In 1976, in the aftermath of the summer Olympic Games in Montreal, the host city was left with a deficit of $1 billion. Wishing to avoid that fate next summer, the voters of Los Angeles precluded the use of city tax money to subsidize the '84 games.

Given that stricture, the Olympic Organizing Committee—which for the first time in Olympic history, is a private entity—has both tightened its belt and dug deep into the pocketbooks of corporate America. The result is that big business is funding almost the entire Olympics budget of $475 million—a modest bankroll compared to the '76 games' budget of $2 billion and the $9 billion spent on the '80 games in Moscow.

While corporate sponsorship fees totaled only 1.5 percent of the Montreal games budget, such fees are projected to pick up 34 percent of the budget for the coming summer Olympics. And ABC's $225 million ante for the rights to televise the event—three times what NBC paid for the TV rights to the Moscow games—makes up another 47 percent of the budget.

In addition to hitting up corporate sponsors for fees ranging from $4 million to $15 million, the organizers also persuaded private concerns to cover other costs, including those for constructing and upgrading various facilities. McDonald's, for example, put up $4 million to build a new swimming pool, and the Weingarten Foundation paid the bill for improvements at one Olympic site, the stadium at East Los Angeles College. The Southland Corp. kicked in $3 million for a new velodrome, and Atlantic Richfield picked up the tab for a new track at L.A.'s Coliseum.

In addition to innovations in the financing, though, great attention has been paid to keeping costs down. Olympic organizers have kept construction of permanent new facilities to a minimum—about $8 million in all, in contrast to a total of some $70 million spent on new facilities at the '76 and '80 summer games. In Los Angeles, the area's many existing facilities will be used extensively. Also, rather than build a brand-new Olympic Village, the organizers will house athletes and officials in various university dormitories in the area. Moreover, the games' paid staff will number only 45,000, half that of the Montreal and Moscow games. The organizers have recruited volunteers in force—including 400 volunteer trainers—and have persuaded corporations to staff some activities.

Other cost-cutting measures include the elimination of many of the perks typically lavished on Olympic officials—limousine service, for example—and other traditional extravagances, such as hosting the congresses of various international sports federations.

One cost that will be borne by taxpayers is that of security. Though the Olympic organizers have formed a considerable security force at their own expense, federal taxpayers will pay for the 700 FBI agents scheduled for duty in Southern California during the games, plus agents from several other federal bureaus. In addition, California state and local taxpayers will cover the costs of thousands of security personnel on hand for the event.


It's been nearly 50 years now that the government has been heavily subsidizing agriculture in this country on the rationale that farmers need protection from the ups and downs of their business. But the free market itself offers ways for farmers to protect their incomes from the extremes of drought and bumper crops. And these ways are coming in for increasing discussion as the cost of government agriculture policies balloons and their self-contradictions become ever more apparent.

Under the Reagan administration, taxpayer support of farmers has skyrocketed. Total government payments to farmers are estimated at $21.8 billion for fiscal 1983, up from $2.75 billion just three years ago. The reason is a huge grain surplus that has forced prices down but boosted outlays by the government, which pays farmers for the difference between the market price and a government-set target price.

But this is just the most recent and egregious effect of farm policies that on the one hand have government paying farmers not to produce food and on the other hand paying them if they do produce "too much." As economic journalist Robert J. Samuelson concluded recently in his column in the National Journal and the Los Angeles Times, "The policies have never worked very well, and the justification for continuing them seems to grow weaker with every passing day."

But since government mechanisms have been a high-priced failure, is there any better way for farmers to cushion the risks inherent in their work? There is. As Susan Lee pointed out in a recent Wall Street Journal article, a free market has its ways of solving the problem.

One is forward contracts. Here, a farmer and a buyer agree that the farmer will sell a specific quantity of crops at a specific price to be delivered at a specific time. If the market price exceeds the contract price at the time of delivery, the farmer doesn't do as well as he would have by relying on the fluctuations of the market. But if the market price is below the contract price at the time of delivery, the farmer can breathe a huge sigh of relief.

Alternatively, the farmer can turn to the futures market and contract to sell a specific quantity on a specific date, with the price of the contract left to fluctuate with market forces. Whichever way the commodity's price goes, the farmer can always prevent a loss by buying back his own contract before the delivery date.

Soon, farmers will also be able to take advantage of options contracts, which give the right but not the obligation to sell at a specified price. As with forward and futures contracts, farmers are protected against huge losses if prices go through the floor; but with options, if prices zoom in the other direction, they can cash in on the windfall because they are not obliged to sell at the contract price. Agricultural options have been banned in the United States since 1936; but now the Commodity Futures Trading Commission has approved a three-year experiment in options, scheduled to begin in late 1984.

Forward contracts, the futures market, and the options market all illustrate the genius of the free market at work. Just as there are sellers and buyers of products and services, there can be sellers and buyers of risk. And the transactions can take place without expending a nickel of taxpayers' money.

Thus, there is a free-market alternative to the government's farm program boondoggle. So when the Wall Street Journal's editors call it an unfair and "unnecessary redistribution of wealth away from taxpayers to farmers," they have the facts on their side.


As the percentage of women who are working has grown in recent years, so has the number of day-care centers—and government regulation of the centers has, predictably, kept pace. But not all day-care providers are cowed by the regulators.

The Los Angeles Times recently reported that from Maine to Nebraska to California, evangelical Christian day-care programs are "engaged in what they see as a modern version of the David and Goliath battle, pitting church against state." In California alone, an estimated 30 religious day-care centers refuse to apply for the required state license.

In the Los Angeles area, the church schools are resisting licensure for several reasons. They object to requirements that their teachers, trained at Bible colleges, must have early-childhood-education credentials, which would mean attending secular schools. They refuse to accept a state ban on corporal punishment, as well as state health and safety regulations that are any more stringent than those for Sunday school classes. More generally, the schools say that their religious principles don't permit state regulation of church affairs.

Critics have charged that the evangelicals want exemption from state licensing so they can use corporal punishment or practice racial discrimination. But Kathleen Murray, director of the liberal Child Care Law Center in San Francisco, disagrees. "The main reason I believe these churches are seeking exemptions is because they are legitimately concerned with the free exercise of religion," she told the Times. And at least in Orange County, unlicensed day-care centers have escaped serious legal difficulties because they often comply voluntarily with most of the licensing requirements they're resisting having imposed.

The case of the evangelical Christian day-care centers illustrates how government regulation in such areas infringes on the liberty of providers and consumers of services. Governments are generally reluctant to enforce such regulations in the face of freedom-of-religion objections. In California, reported the Times, no centers have been shut down for failure to obtain a license.

But if religious day care can be "regulated" by the scrutiny of the customers, why can't secular centers follow the same path? Churches are the largest providers of day care in the country. Their widespread objection to state regulation may help others see the light.


Through its concerted efforts to delay the implementation of cost-based pricing of phone service, Congress is trying to stem the onset of a new telecommunications era. But even if Congress manages to forestall this move toward a market structure in telecommunications, the forces of progress appear to have the momentum on their side.

To recap events: In late September, committees in both houses of Congress approved proposals designed to delay the implementation of cost-based pricing of telephone service, a goal toward which the Federal Communications Commission (FCC) has been working for some time. As Peter Samuel pointed out in our October issue ("Hanging Up on Your Phone Company"), local phone rates are kept low by subsidies from artificially high long-distance tolls: about a third of every dollar charged for a conventional long-distance call—or about $11 billion a year altogether—goes to hold down local rates.

The FCC, however, has ordered an end to this system of cross-subsidization, beginning January 1 (coinciding with the breakup of AT&T). The end to subsidies and the implementation of cost-based pricing for local service means at least an initial rise in local rates—threefold, according to many analysts. And that has legislators up in arms.

Pending congressional legislation against cost-based pricing would hold down local rates, but then interstate long-distance providers—who would still be saddled with having to subsidize local service—couldn't lower their rates significantly. For example, following the FCC's announcement of its cost-based-pricing proposal, AT&T—which, after the breakup, would no longer be a local-service provider—said it would cut its long-distance rates by a total of $1.7 billion next year. But the company later announced that if Congress blocks the FCC plan, thus retaining the cross-subsidization system, it may not cut its rates so much after all.

The AT&T rate-cut plan is simply one of a number of circumstances that seem to have been lost sight of in all the hubbub surrounding the restructuring of phone service. Another is the fact that, if inflation is taken into account, local phone rates have on average actually declined over the last few decades—from 1972 to 1981, for example, they fell 30 percent. And while most talk has centered exclusively on the inevitable local-rate rises, little has been said of the benefits promised by more-competitive—and thus more-innovative—telecommunications services.

The world of mobile communications, for example, will enter a new era when General Motors starts offering some of its '84 models equipped with AT&T-supplied cellular radiophones. Some of GM's Buick Rivieras sold in the Chicago area, where AT&T is installing a cellular radio system for operation late this year, will be offered with a radiophone. Ford plans to start offering the option on some of its '85 models. (A cellular system is set up so that communication between mobile radio units and conventional telephones is possible.)

Both local and long-distance telecommunications will benefit from a recent FCC decision to allot 10 more radio frequencies for digital transmission services (DTS). Primarily used by private businesses for the high-speed transmission of computer and video data, digital systems use microwave signals to "bypass" the local phone company. With the 10 additional channels available, the digital bypass business may pick up momentum.

And another new phase of the highspeed communications era is approaching with the installation throughout the nation of fiber-optic cable for long-distance communication. Several firms have worked out deals with various railroad companies to lay the glass-fiber cable—through which impulses of light carry signals—along the railways' rights-of-way. Thus far, more than 10,000 miles of fiber-optic cable either have been laid or are planned. (Western Union, a firm that is seeking use of railway rights-of-way to lay fiber-optic cable, started its telegraph operations 132 years ago by hanging wire on poles running along such rights-of-way.)

Congressional action to retain a communications system given more to bureaucratic regulation, monopolization, and inefficient subsidization than to competition and innovation may retard the advent of what new technologies promise. But even federal legislators cannot hold off that progress forever.


If awards were given to political scams, a relic of the Hoover administration called the Davis-Bacon Act would place in the top 10. But several recent developments promise relief to taxpayers.

Davis-Bacon requires that workers on virtually all federal construction projects be paid the "prevailing wage" in their locality for the kind of work they're doing. This is not as trivial as it might appear. "Prevailing wage" is not defined in Davis-Bacon, and Labor Department rules have often led to high, union-negotiated wages being paid on projects covered by Davis-Bacon or parallel wage provisions in 58 other federal statutes. And in addition to direct federal projects, the feds are heavily involved in private construction through loans, grants, and loan guarantees; so Davis-Bacon or related provisions cover about one-fourth of all construction in the country. That was an estimated $53 billion worth in 1981, according to a report released by the Congressional Budget Office in July.

CBO analysts estimated that Davis-Bacon boosted government construction outlays by 3.7 percent in 1982, costing the taxpayers about $1 billion. "In addition," noted the report by the generally liberal CBO, the act "interferes with a major function of market-determined wages—namely, signaling workers to seek employment where their efforts are valued most highly." Davis-Bacon also imposes reporting and paperwork requirements on contractors and limits the use of less-skilled workers and trainees.

Repeal of Davis-Bacon, noted the CBO, would probably save taxpayers some $5 billion over the next four years. Short of repeal, Congress could legislate reforms, such as raising the threshold level of covered construction projects from $2,000—where it has stood since 1935.

Over the years, congressional attempts at repeal and reform have never survived the tender mercies of the AFL-CIO Building and Construction Trades Department and its congressional acolytes. Typically, a repeal bill sponsored by Rep. John Erlenborn (R–Ill.) and a reform bill sponsored by Sen. Don Nickles (R–Okla.) are both bottled up in committee.

But in 1982, instead of waiting for Congress to act, the Reagan administration initiated regulatory changes in the Department of Labor's definition of "prevailing wages" and in other DOL rules that implement Davis-Bacon. Recently, the US Court of Appeals for the District of Columbia upheld most-of the new rules, which had been challenged by the AFL-CIO. With "prevailing wages" more often being the average wages paid in an area instead of the union wages, the Labor Department estimates that its rules changes will save $700 million a year.


The problem of excessive government spending is hardly new. In the past 53 years, there have been 45 federal deficits; in the last 15, 15. To a large extent, the problem is inherent in the porkbarrel-and-boondoggles political process. But there is a reform that might alleviate at least some of the excesses of government spending: the line-item veto.

Under the current system, a president has the option of vetoing any appropriations bill sent to him by Congress. But as economic writer Henry Hazlitt pointed out in a recent Wall Street Journal piece, it's an empty power. That's because "Congress has perfected the device of throwing in…veto-buying appropriations with those the president needs to carry on the government" and "has perfected the practice of passing its appropriations bills at the very end of a session." Thus, the president can either take the entire spending package or face the prospect of no money whatsoever for basic programs. Presidents hardly pause before taking the first option.

Total spending could very well be cut, however, if a president could exercise a line-item veto, rejecting some items in an appropriations bill while approving the rest. Many presidents of various political persuasions, including Roosevelt, Truman, and Eisenhower, have put in a bid for line-item veto power. The Journal has called on President Reagan to make it "the centerpiece of his reelection campaign," and Treasury Secretary Regan has come out in favor of the idea.

For skeptics, there's already substantial evidence of the effectiveness of the line-item veto. Forty-two state governments operate this way. And, in California, for example, Republican Gov. George Deukmejian used his line-item veto this year to cut $1.7 billion from the state budget, of which the Democratic-controlled legislature will probably be able to restore only about $2 million. Two years ago, Illinois Gov. James Thompson was able to forestall state funding of a mental-health center until the legislature found equal savings somewhere else in the budget.

Gerald Miller of the National Association of State Budget Officers told the Journal, "The line-item veto is an important tool.…It gets to the fundamental point of fiscal discipline in that the chief executive is ultimately responsible."

Since 1931, pointed out Henry Hazlitt in the Journal, Congress has increased Americans' tax burden 30-fold—that's after accounting for inflation. Yet federal deficits have gotten worse. "So let us finally drop the delusion," he argued, "that we can pay for any level of spending by raising taxes." Spending must be cut, he argued, and the line-item veto seems like an effective surgical instrument.


There have been some interesting developments lately in the steady movement to reduce government's regulation of television. Not surprisingly, many are the work of the Federal Communications Commission (FCC), chaired by super-deregulator Mark Fowler.

Instead of waiting for a TV broadcast deregulation bill stalled in the House, the FCC has proposed four measures to reduce controls over the program content of the 830 commercial TV stations in the United States. These include repeal of the "5-5-10" requirements that most stations set aside at least 5 percent of their air time for news and public-affairs programs, 5 percent for local programming, and 10 percent for nonentertainment shows. The FCC would also do away with the requirement that stations determine the kind of programs their communities want by using elaborate surveys, another requirement that stations keep a program log of everything broadcast, and a ceiling of 16 minutes of commercials per hour. In fact, the commission has asked for public comment on eliminating all other programming rules, as well. The FCC says that these rules not only limit broadcasters' freedom but require about 2.5 million hours a year to comply with.

In 1981, the FCC made a similar deregulatory move on the radio front, eliminating most of its oversight of radio programming. And in May, an appeals court upheld the agency's legal authority to do so.

Meanwhile, the FCC has also moved to define, and possibly end, application of the Fairness Doctrine to cable TV. The rule, which applies to network television as well, has in practice meant that stations must give air time to opposing interests.

Municipal cable regulation has also suffered a defeat in Miami. An ordinance there prohibiting cable companies from transmitting "indecent" programming was overturned by a US district court. The judge said the ordinance violated First Amendment rights of free speech and Fourteenth Amendment rights of due process.

Brenda Fox, an attorney for the National Cable Television Association, was delighted. She noted that in the Miami decision and a similar earlier decision in Utah, "the courts have said that cable is more like print [media] than broadcast. That indicates that cities would have a hard time writing a constitutionally valid law that would regulate indecency on cable."

Not everyone is as pleased with reduced government intrusion in broadcasting. There is a large difference of opinion on the right over deregulation. Groups such as the Conservative Caucus and Accuracy in Media have lambasted the FCC for "planning to strip away important [government] protections against unfair abuse by broadcasting licensees." On specific matters, they have demanded that the FCC shut down a New York-based "dial-a-porn" telephone recording service, and they want the agency to deny the license renewal for the leftist Washington radio station WPFW—so far to no avail.

"Fowler's libertarian views," warned Human Events recently, "course through other FCC actions." If "present trends continue," said the paper, "broadcasters will one day be 'free' to be as unfair, partisan or obscene as they desire."

In contrast, National Review recently printed a favorable review of Laissez Parler: Freedom in the Electronic Media, published by the Social Philosophy and Policy Center at Bowling Green State University. Reviewer Chilton Williamson called it "an excellent little book" that "makes an exceedingly strong—indeed, to my mind, a really unanswerable—case for the proposition that 'democracy would be better served by private ownership and unrestricted markets in the media.'"

The debate will certainly continue. Meanwhile, the Economist reports that five European governments are evidently willing to permit largely unregulated cable television operations—Austria, Switzerland, Holland, Finland, and Norway. Of these, Finland is "going farther towards the free-enterprise solution than even Mrs. Thatcher's Britain has dared to propose. There cable is to be as free from restrictions as print." Perhaps Helsinki has its own Mark Fowler.


It has been estimated that 15 percent of the US defense budget—which, in its $200-billion entirety, constitutes nearly 7 percent of this nation's GNP—goes to defending Japan. By contrast, Japan devotes less than 1 percent of its GNP to its defense budget. It is a situation that for some time has riled many Americans—including Rep. John Kasich (R–Ohio), who in July introduced into the House a resolution designed to prod Japan into significantly increasing its defense spending—by reducing US defense aid if it doesn't.

Of particular interest, however, is the growing debate among the Japanese themselves concerning the soundness of relying on the United States for military protection. In recent months, and especially since the Soviets' downing of a Korean civilian airliner near Japan, prominent Japanese have been raising pointed questions about their nation's defense and the proposal that Japan seriously arm itself against Soviet aggression.

Even before the Korean plane was shot down, Japanese political science professor Kichitaro Katsuda, in a late-August op-ed piece in the Los Angeles Times, warned that Japan's "nuclear allergy"—that is, its antinuclear fervor—may be "playing into Moscow's hands." "World peace today rests precariously on the East-West nuclear balance of terror," Katsuda wrote. "Won't unwillingness to address a grim reality lead Japan into another disaster?"

Shortly thereafter, Tokyo-based writer Osamu Kaihara—formerly with Japan's Defense Agency and its National Defense Council—discussed the Soviet threat to Japan in an op-ed piece in the Wall Street Journal. Kaihara suggested that Soviet forces are so mighty and so concentrated upon Japan that the idea that Japan defend its sea lanes of communication—a goal supported by recent Japanese administrations and the US defense community—is not realistic.

That prompted a response by US Navy Commander James Auer, the Defense Department's assistant secretary for Japan. The point of Japan expanding its defense, Auer proposed, is not to match Soviet force but rather to infuse more caution into Soviet calculations. "The more capable and credible Japanese and American naval and air might becomes," wrote Auer in a letter to the Journal, "the less likely are the Soviets to try interrupting the wide ocean paths."

Discussing Japan's reluctance to arm itself against Soviet aggression, Japanese political science professor Tetsuya Kataoka wrote in the Los Angeles Times: "As long as the United States unilaterally guarantees Japan's security, Japan feels the Soviet threat only indirectly." But according to recent reports, the Japanese public—which has been strongly pacifist since the end of World War II—is becoming more aware of a Soviet threat since the Korean airliner incident.

Cox News Service writer Walter Miller reported, shortly after Flight 007 was shot down, that "Japanese public opinion appears to be making a gradual shift in support of a stronger defense force." And Bradley Martin, of the Wall Street Journal, reported from Tokyo that "less is being heard from the pacifists than might be expected in the aftermath of an event demonstrating so graphically how close Japan is to the Soviet Far East and Moscow's growing and unfriendly array of military might."

If the Japanese begin to take responsibility for their own defense, including how much is appropriate, US taxpayers can only benefit.


Who could coordinate private efforts to aid freedom fighters around the world? In our November issue, we reported in Trends a resolution passed by the Veterans of Foreign Wars to help raise money for humanitarian aid to Nicaragua's anti-Sandinista guerrillas. In an article in the same issue, Jack Wheeler suggested that the Soviet regime could be brought to its knees by a campaign of subversion conducted by the millions of oppressed Soviet subjects ("How to Dismantle the Soviet Empire"). Just who would coordinate these efforts—the governments of free nations or private groups—was left an open question. Now comes word, in a recent issue of the British journal Free Nation, of the formation of Resistance International, an organization to oppose Marxist and other repressive regimes worldwide.

Over the summer, an initial rally in London to launch the organization was followed by rallies in Amsterdam, Paris, and Milan. A central goal of RI, whose leader is the exiled Soviet dissident Vladimir Bukovsky, is to coordinate the anti-authoritarian efforts of exiles from, and dissidents within, communist and other repressive nations. The group also is seeking international recognition "as a representative political and public institution."

Already, Free Nation reports, representatives of antistate groups from Angola, Bulgaria, Cape Verde, Cuba, Laos, Romania, Russia, Vietnam, and Yugoslavia have adopted RI's declaration of its aims. And RI is said to be negotiating to set up further liaisons with representatives of resistance movements in Afghanistan, Argentina, Cambodia, Crimea, Czechoslovakia, Ethiopia, Mozambique, Nicaragua, Poland, and Tibet.

An indication of RI's potential as a significant, recognized force is the illustrious composition of its international supporting committee. Among the members are the French philosopher Raymond Aron and his compatriot Simone Veil, former president of the European Parliament; British Member of Parliament Winston Churchill; Yugoslav rebel, and former Tito deputy, Milovan Djilas; Enzo Bettiza, editor-in-chief of the Italian Il Giornale Nuovo; and the renowned musician Mstislav Rostropovich.


The government's Landsat monopoly is crumbling rapidly. And it doesn't look like that will pose any problem for the users of satellite-produced pictures of geological formations and crops.

For more than a decade, the government's earth remote-sensing satellites (Landsats) have been providing images that are quite valuable in a wide range of enterprises, including oil exploration, mining, crop forecasting, and timber management. The Carter administration had already decided to let the private sector take over this potentially profitable area—by the 1990s. In 1981 the Reagan administration stepped up the privatization schedule, vowing to end the government's participation with the scheduled launch of a Landsat in 1985.

The government's threatened exit from the field has provoked a lot of anguished cries that Landsat users would be left without the pictures they've come to rely on. But as the Wall Street Journal noted recently, problems with the Landsat now in orbit, and Congress's failure so far to approve the $25 million needed for the 1985 launch, "is attracting new players" to the market.

One of the newest and most promising of these players is Space America, a private-enterprise consortium involving Space Services, Inc. (SSI), American Science and Technology Corp., and Aeros Data Corp. Space America formalized plans this fall for the launching of three remote-sensing satellites beginning in 1986—whether or not the government pulls out of the field. And, according to Commercial Space Report, the group intends to submit a proposal to manage and commercialize the government's Landsat program.

But earth data will also be flowing from overseas. In Japan, an earth-sensing satellite specializing in ocean scenes is on the drawing boards, according to the Journal. And Spot, the ambitious US subsidiary of a French multinational (but government-subsidized) company, is already lining up American clients for its first picture-taking satellite, scheduled for launching in January 1985 on the European Ariane rocket.

Spot will market its wares here by offering more and better service than is available from Landsat. For example, Spot plans to sell pictures that show surface objects as small as 10 meters, compared to the 80-meter resolution of the main Landsat camera. (Space America, on the other hand, maintains that "the proven market is at 80 meters" and that it will not add high-resolution capability unless demand proves itself.) Spot will also accept special orders for three-dimensional images and for photos of out-of-the-way places.

Private-enterprise satellites may not have completely smooth sailing in this country. The Wall Street Journal reports that "hard-nosed national security bureaucrats" want veto power over private companies' choices of countries for installing receiving stations. Moreover, a Pentagon bureaucrat has said that the government won't permit private satellites' pictures to approach the resolution of spy satellites-classified information, but certainly below one meter. Limitations sought in the name of national security may be difficult or futile to maintain, however, if foreign competition jumps in with forbidden services.


Reign in Spain tamed. As a result of Spain's reformed penal code initiated by the recently elected Socialist government, scores of people imprisoned for drug offenses are being released, and jails there are emptying.

Trucks to follow planes? Reese Taylor, Jr., who chairs the Interstate Commerce Commission, has written to President Reagan recommending that his agency be abolished. He reportedly stated his support for totally eliminating government regulation of the trucking, freight-forwarder, and water-carrier industries.

Victims' rights expanded. The California legislature has passed and sent to Gov. George Deukmejian six bills aimed at increasing compensation for victims of violent crimes. The legislation would double the amount of restitution fines that can be imposed in criminal cases, make it easier for victims to file civil suits to collect restitution, and enforce collection of restitution fines.

Irish eyes smiling. British Airways, the government-owned airline, has lost a major battle in its struggle to maintain a monopoly on flights between London's Heathrow Airport and Belfast, Northern Ireland. A British court has said yes to the bid of independently owned British Midland Airways to offer service on the route.

Soft property. The US Court of Appeals expanded the domain of property rights when it ruled in September that copyright laws apply to computer software. In May 1982, Apple Computer had sued Franklin Computer for copying Apple's software. Franklin did not deny the copying charge but claimed that software cannot be copyrighted.

Forest fees. Addressing the Audubon Society's national conference in September, US Forest Service chief R. Max Peterson urged that recreationalists be charged a fee to use the national forests. Even a charge of $1 per day, Peterson commented, would double the Forest Service's recreation budget. The audience was not exactly receptive to the idea.

Easy labor? Perceiving many recent court interpretations of the National Labor Relations Act as promanagement, organized labor is considering a push to repeal the act. Both William Winpisinger and Lane Kirkland, presidents of the International Association of Machinists and of the AFL-CIO, respectively, have commented favorably on the notion, which some labor groups refer to as "labor deregulation."

Solicitors grounded. The Los Angeles Board of Airport Commissioners, after years of controversy over the issue, in effect began acting as a private property owner when it voted in July to prohibit fund raising and proselytizing within the central terminal of the Los Angeles International Airport. The International Society of Krishna Consciousness is contesting the resolution in court.



SOUTH AFRICA—"Right now, we are the biggest [real] estate agents in the world," a South African government official recently told the Los Angeles Times. He was referring to a program begun in July to sell some 520,000 government-owned houses—400,000 in black residential areas, 100,000 in communities for Asians and people of mixed race, and 20,000 in areas occupied by poor whites.

South Africa's privatization of all but about 6 percent of its government-owned housing is comparable in a sense to the Thatcher government's sale of British "council houses" to their occupants (see "Margaret Goes to Market," REASON, Feb. 1983). But in South Africa, the sales also represent a shift in one aspect of the government's long-standing apartheid policy: blacks can now settle permanently near the cities where they work.

Before, blacks who worked in white cities were legally restricted to being temporary residents, or "sojourners." This meant that they were permitted only to rent government housing, and they were required to return periodically to government-designated "homelands."

With the new policy, however, the government is actively encouraging blacks to buy at bargain prices the houses they rented in the past. In the ghetto of Soweto, where several blacks protesting apartheid were killed in 1976, there are now signs urging, "Get That Feeling of Permanence—Buy a House Now," according to the Times.

Apparently the government's aim with the new policy is to temper growing black resistance to the government by fostering a substantial black middle class. Johan Kruger, who runs the new housing program, observed, "A black who has a stake in the country isn't apt to burn it down."


BRUSSELS—The agreements among the 10 member-nations of the European Economic Community (EEC), or Common Market, are meant, in part, to enhance the economic vitality of Europe by promoting free trade and competition among the various nations. In practice, however, EEC members frequently deviate from rules prohibiting unilateral price controls and other policies restraining trade. But in two recent cases—one in Germany, the other in France—such EEC violations are being challenged.

A West German insurance broker put a national law to the test by placing insurance business with British insurers—the most efficient and competitive within the EEC. Although German law bars domestic insurance business from going to foreign markets, the broker claimed that he was acting in accordance with EEC free-trade agreements. In April, the Economist recently reported, a German court ruled against the broker, but he is taking his case to the European court, which adjudicates allegations of EEC violations.

In France, retail magnate Edouard Leclerc—whom the Economist bills as "the Freddie Laker of French capitalism"—is challenging his nation's price-control laws. At his chain of 450 supermarkets, Leclerc has undercut government-set prices on books and gasoline (which is sold outside the stores to attract shoppers), on the grounds that such controls violate EEC agreements. When Leclerc contested finance-ministry orders to stop slashing prices on these goods, a French court ruled that price fixing does indeed violate Common Market law; now the matter has been referred to the European court.

Leclerc's next target is tobacco price controls. If Seita, the state cigarette-producing monopoly, refuses to supply Leclerc with cigarettes—which he will sell at prices below those charged by France's tobacconists—Leclerc plans to import cigarettes from other EEC countries. It looks like more state controls will go up in smoke.