May

THEFREEMAN IDEAS ON LIBERTY FEATURES 276 282 288 290 296 300 304 307 309 313 316 318 322 Center 294 311 327 274 335 329 Henry Hazlitt: Journalist of the Century by Llewellyn H. Rockwell, Jr. The inspiring legacy of "the economic conscience of our country and our nation." H. G. Wells in Russia by Martin Gardner Remembering Wells' long-forgotten 1920 book, Russia in the Shadows. "Zero Inflation": A Flawed Ideal by George A. Selgin Proponents presume a stationary economy. Pearl Jam vs. Ticketmaster: A Holy War on Reality by Charles Bilodeau Rock bands, middlemen, and ticket prices. Spending Money Freely by Lawrence H. White There is more at stake in electronic funds transfer than simply convenient payment methods. Phones and Freedom by Marty Mattocks In telecommunications as elsewhere, a free market is the most fertile arena for human progress. Live Freely, Live Longer by Max More Liberating life extension research from growing government control.

Two Insights for Business Ethics by Douglas B. Rasmussen Individual rights and human moral wellbeing. Rights versus "Rights" by Tibor R. Machan Exploring the nature of negative and positive rights. Bilingual by Choice by James M McCaffery Parents, not government, should determine the language training of children. Rolling Back the Imperial Congress by Ralph R. Reiland Free markets and limited government are the key to prosperity. John Stuart Mill's Immortal Case for Toleration by Jim Powell The legacy of On Liberty. The Story of a Movement by Peter J Boettke Karen Vaughn's Austrian Economics in America. COLUMNS NOTES from FEE-Woeful Bankers by Hans F: Sennholz IDEAS and CONSEQUENCES-The Right Direction for Welfare Reform by Lawrence W Reed A MAITER of PRINCIPLE-In Praise of Pain by Robert James Bidinotto ECONOMICS on TRIAL-Did the Gold Standard Cause the Great Depression? by Mark Skousen DEAARTMEN~ . ' Perspective-Roger Clites, Donald Kagan, Thomas L. Martin Letters to the Editor Book Reviews -Hayek on Hayek: An Autobiographical Dialogue edited by Stephen Kresge and LeifWenar, reviewed by Robert Batemarco; -The New Unionism in the New Society: Public Sector Union in the Redistributive States by Leo Troy, reviewed by Charles W Baird; -Race and Culture: A World View by Thomas Sowell, reviewed by John W Robbins; -Education and the State: A Study in Political Economy, Third Edition by E. G. West, reviewed by Julio H. Cole.

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: Lawrence H. White EditorEmeritus Paul L. Poirot Lewisburg, Pennsylvania Book ReviewEditor Robert Batemarco Marymount College, Tarrytown, New York AssistantEditor Gregory P. Pavlik Columnists Robert James Bidinotto Staff Writer, Reader's Digest 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 Donald J. Boudreaux Clemson University Clarence B. Carson American Textbook Committee Wadley, Alabama John Chamberlain Cheshire, Connecticut Thomas J. DiLorenzo Loyola College, Baltimore, Maryland Joseph S. Fulda New York, New York Roger W. Garrison Auburn University Bettina Bien Greaves Resident Scholar, FEE Robert Higgs The Independent Institute, Oakland, California John Hospers University of Southern California Tibor R. Machan -Auburn University Ronald Nash Reformed Theological Seminary Maitland, Florida Edmund A. Opitz Chatham, Massachusetts James L. Payne Sandpoint, Idaho William H. Peterson Washington, D.C.

Jane S. Shaw 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 © 1995 by The Foundation for Economic Education. Permission is granted to reprint any article in this issue, except "H.G. Wells in Russia" and "John Stuart Mill's Immortal Case for Tolera tion," 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$30.00 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 singleissues of The Freeman are $2.00. For foreign delivery, a donation of $40.00a year is suggested to cover mailingcosts.

Bound volumes of The Freeman are available from The Foundation for calendar years 1972to date. The Freeman is available in microform from University Microfilms, 300 N. Zeeb Rd., Ann Arbor, MI48106. PERSPECTIVE DestructiveAchievement Twenty-five years ago I met a nineteen year-old man who liked to brag that he had "tom up" seven cars. Apparently that was the only noteworthy thing that he had ever done. Today he would be forty-four years old, assuming he is still alive. Recently I wondered what had happened to him and what he is now doing. Is he still tearing down the achievements of others? If so, how does he justify it? How does he "get away" with it? Might he be a member of the political establishment that limits the amount of land that farmers may cultivate? Might he be blocking the work of loggers, or of coal miners, or any of uncounted other produc tive individuals? At least the young man was honest about what he did. He said that he "tore up cars."

His specialty was overwhelming transmis sions but anything that would disable a car satisfied him. He knew that what he did was destructive, was counterproductive, and he made no bones about it. Unfortunately, the advocates of various causes and the elected officialsand bureau crats who assist the advocates claim to be guided by nobler motives. But their coun terproductive actions are often far more harmful to the economy, and particularly to others, than was the warped young man who tore up cars as a way of satisfying his need to·achieve. Unless the car wrecker caused an acci dent that involved someone else---and, for tunately, he had not at the time I met him-the damage which he caused affected primarily his own property and· economic wellbeing. Those who seek to limit the productive actions of others may appear to be less deserving of our condemnation but, in real ity, they actually do far more total damage than did the car wrecker.

This is not to excuse the young man. It is simply to point out that seemingly respect able people who claim that they are acting with good motives, even sacrificing for the 274 benefit of others, are often either hypocrit ical or else are fooling themselves when they act in ways that destroy far more than did the young man who "tore up cars." -ROGER CLITES Professor Clites teaches at Tusculum Col lege in Tennessee. The Role of the West Americans do not share a common ances try and a common blood. They and their forebears come from every comer of the earth. What they have in common and what brings them together is a system of laws and beliefs that shaped the establishment of the country, a system developed within the context of Western Civilization. It should be obvious, then, that all Americans need to learn about that civilization if we are to understand our country's origins, and share in its heritage, purposes, and character ....

The assault on the character of Western Civilization badly distorts history. Its flaws are real enough, but they are common to almost all the civilizations known on any continent at any time in human history. What is remarkable about the Western her itage and what makes it essential is the important ways in which it has departed from the common experience. More than any other it has asserted the claims of the individual against those of the state, limiting its power and creating a realm of privacy into which it cannot penetrate .... It has produced the theory and practice of the separation of church from state, thereby protecting each from the other and creating a free and safe place for the individual conscience. At its core is a tolerance and respect for diversity unknown in most cul tures. One of its most telling characteristics is its encouragement of criticism of itself and its ways. Only in the West can one imagine a movement to neglect the culture's own heritage in favor of some others.

-DONALD KAGAN (Excerpts from an address to Yale Univer sity freshman class, September 1, 1990) PERSPECTIVE The Blessingsof Earthquakes? A January New York Times article cited experts who claimed that the Kobe earth quake could give a boost to a Japanese economy struggling to recover from a long recession. Henry Hazlitt has passed on, but I imagine he would have said, "There you go again using the 'broken-window fallacy.' " "The broken-window fallacy, under a hundred disguises, is the most persistent in the history of economics, " Hazlitt observed in Economics in One Lesson. The fallacy is "solemnly reaffirmed" daily by editorial writers and' 'professors of economics in our best universities" who see "almost endless benefits in enormous acts of destruction" with its consequent stimulation of produc tion. Of course, what makes the fallacy so initially tempting is that the "experts" are at least right in the first conclusion that there will be more business for the construction industry. But this new activity arises at the opportunity cost of lost business elsewhere, which will not occur because money is redirected toward reconstruction. As Haz litt put it, the experts "see only what is immediately visible to the eye" while ne glecting the invisible costs to the rest of the economy.

Hazlitt was right. Resist the temptation of the broken-window fallacy! If the fallacy is accepted, we should then be prepared to accept bombing campaigns as part of the next fiscal stimulus package! -THOMAS L. MARTIN Dr. Martin is an Associate Professor of Economics at the University of Central Florida in Orlando. This item is an adaptation of his letter to the editor, the New York Times, published January 25, 1995. For more on Henry Hazlitt's enduring influence, see page 276. 275 THEFREEMAN IDEASON LIBERTY Henry Hazlitt: Journalist of the Century by Llewellyn H. Rockwell, Jr. H enry Stuart Hazlitt wrote brilliantly and presciently for more than eight decades on culture, government, econom ics, and political affairs. He warned against deconstructionism, against Freudianism, and against the attack on reason. He cen sured the income tax, central banking, the New Deal, Keynesianism, socialism, war socialism, price controls, unionism, the wel fare state, and deficits.