Freedom and Democracy Are Different; J. Wenders

In America, we rely on ours~lves, not a gov ernment, to improve ourselves. We are in con trol of our destiny. And while this freedom places additional responsibility on us for what we do with our lives, it is better than placing false hopes in others. Many people say America is great because everyone has the right to vote. But I remember we voted in Italia and things always got worse instead of better. What makes America great is not our right to vote but the rights we have that protect us from those for whom we vote. I hope and pray you will understand why I will not return to our beloved homeland. Please always know that my love and thoughts are with you. Your loving son, Bruno Giuseppe lit his pipe and began reading the let ter to himself. As he read, distant memories of his parents and homeland were reawakened. Giuseppe found it strange that though his parents had died long ago, he still felt a heavy burden of guilt for having left them.

It was late. The rest of the flat was dark and qui et. Giuseppe wearily got up and turned down the space heater before joining Irena in bed. As he fell asleep, his last waking thoughts were his hope that Vito Abboduto would read the letter to Bruno's mother and father with the same intensity and emotion with which it was written. D Freedom and Democracy Are Different by John T. Wenders T he earthshaking events of the past few months in Eastern Europe have generated surprise, shock, hope, and applause throughout the world. The most important conse quence of these events, however, is not the demise of authoritarian socialist governments, but the impetus given to an examination of the relation ship between the private and public sectors in all nations. Contrary to the media hoopla that equates democracy with freedom, the mere replacement of a Communist socialist government with a demo cratic socialist one, while an improvement, does John T. Wenders is Professor of Economics at the University of Idaho.

not alone advance the cause of freedom very much. Freedom and democracy are different. Democ racy addresses how affairs in the public sector will be conducted. Democracy is greater when individ uals vote on those matters assigned to the public sector. On the other hand, freedom is concerned with the relationships among people in the private sector. Freedom means individuals may choose how to interact on a voluntary basis outside the purview of the state. In short, democracy means you get to vote in the public sector; freedom means you get to determine the terms of your interactions with others in the private sector.

The popular news and debates over reform in Eastern Europe have focused on the develop ments toward democracy in the public sector to the neglect of the more important question of how human activities are divided between the public and private sectors. One can envision a country with an authoritarian, but very small, public sector in which freedom is much greater than in a country with a democratic, but very large, public sector. The key is a constitution that draws the line between the public and private sectors, and between democracy and freedom. More impor tant, the role of the constitution is to protect free dom from democracy and the individual from the majority. Some freedoms are civil, like free speech, reli gion, and association.The First Amendment takes the regulation of speech, includingthe press, out of the public sector.Left to a democratic politicalpro cess, free speech would be severely restricted by lawmakers-invasions of free speech are repeat edly being struck down by the courts, and many more are prevented by these precedents. The Con stitution protects free speech from democracy.

In the economic sphere, freedom means that individuals have a right to own, buy, and sell prop erty as they choose in free markets. In the past cen tury, there has everywhere been a steady invasion of market activity by the political process. Even in capitalist countries such as the United States, the public sector has continually expanded. Once eco nomic activityis addressed by the political process, it immediately becomes subject to capture by those-often a tiny minority-who can effectively manipulate it to their own ends. In many ways this political invasion of the marketplace throttles free speech as well, as witnessed by the successful efforts of newspaper trade groups, normally staunch defenders of free speech, to prevent com petition from telephone companies who wish to enter into electronic publishing. The economic collapse of Communist socialism is largely responsible for the upheavals of the past year. Yet the popular notion is that this economic collapse can be repaired by a democratic reform of the political process. On the contrary, economic reform can be achieved only by removing econom ic matters from the political process. Unless the size and scope of the public sectors in Eastern Europe, now all-pervasive, are shrunk consider289 ably, little will have changed. The only difference willbe that people acquire the right to vote on how the public sector constrains their freedoms.

The lessons of the past are clear, if Eastern Europe chooses to look. Wherever economies are heavily regulated (as in Eastern Europe, China, North Korea, India, most of Africa and South America), socialist or not, they have been out stripped by their market-oriented counter parts-Western Europe, Japan, South Korea, Tai wan, Hong Kong, Singapore, Chile, the United States, and the Commonwealth nations. The constitutional bases for a market economy are very simple: property rights must be vested in individuals or voluntary associations of individu als. These rights, like our freedoms of speech and religion, must be well defined and tenaciously defended (as is free speech) against encroachment from the public sector. Titles to property and ser vices must be freely transferable. The objection to keeping the public sector out of private economic activity is that markets don't alwayswork ideally.Yet the same people who con demn the marketplace for not working ideally want to scrap it for a politically directed system that is demonstrably worse. Rational choices can be made only by weighingthe benefits and costs of alternatives. Only individualscan know their alter natives, and only individuals who directly bear the consequences of their choices will weigh these properly. Filtering choices through complex polit ical and bureaucratic processes assures that the alternatives will be neither known nor weighed.

Markets are certainly not perfect, but they are much better than the alternatives, as events in Eastern Europe have shown. There is a difference between democracy and freedom. Freedom must be protected from democ racy. A good constitution will do that. Only when the countries of Eastern Europe and elsewhere adopt and enforce such constitutions will the eco nomic progress that inevitablyfollowsbe realized. In our own economy the dangers of public en croachments on the private sector are usually en countered more subtly.Here, we have produced a massive public sector by tolerating incremental encroachment without ad'dressingthe larger issue. If nothing else, the recent events in Eastern Europe should stimulate us to rethink the drift of piecemeal democratic encroachments on our own freedoms. D 290 The Growth of Government in the United States by Robert Higgs B ig government-we heard a lot about it when Ronald Reagan was first seeking the Presidency. Lately the topic has attracted less attention from politicians, commentators, and scholars. But the thing itself has not disappeared.