MAY 1998 Volume 27, Number 5 IMPRIMISBecause Ideas Have Consequences 26th Politics, Economics, year and Education in the 21st Century John Fund 780,000 subscribers Editorial Board, Wall Street Journal Journalist John Fund makes some fascinat- ohn Fund began his journalism ing predictions about life in the 21st century, Jcareer in 1982 as chief inves- from how “cybercash” will lead to a global tax tigative reporter for syndicated columnists Rowland Evans and revolt to how privatization will challenge Social Robert Novak. Today, he is a Security and the public school system. His member of the editorial board of remarks were delivered at the Shavano Institute the Wall Street Journal, where for National Leadership’s 15th anniversary pro- he previously served as deputy gram, “Heroes for a New Generation and a New editorial features editor and Century,” in Colorado Springs last October. where he has worked since 1988. His insightful arti- ince its founding in 1887, the Wall Street cles have made him Journal has refused to endorse political a familiar name to candidates. The lone exception occurred in America’s top busi- 1928, when the paper championed Herbert ness executives and SHoover. “Never again!” the editors vowed, for they political leaders. had rediscovered the wisdom of our founder, He is also an on-air Charles Dow, who once said, “Politicians, properly analyst for the new observed, will often disappoint. Ideas, properly 24-hour Fox News understood, seldom will.” Channel and an Internet columnist Hillsdale College–with its emphasis on ideas, not for MSNBC. personalities, and on the permanent things, not the His articles have shifting sands of politics–follows in that great tradi- appeared in a wide tion. And, in keeping with the theme of “permanent range of publica- things,” I want to take this opportunity to remind tions, from Esquire and the New those individuals who have been deeply disappointed Republic to Reader’s Digest and by recent political events that the long-term outlook National Review. He is the is much brighter than they may realize. co-author with James Coyne of Cleaning House: America’s Campaign for Term Limits and The Cyberspace collaborated with Rush Limbaugh on his best-selling book, The Way Economy Things Ought to Be. Roll Call magazine has dubbed him the ook, for example, at the economy. Despite “Tom Paine of the modern con- the predictions of many economists, the gressional reform movement.” largest and fastest growing market in the world in the next twenty years is not going Lto be in China. It is going to be in cyberspace. We Hillsdale College, Hillsdale, Michigan 49242 IMPRIMIS Because Ideas Have Consequences are about to witness incredible technological New Attitudes developments that will make it very difficult for traditional nation-states to “capture” income, to here are three new public attitudes tax heavily, and to enforce burdensome regula- emerging that constitute another long- tions. Just as communism in the East failed to sur- term trend. First, the next generation will vive the technological revolution of the last half of not regard government as a “good buy.” the 20th century, big bureaucratic governments in TEven today, if government were a consumer prod- the West will fail to survive the advances of the first uct on the store shelf, it would probably be recalled half of the 21st century. as defective and its manufacturer sued for false “Cybercash” and encryption will protect and advertising. People will look to private instead of conceal assets, and nation-states will find it increas- public alternatives to fulfill their ingly difficult to tax at punitive rates. Welfare states needs. Does this sound improba- will lose their most talented citizens through mass ble? Consider this: Ten years ago, desertion if they don’t adopt common sense eco- it was the kiss of death for a politician to nomic policies. Jim Davidson, chairman of express even mild concern about Social the National Taxpayers Union, recalls that Security funding. Now, members on both sides of in the Middle Ages there were “march the aisle in Congress are talking openly about the regions”–areas bordering two or more “inevitability” of privatizing the entire pension kingdoms–that won favorable tax rates system. Moreover, a from governments, just as the Cayman decade ago, educa- Islands, Bermuda, and the Bahamas tional choice was a are doing today. “wacky” idea pro- In the next century, more and more posed by the “right- technologically savvy individuals will also wing fringe.” Now, it choose to set up shop where their capital has gained so much is best treated. It will thus be credibility among lib- impossible for tax collectors erals as well as con- to penalize successful servatives that it can entrepreneurs because be called “main- goods will be made in one stream” and it has country, sold in a second, financed captured the partial support of Democratic senators in a third, by investors living in a fourth, whose Daniel Patrick Moynihan and Joseph Lieberman. profits are sent to a fifth, which is a tax haven. The second attitude is that politicians should be held accountable. Voters are tired of candidates The Global Tax who make promises on the campaign trail only to break them once they are elected to office. For the Revolt same reason, proposals to institute “direct democ- racy” through such legislation as term limits and n the 21st century, governments will surrender initiative, referendum, and recall will gather power to citizens, not because they want to, momentum in the next century. but because they must. This long-term trend The third attitude concerns values. People are is inspired by what I call Fund’s Law: telling pollsters that the single greatest threat to “GovernmentsI will always do the right thing–after future generations is the decline of morals and they have exhausted all other possibilities.” ethical standards. Fortunately, these individuals America will institute a flat tax, a national aren’t content merely to voice their fears; they are sales tax, or some other version of radical tax doing something about them. In other words, they reform, not because Washington, D.C., wants it, are leading a moral counterrevolution. They are but because the tax system is on the verge of col- buying millions of copies of values-oriented texts lapse. I have examined the private studies of the like William Bennett’s Book of Virtues. They are size of the “underground economy.” Believe it or founding thousands of home school cooperatives not, they frighten even me, and I am an ardent and hundreds of new private schools. They are advocate of laissez-faire! joining dozens of traditionalist groups like In every nation, people have had enough of Promise Keepers, Focus on the Family, and the Robin Hood-style income redistribution and of Christian Coalition. And in towns and cities across confiscatory taxes on wages, savings, investment, the land, they are rebuilding the “little platoons” and entrepreneurship. A global tax revolt is brew- of family, church, and community that are the ing. To prevent it from boiling over, governments basis of the free society. will, as a last resort, finally turn to the free market. Does this mean that Americans are becoming 2 more intolerant? Certainly not. We have always schools are allowing students to graduate from enjoyed a reputation for being a tolerant sort. For high school and college without mastering basic more than 200 years, we have prospered with a skills or meeting academic requirements that were “live and let live” philosophy. Our famous “melt- once the minimum standard for junior high stu- ing pot” society allows for all kinds of differences dents. Is this an accident? Of course not. It is the in lifestyle and opinion and even a good deal of intention of big government to eliminate educa- outright eccentricity. tional standards and to discourage citizens from But what is changing, and changing dramati- thinking for themselves. cally, is Americans’ consensus on personal respon- sibility. From time to time, the Times Mirror Corporation conducts a national poll asking, in Statism and effect, “Do you believe success in life is largely Paternalism determined by forces outside of a person’s control?” Twenty years ago, 50 percent of the respondents said f such an intention doesn’t sound like a serious “yes.” Today, only 33 percent answer affirmatively. threat, please recall the example of commu- There is a growing consensus that personal nism, which springs from the same deadly responsibility is important. Indeed, most combination of statism and paternalism. It Americans believe that if it were assumed a little Iwas one of the most meaningful experiences of my more often it might even result in a lot less sin. entire life when, in 1984 (the year British novelist Think about how this will play out in terms of pol- George Orwell made infamous), I visited East itics, economics, and the culture at large. Political Germany. You remember East Germany–the Berlin candidates who encourage people to think of Wall, the border guards, the secret police, the bread themselves as victims will lose votes. Economic lines, the burnt out and crumbling buildings? programs like welfare, that promote dependence, That was the Germany I went to visit. I was will be cut or even scrapped. accompanied by a friend from the American Embassy. On our tour, we stopped by the Museum of History in East Berlin. It was an amazing place. The Reins of Power I learned things there I never thought I would do not mean to paint a rosy picture in which learn. For example, I learned that television was the 21st century fulfills every promise of invented by an East German in 1956.