Freeman

ARTICLE

Perspective: Op-Ed Update

MAY 01, 1988

FEE’s op-ed program, in which we send Freeman articles to newspapers around the country, is entering its third year. in our first two years, we placed articles in more than 75 different newspapers, including The Wall Street Journal, Chicago Tribune, Newsday, Detroit News, Chicago Sun-Times, Houston Chronicle, Cleveland Plain Dealer, Miami Herald, San Diego Union, Orange County Register, San Jose Mercury News, Indianapolis Star, Dayton Daily News, Charlotte Observer, Richmond Times-Dispatch, Allentown Morning Call, Colorado Springs Gazette, Canton Free Press, Washington Times, and The Phoenix Gazette. We received more than 240 tearsheets representing a combined circulation of over 27 million.

We now are expanding this program to include Spanish translations of Freeman articles, which are being sent to Hispanic newspapers in the United States as well as to major newspapers in Latin America.

If you see one of our articles in your local paper, we would greatly appreciate it if you would send us a clipping.

—BJS

Economic Crime

It’s a mad world, as Paul S. Columbus can attest. The California entrepreneur was just sentenced to two years in prison and fined $100,000 for trying to bring cheap Japanese-made computer chips into the U.S. It seems Mr. Columbus’s effort violated the U.S.-Japan price-fixing accord that makes it illegal for Americans to buy chips at free-market (that is, lower) prices. We aren’t surprised that a cartel should force U.S. consumers to look to the black market for chips, but it’s still quite something to see the day arrive when the U.S. would start throwing people in prison for trying to serve those consumers.

The Wall Street Journal,

January 14, 1988

Silkworms or Textiles?

From the perspective of fundamental economic principles, one can often perceive connections between policies that might otherwise be overlooked.

Not long ago, for example, two articles regarding our relationships with China appeared virtually side-by-side in The Wall Street Journal (December 21, 1987, page 9). Although apparently devoted to separate topics, they are actually intimately interrelated.

First, the Journal reported new limits on China’s textile exports to the United States. Under pressure from U.S. officials, the Chinese agreed to an annual growth rate of 3 per cent. This new rate does exceed the I per cent growth limit on textile imports from Hong Kong, Japan, South Korea, and Taiwan, but it falls dramatically below China’s recent textile export growth rate of 19 per cent.

Just below this article, another piece provided more sinister news. U.S. satellite intelligence reports suggested that China might be shipping more sophisticated Silkworm missiles to Iran.

Of course, these two articles, thus juxtaposed, could provoke outrage. After all, here we are buying Chinese textiles, and what do they do? Arm our adversaries! Perhaps we should conclude that our 3 per cent limit on the growth of textile imports from China is too generous rather than too stingy!

But think again. Remember the basic economic dilemma taught during the first week of any introductory economics class: limited resources force us to choose between guns and butter. In the present context, this principle suggests that, if we would buy more textiles from the Chinese, they would have fewer resources available to devote to Silkworm production.

Furthermore, if we buy more Chinese goods such as textiles, the Chinese will earn more desperately needed foreign exchange which they can use to buy products from our export industries. New job opportunities would emerge to replace those lost for textile workers. Living standards would improve in China and in the U.S. as both countries concentrated on producing those items for which they have comparative advantages. These are the gains from free trade.

Here then is another example of the unintended but adverse effects of political meddling in the marketplace, if we really want the Chinese to produce fewer guns, shouldn’t we butter up to them by buying more—not less—of their textiles?

—Russell Shannon

Clemson University

The Police Power

The only thing that distinguishes the institution of government from any and every other institution is its possession of police power. It alone has the legal right to incarcerate a person or even take a person’s life. Therefore, the more we delegate to our government responsibility for different aspects of our individual and social lives and thereby expand the incidence of police power, the more we move toward a compulsory, authoritarian society and away from a free society. To be truly free we must limit government, i.e., police power, to the administration of justice, and thus provide that social order which is essential to free intercourse.

—Miller Upton

(Dr. Upton is former president of Beloit College in Wisconsin.)

The Communist Collapse

As governments in the East bloc have more and more difficulty supplying medical care, housing, and other social services, birth rates in all six countries are declining, despite generous new incentives for larger families. Life expectancy has dropped in some of the six countries—for example, in Hungary, from an average 67 to under 65—and families are feeling the pressure resulting from parents who hold two and sometimes three jobs apiece.

In these countries, where food, health, education, public transportation and housing are heavily or totally subsidized, the squeeze on ordinary citizens is amplified by increases in the costs of some consumer goods and rents and, in the case of Hungary, a new income tax. In some East European hospitals, patients are now being asked to supply their own medicines.

Nowhere is the sense of deterioration more evident than in air and water pollution. For example, an official Slovak study concluded recently that Bratislava is the most severely polluted city in all of Europe. Instead of allowing the analysis to be made public, the Government pulped 2,000 copies and sought to sequester those remaining in circulation.

A Czech water quality specialist confided to a visitor that Prague’s drinking water contained such a high level of toxins that infants in the capital were restricted to drinking bottled mineral water. To the north in the factory town of Usti nad Labem, air pollution has reached levels that compelled local school authorities to send pupils out of town to special education facilities for four months a year.

—David Binder,

writing in The New York Times,

January 6, 1988

Property and Propriety

Property is related to propriety, and is an ethical institution. It is a feature of our civilization.

The kinship of property with what is proper has been recognized from early times. It has been acknowledged by the people themselves in that genuine expression of popular feeling—language. It has been seen by our great thinkers. No matter what period or aspect of our civilization we may consider, we find that the institution of private property has been defended on grounds of justice, freedom, progress, peace and happiness. Often attacked and suppressed, ultimately free property emerged victorious.

—Gottfried Dietze,

In Defense of Property

The Will to Power

The chief danger to property has not been from the covetous neighbor nor from the habitual thief. It has been from the acquisitive and confiscatory activities of rulers. The Will to power, the temptation to exercise power simply because one has it, has led rulers to arbitrary interferences with liberty of the person. Covetousness has led them to arbitrary seizure of property. Both have joined to bring about arbitrary interferences with the liberty of using property. It is significant that the current of thought which is giving up the idea of property is also giving up the idea of liberty. As the two grew up together they are a common subject of attack by those who conceive the one must go with the fall of the other.

—Roscoe Pound,

“The Law of Property

and Recent Juristic Thought,”

American Bar Association Journal (1939)

Available from FEE . . .

We have a limited number of copies of Burt Folsom’s Entrepreneurs vs. The State, priced at $14.00. (See John Chamberlain’s review on page 206.) Call or write FEE to reserve a copy.

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May 1988

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