April

THEFREEMAN IDEAS ON LIBERTY FEATURES 196 Insurance: True and False by Llewellyn H. Rockwell, Jr. The false promise of government security. 200 Globalism and Sovereignty: A Short History of the Bricker Amendment by Thomas E. Woods Jr. An American stand for independence. 205 Born Again: The Resurgence of American Prohibition by Mark Edward Lender Anti-smoking legislation parallels Prohibition. 210 Creative Destruction-Again by David N Laband and John M Wells The job market changes in response to economic progress. 213 Jack the Radical by Alastair Segerdal Socialism and the creation of "Jack the Ripper." 220 The U.S. Presidents and the Money Issue by Greg Kaza A historical survey. 225 Mary Wollstonecraft-Equal Rights for Women by Jim Powell The individualist roots of feminism. 232 Russell Kirk's Economics of the Permanent Things by John Attarian The conservative thinker's defense of the market.

COLUMNS Center NOTES from FEE-Against the Stream by Hans F. Sennholz 207 POTOMAC PRINCIPLES-That Taxing Time of Year Again by Doug Bandow 218 IDEAS and CONSEQUENCES-A Vote for Optimism by Lawrence W Reed 238 ECONOMICS on TRIAL-Who Deserved the Nobel Prize? by Mark Skousen DEPARTMENTS 194 Perspective-No Stephan Kinsella; A look back at the April 1956 Freeman. 241 Book Reviews -The Vandals' Crown: How Rebel Currency Traders Overthrew the World's Central Banks by Gregory 1. Millman, reviewed by Raymond 1. Keating; Shake-Down: How the Government Screws You from A to Z by James Bovard, reviewed by William H. Peterson; Revolution at the Roots: Making Our Government Smaller, Better, and Closer to Home by William D. Eggers and John O'Leary, reviewed by James L. Payne; Wildlife in the Marketplace, edited by Terry L. Anderson and Peter 1. Hill, reviewed by Jane M. Orient; Private Cures for Public Ills: The Promise ofPrivatization, edited by Lawrence W Reed, reviewed by E. S. Savas; The Sacred Fire ofLiberty: James Madison and the Founding ofthe Federal Republic by Lance Banning, reviewed by William 1. Watkins, Jr.; America First! Its History, Culture, and Politics by Bill Kauffinan, reviewed by Gregory ~ Pavlik.

THEFREEMAN IDEASON UBERTY Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 Phone (914) 591-7230 FAX (914) 591-8910 E-mail: freeman@westnet.com President: Hans F. Sennholz Managing Editor: Beth A. Hoffman Guest Editor: Gregory P. Pavlik Editor Emeritus Paul L. Poirot Lewisburg, Pennsylvania Book Review Editor Robert Batemarco Marymount College, Tarrytown, New York Associate Editor Gregory P. Pavlik Assistant Editor William J. Watkins, Jr. Editorial Assistant Mary Ann Murphy Columnists Doug Bandow Cato Institute, Washington, D.C. Lawrence W. Reed Mackinac Center for Public Policy Midland, Michigan Mark Skousen Rollins College, Winter Park, Florida Contributing Editors Charles W. Baird California State University, Hayward Doug Bandow Cato Institute, Washington, D.C. 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 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 Edmund A. Opitz Chatham, Massachusetts James L. Payne Sandpoint, Idaho William H. Peterson Adjunct Scholar, Heritage Foundation, 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 nonpolitical, 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 © 1996 by The Foundation for Economic Education. Permission is granted to reprint any article in this issue, except "Mary Wollstonecraft," 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 $30.00or more receive a subscription to TheFreeman. Student subscriptionsare $10.00 for the nine-month academic year; $5.00 per semester. Additional copies of singleissues of The Freeman are $3.00.For foreign delivery, a donation of $45.00a year is suggested to cover mailingcosts.

Bound volumes of The Freeman are available from The Foundation for calendar years 1972to date. The Freeman is availablein microform from University Microfilms, 300 N. Zeeb Rd., Ann Arbor, MI48106. PERSPECTIVE Pride and the Nanny State I do not come from a rich family, and the other day it struck me that I am, in a way, glad of this. My wife and I recently pur chased our first house, and, after we had inspected it one Sunday while it was still being completed, I remarked to her that it was a satisfying feeling to be purchasing the house ourselves. While other aspects of our lives, such as relationships with spouses, family, and friends, are undeniably meaningful and es sential to achieving happiness, we humans also live in the economic world. So it is natural that surviving, flourishing, and pros pering would also be a significant source of happiness. It is deeply satisfying to have truly earned something-a car, a new com puter, a job, even if these are derided as "material" by some.

But this source of satisfaction is being threatened by the welfare state of liberals' and socialists' dreams. Well-meaning people often proclaim that people have a right to food, to employment, housing, education, pension plans, medical care, and so on, and that government should therefore provide us with them. Surely we should not let people starve, or be reared illiterate and uneducated, these humanitar ians say. But when government gives us these things and relieves us from the respon sibility of providing them, it also removes the possibility of our achieving them, and of taking pride in such accomplishments. Even feeding one's family and educating one's children, provide a feeling of serene accom plishment. When I stand in a grocery line and purchase groceries with money I have earned myself, Ifeel a self-satisfaction that I doubt any welfare recipient cashing in his food stamps ever could. Parents who pay for their children's education in private schools undoubtedly derive satisfaction from this, a feeling that is denied to the bulk of parents whose children are state-educated.

If the nanny state took care of all our wants, one could" I suppose, attempt to convince himself that he really paid for it through taxes. But I doubt that this contriv ance would succeed any better than "play194 ing market" did in socialist economies. It is just not the same. This is how it seems, in any event, in my own experience. I attended a large state university. Although students pay tuition, because the school is heavily subsidized by tax revenues, tuition covers only a small portion of the cost of their education. The rest is given to them free by the state~ If I tell someone I paid my own way through col lege-well, it's not quite true, is it? Uncon vincingly arguing, "Well, I probably paid more in taxes than it cost to educate me" simply cannot substitute for unambiguously saying "I earned this" or "I paid my own way." Nor would our benevolent providers long let us say even this. I frequently receive requests for contributions to my alma mater, with the underlying implication that I should "give back," since I obviously was given something for free. I have even heard lib erals entertain the idea that some sort of "fee" be paid by rich Americans trying to emigrate to escape taxes, on the grounds PERSPECTIVE that they must "pay back" the government for all the benefits conferred on them, such as education, roads, or even for the freedom they had that "allowed" them to earn their fortune in the first place. So in practice, the omni-provider state not only removes a huge source of satisfaction and accomplish ment from people's lives, it also turns the tables on its wards and imposes obligations on them, tellingthem that they are' 'in debt"

to the state for all it's done for them. In the land where "self-made man" used to be one of the highest marks of praise, it has become almost impossible to be one. If we want individuals to be able to achieve meaningful satisfaction in their lives, to take pride in their accomplish ments, we must allow them to fail, as well as succeed, and we must replace the nanny state with a regime of self-reliance and self-respect. -N. STEPHAN KINSELLA Mr. Kinsella practices patent law with Schnader Harrison Segal & Lewis in Philadelphia. Forty Years Ago in The Freeman... Frank Chodorov: " ... whenever govern ment undertakes to solve an economic prob lem, it simply creates other problems. This is because the laws of economics operate without regard to political 'expediency.' "As Nock observed in Our Enemy, the State: 'Every intervention by the State en ables another, and this in tum another, and so on indefinitely. . . .'"

LeonardE. Read:" . .. there doesn't appear to be any widespread, lively recognition of the fact that conscience, reason, knowl edge, integrity, fidelity, understanding, judgment, and other virtues are the distinc tive and exclusive properties of individual persons. "Somehow, there follows from this lack of recognition the notion that wisdom can be derived by pooling the conclusions of a sufficientnumber of persons, even though no one of them has applied his faculties to the problems in question. With this as a notion the imagination begins to ascribe personal characteristics to a collective-the committee, the group, the association-as though the collective could think, judge, know, or assume responsibility. . . . With this as a notion, the responsibility for per sonal thought is relieved and, thus relieved, fails to materialize to its fullest." Paul Poirot: "The only security any person can have lies within himself. Unless he is free to act as an individual, free to be productive in his own behalf, free to deter mine what part of that production he will consume now and what part he will save, and free to protect his savings, there is no chance that he can find security anywhere. "

195 THEFREEMAN IDEASON UBERTY Insurance: True and False by Llewellyn H. Rockwell, Jr. T he movie classic Double Indemnity tells the story of a couple's attempt to com mit murderous insurance fraud. Their plans were foiled through the investigation of a hard-bitten insurance eXt(cutive. At the time, audiences were shocked that a middle class couple would attempt such a scam. The film shows how insurance is sup posed to work. The company offered double payment on life insurance if the policyholder fell off a train and died. Why did the com pany offer such a policy? Because the data from past experience suggested that it vir tually never happened. When it did in fact happen, executives at the company sus pected foul play. As the story makes clear, the business of insurance is the business of making money, not granting welfare. That requires collect ing more in premiums than is paid out in settlements. To do that, firms must assess the risks inherent in every conceivable set of conditions.