May

THEFREEMAN IDEASON LIBERTY IDEAS AND INFLUENCE 251 Perspective-An Affirming Flame 253 The World in the Grip of an Idea Revisited by Clarence B. Carson 260 The Welfare State: Promising Protection in an Age of Anxiety by Robert Higgs 267 Losing Freedom Costs a Lot by John Semmens 274 "I, Pencil" by Leonard E. Read 279 Education and the Free Society by George Roche 283 Fifty Years of FEE-Fifty Years of Progress in Austrian Economics by Israel M Kirzner 290 Civil Rights Socialism by Llewellyn H Rockwell, Jr. 295 Environmental Protection: The New Socialism? by Jane S. Shaw 299 Freedom and American Labor Relations Law: 1946-1996 by Charles W Baird 310 Banking and Freedom in the Fifty Years of FEE by Steven Horwitz 315 The Economic Foundations of Freedom by Ludwig von Mises 322 Rose Wilder Lane, Isabel Paterson, and Ayn Rand: Three Women Who Inspired the Modern Libertarian Movement by Jim Powell THE PAST AS PROLOGUE 332 Onward Still by Hans F Sennholz 337 FEE and the Climate of Opinion by Bettina Bien Greaves 348 Leonard Read, the Founder and Builder by Mary Sennholz 355 From Leonard Read: A Legacy of Principles by Melvin D. Barger 362 The Moral Dimension of FEE by Gary North 371 The Freeman: Ideas on Liberty by Paul L. Poirot 375 The Function of The Freeman by Henry Hazlitt 380 The Foundation for Economic Education: Success or Failure?

by Benjamin A. Rogge COLUMNS 271 POTOMAC PRINCIPLES-Fifty Years of Statism by Doug Bandow 320 ECONOMICS on TRIAL-One Graph Says It All by Mark Skousen 346 IDEAS and CONSEQUENCES-FEE: A Lighthouse for Freedom by Lawrence W Reed BOOKS 393 The Literature of Liberty by Edmund A. Opitz and Robert Batemarco 401 The Case for the Free Market by John Chamberlain 403 Bastiat, Liberty, and The Law by Sheldon Richman 407 Classics Reconsidered eJohnAttarian: Democracy and Leadership by Irving Babbitt; Leonard P Liggio: The Servile State by Hilaire Belloc; Raymond J. Keating: Wealth and Poverty by George Gilder; Murray Weidenbaum: The Constitution of Liberty by Friedrich A. Hayek; Dwight R. Lee: "The Use of Knowledge in Society" by Friedrich A. Hayek; William H Peterson: The Failure of the "New Economics" by Henry Hazlitt; James L. Payne: The Right and Wrong of Compulsion by the State and Other Essays by Auberon Herbert; Matthew Carolan: Modern Times by Paul Johnson; William C. Dennis: In Defense of Freedom and Related Essays by Frank S. Meyer; Jane S. Shaw: Knowledge and Decisions by Thomas Sowell; Peter J. Boettke: Human Action: A Treatise on Economics by Ludwig von Mises.

IN APPRECIATION . .. 388 FEE Trustees and Staff, 1946-1996 412 The Freeman, Honor Roll of Authors, 1956-1996 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: Mark Spangler EditorEmeritus Paul L. Poirot Lewisburg, Pennsylvania Book ReviewEditor Robert Batemarco Marymount College, Tarrytown, New York AssociateEditor Gregory P. Pavlik AssistantEditor William J. Watkins, Jr. EditorialAssistant 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 ContributingEditors 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, HeritageFoundation, 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 501(c)(3) tax-exempt organization.

Copyright © 1996 by The Foundation for Economic Education. Permission is granted to reprint any article in this issue, except "Three Women Who Inspired the Libertarian Movement," 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 subscriptionto 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 $7.00. 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 available in microform from University Microfilms, 300 N. Zeeb Rd., Ann Arbor, MI48106. PERSPECTIVE An Affirming Flame For half a century, the Foundation for Economic Education has devoted itself to study ing and explaining the principles that underlie a free society, striving to make its message acces sible to people from all walks of life.

Those who assume (often automatically) that America is still the model of a free society, might view fifty years of freedom talk as pointless pon dering. But others, who comprehend just how far down the socialist path Americans have walked, admire FEE as a champion in the intellectual fight to renew liberty. The seven trustees who founded FEE in 1946 correctly anticipated in their original prospectus that those most interest ed in FEE's activities would "have no doubts about the decline of economic liberty in America. Coercion is being rapidly substituted for voluntary enterprise. Collectivism is displac ing individualism." By the 1940s, this shift in ideas had marked a critical point in world history. In the United States, the last bulwark of freedom, an under standing of the ideological heritage that yielded the most prosperous country ever was quickly fading as people sanctioned government solu tions and political programs to guarantee the good life. In bold contrast, a solitary FEE embarked upon its mission, and emerged as more than an educational organization.

FEE and its founder, Leonard E. Read, would come to occupy a special place in the hearts of many "students of liberty" who, before discover ing this wellspring of inspiration and comfort, felt isolated in their thinking. The late Benjamin Rogge referred to Read's FEE as "an island of sanity in an increasingly insane world" and an institution that merited total appreciation for burning "a brilliant and never-failing and affirm ing flame." In rallying freedom's thought leaders and emulators, FEE fashioned the basic fabric of the modern libertarian movement. To say that FEE is the "granddaddy" of pro freedom think-tanks has practically become a cliche-but true nevertheless. Leonard Read was the first to react in an effective, organized way to the rise of collectivism and statism in twentieth251 PERSPECTIVE FEE's Irvington-on-Hudson home-an 1889 Hudson River mansion purchased and converted into offices in 1946.

century America. He imbued his institution with a style that was to become a trademark-focus ing on ideas rather than personalities, searching for truth rather than compromise, and educating self rather than reforming others. FEE's exam ple encouraged the establishment of similar organizations not only in this country but the world over. FEE continues to serve a vital role in the revival of classical liberalism. Attempting to distill the essence of such an organization's half-century of activities into a single publication would be challenging (if not foolhardy). Nonetheless, this issue of The Freeman, the banner publication for the last forty of FEE's fifty years, commemorates the golden anniversary of the Foundation for Economic Education. It is dedicated to Leonard Read and the writers, speakers, editors, staff, trustees, and students who have devoted them selves to FEE's operations or graced the pages of its publications.

Our special issue opens by revisiting the idea that has captured the fancy of world populations and prompted the forming of FEE-socialism in all its versions. Subsequent articles survey trends in collectivist variants found in the United States-welfarism (and its massive costs), democratic statism, government schooling, civil rights legislation, environmental regulation, compulsory unionism, and central banking. Classic reprints by Leonard Read and Ludwig von Mises illustrate the importance of free markets. We also hear about the resurgence in Austrian Economics, and three authors whose impact on libertarianism was made through the popular press. In a special series of articles FEE staff mem bers and associates reflect on the Foundation's past and future, its founder, and the develop ment of a literature of freedom-abundant today but scarce at FEE's founding. Current president Hans F. Sennholz advises that FEE's mission is more urgent than ever. Despite the collapse of socialist economies, the United States may be weaker today in the spiritual and moral antecedents of a free society as socialist values live on in the minds of many Americans under various labels.

Finally, the spirit of FEE's golden jubilee could not have been captured without hearing directly from people who have been inspired by FEE. They speak for themselves as their stories and expressions of gratitude are quoted throughout this issue. -Mark Spangler, Guest Editor Beth A. Hoffman, Managing Editor 252 THEFREEMAN IDEASON UBERTY The Worldin the Grip of an Idea Revisited by Clarence B. Carson T he notion of a work under the title The World in the Grip of an Idea began to take shape in my mind in 1976, and I began the writing of it in the fall of that year (which was also the thirtieth anniversary of FEE). A somewhat amended and expanded ver sion was published as a book under that title by Arlington House in 1980. Many intellectual and spiritual changes have oc curred in the past twenty years, some of them in directions sought by the Foundation for Economic Education. I hope to highlight some of these changes and their relation to the work of FEE by revisiting the theme of this book and placing them in the context of developments in the last several years.