November

424 PR Morality William H. Peterson How corporate leaders can take a moral stand. 427 Why College Costs Are Rising John Hood How government subsidy has boosted prices and encouraged waste. 432 Minimum Wage, Maximum Harm Perry E. Gresham A big lesson in a small town. 434 The Inequality of Labor Legislation Deborah Walker Whom do labor laws protect? 436 The Banking Crisis Hans F. Sennholz The crumbling of our overregulated national banking system. 441 Decentralization: Freedom by Diffusion David C. Huff Achieving true freedom through self-government. 443 Broadcasting, Property Rights, and the First Amendment Gordon T. Anderson Federal control of the airwaves is antithetical to the principles of a free society. 448 The Myth of Cultural Imperialism Robert K. Rauth, Jr. It is not surprising that the most open society on earth has the most attractive popular culture. 454 Bringing the Pirates to Bay Gary McGath Concerning property rights and software piracy.

457 Leave DAT Alone Carl Clegg "Fair use," the copy-code law, and digital audio tape. 459 Privatization at the State and Local Level Donald Grunewald How to improve the economic efficiency of airports, hospitals, colleges, and other institutions. 461 Books John Chamberlain reviews Economics and the Moral Order by Joseph Baldacchino and Educating for Virtue, a collection edited by Mr. Baldacchino. Also, reviews of Compassion versus Guilt and Other Essays by Thomas Sowell and Ludwig von Mises: Scholar, Creator, Hero by Murray N. Rothbard. CONTENTS NOVEMBER 1988 VOL. 38 NO.11 THEFREEMAN IDEAS ON 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, chairman; Ridgway K. Foley, Jr., vice-chairman; 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 Banking Crisis," 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 Bruce M. Evans Remembering Who We Are The election of national leaders brings forth feelings of anxiety and expectancy. Yet, change often carries a glimmer of hope, even in the minds of hardened realists or confirmed skeptics. Somehow, coming off a season of defeats, a football team retains a spark of optimism that its first game can be won. Similarly, we often feel a new year will be better than the last-ot a new can of coffee offers a better aroma. It may even be possible that a new President will be better than the last one.

Americans are harsh judges of political figures. Our feelings are a curious mixture of high hopes and not-so-high expectations. We hope for a return to personal initiative and responsibility, but we expect a continuation of current welfare state policies. We hope for a return to reason and logic in meeting problems of natural resources and economic policy, but we expect that special interest groups will con tinue to hold sway. Thus, we are frequently the schizophrenic victims of hope and despair. Many of us had parents who said to us in some way as we prepared to leave home: "Re member who you are." And I want to suggest that here: Remember who you are. Free people have been characterized throughout history by initiative, courage, inde pendence, and compassion-all of which con tribute to a better quality of life. Traditionally, free people ask only for an opportunity.

Elected officials in America once were seen as people of character, integrity, principles, and good judgment-chosen to protect the in terests of all the people. It was understood that special interest issues were not to be settled by governmental intervention, but through peaceful interactions in the market. We need leaders who will help us understand that if we try to advance our vested, selfish in terests through political means, we will restrict our own freedom, as well as that of our fel lowmen. Edmund Burke once said: "The great differ ence between the real statesman and the pre tender is that one sees into the future, while the other regards only the present; the one lives by the day, and acts on expediency; the other acts on enduring principles and for immortality. ' , If there were fewer calls for expediency and political intervention, there would be far less of the same. Much of the regulation which we find so offensive is brought on by the abuse of influence and by special request. Group after group is organized to secure more money or advantage through government ·intervention.

In his address urging adoption of the United States Constitution, Benjamin Franklin stated: " ... I cannot help expressing a wish that every member . . . would doubt a little of his own infallibility." Let us ask our officials to recall their own fallibility. Let us ask them to remember that the constitutional purposes of government pertain to the protection of life, liberty, and property, and to leave our personal and social problems to individual and community initiatives. Whether one's perspective is optimistic or pessimistic, we should note with Emerson that "This time, like all times, is a very good one, if we but know what to do with it. " Let us use it well! -BRUCE M. EVANS President PERSPECTIVE Civilization The Declaration of Independence lists "the pursuit of happiness" as among the most fun damental of rights. In this the framers were re alists, rather than moralists. Civilizationhas greatlyadvancedin material wealth and its intellectual underpinnings: steadily, clearly, and progressively the standard of living has risen and the proportion of total output devoted to life's necessities has fallen.

Indeed, in many cases, today's understanding of a necessity was yesterday's understanding of a luxury. Moralists may prefer to think of civilization as progress in "the pursuit of virtue," but evi dence for this is scanty. Violence, coercion, and fraud flourish everywhere, even in the most "civilized" and "advanced" countries. Nor are crimes and sins of man against man less abundant now than in yesteryear. "Civilized," literally, means "fit for life in cities." And indeed it is the cities that are most vibrant economically and intellectually, centers of commerce and know-how, filled with trade and economic and intellectual specialization and cooperation. As Jefferson described the "march of civilization" - "like a cloud of light, increasing our knowledge and improving our condition. " But as Jefferson so often predicted, cities are also among the places least given to virtue and most given to vice, with violence done to persons and property everywhere"in sight.

What does this mean to those of us devoted to the freedom philosophy? It means that while the pursuit of happiness, and the economic and intellectual progress that makes it possible, are aided greatly by the cooperation, competition, and specialization of the marketplace, the pur suit of virtue is intrinsically a matter of indi vidual effort dedicated to self-improvement. This the Founders understood. -JOSEPH S. FULDA 420 THEFREEMAN IDEAS ON LIBERTY The Pilgrims in Holland by Robert A. Peterson T he Dutch have given many things to America: Easter eggs, Santa Claus, waffles, sauerkraut, sleighing, skating, and a host of "vans" and "velts" who helped to build our nation.! But perhaps their greatest contribution to America was the 11 years of freedom they gave the Pilgrims-crucial years that helped America's founding fathers work out their philosophy of freedom and prepare for self-government in the New World.