December

THEFREE IDEAS ON LIBERTY 468 Ebenezer Scrooge and the Free Society Howard Baetjer Jr. Self-interest and interest in others go together. 472 The Liberating Arts Edmund A. Opitz How to make our lives count for the things that really matter. 480 The Decline of Secondhand Bookstores Herbert London· Changing economic conditions in New York City. 481 Origins of the German "Economic Miracle" Robert A. Peterson Marking the 40th anniversary of Ludwig Erhard's sweeping free market reforms in Germany. 483 Profits from Power: The Soviet Economy as a Mercantilist State Gary M. Anderson Revising the notion of the Soviet system as a socialist planned economy. 492 Peking Duck or Kentucky Fried? Lawrence W. Reed The Colonel brings capitalism to China. 494 Perestroika: Can It Work? Manuel F. Ayau and Julio Cole Imitating the marketplace is not enough. 496 How to Solve the Debt Crisis Christopher L. Culp How the U.S. financial sector can help avert a Third World debt "disaster."

501 A Reviewer's Notebook John Chamberlain A review of The A.merican Conservative Movement by John P. East. 502 Other Books Cogs in the Wheel: The Formation of Soviet Man by Mikhail Heller, and Changing Course: Civil Rights at the Crossroads by Clint Bolick. 507 Index for 1988 Prepared by Bettina Bien Greaves. CONTENTS DECEMBER 1988 VOL. 38 NO. 12 THEFREEMAN IDEASON LIBERTY Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 President of the Board: Bruce M. Evans Vice-President: Robert G. Anderson Senior Editors: Beth A. Hoffman Brian Summers Contributing Editors: Bettina Bien Greaves CarlO. Helstrom, III Jacob G. Hornberger Edmund A. Opitz Paul L. Poirot 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 champion of private property, the free market, and limited govern ment. FEE is classified as a 26 USC 501 (c) (3) tax-exempt organization. Other officers of FEE's Board of Trustees are: Thomas C. Stevens, chainnan; Ridgway K. Foley, Jr., vice-chainnan; Paul L. Poirot, secretary; H.F. Langenberg, trea surer.

The costs of Foundation projects and services are met through donations. Donations are invited in any amount. Subscriptions to The Freeman are available to any interested person in the United States for the asking. Additional single copies $1.00; 10 or more, 50 cents each. For foreign delivery, a donation of $15.00 a year is required to cover direct mailing costs. Copyright © 1988 by the Foundation for Economic Education, Inc. Printed in U.S.A. Permission is granted to reprint any article in this issue, except "The Decline of Secondhand Bookstores" and "Peking Duck or Kentucky Fried?" provided appropriate 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 issues are available on microfilm from University Micro films, 300 North Zeeb Road, Ann Arbor, MI 48106.

The Freeman considers unsolicited editorial sub missions, but they must be accompanied by a stamped, self-addressed envelope. Our author's guide is available on request. PERSPECTIVE Freedom's Child Walter and I were very lucky. Our babunia (grandmother) never worked. She was always at home, so we never had to go to the govern ment kindergarten, the sadochok, which begins when a kid is three years old. Babushka taught us our ABCs, addition and subtraction, before we went to the first grade. She told us the Bible stories she knew. Where there are no Bibles, the only way you can learn to know the Lord, to know what God is about, is to talk. You spend time with your grandmother be cause you love her and listen to her and you learn what's true and what isn't. Then you go to school six days of the week, from nine in the morning to three in the afternoon, listening to the teacher and learning to become Young Pio neers, and then you join the League of Young Communists, the Komsomol.

So you become in-between. You just don't know what's right. For a certain period of your life, you go through a stage like being lost. Finally, you really have to decide what you believe. You either become a person of your own-you learn things within your family and its beliefs, and you believe in them-or you are pulled into the society. Either you become a Christian, a believer in God, or you become the absolute opposite. In the Soviet Union, everything is against God, against religion, against Christianity. Ev erything is for Communism. But Communism doesn't work. So this contradiction makes you think, question things. You press for answers and you have to guess for yourself what they are. But we were lucky. We had our babunia. She taught us everything she knew about God, and about believing in Him and in knowing what was right. -NATALIE POLOVCHAK WILCOXEN, writing in Freedom's Child, by Walter Polovchak (Random House, 1988), a book which relates the story of young Walter's defection from the Soviet Union.

PERSPECTIVE Marxism Is Dead The Communist Manifesto, published in 1848, is a clever piece of literature aimed at curing all the ills of society created by class an tagonisms. With this taken into consideration, there is no denying the appeal of the communist "perfect society" -an end to exploitation, alienation, and human suffering. But Marx and Engels were wrong. They asserted that "Society as a whole is more and more splitting into two great hostile camps, into two great classes facing each other - bourgeoisie and proletariat," and with an in crease in class antagonisms there eventually would be a social revolution which would crush the bourgeoisie and create a "perfect society." Marx and Engels, however, turned out to be poor prophets. Instead of an increase in class antagonisms between the bourgeoisie and the proletariat, there has been a decrease. The reason for this is the capitalist revolution. Capi talism has provided a better standard of living and general well-being for the masses than Marx or Engels could ever foresee-and it shows no signs of decaying.

But is man better off? Has capitalism "left no other bond between man and man than naked self-interest, than callous 'cash pay ment,' " and "reduced the family relation to a mere money relation"? The capitalist society can be callous, and certain characteristics of the bourgeoisie often are contemptible, but with the proper institutions-especially family and religion-the vices of a free market society can be restrained and transcended, leaving more to life than' 'naked self-interest." The Communist Manifesto falls apart at this point and the au thors' attempt to discredit religion and family turns out to be lame. So who believes in Marxism? Is it an ide ology for all nations as Marx and Engels claimed? History once again proves them wrong. There has yet to be a country which has experimented with Marxism and carried out its agenda word for word. Lenin ran into the problems inherent in strict Marxism and experi mented with a limited market system - the New Economic Policy. China has been moving away from strict Marxism, as have several na tions in the Soviet Bloc. It is evident that Marxism is fatally flawed, and except for a few godless radicals who naively hold to this ide ology, it is dead.

-ROBERT JORDAN Florida State University Soviet Awakening It is time to stop deceiving ourselves, stop believing the office ignoramuses and calmly admit that the problem of "consumer selec tion, " the problem of competition, is not rooted in any social or class relationships. . . . Bottom-line, market stimuli must extend to all stages of the process "research-develop ment - investment-production - marketing-ser vice. " Only the marketplace, and not mere ad ministrative innovations, can subordinate this entire chain to the demands of the consumer. -NIKOLAY SHMELYOV writing in the June 1987 issue of the Soviet journal, Novy Mir, as reported in the Montreal Gazette (July 6, 1987) Felix Morley Prize Winners We are pleased to note that five young Freeman authors have been honored in the 1988 Felix Morley Memorial writing competi tion sponsored by the Institute for Humane Studies. Our congratulations go to Christopher L. Culp, Nick Elliott, John Hood, Philip S.

Smith, and Robert S. Taylor. It has been espe cially gratifying for us to work with such prom ising young writers. -BETH A. HOFFMAN & BRIAN SUMMERS 468 THEFREEMAN IDEASON LIBERTY Ebenezer Scrooge and the Free Society -by Howard Baetjer Jr. B ehaving in a self-interested manner does not mean disregarding others. On the contrary, because we are social beings who depend on, and often care deeply about many others around us, a sound attention to our self-interest must include a great deal of con cern for others. However true we may see this to be on a mo ment's reflection, many of us often lose sight of it, especially in our political and economic thinking. Particularly in regard to the free economy, a vague equating of selfishness and capitalism often infects people's thinking. The very word capitalism brings to many minds grim visions of ruthless characters damning-the public interest or selling their mothers for far things.