August

462 Transfer of Development Rights: Top-DownPlanning in Disguise by Sarah Foster Beware "market-based" or "market-oriented" regulatory schemes. 467 GovernmentFunding for Not Training Doctors:Another Odd Program by Herbert London An idea as flawed as agricultural subsidies. 469 Fore:Watch Out for Government Golfl by Raymond J. Keating What's wrong with amateur golf-and what could go wrong with pro golf. 472 Henry Grady Weaver'sClassic Vision of Freedom by John M Hood Honoring the fiftieth-anniversary edition of The Mainspring ofHuman Progress. 479 "From Small Beginnings":The Road to Genocide by James A. Maccaro How the German medical profession came under the total domination of the Nazi regime. 482 Government:An Ideal Concept-Leonard Read's Formula for Freedom by Esler G. Heller Reassessing a classic. 488 Why Managed Trade Is Not Free Trade by Robert Batemarco A crucial distinction. 491 One Life for Liberty by Becky Akers The story of Nathan Hale.

496 Anne Robert Jacques Turgot,Who First Put Laissez-FairePrinciples into Action by Jim Powell A champion of religious toleration, free expression, sound money, and prudent government. 511 The Undiscountable Professor Kirzner by Roger W Garrison A look at Israel Kirzner's Essays on Capital and Interest. COLUMNS Center NOTES from FEE--coercivists and Voluntaristsby Donald J. Boudreaux 465 IDEAS and CONSEQUENCES-Deregulation: Coming to a Utility Near You by Lawrence W Reed 477 POTOMACPRINCIPLES-Is VoluntarismEnough? by Doug Bandow 508 ECONOMICSon TRIAL-Has Capitalism Failed or Succeeded? TheTale of Two Graphs by Mark Skousen DEPARTMENTS 458 Perspective-W 1. Brogdon, Jr., George C. Roche III 514 Book Reviews Red Flag Over Hong Kong by Bruce Bueno de Mesquita, David Newman, and Alvin Rabushka, reviewed by George C. Leef; Facts, Not Fear:A Parent's Guide to Teaching ChildrenAbout the Environmentby Michael Sanera and Jane Shaw, reviewed by Gregory F. Rehmke; Up From Poverty:Reflections on the Ills of Public Assistance, edited by Hans F. Sennholz, reviewed by Dale Matcheck; Libertarianism:A Primer by David Boaz, reviewed by John Attarian; Epitaph for American Labor by Max Green, reviewed by David Kendrick.

THEFREEMAN IDEAS ON 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 FEE Home Page: http://www.fee.org President: Donald J. Boudreaux Managing Editor: Beth A. Hoffman Guest Editor: Raymond J. Keating Editor Emeritus Paul L. Poirot Lewisburg, Pennsylvania Book Review Editor George C. Leef Adjunct Professor of Law and Economics, Northwood University 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 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 Jim Powell Westport, Connecticut William H. Peterson Adjunct Scholar, Heritage Foundation, Washington, D.C.

Sheldon Richman Foundation for the Future of Freedom Jane S. Shaw PERC, Bozeman, Montana Richard H. Timberlake 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, educational champion of private property, the free market, and limited government. FEE is classified as a 26 USC 501(c)(3) tax-exempt organization. Copyright © 1997 by The Foundation for Economic Education. Permission is granted to reprint any article in this issue, except "Turgot," 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 dona tions, which are invited in any amount. Donors of $30.00or 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 this issue of The Freeman are $3.00 each. For foreign delivery,a donation of $45.00 a year is suggested to cover mailing costs.

Bound volumes of The Freemanare availablefrom The Foundation for calendar years 1972 to date. The Freemanis available in microform from University Microillms, 300 N. Zeeb Rd., Ann Arbor, MI 48106. PERSPECTIVE A Private-Enterprise Gold Standard? How can a business with international sales protect itself from fluctuations in exchange rates caused by monetary policy? One small custom-automobile builder in England is try ing a simple, if radical, solution: Marlin Cars of Crediton, Devon, has announced prices for their handmade cars in ounces of gold. Marlin cars combine modern engines, transmissions, and suspension systems with traditionally styled aluminum bodies and box-girder steel frames. In preparing to fill sales orders from various countries, Marlin has become caught up in the growing controversy over European Currency Units. Terry Matthews, Marlin's director, said, "We're sick and tired of all this posturing by politicians, pundits, and economists over whether the U.K. should opt in, opt out, or even 'twin-track'-so we've decided to go it alone. We're more than happy to cut short the debate by quoting the international prices of our cars in gold." Ms. Matthews says that the company is valuing a basic Marlin Hunter two-seat sports-tourer with electric windows, manual gearbox, and a Ford DOHC 2.0 liter engine at 85 ounces of gold.

"This means that a customer anywhere in the world only needs to check this figure against the prevailing local rate for gold bullion to get an actual price of one of our cars," she adds. "As a standard, the quantity in circulation is relatively stable; no one can easily print more of it to satisfy short-term economic or political goals. As a unit of value, gold is recognized the world over as a hedge against monetary uncertainty." Strong historical evidence shows that gov ernments consistently inflate money in an effort to obtain more taxes. This has been true at least back as far as the Roman Empire, when Rome began making coins of less valu able alloys.The problem is becoming acute in Europe, where the search for a common currency has revealed in stark detail the reluctance of nearly every country in the European Union to give up control of their money. Conservative economists have tried 458 for years to get governments to readopt the gold standard, with little success. Such deci sions are more political than logical, and there are many monetarist economists who think that returning to the gold standard would be disastrous. It certainly would wreck their active monetary policies, but it could give a stable basis for exchange, with low interest rates for borrowing and the abilityto savewith security.

Is it possible to establish a "private" gold standard, that is, one independent of gov ernment action, one dependent on markets alone? This little company believes it is, strongly enough to become the spearhead of a movement to quote prices in gold. The beauty of Marlin's policy lies in the inability of· any government to forbid it. Countries can forbid private ownership of gold, but can't prevent their citizens from using the price of gold as a standard for exchange. The danger of this concept lies in the fluctuations in gold prices with respect to local money. Yet that very danger becomes a strength when measured against a cur rency of declining value. With all the debate about establishing a gold standard and multinational fiat money, why can't busi nesses simply quote the prices of their products in gold? Why indeed can't they establish a de facto gold standard? One tiny company is betting that it can be a start.

-We J. BROGDON, JR. Bill Brogdon, a retired captain in the U. S. Coast Guard, residesin Cape Cartere~ North Carolina. State and Society Some astute observers, such men as Nietz sche and Burckhardt, were warning as long ago as the mid-nineteenth century of the dangers stemming from the new mass-man and the new mass-state. Social critics of our own time, of the stature of Wilhelm Roepke and Ortega y Gasset, have pointed to more and more signs of the dangers inherent in the centralized modern state. Meanwhile, the PERSPECTIVE consolidation of power in the new dispensa tion has steadily advanced. In Frank Chodorov's words: "The present disposition is to liquidate any distinction between State and Society, conceptually or institutionally. The State is Society; the social order is indeed an appendage of the political establishment, depending on it for suste nance, health, education, communications, and all things coming under the head of the pursuit of happiness."

Such a system gives far too little to man's freedom or personality. The state swallows the individual. Even if such centralization were efficient in the satisfaction of human wants, which it is not, the means used to achieve the end would still be unacceptable simply because they are incompatible with human freedom. Even more dangerous, perhaps, is the risk that the very concept of freedom itself can become so misused and distorted within such a society that no individual dare lay claim to any rights or dignity having a higher source than the society in which he lives. At that moment, the guarantees developed by West ern civilization to protect the individual from the arbitrary exercise of power have in effect all been swept away,no matter what label that society might give itself. Once such checks upon the exercise of power have been removed, all the internal vitality and freedom within such a society are open to destruction in the name of "order."

Soon the preservation of "order" or the pursuit of the "greatest social good" is iden tified with whatever action the wielder of centralized power deems suitable. Resistance against the exercise of such power comes to be viewedby societynot as an expressionof human individualityand free choice, but as an assault upon the public good, a crime of the selfish individual against the selflesscommunity. -GEORGE C. ROCHE III The Freeman, August 1967 adapted from "Power" Dr. Roche, a former FEE staff member, is president of Hillsdale College. 459 THEFREEMAN IDEAS ON LIBERTY The Pine Barrens Parousia: A Reporter'sNotebook by Matthew Carolan C ircling the corner of Doe Run in Manor ville, New York, my guides and I came across a young married couple discussingwith their landscaper the finer points of decorative rock gardening. Just another idyllic day here on the East End of Long Island, it seems, a stone's throw from the lovely Peconic River.