Chaff About Wheat; W. Rickenbacker

114 THE FREEMAN February eral tail feathers wherever we can. It does not mean that we should desert the polling place. I merely suggest that we should not place ultimate reliance upon the ballot box or a written document for the perfect solution. We come nearer Chaff About Wheat WILLIAM F. RICKENBACKER WHEAT, of all things, has been making the headlines in recent .. weeks as if it were married to a Greek shipping lord. There has been the announcement of general crop failures in the Communist world, an enormous sale by Amer ican exporters, accusations of "windfall" profits by those ex porters, guarantees of higher than-market prices for wheat and even for the shipowners who trans port it to the Soviet Paradise, the decision of the longshoremen's union to abandon its long-estab lished policy of refusing to work @National Review, Inc. 1972. Reprinted by permission from the November 24, 1972 issue of National Review, of which Mr.

Rickenbacker is a contributing editor. He also is editor of the Rickenbacker Report, an invest ment advisory service, and publisher of the Financial Book Digest. to perfection if we concentrate on self-improvement and self-enlight enment, so that each of us brings his own candlepower into conjunc tion with others. Who knows the Remnant might become a horde. ~ vessels under Soviet flag - and so on and so forth. Wheat, quite clearly, is a "problem." N ow the interesting thing is that there is no reason why wheat intrinsically should be a problem, as, for example, carbon monoxide is a problem. Men of average abil ity can cooperate with the Lord's creation in such a way as to pro duce wheat in abundance; mechan isms can match up supply and de mand as they do for hundreds, nay thousands, of other commodities; transportation can be arranged at less than the presidential level for wheat as it is routinely for, say, cornflakes or narcotics. What's so special, and what's so especially problematical, about wheat?

I submit that the. special char1973 CHAFF ABOUT WHEAT 115 acteristic is governmental inter vention. Across the sea, in the Soviet Paradise, where the farm ers in czarist days never failed to export their agricultural produc tion' to Europe and Asia, the intrusion of a crazy .political ide ology has converted abundance into penury, an agricultural ex porter into an importer. On this side of the water, the intrusion of an equally crazy political ideology has distorted just about every as pect of wheat economics. You can't plant wheat without a license. Trafficking in licenses is a crime. General tax revenues are used to prop up the domestic price of wheat, raising the cost of living. If a wheat exporter sells wheat at less than the domestic price, the Department of Agriculture will make up the difference. So, general tax revenues are used to depress the world price. Exporters can gamble on varying differentials in the daily quotes, and apply for subsidies calling for larger pay ments than needed to offset their actual losses. In the recent sale of wheat to the Soviet Paradise, this system alone cost the taxpayers $120 million. Some "sale"! The artificially swollen price for do mestic wheat encourages perennial overproduction and embarrassing "surpluses" that, in merely eco nomic terms, are as surely a sign of coercive distortion as the "shortages" created by Soviet ide ology in the historic breadbasket of Europe.

As for transportation, the two meddling governments, Washing ton and Moscow, have agreed to pay more than the market rate for shipping. General tax revenues will be used to line the pockets of the shipowners. By political agree ment, one-third of the wheat transported from the U.S. to the USSR must go in American bot toms, one-third in Soviet bottoms and one-third in "other" vessels. No matter what price the "other" vessels charge, the Soviets will pay 10 per cent more to the American shipowners. Presumably this will help American ships to stay in business despite the ruinous re sults of governmental interven tionism and subsidies in the ship ping industry - another, but sick eningly similar, story. All of this finagling, boondoggling, price setting and reciprocal pocket-lin ing would be strictly illegal if done by private citizens. It seems clear that the effect of governmental meddling in wheat has been to unbalance the supply demand function in the U.S. and the USSR, to raise prices in both places, to create "problems" where none had existed before (trans portation of Ukrainian wheat to Europe was no "problem" when it was handled, year after year, by 116 THE FREEMAN February freely functioning agents), and to misallocate scarce resources such as human labor, farm machinery, real estate, storage bins, fertilizer and on and on. It is, in fact, im possible to show that the wheat maneuvers of Washington and Moscow have done any economic good at all; and it is easy to show that the overall net result has been entirely negative, raISIng everyone's cost of food and creat ing hostility where once there had been only cooperation.

Here, as always when the gov ernment intervenes in a market, the "problem" does not reside in some inanimate obj ect named "wheat" or ','natural gas," but in false ideologies. More .precisely, the problem does not lie in false ideologies but in a political system that permits some people to im pose their false ideologies on oth ers. I would gladly let the Depart ment of Agriculture go on forever with its delusions and magicalop erations. But why· must it have the power to force all of us to pay for its mistakes? Wonder what would happen if the Department of Agriculture had to offer its "services" in a free market? ~ Inventions vs. Interventions THE INTRODUCTION of great inventions appears to be one of the most distinguished of human actions, and the ancients so con sidered it, for they assigned divine honors to the authors-of inIDEAS ON ventions, but only heroic honors to those who displayed civil merit $ such as the founders of cities· and empires, legislators, the delivLIBERTY erers of their country from lasting misfortunes, the quellers of tyrants, and the like. And if anyone rightly compares them he will find the judgment of antiquity to be correct; for the benefits derived from inventions may extend to mankind in general, but civil benefits to particular lands alone; the latter, moreover, last but for a time, the former forever. Civil reformati<>-n seldom is carried on without violence and confusion, while inventions are a blessing and a benefit without injuring or afflicting any.

SIR FRANCIS BACON EDMUND BURKE is generally re garded as one of the founders of modern conservative thought. As a defender of tradition, private property, slow social change, and "muddling through," he was an opponent of aprioristic thinking, rationalistic blueprints for social reconstruction, and "metaphysical arithmeticians." He is therefore not heralded as a master of the subtle skills of economic reason ing. Nevertheless, Burke's teach ings on the relationship between policies of monetary debasement and social change indicate that he was far more alert to the dangers of monetary inflation than are recent defenders of Federal defi cits and a system of price-wage controls. When N a,Uon's Business Dr. North, economist of the Pacific Coast Coin Exchange, also lectures at seminars of The Foundation for Economic Education. EdmundBurke on Inflation and Despotism GARY NORTH can survey 450 leading business executives concerning their opin ions on price and wage controls, and find that over 70 per cent of them favor the controls, with 47 per cent of them favoring an in definite extension of such controls, it is not difficult to conclude that Edmund Burke had a more sophis ticated sense of economics than our modern professionals. 1 In 1790, Burke distinguished himself by writing what was to become the classic statement of conservative social theory, Reflec tions on the Revolution in France.