Publisher's Notes

• REVOLUTION AGAINST INFLATION: International financial expert Harry D. Schultz has this to say about economic conditions in 1974: "Many are predicting deflation to take over if business slumps and profits shrink. I say: inflation will continue unabated in '74. The pace may in fact accelerate. I fear inflation will be with us not only in '74 but for the rest of the decade. When government took over money printing from private banks they got the power to sustain inflation. This was abetted by creation of the IMF, which virtually is an engine of global inflation. Traditionally and more so now than ever, only a coup d'etat, a revolution ends uncontrolled inflation. Don't look for market forces to bring it on, for all governments are not socialist, in varying degrees, and they subvert market forces, at least on the surface. Money will continue to be debased, people will continue getting poorer, some will starve, but an illusion of relative prosperity will be maintained through money floods, i.e. inflation through excessive credit and money creation. Inflation rate will ebb and flow, but will not become net deflation."

One of Dr. Schultz's few non-gloomy predictions for 1974 is the following: "Mike Oliver will reveal the location of a new nation (with land secretly acquired at the end of '73), to be offically founded in '74". For an in-depth discussion of Mike Oliver's ideas on the need for a new, free-enterprise enclave, see "Designing a Free Country: An Interview with Mike Oliver," in the December 1972 REASON. Copies are still available for $1.50.

• HIGH PRICES OR GASOLINE SHORTAGES: Long lines and lengthy waits at the gasoline station—and closed stations—are commonplace in many parts of the United States as we go to press. On February 16, the LOS ANGELES TIMES stated in a front-page story, "Gasoline rationing…will not be necessary in California unless panicky motorists bring it on themselves.…" Motorists throughout the country are looked to by all levels of politicians to hold highway speeds down and avoid panic buying. Yet in Europe, where retail gasoline prices have been allowed to drastically increase (20 to 30%) without price controls, the supply-demand mechanism has led to "only minimal inconveniences, no queues at stations, courteous attendants and unflustered customers," as reported in an article entitled, "Tired of Gas Queues? Go to Europe," in the February 15 issue of the WALL STREET JOURNAL.

Instead of allowing the market to clear in the United States (so that supply equals demand—which would occur when the price is allowed to go to approximately 85¢/gallon according to an economist for Arco), there is constant talk of rationing and strict enforcement of the newly-enacted 55 m.p.h. speed limit. In California, the Highway Patrol (CHP) has begun to write what they themselves identify as "marginal" citations—tickets for speeds 1 or 2 miles over the limit. The CHP is doing so as a significant change in its "enforcement perspective"—although it admits the limit is "not designed for traffic safety but for conservation of fuel"—on the ground that "violations of this [55 m.p.h.] limit represent an improper drain of energy resources." Unfortunately for the CHP, its patrolmen are spread so thin on the state's 100,000 miles of highways that "the chances of a driver getting a speeding ticket are remote." Given such an attitude, it is foolish to speed if a patrolman is around. But the incredible attempt of the state to regulate the conduct of every driver's speed in the name of setting priorities over scarce resources overlooks the value of time to a driver. Since the question of having sufficient supplies at higher prices—instead of inadequate supplies at lower prices—has not occurred to the bureaucrats, we suggest careful consideration of the comments of Professor Manne in his article this month: "[U]se every legal means at your command to vex, confuse, delay, undermine and avoid every regulation…"; "[M]orality, in the case of arrogant, intrusive, totalitarian laws, lies in the barest possible obedience and in refusal to cooperate willingly beyond the letter of the law." And keep your eye on your rear-view mirror.

• THINGS COULD GET WORSE: You might think that things are bad enough already, but look what's happening in Uruguay: The cost of living in Uruguay rose by 77.51 percent during 1973, according to the Economy Ministry (as reported in the CHRISTIAN SCIENCE MONITOR, February 7). Even so, this was good news for Uruguayans—compared with 1972, when the cost-of-living increase was 94.71 percent. And American merchants who have been prosecuted for price-ceiling violations might be relieved not to be in Russia, where an accountant and a storekeeper were recently sentenced to death for selling building materials and fertilizer on the black market (LOS ANGELES TIMES, February 16)—raising to 90 the number of Soviet citizens sentenced to die by firing squad in the past three years.

• SAN DIEGO TEN REVERSAL: On February 1, the Ninth Circuit Court of Appeals handed down a dramatic reversal of many of the convictions in the San Diego Ten case. Libertarian tax protester Chris Bates was among those exonerated from his conviction (on one count of attempt to secure seized property.) The case stems from events occurring at a protest demonstration in May 1972 when Robert Heck of San Diego was locked out of his business by the IRS for failure to pay back taxes. The Court of Appeals held that the IRS seizure of Heck's property was illegal. Previously, charges in the case against Hank Hohenstein had been dismissed.

• LIBERTARIAN INSIGHTS: Economic illiteracy is running rampant in the media's coverage of inflation and the energy crisis. Two recent articles make some sense: "Some Preliminary Effects of a Heavy Hand," by Alan Reynolds, REASON Contributing Editor and Associate Editor of NATIONAL REVIEW, in NEW YORK TIMES, January 20, 1974; and "The Helping Hand Behind Food Prices," by Professor Roger LeRoy Miller (Univ. of Washington), in HARPER'S, February 1974—one of HARPER'S first libertarian pieces. Also excellent fare is University of Chicago Professor Ronald Coase's widely-discussed comparison of "The Market for Goods and the Market for Ideas," to appear in the March PAPERS & PROCEEDINGS issue of the AMERICAN ECONOMIC REVIEW.

• REASON PAPERS UPDATE: Editor Tibor Machan reports a steady stream of orders for the inaugural volume of Reason Enterprises' new journal, REASON PAPERS. Cash flow and printing problems are delaying the initial issue, but those who have placed orders should rest assured that they will be filled. To obtain a copy at the special prepublication price, see ad on page 2 of this issue.

• COMING NEXT MONTH: REASON's May issue will be the previously announced double-size financial issue, devoted to practical advice on personal financial survival in the face of an impending monetary crisis. Many prominent contributors are included in the Special Issue (cover price $3.00), edited by Bob Meier.