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THEFREEMAN IDEAS ON LIBERTY FEATURES 540 545 548 549 553 555 557 559 561 566 568 574 577 Center 551 564 584 538 587 The New York City Guide to Destroying an Economy by Raymond J. Keating How an enormous welfare state and burdensome taxes brought about the economic demise of a great metropolis. Why Laws Backfire by Marisa Manley The unintended consequences of intervention. On Keynes as a Practical Economist by Julian L. Simon Clever is as clever does. The Courage to Try by Frank Orlowski A young job applicant provides an inspiring example of self-reliance. The Incredible Regulatory Follies by Ralph R. Reiland Even children can't escape the long reach of regulation. Ancient Lessons by James A. Maccaro Taxation and confiscation in the Roman empire. Thielicke on the Modern Welfare State by Daniel F: Walker German theologian Helmut Thielicke's wise warnings on the dangers of government paternalism.

The One-Minute Shed by Donald G. Smith Inside the bureaucratic mind. Big Labor and Big Government by Karen Kerrigan The union movement's "new" agenda. Defining Justice by Mark Da vee True justice is realized when our lives, liberties, and property are secure. The Economic Costs of Sexual Harassment by Elizabeth Larson Who pays the bills for this phantom epidemic? Berton Braley, Commercial Poet by Chris Baker A new look at a popular versifier. John Locke-Natural Rights to Life, Liberty, and Property by Jim Powell One of freedom's most influential philosophers. COLUMNS NOTES from FEE-Is Inflation Dead? by Hans F: Sennholz IDEAS and CONSEQUENCES-Wanted: A Line Between Public and Private by Lawrence W Reed POTOMAC PRINCIPLES-Minimum Wage Plus by Doug Bandow ECONOMICS on TRIAL-Why Wages Rise by Mark Skousen DEPARTMENTS Perspective-William E. Simon Book Reviews •Deregulating Freight Transportation by Paul Teske, Samuel Best, and Michael Mintrom, reviewed by Burton W Folsom, Jr.; Roads in a Market Economy, by Gabriel Roth, reviewed by John Semmens; Why Not Freedom! America's Revolt Against Big Government by James Ronald Kennedy and Walter Donald Kennedy, reviewed by Wesley Allen Riddle; The Political History ofEconomic Reform in Russia, 1985-1994 by Vladimir Mau, reviewed by Yuri N. Maltsev; The Free Society by Lansing Pollock, reviewed by Robert Batemarco.

THEFREEMAN IDEASON LIBERTY 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: Raymond J. Keating 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 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.

Jim Powell Westport, Connecticut 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" John Locke," provided credit is given and two copies of the reprinted material are sent to FEE. 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 subscriptions are $10.00 for the nine-month academic year; $5.00 per semester. Additional copies of this issue of The Freeman are $3.00each. For foreigndelivery, a donation of $45.00 a year is suggested to cover mailing costs.

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, MI 48106. PERSPECTIVE A New Beginning for Freedom In a time when so much rancor and rhetoric fill the air, I would like to bring a contrarian's message-a message about ex citing possibilities, a message that is hope ful, optimistic, and yet, I believe, realistic. I am writing about a new beginning for freedom-not just for America, which is thrilling in itself, but also for the whole world. Because, for the first time in human history, the Free World encompasses more than half of all nations. The map is turning from dark to light. We have it within our grasp to bring alive a shining vision of freedom and prosperity for the whole human family. And, we are strengthening the prin ciples of religion, property rights, and a society of laws and free markets to raise living standards dramatically for millions who have known only poverty and pain.

Freedom's economic possibilities are stag gering-and it willbe very difficultto put the genie back in the bottle. The recent liberation of Eastern Europe represents the greatest business marketing opportunity since the rebuilding of western Europe after World War II. Industrious and inventive people in the Far East are build ing a new economic superpower among the nations of the Pacific Rim. Even Latin America, despite the collapse of the Mexi can peso, is struggling to move in a new direction. Indeed Latin America is strug glingto throw offdecades of corrupt statism in favor of less government, freer markets, and new incentives for their people. In a word, freedom is busting out all over. It's springtime for worldwide liberty. Perhaps the best proof is right next door. Communist diehard Fidel Castro just trimmed his beard and donned a business suit on his trip to France, as part of his P.R.

campaign to persuade the free world to bail out Cuba. Castro said, yes, Cuba willpermit some economic freedom because the Cuban 538 system must, in his words, adapt to the realities of today's world. Marxist academicians and dictators like Castro used to predict with brash conceit that freedom would be tossed into the dust bin of history. Well, guess whose principles ended up in the trash heap? Many of our so-called intellectual leaders also predicted that advancing technology would give the State enormous power over its citizens. Television, cameras, and com puters would create a "big brother," said George Orwell, watching every move we make, punishing any disobedience to the State. Well, it hasn't quite turned out that way. Advances in new technologies and instant communications are creating an Informa tion Age that is shrinking the planet with startling speed, and hurtling the world to ward a new future-with more freedom, not less. Technology has become the great de mocratizer-turning the tables on the dic tators, giving people information they want to know, without fear of censorship.

Look what's been happening. In Poland, the leaders of Solidarity credited the fax and copy machine as key instruments of their liberation. Once upon a time, you needed a tank to blast through walls. Today, with a computer, modem, or fax, you can pass right through them. You cannot only cross borders, you can dissolve them. Who would have dreamed that something as small as a computer chip could contribute to knocking down something as big as the Berlin Wall? And, since governments can't jam a VCR like a radio signal, its pictures PERSPECTIVE can expose the world to a new "home shopping network" of possibilities. But, none of that would have happened without freedom. Freedom to invent and produce new technologies. Freedom to sur vive, to succeed, to fail-and move on to the next idea, dream, or venture. So, yes, freedom is my passion. Because, if I may paraphrase a famous sports legend, Vince Lombardi, freedom isn't everything, it's the only thing. Freedom is the one idea that speaks to the unlimited possibility of the human spirit-and the only idea that has delivered on the promise of human progress. It is the idea that created America, and enabled America to create and defend freedom throughout the world.

I'd like to believe something within us has profoundly changed, and hopefully for ever-that we've rid ourselves of our infat uation with so-called charismatic politicians who beguile us with clever promises and beautiful words. We've challenged, directly and defiantly, the fiction that our rights and income originate with Washington, and that government can only. expand, never contract. We're learning a hard, bitter truth. Government, by trying to do too much, has undercut the ability of individual people in their communities, businesses, and churches to meet the real needs of America as we have in the past. -WILLIAM E. SIMON, President The John M. Olin Foundation (Excerpted from Mr. Simon's remarks at a dinner at St. Leo College, Tampa, Florida, April 6, 1995.) 539 THEFREEMAN IDEASON LIBERTY The New York City Guide to Destroyingan Economy by Raymond J. Keating N ew York City once served as an inter national beacon of economic opportu nity, attracting individuals and entrepre neurs from around the globe. But for several decades, New York's entrepreneurial lights have been dimming, to the point now that they are all but extinguished.