September

IDEAS ON LIBERlY 468 Is Politics Insoluble? by Henry Hazlitt Is a science of government possible? 474 Property Rights, American Constitutionalism, and International Human Rights "Law" by Daniel F. Walker Individual rights under siege. 478 Rights Versus Entitlements by Steven Yates Granting entitlements leads to an expanding and costly government. 480 Ideas and Consequences: America's Economics Knowledge Deficit by Lawrence W. Reed 482 Economic Illiteracy Makes Bad Law by Mark S. Pulliam When courts overthrow private contracts they undermine the system of private property and exchange on which business. rests. 486 "Thou Shalt Not Steal" by Jan Michal Malek Protection of private property is essential for economic progress. 491 Treachery? by Scott Alexander The importance of trust. 493 How Japan Realized Her "Impossible Dream" by Toshio Murata It was hard work, saving, entrepreneurship, and trade that enabled the Japanese to pull themselves up from ground zero after World War II.

501 Science-Coming Out of the Closetby Eric W. Hagen and James J. Worman Beware of the predictions of environmental experts with political bias. 505 A Crisis in the Making: Europe's Welfare Burden by Nicholas Elliott Financial crises threaten entrenched programs. 508 Are Women Exploited by the Free Market? by John Chodes Before the enactment of "pro-labor" laws, women competed successfully on the market for work and wages. 514 Singing the Ticket Scalping Blues by David N. Laband When ticket holders are prohibited from offering their tickets to others, the wishes of the most eager would-be buyers are frustrated. 516 Transitting Away from the Free Market by Robert A. Condry New subsidies for mass transit. 518 What Is a Capitalist? by Roger M. Clites Should a capitalist be maligned for self-denial (saving) and producing for others? 520 FDA and the Market in Natural Medicine by Stephanie Hiller Restricting the ability of individuals to care for their own health needs.

525 Correction, Please! The Free Market Works Fine, Except •.. by Mark Skousen 528 Book Reviews Bettina Bien Greaves reviews The Ghost of the Little House: A Life of Rose Wilder Lane by William Holtz; The God of the Machine by Isabel Paterson, reviewed by John Attarian; Russian Currency and Finance by Steve H. Hanke, Lars Jonung, ·and Kurt Schuler, reviewed by William H. Peterson; Angry Classrooms, Vacant Minds by Martin Morse Wooster, reviewed by John Hood; Code Blue: Healthcare in Crisis by Edward R. Annis, M.D., reviewed by Frank J. Primich, M.D.; Man and Nature, The Foundation for Economic Education, reviewed by Raymond J. Keating. CONTENTS SEPTEMBER 1994 VOL. 44 NO.9 THEFREEMAN IDEASON UBERTY Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 Phone (914) 591-7230 FAX (914)591-8910 President: Hans F. Sennholz ManagingEditor: Beth A. Hoffman GuestEditor: Bettina Bien Greaves 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 50l(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 $25.00or 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 COEtS. Bound volumes of The Freeman are available from The Foundation for calendar years 1972 to date. The Freeman is available on microfilmand CD-ROMfrom University Microfilms,300 North Zeeb Road, Ann Arbor, MI 48106. PERSPECTIVE A Word From the Guest Editor For many years I have been on the Foun dation's staff. When people asked me what I did, I would tell them, "I read, I write, and I look things up." That about covers it.

Occasionally I edited an article for The Freeman. But this is the first time I have actually edited an entire issue. The quality of the articles included here is impressive. A thought-provoking article on government by the late Henry Hazlitt leads off. Daniel Walker, Mark S. Pulliam, Scott Alexander, and Jan Malek deal with the very fundamentals of a market society private property, contract, and trust. And Japanese professor Murata destroys the myth that MITI's "industrial policy" is invincible. These and the other articles in this issue are described briefly in the Table of Contents. Being Guest Editor has been a challenge, also fun. Through it all, I have gained much respect for those before me, especially Paul Poirot and Brian Summers, who, month after month, and year after year, put to gether a journal of well-written, interesting, educational, and thought-provokingarticles. -BETTINA BIEN GREAVES Justice The utilitarian economist does not say: Fiat justitia, pereat mundus. [Let justice be done even though the world be destroyed.] He says: Fiat justitia, ne pereat mundus.

[Let justice be done so the world will not be destroyed.] He does not ask a man to renounce his wellbeing for the benefit of society. He advises him to recognize what his rightly understood interests are. In his eyes God's magnificence does not manifest itself in busy interference with sundry affairs of princes and politicians, but in endowing his creatures with reason and the urge to ward the pursuit of happiness. -LUDWIG VON MISES Human Action 466 Quality I still remember my teachers in Switzer land some fifty years ago hammering into our heads that only will we succeed in the bigger world, if we produce quality, to make up for the small size of the homeland. "Our country has no natural resources," they used to preach, "but we have people, and if they excel, they will be noticed. If every move you make is more courteous, the workplace cleaner, the food you prepare better, you will succeed. Not everyone is cut out to be great and to do great things, but as long as you do even little things in a great way, you will not only survive but tri umph."

-GINA KINDSCHI BLOOM Variety It is easy to point to evil in the world. But if men are free and at peace with their neighbors, the good that comes froni social cooperation overpowers the bad. Individu als with different aptitudes, interests, tal ents ,wants, and goals benefit by specializ ing and exchanging the products of their labor. This is the market. Songwriter Jan Conn reflects on the good that comes from "variety" in her musical, Run to Catch a Pine Cone: The world needs lots of variety. Think about it and you'll agree. Because the world needs variety. . . That's why the world needs me. You can't paint a picture with only one color. With only one color, life couldn't be duller. But when you add contrast the picture will live. So let me be me, I'll have much more to give. Variety, Variety, the world depends on it, yes siree. PERSPECTIVE Mountain and flatland, desert and sea. Because I'm different this old world needs me.

A tune withjust one note is no tune at all. The magic begins when the notes rise and fall. So let me sing my song, whatever it be. The world will be richer because I am me. Variety, Variety, look around you and you will see, The old world thrives on variety. That's why the world needs me. -JAN CONN Run to Catch a Pine Cone The Human Mind Thomas J. Watson, Jr., chairman of In ternational Business Machines Corp.: "There is really no comparison between the human mind and the most· fantastic com puter ever imagined. There are many things that a machine has never done, cannot do today, and willnot do tomorrow; in fact, will never do. The human mind holds billions of pieces ofinformation, allcataloged we know not how, all brought to mind or retrieved we know not how, all synthesized into knowl edge, into intelligence,into creativity, and all availableto guideevery one of us as we move through this complicated world-available to give us morality, character, sympathy, and countless other human traits."

-The National Observer, November 18, 1968 (p. 14) Toleration It is not the diversity of opinions, which cannot be avoided; but the refusal of toler ation to those that are of different opinions, which might have been granted, that has produced all the bustles and wars. -JOHN LOCKE "A Letter Concerning Toleration" 467 THEFREEMAN IDEASON LIBERTY Is PoliticsInsoluble? by Henry Hazlitt H L Mencken was fond of saying • • that most of the problems men agonize over are inherently insoluble. A haphazard search among his books has failed to turn up a supporting quotation, and perhaps my memory misleads me. He may merely have said "some," not "most" problems. In the latter case, at any rate, I agree with him. I would include at least two whole categories of problems among the insoluble ones. First, all problems com monly classed as metaphysical, ontological or cosmological-such as "How can we tell the really real from the apparently real?" or "What was the First Cause?," or "What is mankind here for?," or "What is the pur pose of the universe?" And so on. The second category contains all the really basic political problems.