Through Others' Eyes; R. Clites

Roger M. Clites WE are often reminded by the news media of the value placed on politi cal freedom by those who challenge overwhelming odds to escape from iron curtain nations, be they in east ern Europe, Asia, the Caribbean, Central America or elsewhere. Oc casionally slight mention is also made of a desire for economic free dom. However, the emphasis nearly always is on escape from political repression. (In fact, our federal gov ernment policies concerning refu gees allow that status only on the basis of political repression, not on the basis of economic repression.) My purpose here is to recount the im portance of the relative economic freedom of the United States to two citizens who spent their early years in other economies. Roger Clites is Associate Professor of Business at Clarke College, Dubuque, Iowa. 56 Herman was a university student I had in several classes between 1956 and 1959. A few years earlier he had won a competition among 1300 stu dents about to graduate from the gymnasium level of German educa tion. The prize was a year of college study in the United States. Based on his observations of the relatively greater amount of economic freedom in the United States, Herman re solved to return to America and to become a citizen. At that time the quickest way for Herman to secure United States citizenship was to en list for a period of servitude in the U.S. military; so he joined the navy.

I first met Herman when he was working in a camera store and at tending my night class in "Princi ples of Economics." Early in that course he taught all of us something I've cherished ever since. I had been THROUGH OTHERS' EYES 57 listing and discussing with the class various reasons why the U.S. econ omy out-performed that of other na tions. We discussed such matters as abundant natural resources, geo graphic removal from the destruc tion of most major wars, settlement of the country by ambitious and able immigrants and other factors. Her man then pointed out that we were overlooking the most important of all considerations. He called that matter, "non-policies of govern ment." He went on to explain what he meant by giving several exam ples, both of government policies and of traditions and attitudes that com plemented those policies, which fos tered and perpetuated economic waste in his homeland.

The AcademicRoute Herman rapidly took advantage of the relative economic freedom he found in the United States. A year following our first meeting he was still working to support himself but was' now attending the university full-time so as to ready himself to enter a higher level of the work force as soon as possible. When Herman graduated the next year, he had been voted two honors. The faculty se lected him as the student who had contributed the most to the school of business during his student years. Remember, he did this while work ing his way through the university. Meanwhile, his fellow students selected him as "most likely to suc ceed." Herman was a talented per son, pursuing an "intellectual" path to economic improvement. The other person I have in mind was more a "common man," though uncommon in many ways. He called himself "Pete," since most people in this country could not or would not learn his real name. He migrated to the United States from Greece in 1957 at age 18 with no knowledge of English and little more than a dream.

Pete started working at the commo nest of common labor while learning the language. After a time he be came manager of a soft ice cream store. When Pete was 23 years old he decided he wanted to marry Anne, one of his customers, who was about to graduate froln college. Anne's fa ther might well have objected to the marriage on religious grounds. She was Southern Baptist and Pete was of nominal Orthodox persuasion. However, her father took an eco nomic approach. He pointed out to Pete that his thriving automobile dealership had made it possible for him to provide well materially for Anne and questioned whether she would long be happy with Pete's earnings. As usual, Pete saw this as one more temporary obstacle to be overcome. He consulted with some of his friends in the local Greek community who happened to be in the restaurant 58 THE FREEMAN January business. They told him they had learned that they could cut their costs of produce more than half by buying directly from nearby farmers. So, Pete decided that he could buy di rectly from the farmers, who were in the Carolina Piedmont region, and successfully compete with the large wholesalers who sold to stores and restaurants in the mountain area 100 to 150 miles to the northwest. He challenged Anne's father to help him finance a used pickup truck with the claim that within six months he could be earning more than the father earned from his auto dealership. The truck purchase was arranged.

EntrepreneurialAchievement Pete made good his prophecy. The large wholesalers had the expense of storage warehouses, salescommis sions, management salaries, truck drivers' wages and, most of all, spoilage costs of up to one-third of their produce. Pete, however, was management, salesman and truck dri ver combined. His glove compart ment was· his office. Every day he worked until the large "dog house" he had built to protect and contain goods on the rear of his truck was sold out, so he had virtually no loss due to spoilage. He charged at least 20 per cent lower prices than the big wholesalers, so he had no trouble selling his merchandise. I met Pete in 1965 when he was 25 years old. He and Anne lived in an apartment house I managed and Anne was in two of my classes studying toward her MA degree. Pete normally worked three days a week for about 14 to 16 hours, each. He would make $200 to $300 per day.

(Remember, this was 1965 when prices were roughly one-third what they are today.) Pete once worked six consecutive days to see how much he could earn in a week. It came out about $2000, he claimed. Even if he exaggerated, he must have done quite well. I used to tell him he would either be a millionaire or dead by his 40th birthday. He claimed his primary goal was to make it possible for Anne to earn her PhD from Har vard. I was next in touch with Pete in 1969. He was in Boston collecting substantial royalties from a route of coffee vending machines he had es tablished. Anne was home with their little girl, but was planning to begin work on her doctorate before long. When our paths next crossed in 1980, Pete was almost 40 years old. Anne had her doctorate, not from Harvard, but from another univer sity in the Boston area. She was head of her department at a community college in Boston. Pete still collected royal ties on his ever-expanding cof fee machine routes and owned up wards of a dozen store buildings plus other real estate. He, Anne and their two children spend each Christmas vacation in either Florida or the Ca1983 THROUGH OTHERS' EYES 59 ribbean. Every other summer they visit his family in Greece for an ex tended period.

These two entirely different men came to the United States from greatly divergent backgrounds, saw the opportunities available in this land of relative economic freedom and put into action their apprecia tion of the opportunities available to them. Herman took the approach of education and, eventually, the cor porate world. Pete, who arrived without either skill or knowledge of the language, decided to learn the language and put to work whatever talents and abilities he could find within himself. He was able to see what was needed or wanted, wher ever he located, and set out to pro vide it at a price that would be com petitive and yield him a good income. Why is it that these men who were not accustomed to our relative eco nomic freedom could profit so much more from it than can most who have grown up surrounded by it? Perhaps it is because they appreciated it, whereas we take it for granted. ® IDEAS ON LIBERTY Freedom, Productivity, and Progress EMERSON once remarked that if a man made a better mousetrap the world would beat a path to his door, but he neglected to mention what some of the folks would do when they got there. It is to be expected that the Amalgamated Mice of America would mouse-cott the new arrange ment, nor can one help sympathizing with those who may be hurt in the short run by the march of progress. But more than likely, the Emerson Better Mousetrap Company would come in for a lot of opposition from others with less obvious reasons for objecting to the innovation. Unfor tunately, it seems that ever since our stone age grandparents thought of moving out of the cave, anyone who upset the status quo by trying to do things a bit more efficiently has been suspect. Doubtless that is why human history is largely the story of poverty and stagnation.

We often fail to realize how hard it was to get the machine age in motion and how hostile forces threatened to swallow the fresh new ideas which sparked this revolution before it got started .... The sudden burst of productivity, coming nearly two centuries ago to a world with a chronic and psychopathic fear of abundance, generated a bitterness against the machine which persists even today. EDWARD P. COLESON A REVIEWER'S NOTEBOOK THE COMING BOOM JOHN CHAMBERLAIN David Raboy, a Washington-based economist, has come up with an un conventional view of the inflation and subsequent depression of Andrew Jackson's day. Jackson's war on the Second Bank of the United States had nothing to do with the case. It was the British substitution of opium for silver in making payments to the Chinese for tea and silks that caused Jackson's troubles. The opium re leased silver: to flow into the United States. When Britain later encoun tered difficulties at home, the with drawal of silver caused the panic of 1837.