August

286 Churches and the Social Order Edmund A. Opitz 312 Privatization: The Rediscovery A free society is built around a of Entrepreneurship nucleus of people of intellect William H. Peterson and integrity. The privatization movement around the world. 294 Farming Is a Business Clarence B. Carson 317 A Reviewer's Notebook Government intervention John Chamberlain disrupts the business of A review of "Witnesses at the agriculture. Creation: Hamilton, Madison, Jay, and the Constitution," by 300 Information and the Economic Richard B. Morris. Problem Brent M. Johnstone 319 Other Books The price system is an essential "Audio Classics-The Wealth means of communicating of Nations," script by George information. H. Smith. 306 The Failure of the "Middle Way" Jose [talo Stelle Government intervention undermines the rule of law.

THEFREEMAN IDEAS ON LIBERTY Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 President of the Board: Robert D. Love Vice-President of Operations: Robert G. Anderson Senior Editors: Beth A. Hoffman Brian Summers Editorial Adviser: Paul L. Poirot Book Review Editor: Edmund A. Opitz Contributing Editors: Howard Baetjer Jr. Bettina Bien Greaves Gregory F. Rehmke Joan Kennedy Taylor The Freeman is the monthly publication of The Foundation for Economic Education, Inc., Irvington-on:-Hudson, NY 10533 (914) 591-7230. FEE, founded in 1946 by Leonard E. Read, is a nonpolitical educational cham pion of private property, the free market, and limited government. FEE is classified as a 26 USC 501 (c) (3) tax-exempt organization. Other officers of FEE's Board of Trustees are: Bruce M. Evans, chairman; Thomas C. Stevens, vice-chairman; Joseph E. Coberly, Jr., vice-president; Don L. Foote, secretary; Lovett C. Peters, treasurer.

The costs of Foundation projects and services are met through donations. Donations are in vited in any amount. Subscriptions to The Freeman are available to any interested per son in the United States for the asking. Single copies $1.00; 10 or more, 50 cents each. For foreign delivery, a donation of $10.00 a year is required to cover direct mailing costs. Copyright © 1986 by The Foundation for Economic Education, Inc. Printed in U.S.A. Permission is granted to reprint any article in this issue, except "Privatization: The Redis covery of Entrepreneurship," provided ap propriate credit is given and two copies of the reprinted material are sent to The Foundation. Bound volumes of The Freeman are available from the Foundation for calendar years 1969 to date. Earlier volumes as well as current is sues are available on microfilm from Univer sity Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106.

The Freeman considers unsolicited editorial submissions, but they must be accompanied by a stamped, self-addressed envelope. Our author's guide is available on request. PERSPECTIVE Seize the High Ground If liberty is to prevail in its intellectual struggle with socialism, its friends must seize the high ground oj moral ity. The free market, private property, minimal government approach to so ciety is right morally. All the varieties of socialism, interventionism, forced welfare, redistribution, and so on any interferences with the peaceful pursuit of happiness-are wrong. Over and over again, friends of liberty must point out, politely but stead fastly, that all interventionist schemes are wrong because they require a gun to be pulled on peaceful people. The socialists have had the high moral ground too long, because no one has opposed them. They cannot hold it in the face of reason and clearly articu lated principle.

The principle of liberty and prop erty-the right of all people to use their own lives and possessions in peaceful pursuit of the good as they see it-is a sacred principle not to be compromised. It is the foundation on which the just and happy society is built. We must stress its importance, and the disasters that occur when we tamper with it. One Sunday morning last year, when the New York Times carried its heart-wrenching, front page picture of Ethiopian refugees trudging across baked wastes toward the Sudan, a friend asked if I would not justify tax ation for such a good cause as the re lief of those emaciated souls. Shouldn't the right to property come second to relieving suffering of that magnitude? I replied that the Ethiopians were starving precisely because their right to property had been put second. To endorse taxation for the relief of the starving Ethiopians would be to en dorse the essential moral wrong that underlies their starvation.

Any person who proposes govern ment force against peaceful people should be reminded politely but firmly that the principle is wrong. The means are wrong. They are not allowable, whatever the ends. Eventually those means lead to destruction. -HB Inflationin Brazil Brazil attracted worldwide attention several years ago when it adopted' 'in dexation" in the attempt to make in flation tolerable for the masses. This scheme provided for wages, salaries, rents, and mortgage payments to rise automatically each month to compen sate for the inflation. However, the government did not halt the monetary expansion via the printing press or bank credit. Thus the economic crisis continued, with the irregularities and inequities inflation always brings. To alleviate the developing crisis, the Brazilian government has now adopted new measures to freeze prices and control salaries. And it has intro duced a new currency, the "cruzado."

However, according to Visao, a lead ing Brazilian news magazine, "The real cause of inflation-excessive ex penditures by the Government fi nanced by the printing of new money-is not even considered." Vi sao goes on to say that "The official position . . . gives no assurances that the Government will cease its infla tionary tactics while the prices are being frozen. So, what we have is 're pressed inflation,' ... which only helps to camouflage the present crisis.' , VisCio compares the situation in Brazil to that in Chile under the Marx ist regime of Allende. "A feeling of general animosity has been raised against the business community and the supermarkets and department stores have been the targets of mob vio lence." Visiio equates the Brazilian government's economic package with "a leftist coup ... an extreme case of State intervention in the economy and an assault on individual rights."

-BBG The Tin Cartel The tin cartel recently collapsed-un der the weight of human ingenuity. The International Tin Council (lTC), which consisted of 22 member na tions, worked to hold the price of tin above market-clearing levels. The ITC relied on a "buffer stock" of tin pur chased or contracted for to smooth out fluctuations in tin prices and to hold prices up. But artificially high prices proved to be the cartel's undoing. In addition to calling forth new supplies of tin from previously un developed sources, higher prices spurred changes on the demand side. Every increase in the price of tin brought new minds to bear on the' 'tin problem," searching for ways to use less and to substitute alternate materials. High prices led to so many inno vations in the use of tin substitutes that tin deposits are now less valuable than they otherwise would have been. As a recent Wall Street Journal article pointed out, tin cans have lost their place as the primary container for beverages, and that change probably is irreversible.

Human ingenuity created the myr iad uses for tin, and this same inge nuity has discovered substitutes for tin. The rate of discovery and substi tution is related to the price of tin and the prices of substitute materials. If prices are held artificially high, as was done by the lTC, they convey false in formation about the availability and mining costs of tin. Thanks to the International Tin Council, and the entrepreneurs who reacted to higher prices, there are now fewer uses for tin, and more for alu minum, plastic, and paper. -GFR PERSPECTIVE 284 A ChristianSpeaksUp for Capitalism Christianityand capitalismas alliesrather than enemies. by James D. Gwartney James D. Gwartney is Professor of Economics at Florida State University and an Associate of the Political Economy Research Center. M any Christian leader.s-evangelical, mainline Protestant, and Roman Catholic-appear to have a feeling that cap italism is unfair and needs more government interven tion to keep it humane. While many of us who are both Christians and economists consider this view misguided, we sometimes lack arguments to help change this view. I'd like to offer a few.