Scandals; J.S. Fulda

An exploration of the varied causes of this recent and unsettling phenomenon, which we shall undertake here, is necessary if one rejects the conventional wisdom that today' s scandals have arisen from the character defects of our current leaders, politicians, and businessmen who, it is believed, are morally inferior to and more venal than those of yesteryear. In studying news reports over the last few months, several sociopolitical trends largely responsible for the huge increase in indictments precipi tated by scandals.clearly emerge. First, there are more requirements and prohi bitions set by the law, the courts that interpret them, and the administrative agencies that apply them than ever before. And even where the requirements or prohibitions are long standing, the focus, energy, and skill brought to their enforcement is a recent development. Naturally the more laws and regulations there are to be broken, the more violations will occur. And the more effort applied to discov ering such violations, the more will be discov ered.

Joseph S. Fulda is Assistant Professor of Computer Science at Hofstra University and resides in Manhattan. It is not that this generation has discovered more mala in se, the political theorist's term for acts wrong by their very nature and apprehen sible as such to any civilized man. Rather it is the extreme proliferation of the mala prohibita, the designation classically given to acts simply declared crimes by the state. Into this category fall many of the ancient victimless crimes, but also, and even here in capitalist America, many economic' 'crimes." ' For example, it is a felony to purchase five per cent of a company's stock without notifying the government. This not only is an abridgment of the freedoms of speech and enterprise, it is hardly apprehensible as wrong by its very na ture. Even worse, it is also a felony to aid someone's nondisclosure of five per cent own ership, by holding the stock for him. What we have here, then, is a situation where a mere bailment is treated as a serious crime, its trivi ality masked by such terms as "parking secu rities" and "stock fraud," which to the general public sound so ominous.

Then there are also the numerous restrictions on mere possession, which have included il legal substances, controlled substances, contra band, fireworks, gold, firearms, burglars' tools, and whatnot. Also burdensome are the many restrictions on the peaceful exchange of goods and services between consenting adults. For example, it is felonious for a stockbroker to lend a client more than a specified percentage of the means needed for a securities purchase. What once would have been seen as an act·of brotherhood or at least a common business practice has become a "margin violation," punishable by a prison term. Furthermore, when services are exchanged, even between friends, both parties are required to report the service received as barter income or face fed eral charges. One can't even exchange small favors without the intrusion of the taxman. Proscribed and Prescribed Actions On and on the list goes-and we haven't even begun to enumerate the restraints and mandates placed on business enterprises. But the idea is already clear: The index of pro scribed and prescribed actions far outstrips the security needed by civilized men for social in tercourse. And the longer this irrational and ca pricious list grows, the longer will be the list of offenders. It is well to recall Jefferson's com ment on this trend already evident in 1816.

"Our legislators," he wrote, "are not suffi ciently apprised of the rightful limits of their power: that their true office is to declare and enforce only our natural rights and duties. . . . The trial of every law by one of these texts would lessen much the labors of our legislators and lighten equally our municipal codes."1 Second, there has been an almost unimagin able expansion of government-sponsored pro grams, government-funded programs (grants and subsidies), and government regulation of privately sponsored and funded activities. As I discussed in an earlier article,2 such programs provide almost limitless opportunities for abuse, both for the legislators, bureaucrats, and regulators dispensing the funds, permits, or contracts and for the corporations and indi viduals seeking to receive them. And both sides, givers and takers, have used these oppor tunities. An excellent and timely description of this process comes from William Stem, formerly CEO of New York State's Urban Development Corporation-a huge government agency "that does everything from building convention centers to financing economically depressed mushroom farms." Mr. Stem candidly admits that "[t]he fact that government is involved in so much in New York . . . creates the mo tivation to influence government. And the process of influencing government is always SCANDALS 445 sleazy. . . . It's a side of liberalism that was not predicted, and I think not completely un derstood.... [T]he government becomes very much organized to push through the interests of whoever makes their influence felt."3 In other words, the use of what Albert Jay Nock called "the political means" of acquiring wealth-taking it-rather than "the economic means"-eaming it-is seductive. By its ex pansion into all areas of everyday living, gov ernment is creating temptations on a massive scale. It is easy to fault individuals who suc cumb to temptation, but one should do so only with the realization that government-wrought temptations are today ubiquitous and overpow ering. Thus, it is not that people on both sides of the government dispensary are morally weaker than those of earlier times: The problem is the incredible size and scope of the govern ment dispensary, and the very notion that gov ernment may take from A to give to B or regu late the peaceful activities of A to benefit B. In pursuit of privileges, favors, and contracts, people often ignore the rule of law and thereby risk ending both their own careers and the ca reers of those in government who assist them in return for some form of payoff. Thus, as the daily news reports show us, the existence of the government dispensary with its enormous temptations and corrupting influence is not only theoretically indefensible, it is a very real human tragedy which brings people down at the peak of their powers who otherwise would have lived decent lives and had productive ca reers.

Third, with the advent of special prose cutors, full-disclosure requirements, and many other similar developments, the intense scru tiny placed on public officials and public figures is greater than that of any previous age. Facilitated by modem transportation, commu nication, and information processing systems, such scrutiny is urged on us by its advocates because of the pervasive corruption discovered in and following the Watergate era. And the more corruption discovered, the more intense is the push for yet more scrutiny. On the surface, it appears that this trend is not directly caused by the growth of govern ment. After all, scrutiny from the press, en couraged by the very weakened state in which 446 THE FREEMAN. DECEMBER 1987 the courts have left libel law in the United States, can be as unrelenting as that of a U.S. Attorney, a state prosecutor, or a legislative panel. However, closer examination reveals that what really has occurred is the blurring of the all-important distinction between private and public. With almost everything heretofore con sidered private now considered public, such scrutiny is to be expected. And the continuing attenuation of the distinction between the public and the private is a direct consequence of the growth of government.

Nor is scrutiny itself goal-free. Most of it is directed to discovering whether the person has violated some insignificant malum prohibitum or whether he has been involved in the abuse of the government dispensary. Only rarely does the scrutiny placed on persons in public life re sult from suspicion that a malum in se, unreCulture vs. BarbarisDl lated to the government dispensary, has been committed. In sum, were government's powers to grant subsidies, privileges, contracts, tax exceptions, licenses, and permits sharply curtailed and were government to refrain from declaring peaceful acts illegal, even today' s heightened scrutiny would yield little of substance. The public would soon lose interest in reading about probes, inquiries, hearings, and investigations -and scandals once again would be scan dalous. D 1. E. Dumbauld, ed., The Political Writings of Thomas Jef ferson, p. 55. 2. J. Fulda, "The New Bondage," The Freeman, April 1982, pp. 243-248.

3. P. Weber, "City of Scams: The Streets Were Paved with Gold Diggers," National Review, June 5, 1987, p. 27. The article dis cusses the corruption scandals in both New York State and New York City, which magnify yet still typify the situation with govern ment in general. IDEAS ON LIBERTY C ulture strives to establish a boundary between itself and barbarism. The manifestations of barbarism are called' 'crimes." But existing . criminology is insufficient to isolate barbarism. It is insufficient because the idea of "crime" in existing criminology is artificial, for what is called crime is really an infringement of "existing laws," whereas "laws" are very often a manifestation of barbarism and violence. Such are the prohibiting laws of different kinds which abound in modem life. The number of these laws is constantly growing in all countries and, owing to this, what is called crime is very often not a crime at all, for it contains no element of violence or harm. On the other hand, unquestion able crimes escape the field of vision of criminology, either because they have not the recognized form of crime or because they surpass a certain scale. In existing criminology there are concepts: a criminal man, a crim inal profession, a criminal society, a criminal sect, a criminal caste and a criminal tribe, but there is no concept of a criminal state, or a criminal government, or criminal legislation. Consequently the biggest crimes ac tually escape being called crimes.

-Po D. OUSPENSKY A New Model of the Universe 447 Should Cigarette Advertising Be Banned? by Douglas J. Den Uyl and Tibor R. Machan T he American Medical Association has . recently called for a ban on the adver tising and promotion of all tobacco products. A new wave of debate on Constitu tional questions and on the nature of adver tising is sure to follow and, indeed, has already begun. We intend to sidestep the "public policy" approach and focus instead on what is less discussed: basic moral and political values. We consider the main values embodied by our Constitution to be basic moral values as well. Central among these values are liberty, limited government, and natural or human rights. We also take it that these values are not subject to majority rule. This point was clearly expressed by the U.S. Supreme Court when it stated in West Virginia State Board of Educa tion v. Barnette (1943) that The very purpose of the Bill of Rights was to withdraw certain subjects from the vicissi tudes of political controversy, to place them beyond the reach of majorities and officials, and to establish them as legal principles to be applied by the Courts. One's right to life, liberty and property, to free speech, a free press, freedom of worship and assembly and other fundamental rights may not be sub mitted to a vote; they depend on the outcome of no elections.