VOLUME XVII, NUMBER 4 Winter 2008 Policy Forum: New Book Shows How Looking Beyond Iraq to End Global Poverty ow will Iraq fare if and when the United hy do some nations become rich while HStates significantly reduces its military Wothers remain poor? Traditional main- personnel from that country? How strong is the stream economic growth theory has done economic case for U.S. military intervention little to answer this question. During most of in the oil-rich Middle East? These and related the twentieth century it focused on models issues were addressed at the panel discussion, that assumed growth was a simple function “Troop Withdrawal: Looking Beyond Iraq,” of labor, capital, and technology. Fortunately, held September 21, at the Independent Insti- more and more scholars have begun to recog- tute’s Washington, D.C. office. nize the foundations of growing prosperity: entrepreneurship and a free legal environment conducive to its flourishing. JAMES DUGGAN

Leon T. Hadar and David R. Henderson address the Independent Policy Forum. Research Fellow Leon T. Hadar, author of the Independent Policy Report A Diplomatic Road to Damascus (see p. 6), began by compar- ing the Iraq war to a movie that fails at the box office. Whereas many people might attribute its failure to weak acting or sloppy editing, the fundamental problem may have been a bad script that no amount of money or technical excellence could have fixed. (continued on page 5) IN THIS ISSUE:

Forum: Looking Beyond Iraq...... 1 In Making Poor Nations Rich: Entre- New Book on Ending Global Poverty...... 1 preneurship and the Process of Economic President’s Letter...... 2 Development (Stanford University Press), The Independent Review...... 3 edited by Research Fellow Benjamin Powell, Independent Institute in the News...... 4 sixteen scholars highlight the importance of Policy Report: Diplomacy with Syria...... 6 entrepreneurship and the legal and regulatory climate in which it operates. Through case Garvey Essay Fellowship Winners...... 6 studies ranging from Asia and Africa to Latin Lower Your Taxes at Year-end ...... 8 (continued on page 7) 2 The INDEPENDENT

President’s Letter: EXECUTIVE STAFF DAVID J. THEROUX, Founder and President MARY L. G. THEROUX, Vice President MARTIN BUERGER, Vice President & Chief Operating Officer ALEXANDER TABARROK, Ph.D., Research Director Ending Poverty BRUCE L. BENSON, Ph.D., Senior Fellow IVAN ELAND, Ph.D., Senior Fellow ROBERT HIGGS, Ph.D., Senior Fellow ost of the world ALVARO VARGAS LLOSA, Senior Fellow lives in abject pov- CHARLES V. PEÑA, Senior Fellow M RICHARD K. VEDDER, Ph.D., Senior Fellow K. A. BARNES, Controller erty and misery. Approx- ELIZABETH BRIERLY, Public Affairs Manager CARL P. CLOSE, Academic Affairs Director imately 10 percent of the JULIANNA JELINEK, Development Director WENDY HONETT, Publicity Manager population (roughly 600 GAIL SAARI, Publications Director million people) exists at BOARD OF DIRECTORS gilbert i. collins, Private Equity Manager or below an economic ROBERT L. ERWIN, Chairman, Large Scale Biology Corporation James D. Fair, III, Chairman, Algonquin Petroleum Corp. level of $1 per day, and PETER A. HOWLEY, Chairman, Western Ventures Isabella S. johnson, Director, Speakman Company approximately half of the W. Dieter Tede, Owner, Hopper Creek Winery David J. Theroux, Founder and President, The Independent Institute world (3 billion people) lives at or below $2 per Mary L. G. Theroux, former Chairman, Garvey International SALLY von behren, Businesswoman day. Why do some nations like China get richer BOARD OF ADVISORS herman belz while others like those in sub-Saharan Africa re- Professor of History, University of Maryland Thomas Borcherding main poor? What obstacles prevent development Professor of Economics, Claremont Graduate School Boudewijn Bouckaert Professor of Law, University of Ghent, Belgium in some countries with plentiful resources while James M. Buchanan Nobel Laureate in Economic Science, George Mason University others that may be resource-poor thrive? ALLAN C. CARLSON President, Howard Center for Family, Religion, and Society For many decades, most of academia, the me- ROBERT D. COOTER Herman F. Selvin Professor of Law, University of California, Berkeley Robert W. Crandall dia, business and government have claimed that Senior Fellow, Brookings Institution RICHARD A. EPSTEIN abject poverty is caused by a lack of physical re- James Parker Hall Distinguished Service Professor of Law, University of Chicago A. ERNEST FITZGERALD sources, unjust terms of trade, and unfair capital Author, The High Priests of Waste and The Pentagonists B. Delworth Gardner flows. And only greater government controls can Professor of Economics, Brigham Young University George Gilder Senior Fellow, Discovery Institute be the answer. Characteristic of this mindset are Nathan Glazer Professor of Education and Sociology, Harvard University calls for increased government-to-government WILLIAM M. H. HAMMETT Former President, Manhattan Institute aid that expands the bureaucratic strangulation Ronald Hamowy Emeritus Professor of History, University of Alberta, Canada STEVE H. HANKE and political corruption already so pervasive in Professor of Applied Economics, Johns Hopkins University Ronald Max Hartwell most countries, restricting the poor’s ability to Emeritus Professor of History, Oxford University JAMES J. HECKMAN freely innovate, build enterprises, and trade to Nobel Laureate in Economic Science, University of Chicago H. ROBERT HELLER President, International Payments Institute improve their lives. wendy kaminer Contributing Editor, The Atlantic Monthly Now questioning this dogma, our Research LAWRENCE A. KUDLOW Chief Executive Officer, Kudlow & Company Fellow Benjamin Powell argues in our new book JOHN R. MacARTHUR Publisher, Harper’s Magazine DEIRdre N. McCloskey that he has edited, Making Poor Nations Rich (see Distinguished Professor of Liberal Arts and Sciences, University of Illinois at Chicago J. Huston McCulloch p. 1), that we must instead free the people of poor Professor of Economics, Ohio State University Forrest McDonald countries by ending such controls. Distinguished University Research Professor of History, University of Alabama Thomas Gale Moore With a foreword by UCLA economist Deepak Senior Fellow, Hoover Institution Charles Murray Senior Fellow, American Enterprise Institute Lal and involving the work of fifteen economists, Michael Novak Jewett Chair in Religion and Public Policy, American Enterprise Institute Making Poor Nations Rich comprehensively JUNE E. O’NEILL Director, Center for the Study of Business and Government, Baruch College demonstrates the power of market-based enter- Charles E. Phelps Provost and Professor of Political Science and Economics, University of Rochester Paul Craig Roberts prise to end the oligarchic rule of government Chairman, Institute of Political Economy Nathan Rosenberg elites and emancipate the bulk of the world’s Fairleigh S. Dickinson, Jr. Professor of Economics, Stanford University Simon Rottenberg population from the prisons of poverty. Professor of Economics, University of Massachusetts PAUL H. RUBIN Professor of Economics and Law, Emory University This far-reaching Independent Institute book BRUCE M. RUSSETT Dean Acheson Professor of International Relations, Yale University along with all of our books, our journal The In- Pascal Salin Professor of Economics, University of Paris, France dependent Review (p. 5), events (p. 1) and other WILLIAM F. SHUGHART II Robert M. Hearin Chair and Professor of Economics, University of Mississippi VERNON L. SMITH programs provide unique and essential insights Nobel Laureate in Economic Science, George Mason University Joel H. Spring to redefine and redirect public debate and the Professor of Education, State University of New York, Old Westbury Richard L. Stroup direction of government reform. To fund this Professor of Economics, Montana State University Thomas S. Szasz work however, we will not accept government Emeritus Professor of Psychiatry, State University of New York, Syracuse Robert D. Tollison Robert M. Hearin Chair and Professor of Economics, University of Mississippi funding. Instead we rely on the generous tax- Arnold S. Trebach Professor of Criminal Justice, deductible support of Independent Associate GORDON TULLOCK University Professor of Law and Economics, George Mason University Members. Hence, we invite you to join with GORE VIDAL Author, Burr, Lincoln, 1876, The Golden Age, and other books Richard E. Wagner us to boldly advance this work, and in so doing, Hobart R. Harris Professor of Economics, George Mason University Sir Alan Walters receive copies of our new publications plus other Vice Chairman, AIG Trading Corporation Paul H. Weaver benefits (please see enclosed reply envelope for Author, News and the Culture of Lying and The Suicidal Corporation Walter E. Williams Distinguished Professor of Economics, George Mason University further details). We hope to have the opportunity Charles Wolfe, Jr. to work with you! Senior Economist and Fellow, International Economics, RAND Corporation THE INDEPENDENT (ISSN 1047-7969): newsletter of the Independent Institute. Copyright ©2007, The Independent Institute, 100 Swan Way, Oakland, CA 94621-1428 • 510-632-1366 • Fax: 510-568-6040 • Email: info@independent. org • www.independent.org. The INDEPENDENT 3

The Independent Review Going Postal • Katrina Recovery • Tocqueville he Independent Review continues its Katrina Context”). Instead the slow pace of Ttradition of wide-ranging scholarship on post-Katrina reconstruction is caused by many economics, public policy, and political and disaster-response policies and redevelopment social theory. Here is a sampling from the Fall initiatives that have distorted the signals from 2007 issue. markets and civil society that would otherwise Reforming the Postal Service have fostered a swift and sustained recovery. Years after UPS and FedEx refuted the ra- Based on extensive field research, including tionale for a monopolistic and inefficient U.S. interviews with hundreds of residents, business Postal Service, statutes and criminal penalties(!) owners, and government officials, Chamlee- continue to shield half of the agency’s mail Wright takes a tough look at policies that have volume against competition from private carri- ers. In contrast, the European Union and other countries around the globe have abandoned their state-run postal operations. One might have expected this costly embar- rassment to have been corrected by the Postal Accountability and Enforcement Act of 2006, but this wasn’t the case, explains James A. Montanye in “Going Postal: Regulatory Re- form in the Digital Age.” The new law will lead to the closure of some unprofitable post offices, but meaningful reform may not occur until the Postal Service comes to the brink of collapse. And that pos- sibility looks likely, as e-mail and other cheaper and more reliable alternatives offered by the Internet quickly erode the agency’s revenues from its monopoly on First Class mail. However, meaningful reform will need to overcome powerful vested interests. With nearly one-third of the federal civilian workforce (earning an estimated 30 percent more than they would in the private sector), the Postal Service may pose a stronger obstacle to reform than did created “signal noise” that discourages non- the airlines, trucking, and telecommunications government efforts to rebuild. She also offers industries when the prospect of deregulation helpful principles that could—and, in some confronted those industries. places, already have—spur redevelopment. See www.independent.org/publications/tir/ “Effective recovery, even in the wake of article.asp?issueID=51&articleID=660. catastrophic disaster, depends primarily on the social and economic systems that coordinate Government Policies Stall people’s daily life,” writes Chamlee-Wright. Hurricane Recovery “It is imperative that public policy play only Two years after Hurricane Katrina pum- a supportive role to these systems rather than meled the Gulf Coast, recovery in many areas create signal noise that inhibits their successful has stalled. Neighborhoods still lie in ruins. reestablishment.” Thousands still populate “temporary” FEMA See www.independent.org/publications/tir/ trailer parks. Residents and business owners article.asp?issueID=51&article659. wait for signs of whether and when their com- munities and customers are going to return, Misreading Democracy in America but the communities and customers can’t—or Alexis de Tocqueville, author of the two- won’t—return until housing, businesses, and volume classic Democracy in America (1835, services are restored. 1840), predicted that the United States would This Catch-22 is not an inherent by-product avoid the Industrial Revolution that was then of the vast storm-related destruction, according transforming England. Instead, he believed to economist Emily Chamlee-Wright (“The Americans would remain self-sufficient farm- Long Road Back: Signal Noise in the Post- (continued on page 5) 4 The INDEPENDENT

The Independent Institute in the News Opinion: Senior Fellow Ivan Eland wrote reviewed in the Charleston Gazette. The on Iraq partitioning in The Hill and the Journal of Economic Issues reviewed Washington Times on terrorism in the Judge and Jury. Reference & Research Washington Examiner, and on al Qaeda in Book News reviewed Neither Liberty Nor Providence Journal. The Wall Street Journal Safety. The Wall Street Journal reviewed ran Research Fellow William Gray’s Electric Choices. Hot Talk, Cold Science explanation of hurricane forecasting. Policy was cited in the Skeptical Inquirer. report author Leon Hadar wrote on Middle Plowshares & Pork Barrels was cited East conflict in the Columbia Tribune in the Charleston Gazette and Restoring (MO), Gulf Times (Qatar), and San Diego Free Speech and Liberty on Campus in Union-Tribune. Research Fellow David . Isenberg wrote about oil in the Asia Times. Broadcast: West Virginia Radio Network Research Fellow Pierre Lemieux wrote on inter­viewed Research Fellow Donald labor policy for the National Post. Research Downs about Ahmadinejad’s speech. Fellows E. C. Pasour, Jr. and Randal Research Fellow Fred Foldvary discussed Rucker collaborated on farm policy in the Chrysler’s sale on KPFA (CA). Charles Pittsburgh Tribune-Review and Billings Peña offered military analysis on MSNBC, Gazette, and on ethanol for Connecticut Post the “Dan Lovallo Show,” C-SPAN 2, ARD and Tampa Tribune. The Wall Street Journal Radio Network (Germany), Al-Jazeera, ran Research Fellow John Semmens’ op-ed CTV NewsNet (DC), and WDRC (CT). on driver licensing. Research Director Alex President David Theroux was interviewed Tabarrok wrote about bail in the Journal on troop withdrawal on KTVU (CA). of Law & Economics. Research Fellow Ivan Eland spoke on Afghanistan, Iraq Robert Whaples predicted a rosy long-term partitioning, al Qaeda, and bin Laden, economy in the Providence Journal. In his at outlets including Al-Jazeera, CBC- Washington Post Writers Group syndicated TV (Canada), KMED (OR), WWRL column, Senior Fellow Alvaro Vargas (NY), and “The Steel on Steel Show.” Alvaro Vargas Llosa was interviewed on Bloomberg Television, France 24 TV, and the Talk Radio Network. John Semmens spoke about driver licensing on the “Brian Wilson Show” (OH). Benjamin Powell and Alex Tabarrok discussed immigration on “Lou Dobbs Tonight” (CNN). Gabriel

ALEXANDER TABARROK Roth discussed road pricing on Canadian RESEARCH fellow, the independent institute and U.S. radio. Print: Alvaro Vargas Llosa was quoted Independent Institute Research Fellow Alexan- by Vertigo (Mexico), Investor’s Business der Tabarrok on CNN. Daily, Bloomberg News, Liberation Llosa wrote about ethanol, China, dictators, (France), and Veja (Brazil). Jornal do terrorism, etc. Senior Fellow Charles Peña Brasil interviewed Ivan Eland on 9/11. wrote on nuclear proliferation for the Wayne The Observer (UK) quoted Charles Peña Independent, and on the CIA’s 9/11 report on General Petraeus. Benjamin Powell for the Arizona Daily Star, Buffalo News, was quoted in Sydsvenskan (Sweden) on and Bulletin (OR). Research Fellow Gabriel international remittances, and cited in Roth evaluated traffic congestion in the Colorado Biz on immigration. Gabriel Atlanta Journal-Constitution and Detroit Roth was quoted on auto use limits News. Research Analyst Anthony Gregory in Diario Reforma (Mexico) and on wrote on war, statism, and “The Simpsons” infrastructure in EXAME (Brazil). Randal for LewRockwell.com. Research Fellow R. Rucker and E. C. Pasour, Jr. were cited Benjamin Powell wrote on immigration in on “pork” in Seattle’s Post-Intelligencer the Financial Times. and on ethanol in the Shawnee News- Books: Anarchy and the Law was Star. quoted Street reviewed in SciTech Book News and Smart contributor Peter Samuel on road Reference & Research Book News. congestion. The Economist quoted Alex Depression, War, and Cold War was Tabarrok on usury. • The INDEPENDENT 5

Independent Policy Forum: Troop Withdrawal: Looking Beyond Iraq (continued from page 1) Such is the case with the U.S. in Iraq, ac- rector, Center on Peace and Liberty) addressed cording to Hadar. Had U.S. military command- criticisms leveled at U.S. troop withdrawal from ers acted differently in Iraq, the campaign still Iraq. Withdrawal, he argued, could help prevent would have suffered from a faulty “script”— a full-blown civil war by pressuring the Iraqi that is, a set of dubious assumptions that have government to pursue political decentraliza- long guided U.S. policy in the Middle East. tion, either by partitioning the country or by Those assumptions—which support the notion creating a loose confederation of Shi’ite, Sunni, that the U.S. should be the region’s predomi- and Kurdish states. nant security guarantor and peace broker—are strategically outdated, economically fallacious and morally questionable, according to Hadar. The U.S. foreign-policy establishment ac- cepts those assumptions and hopes the U.S. will resume the leadership role it played in the Middle East in the 1990s, but that course would be a mistake, according to Hadar. Instead, he proposed that the U.S. help create a consor- tium of great powers—including the European Union, Russia, and perhaps eventually China JAMES DUGGAN and India—to deal with global threats such as Ivan Eland address the Independent Policy Forum. terrorism, rogue states, and weapons of mass destruction. History can teach us much about how—and Next, David R. Henderson (Naval Post- how not—to partition a country, Eland then graduate School) examined the leading eco- explained. For example, the Indo-Pakistani nomic rationale for U.S. intervention in the partition of 1947 shows that security should Middle East: “oil security.” be provided to migrating populations; whereas “The idea that a government needs to use the partition of Ireland in 1921 shows that leav- military force to maintain access to oil is ing a large minority in one region can prolong false,” said Henderson, who drew on his recent civil strife. policy report, Do We Need to Go to War for “The lesson for Iraq is, you can’t leave a Oil? Because oil is sold in a world market, an big block of one group on the other side of the oil-exporting government cannot effectively line,” Eland said. “Small group pockets are target an enemy country by ending its exports okay, but we must gerrymander the borders to that country. to make the new statelets as homogeneous as “Moreover, by restricting supply, this gov- possible, leaving no big concentration of one ernment will forgo oil revenues and hurt itself,” group on either side.” he said. “No government restriction of supply in Eland also stressed the need for each group any other country can cause people in another to help draw defensible borders and to be given country to line up for gasoline. Only price con- its own oil-producing land. trols in the home country can do that.” A transcript of this event is available at www. Finally, Ivan Eland (Senior Fellow and Di- independent.org/store/events.•

The Independent Review: Tocqueville (continued from page 3) ers or jacks-of-all-tradesmen who would avoid of Democracy in America are so ambiguous not only large industry, but also higher educa- that readers can see what they want to see tion, professional specialization, scientific and and thus misinterpret Tocqueville in ideologi- scholarly research, and large-scale organiza- cally congenial ways, argues Daniel Choi in tions in general; they would also stay relatively “Unprophetic Tocqueville: How Democracy equal in wealth and income. in America got the Modern World Completely Long ago, history proved Tocqueville gross- Wrong.” ly mistaken, yet he is hailed almost universally Choi writes: “Had these various commen- as the supreme oracle of the modern age. tators pursued clarity rather than ideological Why have scholars across the ideological vindication, the anti-Marxists among them spectrum gotten Tocqueville wrong? Simple. might have seen that Tocqueville’s vision of the Like the inkblots of a Rorshach test, parts (continued on page 8) 6 The INDEPENDENT

Independent Policy Report Diplomacy with Syria fter years of threatening and isolating “Ending Syria’s political and economic iso- ASyria, President Bush this year expressed lation could create conditions for the resump- interested in diplomatically engaging President tion of negotiations between Israel and Syria, Bashar al-Assad. In his new Independent Pol- as well as between Israelis and Palestinians, that icy Report A Diplomatic Road to Damascus, could eventually lead to peace and security for Independent Institute Research Fellow Leon T. Israel,” Hadar writes. Hadar lauds this overdue policy reversal. Open dialogue would also encourage Syr- Greater U.S. engagement with Syria, accord- ian officials to continue cooperating with U.S. ing to Hadar, could advance important strategic agencies in pursuing al-Qaeda, according to Hadar. It will also strengthen reformist forces within the country, which will foster better integration into the global economy. Additional benefits could include a more positive future for Iraq, long-term prospects for a viable state in neighboring Lebanon, and progress toward peace between Israel and Palestine, Hadar notes. Finally, focusing on the common interests between the United States and Syria will shift the regional balance of power away Leon T. Hadar from Iran. interests of both governments, such as thwart- “What has been surprising,” Hadar contin- ing Sunni radicalism. The Syrian government ues, “is the failure of Washington to compre- brutally fought a Sunni fundamentalist revolt hend that reality, instead taking steps that made from 1976 to 1982, but the threat to Ba’athist it more likely that Syria would work with Iran rule could return if Assad’s regime, under eco- to secure its interests in the region while at the nomic duress from U.S. sanctions, move closer same time helping to strengthen the Syrian to Shiite Iran and thereby radicalize Syria’s Islamist opposition forces that want to oust the Sunni majority. A U.S.-Syria rapprochement Ba’athists from power.” could even help foster stability elsewhere in This Policy Report can be downloaded at www. the strife-worn Middle East. independent.org/publication/policy_reports/.• Garvey Essay Fellowship Winners he Independent Institute is pleased to an- • Second Prize ($5,000): Jason Sorens, Assis- Tnounce the winners of the 2007 Olive W. tant Professor of Political Science, University Garvey Fellowship Contest. at Buffalo, SUNY Applicants were asked to submit an essay • Third Prize ($1,500): Art Carden, Assistant on the topic: Is foreign aid the solution to Professor of Economics, Rhodes College global poverty? Student Division Faculty Division • First Prize ($2,500): John Parker, University • First Prize ($10,000): Peter Leeson, BB&T of Alabama Professor for the Study of Capitalism, George • Second Prize ($1,500): James Estes, Pitts- Mason University burgh Theological Seminary (continued on next page)

From left to right: Garvey Fellows Peter T. Leeson, Jason Sorens, John Parker, and James Estes. The INDEPENDENT 7

New Book: Making Poor Nations Rich (continued from page 1)

America and Europe, they present compelling evidence that the protection of private-property Praise for rights and the widening of economic freedom Making Poor Nations Rich help make entrepreneurship more productive “I wish politicians would pay careful and thus contribute to greater prosperity. attention to the arguments expounded by this Making Poor Nations Rich begins by ex- remarkable book.” plaining how entrepreneurs create economic —Ernesto Zedillo, former President of growth and why some institutional environ- Mexico; Director, Yale Center for the ments encourage entrepreneurship better than Study of Globalization others. Mancur Olson and Randal G. Hol- combe explain why vigorous entrepreneurship “Making Poor Nations Rich gives readers is essential, not natural resources or access to a deeper understanding of the true forces of economic growth.” current technology. William Bamoul explains —Arnold C. Harberger, Distinguished that special favors to entrepreneurs are often Professor of Economics, UCLA anti-competitive and counterproductive, and Robert Lawson surveys the empirical literature Ireland’s large cuts in taxes and government on development, entrepreneurship, private- spending fostered increases of foreign direct in- property rights, and economic freedom. vestment and entrepreneurship, which led to its The book then looks at barriers to entre- economic revival, and Frederic Sautet exam- preneurship that hamper economic growth. ines similar developments in New Zealand. The George Ayittey argues that foreign aid has book closes with Scott Beaulier’s eye-opening often undermined local entrepreneurship in Af- look at Botswana, which has transformed itself rica. Alvaro Vargas Llosa explains why many from one of the world’s poorest nations into an Latin American reforms in the 1980s and 90s upper-middle-income nation. were inadequate. Peter Boettke, Christopher “The overall message of this book is simple, Coyne, and Peter Leeson explain why entre- yet is vitally important for the millions who preneurship in Romania is weak despite several reside in underdeveloped regions of the world,” attempts at reform. And Dan Johanson shows writes Benjamin Powell in the introduction. why Sweden’s regulatory-welfare state is also “Economic freedom and private property unkind to entrepreneurs. rights are essential for promoting the produc- Lastly, the book examines countries that tive entrepreneurship that leads to economic have grown their economies by strengthening growth. In countries where this institutional private-property rights and granting more eco- environment is lacking, sustained economic nomic freedom. James Dorn describes China’s development remains elusive. When countries reforms (and areas for improvement), as do make pro-market reforms that enhance their Parth Shah and Renuka Sane in their chap- institutional environment, growth improves— ter on India. Benjamin Powell looks at how sometimes dramatically.”•

Garvey Fellowship Winners (continued from page 6) • Third Prize ($1,000): Juan Ramón Rallo, Competition has rewarded college students Universidad de Valencia for essays on selected topics on economic In addition to the cash prizes, winners and personal freedom. The contest has since from both divisions will receive assistance in been broadened to include untenured college getting their articles published and a two-year teachers, as well as undergraduate and gradu- subscription (eight issues) to the Independent ate students. Institute’s quarterly journal, The Independent To read the complete text of the winning essays, Review: A Journal of Political Economy. see www.independent.org/students/garvey/ Since 1972, the Olive W. Garvey Fellowship winners2006-2007.asp.• New Publications & Events: To Order Anytime: www.independent.org 1-800-927-8733 8 The INDEPENDENT

Lower Your Taxes at Year-end! s long as we have to live with it, we might you—higher than you might otherwise have Aas well take advantage of the tax code, and felt able to do. charitable deductions remain one of the best So now’s a good time to take a look at your ways to reduce your tax bill. portfolio and see if it’s time to clear out some Bearing this in mind, it’s important to note appreciated stocks, and help the cause of lib- that this year marks the close of the new tax law erty at the same time. Please check with your that allows taxpayers who are 70½ or older to tax advisor to determine if any of the ideas move up to $100,000 a year from their IRAs above are the right strategy for you, and please directly into a charity, tax-free. This break was keep the Institute in mind! made available only for distributions in 2006 If you should give to the Institute at the end and 2007 made directly to qualified charities of this year, we want your giving to be fully like the Independent Institute, so this is your satisfying to you—satisfying in what you give, last year to take advantage of the tax-free how you give, and where it goes. And on this break! Other ways to reduce your tax bill last point, you can rest easy: for the fourth year include gifts of cash (check or credit card), or in a row, the Independent Institute has received if you’re holding appreciated stock and would the highest, four-star rating from Charity like to make a gift to the Independent Institute, Navigator, the preeminent public charity rating you could make a tax-wise gift and transfer service. The Independent Institute efficiently the stock directly to the and effectively deploys your investment in us to Independent Institute. You produce award-winning, innovative solutions won’t owe any tax on the to the most pressing problems of the day, on appreciation of the stock, the forefront of the battle of ideas! and we can sell the stock, For further details, contact JuliAnna Jelinek. charity tax-free, for a net gift to Development Director, at 510-632-1366 x153, navigator us—and tax-deduction for [email protected] •

The Independent Review: Tocqueville (continued from page 5) future is classless only because the early-19th- generate modern economic classes; the com- century democratic economy, which he mistook munitarians among them would have seen that as eternal, was too simple and unproductive to Tocqueville cared so much about townships not because they fostered civic participation per se, but simply because they were effective in teaching the generic art of collaboration; and, finally, the conservative commentators PAID among them might have seen that the ‘petti- US POSTAGE PERMIT #2443 PERMIT COLUMBUS, OH

NON-PROFIT ORG NON-PROFIT ness’ Tocqueville ascribed to democracy was an artifact of early-19th-century economic assumptions as well.” See www.independent.org/publications/tir/ article.asp?issueID=51&articleID=655.• Subscribe Free! The Lighthouse Stay abreast of the latest social and economic issues in the weekly email newsletter of the Independent Institute. • Insightful analysis and commentary • New publications • Upcoming events • Current media programs • Special announcements Subscribe today by visiting www.independent.org 100 Swan Way 100 Swan California 94621-1428 Oakland, REQUESTED CHANGE SERVICE