Frontlines

Ideas Have Consequences Eventually

What would be the correct libertarian position in a case where one government agency attacks another because the latter is forcibly preventing free trade? This writer, for one, would cheer and offer to hold the coat of the attacker—if for no other reason than that it keeps the jobholders busy. The Antitrust Division of the Justice Department has taken the American Bar Association and the Texas State Board of Public Accountancy to court, charging violation of federal antitrust laws. The Federal Trade Commission is conducting investigations into licensing "to identify cases of disguised monopoly." And the Equal Employment Opportunity Commission is now contending that state licensing boards are violating Title VII of the Civil Rights Act of 1964. The examples of government-caused injustice so far outnumber the cases of private predation that it might have seemed inevitable the government would eventually discover itself and do something about the problem.

The stimulus for all this laudable action is a flood of recent articles and studies by economists. Since the days of Adam Smith, economists have recognized the role of the State in creating monopolies. Indeed, in those days the concept of a non-government monopoly was absurd. The Journal of Law and Economics, published by the University of Chicago Law School, 1111 East 60th Street, Chicago, IL 60637, for $9.00 per year, is the fountainhead for modern anti-licensing research. The Journal has been published since 1959, but sometimes the older generation has to die off before a younger generation of bureaucrats can make changes in direction. In 1971, the Journal published Prof. Yale Brozen's research findings that concentrated industries don't make above average profits. Perhaps in 15 years, the Justice Department will drop its suit against IBM.

Defend the Black Market

Students of the money supply have known for some time that an unusual proportion of the currency in circulation consists of bills larger than $20. Images of Watergate and suitcases full of cash spring easily to mind. During 1977, the demand for cash increased at 12 percent per annum, significantly in excess of the demand for bank deposits. It has been estimated by Peter M. Gutmann of the City University of New York that this cash was used to produce $176 billion in GNP "off the record." This means the government's statistics do not record that production.

Since the beginning of government data collection, however, all unlawful activity—regardless of how productive—has been excluded from the national product accounts. Gambling and prostitution in Nevada count, but gambling and prostitution in California or Arizona don't. The illegal drug trade, a multibillion dollar industry, employing many thousand people, only counts on the government side: the salaries of the cops. If anyone ever had doubts about the validity of economic statistics, these considerations should change one's view.

With the recent increase in Social Security taxation, much of the cash in circulation will be used for everyday business activity, but will not be reported as income. In Britain today, it is common for home repair servicemen to quote two prices, the higher one for payment by check and the lower one for payment in cash. This is one of the reasons that self-employed persons in Britain were required last year to obtain identification cards from the Inland Revenue. Significantly, the agency refused to issue cards to a sizable proportion of the applicants.

Relevant Libertarian Strategy

At the Midwest Libertarian Conference, held in Indianapolis in November, Mark Krausz suggested a strategy for political activists which seems potentially more valuable than running candidates for office. It is difficult at best to communicate libertarian issues to voters, given the popular "majority rules" theory of a free society. Mark Krausz proposed that this theory be turned to a libertarian end by pressures to enact initiative and referendum laws in those states and cities which do not permit such things today. Only 22 states and a few municipalities permit this procedure. On the plus side, of course, who would argue that the people should not have a say in the decisions of government? The secular religion of our mass society, is "one man, one vote" and a local petition drive to establish popular voting on questions of government would focus attention on the absence of this democratic right when it comes to important government questions.

Further, a petition drive would smoke out the very special interests which benefit from taxation at present (e.g. schoolteachers). School bond issues have gone down to defeat in a surprising number of communities in the past few years, even when this meant closing the schools before the end of the school year.

Krausz continued, "Being pessimistic, if the L.P. won the initiative referendum battle in only 10 percent of those cities with an average population of only 20,000, Libertarian candidates and literature could say, 'The Libertarian Party has returned power over tax dollars and spending to 10 million citizens in 500 cities.' That reads a lot better than 'Libertarians in Maine try to eliminate import quotas and subsidies for Maine shoe manufacturers.'"

Some Newsletters

This writer receives dozens of newsletters each month (and I would like to receive more). Some of the ones which are especially interesting, and which are frequently the source of news items which don't appear in the mainstream press, are:

A.R.E.A. Bulletin, publication of the Association for Rational Environmental Alternatives, $12.00 per year, c/o Lynn Kinsky, 750 Vista Vallejo, Santa Barbara, CA 93105.

Ernie Ross Report, commentary on current events, $12.00 per year, 565 W. Harlow Road #52, Springfield, OR 97477.

World Money Analyst, $10.00 for a three-month trial subscription, 1129 National Press Bldg., Washington, DC 20045.

Gold Newsletter, published by the National Committee for Monetary Reform, $20.00 per year, 1524 Hillary Street, New Orleans, LA 70118.

Southern Libertarian Review, $5.00 per year, c/o Eric Scott Royce, 1236-A South Taylor Street, Arlington, VA 20004.

Growing Without Schooling, $10.00 for six issues, published by John Holt Associates, 308 Boylston Street, Boston, MA 02116.

As an incentive, this column will make it a point to plug any newsletter which we receive which seems to have special merit as a source of information.