March

92 Hollywood's Views of Capitalism Raymond J. Keating Movies by Frank Capra, Oliver Stone, and Francis Ford Coppola. 96 America's Impending Brain Drain Fulton Huxtable Our changing values and growing government have more consequences than meet the eye. 101 Class Exclusion Notice Virgil and Lois Swearingen Two airline passengers attempt to prevent litigation being brought in their name. 103 Scholarship, Leadership, and Public Works Jobs William R. Allen and William Dickneider A small example of the failure of higher education. lOS The Forgotten Consumer Eric-Charles Banfield In matters of trade, jobs are not the issue. 107 The Case for Shopping at Kroger Anthony Woodlief How strikes harm workers. 110 Richard Cobden: Creator of the Free Market John Chodes A nineteenth-century businessman shows us the way to economic freedom. 116 Book Reviews John Chamberlain reviews Out of Work: Unemployment and Government in Twentieth-Century America by Richard Vedder and Lowell Gallaway; Pride, Prejudice, and Politics: Roosevelt Versus Recovery, 1933-1938 by Gary Dean Best, reviewed by C. Lowell Harriss; Capital Ideas: The Improbable Origins of Modern Wall Street by Peter L. Bernstein, reviewed by Raymond J. Keating.

CONTENTS MARCH 1993 VOL. 43 NO.3 THEFREEMAN IDEASON LIBERTY Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 President: Hans F. Sennholz, Ph.D. Editor: John W. Robbins, Ph.D. Senior Editor: Beth A. Hoffman Associate Editors: John Chamberlain Bettina Bien Greaves Edmund A. Opitz Paul L. Poirot, Ph.D. Contributing Editors: Clarence B. Carson, Ph.D. Thomas J. DiLorenzo, Ph.D. Robert Higgs, Ph.D. John Hospers, Ph.D. Ronald Nash, Ph.D. William H. Peterson, Ph.D. Richard H. Timberlake, Ph.D. Lawrence H. White, Ph.D. 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 non-political, educational champion of pri vate property, the free market, and limited government. FEE is classified as a 26 USC 501(c)(3)tax-exempt organization. Copyright © 1993 by The Foundation for Economic Education. 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 Foun dation.

The costs of Foundation projects and ser vices are met through donations, which are invited in any amount. Additional copies of single issues of The Freeman are $2.00. For foreign delivery, a donation of $35.00 a year is suggested to cover mailing costs. Bound volumes of The Freeman are avail able from The Foundation for calendar years 1972 to date. Earlier volumes as well as cur rent issues are available on microfilm from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI48106. Phone (914) 591-7230 FAX (914) 591-8910 PERSPECTIVE Poverty and Freedom Poverty is an uninteresting subject. Pov erty has been, and continues to be, man's standard fate throughout his entire history. The reason is simple. People are poor be cause they cannot produce much that is valued by others. The intriguing question is why a tiny percentage of the world's popu lation, for only a tiny part of man's history, has been spared man's usual fate. If we could answer that question, America's wealth could be readily duplicated through out the world.

While nobody has the complete answer, there are some clues, hunches, and bits of circumstantial evidence. Freedom is the connection. Where we find riches, we tend to find freer people. An examination of Amnesty International's listings of human rights abuses shows a definite pattern where those nations with the least respect for human rights are also the poorest. By con trast, those with the greatest respect for human rights tend to be the richest. -WALTER E. WILLIAMS The War on Words Words-nasty or nice-are never more than passive sparks. Only when there's something to burn can there be a fire. The tantrums you threw as a child, the rage you feel when your expectations are unfulfilled, the angry outbursts that follow stress in your life-these are learned responses to external events. Each of us is responsible not only for how we act, but for how we feel. Yes, as children we were slaves to parental schooling and guidance. Values on our moral menu were instilled in us with little choice or control on our part. But-we don't remain helpless toddlers. Humans have powerful, active centers of volition and reason in their nog gins capable of discerning good from bad, better from worse. We are educable for life.

Childhood emotions and behaviors can be silly, impetuous, and wrong-and they can be changed. We don't have to be jerks just 82 because Mom and Pop couldn't do a better job. Anti-hate/harassment ordinances seem now the vogue. City fathers and mothers, with altruistic impatience, try to protect minority sons and daughters from verbal sewage. We reflect: Prohibition failed to control alcohol consumption; the War on Poverty increased welfare lines; the War on Drugs is a horrible political addiction. And now the War on Words: What will be its impact on freedom of speech? By exten sion, will we give credence to wouldbe censors of all forms of communication? Words will never hurt us like the sticks and stones of bad laws. -JERRY BOAL Congressional Reforms Several recent reforms tend to bias the composition of the Congress in such a way as to be inimical to liberty. First, with the advent of strict limits on outside income, members of Congress and high government officialsappointed to office end up viewing the federal government as their principal source of wealth. This is no doubt a partial explanation for the actions of these officers of the state; laws are passed and regulations are enacted which have the effect of influencing a large number of their constituents to regard the state as their principal benefactor.

Second, full financial disclosure require ments ensure that only persons with a re markable degree of personal tolerance of government intervention and invasion of privacy will seek or accept high office. It is all too easy for a man to suppose that what interventions and burdens he can tol erate, his neighbors can and ought to bear as well. Third, campaign'spending limitations and public financing of campaigns serve to limit the role of private wealth in elections. This means that fewer persons who have ac quired wealth in freedom, and are thus PERSPECTIVE favorably disposed to economic freedom, willgain office.Invariably, those who do not favor economic freedom favor political re distribution of wealth and the consequent diminution of freedom. -JOSEPH S. FULDA Public EmployeePay Pay for employees of state and local governments rose four times faster than pay for employees in the private sector during the 1980s.By 1989,the average government employee at the state and local level re ceived 9.1 percent more compensation than the average nongovernment employee.

From 1980 to 1989: Average private sector employee com pensation increased by 3.4 percent or $960 annually after adjusting for inflation. The average increase for employees of state and local governments was 14.6 per cent or $4,031 annually after adjusting for inflation. Thus, compensation for state and local government employees increased $4.20 for every $1.00 of increase in the private sector. In all but five states, state employees have higher average wages and salaries than pri vate sector employees. Local government employees average more than nongovern ment employees in 36 states. During the 1980s: State government employee wages and salaries grew faster than those for private sector employees in all but four states. Wages and salaries of local government employees grew faster than those in the pri vate sector in every state but Massachusetts. Spending for education was not a major factor. Government employees not involved in education saw wages go up 79.2 percent beforeadjustingfor inflation,comparedto a 65.8 percent increase for those working in education.

-WENDELL Cox and SAMUEL A. BRUNELLI "America's Protected Class" 83 THEFREEMAN IDEASON LIBERTY ETHICS AND BUSINESS by Edmund A. Opitz A few years ago there was an immensely popular television series, named after Dallas. The central character of this show was a powerful and unscrupulous business man who got that way by climbing over the backs of rivals, manipulating politicians, and wheeling and dealing with shadowy figures on the fringes of the underworld. J. R. Ewing finally got in the way of a bullet, and for months this nation was racked by the question: "Who shot J.R.?" But the civi lized man could only wonder why the trigger man waited so long! Business and the businessman have had a bad press, almost uniformly. Do you re member the television show whose hero was a businessman? The show that portrayed this businessman as a person of integrity and vision, who labored long hours to produce a product that supplied a genuine need, which he marketed at prices people could afford?