April

by Mark Skousen THE PURSUIT of HAPPINESS-What American Education Needs by Walter E. Williams 2 6 55 Perspective-"Security" or Friedman by Sheldon Richman "So-Called Property Rights"? It Just Ain't So! by Roger Meiners Book Reviews The Future and Its Enemies by Virginia Postrel, reviewed by George C. Leef; The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor by David S. Landes, reviewed by Randall G. Holcombe; From Wealth to Power: The Unusual Origins of America's World Role by Fareed Zakaria, reviewed by Robert Higgs; American Abundance: The New Economic and Moral Prosperity by Lawrence A. Kudlow, reviewed by William H. Peterson; Africa in Chaos by George B. N. Ayittey, reviewed by Mwangi S. Kimenyi; Swimming Against the Tide by Clarence B. Car son, reviewed by Norman S. Ream.

[T]he fraction of a person's income that it is reasonable for him or her to set aside for retirement depends on that person's cir cumstances and values. It makes no more sense to specify a minimum fraction for all people than to mandate a minimum frac tion of income that must be spent on hous ing or transportation. Our general pre sumption is that individuals can best judge for themselves how to use their resources. Mr. Feldstein simply asserts that in this par ticular case the Government knows better. . . . I find it hard to justify requiring 100 percent of the people to adopt a Govern ment-prescribed straitjacket. Friedman ends by calling for a voluntary pension system. (In one sense, it would still be compulsory; we'd be taxed to support people "Security" or Friedman True joy is waking up to a Milton Friedman op-ed. He never quits. In January the New York Times published his article "Social Security Chimeras." What a breath of fresh air!

Milton Friedman begins by criticizing the increasingly common suggestion that individ ual accounts replace part of each person's Social Security benefits. "Why replace only part and not all of Government benefits?" he asks. He goes on to refute the response that the government needs the money to pay cur rent retirees. Friedman's op-ed really shines when he demolishes the case for a mandatory priva tized system. As advocated by economist Martin Feldstein and others, everyone would be forced to save a minimum amount specified by the government. Feldstein says that's nec essary because, "First, some individuals are too shortsighted to provide for their own retirement [and] second, the alternative of a means-tested program for the aged might encourage some lower-income individuals to make no provision for their old age deliber ately, knowing that they would receive the means-tested amount."

Friedman's response: Ideas On Liberty THE FI\EEMAN The Freeman is the monthly publication of The Foundation for Eco nomic 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 © 1999 by The Foundation for Economic Education. Per mission is granted to reprint any article in this issue, 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 $30.00 or more receive a subscription to The Freeman. For foreign delivery, a donation of $45.00 a year is suggested to cover mailing costs. Student subscrip tions 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. Bound volumes of The Freeman are 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. Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 Phone (914) 591-7230 FAC((914)591-8910 E-mail: freeman@fee.org FEE Home Page: http://www.fee.org President: Donald 1. Boudreaux Editor: Sheldon Richman Managing Editor: Beth A. Hoffman Editor Emeritus Paul L. Poirot Book Review Editor George C. Leef Editorial Assistant Mary Ann Murphy Columnists Charles W. Baird Doug Bandow Dwight R. Lee Lawrence W. Reed Mark Skousen Walter Williams Contributing Editors Peter 1. Boettke Clarence B. Carson Thomas 1. DiLorenzo Burton W. Folsom, Jr. Joseph S. Fulda Bettina Bien Greaves Robert Higgs John Hospers Raymond J. Keating Daniel B. Klein Wendy McElroy Tibor R. Machan Ronald Nash Edmund A. Opitz James L. Payne William H. Peterson Jane S. Shaw Richard H. Timberlake Lawrence H. White 2 now on Social Security.) "I believe that the ongoing discussion about privatizing Social Security would benefit from paying more attention to fundamentals," Friedman said, "rather than dwelling simply on nuts and bolts of privatization." Hear, hear!

* * * Corporate layoffs make for good, glitzy television-news reporting. The addition of jobs is dry and statistical. No wonder people have a sense that layoffs outnumber new jobs. Charles Baird looks at the facts and finds a whole different picture. Richard Cobden once pointed out that when government touches something-he had trade and religion in mind-it's twisted into something else entirely, and not for the better. Bruce Benson demonstrates that sci ence can be added to Cobden's list. The energy crisis, a production of your gov ernment, is long gone, but the regulations designed to whip us into efficientenergy users live on. Worse, we get new ones all the time. Ben Lieberman shows the lengths to which such inanity can go. If you lived through that crisis, you might have thought the future would be an eternal nightmare compliments of oil sheiks and these letters were scarier than "IRS"-OPEC.

Since then the price of a gallon of gas has fall en below the price of a gallon of milk. What happened to the big bad cartel? Christopher Mayer will fill you in. What is really happening in China? Is it going capitalist even as it defends the social ist revolution? Why is it jailing dissidents? James Dorn brings lucidity to the enigma. The term "the tragedy of the commons" has become a cliche, useful to freemarket advo cates as well as statist environmentalists in promulgating their policy views on property and ecology. Bruce Yandle explores how tragedies can become triumphs. The welfare state doesn't miss a trick. Under President Bush, the Commerce Depart3 ment started a program to subsidize private companies in the development of new tech nology. You see, markets aren't good at that and-well, John Sparks will give you the scoop on this creative piece of governance. During the 1920s, the monetary authority did something to set the stage for the eco nomic debacle of the 1930s. But what? The literature is full of conflicting answers.

Richard Timberlake sorts it all out in the first of a series of articles. Labor-relations law is premised on the Marxist notion of an irreconcilable conflict between workers and employers. Economists have debunked the notion, and so have some businessmen. Daniel Hager tell us about one: James F. Lincoln. The withholding tax is a classic case of adding insult to injury. It's bad enough the government appropriates a chunk of our income; but it does so before we even see it. Donald Boudreaux and Andrew Morriss point out that withholding is more than just an insult. If you tell people you don't want govern ment benefits you are "entitled" to, people sure look at you funny. That's what Mark Reboul found out when he was laid off. FEE president Don Boudreaux's monthly Notes from FEE column moves to the front of the magazine beginning this month. In other columns, Lawrence Reed reports on a new study about high-school economics texts, Doug Bandow dissects the minimum wage, Dwight Lee exposes the "hidden technology"

myth, Mark Skousen wonders about Diamond Head and property rights, and Walter Williams takes on the government schools. Roger Meiners looks at what William Weld has to say about property rights and the envi ronment and implores, "It Just Ain't So!" Our book reviewers examine tomes on con flictingoutlooksabout the future, the wealth and poverty of nations, America's role in the world, the economy ahead, misery in Africa, and the memoirs of Clarence Carson. -SHELDON RICHMAN e>n by Donald J. Boudreaux Who's Progressive? O ur world is full of grotesque mislabeling -for example, politicians are called "Honorable." Few labels, though, are as inappropriate as is the term "progressive" when it is used, as it frequently is, to describe people who endorse widespread government regulation. "Progressivism" came into use in late nineteenth-century America as the label for a naIve yet ambitious program for giving the government carte blanche control over the economy. To this day, American leftists (mostly of an academic bent) snootily declare themselves and their policies to be "progressive."