August

Winners and WinnersIdeas 0/1 Liberty THE FI\EEMAN Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533 Phone (914) 591-7230 FAX (914) 591-8910 E-mail: freeman@fee.org FEE Home Page: http://www.fee.org President: Donald J. 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 Russell Roberts Mark Skousen Thomas Szasz Walter Williams Contributing Editors Peter J. Boettke Clarence B. Carson Thomas 1. DiLorenzo Burton W. Folsom, Jr. Joseph S. Fulda Bettina Bien Greaves Robert Higgs John Hospers Raymond 1. Keating Daniel B. Klein Wendy McElroy Tibor R. Machan Andrew P. Morriss Ronald Nash Edmund A. Opitz James L. Payne William H. Peterson Jane S. Shaw Richard H. Timberlake Lawrence H. White 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 50l(c)(3) tax-exempt organization. Copyright © 1999 by The Foundation for Economic Education. Per mission is granted to reprint any article in this issue, except "Socialized Medicine," 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 delivery outside the United States: $45.00 to Canada; $55.00 to all other countries. Student sub scriptions 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.

Cover: Courtesy Thomas E. McMaster. Books and articles by the dozen bemoan the gap between "winners and losers" in today's economic boom. Even writers not associated with socialism have joined the moaners' cho rus. For example, conservative Edward Luttwak writes in his new book, trendily titled Turbo-Capitalism: Winners and Losers in the Global Economy, "living in a country that so greatly respects and admires high-earning winners, losers find it hard to preserve their self-esteem." Let's ignore the psychobabble and look at this idea of winners and losers. In games, the object is to win, which means to fulfill some arbitrary conditions defined by the rules of the game. Because one player or team wins, the other loses. The victory and loss are not inde pendent events. That's why we say the Yankees beat the Padres in the World Series. Writers who describe the economic process in terms of winners and losers indicate, inten tionally or not, that the same zero-sum princi pIe applies: namely, that people who make high incomes are responsible for others' mak ing low incomes. But how can that be? Is Bill Gates the reason that some people earn only the minimum wage? Does anyone live in poverty because Sam Walton got rich?

That's not only untrue, it's worse than untrue. The fortunes of Gates, Walton, and anyone who earns a high income are the con sequences of their having enriched a multi tude of people considerably less wealthy than themselves. You have to produce things people want if you intend to get rich (unless you find a way to milk the taxpayers). Market activity is a positive-sum, or win-win, process. In a free (or free-ish) economy, the rich get richer by making the "poor" richer. If you don't believe it, ask yourself where would you rather be "poor," here or in India? To be sure, people with acute entrepreneur ial alertness or valuable skills and knowledge will do spectacularly well. By comparison, the people who lack those things will seem to be losers. But they aren't. And since there is unlimited wealth yet to be created, anyone-if 2 free-can have his shot at being a "winner." Whatever is holding a particular person back, we can be sure it isn't the people who have already succeeded.

* * * American collectivists have long wanted the government to nationalize the railroads. They finally got their wish in recent decades. As Gregory Bresiger shows, they should have been more careful about what they wished for. What if family finances were run like the Social Security Trust Fund? William Conerly describes his imaginative method of financing his children's college education without hav ing to give up anything. The Academy Award for the best movie in 1998 went to Shakespeare in Love. The script was co-written by Tom Stoppard, whose plays have a feature that sets him apart from most of the arts world: anti-collectivism. Norman Barry looks at the philosophy that underlies Stoppard's work. The market order has been credited for many good things. Andrew Cohen finds one more way it benefits us: it provides a founda tion for friendship. Antitrust law's interference with business efficiency has long been documented by econ omists and legal scholars. What gets far too little attention is its immorality and injustice.

D. T. Armentano demonstrates that the law fails the test of ethics too. Ever since historian Richard Hofstadter wrote his book The Paranoid Tradition in American Politics, statists have had a conve nient way to smear any uncompromising advocate of individual liberty and limited government. James Bovard takes a close look at the book, the thesis, and the author. Medical treatment presents many complex ethical issues. State intervention in health care only makes difficult matters worse. Karen Selick discusses a case from Canada. 3 This month marks the centenary of the birth of the late W H. Hutt, an important and prolific freemarket economist. Richard Ebeling contributes an appreciation of Hutt's long career. Golf used to be a relaxing pastime. Then the environmentalists came along. Ray Keat ing explains. Lawyers have long been jealous of their monopoly in the practice of law. George Leef describes the lengths to which the profession is willing to go to prevent people from obtain ing legal advice outside approved channels.

Attempts by states to impede corporate takeovers are presented in humanitarian terms. But as Christopher Mayer explains, they are special-interest bids that undermine property rights. The clash between academic freedom and freedom of association may seem irreconcil able-until a missing element is brought into the debate. A controversy at the University of Notre Dame prompts James Otteson's dis course on rights real and imagined. In the columns department, Donald Boudreaux distinguishes real false cons ciousness from false false consciousness; Lawrence Reed remembers hard-money man James Blanchard; Doug Bandow argues for voluntary voluntarism; Dwight Lee links con servation to speculation; Mark Skousen reminds us of what Say really said; and Charles Baird reads the California legislature the riot act about compulsory unionism for professors. Andrew Morriss wonders if a hidden fist is really necessary to protect the invisible hand and decides "It Just Ain't So!"

Book reviews this month examine the fed eral government's welfare state for Indians, the Great Depression, the importance of prop erty, the lives of two lucky people, and the global environmental movement. -SHELDON RICHMAN e>n by Donald J. Boudreaux True False Consciousness A few years ago I listened to a professor from a prestigious law school speak on the modern economy. This learned scholar was baffled that people voluntarily shop at Wal-Mart and Home Depot. He asked: "Why do so many people patronize large, imperson al retailers who destroy downtowns and sell goods that destroy the human spirit? Why do consumers and workers willingly permit themselves to be oppressed by capitalism?" His answer was one that's given with appalling frequency by many statist scholars: false consciousness. This is the notion that people act contrary to their true interests because they don't know what's good .for them. Refusing to abandon juvenile notions about the horrors of private property and free markets, radical leftists instead resort to accusing the masses of collective stupidity.