March

THEFREEMAN IDEASON LIBERTY FEATURES 124 128 135 141 144 149 151 152 154 158 160 170 173 Center 133 146 175 122 177 An Optimist's View of the Entrepreneurship Explosion by Raymond J. Keating Greater economic freedom is on the horizon. The Case for Economic Freedom by Benjamin A. Rogge A classic moral defense. The Role of Government: Promoting Development or Getting Out of the Way by Doug Bandow How interventionism impedes economic growth and perpetuates poverty in underdeveloped countries. The Source of Rights by Frank Chodorov The importance of the individual. Confession of a Compliant Taxpayer by Dwight R. Lee To curtail fiscal folly, reduce the money pouring into federal coffers. Dying for a Pizza by Ralph R. Reiland Attack crime, not commerce. Cause and Effect: Crime and Poverty by Roger M Clites The real costs of violent and antisocial behavior. We Have Yet to Learn by Gregg MacDonald The perils of ignoring history.

On Trial Again by Meredith Kapushion A philosophical experiment. The End of the World as We Know It? by William V Bandoch, Jr., and Walter Block Is new technology rendering human labor obsolete? Albert Jay Nock: A Gifted Pen for Radical Individualism by Jim Powell Portrait of "an authentic American radical." Isaiah's Job by Albert Jay Nock The demands-and rewards-of working for the Remnant. Russell D. Shannon: In Memoriam by Donald J. Boudreaux A tribute to a gifted writer and teacher. COLUMNS NOTES from FEE-Balancing the Budget by Hans R Sennholz IDEAS and CONSEQUENCES-A History Lesson for Free-Market Pessimists by Lawrence W Reed POTOMAC PRINCIPLES-An Agenda for Limited Government by Doug Bandow ECONOMICS on TRIAL-The Rich Get Richer, and the Poor Get ... by Mark Skousen DEPARTMENTS Perspective-- William H. Peterson Book Reviews •The Bamboo Network: How Expatriate Chinese Entrepreneurs Are Creating a New Economic Superpower in Asia by Murray Weidenbaum and Samuel Hughes, reviewed by William H. Peterson; Christianity and Economics in the Post-Cold War Era: The Oxford Declaration and Beyond, edited by Herbert Schlossberg, Vinay Samuel, and Ronald 1. Sider, reviewed by John W Robbins; Getting It Right: Markets and Choices in a Free Society by Robert 1. Barro, reviewed by Chris Weinkopf; Classical Economics: An Austrian Perspective on the History ofEconomic Thought, Volume II by Murray N. Rothbard, reviewed by Douglas E. French; The Life ofAdam Smith by Ian Simpson Ross, reviewed by Raymond 1. Keating; Backfire by Bob Zelnick and The AffirmativeAction Fraud by Clint Bolick, reviewed by Michael Levin.

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: Hans F. Sennholz Managing Editor: Beth A. Hoffman Guest Editor: William H. Peterson 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 "Albert J. Nock," 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. For foreign delivery, a donation of $45.00 a year is suggested to cover mailing costs. Additional copies of this issue of The Freeman are $3.00 each.

Bound volumes of The Freeman are availablefrom 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 Role of Government in Society Some time ago the Intercollegiate Studies Institute (lSI), now headquartered in Wil mington, Delaware, ran a series of student seminars around the country on the Role of Business in Society (ROBIS). I know, for I ran one at Campbell University in 1978 that featured free-market stalwarts like Walter Williams and the late Arthur Shenfield. Surely the role of business deserves depic tion and discussion. But so does, and I think more so, ROGIS-standing for Role of Gov ernment in Society, an acronym coined by Edward A. Prentice of the Mount Hood Society of Portland, Oregon, and Professor Fred Decker of Oregon State University. There are at least three key questions relating to that role: Precisely what role should the state play in society, including the economy? How should that role tie into America's concern over individual rights so magnificently framed in 1787 and ratified in 1791 as the Bill of Rights?

And what of the principle of federalism embodied in the Tenth Amendment as: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people"? Overarching these questions is, I think, the nature of man and the admonishment of an angry Lord Jehovah who, on banishing sinful Adam and Eve, thundered down on them: "By the sweat of thy face shalt thou eat bread." For suddenly the Garden of Eden and its boundless plenty were no more. Instead, productive resources, including time, were limited, sharply. The law of scarcity was in, starkly. Adam and Eve and their issue down to this hour faced-face-a life that Thomas Hobbes baldly said in his Leviathan (1651) was "solitary, poor, nasty, brutish, and short." So man, then and now, is in a fix, caught in a law of trade-nffs. He can't have his bread and eat it too. He must weigh unlimited ends against limited means. So Nature forces him to make hard choices on the correct 122 construct of the state-as society's protector or provider or both.

Life is about choices. In making economic decisions, individuals must choose among scarce resources that have alternative uses. They must try to conquer or, more accurately, lessen scarcity. But how? How, indeed, when everyone is choosing from among the same scarce resources? Is this not a recipe for chaos if not bloodshed, the law of the jungle? Particularly in light of the condition of man, which Hobbes, for his part, saw as "a condition of war of everyone against everyone"? But man's lot is not war but peace-if with a proviso of a proper role for government: a system of private property rights, limited government, a state not as a coercive provider of goods and services but as a peaceful protector of life, liberty, and property. From this construct, based on the original U.S. Constitution and Bill of Rights, emerged a system of free markets: a price system, capital investment, international trade, posi tive entrepreneurship. So the Founders un leashed Adam Smith's mighty Invisible Hand-personal incentives under the rule of law driving this remarkable system of freedom and free enterprise, of social cooperation and international harmony, called capitalism.

Despite capitalism's success, people often ask: Why is poverty so widespread within the nation and across the world? That's the wrong question. For, as noted, man is born into scarcity; poverty is his natural condition. Adam Smith raised the right inquiry: Why wealth? Thus, An Inquiry into the Nature and Causes of the Wealth of Nations. PERSPECTIVE This "inquiry" -Smith's much-overlooked title word-needs economic education, a widespread understanding of ROGIS, of how capitalism and the world work-an under standing, by the way, sought by Leonard E. Read, in a stroke of brilliant entrepreneur ship, when he began The Foundation for Economic Education in 1946. Ludwig von Mises, FEE's academic adviser for more than 25 years, warned of boomer anging state intervention in Human Action: "All varieties of [state] interference with the market phenomena not only fail to achieve the ends aimed at by their authors and supporters, but bring about a state of affairs which-from the view of their authors' and advocates' valuations-is less desirable than the previous state of affairs which they were designed to alter."

The idea of ROGIS then is pivotal. Gov ernment is necessary, yes. But, as noted by George Washington: While government can be a helpful servant when limited, it becomes a fearsome master when unlimited. Overextended government that reaches be yond the rule of law-fostering intervention ism and the Welfare State-is an idea whose time never should have come. This issue of The Freeman explores, retrospectively and more so prospectively, government's proper role. -WILLIAM H. PETERSON Dr. Peterson, a Heritage Foundation adjunct scholar and Distinguished Lundy Professor of Business Philosophy Emeritus at Campbell University in North Carolina, is this issue's Guest Editor. Coverart: "Isaiah" by Gustave Dore. Signing the Declaration ofIndependence. 123 THEFREEMAN IDEAS ON LIBERTY An Optimist'sView of the EntrepreneurshipExplosion by Raymond J. Keating A. dvocates of economic freedom, rejoice.