Trends
REASON MAKES BIG-TIME
The 10 January edition of the New York Times Magazine carried a brilliant cover story entitled "The New Right Credo—Libertarianism," by Stan Lehr and Louis Rossetto. The article outlines the basics of the libertarian philosophy and its origins in the writings of Rand, Hayek, Rothbard, Heinlein, etc. In assessing the periodicals in the field, the article noted that, "The most professional libertarian publication is Reason Magazine, edited by 23-year old graphic designer Lanny Friedlander."
WHO'S PROTECTED BY QUOTAS?
The industries urging most loudly for import quotas during the past year assert that they need protection against lower-priced imports. When questioned about the danger of other governments enacting retaliatory quotas, the same lobbyists make much of the fact that exports account for only 4% of the U.S. gross national product. Nevertheless, a recent economic analysis indicates that there is more to the export picture than is apparent on the surface.
Milton Godfrey, of Cybermatics, Inc., has developed a computer-based input-output model of the flow of goods in international trade. One of the outputs is the amount of indirect exports of products in 16 key industries (an indirect export being the use of a product as a component or ingredient in another product which is then exported). Godfrey's model shows that, on the whole, for every dollar of direct exports there is another dollar of indirect exports. Thus, a significant percentage of the sales that many industries consider "domestic" is actually export sales.
More revealing still are the figures for specific industries. The textile industry, loudest proponent of quota protection, racks up $2.85 in indirect exports for each $1 of direct exports. An example is denim sold to the makers of Levis which are exported. Thus, although the textile industry counts only 5% of its sales as exports, in fact over 19% of its sales are exports when the indirect exports are included. Thus, the textile makers have far more to fear from retaliatory actions abroad than they realize!
Similar figures exist in many other industries. The oil industry has $4 in indirect exports for every direct $1; the quota-hungry steel industry exports $4.18 in indirects per dollar of direct exports. For aluminum, the figure is around $3 indirect per dollar direct. Because of the many exports containing glass, the glass industry does $1.38 worth of indirect exporting for every export dollar. And so it goes. In the end, though, the joke will not be just on these short-sighted industries—new obstacles to free trade will be felt by everyone, in the form of higher prices and less efficient production. Godfrey's input-output analysis, by making the facts of interventionism more visible, may ultimately succeed in waking people up. It can't happen too soon.
Source: Forbes Sept 1, 1970, p. 35
CRONKITE'S CRISIS
For years libertarians have pointed out the inconsistency between the "freedom of the press" guaranteed the printed media and the FCC's regulation of aural and visual media in the name of the "public convenience and necessity." R.H. Coase's 1959 paper "The Federal Communications" although one of the most thorough examinations of this inconsistency, and of its threat to liberty, has been largely ignored. Certainly, spokesmen for the media have been loathe to bring the subject up, possibly for fear of retaliation. After all, who wants to risk the Commission's displeasure, and thereby lose his license?
Which makes all the more noteworthy the recent address by CBS's Walter Cronkite, to the 61st national convention of Sigma Delta Chi. Perhaps it has taken the veiled threats of Spiro Agnew and Martha Mitchell to awaken newsmen to the dangers of government regulation, but whatever it is, Cronkite is wide awake. The United States, said Cronkite, faces a communications crisis that "could undermine the foundations of our democracy, which is a free and responsible press." Noting the recent trend toward fewer and fewer newspapers, Cronkite stated that broadcast media can provide a check on printed media "if we are left free to perform that essential journalistic function. The trouble is that we are not free, we are government-licensed."
Noting that "both left and right strangely agree that government control is some magical answer," Cronkite went on to explore the ever-present implications of government control—whatever the rationalizations, and to call for its removal. "The power to make us conform is too great to be forever dormant. The axe lies there temptingly for the use of any enraged administration, Republican, Democrat, or Wallacite. We are at the mercy of the whim of politicians and bureaucrats, and whether they choose to chop us down or not, the mere existence of their power is an intimidating and constraining threat in being."
We must resist every new attempt at government control, intimidation, or harassment. And we must fight tenaciously to win through Congress and the courts guarantees that will free us forevermore from the present restrictions." Brave words from one whose company and industry exist at the pleasure of the FCC. More noteworthy still from a representative of an industry which has largely upheld and defended the principle of government regulation for the "public good" since its inception.
Let's hope other broadcasters get the message.
Source: "Possible Communications Crisis Alarms Newsman," UPI, datelined Chicago, Nov. 22, 1970
Reference: "The Federal Communications," R.H. Coase, The Journal of Law & Economics, Vol. II, Oct. 1959, pp. 1-40 (available from the University of Chicago Law School, 1111 E. 60th St., Chicago, III. 60637).