February

THEFREE IDEAS ON LIBERTY 44 Freedom of the (Printing) Press MichaelL. Coulter A new threat to pressfreedom. 46 ~esurfacing the Road to Serfdom Susan Marie Szasz Property rightsare anterior to, and necessaryfor, human rights. 50 Lessons from the Road: The Evolution of an Eatery John BadenandRamonaMarotz-Baden McDonald'sstrivesto serve a changingmarket. 52 The 1946Voter Revolt Against Government Regulation Gary M. Anderson Governmentinterventioncan be rolled back. 57 Wllhelmvon Humboldt: German ClassicalLiberal RichardMiniter A seminalthinker on the philosophyof self-development. 61 The Growth of Privatized Policing NicholasElliott Privatesecurityguardsnow outnumber the policein Britain,the United States, and Canada. 64 Did Horvat Answer Hayek? The Crisis of YugoslavSelf-Management DavidL. Prychitko The failureof Yugoslavsocialism. 71 The Charade of Participatory Democracy RidgwayK. Foley, Jr.

Publichearingsare a snare and a delusion. 76 Book Reviews John ChamberlainreviewsPopulationMatter&·People,Resources, Environment,andImmigrationby Julian L. Simon.Also featured: Economics on Trial: Lies, Myths, and Realitiesby Mark Skousen;Ideas, Interests& Consequencesby Andrew Gamble,et al. CONTENTS FEBRUARY 1991 VOL. 41 NO.2 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; Philip M. Spicer, vice chairman; Paul L. Poirot, secretary; DOll 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 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 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 PERSPECTIVE Valuingthe Future If private property rights are well defined and respected, then the owner of a resource has confi dence that he or she will, by maintaining owner ship, benefit from any increase in the future value of the resource. As evidenced by the fact that graf fiti is ubiquitous on the walls of public rest rooms but seldom seen on the walls of rest rooms in pri vate homes, people are more concerned with the future value of property they own than of property they do not own. But genuinely farsighted behavior often re quires that individuals consider consequences of their decisions that will not be realized until after they are gone. The private ownership of property by itself will not provide the necessary incentive for people to concern themselves with outcomes which extend beyond their own existence. Yet we observe property owners sacrificing current con sumption in order to make investments that will not payoff for several generations. Many re search and development projects will not, at best, payoff for decades. Owners of forest land replant white oak and Douglas fir trees that will not be harvested for 60 or more years. Some people in vest in the production of wines and spirits that will be aged a century or more before they are sold and consumed. This behavior occurs because private ownership rights are generally transfer able, and because future values are reflected in current prices.

-Dwight R. Lee and Robert L. Sexton, writing in the April 9, 1989, OrangeCountyRegister Antitrustand Monopoly Government, and not the market, is the source of monopoly power. Government licensing,certifi cates of public convenience, franchises, patents, tariffs, and other legallyrestrictive devices can and do create monopoly, and monopoly power, for spe cific business organizations protected from open competition. Abusive monopoly is alwaysto be as-' sociated with governmental interference of pro duction or exchange, and such situations do injure consumers, exclude sellers, and result in an inefficient misallocation of resources. But importantly, for this discussion, such monopoly situations are legal, created and sanctioned by the political au thority for its own purposes. Thus, ironically or in tentionally, the bulk of the abusive monopoly in the business system has always been beyond the scope of antitrust law and antitrust policy. An titrust ... is both a myth and a hoax.

-Dominick 1: Armentano, Antitrustand Monopoly:Anatomy ofa PolicyFailure The Marketfor Corporate Control The (relatively) free market economy of the United States has found a way to pierce the pro tective veil that insulates unresponsive manage ment from the wrath 'of small shareholders-the takeover. The corporate takeover is practically the only way that entrenched management can be shaken up and either forced to be responsive to shareholder interests or fired. This market for corporate control does not exist to any great ex tent in any country except the United States, which provides a competitive advantage over other countries because the threat of takeover provides corporate management an extra incen tive to work for shareholder interests rather than its own. Thus, shareholders of United States com panies receive a higher return on investment than can investors in companies that are not subject to a takeover threat, all other things being equal.

The attack on Drexel Burnham, and the threat of an attack on anyone else who tries to facilitate the market for corporate control with junk bonds, is bound to harm the market for corporate control and thus decrease the already weak voice that shareholders have. Management of companies that do not have to fear a takeover will have less incentive to be efficient, which also hurts employ ees and consumers. -Robert W. McGee and Walter E. Block, writing in the NorthernIllinoisUniversityLaw Review PERSPECTIVE On the Skids I wonder if one could not draw a parallel between a drunk on the skids and the American people with their addiction to more government. Or maybe compare our socialwelfare system with a mountain system of high peaks and bottomless ravines. Behind us are the mountaintops of capitalism; below us is the chaos of socialism;we are perched on the slippery slopes which lead only downward.

Recently we witnessed several drunks in Eastern Europe, who after 40 years of socialism finally hit the bottom and only then were able to pick them selves up to vow never again to partake of what had nearly killed them. Need we follow them clear to the pits before we realize the terrible damage we do to ourselves when we tinker with the marketplace? -Douglas N. Merritt, writing in the July 10, 1990, Atchison DailyGlobe,Atchison, Kansas The CaretakerState The modem state taxes people in the name and fa~ade of compassion in order to accomplish its sal vation of all men by legislation, controls, and sci ence. People have long believed in statist salvation, and they have looked to the state to solve prob lems, moral problems, they themselves refuse to acknowledge as their responsibility. One of my more vivid memories of this came with the 1971 earthquake in California's San Fernando Valley in Los Angeles. I heard someone in a checkout line of a supermarket complain about the earthquake, and earthquakes in general, and ask, "Why doesn't the government do something about it?"

Impossibletasks have been asked ofthe state, and the state has failed again and again.As a falsesavior, it is increasinglythe target of the people's bitterness. The crisiswillonlyworsen,and the evilsexperienced by peoples and states will intensify,until they recog nize that the state is not god, nor is its power to do good equal to what man can do under God. -Rousas John Rushdoony, writing in the June 1990issue of ChalcedonReport 44 THEFREEMAN IDEASON LIBERTY Freedom of the (Printing) Press by Michael L. Coulter F reedom of the press is coming under a new attack in the United States. The threat is of an economic nature, and is rooted in sin cere, seemingly harmless, environmental con cerns. But if present trends continue, the results could have a devastating effect on press freedom. Several states recently enacted laws requiring newspapers to use varying amounts of recycled paper. Other states are considering similar mea sures. The California law, passed in 1989, man dates that, beginning in 1991, 25 percent of newsprint purchased by publishers contain at least 40 percent of old newspaper print (ONP). This rate increases incrementally until the turn of the century when 50 percent of purchases must con tain 40 percent of ON~l The Connecticut law, passed in 1990,is even tougher. It mandates that by 1993,20 percent of newspaper that is consumed willhave to be recycled.This rate willreach 90 per cent by 1998.2 Several bills have been introduced in Congress that would require newspaper pub lishers to use certain percentages of recycled newsprint, while other bills would amend the tax code so that publishers who don't use recycled newsprint are penalized.