June

THEFREEMAN IDEAS ON LIBERTY FEATURES 324 330 333 339 344 347 352 360 365 370 Center 337 357 383 322 385 John Jacob Astor and the Fur Trade: Testing the Role of Government by Burton W Folsom, Jr. Why government-supported companies so often fail-and why entrepreneurs tend to provide better products at lower costs. Three Fallacies of Rent Control by Robert Batemarco Countering erroneous economic arguments. Should Profits Be Shared with Workers? by Dwight R. Lee The empty promises of profit-sharing. First, Let's Deregulate All the Lawyers by George C. Lee! The economic and moral case for eliminating professional licensing of attorneys. The Pervasive Duty to Rescue by Donald J. Kochan The dangers of coerced benevolence. The Mont Pelerin Society's 50th Anniversary by Greg Kaza A milestone in the history of classical liberalism. Russell Kirk's Conception of Decadence by Gleaves Whitney Do all roads lead to Avernus?

The Gift of a Child: The Promise of Freedom by Clark Durant Creative approaches to learning, teaching, and schooling. Insurance "Redlining" and Government Intervention by Gary Wolfram The market isn't the problem and regulation isn't the cure. Frederic Bastiat, Ingenious Champion for Liberty and Peace by Jim Powell The enduring eloquence of the author of The Law and other cherished works. COLUMNS NOTES from FEE-The Unique Role of FEE by Donald J. Boudreaux IDEAS and CONSEQUENCES-The Futility of Class Warfare by Lawrence W Reed POTOMAC PRINCIPLES-The Liability Lottery: Politics by Other Means by Doug Bandow ECONOMICS on TRIAL-Wards of the State? by Mark Skousen DEPARTMENTS Perspective-Jacques Ellul; Sally von Behren Book Reviews •What It Means to Be a Libertarian: A Personal Interpretation by Charles Murray, reviewed by Doug Bandow;1997 Index of EconomicFreedomby Kim R. Holmes,BryanT. Johnson,and Melanie Kirkpatrick, reviewed by George C. Leef; The Welfare State: No Mercy for the Middle Class by John McKay, reviewed by Murray Sabrin; The Political Racket: Deceit, Self-Interest and Corruption in American Politics by Martin L. Gross, reviewed by William H. Peterson; The Road to Hell by Michael Maren, reviewed by Laurence M. Vance.

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: George C. Leef 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, HeritageFoundation, Washington, D.C.

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 "Frederic Bastiat," 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 available from The Foundation for calendar years 1972 to date. The Freeman is available in microform from University Microfilms, 300 N. Zeeb Rd., Ann Arbor, MI 48106. PERSPECTIVE The Great Illusion At present, the greatest problem is the citizen in the clutches of political power.... To think of everything as political, to con ceal everything by using this word (with intellectuals taking the cue from Plato and several others), to place everything in the hands of the state, to appeal to the state in all circumstances, to subordinate the problems of the individual to those of the group, to believe that political affairs are on everybody's level and everybody is qualified to deal with them-these factors characterize the politici zation of modern man and, as such, comprise a myth. The myth then reveals itself in beliefs and, as a result, easily elicits almost religious fervor. We cannot conceive of society except as directed by a central omnipresent and omnipotent state. What used to be a utopian view of society, with the state playing the role of the brain, not only has been ideologically accepted in the present time but also has been profoundly integrated into the depths of our consciousness. To act in a contrary fashion would place us in radical disagreement with the entire trend of our society, a punishment we cannot possibly accept. We can no longer even conceive of a society in which the political function (on the part of the govern mental authority) would be limited by exter nal means: we have arrived at the monistic idea of power that stops power. We can no longer conceive of a society with autonomous "in-between" groups or diverging activities.

The primary role of political affairs is one of the common sociological presuppositions shared by all and growing in all countries. We consider it obvious that everything must be unreservedly subjected to the power of the state; it would seem extraordinary to us if any activityshould escape it. The expansion of the state's encroachment upon all affairsis exactly paralleled by our conviction that things must be that way.... Torepeat: it is not just the fact of the state being at the center of our livesthat is crucial, but our spontaneous and personal acceptance of it as such. We believe that for the world to be in good order, the state must have all the powers.... 322 The conviction that the individual's inner conflicts, like the external realization of val ues, are a collective and social affair and will find their solutions in the political realm is only the mystifying aspect of every man's personal surrender with respect to his own life. Because I am incapable of doing good in my own life, I insist that the state must do it in my place, by proxy.Because I am incapable of discerning the truth, I ask the government to discern it for me; I thus free myself of an onerous task and get my truth ready-made.

Because I cannot dispense justice myself, I expect a just organization to existwhich I only have to join to safeguard justice.... But, it might be objected, is the politically interested citizen not eager to see power controlled, rather than to see its growth further promoted? This is a great illusion.The more an individual has become politicized, the more he will see and think about all PERSPECTIVE problems as political problems, the more importance will he attach to political action, and consider it the only possible course and, by his attitude, endow that course with a maximum of power and effectiveness.At the same time, the more politicized he is, the more will he be focused on and oriented toward that basic political force and form: the state. The more he takes recourse to the state, the more power he gives it.... At each step, state power is increased. The people under the spell of politics seek less and less to control the state; politicizing everything, they consider it normal that the state should con stantly expand its area of action and use ever more instruments of power. This is legitimate in their eyes, as they believe that all will be solved by political action.

-JACQUES ELLUL, The Political Illusion (Alfred A. Knopf, Inc., 1967) Donald J. Boudreaux Elected FEE President We are pleased to welcome Dr. Donald J. Boudreaux as the new president of the Foun dation for Economic Education. Dr. Boud reaux was elected at the Annual Meeting of FEE's Board on May 19, 1997. At the May meeting we also bade fare well to retiring president Hans F. Sennholz, who did so much to revitalize FEE during his five-yeartenure. The Board is grateful for the tireless dedication and service of Dr. Sennholz and his wife, Mary. We hope he will find time during his busy retirement in Penn sylvania to write for The Freeman. Don Boudreaux continues FEE's tradition of excellence and energetic leadership. He earned an M.A. in economics from New York University, a Ph.D. in economics from Au burn University, and a J.D. from the Univer sity of Virginia School of Law. He has taught at George Mason University, and, since 1992, at Clemson University, as an associate pro fessor in the Legal Studies Group. He was a John M. Olin Visiting Scholar at Cornell Law School for the 1996 spring term.

Don has an impressive list of scholarly publications, including articles in the Cato Journal, Southern Economic Journal, The In dependent Review, and several lawreviews.He is a long-time contributor to The Freeman and was guest editor of the July 1995 issue. Don's writings have also appeared in the Wall Street Journal, the Washington Times, Reason, The Free Market, and many other newspapers and magazines. In addition to his classroom teaching and his writing, he has found time to serve as an associate editor of The Indepen dent Review, as book review editor of Consti tutional Political Economy, and as a lecturer at many seminars for college students and high school teachers and students. We are enthusiastic about the future of FEE under Don's capable direction. To learn more about his vision for FEE, please see his inaugural Notes from FEE in this month's issue. -SALLY VON BERREN Chairman of the Board 323 THEFREEMAN IDEAS ON LIBERTY John JacobAstorand the Fur Trade: Testingthe Role of Government by Burton W. Folsom, Jr.