April

159 Why War? by Bettina Bien Greaves When free trade and social cooperation are abandoned, conflict will result. 164 A Free-Market University by William H. Peterson A look at Guatemala's Universidad Francisco Marroquin. 166 The New Forest by John Chodes Robin Hood revisited. 168 Government "Investment" by John Semmens Analyzing the flaws in popular thinking about subsidies for public transit. 170 The Egg and I by William E. Pike Who-or what-is the "public" in public property? 172 Ideas and Consequences by Lawrence W. Reed 174 Monopoly Demand for Labor? by Glen Tenney Thoughts on the nature of labor markets. 177 Higher Airfares Ahead? by William L. Anderson How the airline antitrust settlement hurts consumers. 178 Social Security, the Welfare State, and the Market by Sylvester Petro Wishful thinking cannot make the state something it is not. 187 Government-Created Poverty by Joseph P. Martino How Brazil destroyed the possibility of economic growth.

189 Keeping Bad Company? by J. Wilson Mixon Can the state learn from its mistakes? 191 Promote Free and Not Command Constitutions by Bernard H. Siegan Advice for the former Communist countries of Eastern Europe. 193 The Women's Agenda by Deborah Walker Economic freedom is every woman's best friend. 198 All of Us Are Equal? by Tibor R . Machan Questionable kinds of egalitarianism. 200 Mother's Little Helper by Doug Bandow Exploring J. Robert Dumouchel's Government Assistance Almanac. 204 Are Government Statistics Necessary? by Robert Youngblood Data-gathering as a political tool. 205 Morality and Wisdom by Brian Buckles Knowledge by itself does not lead to wisdom. 207 Money and Inflation by Lawrence M. Parks Failuresof the ConsumerPrice Index. 209 Correction, Please! by Mark Skousen 211 Book Reviews John Chamberlain reviews Toward Managed Peace by Eugene Rostow and Final Warning by Dr. Robert Peter Gale; Making Democracy Work: Civic Traditions in Modern Italy by Robert D. Putnam, reviewed by Ben W. Bolch; What Everyone Should Know About Economics and Prosperity by James D. Gwartney and Richard L. Stroup, reviewed by John Attarian; Taking the Environment Seriously edited by Roger E.

Meiners and Bruce Yandle, reviewed by Jonathan Adler. CONTENTS APRIL 1994 VOL. 44 NO.4 THEFREEMAN IDEASON LIBERTY Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 Phone (914) 591-7230 FAX (914) 591-8910 President: Hans F. Sennholz, Ph.D. Managing Editor: Beth A. Hoffman Guest Editor: William H. Peterson Editor Emeritus: Paul L. Poirot, Ph.D. Review Editor: Robert Batemarco, Ph.D. Associate Editors: John Chamberlain Bettina Bien Greaves, Soc. Sci. D. Rev. Edmund A. Opitz Columnists: Gary North, Ph.D. Lawrence W. Reed Mark Skousen, Ph.D. Contributing Editors: Charles W. Baird, Ph.D. Doug Bandow E. Calvin Beisner Peter J. Boettke, Ph.D. Clarence B. Carson, Ph.D. Thomas J. DiLorenzo, Ph.D. Joseph S. Fulda, Ph.D. Roger W. Garrison, Ph.D. Robert Higgs, Ph.D. John Hospers, Ph.D. Tibor R. Machan, 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, estab lished in 1946 by Leonard E. Read, is a non political, educational champion of private prop erty, the free market, and limited government. FEE is classified as a 26 USC 501(c)(3)tax exempt organization. Copyright© 1994 by The Foundation for Eco nomic Education. Permission is granted to reprint any article in this issue, except "Morality and Wisdom," provided appropriate credit is given and two copies of the reprinted material are sent to The Foundation. The costs of Foundation projects and services are met through donations, which are invited in any amount. Donors of $25.00 or more receive a sub scription to The Freeman. 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 de livery, a donation of $40.00 a year is suggested to cover mailing costs.

Bound volumes of The Freeman are available 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 Arbor, MI 48106. PERSPECTIVE The Market's Easy Touch A few years back, yet another phenome non emerged to lacerate the sensibilities of the people in the inner cities: Radios blaring at all hours of the day and night. In addition to the obvious assault on the quality of life in the poorer neighborhoods, the maximum volume radios aggravated racial tensions for the simple reason that most of the radio owners were minority youths in their teens and twenties. In my own neighborhood Spanish Harlem in New York City-derog atory comments about the traditionally out of-doors Hispanic culture abounded. People of all persuasions, especially older folk, began to fight back. Soon the city-run subway and surface transit systems sported large red-on-white signs, "No Radio Play ing." Then, police were authorized to seize radios while they were blaring (as evidence, not civil forfeiture). Some folks took on an us-or-them attitude towards the minority youths that were typically at the center of the problem, and race relations took a giant step backwards.

Along came SONY, and with its well known ingenuity and inventiveness, a new product was placed on the market: the Walkman. Soon, blaring radios became a thing of the past as people of all ages and ethnic backgrounds enjoyed music on trains, buses, and streets alike, while walk ing, riding, or simply sitting on park benches. Users of this product· clearly en joyed having their immediate surroundings suffused with music, possible before the Walkman only with the offensive maximum volume radios. SONY did what it does best: It identified a real need-environment suffusing music which doesn't disturb the neighbors-and filled it with a new product. Today, blaring radios are a rarity; youths and older folk, minorities and whites, all use Walkmans or the many imitations that the market has spawned. And, the racially tinged angry comments of yesteryear have been proven wrong. SONY's success shows the difference between the easy touch of the market response to social problems and the 154 heavy-handed state response to qualityof life issues. SONY has been rewarded with profits for its genteel product. And, "Walk man" is now an entry in the 1993 (10th) edition of the Merriam-Webster dictionary -just see page 1329!

-JOSEPH S. FULDA (Dr. Fulda, a contributing editor of The Freeman, is the author of Are There Too Many Lawyers? And Other Vexatious Ques tions, available from FEE.) Reinventing Government? My wife and I recently had an experience that suggests problems for the much-touted attempt to reinvent government. Because my wife is a foreign national, we were required to register with the Immigration and Naturalization Service (INS). If inspir ing vision statements and glossy reports could make government agencies respon sive to their "clients" our experience with the INS would have been far different. A few weeks before our marriage we obtained a stack of forms with instructions on how to fill them out. The large number of barely intelligible questions attempting to determine whether my wife was a prostitute or had engaged in acts of genocide was a harbinger of the things to come. But despite these initial difficulties, we were able to complete everything in full and report as instructed to the Los Angeles INS office.

The agency's vision statement, visible upon entering, is an impressive list of ad jective-laden sentences. It begins by pro claiming the agency's commitment to qual ity service and ends by stating, in large block letters that "well-trained" information of ficers will, above all else, "create an au thentic and compassionate culture treating each person with respect and dignity." Judging from the information officers that "assisted" us, it seems that INS employees are working overtime to violate every edict laid out in their pledge. Rude is far too weak a word to describe the way our officer treated us. Upon receivPERSPECTIVE ing the packet of paperwork we had spent several weeks completing, the agent pro ceeded to throw aside with unnecessary force what he considered superfluous. He refused to answer the questions I politely asked, only rebuffing me with "I'll tell you what you don't have and then tell you to leave. " After shuffling through the dishev eled stack offorms , he grudgingly gave them his stamp of approval. At no time did our "public servant" make eye contact with us.

At yet another desk, another INS official attempted to intimidate my wife with insult ing questions, such as "Are you sure you know your name?" and, "Well, why don't you sign it then?" As we sat and waited, we watched as one "customer" after another left the interview with a deep scowl. The motives of our taxpayer-supported officials suddenly became transparent. As unac countable members of the civil service, they could enjoy exercising petty power over those who had no choice but to submit. Whether all government bureaus exhibit such astounding contradictions between vi sion and reality is a question I cannot answer. I can state with confidence, how ever, that it would be impossible for rude ness of the type we experienced at the INS to persist in any organization subject to competition. Such behavior would last no longer than it takes customers to walk out the door. America's infatuation with the idea that we can somehow reform government with the stroke of a pen ignores the role of incentives and disincentives in shaping be havior. Creating empty mission statements does nothing to motivate otherwise unmo tivated personnel. A lack of accountability and proper incentives to reward diligence creates a situation in which employees have difficulty maintaining any sense of respect for their colleagues, their clients, or them selves.

I can only hope that the emptiness of the INS vision statement is not repeated on a larger scale by the "reinvention" of gov ernment. But I am not optimistic. -JEFFREY G. LEE 155 THEFREEMAN IDEASON LIBERTY THE ECONOMIC WAY OF THINKING PART? by Ronald Nash I n previous parts of this series, I explained the importance of becoming familiar with a number of commonsense principles that make up what is often called the economic way of thinking. Principles already exam ined include the importance of incentives and the fact that everything has a cost. This month's principle intr04uces us to the un avoidable fact of economic uncertainty. The Reason for Economic Uncertainty We seldom know enough about individual persons, even people especially close to us, to predict with any certainty what choices they will make among the various options open to them. We may know that a partic ular friend ranks tickets to Chicago Cubs baseball games very high in his personal scale of values. But we may not know how smitten he has become with the young lady he met yesterday and how suddenly the Dr. Ronald Nash is a contributing editor of The Freeman. He is professor of philosophy and theology at Reforrn.ed Theological Seminary in . Orlando, Florida. His many books include The Closing of the American Heart: What's Really Wrong with America's Schools and Poverty and Wealth: Why Socialism Doesn't Work, both published by Probe Books in Richardson, Texas.