Anything that’s peaceful. A fair field and no favors. No man-concocted restraints against the release of creative human energy.
These are the words Leonard E. Read used to describe his ideal of a free market, private property, limited government order. And this is the ideal to which The Foundation for Economic Education remains steadfastly dedicated. But the real world is far from ideal. Markets are regulated, private property is violated, and government is frequently used, not to protect people from fraud and coercion, but for personal gain and special interest plunder. The Foundation, it would seem, is out of touch With the real world. Our idealism, it can be argued, is a luxury which men and women of practical affairs can ill afford. It will only get in the way. But if we pause to reflect, we see that idealism-standing ramrod straight for liberty—by no means prevents us from reaching practical goals. In fact, a Principled stand for liberty may be the only way to attain the kind of society any of us—or our children—would want to live in. Consider the following: 1. Idealism is goal-oriented. In our case, we constantly strive for a free society, although we are well aware that, in the foreseeable future, our ultimate goal remains out of reach. Such a clearly defined goal is our greatest asset, especially when things don’t seem to be going our way. We know where we want to go and will not be swayed by compromise or political expediency. 2. Idealism is energizing. The ideal is worth working and sacrificing for. When the ideal goal is far from the everyday reality—as in the case of the freedom ideal—the student of liberty doesn’t despair. His ultimate goal isn’t tomorrow’s Congressional vote or next year’s election. He is striving to work on the highest possible plane—his own understanding and exposition of the freedom philosophy. Self-improvement along these lines is a full-time job. There is no time to be disheartened when the political winds seem to blow against us. Self- improvement is enormously satisfying. And it is fun! 3. Idealism is attractive. It gains adherents who yearn for something more than pragmatism, compromise, and expediency. Our experience at FEE has shown time and again that the people who go on to work the longest, hardest, and most effectively for freedom are precisely those individuals who have been attracted by the purity of our message. 4. Idealism works. Combine a clearly perceived goal, a constant striving for self-improvement, and the energetic adherents this striving attracts, and you have a powerful force which will not be swayed from its ideal. In the long run, this is the only way anything worth having has ever been attained.
—BJS
Foreign Debtors
U.S. banks hold more than $240 billion in foreign debts. What are the prospects of these debts being repaid? Recent developments in the loan markets may provide an answer.
Since 1982, when the international debt crisis first made headlines, New York and London brokers have been quietly trading portions of these debts in a secondary market. This market has now grown to where we can get an idea of the true value of these loans.
If traders are completely confident that a debt will be repaid, it will trade at book value—100 cents on a dollar. But many foreign debts are trading at much less than book value. Argentine debt, for example, is offered at 67 cents on the dollar. Mexican debt stands at 62 cents, Polish debt at 53 cents, Peruvian debt at 24 cents, and Bolivian debt at a paltry 8 cents.
As with any other market price, these figures vary with time and changing expectations. But with traders putting their money on the line, the secondary market for foreign debt may be the best gauge of debt serviceability.
—BJS
A Man’s Home . . .
No one is really responsible for collectively owned property; no one cares. So it deteriorates. Individuals who own property do care because they know they are responsible. A recent visitor to the home of his ancestors in East Germany pointed to the contrast in an article in The Wall Street Journal.
He described the fate of that small East German town under the communist regime. The old castle, once a “stately mansion” surrounded by lavish park and flower gardens, was in shambles, with spider webs, wallpaper peeling, window sills covered with dust and dead moths, its garden overgrown. There was a state-run grocery store on the old castle’s first floor and people were living in its nooks and crannies. “The neighborhood that belongs to all,” this observer wrote, was “dingy and chaotic; chickens, ducks and rabbits run wild around the muddy streets and run-down houses.”
The residents’ private homes presented a sharp contrast. “[I]nside the homes, the private castles of the people . . . . pride and responsibility thrive . . . .”
When property is collectively owned, no one cares. When property is privately owned, the owners care; they are willing to “go that extra mile” because they know they are responsible for it.
—BBG
Liability Crisis
“Thousands of patients with rare neuromuscular disorders are suffering renewed contortions of the eyes, face, neck and other parts of the body because their supply of experimental medicine was cut off when its only manufacturer was unable to obtain liability insurance.”
This item, from the October 14, 1986 issue of The New York Times, is indicative of the frightening trend in liability coverage. What is the cause of this crisis’? Is there a cure? See Ridgway K, Foley’s penetrating analysis which begins on page 12.
—BJS