October

381 Why Free Markets Are Difficult to Defend by D. Eric Schansberg That which is seen and that which is not seen. 383 Your Money-Your Choice by E. C. Pasour, Jr. Correcting the statist assumptions of ABC News. 386 The Trouble with Keynes by Roger W. Garrison Keynesian economics is defunct in theory, but Washington hasn't got the word. 389 Why Government Can't Create Jobs by Mark Ahlseen In order to create, government must first destroy. 391 A Life-Saving Lesson from Operation Desert Storm by Donald J. Boudreaux Voluntary military service reduces the incentive to use humans' lives recklessly. 393 The Cause of Freedom Begins with Me by Roger Koopman Free societies begin with free individuals. 395 Immigration-Friend or Foe? by James E. McClure and T. Norman Van Cott Working immigrants enrich everyone. 397 The Common Good and the Free Rider by Mack Tanner Solving an economic and practical problem.

402 Why Adam Smith Burned His Clothes by Edwin G. West And today's officeholders pay their babysitters' taxes. 404 A Tribute to Edmund A. Opitz by Robert Sirico On the occasion of his retirement. 406 Book Reviews John Chamberlain reviews the first volumes in The Freeman Classics Series; William H. Peterson examines The Coming Collapse of America and How to Stop It by Harry E. Figgie, Jr. CONTENTS OCTOBER 1993 VOL. 43 NO. 10 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: Doug Bandow Clarence B. Carson, Ph.D. Thomas J. DiLorenzo, Ph.D. Roger W. Garrison, 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. Donors of $25.00 or more receive a subscription to The Free man. Student subscriptions are $10.00 for the nine-month academic year; $5.00 per semester. Additional copies of single issues of The Freeman are $2.00. For foreign deliv ery, a donation of $40.00 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. The Freeman is available on microfilm and CD-ROM from University Microfilms, 300 North Zeeb Road, Ann Ar bor, MI 48106. A computer diskette contain ing the articles from this month's issue is available from FEE for $10.00; specify ei ther 31/2" or 51/4" format. Phone (914) 591-7230 FAX (914) 591-8910 PERSPECTIVE Prison Costs Prison operating costs in New York State have risen by 148 percent since 1983, while the number of inmates has increased only 93 percent. It is estimated that the state's prison population willgrow from the current 54,900 to 74,400 by the year 2000. Annual operating costs in NewYork are $24,173 per inmate. -EXECUTIVE ALERT The Importance of Self-Government I asked my family one evening when we were all gathered in the living room, "What is the first thing that comes into your mind when I say the word government?"

The responses? "The United States of America and its people." "Bill Clinton." "The White House." "A group of men." Most of us, I think, would have answered in a similar way. The first thing that comes into our minds is civil government. But our minds are different from the minds of earlier Americans. In the first chapter of his book God and Government, Gary Demar does an excellent job of pointing out how. In 1828, Noah Webster defined government in terms of personal self-control: "Direction, regu lation. 'These precepts will serve for the government of our conduct.' Control, re straint. 'Men are apt to neglect the govern ment of their temper and passions. '" Prior to World War I, textbooks dealing with national government were qualified with the title "civics," indicating their awareness that there were personal, family, church, school, and civil governments, each with its own legitimate sphere of authority.

Webster's 1828definition went on to include family government before he dealt with government on the state or national level. The fact that modern dictionaries list civil government first indicates how much our thinking has changed. -MARTY MATTOCKS 370 A Political Harvest Another effect of public instability is the unreasonable advantage it gives to the sa gacious, the enterprising, and the moneyed few over the industrious and uninformed mass of the people. Every new regulation concerning commerce or revenue, or in any manner affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow citizens. This is a state of things in which it may be said with some truth that laws are made for the few, not for the many.

-The Federalist The Sins of the Intellectuals The intellectual leaders of the peoples have produced and propagated the fallacies which are on the point of destroying liberty and Western civilization. The intellectuals alone are responsible for the mass slaugh ters which are the characteristic mark of our century. They alone can reverse the trend and pave the way for a resurrection of freedom. -LUDWIG VON MISES Capitalism The bourgeoisie, during its rule of scarce one hundred years, has created more mas sive and more colossal productive forces than have all preceding generations to gether. Subjection of nature's forces to man, machinery, application of chemistry to in dustry and agriculture, steam cultivation, PERSPECTIVE canalization of rivers, whole populations conjured out of the ground-what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

-KARL MARX Economic Control Economic control is not merely control of a sector of human life which can be sepa rated from the rest; it is the control of the means for all our ends. -F. A. HAYEK The Wisdom of Henry Hazlitt The socialists and communists propose to cure poverty by seizing private property, particularly property in the means of pro duction, and turning it over to be operated by the government. What the advocates of all expropriation schemes fail to realize is that property in private hands used for the production of goods and services for the market is already for all practical purposes public wealth. It is serving the public just as much as-in fact, far more effectively than-if it were owned and operated by the government. -HENRY HAZLITT (1894-1993) "Private Property, Public Purpose" A memorial service for Mr. Hazlitt was held at The Foundation for Economic Educa tion on August 4, 1993. Edmund A. Opitz, Bettina Bien Greaves, Hans F. Sennholz, George F. McKendry, and Andrea Rich shared reflections on Mr. Hazlitt's charac ter, intelligence, and dedication to the cause of liberty.

371 THEFREEMAN IDEASON LIBERTY THE ECONOMIC WAY OF THINKING PART 1 by Ronald Nash T his is the first of an eight-part series designed to introduce the general reader to economics. None of these essays will contain a single graph or make any use of complex equations or higher mathematics. These essays will explain fundamental eco nomic principles in plain language that any one will be able to understand. This first essay in the series will introduce the reader to economic thinking through the following steps: (1) I will offer a definition of the term economics; (2) I will explain two fundamen tal economic concepts, scarcity and choice; (3) I will relate scarcity and choice to the way in which every human being unavoid ably ranks his options; and (4) I will discuss the difference between free goods and eco nomic goods. What Is Economics? It is a mistake to think that economics deals only with the making, spending, sav ing, and investing of money or with the Dr. Nash is a Contributing Editor of The Free man and Professor of Philosophy and Theology at Reformed Theological Seminary in Orlando.