Ideas On Liberty October 1999 Vol. 49, No. 10 , 8 The "Berry Bikes": A Lesson in Private Property by DanielL. Alban and E. Frank Stephenson 10 The Encryption Scramble by Claude V. Z. Morgan 14 Bought and Sold: Drug Warriors and the Media by Paul Armentano 19 Wilhelm Ropke: A Centenary Appreciation by Richard M Ebeling 27 My Barbers by Joseph S. Fulda 31 Money and Gold in the 1920s and 1930s: An Austrian View by Joseph T. Salerno 43 Market Money and Free Banking by Bettina Bien· Greaves 4 THOUGHTS on FREEDOM-Who's "Locked In" to What? by Donald J. Boudreaux , 17 IDEAS and CONSEQUENCES-Where Are the Omelets? by Lawrence W. Reed 25 POTOMAC PRINCIPLES-Health Care: Over the Canadian Cliff? by Doug Bandow 29 PERIPATETICS-The Love of Economics by Sheldon Richman , 41 ECONOMIC NOTIONS-Comparative Advantage by Dwight R. Lee 51 ECONOMICS on TRIAL-Chicago Gun Show by Mark Skousen 63 THE PURSUIT of HAPPINESS-Conflicting Visions by Walter E. Williams 2 Perspective-Ever Striving by Sheldon Richman 6 Legalized Theft Is Good for the Poor? It Just Ain't So! by Thomas J. DiLorenzo 50 Capital Letters 53 Book Reviews The Great Philanthropists and the Problem of "Donor Intent" by Martin Morse Wooster, reviewed by George C. Leef; The Crisis of Global Capitalism by George Soros, reviewed by Brink Lindsey; Nixon's Economy: Booms, Busts, Dollars, and Votes by Allen 1. Matusow, reviewed by David L. Littmann; To Serve and Protect: Privatization and Community in Criminal Justice by Bruce Benson, reviewed by Morgan O. Reynolds; Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed by James C. Scott, reviewed by Aaron Steelman; Silencing Science by Steven Milloy and Michael Gough, reviewed by Kenneth Silber; Staring into Chaos: Explorations in the Decline ofWestern Civilization by B. G. Brander, reviewed by Gleaves Whitney. THE F'EEMANIdeas On Liberty Ever Striving Published by The Foundation for Economic Education It is not "mere theory" to say that entrepre­ Irvington-on-Hudson, NY 10533 neurs, lured by the prospect of pure profit, Phone (914) 591-7230 FAX (914) 591-8910 constantly strive to make our lives better. It E-mail: [email protected] FEE Home Page: http://www.fee.org happens somewhere every moment ofthe day, usually out ofsight. It is so ubiquitous we take President: Donald 1. Boudreaux it for granted. Editor: Sheldon Richman One of the most fascinating lectures I ever Managing Editor: Beth A. Hoffman heard was about how the Coca-Cola Company Editor Emeritus Paul L. Poirot works assiduously to make cans and bottles Book Review Editor with fewer materials and less energy. A few George C. Leef decades ago, only an arrogant he-man could Editorial Assistant crush a can against his head. Today, a 90­ Mary Ann Murphy pound weakling can do it. As a result ofCoca­ Columnists Charles W. Baird Cola's efforts, we have lighter containers and Doug Bandow more resources for other things that enhance Dwight R. Lee our lives. (Why environmentalists think busi­ Lawrence W. Reed ness has an interest in using more resources Russell Roberts than necessary continues to mystify me. Are Mark Skousen businessmen "greedy" or not?) Thomas Szasz Walter Williams Now comes news that Hewlett-Packard is Contributing Editors developing computer parts the size of-hold Peter J. Boettke on-molecules. According to researchers, Clarence B. Carson we could someday have computers 100 bil­ Thomas J. DiLorenzo lion (that's not a typo) times faster than the Burton W. Folsom, Jf. Joseph S. Fulda best personal computers available today. (Pre­ Bettina Bien Greaves diction: We'll still be impatient.) Not only Robert Higgs that, these computers will be cheap. John John Hospers Markoff ofthe New York Times writes that the Raymond J. Keating researchers "envision a world in which super­ Daniel B. Klein computing power is so pervasive and inexpen­ Wendy McElroy Tibor R. Machan sive that it literally becomes an integral part of Ronald Nash every man-made object." Edmund A. Opitz Markoff explains that today's computer James L. Payne technology is limited by the wavelength of William H. Peterson light, which is used to create integrated cir­ Jane S. Shaw cuits on silicon chips. But the research team Richard H. Timberlake Lawrence H. White "has found a way to build circuits using chem­ ical processes rather than light, making the The Freeman is the monthly publication of The Foundation for Eco­ nomic Education, Inc., Irvington-on-Hudson, NY 10533. FEE, switches as small as a molecule," Markoff established in 1946 by Leonard E. Read, is a non-political, educational champion of private property, the free market, and limited government. writes. "As a result, the researchers believe FEE is classified as a 26 USC 501(c)(3) tax-exempt organization. that they can make components for future Copyright © 1999 by The Foundation for Economic Education. Per­ mission is granted to reprint any article in this issue, provided credit is computers several orders of magnitude tinier given and two copies of the reprinted material are sent to FEE. The costs of Foundation projects and services are met through dona­ than today's smallest transistors." tions, which are invited in any amount. Donors of $30.00 or more receive a subscription to The Freeman. For delivery outside the United The smaller integrated circuits will work States: $45.00 to Canada; $55.00 to all other countries. Student sub­ much faster and use less electricity. The mar­ scriptions are $10.00 for the nine-month academic year; $5.00 per semester. Additional copies ofthis issue of The Freeman are $3.00 each. ginal cost of production will approach zero. Bound volumes of The Freeman are available from The Foundation for calendar years 1972 to date. The Freeman is available in microform Researchers say such tiny computers will per- from University Microfilms, 300 N. Zeeb Rd., Ann Arbor, MI 48106. 2 mit vast increases in the storage ofdata. But it attention one of the intellectual heroes of our gets more exciting than that. Markoff reports time. that they "could create a new class of 'Fantas­ At the center of capitalism is the entrepre­ tic Voyage'-style machines, like sensors trav­ neur. While big entrepreneurs like Microsoft's eling within a person's bloodstream, issuing Bill Gates and Wendy's Dave Thomas get lots alerts if health problems are encountered." of attention, little ones, like the barber on the Who can predict what other valuable services comer, are usually taken for granted. Joseph they will render? Fulda pays proper tribute. Scientific problems remain to be solved, Did the Federal Reserve expand or restrain and it will be several years before the tiny the supply of money in the fateful 1920s computers become consumer products, but before the stock market crash and Great we'll be hearing more about this. Watch for the Depression? In recent months, Richard Tim­ term "moletronics" (molecular electronics). berlake argued in these pages that the Fed Isn't capitalism wonderful? practiced restraint to a fault. In a rebuttal this month, Joseph Salerno argues that the Fed *** was the engine of inflation that wrecked the American economy and paved the way for the It seemed liked a good idea. At a small, iso­ New Deal. lated private college, students were invited to Understanding the Fed and the depression use any of 20 collectively owned bicycles to requires an understanding of the nature of get around campus. What could go wrong? money. Bettina Bien Greaves offers a primer Plenty, write Daniel Alban and E. Frank in the tradition ofLudwig von Mises. Stephenson in their story of the relationship In our columns this month Donald between private property and responsibility. Boudreaux discusses government, markets, The Clinton administration wants to make and the real source of "inefficient lock-in"; sure it can unscramble your encrypted e-mail Lawrence Reed asks where the omelets are; and computer files. That requires controls on Doug Bandow documents the Medicare security programs that the government can't nightmare; Dwight Lee takes up the law of crack. Claude Morgan has a status report on comparative advantage; Mark Skousen aims this latest power grab. at gun control; and Walter Williams identi­ The "war on drugs" has eroded property fies a conflict of visions. Thomas DiLorenzo, rights and a host ofwhat are called civilliber­ contemplating the alleged need for the gov­ ties. Now it even jeopardizes freedom of the ernment to give away other people's money, press. Paul Armentano demonstrates that in declares: "It Just Ain't So!" the name ofkeeping young people from using In the book section, reviewers evaluate drugs, the federal government is undermining works on philanthropic foundations gone the integrity ofthe news media. astray, George Soros's lament about global Wilhelm Ropke, an important German capitalism, Nixon's economic record, crimi­ classical liberal during the darkest days ofthe nal justice, the conduct of states, attempts to twentieth century, would have been 100 years impede scientific progress, and the literature of old this month. Richard Ebeling's apprecia­ the decline ofWestern civilization. tion of Ropke's life and work brings to our -SHELDON RICHMAN 3 by Donald J. Boudreaux Who's "Locked In" to What? oliticians and bureaucrats are prone to New Justification for Poveremphasize problems with the world Government Activism and to propose command-and-control "solu­ tions." Economists, sad to say, have aided and But government's thirst for power is abetted that mindset with a series of suspect unquenchable, .as is the willingness of some theories of how markets are doomed to per­ economists to provide intellectual cover for form inadequately.