Entrepreneurs Do Their Home Work

As women seek ways to combine family and professional responsibilities, many are opting to work at home. According to a new study by the National Center for Policy Analysis (NCPA), as many as 23 million Americans use their homes as a place of work, and more than 70 percent of home-based small businesses are run by women.

But according to Joanne H. Pratt, author of the NCPA study, those working at home must contend with a host of federal, state, and local restrictions. Federal law bans most manufacturing of garments in the home, while 18 states, the District of Columbia, and Puerto Rico have their own restrictions on home-based work. In Illinois and Hawaii, only those who are incapable of leaving the home are permitted to work there. And if you live in Chicago, don't you dare use your home computer to call the office machine—it's strictly forbidden.

Other restrictions limit employment, advertising, how many or which rooms can be used for work, and the types of work that can be done there. In Blaine, Minnesota, for example, a home worker is forbidden to:

Employ anyone who does not live in the same house. (A writer may not hire a secretary to do typing.)
• Use the garage to store merchandise. (An artist cannot store paintings in the garage.)
• Work in more than one room, regardless of the size of the house.
• Tutor more than one student at a time.
• Conduct any kind of wholesale or retail business, except by mail. And those who do business by mail may not receive, sell, or ship merchandise.

Arlington, Virginia, prohibits home-based workers from seeing more than 12 customers a day or four at a time, and Visalia, California, bars all advertising, even in the Yellow Pages. Laws in Ohio and Michigan forbid the use of residential entrances to homes for business purposes, but many local ordinances in those states also prohibit entrances used exclusively for business purposes.

Penalties can be severe: In Marquette, Michigan, violators of zoning ordinances may be subject to a $100 fine or 30 days in jail. Each day the ordinance is violated counts as a separate offense, so a year's worth of illegal home-based work could cost $36,500 or 30 years in jail.

Federal tax laws allow expense deductions for use of the home for work only under very restrictive conditions. "Regular" use of the home for business can be deducted, but "occasional" use cannot. And no deduction is allowed for areas of the house used for both business and residential purposes.

The study recommends lowering these legal barriers. "Home-based work will achieve its potential benefits to individuals and the economy only when it is made legal," concludes Pratt. Adds NCPA president John Goodman, "The right to engage in home-based work will probably be the single most important women's issue of the next decade."

Out of the Mouths of…

Rep. Ben Nighthorse Campbell (D–Colo.), who is trying to get a painting of an Indian scalping a white man taken off a House committee wall:
"If we have to keep it in government, send it to the IRS. They scalp us all."

Human rights activist Natan Sharansky, imprisoned for nine years in the Soviet Union and now living in Jerusalem, writing in the Wall Street Journal:
"The West must realize that Soviet nonadherence to human-rights contracts is not merely a humanitarian problem. On the simplest and most pragmatic level, it raises the question of credibility. Is it wise to rely on any agreements with a government that has shown nothing but contempt for its own signature on numerous agreements?"

Prosecuting the Case Against Drug Laws

The chorus of voices calling for the legalization of drugs—an odd mixture that includes Milton Friedman, Timothy Leary, William F. Buckley, and Larry Flynt—has received an unlikely echo from the establishment. The New York County Lawyers' Association, with 10,000 members in the New York metropolitan area, has endorsed the decriminalization of cocaine and heroin.

The driving force behind the association's action was James M. Ostrowski, a New Jersey lawyer and member of the group's Committee on Law Reform. Ostrowski's 37-page position paper—which he says was influenced by repeal and reform advocates Roy Childs, Arnold Trebach, and Thomas Szasz, among others—won a 5-to-3 endorsement from the Law Reform Committee.

Ostrowski's monograph makes a pragmatic argument for legalization. "I don't think this policy [prohibition] can be defended on practical grounds," he told REASON. "And I am determined as hell that people be persuaded" of the merits of legalization.

The committee-endorsed paper includes a careful cost-benefit analysis. Ostrowski lists the pernicious effects of illegality, including "four million drug-related crimes," often because of black-market prices; 10,000 deaths annually from improper dosages, contaminated needles, and AIDS; "$80 billion in economic losses," from inflated drug prices and enforcement costs; festering police crime and corruption; and the steady erosion of civil liberties.

The committee's action may or may not be acted upon by the association as a whole. Ostrowski doesn't mind. "My big push was to get a dialogue going, not a monologue. Our major goal was to get the argument out to the public."

It's getting there, it's getting there.

Private Spacelines Taking Off

True privatization of space transportation is finally under way, nearly two years after the Challenger disaster destroyed NASA's hopes of monopolizing the road to space. In various stages of evolution are private launch-vehicle developers, private launch operators, and even private spaceports.

Aerospace firms have always built U.S. launch vehicles, under contract to either NASA or the military. But the government has been the sole satellite launcher, even for private firms such as HBO. Now, all that is changing.

Market forces are pushing the established rocket builders into the space-transportation business. Communications satellite customers are negotiating to buy not just the satellite but the delivery to orbit as well, as part of a single package.

British Satellite Broadcasting (BSB) in June selected Hughes Aircraft to supply two direct-broadcast birds for 1989 launch. Instead of contracting with NASA to launch them, Hughes is buying two McDonnell Douglas Delta rockets and providing BSB with fully insured delivery to orbit. This delivery-to-orbit model was followed again in September, when Aussat Proprietary Ltd. announced plans to order its next two comsats this way.

The second generation of private launch companies is also offering complete services. And three of them are getting closer to their first satellite launches.

The pioneer, Space Services Inc. (Houston), has acquired its first commercial customer, a new satellite navigation company called Starfind. SSI will launch a series of five geosynchronous satellites, which Starfind says will enable users on the earth's surface to pinpoint their location to within 12 feet. The first launch is scheduled for the end of 1988.

Meanwhile, American Rocket Company (AMROC, Camarillo, Calif.) is gearing up for its first suborbital launch from Vandenberg Air Force Base. (One of its engine tests earlier this year was featured on the cover of Aviation Week magazine).

And a third start-up—E-Prime Aerospace Corp. (Titusville, Fla.)—made its debut early in 1987. In contrast to AMROC, which is developing its Industrial Launch Vehicle from scratch, E-Prime is using off-the-shelf rocket motors (as is SSI). Because of this, it is aiming at a 1988 initial launch date.

Skeptics wonder where the customers will come from, especially for the small payloads (up to several thousand pounds) possible with the startup firms' rockets. These entrepreneurs maintain that their simpler, lower-cost launch vehicles will open up new markets in space. AMROC talks about more-reliable, survivable communications networks, both military and civilian, based on large numbers of small satellites rather than a few large expensive ones. There is also a backlog of scientific payloads awaiting launch, because of the shuttle's grounding. New forms of remote-sensing and navigation systems are also being talked about—and in some cases, developed. And should the Strategic Defense Initiative reach the deployment stage, the launch-vehicle business will grow dramatically.

Today's biggest problem is access to launch facilities. The government owns them all and is imposing severe insurance and paperwork requirements. And that, in turn, is leading to serious interest in private spaceports. Hughes is investigating privately owned Palmyra Island in the Pacific. The governor of Hawaii has been promoting development of a private spaceport on the Big Island, a prospect which intrigues AMROC. And an Australian group has done a feasibility study for a Cape York spaceport in Queensland. All three would be closer to the equator than any existing U.S. launch site, giving the rockets an extra boost from the earth's rotational speed.

Put it all together, and it's not hard to project that by 1995 you'll be able to order a privately built satellite, launched by a private space-line, using a privately built rocket, from a private spaceport. Eat your heart out, NASA.

Affirmative Action Fails a Test

Demond Crawford cannot take an IQ test—because he's black. It's a bizarre California policy that his mother, Mary Amaya, is fighting.

Crawford and Amaya are up against a bit of reverse discrimination that stems from a 1971 NAACP-backed lawsuit over allegedly race-biased IQ tests. When a court agreed with the charge in 1978, California officials, with the court's approval, banned IQ tests for any black child in a California public school. The ruling in the bias lawsuit was upheld last year by the Ninth Circuit Court of Appeals.

Amaya has plenty of reason to want an IQ test for Crawford: A school psychologist, on the basis of a personal evaluation, once recommended that her older son be placed in a class for the educable mentally retarded. But Amaya used the results of an IQ test, administered before the ban went into effect, to demonstrate that the psychologist was wrong. That son is now an officer in the military.

When local school officials told Amaya they wouldn't check her younger son's IQ as part of a battery of tests to figure out why he's not doing well in school, she aired her objections in the local newspaper. The case drew the attention of the national media and of William Allen, a professor of government at Harvey Mudd College and a member of the U.S. Commission on Civil Rights.

Allen, who is himself black, told REASON that the case "shows how certain affirmative action principles can produce the most perverse results when persisted in by doctrinaire adherents." The worry about bias in IQ tests, he said, "is largely based on anecdotal accounts, many of which are silly on the face."

The commission has now decided to move to the front burner a planned study of alleged bias in standardized tests. Meanwhile, several legal foundations have expressed interest in challenging the California policy, and Jerome Satler, a professor of psychology at San Diego State University, is forming a legal defense fund for Amaya and Crawford.

Could there be a case like this without some irony? Though Crawford's father is black, Amaya is Hispanic. If her son called himself Hispanic, he would be free to take the test. But Amaya sees it as a matter of principle. As she told Newsweek, "They're telling him to be ashamed of his black heritage."

The Only Nice Thing We Will Say About Politicians This Year

The pack of bland candidates trudging through Iowa and New Hampshire snows isn't the most electrifying group you'll ever meet, but even a blind squirrel finds an acorn now and then. So as we fall under the sway of the holiday season, we offer a few provocative—and maybe pro-liberty—stances, statements, or throw-away lines from the dozen '88 contenders.

• Rep. Jack Kemp (R–N.Y.) wants to adopt a gold standard by 1988. He favors enterprise zones, selling public housing to tenants, and privatizing Amtrak. He opposes national service for the nation's youth.

• Sen. Robert Dole (R–Kans.) opposes mandatory AIDS testing. He's been skeptical of Reagan administration policy in the Persian Gulf.

• VP George Bush led an administration deregulation task force. He told off (Bush-style, natch) the religious right last summer.

• Former governor Pete du Pont opposes the MX missile. He favors education vouchers and an end to farm subsidies. He proposes Social Security reform. (See "Tentatively Bold," Dec.)

• Preacher Pat Robertson has said of Social Security that we ought to "turn it over to the private sector." He wants to abolish the departments of energy and education.

• Gen. Alexander Haig has been sharply critical of the U.S. reflagging of Kuwaiti ships. He supports the right to an abortion. Comedian Mort Sahl thinks he's great.

• The Rev. Jesse Jackson calls for a reduced U.S. contribution to NATO. He's denounced excise-tax increases. He supported the Nebraska parents who went to jail a few years ago rather than send their children to public schools.

• Sen. Albert Gore (D–Tenn.) opposes mandatory AIDS testing. He opposes both federal restriction and federal funding of abortions. He supports a balanced-budget amendment.

• Former governor Bruce Babbitt wants to abolish urban-development hand-outs from the federal pot and end government subsidies to the largest farms. He favors means-tests for Social Security and Medicare, among other "entitlement" programs.

• Gov. Michael Dukakis opposes an oil-import tax. He has hinted at pulling U.S. troops out of South Korea. (See "The Duke Talks Tall," Oct.)

• Sen. Paul Simon (D–Ill.) champions a balanced-budget amendment. He favors troop withdrawals from Western Europe. He supports the taxpayers' bill of rights.

• Rep. Richard Gephardt (D–Mo.) approves of the privatization of public housing. He is against gun control.


? Legal but not free. Poland has its first non-state, non-Catholic magazine that's legal. Res Publica has been around since the late '70s but was legalized this year after a two-year appeal to the Polish bureaucracy. The magazine, according to The New Republic, has disavowed financial injections from government, church, or the U.S. National Endowment for Democracy. Yet freedom comes in small doses: the first issue included blanked-out quotations—each annotated with the number of the law prohibiting the subject of discussion.

? Space for choice. Has the state gone too far? The New York Times headlined the story "Ban on Children Upheld." Actually, kids are still allowed—but not where people choose to live without them, according to a California Supreme Court ruling. The jurists unanimously upheld a state law exempting mobile home parks from civil rights statutes, so they are free to serve consumers who want to live kids-free.

? A baby trend? The midwife option, long resisted by doctors and sympathetic state licensing boards, is growing as a birth alternative. The American College of Nurse-Midwives reports that nearly 3 percent of all births in this country are handled by registered nurses with additional midwifery training. That's up from less than 1 percent a decade ago.

? Man bites dog. When the federal government "reformed" the income tax in 1986, state governments stood to rake in $6 billion more because of linkages between the way states and the feds extract their tribute. Or…the states could give the windfall back to the people through rebates or tax cuts. In fact, remarkably, more than 80 percent of the potential windfall has been returned to the taxpayers.

Global Trends

Red Reins Are Falling Down

When several hundred East German rock fans gathered at the Berlin Wall several months ago trying to catch stray notes from a Genesis concert in the West, three chants were hurled at the authorities: "The Wall must go!" "Down with the pigs!" "Gorbachev! Gorbachev!"

The trio of slogans graphically captures the realist and romantic aspirations of East Bloc youth: absolute freedom is the desire; liberalization à la glasnost would be a nice start. Here, a roundup of Warsaw Pact rock.

USSR: Russian rockers aren't sure whether glasnost is the answer to their prayers or the path to selling out and preemption. (The Young Communist League sponsors regular rock dances for docile fans.) Perhaps the group to watch is Boris Grebenschikov's Aquarium, said to combine reggae, blues, folk, and Russian music to pleasing effect. Aquarium, a leader of the pre-Gorbachev underground, has surfaced: they appear regularly on TV and are recorded on state labels. The dreamy, poetic Aquarium—overtly religious in an atheist land—represents one beneficiary of glasnost; just as notable is the Leningrad band Television Set, whose anthem "Get Out of Control" thunders: "They monitor us from birth/Our kind uncles and aunts/We grow up an obedient breed/We sing what they want/We live how they want."

Poland: Give 'em an inch…Polish authorities tolerate a good deal more than other East Bloc governments. General Jaruzelski's slack cultural noose permits most rock a relatively free hand. The exception: radical punk bands, most of which are, perforce, political. The king of Warsaw Pact punk is Dezerter, the voice of what the band calls Poland's "miscarried generation." A few Dezerter tunes have seeped into the West: for a good introduction, check out the "We Don't Want Your Fucking War" compilation of nuclear-shadow punk bands on the Mortarhate label.

Czechoslovakia: Twenty years after the liberal gusts of Prague Spring, Czech rock is tightly controlled by the state: dissenters find expression through illegal punk bands. The best are said to be FPB, Plexis PM, and Posadkova Hudba Marneho Slavy. Recordings are rare to nonexistent: punks are either in jail or deemed "unrecordable."

Rock musicians are the forgotten dissidents of the East. Western intellectuals don't petition for their release from jail; Western politicians don't fulminate about the suppression of guitars, mohawks, and scabrous lyrics. But wherever kids are kids and authorities are hated, there is rock and roll's country.

Consumer Choice Flies in the Japanese Underground

What's your image of the black market? Seedy people making shady deals in dark alleys?

'Tain't necessarily so. In Japan, picture travel agencies defying the law by selling overseas-flight tickets for up to 50 percent less than the government's official price.

Besides giving Japanese travelers a break, this breach of law has forced the government to loosen its regulatory grip on the air travel industry. "We know we can't stamp out illegal airline tickets," Kenji Okamoto, an advisor to the Transport Ministry, told the Wall Street Journal. "So we will try to compete with the black market by allowing airlines to lower their fares."

Such heresy wasn't heard before the black market threatened to outcompete the government. Individual travelers had to pay first- or economy-class fares; discount tickets were generally available only for group tours. So Japanese consumers paid higher air fares than consumers in many other Asian countries.

For example, an economy-class ticket from Tokyo to San Francisco costs the equivalent of $2,333. A ticket from Hong Kong to San Francisco costs only $1,153—with a stopover in Tokyo. So Japanese travel agents now import tickets from Hong Kong (and other countries) and sell them below official prices; they also create phony group tours and sell discount tickets to individuals.

But don't expect Japanese bureaucrats to consider fully deregulating either the national or the two private air carriers. If it did, explains Okamoto, Japan "probably wouldn't have a national airline."