October

IDEASON LIBERTY 540 Ending Welfare as They Knew It by Gerald Wisz CONTENTS A private group run by committed volunteers made real changes in a OCTOBER dependency-causing welfare program. 1994 543 Grassroots Mentors by Robert L. Woodson VOL. 44 Personally-involved volunteers are helping neighborhood youngsters NO. 10 make wiser choices. 545 What Makes Entrepreneurs Tick? by Gary S. Williams Profiles of entrepreneurs in southeastern Ohio show that perseverance is the key. 550 Beyond the Invisible Hand by Haven Bradford Gow The Golden Rule is a necessary foundation for modern business. 551 Ideas and Consequences: "The Immigration Problem" by Lawrence W. Reed 553 School Choice for Inner-City Kids by Timothy P. Ehrgott Private philanthropy gives inner-city parents educational choice without burdening taxpayers. 555 Foreign Aid the Voluntary Way by Menlo F. Smith An American volunteer group gives a hand up to entrepreneurs in developing countries.

557 Good Intentions Under the Microscope by Thomas A ~ Hyatt Congress's attempt to improve clinical laboratories has lowered quality while adding to costs. 559 A Firm Hand Up for Street Addicts by Phil Boerner In Denver, a private voluntary group helps those who are ready to help themselves. 561 Sour Days at the Lemonade Stand by Ted Levinson Government regulation threatens to squeeze even the simplest businesses. 563 The Befriending Volunteer: Octavia Hill by Peter Clayton The nineteenth-century English reformer who championed personal, voluntary methods of social improvement. 565 Some Philanthropists Turn Their Backs on Voluntarism by Kimberly O. Dennis The grant-giving foundations have all too often acted to strengthen government programs at the expense of voluntary groups. 567 Zsa Zsa and the Litigation Explosion by Ralph R. Reiland Growing legal restrictions on behavior are stifling creativity.

569 Time to Smarten Up Rather than Dumb Down by Philip Perlmutter The quest to improve standards through measures of achievement is being compromised by bending the rules for favored groups. 571 Uncle Sam's High-Priced "Volunteers" by Jill K. Cunningham The government buys the illusion of a youth volunteer program-while undermining the ethic of voluntarism. 573 Correction, Please! I'm All for Free Trade, But ••.by Mark Skousen 576 Book Reviews John Chamberlain reviews Free Markets, Free Men by George C. Roche III; The Virtue of Liberty by Tibor R. Machan, reviewed by J. E. Chesher; The Downing Street Years by Margaret Thatcher and The View From No. 11: Memoirs of a Tory Radical by Nigel Lawson, reviewed by Raymond J. Keating; Facing Up: How to Rescue the Economy from Crushing Debt and Restore the American Dream, by Peter G. Peterson, reviewed by John Attarian; American Democracy: Aspects of Practical Liberalism by Gottfried Dietze, reviewed by William H. Peterson.

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 Managing Editor: Beth A. Hoffman Guest Editor: James L. Payne EditorEmeritus Paul L. Poirot Lewisburg, Pennsylvania Book ReviewEditor Robert Batemarco Marymount College, Tarrytown, New York AssociateEditors John Chamberlain Cheshire, Connecticut Bettina Bien Greaves Resident Scholar, FEE Edmund A. Opitz Chatham, Massachusetts Columnists Lawrence W. Reed Mackinac Center for Public Policy Midland, Michigan Mark Skousen Rollins College, Winter Park, Florida ContributingEditors Charles W. Baird California State University, Hayward Doug Bandow Cato Institute, Washington, D.C. E. Calvin Beisner Covenant College, Chattanooga, Tennessee Peter J. Boettke New York University Clarence B. Carson American Textbook Committee Wadley, Alabama Thomas J. DiLorenzo Loyola College, Baltimore, Maryland Joseph S. Fulda New York, New York Roger W. Garrison Auburn University Robert Higgs Edmonds, Washington John Hospers University of Southern California Los Angeles, California Tibor R. Machan Auburn University Ronald Nash Reformed Theological Seminary Maitland, Florida James L. Payne Sandpoint, Idaho William H. Peterson Heritage Foundation, Washington, D.C.

Jane S. Shaw Political Economy Research Center (PERC) Bozeman, Montana Richard H. Timberlake University of Georgia Lawrence H. White University of Georgia 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, educa tional champion of private property, 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 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 Foundation. The costs of Foundation projects and services are met through donations, which are invited in any amount. Donors of$25.oo or more receive a subscription 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 delivery, 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 in microform from University Microfilms, 300 North Zeeb Road, Ann Arbor, MI 48106. PERSPECTIVE Better Than Snake Oil This issue of The Freeman emphasizes voluntarism and voluntary solutions to pub lic problems, a topic of great interest to friends of limited government. When people have a problem to solve, they tend to reach for anything. When we're ill, for example, there's no limit to the remedies some of us are willing to try. Even drinking snake oil can seem better than giving up and doing nothing. Many govern ment programs are adopted on this same basis. Their promoters know that they have failed in the past, but they support them saying, "we've got to try something."

The logic may be weak, but the sentiment behind it has a powerful appeal. The human race is a problem-solving species. If there are public problems to be addressed, people are likely to want to tackle them. If govern ment is the only problem-solving system they see, then they will go on using it, decade after failed decade. The conserva tives and libertarians who advise them not to will get no credit for saying "I told you so." They will go on being ignored. The natural, obvious problem-solving system for those who object to' the coercion of the state is voluntarism. Voluntary groups can do-and are doing!-almost ev erything government is trying to do, and they can do it more sensitively and more efficiently. Friends of liberty needn't be marginalized as ineffective naysayers. Holding high the banner of voluntarism, they can be the real problem-solvers. It behooves us to learn about the volun tary sector, to understand its prospects, and to take our places as donors and participants in voluntary projects in our local commu nities.

-JAMES L. PAYNE Guest editor for this issue, James L. Payne, is director ofLytton Research and Analysis in Sandpoint, Idaho. He is the author of Costly Returns: The Burdens of the U.S. Tax System, and is writing a book on voluntarism. 538 Voluntarism'sPersonalTouch: A Letter from OctaviaHill Voluntarism is more than a principle. It also incorporates a style of leadership, a way of approaching people and their prob lems. Ifyou are not going to useforce to get people to reform, it tends to follow that you will have to approach them in a friendly manner in order to persuade them. Volun tarism is therefore a sociable, sensitive method ofreform: the exact opposite of the impersonal, bureaucratic methods of gov ernment. One who emphasized this personal ap proach was Octavia Hill, the nineteenth century English reformer. As Peter Clayton describes in this issue's article about her, she was instrumental in founding a number ofvoluntary enterprises in the social welfare field. In the 1860s she began a program of low-cost housing and social uplift based on personal contact between tenants and the manager. As a housing manager herself, she played the role of befriender, always looking for ways to guide tenants to happier lives. She brought them flowers, arranged outings, set up drama groups, and estab lished a savings program for them.

Her method of "friendly visiting" was copied in housing projects in other coun tries, including the United States. The fol lowing excerpt from an 1880 letter to a fellow-worker in Philadelphia is an eloquent statement of the importance of personal involvement in programs of social uplift. The document was unearthed in the Temple University Library by researcher Tina Hum mel. Tell your fellow-workers from me, will you? how much interested I am to hear of what they have done and are doing. I am satisfied that visiting, such as I gather you have established, which brings those of different classes into real, friendly relations, must in time help to raise those who are fallen low in any sense of the word; from PERSPECTIVE wealth, little can be hoped; from inter course, everything. That is to say, every thing we have to give seems to communicate itself to those we love and know; if we are true we make them truthful, if faithful, full of faith; if earnest and energetic, earnest and energetic; while they give to us what ever they excel in: patience, energy, hope, industry.

It is only a gradual process, but it is a sure one. Human intercourse in God's own mercy, seems appointed to be the influence strongest of all for moulding character. What we strongly desire to see those we work among become; what we ourselves struggle to be, that or something nearer to it, in time, they will be; and as poverty, drunk enness, dirt, and many other outward evils spring from character, so we can only really teach them by moulding character; first our own, and then insensibly and gradually those of our friends, poor or rich, and submitting in turn to learn from them in all in which they are greater or better than we. Thus and thus only can we help one another, and your systems and our systems are valuablejust in so far as they bring loving and helpful people among those who suffer or sin, and enable the different powers developed in different classes of people to tell on one another. From the beginning of the world it has been so, and we shall find no other way to save and to help. What we are in our homes, our shops, our markets, our school, our whole lives, that we shall be among our poor.

You who seem to have succeeded in developing regular visiting to a great extent, may be happy in remembering that it means the human intercourse, help, and friendli ness which will lighten, cheer and purify many a home. I am sure you will scorn all systems if ever they become mere routine, and will feel that each visitor is bound to throw into the regular work the utmost amount of fire and heart, that your wisdom must be penetrated with tenderness, and your mercy far seeing in its wisdom. 539 THEFREEMAN IDEASON LIBERTY Ending Welfareas They Knew It by Gerald Wisz B roadway Presbyterian Church, located in uptown New York City near Colum bia University, has always had a place in its heart for the poor people in its community. That's why the church started a soup kitchen in 1980. The indigent, many of whom were drug-addicted and incapable of holding down a job, would come to the church to eat.