Trends

All That's Not Left Is Not Right

It took them a while, but political analysts are increasingly coming to the realization that the old liberal/conservative dichotomy just isn't enough to describe how voters and legislators think. The political world is populated also, they're noticing, with populists and libertarians.

As REASON reported in a Trends item in March 1981, the new, four-way schema was devised by William S. Maddox and Stuart A. Lilie of the University of Central Florida. Whereas liberals, they noted, generally favor government intervention in economic matters but laissez-faire in the social realm, and conservatives are just the opposite, populists favor government involvement in both and libertarians in neither. It made a lot of sense to us and to others who aren't at home with either the right or the left; and it seems to be making sense of a lot these days.

The National Journal, for example, for the first time in five years of analyzing congressional voting patterns, has employed this four-way description. And so it found 14 senators and 50 representatives with libertarian voting patterns. (NJ's criterion: they "vote conservative on economic issues and liberal on either social issues or foreign policy." Note that finer discrimination would be possible if votes on social and foreign issues had to be noninterventionist before the legislator would be called a libertarian.)

The insufficiency of the old political categories is showing up in the mass media also. In a recent article discussing Ed Zschau's emergence as a serious Republican challenger to California's Democratic Senator Alan Cranston, the New York Times described Zschau as "a free-market conservative with libertarian instincts…[who] opposes government intervention in both the economy and personal lives."

The press in trend-setting California is similarly loosening the categorical straightjacket. The Oakland Tribune, reporting on how socially liberal Republicans are vying with socially conservative ones for control of the state party, noted during the Zschau primary campaign that "the overriding trait that characterizes these new Republicans is a skepticism of government—they describe themselves as fiscal conservatives yet social libertarians."

Ron Smith, Zschau's campaign manager, told the Tribune that many young people "tend to say 'I like where you [Republicans] are on economics but I can't stand your narrow viewpoint on social issues.' And we're saying 'Don't stay away, we hear you.'"

Political commentators seem to be hearing them too.

Afghan Rebels Turn to Hard Drugs—To Finance Their War

Rebel armies usually finance their operations the old-fashioned way: they beg, borrow, or steal. But the hardy Afghan patriots fighting their Soviet invaders have hit upon a novel method of funding—opium harvesting.

Islamic law prohibits these devout Moslems' use of opium, but not its cultivation. So Afghan rebel forces, desperate for money, have taken to growing and selling the drug on "an extensive scale," according to a New York Times report. Declared one elderly rebel supporter: "We must grow and sell opium to fight our holy war against the Russian nonbelievers." The Times reporter noted similar comments "from dozens of rebels."

Although growing opium is a venerable tradition in Afghanistan, the number of poppies has reportedly mushroomed as the resistance battles on. The Afghan crop—estimated at 800 metric tons this year—is now the largest in the world.

Once harvested, the opium is usually exported via Iran, despite the fact that the Ayatollah's government, like the US government, forbids opium use and trafficking. The drug fetches $40–$50 a pound on the black market.

Despite overwhelming evidence, US officials deny that the Afghan rebels "have been involved in narcotics activities as a matter of policy to finance their operations." Only Allah knows, then, why drugs have been showing up in the United States in wrappers with messages such as "Victory to the Afghan Rebels" and "Beat the Soviet Invaders."

Western Governors Divert Flow of Water Policy

In a move that represents a significant reversal of decades of government thinking on water, the Western Governors Association has adopted a policy proposal designed to move the West toward a market in water. The plan, adopted unanimously at the WGA's recent meeting, recommends changes in federal, state, and local water laws to encourage a more-efficient use of existing water supplies instead of relying on federally subsidized water projects.

In part, the governors' action amounts to an acknowledgment of the fact, as the Congressional Budget Office proclaimed in 1983, that "the days of huge federal outlays for equally large water projects appear to be over." Whereas for most of this century the feds tried to meet the growing demand for water in the arid West by building expensive dams and canals, in the last decade the federal government hasn't authorized a single new water project.

In addition, explains attorney Bruce Driver, who drafted the WGA plan, westerners had begun to realize that many of these projects are wasteful and damaging to the environment.

The resulting plan is described by Arizona Governor Bruce Babbitt as "the most useful and profound document" ever produced by the WGA. It recommends, says Driver, changes in "fossilized" federal laws that currently act as an impediment to market transfers of water and fine-tuning of state water laws, including issues of transfer, salvage, joint use of water, and environmental protection.

Under the present system, the sale of water by those who hold rights to it is often prevented by law, and government-developed water is sold for a song. The economically predictable result is that water in the West doesn't flow to those who value it most. To make matters worse, western water law stipulates that if the owner of water rights doesn't use all the water to which he is entitled, his entitlement will be reduced accordingly. With this use-it-or-lose-it system, those who own water rights—mainly farmers—have no incentive to conserve on water use.

Agriculture, notes Driver, now soaks up 85–90 percent of the water consumed in the West. But with agriculture in a slump, farmers these days can barely afford to pay for the water, even at highly subsidized rates. Cities, on the other hand, are willing and able to pay much more for it. The WGA proposal encourages governments at all levels to let farmers sell to cities—at market rates—the water to which they are historically entitled. Excess agricultural water would no longer be used by farmers for the sake of using it, and it would pay them to free up additional supplies through conservation.

Proponents of a market approach figure that with prices getting water allocated efficiently, much of the region's future water needs could be met without any new, environmentally taxing water projects. In California's agricultural Central Valley, for example, farmers pay a government-subsidized price of less than $10 for an acre-foot of water (an acre of water one foot deep), while San Diego water officials say they're willing to pay $200 for the same amount. Driver estimates that 10 percent of the water now used in agriculture could meet the recreational and urban needs of most growing areas into the 21st century.

Will anyone listen to the WGA? "These are governors who made the proposal," Driver told REASON. "That should make a difference."

Officials from the Interior Department, the biggest supplier of western water, have already agreed to work with western officials to support proposals in Congress that encourage water marketing. At the state level, there are incentives: aside from meeting the needs of growing cities, state officials have their eyes on recreational tourism, which is booming—and is hurt by water projects that damage the environment.

A lot will have to change before there is a market in water in the parched West. But the first step has been taken. "Five years ago," Colorado Governor Richard Lamm told the Washington Post in the wake of the WGA meeting, "we were [asking]: how do we store more water. Now, we're saying we have to look to efficiency, conservation and water rights transfers. This is a major, major change in the way the West views water."

Roads Scholars Say Markets the Way to Go

Seven hundred twenty billion dollars—with that many dollar bills, you could cover Delaware with plenty to spare. Or you could pick up the tab for repairs on the nation's highways and bridges between now and the turn of the century.

Those kinds of repair bills, combined with increasing congestion in many places, have transportation gurus worried. So worried, in fact, that they've actually begun to take a serious look at proposals for privatizing roads, both in the United States and abroad.

Economists usually consider roads classic examples of "public goods"—goods from which it is difficult or impossible to exclude nonpaying consumers—and therefore unlikely targets for privatization. But new technology has made it easier to administer toll roads. A six-month experimental program in Hong Kong, for example, attached inexpensive electronic devices to cars; when the cars passed over sensors in the road, the sensors recorded their identification numbers for later billing for road usage.

Proof that road privatization is hitting the mainstream: In July, the very establishment Transportation Research Board of the National Research Council held a conference to discuss not only direct pricing schemes, like the one used in Hong Kong, but also several papers advocating the outright sale of government highways. (And it used to be that only crazy radicals, not MIT professors, talked about selling off the roads!)

The conference attracted experts from as far away as India and South Africa. They seemed to agree that toll roads, private or public, provide a viable way to build and finance highways and can reduce congestion by pricing according to demand—charging a higher price during rush hours or on especially busy streets.

"This conference is a very significant watershed.…They've gone beyond contracting out for support services like sweeping and road repair to the point where they're actually talking about selling off roads to the private sector and the advantages and disadvantages of that," says Philip E. Fixler, Jr., director of the Reason Foundation's Local Government Center.

Toll roads might be more economically efficient than the existing system of free road use, but they could actually cost motorists some personal freedom. To make sure people don't cheat, most toll schemes call for some kind of monitoring—a kind of Big Brother in the back seat. On the toll road it operates around the city of Bergen, the Norwegian government videotapes license plates and checks the numbers against records of who has bought a monthly pass. The Hong Kong experiment used closed-circuit TV for the same purpose. And any new way for the state to grant access is also a new way to prevent access.

But the market will out. As Ian Catling and Gabriel Roth reported at the conference, Hong Kong's pilot program wasn't extended partly because citizens saw the tolls as an additional tax and partly because they didn't like having their trips monitored. If the roads were truly private, perhaps owners would have to come up with less intrusive ways to ensure payment—or face losing customers to more creative highway magnates.

Kids Just Wanna Dance?

Far be it from us to spoil a good witchhunt, but two professors at Cal State Fullerton have dumped a bucket of ice-old water onto the fires of censorship being fanned by the Parents Music Resource Center (PMRC).

The PMRC made a splash last year denouncing rock and roll lyrics that they figured were too salacious, satanist, disrespectful of authority, etc., for teens' ears. In the words of PMRC's Susan Baker, "It is our contention that pervasive messages aimed at children which promote casual sex, glorify suicide, and advocate the use of violence…are contributing factors" to teen pregnancies, suicide, and, doubtless, other teen problems.

The PMRC pressured most major record companies into agreeing to put warning stickers—"Explicit Lyrics"—on the jackets of controversial records. (And what red-blooded kid won't take that as a primo seal of approval?) But now Profs. Jill Rosenbaum and Lorraine Prinsky have found, contrary to PMRC worries, that "specific lyrics seem to be of little consequence to most kids. The musical beat or overall sound of a recording is of greater interest."

Rosenbaum and Prinsky surveyed 300 Southern California teens, using a 40-page questionnaire, to determine how deeply they are affected by rock lyrics. Among the findings, reported in the Los Angeles Times:

–Their most popular single song topic is love.

–More than a third of the junior high and high school kids were unable to explain what even their favorite song means.

–Just 7 percent of their favorites are about sex, drugs, violence, and other PMRC bugaboos.

–Perhaps "2 or 3 percent" of teens listen carefully to rock lyrics.

If teen-lyrics worriers took the time to really listen to the music, they'd probably be elated at that last figure, given the individualistic, anti-authority nature of a lot of rock and roll. If inane songs about devil worship have them in a tizzy, what would they think about lyrics like the Animals' defiant "It's my life and I'll do what I want/It's my mind and I'll think what I want"?

Bosses and Workers Steel Themselves for Profits

We hear it over and over again, usually from corporate bosses, or from union bosses, or from political bosses: the American steel industry just can't compete in the world market, what with all those lower-paid foreign workers and with all those foreign governments granting all sorts of favors to their national steel industries. So what's the solution? More restrictions and tariffs on imported steel, the bosses shout—and consumers get stuck with higher bills.

But, judging from a recent Fortune magazine report on a handful of innovative steel plants, enterprising execs and workers can find ways to reestablish their competitiveness:

• When a money-losing Huntington, West Virginia, steel plant closed down in 1982, new owners took it over, including the plant's former manager and some local businessmen. The union and the new management worked out a contract with some unusual features: workers agreed to a drastic reduction of costly work rules in exchange for profit sharing and a general no-layoff policy. Management, too, found that it could cut back: the staff in one department, for instance, was reduced by more than two-thirds, and the firm eliminated six levels of decisionmaking. With few formal work rules, workers do more in less time—and are rewarded commensurately through profit sharing. "Last year," Fortune reported, "the plant racked up $5 million in profits on sales of $55 million."

• When US Steel closed down an unprofitable Johnstown, Pennsylvania, plant in 1984 after the union balked at cutting the average worker's pay from $21 to $15 per hour, 700 union members were out of work. New managers bought the plant and invited the union back in, offering workers lower wages—$10.50 an hour, including benefits—but with a profit-sharing plan, which netted workers an additional dollar an hour in 1985. Since it started shipping its products to buyers, the revamped Johnstown Corp. has turned a profit, with $24 million in sales last year. And, Fortune reported, "morale is so high that workers have gone in on Saturdays to clean and paint equipment on their own time."

• In Marion, Ohio, new investors took over a small plant formerly owned by Armco but shut down in 1981. After an initially difficult period that included bankruptcy, the reorganized Marion Steel Co. now makes a profit. The nonunion workers share in the profit, which in the last half of 1985 added $1 to their $14-an-hour wage (down from $23 an hour, including benefits, under Armco management). Last September the union tried to reorganize Marion's workers: they rejected the move, 204 to 23.

• In 1980, the nonunion McDonald Steel Corp. started leasing US Steel's closed-down rolling-mill plant near Youngstown, Ohio, and has seen its business grow by 10 percent a year ever since. Last year McDonald had earnings of $1 million on sales of $24 million. The new management has shifted much managerial responsibility directly to workers, dispensing with such formalities as requiring workers to punch time clocks, for example.

Now, Fortune reported, a few of the big steelmakers are taking lessons from these innovators and introducing their own experiments with profit-sharing plans and work-rule-reduction agreements with unions. To save a US Steel operation near Birmingham, Alabama, for instance, the union agreed to toss out traditional work rules and to cut the work force from 5,000 to 2,100, while the corporation invested in new equipment. The result: the plant now produces a ton of steel with just half the labor it took before.

These examples suggest that the competitiveness of the American steel industry is mainly a domestic problem of bosses and workers cooperating to lower costs and increase productivity. When the next round of protectionist alarms goes off, perhaps these innovators' experience will belie the cries of helplessness in the face of foreign competition.

Milestones

? News on first. The wishy-washy Supreme Court does it again. The court ruled unanimously in June that cities may be violating the First Amendment when they grant local monopolies to cable TV companies. The decision, which sent the case in question back to district court, could encourage suits by cable companies that have been locked out by city-granted monopolies. Like newspapers, said the opinion, "cable television partakes of some of the aspects of speech and the communication of ideas." The wishy-washy part? "The First Amendment values," added the justices, "must be balanced against competing societal interests."

Global Trends

The Belgian Who Refuses to Waffle

DEURNE, BELGIUM—Guy Verhofstadt doesn't hesitate to call himself a libertarian. Although this species has become better known by the general public during the last five years or so, Verhofstadt is nevertheless a curiosity: he is also vice prime minister of the Kingdom of Belgium. In fact, he is its youngest vice prime minister ever. When he accepted the nomination, after the October 1985 election, he was but 30 years of age.

Verhofstadt (Spotlighted in REASON's August 1983 issue) began his political career as a Ghent city councilman. In 1977 he became secretary to Willy Declercq, then-president of the PVV, Belgium's foremost Flemish-speaking liberal party. (In Europe, liberal retains its original meaning: support for individual rights in the economic and personal spheres of life.) Verhofstadt became president of the PVV's youth department in 1979 and three years later succeeded Declercq as president of the party itself. In the meantime, in 1980, Verhofstadt and several of his PVV colleagues had made a months-long journey to the United States to contact the numerous libertarian organizations, magazines, professors, and activists there.

Verhofstadt's party, in coalition with Flemish and French-speaking Christian parties, has governed Belgium since 1981. It has required numerous compromises. Always, however, he has clearly stated his principles and explained why he accepted a compromise inconsistent with them.

Verhofstadt's elevation to the position of vice prime minister in 1985 was complemented by his nomination to the chief spot at the budget ministry. This position is perhaps even more important than the other. All other ministers of government must submit their budgets to Verhofstadt, which gives him some influence in the whole of the state's finances.

It's still too early to judge Guy Verhofstadt's performance in slashing the Belgian state. Tax-weary citizens will have to wait a while to discover whether or not Belgium's libertarian can succeed at this daunting task.

—Fred Dekkers