February

57 Why Is There a Drug Problem? George C. Leef Seeking answers to a complex question. 60 "What Do You Want to Be?" Margaret Bidinotto Encouraging children to make choices. 62 Responding to the Oil Shock: The U.S. Economy Since 1973 Rodolfo Alejo Gonzalez and Roger Nils Folsom Rational and nonrational responses to the energy "crisis." 66 The Entrenchment of the State Matthew Hoffman Why has no major Communist government ever been overthrown from within? 69 Blockading Ourselves Cecil E. Bohanon and T. Norman Van Cott What th~ blockade of Confederate ports teaches about protectionism. 71 Popper, Hayek, and Classical Liberalism Jeremy Shearmur Which form of social organization would best enable us to learn from our mistakes? 74 Islamic Capitalism: The Turkish Boom Nick Elliott Individual effort points the way to a prosperous future. 76 Markets and Morality Peter J. Hill The moral advantages of a social system that holds individuals accountable for their actions.

80 Taxation Versus Efficiency Richard Jones How taxation discourages the advantages of specialization. 82 Myths of the Rich Man Joseph S. Fulda The market process assures us that society will never be at the mercy of one malevolent monopolist. 84 Book Reviews The second volume in The Life of Herbert Hoover by George Nash. Equity and Gender by Ellen Frankel Paul. The Theory of Free Banking: Money Supply Under Competitive Note Issue by George A. Selgin. CONTENTS FEBRUARY 1989 VOL. 39 NO.2 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 government. 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, 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 © 1989 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 Microfilms, 300 North Zeeb Road, Ann Arbor, MI48106. 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 Justice and Charity What is justice? The first thing to remember is that justice is blind. We have been trying to tell people that for a great many centuries. There leaps to mind the famous statue of Justice with scales held high and sword in hand, and blindfold over the eyes. Justice does not dis criminate. It does not see whether one is of high or low class, rich or poor, black or white, work ing or not working. It does not see one's na tional origin. It does not detect one's religion. It treats all men alike and all men equally. That is the essence of justice. The statue would also remind us by the sword that it is enforced by the coercive power of the state. The principal busi ness of the state, of law and of government, is the enforcement of justice, the protecting of the rights of all people equally.

On the other hand, charity is not based on coercion, nor is it blind. Charity is discriminat ing and voluntary. If you remove the voluntary aspect of charity, it ceases to be charity. What would you think if, after Robin Hood had placed his sword at the throat of some rich man and deprived him of his purse and scattered his coins to the poor, that rich man told his friends how charitable he had been to the poor? There was no charity in what happened on the rich man's part-not a penny's worth! If you take away the voluntary aspect of charity, it be comes despoliation. It is legal plunder. It is rob bery, not charity. Confusing justice and charity has produced something called "social justice, " the basis for the welfare state. Social justice is having a tremendous negative impact upon the economic well-being of this country. You cannot have charity or justice when you forcibly take money from A and give it to B.

You have not charity because it was not freely willed. You have not justice because you are not treating A and B alike but are taking from one and giving to the other. The rights of each have not been protected, but stripped. -excerpted from "The Bible and Economics, " a sermon by Dr. D. James Kennedy, Coral Ridge Ministries The Decline of Moral Consciousness The great tragedy of the welfare state has been the decline of moral consciousness among the. American people in the twentieth century. The use of the political process to provide spe cial, privileged benefits to certain classes of people is now considered to be as American as apple pie. The common belief is that since the welfare system is now an ingrained part of American life, people should simply accept its legitimacy and direct their efforts to making the system function more efficiently. This degeneration in moral consciousness can be found even in some of the most free market oriented people in the country. I re cently attended a conference whose purpose was to promote an improved understanding of the free enterprise system. One keynote speaker at the conference·proudly attributed his business success to a Small Business Administration loan. Another keynote speaker called for a closer partnership in business development be tween businessmen and politicians.

Neither speaker even remotely suggested that the use of the political process to feather a per son's nest is morally wrong. Equally tragic, the talks appeared to be well-received by the audi ences, almost as if the listeners were comforted by this "practical approach" to free enterprise. We should never be ashamed or embarrassed to speak out against the immoral actions of our own government. How else can we hope to eradicate the evil which pervades the entire po litical system? To remain silent in the face of wrongdoing not only constitutes cowardice, it also is an implied acceptance of enshrined po litical immorality. The only legitimate functions of law are the protection of life, liberty, and property and the preservation of peace. We have permitted the politicians to pervert law by using it to direct lives, limit liberty, and plunder property. The PERSPECTIVE result is not peace but rather perpetual conflict over the distribution of the loot. It is time to eliminate, not reduce or make more efficient, government welfare, social security, food stamps, loan guaranties, subsidies, licenses, import restrictions, educational grants, and all other means by which some people use the po litical process to gain at the expense of others.

Only by standing firm against the immoral nature of the welfare state can we hope to raise the moral consciousness of our fellow citizens. -JACOB G. HORNBERGER The Insanity of Inflation Sanity consists in limitation; the inordinate is always insane and always ends in destruction. Because inflation is indeed inordinate, it too has a certain insanity about it and naturally it tends to end in an explosion of destruction, a nihilist act with money. The insanity of inflation leaves a mark of insanity on society; it changes a good society into one which, so long as inflation lasts, is wholly and fraudulently unjust. All evil is a breach of order, but only some evil is a breach of order with unlimited effect; inflation is an unlimited monetary and economic evil. -WILLIAM REES-MOGG The Reigning Error Reader's Digest Reprints Free Trade Article "The Political Economy of Protectionism," by Thomas J. DiLorenzo, has been reprinted in the February 1989 Reader's Digest. This article originally appeared in the July 1988 issue of The Freeman.

We have extra copies of the Digest version of Professor DiLorenzo's article. Please write to FEE, stating the quantity you'd like.