August

290 Cuba: Misery and Hope JorgeAmador Firsthandaccountsfrom Castro'sCuba. 294 California's Man-Made Drought Dirk Yandelland MichaelC. Paganelli All rationingplansignorethe naturalforcesof the market. 296 Teaching Business Ethics in an Environment of Mistrust TiborR. Machan Businessand prosperitydeserveand mustgaina better moralreputation. 304 Child Labor and the British Industrial Revolution LawrenceIt:" Reed Correctingsomefalse and misleadingnotionsabout capitcdismand working children. 308 Why Work More? RogerM. Clites The damagedone by the "stair-step"tax. 309 FireFighting for Profit Nancy It:" Poole A profileof RurallMetroCorporation. 314 Public Interest Is Usually Special Interest DwightR. Lee and RobertL. Sexton "Needs"proliferatewhensomeoneelseis pickingup the tab. 315 Karl Marx: An Irrelevant Man DonaldG. Smith Does Marxhaveanythingto say to the Americanpeople? 317 Book Reviews John ChamberlainreviewsA Childof Fortuneby JeffreySt. John. Other books: The Myth ofScientificPublicPolicyby Robert Formaini,and If You'reSo Smart: The Narrativeof EconomicExpertiseby DonaldN. McCloskey.

CONTENTS AUGUST 1991 VOL. 41 NO.8 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 Edmund A. Opitz Paul L. Poirot Copy Editor: Deane M. Brasfield The Freeman is the monthly publication of The Foundation for Economic Education, Inc., Irvington-on-Hudson, NY 10533. FEE, established 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; David H. Keyston, vice chairman; Paul L. Poirot, secretary; Don L. Foote, treasurer. The costs of Foundation projects and services are met through donations. Donations are in vited in any amount. Subscriptions to The Freeman are available to any interested per son in the United States for the asking. Addi tional 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 mail ing costs.

Copyright © 1991 by The Foundation for Economic Education, Inc. Printed in the U.S.A. Permission is granted to reprint ariy article in this issue except "Teaching Business Ethics in an Environment of Mistrust," 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 1971 to date. Earlier volumes as well as current is sues are available on microfilm from Univer sity Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. 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. Phone: (914) 591-7230 FAX: (914) 591-8910 Cover art: © Washington Post Writers Group PERSPECTIVE Legacy What kind of world will we leave to our chil dren? Will they be burdened with our debts? With in terest on the national debt becoming the major part of Federal spending, with unfunded SocialSe curity obligations soaring into the trillions of dol lars, with "off-budget" Federally insured loans pil ing on trillions of dollars in more debt, one wonders how they ever will pay it off.

Will their environment be spoiled by our pol lution? Will their air be fit to breathe and their water fit to drink? Will their land be poisoned by toxic wastes? And what about the problems children face right now? How willcrime and drugs in our public schools affect them in future years? These are, indeed, serious concerns. Yet our greatest failure-and our greatest hope-may be in the values we teach our children. Are we teaching them thrift and honesty when we incur debts we have no hope of repaying? Are we wise to excuse criminal behavior as merely a "sickness"? Are we helping our children to control their own behavior when we say that a drug addict "can't help it"? Are we showing them how to be come responsible adults when time and again we turn to the government to "solve" personal, family, and community problems, with little concern for the rights or property of others? Our personal and family values may seem in consequential compared with the problems the world willface. Yet they hold the solution.

-BRIAN SUMMERS Statecraftand SouIcraft The true problem with humanity is that far too many of us suffer from inadequate moral enlight enment. Many people simply don't sufficiently cultivate the gardens of their souls-not neces sarily because they are evil; they may simply be engrossed in other things, or not realize the im portance of soulcraft. Consequently, religion and morality are often not the governors of conduct that they should be. Indeed freedom is always at risk precisely because the moral worthiness of 282 freedom and free enterprise are inadequately grasped by too many. Characteristically standing this truth on its head, statists often maintain that people are too selfish, depraved, and morally unenlightened to be trusted with freedom. Butthestateitselfis operatedby those selfsameflawed and unenlightenedpeople. When we start with benighted people and add an activist state, all we get is an actively intervening state staffed with benighted people-hardly an improve ment. And because morally ignorant and back sliding people now have the state's power at their disposal, and deploy it to gain their ends, it stands to reason that we willbe worse off; government ac tion will be inadequate in its conception, clumsy or tyrannical in its execution, and harmful in its ef fects. If anarchy is not safe for imperfect, corrupt ible, unenlightened people, neither is any form of government beyond the minimal state envisioned by the Founding Fathers.

And if people were not flawed and unenlight ened? Then, proponents of statism might argue, there would be no need for a welfare state. But nei ther, friends of freedom would rebut, would they want one. The desire to coerce, or enlist the gov ernment to coerce, your neighbors, competitors, or other fellow citizens on your behalf is itself morally flawed, indeed one of the best proofs of insufficient moral awareness. -JOHN ATIARIAN Ann Arbor, Michigan PromotingInefficiency Increased government intervention in the econ omy can change the efficiency of private busi nessand universities and hospitals, and other nonprofit institutions as well-by changing the kinds of people who survive the Darwinian struggle to reach the top. The executive who knows how to get the most bang for the buck may not be the one who ends up in charge, if what is really needed is someone who can keep Congress from taxing those bucks away or from draining them off by imposing new regulatory restrictions or ancillary obligations for environmental or other purposes.

In short, not only does government itself often operate inefficiently; it can also make businesses less efficient by creating an environment that disPERSPECTIVE advantages those businessmen whose primary-or sole-talents are in promoting efficiency. -THOMAS SOWELL,writing in the May 27,1991, issue of Forbes Churchand State When the church becomes so closely identified with the state, how willthe church be viewed when the state in turn becomes oppressive? Ask the peo ple in Romania or the Soviet Union. A close prox imity of church to state compromises the church's ability to critique the state .... The nature of any state is coercive. For the church to avoid repeating past mistakes she will have to resist the age-old temptation of becoming closely identified with the means of coercion. -ROBERT A. SIRICO,CS~ writing in the JanuarylFebruary 1991 issue of Religionand Liberty Choicesand Consequences Every choice we make has consequences for us.

We must bear the burdens of our choices. If our choices are irresponsible we suffer the conse quences and learn from them. We change our choices by reforming. We reform ourselves each day in small waysthat in most people eliminates the need for drastic change. Governmental institu tions, on the other hand, freeze decisions and make incremental reforms almost impossible. This cre ates the demand for drastic results. Removing more decisions from governmental institutions will make it possible to achieve necessary reforms in an easy rather than difficult manner. The natural rela tionship between freedom and morality, then, can be restored to its appropriate harmony. -LEONARD ~ LIGGIO,writing in the October 1990issue of Chronicles HumanNature It's in people's nature that if something is theirs, it's theirs, and a person works with a totally differ ent mindset if he has property. -NATALIYAYEROMEEVA,a private shopkeeper in Leningrad, quoted in the April 23, 1991, WallStreetJournal 283 284 THEFREEMAN IDEASON LIBERTY Beating the System: Soviet Entrepreneurs Work on the Wild Side by SheilaMelvin B Oris Yeltsin, president of the Russian Republic, discussed the problem of entrepreneurshipin the SovietUnionin a recent televisedinterviewwith Barbara Walters.