THE LIBERTARIAN Christopher Weber and Bruce Bartlett on the Inflation Crisis REVIEW Ralph Raico on Leon Trotsky/David Brudnoy on Film March 1979 Sharon Presley on·'Abortion $1.25 _:I'BE _ LIBERTARIAN REVIEW: THE BREADTH AND DEPTH AND EXCITEMENT OF THE DYNAMIC LIBERTARIAN MOVEMENT IS YOURS FOR ONLY $1.00 A MONTH. 1620--------.Montgomery St I San Francisco UBERTARIAN California 94111 'REVIEW O~P~~een~rmys~~riptionfu~ Name~~~~~~~~~~~~~~ o 1year ($12) 02yea~~2~ Ad~~~~~~~~~~~~~~_ o 3 Years ($30) Charge card no. o Payment enclosed City~~~~~_State ~~ Zip_~~_ o Charge me Expiration date o VISA 0 Mastercharge Signature~~~~~~~~~~~_ -------------------------------------------------3001 THE LIBERTARIAN FEATURES REVIEW Why Gov~rnmentWill Never Stop Inflanon 29 March 1979 by BruceBartlett Volume 8, No.2 "Government now has a powerful vested interestin maintaining a highlevel of inflation. A return to price stability is not impossible, but will never occur unless Untangling certain fundamental changes are made." Japan and American Policy in the Web of the Far East 35 Inflation by Leonard P. Liggio U.S. interventionism has led to political instability, famine by Christopher Weber and mass murder throughout East Asia. But in one case it Inflation is driving prices up has led, almost by accident, to development of a faster than ever before in neo-capitalist culture to which militarism is anathema. American history. And President Carter's response has been an anti-inflation program which fleeces American wage earners DEPARTMENTS while evading the root causes of the problem. The Libertarian Editorials 4 Page ... 22 The Inflation Crisis; The Laetrile Issue; Coming Out of the Closet; Involuntary Servitude; Half past Carter Editor: Roy A. Childs, Jr. Opening Shots 10 Senior Editor: JeffRiggenbach by Bill Birmingham Associate Editors: Walter E. Grinder Leonard P. Liggio The Public Trough 12 Joan Kennedy Taylor Businessmen and "Uncle Sugar" Contributing Editors: by Bruce Bartlett Murray N. Rothbard Bruce Bartlett Bill Birmingham Liberty's Heritage 14 Milton Mueller Voltairine de Cleyre Marshall E. Schwartz by Sharon Presley David Brudnoy Editorial Assistant: 18 Victoria Varga The MoveDlent by Milton Mueller Administrative Assistant: Pat Pope Art Director: The Pluntb Line 20 Andy Saunders The Meaning ofSan Jose Assistant Art Director: by Murray N. Rothbard Melanie Price Books and the Arts 38 The Libertarian Review is pub­ Ralph Raico on Irving Howe's Leon Trotsky lished monthly by Libertarian Jack Shafer on Jim Hougan's Spooks Review, Inc. Editorial and business offices, 1620 Montgomery Street, Shaton Presley on James C. Mohr's Abortion in America San Francisco, CA 94111. © 1979 and Linda Bird Francke's The Ambivalence of Abortion by Libertarian Review Inc. All David Brudnoy on Michael Cimino's The Deer Hunter rights reserved. Opinions ex­ pressed in bylined articles do not necessarily reflect the views of the Subscriptions: Single copy, $1.25; 12 issues (one editors or publisher. The Liberta­ year), $15; two years, $25; three years, $35. rian Review welcomes queries Address Change: Write new address, city, state and from authors but does not encour­ zip code on sheet ofplain paper, attach mailing label age submission of "unsolicited from recent issue ofLR, and send to Circulation manuscripts and assumes no re­ Department, Libertarian Review, P.O. Box 28877, sponsibility for them unless they San Diego, CA 92128. Second class postage paid at are accompanied by SASE. San Francisco and additional offices. rises in prices. Thus, as prices begin to rise at ever­ greater rates, an inflatio­ nary psychology takes hold, THE and people, expecting prices to continue escalat­ ing, spend at greater and greater rates, pushing prices up still further. Thus, the fact that there is a lag bet­ LIBERTARIAN ween newly created money entering the economy and price rises and the fact that people's expectations of future price rises count for EDITORIALS something in the economy mean that price rises may at first be less than the rate of creation ofnew money, and declines in living standards; Halting the inflation in later stages of an infla­ The inflation others will face rising un­ crisis will take vision and tionary crisis may sky­ .. employment. Anger and courage, and is therefore rocket far beyond the ac­ cnSlS frustration will begin to beyond the reach of either tual rate of monetary infla­ build. Republicans or Democrats. tion. In reaction, government It certainly cannot be ex­ Therefore, any attempt policy has become com­ pected from the likes of to slow down the rate of AFTER NEARLY A pletely unstable, first inflat­ Jimmy Carter. Inflation is monetary expansion will decade of erratic ing to combat unemploy­ ultimately caused by one not produce a slowing policies, the infla­ ment, thenslamming on the thing alone: by increasing down ofprice rises until the monetary brakes, and foist­ the money supply, by print­ inflationary psychology is tion crisis has hit us ing upon the American ing money and cheapening broken. In a time of unsta­ again. Vanquished people a hazy, "voluntary" the value of the monetary ble government policy, and since 1974, double­ program of wage and price unit. Yet if that is so, how governmental "failures of "restraints" shrouded in are we to explain the cur­ nerve," this may take a long digit inflat,ion is veiled threats. Will we have rent surge in prices? After time. Thus, even through back, and shows no mandatory wage and price all, the Carter administra­ the rate of increase in the sign of abating. All controls? "Definitely not!" tion, we are told, has over­ most significant money opines one voice. "Perhaps seen a slowing of the rate of supply figure-"M2"-has signs point to an if ..." squeaks another. growth in the money supply slowed in the last thirteen inflationary reces­ Whom are we to believe, these last few months. Why weeks (as of this writing) to sion which policy­ and what can we do about then are prices still rising? a mere 1.3 percent annual it? In this administration, As Christopher Weber rate, the percent increase makers had once the answer has become no argues at greater length for the year-to-date is a told us could never one and nothing. If Carter's elsewhere in this issue (pp. much greater 7 percent. administration has done 22-28), the answer is a sim­ And figures over the longer happen. In Janu.ary, nothing else, ithas at least ple one: when new money run are much greater than consumer prIces given the lie to the mushy enters the economy, prices that. So the increase in rose at an 11.8 per­ rationalization for govern­ do not rise in a mechanical prices which has hit us is ment planning. That fashion. People do spend notmerely a response to the cent annual rate­ rationalization has always money as they receive it, relatively low rate of up from 4.8 percent held that government plan­ according to their own pre­ growth in the money supply in 1976, 6.8 percent ning makes for stability and ferences, and it works its over the past thirteen predictability. Yet in mod­ way through the economy, weeks, but to the much in 1977, and 9 per­ ern pressure-group democ­ gradually affecting various greater rate of money sup­ cent in 1978. All racy, nothing could be relative prices. But people ply growth over the past indications are that further from the truth. One do not simply increase their decade and more. Despite a group after another is first spending in proportion as slowing ofthe growth ofthe it will continue up­ flattered and then betrayed. they receive newly created money supply, therefore, ward, wiping out Promises and commitments money. At first, before prices will· continue up­ are made one moment, prices begin to rise very ward. both savings and abandoned the next. Far quickly, they spend at their And so the question: will standards of living. from achieving stability, normal rate. Then, seeing Carter cave in? Will he ac­ Those on fixed in­ government policies have prices rising at seemingly celerate the growth of the made private planning an accelerating rates, they money supply again, or comes such as pen­ impossibility, security a bit­ spend money faster and fas­ even resort· to· mandatory 4 sions will face real ter joke. ter, to beat expected future wage and price controls? THE LIBERTARIAN REVIEW Given Carter's spineless­ money supply-people will different economic theory. move beyond this doctrine. ness, no one can be sure. resist lowering their prices Since the Age of Keynes­ Far from leading to full Certainly his absurd prog­ (including wages) because or Inflation-began, one employment, inflation of ram of "voluntary" con­ they will quite realistically dominant theory has stood the money supply to stimu­ trols won't work, and it is fear that later mandatory in the way of political and late "aggregate demand" in pointless to ask that they be controls would lock them economic progress. That fact will only produce more "given a chance," as vari­ into those lowered wages dogma is symbolized by the unemployment in the long ous weeping pundit-clowns and prices. Faced with fal­ Phillips Curve and its doc­ run than that with which have begged. So, with that ling demand, people will trinaire rationalizations. we began. When unem­ safe assumption made, let's hold out, waiting for a re­ The Phillips Curve pretends ployment exists-whether look at what is likely to versal ofdemand which will to represent economic real­ of labor or anything else­ happen, and what ought to not take place-unless "re­ ity in terms of a simple it is because there is insuffi­ be done instead. flation" begins.