty percent of the works of art and historic artifacts that be­ Dublin, California, has passed an "anti-ugly" ordinance, provid­ long to the Interior Department are missing, and many of the art ing fines of$500 to homeowners whose houses or yards are ugly. works that can be found have been mistreated, according to an audit by the Inspector General. A $5,000 Apache basket was found in use Flossmore, Ill. as a trash can; several valuable Navajo blankets have been nailed to Retreat in the War on Ugliness in suburban Chicago, as office walls, and a painting worth several thousand dollars was reported by the Chicago Tribune: found by auditors in a wastebasket "Misery of the Trail of Tears," After losing a lawsuit by a local resident, Flossmore has re­ by noted Indian artist Joe Tiger, was on display at the Interior De­ pealed its law prohibiting possession of pick-up trucks. Residents partment headquarters when auditors first visited, but was missing are now allowed to own pick-up trucks provided they park them when investigators visited a second time. Itis valued at $50,000. only in garages. Boston, Mass. Maine Solemn promise of Marjorie A. Clapprood, candidate for Latest measure in the War on Something, as fought in the Lieutenant Governor of the Bay State, as reported in the Boston Down Easter State, as reported by the Associated Press: Globe: Effective September 1, the sale of juice or other beverages in "We are going to get the ship of state back on solid ground." aseptic soft-sided paper cartons is illegal in the state of Maine. Germany Fountain Hills, Ariz. Unforeseen complication of German reunification, as reported New hope for the aesthetic partisans of khaki, as reported in in the Detroit News: The Times ofFountain Hills and Rio Verde: As part ofits liquidation sale in anticipation of German reunifica­ The Committee on Architecture of fountain Hills has an­ tion, the East German Stasi (secret police) is offering for sale paper nounced that it will no longer allow "bright colors" on the exterior shredders, powerful searchlights, coffee pots and after-shave. of homes. The standard acceptable color is "Navajo White," with a reflectivity of 78; colors that are either "brighter" or "whiter" are (Readers are encouraged to forward news clippings barred. or other documents for publication in Terra Incognita.) 78 Liberty Morgan Silver Dollars • ••

• • • Pre-1900, at $18.50

Morgan silver dollars in Mint per roll of 20 coins-that's just This offer is limited to stock on condition are currently available $18.50 per coin! hand. Telephone today to confirm at historic low prices, offering the And to make the deal even bet­ your purchase, and to lock in ·to­ astute investor an excellent oppor­ ter, the Morgan silver dollars we day's price. tunity for profit. offer are all minted in the 1800s! As To reserve your purchase, The Morgan silver dollar is the anyone who has acquired silver please call the LCS trading desk most popular silver coin with col­ dollars has learned, the over­ toll-free at 1-800-321-1542. Michi­ lectors. And it's easy to see why whelming majority of silver dollars gan residents call 1-517-351-4720. collectors love these coins-they available are dated 1921 and later Or return the coupon below. No are big, and they are beautiful! No and are relatively low grade. Early sales tax on sales delivered outside other coin approaches the classic date Morgan dollars of this quality Michigan. Morgan silver dollar in terms of are difficult to locate in any quanti­ beauty, rarity, and collector ap­ ty. peal. Morgan silver dollars are the Each Morgan dollar we offer is perennial "blue chip" of rare coin in Mint State, personally graded by investments. Allan Beegle, our chief numisma­ YES! tist. And all are backed by our ex­ A short while ago, a huge auc­ Please send me the mint-state Morgan tion of Mint State Morgans pan­ clusive guarantee: you may return Silver Dollars I've indicated below. I icked many dealers and investors any coin for a full, 100% refund for understand that all, coins were minted into liquidating large quantities of any reason, at any time within 15 in the 1800s, and that I can return any Morgans, at a time when dealers days of when you receive them. coin for a full refund at any time within were strapped for cash. As a re­ Warning: This situation will not 15 days of my receiving them. sult, prices dropped to the lowest last long. The sudden increase in level for Morgan dollars in more the supply of high grade Morgans, Half rolls (10 coins) @ than a decade. combined with the softening price, $187.50 each = And now, you can take advan­ has created a unique opportunity. Full rolls (20 coins) @ tage of the situation, by acquiring As dealers sell off the coins they $370.00 each = Mint State Morgan silver dollars. purchased, the available supply of Postage & handling: $5.00 During the past month, we Morgan dollars will get smaller, have been busy bargain-hunting, and the demand from dealers Total: acquiring quality Morgan dollars needing to build their inventories at prices so cheap that we can will increase. As a result, the price scarcely believe our good fortune. of these dollars may shoot up NAME While our supply lasts, we of­ quickly. fer Mint State Morgan dollars at Act Today: Orders will be filled ADDRESS the unbeatable price of just $370 on a first come, first served basis. CITY/STATE/ZIP

PHONE Half Roll . 10 Coins $187.50 ($18.75 each) Liberty Coin Service 300 Frandor Avenue Full Roll . 20 Coins $370.00 ($18.50 each) Lansing, MI 48912 (800) 321-1542 uo (((jive Me II LibertYJl or (jive Me 'Death." -Patricf(1ienry,1776

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