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Chapter 165 of 241 · The Freeman 1999 by Foundation for Economic Education

Break this Vile Addiction; D. Bourdreaux

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Eight days later, following bouts of bleed ing and diarrhea, Ms. Denson required an emergency Caesarean section. Her premature son weighed only three pounds, four ounces. It is still unknown whether or not her child's health will be permanently impaired. In May, Customs Commissioner Raymond Kelly testified before Congress about this and similar episodes. Asked about his agency's handling of Ms. Denson, Mr. Kelly denied unbelievably-that the Customs Service uses racial profiling. But he defended the practice of strip-searches as a necessary weapon in the "war on drugs." Reflect on this episode-reflect that gov ernment officials waylaid an innocent woman, Donald 1. Boudreaux is president ofFEE. 4 chained her to a bed, and fed her laxatives so that' they could inspect the contents of her bowels. Reflect that this woman's disgraceful experience isn't unique: innocent people are routinely subjected to such humiliating treat ment. Reflect also that a high government official unabashedly tells Congress that such searches are necessary.

Freedom Requires Tolerance of Foolishness Ms. Denson's experience shows that the war on drugs is no such thing: it is, like all wars, a war on people. But the people target ed by government drug warriors don't threat en anyone's peace and prosperity. These peo ple merely seek to do as they please without interference from the state. In a free society, even people who reckless ly risk self-destruction should be free to do so. (Of course, taxpayers owe such abusers nei ther aid nor comfort.) Not only is freedom meaningless if the government assumes the paternalistic power to protect us from our selves, but a wise people will never trust gov ernment with that power. This wisdom motivated Ludwig von Mises to write that "A free man must be able to endure it when his fellow men act and live otherwise than he considers proper. He must free himself from the habit, just as soon as something does not please him, of calling for the police." Without this tolerance for the freedom of others, no one's freedoms are secure. As the government's increasingly bel ligerent "war" against tobacco demonstrates, powers ceded to the state so that it can behave paternalistically on one front will inevitably be abused and extended to other fronts. The reason is that no sound principle is available to constrain these powers. If the state pre sumes to protect me from destroying my life with heroin or marijuana, why should it refrain from protecting me from tobacco, alcohol, animal fat, or a sedentary lifestyle?

Each can ruin lives and upset friends and loved ones. Innocent People Victimized It's important also to be aware of another heavy cost of the "drug war": government's weaponry in this war necessarily is fired scat tershot. These bullets too often hit people such as Janneral Denson-who are innocent of any drug offenses. And Customs Commis sioner Kelly's defense of strip-searches is evi dence that such scattershooting is inevitable as long as the government wages its "war on drugs." Here"s why. Drug traffickers don't tell government authorities about their illegal activities. And there are no victims to complain. Seldom is there a participant in a drug deal who has an interest in reporting it. This fact distinguishes drug selling (and other victimless "crimes") from true crimes such as murder, rape, kid napping, and robbery. Because drug dealing involves only willing participants, drug warriors inevitably must guess whether or not an offense is occurring and who is committing it. Such guessing, of course, involves choosing targets according to their racial, sex, and age profiles. This is why Commissioner Kelly's denial of racial profiling is unbelievable (and why Congress can end it only by ending the "drug war"). No matter how refined the technique for selecting targets, large numbers of innocent people will be detained, strip-searched, and humiliated a la Janneral Denson. After all, if Customs agents could identify drug traffickers without strip-searches, there would be no need for such searches.

5 Some well-meaning people argue that sta tistical errors are the price we must pay for law enforcement. But surely the degree to which we should tolerate such errors ought to be determined by the importance of the law enforcement effort. If the effort itself is high ly questionable, then there's no need to toler ate these errors. The plain fact is that drug prohibition is highly questionable. At bottom, it is an attempt not to protect each individual's prop erty and person from the aggression of others, but, rather, an attempt to engineer social behavior. It's an attempt at the impossible, protecting people from themselves. "Drug war" proponents often retort that without this social-engineering effort our society would descend into a grim incivility. They insist that with drug legalization our streets would teem with disgusting junkies and our storefronts would crassly advertise the sale of deadly narcotics.

For various reasons, I dispute these predic tions. But let me assume here that these are valid. So what? Would a world with more wasted junkies and crass drug merchants be as vile as what we have now? Today, our pris ons are chock-full of nonviolent offenders. Our inner-city streets are battle zones. Young blacks and Hispanics are suspected criminals simply because they are young blacks and Hispanics. Our courts permit government to seize and keep properties that are merely sus pected of having been associated with drug offenses. Many ill citizens cannot get the drugs they need to cure their illnesses or to relieve their suffering. And U.S. Customs agents kjdnap innocent young women and men, chain them to beds, pump laxatives down their throats, and inspect the contents of their stomachs. These and countless other consequences of the "war on drugs" are vastly more unciv il, grim, vile, degrading, unsightly, danger ous, costly, and immoral than even the worst-case scenario of widespread drug abuse.

Let's break our unholy and repellent addiction to the "war on drugs." D The Wealthy Hurt the Middle Class? It Just Ain't So! B ashing the rich just ain't as easy as it used to be. With the stock market at record lev els, unemployment low, and wages rising, most Americans are busy trying to become rich, not brooding overhow much others earn. Most of us are better off, so why begrudge those who, through hard work or sheer luck, are making lots of money? Well . . . Cornell University economist Robert H. Frank has found a reason. Frank, coauthor of 1995's anti-capitalist manifesto The Winner-Take-All Society, argues in the April 12, 1999, New York Times that the wealthy harm the middle class. They do so simply by spending money on such ordinary things as bigger houses, heftier cars, and nice clothes, which raises a sort of "entry barrier" to the good life for the rest of us. Pity the unfortunate middle-class families that can't buy houses in the best school dis tricts, whose puny sedans share the roads with 6,000-pound Lincoln Navigators, and whose children don't wear the hippest clothes. "The gifts you give, the night out at the theater, the family vacation-all are affected by the upward pull exerted by the sharply higher affluence of top earners," Frank contends.

Defending the upper classes doesn't pro vide the same feel-good factor as standing up for the poor and downtrodden.Yet it's danger ously wrong to malign the rich and their spending as some sort of hindrance to the rest of society. Fact is, Frank has it backwards. We'd all be a lot poorer if not for the rich. Let us count the ways. First, the rich give gen erously to charity. Households making $100,000 or more donate over five times as much as middle-class families making 6 $30,000 to $50,000-supporting hospitals, libraries, homeless shelters, research, schools and universities (including Frank's own pri vately endowed university, Cornell, named for the generosity of its chief benefactor, Ezra Cornell, who earned his fortune laying tele graph lines). Second, the rich start new busi nesses, which create jobs for the rest of us. Third, the rich deliver goods and services to society's rank and file. Indeed, we routinely fill our homes with the products the rich have invented, improved, or simply made more affordable: Colgate (toothpaste), Borden (milk), Campbell (soup), Gillette (razors), Heinz (ketchup), Maytag (appliances), Mars (candy), Dell (computers), Turner (entertain ment), Mrs. Fields (cookies), Mary Kay (cos metics), and on and on. The rich have virtual ly "branded" America with their gifts.

Fourth, and perhaps most important of all, the rich playa subtle but vital role in funding economic progress-not by their saving but by their spending! By and large, economies move forward by introducing waves of new products. New goods and services typically enter the market very expensive, with sales to only a small number of consumers-general ly the wealthy. The rich are able to buy, even at what would for most of us be prohibitive prices, simply because they've got the money. Henry Ford's first Model T hit the market at $850 in 1908, a sum that would take an aver age factory worker two years to earn. Not sur prisingly, Ford sold only 2,500 cars that year, and critics dismissed the early automobile as a "rich man's toy." The sticker prices for today's cars may cause buyers to gag, but they actually take less of a toll on the family bud get. A 1997 Ford Taurus required only a third of the work time of the first Model T.

Few entrepreneurs get rich selling only to the rich, even at extravagant prices. The big money-and the greater benefit to society lies in bringing products within the reach of the masses. The "rich man's toy" will remain so forever unless it gets cheaper-if not in dollars and cents at least in the currency that really matters: hours of work. America's free-enterprise economy routine ly makes what were once luxuries for the few affordable to the masses. Videocassette recorders fell from 365 hours of work in 1972 to a mere 15 hours in 1997. A cellular tele phone dropped from 456 hours in 1984 to nine hours in 1997. An IBM computer declined from 435 hours to under 60 hours (while being jazzed up with 20 times more power). So many goods and services that middle-class America takes for granted start ed out as niche products for the rich-elec tricity, telephones, washers, dryers, dishwash ers, televisions, microwave ovens, answering machines, compact disc players, airline trips.

Today's "jet set" includes not just society's wealthy but middle-and lower-income work ers as well. Over four-fifths of Americans earning $20,000 to $40,000 annually have flown on commercial airlines. For those earn ing under $20,000 a year, the fraction is near ly two-thirds. Even families at the lower end of the income distribution can count on eventually having goods and services once bought only by those with fat wallets. Indeed, 97 percent ofAmerican households in poverty have color TVs, nearly three-fourths own one or more cars, two-thirds have microwave ovens and live in air-conditioned dwellings. It wasn't a government welfare program that cut the price of these items to where they're afford able by the masses in America. It was that "unfair" capitalist system against which Frank so pugnaciously loves to rail. More to Come And what about the future? Will the spoils of an increasingly wealthy nation go only to a few? Again, of course not. What the wealthy have today will someday be common on 7 middle-class incomes and below. Take high definition television, which delivers crystal clear images. HDTV sets are selling for $5,000 to $10,000, well beyond the means of the average household. Only the rich will buy the first sets. In time, though, we'll repeat the experience of past innovations. Prices will drop quickly, allowing the typical U.S. family to own a high-definition set within a decade or so. If history has anything to teach us on this score, it's that the capitalist booty is spreading faster through society today than in the past, making its way to middle-and lower-income Americans in half the time it did a century ago.

In Capitalism, Socialism and Democracy, Joseph Schumpeter offered a succinct capsule of the benefit of a freemarket economy: "Queen Elizabeth owned silk stockings. The capitalist achievement does not typically con sist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreas ing amounts of effort." Frank doesn't tell us how to rid society of the inequality that imposes the burden of keeping up with the rich. Those who buy into his argument are likely to advocate penalties on the wealthy-steeply progressive taxes on income or sky-high excise taxes on luxury goods. These measures might very well reduce rich people's spending. But they're not likely to do the middle or lower classes any good. Quite to the contrary, stopping the rich from spending would retard progress and reduce the general standard of living. We'd all end up worse off.

-W MICHAEL Cox, Senior Vice President and Chief Economist, Federal Reserve Bank ofDallas RICHARD ALM, Business Writer Coauthors of Myths ofRich and Poor (Basic Books) A Better Brand of Parent by Marshall Fritz A fter World War II, aborigines in New Guinea scraped clearings in the brush in hopes that planes would land and bring "cargo." They'd seen U.S. forces do similar scrapings, and soon thereafter, great silver birds landed and disgorged "cargo," some of which was left behind and was quite useful. Of course, they were perpetually disap pointed. No combination of width, length, slope, and decoration ever brought in a sin gle silver bird because they didn't know the real source of "cargo." From their stand point, however, they were doing reasonable things. I used to push for tax-funded school vouch ers. My logic was that since most times the private schools do better than the government (a.k.a. "public") schools, why not use the tax funds to allow parents a choice? Like the New Guinean who had limited understanding of "cargo," I had limited understanding of "pri vate education."

The Freeman 1999

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