Sell the Forests, Save the Elderly

REASON's two favorite free-market environmentalists are at it again. Not content to rest on their laurels after proposing that federal wilderness lands be given to environmental groups (see "Saving the Wilderness: A Radical Proposal," July), political economists John Baden and Richard Stroup have come up with an even more audacious proposal: sell off the national forests in order to phase out the faltering Social Security system.

Virtually everyone now concedes that Social Security cannot long survive in its present form. Today there are 3.25 workers for every retiree; by 2010 there will be only 2 workers for every retiree. The chain letter simply cannot continue in this manner. Moreover, economists point out that if our national retirement system were based on private pension funds, the money deducted from wages each month would be invested in productive enterprise, rather than simply being transferred from present workers to present retirees.

The conventional solution to the Social Security problem—bailing it out with "general revenues"—solves neither problem. The tax burden on workers in 2010 will still be just as great, whichever pocket the taxes are extracted from. And the economy will still be without a potentially huge pool of investment capital.

By far the preferable solution would be to shift everybody over to an enlarged private-pension system. But the huge drawback to that is the transition period: if today's workers and employees ceased paying into the system via FICA levies against workers' wages and salaries, where would the money come from to pay benefits to those now retired or about to retire, who've been promised Social Security payments?

Well, Baden and Stroup proposed to the Western Forest Economists Meeting, if the feds can't get it from income, why not draw on their assets? And the feds just happen to be sitting on "hundreds of billions" of dollars worth of assets: the national forest lands. Sold off gradually over a few decades, the 107 million acres of commercial timberland could provide the revenues needed to pay off the Social Security recipients.

Moreover, they argued, there is good reason to believe we'd all be better off with the land in private hands. About two percent of these lands would probably be mined for valuable minerals. Other portions would be opened to hikers and campers—for a fee. And history shows that privately owned timber stands are managed for long-term sustained yields, rather than exploited for quick gain, as tends to happen on leased national forest land.

The solution to today's costliest problem is staring us in the face—if we can just separate the forest from the trees.

Fire Fighting Out of the Regulatory Frying Pan

Arizona, already leading the nation in private enterprise fire protection, has now gone a step further toward the free market. Thanks to both a new state law and a state supreme court ruling, the fire protection business is no longer a franchised, regulated monopoly in that state. Instead, it joins transportation as a competitive, free-market industry.

Fire fighting had been regulated in Arizona since 1970. As public utilities, private fire protection firms were given exclusive territories, and their rates were regulated by the state Corporation Commission. When the commission ruled in 1979 that fire protection firms could no longer provide first-aid, paramedic services to their subscribers, the largest operator, Scottsdale-based Rural-Metro Fire Department, Inc., filed suit to overturn all state regulation of this business.

Last December the state Court of Appeals upheld state regulation, but meanwhile, Rural-Metro had asked the state legislature to deregulate the fire protection industry. A bill doing that was signed into law in April, but then in May the Arizona Supreme Court ruled that regulation of the fire industry had been unconstitutional to begin with.

A side effect of the court ruling was to speed up deregulation of transportation. Although Arizona voters approved such a measure last November, the legislature had voted to delay implementation until mid-1982—basing their authority on the now-overturned Court of Appeals ruling in the Rural-Metro case. Consequently, all trucks, not just fire trucks, have been returned to the free market in Arizona.

Auto Regulations: Counting the Costs

Most people want cars that are safe, get good mileage, and don't pollute the air. A plethora of federal regulations is aimed at achieving these goals. But analysts have begun adding up the costs—and they're disturbed by what they're finding.

Not only is each of these goals costly to achieve by itself, but the means used to achieve each one make the others even more costly to accomplish. According to Brookings Institution economist Lester Lave (Science, May 22), the emission-control laws have reduced fuel efficiency by 7.5 percent and have slightly reduced safety by increasing fire hazards (from catalytic converters). Federal fuel-efficiency legislation, complied with principally by reducing the size and weight of cars, will result in about 1,400 additional deaths each year by 1984, due to the lower inherent crashworthiness of small cars. Federal safety requirements, meanwhile, have made the average car about 200 pounds heavier than it otherwise could be, thereby lowering fuel efficiency.

Lave's article provides a summary of the magnitudes of these "secondary" impacts of regulation, which turn out to be about as significant as their primary impacts. For example, comparing the total expected reduction in deaths and injuries with the costs of required safety features, Lave finds that current government required safety features have a direct annual cost of $296,000 to $444,500 per "fatality equivalent" (a composite measure of deaths and injuries) avoided annually. But the secondary cost, in terms of higher fuel bills, is another $247,000 per fatality equivalent.

The increased cost of federal fuel-economy regulations is already starting to show up in death rates and auto insurance premiums. Compact and subcompact cars now account for 38 percent of all passenger cars on the road—but 55 percent of all fatal accidents and 87 percent of all accidents involving injuries. If you're in a subcompact that collides with a large (full-size) car, your risk of fatality is 8.2 times greater than if you'd collided with another subcompact. If your subcompact hits a midsized car, the fatality risk is 6.3 times higher; hitting a compact ups your risk by only 3.4 times. (These figures were released recently by the National Highway Traffic Safety Administration, the agency which promulgated the fuel-economy standards to begin with.)

Auto insurers are responding to the large increase in the size of claims (resulting mostly from the shift in the mix of car sizes). State Farm, for one, is now giving 15 percent discounts for 23 makes of large cars and charging a 15 percent surcharge for 23 small cars. Because of these changes, the company was one of the few auto insurers to show an operating profit last year.

Davis-Bacon's 50th: Blowing Out the Candles

In Charleston, South Carolina, the going rate for electricians is $8.25 an hour. Electricians working on federally funded projects, however, must be paid $11.85 an hour. Why? Because the Davis-Bacon Act says so!

Passed in 1931, Davis-Bacon directed the secretary of labor to set minimum-pay scales at the level of prevailing wages in the area of each taxpayer-funded construction project. Today, "prevailing wages" has come to mean the highest union rate in the area—and that area is often broadly determined. Critics of the act contend that this has added at least $1 billion a year to labor costs on federal projects.

In addition, economist Walter Williams notes that Davis-Bacon "discriminates against the employment of nonunion construction workers," and since 83 percent of minority craftsmen are nonunion, it prevents such workers from competing with whites. Williams notes that this racist result was one of the factors cited in favor of the act during congressional floor debate in 1931.

New Labor Department Secretary Raymond Donovan, hampered by Reagan's campaign promise that he would not repeal the act but would merely make administrative changes, has drawn up several proposals:

• In place of the highest prevailing union wage, base pay scales on a weighted average earned by the majority of craftsmen in an area.

• Set narrower geographical boundaries to avoid the "import" of higher urban wages to nearby rural areas.

• Cut down federally mandated paperwork.

Lower the ratio of skilled workers to unskilled trainees to allow a one-to-one ratio rather than the current one unskilled per three to five skilled workers.

In lieu of these palliative measures, Sen. Don Nickles (R-Okla.), chairman of the Senate Labor Subcommittee, is leading a fight in the Senate to repeal the act outright, while at press time Rep. Charles Rose (D-N.C.) was rounding up sponsors for a House repeal bill. In the last few years, four states have repealed their "little Davis-Bacon" acts covering state-financed construction. But 38 such state laws still remain.

Education: The Bills Are Coming In

The idea that educational services should be put into the marketplace, so that people can choose what they want and pay for what they choose, continues to arouse support—and opposition. Most national attention is focused on the Moynihan-Packwood-Roth tuition tax credit bill. That measure would allow a parent or self-supporting individual to take an income tax credit (that is, a dollar-for-dollar reduction in taxes paid) of up to $250 for each student he or she supports in an elementary, secondary, or college-level school. In August 1983 the credit would increase to $500.

A number of liberal groups have formed the National Coalition for Public Education to oppose the tax credit bill. Among them are the National PTA, the League of Women Voters, and the American Civil Liberties Union. The Reagan administration is committed to tuition tax credits but is holding off active support until its tax- and spending-cut programs get through Congress.

Ironically, the response to one aspect of those cuts may be an expansion of market pricing of educational services. The administration has proposed major slashes in Impact Aid—money given to local school districts that enroll children of parents who work in federal buildings or live on military bases or in federal housing projects. Some of the largest recipients of that aid are school districts in the affluent counties surrounding Washington, D.C. The Virginia counties have pushed through a new state law authorizing school districts to charge tuition whenever Impact Aid fails to cover 50 percent of the cost of educating children from federally employed families. Affluent Fairfax County is proposing to charge $3,000 a year if the Impact Aid cuts go through.

Even that outrageous figure pales in comparison with costs in the Boston public school system, now up to $4,000 annually per pupil. This had led Boston University's maverick president, John Silber, to challenge the Boston School Board into letting BU have a go at the city school system. Silber says he can run it for at least $40 million less, since the city's budgeted amount is "three and four times what is spent in many excellent parochial schools." Silber points out that student enrollment had gone down 28 percent between 1970 and 1979, and yet the size of the staff increased 54 percent. "Patronage staffing," Silber says, is Boston's major problem.

A few weeks after Silber's challenge, Boston Finance Commission chairman, Edward F. King, proposed a voucher plan that would allow a basic voucher of $1,500 per child to parents. The voucher could be cashed in at the private, public, parochial, or suburban school of their choice. King notes that the plan would make schools "more competitive and efficient" and says it could save $50 million. The plan must first be approved by the Finance Commission, go through public hearings, and be approved by the city council. Unfortunately, it has already been attacked for catering to "the chosen few" (that is, the rich and upper-middle class).

Into Space, Privately

The private aerospace company headed by Gary Hudson, GCH, Inc. (see Trends, Dec. 1980), and its backers, who have formed a company called Space Services, Inc., announced their first rocket launch from the island of Matagorda off the Texas coast in July. By early 1983, Hudson expects to be able to launch a 2,000-pound satellite into geosynchronous (stationary) orbit 22,000 miles up. NASA's space shuttle is scheduled to begin commercial launches in September 1982.

What Hudson expects to offer is a much cheaper launch service. According to Time, Space Services will charge about $15 million to launch payloads to geosynchronous communications orbits; NASA charges about $28 million for the same service—and even that is a subsidized price, according to Sen. William Proxmire (D-Wis.). (Proxmire charged recently that NASA's fee schedule is "phony," and that it should come right out and say that it will be subsidizing commercial users of the shuttle.) Furthermore, Hudson says he can deliver the commercial service with a maximum of $20 million in start-up costs. Financing so far, through SSI, has come from Houston real estate developer David Hannah, Jr., and a group of Texas backers.

GCH's rocket, called Percheron after the French breed of large, fast draft horses, is some 50 feet long and 4 feet in diameter. The reusable payload modules are 12 feet long, and GCH plans to produce 10 modules per month at $100,000 each for use in the flights. The bare-bones budget allows Hudson to increase his staff of 20 to about 100 by the end of the year.

Because GCH and SSI have not loaded their system with as many backup systems as NASA has, NASA officials have expressed concern over the risks. SSI's Hannah says he is carrying $25 million in flight-liability insurance to cover any accidents. Hannah has also written to NASA for an advisory opinion on his clearance to launch, and everything seems to be A-OK. Under the 1967 Outer Space Treaty, the US government is responsible for any launches from this country and must ensure that they are for peaceful purposes. No single US agency, however, has the authority to regulate such launches thus far. Could it be too much to hope that it stays that way?

Limiting Piracy

On January 27, the US Coast Guard seized the freighter Island Merchant, arrested the 10 Colombians on board, and seized 40,000 pounds of marijuana discovered on board the ship. Nothing unusual so far, despite the fact that the Island Merchant was 400 miles from the United States when it was seized, somewhere between Cuba and Haiti; Coast Guard seizures of ships on the high seas have been going on for years. But this one ended up being challenged.

In mid-June, US District Judge Edward B. Davis dismissed the charges against the Colombians arrested in the case and cast doubts on the Coast Guard's action. "The question here," Judge Davis said, "is whether the United States overreaches the international law of jurisdiction when it tries to prosecute foreign crewmen of a stateless ship stopped on the high seas 400 miles from the United States when there is no allegation…that the controlled substance found on the ship would be distributed in the United States."

While the Justice Department has appealed the case, the Coast Guard says it will continue to seize marijuana-laden ships on the high seas. The Coast Guard claims it has authority to do so under a 1980 law that exempts it from proving that the drugs are bound for the United States.

Survey Indicates Libertarian Trend

What Time magazine said, of course, was that its survey showed a "conservative" trend. But a closer examination of the results indicates that most Americans have moved beyond left and right toward a generally antigovernmental attitude. While a majority of the respondents did assent to the statement that "the media reflect a permissive and immoral set of values" (60 percent) and that "we must build up our strength so that we are clearly no. 1" (73 percent), 68 percent of the respondents also agreed that it should be left up to individual women to decide when and if to have an abortion, and 70 percent confirmed that the government is too involved in their lives.

The opinion survey, conducted for Time by the research firm of Yankelovich, Skelly and White, Inc., in mid-May, polled 1,221 registered voters nationwide. It reflected an unabashedly optimistic mood, with the number of respondents who believe things are going well in the country up to 51 percent from 26 percent only in January this year. Also on the bright side, 62 percent want government to stop regulating business and protecting the consumer, 47 percent oppose Reagan's decision to send military advisors to El Salvador, 67 percent oppose military and economic aid to anticommunist allies that violate human rights, 64 percent resent the concern given to the welfare recipient "who doesn't want to work," 61 percent favor passage of the ERA, and a majority concluded that party label makes no difference "in political competence."

However, respondents also are willing to have mandatory registration of handguns (60 percent), think that the Supreme Court and Congress have gone too far in suppressing religious and moral values (71 percent), and favor a constitutional amendment allowing prayer in schools (74 percent). And only 32 percent said they favor the administration's three-year tax-cut plan.

While Time puzzled over the fact that even those who described themselves as "liberal" agree with "conservative" stands (such as opposing regulation of business), we think the confusion is merely the result of an artificial break-down into left and right. (In contrast, see the Trends item "Rethinking the Categories," Mar.) Whatever Americans are deciding to do about their personal lives, a growing number seem to have adopted at least a good part of the libertarian conclusion that people ought to be left free to work things out for themselves.

FCC's Fowler To Foul up Regulation

Recent speeches by the new chairman of the Federal Communications Commission, Mark S. Fowler, lend strong support to his contention that he really is for deregulation (in contrast, see Trends, Aug.). In his first public speech, Fowler lamented the "unbearable arrogance…when an agency acts as if it knows all about how individual technologies ought to operate and how they all should be made to fit into one grand regulatory scheme." Fowler says that he aims to "unregulate" cable, broadcasting, and telephone services.

Fowler's declaration that he will deregulate television broadcasting is significant. Until now, the FCC has only moved on radio broadcast deregulation (see Trends, June), acting to remove restrictions on radio programming and formats, to stop the requirement for submitting program logs, and to end the limitation on number of commercials. If Fowler can extend these deregulatory steps to television broadcasting, the "vast wasteland" may become more exciting to watch.

In another first for an FCC chairman, Fowler has laid emphasis on television's First Amendment freedom. "It's time to extend the First Amendment to the electronic media," he said. "No one forces CBS to air 'Sixty Minutes,' and it's consistently one of the top five shows on the air."

The 39-year-old lawyer has been working on Reagan's political campaigns since 1976, and he calls his outlook "Reaganism." "When government can get out of the way, it ought to," he said in summary of his position. Fowler also advocates the repeal of rules barring broadcasters' entry into new technologies such as cable. Truly anticompetitive actions, he believes, should be handled by the agencies that have been set up to deal specifically with those problems.

Instead of "Crime Pays"—Criminals Pay

The principle of restitution—requiring criminals to reimburse their victims—is receiving some attention lately as the result of a New York state bill and a Justice Department program.

The New York bill, which has been approved by the House and at press time seemed likely to be approved by the Senate, would require every convicted criminal to make a small payment into a general fund for crime victims, in addition to any penalties imposed by the court. Payments to the general fund would be $30 for a felony, $20 for a misdemeanor, $15 for a violation, plus a $1 court processing fee. Sponsors of the bill expect such a schedule to raise $5 million for the Crime Victims Compensation Board. Last year, crime victims in New York received $5.7 million in taxpayer funds.

Sponsors of the bill point out that in Ohio, which has had a surcharge on felons and misdemeanants since 1976, about $4.6 million a year is raised, enough to finance all of that state's crime victim program. Some 15 other states have victim-compensation programs, mostly supported by tax funds.

Since 1978 the Justice Department has funded 41 restitution demonstration projects in 26 states plus Puerto Rico and the District of Columbia. According to an investigator for the Institute of Policy Analysis, Peter R. Schneider, who studied the first 17,000 juveniles to be referred to the program, 88 percent could be expected to complete the restitution ordered by the court. Even for juveniles convicted of very serious personal or property crimes, with up to five previous offenses and often from low-income minority families, the completion rate was over 80 percent.

Repayment of net losses under the program ranged from about 94 percent for losses under $250 to 58 percent for losses of over $1,000. Since court-ordered restitution replaces punishment for these juveniles, Schneider also cited the cost savings of prisoner maintenance ($24,000 to $43,000 a year) as compared with restitution ($1,000 per person a year).

How to Get Chicago Out from under Its Buses

Late spring and early summer focused attention on the problem of failing urban transit systems—specifically, the bankruptcy of the Chicago-area Regional Transportation Authority. While conventional politicians could suggest only one solution—figuring out someone else to tax so as to throw more money at the problem—others came up with more fundamental approaches.

Market researcher George Clowes, for example, urged Chicago commuters to face reality: since RTA is, in fact, bankrupt, he wrote in the Chicago Tribune (June 4), just "dissolve it and get the taxpayer out of the mass transit business.…At the same time, all legal restrictions on starting or operating transportation services—such as regulation by the Illinois Commerce Commission—should be removed to give free enterprise a chance."

Clowes's proposal—essentially that individual rail and bus systems be run as businesses, paid for by their customers—squares with the thinking of some reputable transportation economists. Charles Lave of the University of California at Irvine, for example, has argued that mass-transit deficits could be cut by businesslike (as opposed to politicized) management. Writing in the Spring issue of the Journal of Contemporary Studies, Lave suggested three remedies: (1) increase fares and drop low-density routes, leaving these to paratransit operators; (2) change work rules, especially to make much greater use of part-time drivers rather than paying costly overtime; and (3) stop adding expensive extra capacity at peak hours (the source of the largest part of the transit deficit). Instead, allow competition by jitneys and other paratransit services (see "Alternative Transit," REASON, July 1980) to relieve peak-hour loads.

Jitneys, however, are presently illegal in nearly every city in the United States, including Chicago. Typically, transit agencies lobby fiercely against any suggestion that they be legalized. In Chicago, Jerry Feldman, president of Checker Cab, wants to introduce a fleet of 15-passenger air-conditioned jitney vans, to operate over abandoned bus routes and in parallel with city buses between 9:00 P.M. and 5:00 A.M. Feldman thinks he can make money charging a $1.50 fare, about twice present bus fares but a lot less than taxi fares. The Chicago Transit Authority has ignored the proposal.

Just such a service has started up in Indianapolis. The city's Yellow Cab Co. has put a dozen 15-passenger vans in service, operating along major bus routes to take over some of the peak demand, just as Lave suggested. The Jitney Express charges $1.00 for the first 3½ miles—double the bus fare but less than one-third of taxi fares. The Indianapolis transit agency tried to prevent the Jitney Express from being licensed, but to no avail.

Chicago mayor Jane Byrne might just go for the idea, especially if the RTA is not bailed out by the legislature. As commissioner of consumer sales five years ago, she proposed legalizing jitneys. And one of her planning staffers, Cheri Heramb, did her master's thesis two years ago on the potential of jitney operations. Chicago is in a position to show the nation how to get out from under a bloated mass-transit bureaucracy.

Property Rights Breakthrough?

Some land owners have been getting the short end of the stick for a number of years. In the name of high-sounding goals like open space, relief of congestion, and neighborhood preservation, local governments have enacted severe restrictions on the use people can make of their land—restrictions that often slash the land's value. Advocates of private property rights have argued that such regulation amounts to a "taking" of property, in violation of the Fifth Amendment provision that private property "shall not be taken for public use, without just compensation."

Until recently, the odds that courts would accept that argument appeared poor. The California Supreme Court, for example, has held that a property owner may never collect money damages from a local government in such cases; the best one can do is go to court and attempt to get the regulation softened. But several recent cases suggest strongly that the tide is turning.

The stage was set by US Supreme Court rulings in 1978 and 1980 holding that individuals may file civil rights suits for damages against local government agencies. Based on these rulings, property owners in Ohio and Massachusetts have sued and collected damages from local officials who denied them the right to develop their property.

But the most important case was San Diego Gas & Electric v. City of San Diego, decided March 29. Although the US Supreme Court on that date refused to decide the issue (see Trends, June), analysis of the justices' positions indicates majority support for the property rights position. In the four-member dissent, Justice Brennan argued that the Court should have ruled that the company could collect damages for inverse condemnation. And Justice Rehnquist, who voted with the majority view that it was too early to rule in the case, wrote that he tended to agree with the substance of the Brennan dissent.

Thus, the Supreme Court may end up protecting property owners from "overzealous" planners. "After all," wrote Justice Brennan, "if a policeman must know the Constitution, why not a planner?"

Electricity Decontrol

Electric utilities are in trouble. Soaring fuel prices and environmentalist opposition to new plants have substantially increased their costs. Yet public utility commissions (which regulate their rates in exchange for granting monopoly territories) are increasingly reluctant to grant rate increases. As a result, the utilities' financial condition continues to worsen. By 1981 the value of utility stocks had slipped to just 75 percent of the firms' book value—that is, investors considered the firms worth less than the value of their plant and equipment! Utility bond ratings have also been declining.

More and more economists and energy analysts are concluding that it is utility regulation itself that is the problem. Last year we reported economist Kenneth Lehn's finding that in states with a high degree of "political liberalism," utility bonds ended up having to pay 15 percent more in interest to attract investors, due to tougher public utility commission regulation (see Trends, July 1980). And energy analyst Roger Sant of the Mellon Institute has for some time been arguing that conventional public utility monopoly/rate regulation is based on the mistaken premise that there can be no competition for central-station electricity production.

Sant has now been joined in this view by the director of Harvard University's Energy Security Project, Alvin L. Alm. In a recent Washington Post op-ed piece, Alm argued that our troubled utilities really have only two alternative ways out: either government bail-outs or decontrol. And Alm comes down on the side of decontrol. Already, he points out, small power producers and cogenerators have been exempted by federal law from state regulation. "Extending this exemption to all new facilities not only would be a natural progression toward deregulation, but would allow it to be phased in with a minimum of disruption," wrote Alm.

The advantages of exempting new plants from utility commission control would be considerable, according to Alm. Utilities could set up new subsidiaries or contract with outside firms to build the new plants. The bonds to finance construction would be easier to sell, since the plant's output would be free of regulation. And such a climate would be a real test of the ability of new-technology entrepreneurs to bring to market cost-effective alternative energy sources.

Policymakers are beginning to pick up on the idea of utility deregulation. The heads of both the California and New York utility commissions have endorsed decontrol of new plants; former New York commission head Chuck Zielinski supports decontrol of existing plants, as well. And in a recent Wall Street Journal interview, the head of the Justice Department's Antitrust Division, William Baxter, said he, too, is interested in exploring deregulation of electricity generation.


TMI Bailout Opposed. The Reagan administration has declared its opposition to a direct federal bailout of the Three Mile Island nuclear plant. While General Public Utilities Corp., the plant's owner, has $300 million in insurance, it needs a total of about $1.3 billion to clean up the facility. Budget chief David Stockman says the federal government may only help through sound cleanup regulations, nuclear waste disposal on a reimbursable basis, and general research. The administration has, in fact, proposed to spend $75 million to study the TMI accident.

Indexing Gains. Sen. William Armstrong (R-Colo.) plans to insert a provision in the Reagan tax-cut bill that will tie personal income and capital-gains taxes to an inflation index. A House version of the proposal has over 200 cosponsors.

Handicapped Access Rules. On May 26 the US Court of Appeals in the District of Columbia ruled that the Department of Transportation had exceeded its authority in requiring transit-system operators to spend billions to provide access for the handicapped and remanded the regulations back to the department. The Reagan administration hopes to revoke the unpopular regulations; Transportation Secretary Drew Lewis has sent legislation to Congress that would leave such matters to local communities. Despite their support of the moves to throw out the regulations, some transit agencies are complaining about the expensive orders they have already placed for specially equipped buses, while manufacturers are resentful over the time and money that they have spent attempting to meet requirements that may soon be moot.

An Important Distinction. The true test of one's commitment to individual freedom, wrote economist Walter Williams in a recent column for Heritage Features Syndicate, "is when you allow others to voluntarily do those things which you don't like." Williams made the important distinction between voluntary and involuntary exchanges in the column, entitled "Defending the Right to Be Wrong," noting that his position that such so-called social vices as gambling and prostitution should not be prohibited does not mean that he advocates them. The crux of the matter, Williams argued admirably, is that "in a just society personal harm is not a sufficient condition for prohibition."

IRS Eyes Barter. The Internal Revenue Service has issued a summons for all records pertaining to the members of the Pittsburgh Trade Exchange, a four-year-old organization that acts as a broker for trades. The Exchange contends that the IRS mistakenly included the barter group in its crackdown on the underground economy. The IRS may require such organized barter groups to file an annual barter reporting form.

No More Legal Gravy Train. The market for lawyers in Washington is "no longer the growth industry it was," a lawyer from a firm that represents companies before federal regulatory agencies told the New York Times. With the new aura of deregulation, some law firms have cut down on hiring and staff, while others have shifted their focus from energy, antitrust, and product and job safety areas to different fields.

On Serving Drunks. While a Massachusetts Appeals Court ruled that a bar is liable for injuries attributable to the drunkenness of a customer it had served, the California Supreme Court has ruled that only the imbiber of alcohol, and not those providing it, can be held legally responsible for any resulting injuries or damages.

Spain Allows Divorce. The Spanish Parliament passed a law allowing divorce for the first time in over 40 years (divorce was legal for two years in the '30s). The grounds for divorce under the new law are adultery and separation for over a year.