May

169 The Brady Report: Threat to Stock Market Stability Christopher L. Culp Proposals that would actually increase the likelihood of another crash. 172 Wage Earners and Employers Ludwig von Mises A transcription of a 1962 radio appearance, in print for the first time. 174 Democracy's Road to Tyranny Erik von Kuehnelt-Leddihn Three patterns of social change, all leading to totalitarian slavery. 178 Mom's Monopoly, Part II Susan J. Osburn Sam learns about prices and pricing. 180 Caveat Emptor Walter Block Has the notion of personal responsibility been banished from the legal scene? 182 Vanishing Voluntarism James L. Payne When "voluntary" agencies become government programs. 184 The World Bank vs. the World's Poor James Bovard Bankrolling a rush to socialism in the Third World. 188 A Visit to Nicaragua Lawrence W. Reed Under the Sandinistas, Nicaragua's economy is descending into utter chaos.

190 Africa and the Difference Between Growing Food and Eating It David Osterfeld Economic development is the answer to Africa's food crisis. CONTENTS MAY 1988 VOL. 38 NO.5 198 Home-Based Work: New Opportunities for Women? Joanne H. Pratt Local, state, and Federal regulations threaten a growing sector of the economy. 200 Campus Activities: Who Pays the Bills? Joseph S. Fulda A remedy for some ills affecting student organizations. 202 Readers' Forum 203 Property Rights and Eminent Domain John Hospers An article-review examining Ellen Frankel Paul's natural rights theory of property rights. 206 A Reviewer's Notebook John Chamberlain A review of Entrepreneurs vs. The State by Burton W. Folsom, Jr. 208 Other Books Marva Collins' Way by Marva Collins and Civia Tamarkin.

Op-Ed Update FEE's op-ed program, in which we send Freeman articles to newspapers around the country, is entering its third year. In our first two years, we placed articles in more than 75 different newspapers, including The Wall Street Journal, Chicago Tribune, Newsday, Detroit News, Chicago Sun-Times, Houston Chronicle, Cleveland Plain Dealer, Miami Herald, San Diego Union, Orange County Register, San Jose Mercury News, Indianapolis Star, Dayton Daily News, Charlotte Observer, Richmond Times-Dispatch, Allentown Morning Call, Col orado Springs Gazette, Canton Free Press, Washington Times, and The Phoenix Gazette. We received more than 240 tearsheets repre senting a combined circulation of over 27 mil lion. We now are expanding this program to in clude Spanish translations of Freeman articles, which are being sent to Hispanic newspapers in the United States as well as to major news papers in Latin America.

If you see one of our articles in your local paper, we would greatly appreciate it if you would send us a clipping. -BJS Economic Crime It's a mad world, as Paul S. Columbus can attest. The California entrepreneur was just sentenced to two years in prison and fined $100,000 for trying to bring cheap Japanese made computer chips into the U.S. It seems Mr. Columbus's effort violated the U.S.-Japan price-fixing accord that makes it illegal for Americans to buy chips at free-market (that is, lower) prices. We aren't surprised that a cartel should force U.S. consumers to look to the black market for chips, but it's still quite some thing to see the day arrive when the U.S. would start throwing people in prison for trying to serve those consumers. -The Wall Street Journal, January 14, 1988 PERSPECTIVE Silkworms or Textiles? From the perspective of fundamental eco nomic principles, one can often perceive con nections between policies that might otherwise be overlooked.

Not long ago, for example, two articles re garding our relationships with China appeared virtually side-by-side in The Wall Street Journal (December 21, 1987, page 9). Al though apparently devoted to separate topics, they are actually intimately interrelated. First, the Journal reported new limits on China's textile exports to the United States. Under pressure from U.S. officials, the Chi nese agreed to an annual growth rate of 3 per cent. This new rate does exceed the 1 per cent growth limit on textile imports from Hong Kong, Japan, South Korea, and Taiwan, but it falls dramatically below China's recent textile export growth rate of 19 per cent. Just below this article, another piece pro vided more sinister news. U.S. satellite intelli gence reports suggested that China might be shipping more sophisticated Silkworm missiles to Iran. Of course, these two articles, thus juxta posed, could provoke outrage. After all, here we are buying Chinese textiles, and what do they do? Arm our adversaries! Perhaps we should conclude that our 3 per cent limit on the growth of textile imports from China is too generous rather than too stingy!

But think again. Remember the basic eco nomic dilemma taught during the first week of any introductory economics class: limited re sources force us to choose between guns and butter. In the present context, this principle suggests that, if we would buy more textiles from the Chinese, they would have fewer re sources available to· devote to Silkworm pro duction. Furthermore, if we buy more Chinese goods such as textiles, the Chinese will earn more desperately needed foreign exchange which they can use to buy products from our export industries. New job opportunities would emerge to replace those lost for textile workers. Living standards would improve in China and THEFREEMAN IDEASON 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 Book Review Editor: Edmund A. Opitz Contributing Editors: Bettina Bien Greaves Jacob G. Hornberger 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: 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 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, 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 in the U.S. as both countries concentrated on producing those items for which they have comparative advantages. These are the gains from free trade. Here then is another example of the unin tended but adverse effects of political meddling in the marketplace. If we really want the Chi nese to produce fewer guns, shouldn't we butter up to them by buying more-not less of their textiles? - RUSSELL SHANNON Clemson University The Police Power The only thing that distinguishes the institu tion of government from any and every other institution is its possession of police power. It alone has the legal right to incarcerate a person or even take a person's life. Therefore, the more we delegate to our government responsi bility for different aspects of our individual and social lives and thereby expand the incidence of police power, the more we move toward a com pulsory, authoritarian society and away from a free society. To be truly free we must limit government, i.e., police power, to the adminis tration of justice, and thus provide that social order which is essential to free intercourse.

-MILLER UPTON (Dr. Upton is former president of Beloit College in Wisconsin. ) The Communist Collapse As governments in the East bloc have more and more difficulty supplying medical care, housing, and other social services, birth rates in all six countries are declining, despite generous new incentives for larger families. Life expec tancy has dropped in some of the six countries -for example, in Hungary, from an average 67 to under 65-and families are feeling the pressure resulting from parents who hold two and sometimes three jobs apiece. In these countries, where food, health, education, public transportation and housing are heavily or totally subsidized, the squeeze on or dinary citizens is amplified by increases in the costs of some consumer goods and rents and, in the case of Hungary, a new income tax. In some East European hospitals, patients are now being asked to supply their own medicines.

Nowhere is the sense of deterioration more evident than in air and water pollution. For ex ample, an official Slovak study concluded re cently that Bratislava is the most severely pol luted city in all of Europe. Instead of allowing the analysis to be made public, the Government pulped 2,000 copies and sought to sequester those remaining in circulation. A Czech water quality specialist confided to a visitor that Prague's drinking water contained such a high level of toxins that infants in the capital were restricted to drinking bottled min eral water. To the north in the factory town of Usti nad Labem, air pollution has reached levels that compelled local school authorities to send pupils out of town to special education fa cilities for four months a year. -DAVID BINDER, writing in The New York Times, January 6, 1988 Property and Propriety Property is related to propriety, and is an ethical institution. It is a feature of our civiliza tion.

The kinship of property with what is proper has been recognized from early times. It has been acknowledged by the people themselves in that genuine expression of popular feeling language. It has been seen by our great thinkers. No matter what period or aspect of our civilization we may consider, we find that PERSPECTIVE the institution of private property has been de fended on grounds of justice, freedom, prog ress, peace and happiness. Often attacked and suppressed, ultimately free property emerged victorious. -GOTIFRIED DIETZE, In Defense of Property The Will to Power The chief danger to property has not been from the covetous neighbor nor from the ha bitual thief. It has been from the acquisitive and confiscatory activities of rulers. The Will to power, the temptation to exercise power simply because one has it, has led rulers to arbitrary interferences with liberty of the person. Covet ousness has led them to arbitrary seizure of property. Both have joined to bring about arbi trary interferences with the liberty of using property. It is significant that the current of thought which is giving up the idea of property is also giving up the idea of liberty. As the two grew up together they are a common subject of attack by those who conceive the one must go with the fall of the other.

-ROSCOE POUND, "The Law of Property and Recent Juristic Thought," American Bar Association Journal (1939) Available from FEE . . . We have a limited number of copies of Burt Folsom's Entrepreneurs vs. The State, priced at $14.00. (See John Chamberlain's review on page 206.) Call or write FEE to reserve a copy.