Thirty renowned authors examine 30 of those “threats,” which include the emergence of sharia law within western nations, the paradoxical uniformity that “politically correct” diversity has spawned, the abandonment of democracy promotion abroad, the State regulation of daily life, the imposition of campus speech codes, and the “threat” of cyber-anonymity.

At first glance the “new threats” seem like a grab-bag of issues that will rouse and rile a reader committed to individualism . . . and they do so in rapid secession.

The thought-provoking essay “The Isolation of Today’s Classical Liberal,” by legal scholar Richard A. Epstein, appears directly before the socially conservative essay, “Single Women as a Threat to Freedom,” in which antifeminist Jessica Gavora dismisses a plausible lifestyle choice largely because “single women are pro-statist.” “The Rise of Antireligious Orthodoxy,” by conservative Mark Helprin, directly precedes an essay by the notoriously antireligious left-radical Christopher Hitchens; the juxtaposition is not meant to provide balance, since Hitchens deals with the issues of multiculturalism and diversity.

Yet clearly this is a carefully constructed anthology. At a third or fourth glance, an integrating theme emerges. At its root New Threats is a socially conservative collection on issues that this movement assesses as threats; the anthology’s libertarian contributors indicate where these two movements intersect.

Consider the excellent essays by libertarians Max Borders and Katherine Mangu-Ward.

In “The Urge to Regulate,” Borders recounts how bureaucratic regulation crushed his dream of starting a small home-based business designed to sell products at a farmer’s market. He imagines a parallel world without “regulatory barriers,” in which hard work and reputation are allowed to succeed. Then, poignantly, Borders speculates about “the possible worlds that government interference destroys.” These are populated by working people who long to provide for their families.

In “The War on Negative Liberty,” Mangu-Ward analyzes the bizarre spectacle of Americans asking the government to strip them of lifestyle choices like smoking or consuming trans fats. Or at the very least they wish government to impose punitive taxes on such choices. She compares the Taliban’s prohibition of women eating ice cream to the Brooklyn mom who turns in an unlicensed vendor. The common denominator: “[B]oth want the same thing—a targeted ban on ice cream.”

Borders and Mangu-Ward address fundamental questions that mirror each other. Borders asks, “What makes people want to control others?” Mangu-Ward asks, “[H]ow could people who cherish freedom clamor for the state to take away their choices?”

In opposing government regulation of business and its imposition of political correctness on food choices, the two essays exemplify issues on which libertarianism and social conservatism converge. Similarly, a few nonconservative authors like Hitchens touch on the rare areas of confluence between the right and other positions. In areas of difference, however, it is the conservative voice that is heard. As such New Threats is a fascinating window into the psychology of social conservatism and the issues that will be “burning” for them in the future.

What are some of the differences on issues? Perhaps they are most pronounced in foreign policy. New Threats authors equate democracy with liberty and think that Americans should export it. In “The Abandonment of Democracy Promotion,” Tara McKelvey—a senior editor at The American Prospect—claims such exportation “belongs high on the U.S. foreign-policy agenda and should be supported by substantial resources.” Former New Republic contributing editor James Kirchick concludes in “Transnational Progressivism” that “any threat to American global predominance . . . is in and of itself a threat to freedom, not only to our own, but especially to those people living in dark places.”

An aggressive foreign policy designed to export a specific political system is a difference of opinion with libertarians, indeed.

New Threats is, in rapid turn, provocative, annoying, and enlightening. It is also puzzling in its omission of certain issues and seemingly obvious points. For example, given the 21st-century focus, little discussion of technology occurs outside of a critique of cyber-anonymity. Abstract “ingratitude” is included as a threat to freedom whereas concrete reproduction and population control in light of new technologies is not. In presenting sharia law as a threatening parallel legal system, it is not clear why sharia courts could not operate as Hasidic ones currently do.

Nevertheless New Threats is fascinating and extremely well written. Social conservatives will be delighted; libertarians will embrace fully half of it; Progressives with high blood pressure had best be selective . . . or at least consult a doctor beforehand.

In his May 9 column, “Ron Paul’s Land of Second-Rate Values,” he went after Rep. Paul for his endorsement of drug legalization in the Republican presidential debate. “Dotty uncle,” he fumed, alleging that Paul has “contempt for the vulnerable and suffering.” Paul holds “second-rate values,” he added.

To the Editor:

I was belatedly reading in the November 2003 issue of Ideas on Liberty when I came across something that caught my eye. This was the statement in George Leef’s book review of Pieces of Eight by Edwin Vieira, Jr., claiming that the Constitution defined a dollar as 371.25 grains of fine silver. I could not recall ever seeing such a definition in my admittedly dilettantish studies of this document. As the statement was even referenced to a specific portion of the constitution, Article I, Section 9, clause 1, it was a simple matter to quickly check the reference. This confirmed that the matter detailed here was that there should be no prohibition by Congress of migration or importation of persons (slaves) prior to 1808.

The only reference to coining money in the Constitution is the authorization to Congress “To coin Money and regulate the Value thereof and of foreign Coin” in Article I, Section 8. There is also the prohibition for the States to “coin Money . . . [or] make any Thing but gold or silver Coin a Tender in Payment of Debts” in Article I, Section 10. (Regrettably, no such prohibition was given to the federal government.)

As neither of these portions of the Constitution codifies the specific value of a dollar in terms of silver content, I was wondering if this notion was an error of the author or of the reviewer? Could you shed any light on this matter?
—R. R. SCHOETTKER
By e-mail

George Leef replies:

My thanks to R. R. Schoettker and the other readers who caught my mistake. The legal definition of the dollar as a coin with 371.25 grains of pure silver is in the Coinage Act of 1792. See http://landru.i-link-2.net/monques/coinageact.html.

Social Security Reform Can Be Less Paternalistic

To the Editor:

John Attarian argues in “Is Social Security Reform Paternalistic?” (The Freeman, January/ February 2004) that plans to replace or reform Social Security with a system of compulsory private pensions are “far from being advances,” and are at least as paternalistic as Social Security. His arguments, though, are puzzling.

By calling Social Security “paternalistic,” Attarian means that it takes away the individual’s responsibility to provide for one’s retirement and thus encourages individuals to give less thought to the future, treating them like feckless children rather than responsible adults. Attarian is clearly right about this, but a compulsory private system — for example, such as proposed by the Cato Institute — significantly increases the amount of freedom to plan for one’s retirement and increases one’s responsibility to make such decisions.

In a private system, one has a property right in one’s pension, which one lacks in the pay-as-you-go system of Social Security, and thus one gets to choose, within limits, how to invest one’s contributions, and within limits, how to receive the results of one’s contributions during one’s retirement. Of course, a compulsory private system is not a voluntary, purely libertarian, retirement system, since it forces the individual to contribute to a pension savings account and prevents the individual from making certain savings and investment decisions, but the issue at hand is whether a compulsory private system is better than Social Security, not whether it is the best system or the least paternalistic system. The only place I can find in Mr. Attarian’s article where he tries to refute the argument that a compulsory private retirement system increases freedom and responsibility compared with Social Security is when he says that the compulsory private systems are “messier” than Social Security. This may be true, in that a system where there is zero freedom to decide what happens with your payroll taxes may be less messy than a system where one has a right, hedged with restrictions, to choose how to invest one’s contributions. However, the issue isn’t a quasi-aesthetic judgment about messiness, but rather which system gives people more freedom to plan their lives and their retirement and in that sense treats them more like competent adults.

I have written this letter, not merely because I am puzzled by Mr. Attarian’s argument, but because the matter is a very important one. Unless Mr. Attarian thinks Social Security will simply collapse and that a purely libertarian system will arise out of its ashes, libertarians need to come up with a feasible liberty-increasing alternative to Social Security and other major welfare-state programs. A system of private compulsory savings and insurance is one such alternative that has been elaborated and defended by a number of libertarian writers (including me; see the forthcoming “The Moral Case for a Market-Based Retirement System” in Social Security and Its Discontents, ed. Michael Tanner, Cato Institute) and fellow travelers. If Mr. Attarian has a better feasible alternative, I and other readers of The Freeman would be quite interested in learning about it.
—DANIEL SHAPIRO
dshapiro@wvu.edu
Associate Professor of Philosophy
West Virginia University

I was very puzzled by John Attarian’s article on Social Security reform. Social Security is roughly 24 percent of the money going into the politicians’ hands in Washington. We are talking real money here, over $500 billion annually. Why do you think the Washington establishment is fighting reform proposals with personal retirement accounts (PRAs)? PRAs are about real political power and real political change.

Giving each worker more control and ownership over their retirement assets is key to decentralizing power away from Washington. Once every worker has savings in the capital markets of our country, it will make a world of difference. . . .

Real savings in PRAs, with the miracle of compound interest, will give all Americans the ability to create real wealth. Taking those funds out of the hands of the politicians and putting them into workers’ individual accounts will be a big step forward for freedom. Yes, it is not a perfect world, with each individual having complete control over his or her life. But it is a big step in the right direction. . . .
—BOB COSTELLO
bobcostello89@hotmail.com
President, SocialSecurityChoice.org

John Attarian replies:

I did not make an “aesthetic” judgment about “messiness,” simply a judgment of the obvious fact that these schemes of forced saving and investment are more paternalistic than Social Security because the government is meddling and exerting control in many more ways: the decision to save; the forced saving of tax money; where the savings may be invested; how long the investments are to be held; when they may be drawn on; how much one may receive; and in what form (lump sum, annuity, etc., etc.). This is obviously far more, and far worse, micromanagement of one’s life than Social Security undertakes. My image of the hovering mother overseeing Billy’s every move is quite accurate.

As for a feasible alternative, given the political realities I think the most we can hope for is to phase Social Security out. The Social Security Act should be repealed, and with it the payroll tax, which was intended to create a mentality of entitlement and make the program untouchable. Social Security should be converted to a rigorously meanstested benefit financed out of general revenue for those born before 1965. The younger generations, born after 1965, should be fully on their own, free to make their own arrangements for old age with fully voluntary IRAs, which should be totally tax-free as compensation for their loss of all claims to Social Security benefits.

My own view is much closer to the second claim than the first. While I recognize the depressing frequency of pork-barrel legislation and numerous regulations that are structured to benefit special interests rather than the so-called public interest, I believe that the broad thrust of policy responds to the desires of the general public. Given this view, I believe that the road to greater freedom in America is to encourage a broader consensus for freedom that will in turn get translated into more limited government via the political process.

While reasonable people may disagree on these differing perceptions of the nature of the American political process, I think it’s undeniable that the average American is considerably more comfortable with an activist role for government rather than a more limited role. Why is this the case? Why don’t my fellow citizens prefer more limited government?

At first glance, liberty should be wildly popular. Each of us loves it and expects it for ourselves. Few of us want to be bossed around or treated like a child. There is a strong human urge to have our own way without restraint, and it starts young. As a parent, I see this desire in action constantly. Simply tell a baby “no” to any desire, be it for more food or something as simple as climbing the stairs, and you can see the desire for freedom in action. If anything, this resentment of authority grows stronger with time. I don’t have teenagers yet, but I hear they’re pretty willful. How do these creatures of desire, these babies and adolescents, mature into voters who support candidates who constantly advocate and implement restrictions on freedom — from drug laws to labor regulations to high tax rates?

There are many explanations for why activist government is not only prevalent in our times but popular. But one answer lies within each of us, working to counteract that same internal force working for liberty. There is one urge that may be equally strong as the desire to have your own way, and that’s the urge to impose your will on others. Again, parenting gives us insight into this urge, but from the other side of the highchair. We want our children to do what we tell them. Parental discipline may be weaker and punishment less corporal today than in past times, but we as parents still spend a great deal of time bossing our kids around or at least trying to.

When our children obey us, we feel good for two reasons. The first is altruistic, but the second is a little less attractive. Yes, we tell our children to stop playing in traffic for their own good. Yes, we refuse them the second ice-cream cone for reasons of health or the creation of self-discipline. But we also try to manipulate our children for our own benefit. We ask our children to quiet down because we’d like a more peaceful home. We tell them to sit rather than roughhousing with each other. We tell them to read this book or that because we want them to be more like us. We send them to bed earlier than they’d like because they need a good night’s sleep, yes, but also because we like a little private time with our spouses.

Power is an intoxicating elixir. One of the secrets of good parenting is restraining the urge to impose authority on our children simply because it is gratifying to have obedient children.

I’m not suggesting that we should indulge our children in order to let them enjoy freedom. I’m arguing that even the best of parents resents a child’s disobedience. We don’t like having our will thwarted as adults any more than we did as children. One challenge of being a parent is not to impose our will on our children just for the sake of being in control. This desire for control and the seductiveness of power can conflict with what is best for our children.

And of course, this phenomenon of imposing our will on others doesn’t stop at our children. We want our spouse to act in ways that we deem desirable, our co-workers to recognize our wisdom and act in ways that we feel is best for the organization, and so on. We even want people to vote the way we do and support the policies we think are best for the country and the world.

The Public Arena

The conflict between the desire to be free and the desire to impose our will on others plays itself out in the public arena. We want our Scotch, but think it right to make cocaine illegal. We want to go skiing, but we force others to wear their seatbelts. We want to eat our ice cream, but think it’s okay to ban smoking.

Mencken defined Puritanism as the haunting fear that someone, somewhere may be happy. A paternalistic government plays into the Puritanism most of us harbor somewhere deep inside. Not content with mere disapproval, we use force via the political process to restrain others.

Next time you’re in the grocery and you see a stressed-out mom or dad screaming at the kid who naturally wants to play with the candy at the check-out line, you’re seeing the roots of big government.

For normal human beings and decent parents, those grocery-store-type moments are few and far between. Love restrains us from indulging our urge to boss our children around for our good rather than theirs. Love for our children encourages us to let them begin to make their own choices as they grow up and head toward adulthood.

I long for a world where we show the same restraint in the political arena. One way to get to that world is to remind our fellow citizens of the virtues of adulthood. As an adult, I make my own decisions and deal with the consequences. Why do we want a political system that treats us like children?

He notes that despotism in a constitutional republic would be different from what it was in the Roman empire. How so? “[I]t would be more extensive and more mild; it would degrade men without tormenting them.”

Specifically: “Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood. . . .”

But that is not its object. Rather, “it seeks, on the contrary, to keep them in perpetual childhood. . . . For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?”

He goes on with an almost spooky prophecy:

After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

Tocqueville also sees the paradoxes of democracy. How relevant they still are:

I have always thought that servitude of the regular, quiet, and gentle kind which I have just described might be combined more easily than is commonly believed with some of the outward forms of freedom, and that it might even establish itself under the wing of the sovereignty of the people.

“Our contemporaries are constantly excited by two conflicting passions: they want to be led, and they wish to remain free. As they cannot destroy either the one or the other of these contrary propensities, they strive to satisfy them both at once. They devise a sole, tutelary, and all-powerful form of government, but elected by the people. They combine the principle of centralization and that of popular sovereignty; this gives them a respite: they console themselves for being in tutelage by the reflection that they have chosen their own guardians. Every man allows himself to be put in leading-strings, because he sees that it is not a person or a class of persons, but the people at large who hold the end of his chain. (Emphasis added.)

Tocqueville concludes, “Thus their spirit is gradually broken and their character enervated. . . . It is indeed difficult to conceive how men who have entirely given up the habit of self-government should succeed in making a proper choice of those by whom they are to be governed; and no one will ever believe that a liberal, wise, and energetic government can spring from the suffrages of a subservient people.

“A constitution [that is] republican in its head and ultra-monarchical in all its other parts has always appeared to me to be a short-lived monster.”

Tocqueville might have had his timing off, but with a fiscal crisis on the horizon—the product of a bloated welfare state, an aging population, and a lackluster economy mired in corporatism—the “monster” is in trouble. Is it too late to turn things around?

* * *

One of the most politically safe government programs today is federal insurance of bank deposits. Yet there was a time when the idea of underwriting reckless bank behavior was thought so ridiculous that even President Franklin D. Roosevelt opposed it. Warren Gibson explores the FDIC.

It’s not what we don’t know that gets us into trouble. It’s what we think we can model but can’t. Max Borders explains.

The leading countries’ pressure on offshore financial centers—that is, low-tax jurisdictions that respect people’s privacy—is nothing less than an updated version of imperialism. So says Robert Stewart.

President Obama insists he wants to help small business create jobs. He even has a program for that. Is there less here than meets the eye? Bruce Yandle thinks so.

Americans rightly have an intuition that bureaucracies are inept. So why would the adoption of children be trusted to one? James Payne wants to know.

Once upon a time, central and eastern Europe were ruled by brutal and incompetent communist regimes. And back then, when the World Bank thought Romania had an enlightened despot, James Bovard took a little tour. He reminisces inside.

One of the founders of the modern libertarian movement was a newspaper magnate named R. C. Hoiles. Nothing raised his ire like government-run schools. Wendy McElroy tells why.

And if that’s not enough, there are the columnists: Lawrence Reed looks back at FDR’s great bait-and-switch in 1932. Donald Boudreaux considers the private provision of public goods. Burton Folsom sees ominous parallels between Roosevelt and Obama. John Stossel is outraged that we need government permission to pursue many occupations. Walter Williams wants no part of the “war on drugs.” And Art Carden and Mike Hammock, encountering the argument that government should underwrite investments in nuclear power, proclaim, “It Just Ain’t So!”

Books on Obamanomics, big government, race, and the financial mess come under our reviewers’ scrutiny.

Empowered to regulate industry marketing practices, the FDA must develop warning labels that must cover 50 percent of the side space on cigarette packages. The labels must draw from a catalog of congressionally sanctioned phrases that include:

WARNING: Cigarettes are addictive. WARNING: Tobacco smoke can harm your children. WARNING: Cigarettes cause fatal lung disease. WARNING: Cigarettes cause cancer. WARNING: Cigarettes cause strokes and heart disease. WARNING: Smoking during pregnancy can harm your baby. WARNING: Smoking can kill you. WARNING: Tobacco smoke causes fatal lung disease in nonsmokers. WARNING: Quitting smoking now greatly reduces serious risks to your health.

As dramatic as this all seems, this extension of FDA powers received a somewhat mixed response from the medical and health-advocate communities.

John Cohn, a lung-disease specialist at Thomas Jefferson University Hospital in Philadelphia said, “It’s sort of like asking the police commissioner to regulate prostitution.” Perhaps Cohn anticipates agency capture of the sort typically seen in Washington.

Matthew Myers, president of the Campaign for Smoke-Free Kids, a leading lobbyist for the law, took a more optimistic but still somewhat guarded position. “You can stay with the status quo, with industry controlling the level of nicotine in products and companies deciding what health claims to make. Or you can give control to an agency with a history of scientific expertise in regulating products. This fills an important gap.”

All Bark

This somewhat tepid celebration was prompted by uncertainty about how the FDA would really manage its new authority. There is also the feeling that this statute, like many others, had a title that sounded more powerful than the content justified. The word “prevention” in the title sounds rather dramatic, but the teeth in the law itself are more like baby teeth than fully mature incisors. (Consider, for example, the exception made for menthol-flavored cigarettes.)

The politicians’ commentary that followed the law’s passage was much more boastful and self-congratulatory. Senator Edward Kennedy, long an advocate for more government control of the industry and sponsor of the Senate version of the law, exclaimed, “Miracles still happen. The United States Senate has finally said ‘no’ to Big Tobacco.”

Had Congress really said no?

In a way, Kennedy misstated what had actually happened. The Senate had not entirely said no. Indeed, the biggest of big tobacco, Altria Group, the producer of market-leader Marlboro, had lobbied long and hard for the bill’s passage. Altria’s two major competitors, Lorillard and Reynolds Tobacco, saw the law as giving Marlboro, with its market share locked and a lead in developing no-nicotine products, an unfair advantage. As is often the case, the Senate picked a winning horse and rode it. The Senate said yes to one and no to two others.

With Kennedy unable to lead the battle for his bill due to illness, Senator Christopher Dodd assumed leadership. Not quite as dramatic in his comment as Kennedy, but in a way equally inaccurate, Dodd said, “For more years than anyone can count, we’ve had an industry that’s gone basically unregulated.”

Unregulated Tobacco?

It is true that tobacco products have not been regulated by the FDA, though the agency has attempted to do so almost since its 1906 founding. But after decades of regulation by the Federal Trade Commission (FTC), the Federal Communication Commission (FCC), and Congress itself, hardly anyone who has followed the industry would say it has gone “basically unregulated.”

Instead, some would argue that it was regulation that defined the industry’s trade practices and, by doing so, maintained the industry’s high profits and expanded the sale of products in just those markets Tobacco-Free Kids and others worry about. (See John Calfee’s “The Ghost of Cigarette Advertising Past, Regulation, Nov.-Dec. 1986.)

How could this be? Consider the following capsules that come from a long tobacco saga (these and more can be found in Bruce Yandle, et al., “Bootleggers, Baptists and Televangelists: Regulating Tobacco by Litigation,” University of Illinois Law Review, 2008):

Almost from the start, tobacco products were regulated. The first government efforts to control tobacco consumption date at least to 1629, when the colonial authorities in Massachusetts Bay prohibited settlers from planting tobacco except in small quantities used for medicinal purposes. (Kennedy’s position follows a historic Massachusetts tradition.) Health interest groups have a long history of activism as well. The focus was on cigarettes. There were several hundred anti-cigarette leagues in the United States with more than 300,000 total members by the turn of the nineteenth century.

Twenty-six states banned the sale of cigarettes to minors by 1890, and 16 states totally prohibited cigarette sales by the end of 1909. World War I is said to have been a stimulus for cigarette consumption. As a result of extensive lobbying by tobacco producers, by 1927 all of the state bans on sales to minors were repealed. As bans declined, state taxes appeared, beginning in 1921 in Iowa and spreading to nearly all states by 1960. Politicians learned that tobacco products were a mother lode for tax revenues. There were no more total bans.

The FDA was explicitly denied authority to regulate tobacco when Congress passed the Pure Food and Drug Act of 1906, which created the agency. Just before passing the act, nicotine, then listed as a drug, was removed from the U.S. pharmacopeia. This assured the FDA could not regulate nicotine as a drug. Since 1906, when amending the FDA act and related legislation, Congress has consistently rejected proposed amendments to grant FDA regulatory powers. Congress regulated the industry itself.

While scientific data may have been lacking, popular recognition of the harms from smoking showed up in expressions that developed for cigarettes and related ailments: coffin nails, smoker’s cough, gasper, wheezer, lung duster. Yet a 1938 Consumer Reports article on smoking and health indicated no scientific evidence of harm from smoking. Nevertheless, marketplace recognition of health problems led the tobacco companies to go on the attack: “Not a cough in a carload” and “Remember Juleps, forget your cough” (Chesterfield); “Not a single case of throat irritation due to smoking” (Camels); and “Why risk sore throats?” (Old Gold).

In 1950 the FTC issued cease-and-desist orders against major cigarette companies on all health-effect advertising. The commission found that all popular cigarettes were harmless for healthy smokers. On these grounds, comparative health claims–”less smoker’s cough,” for example–were prohibited. Later, when cigarette producers introduced filters and began to advertise levels of tar and nicotine, the FTC struck again. In February 1960 the FTC announced that it had negotiated a voluntary agreement with the tobacco companies to cut all tar and nicotine claims from cigarette advertising. The agency heralded the “industry-government cooperation.” The FTC action brought to an end health-effect advertising that had led to a sharp decline in tar-weighted cigarette sales and the demise of some of the stronger cigarette brands.

In 1964 the Surgeon General reported a causal connection between smoking and lung cancer, chronic bronchitis, and coronary disease. He also stated that “cigarette smoking is a health hazard of sufficient importance in the United States to warrant appropriate remedial action.” Immediately, the FTC initiated proceedings to regulate cigarette advertising. In a final proposed rule, the FTC called for all cigarette packages to carry this warning: “Cigarette Smoking is Dangerous to Health and May Cause Death from Cancer and Other Diseases.” Congress intervened, sharply rebuked the FTC, and in 1965 passed the Federal Cigarette Labeling and Advertising Act that required a milder warning: “Caution: Cigarette Smoking May Be Hazardous to Your Health.” The FTC was banned from further meddling for at least four years.

Cigarette Regulation May Be Fatal to New Entrants

In May 1969 the FTC attempted to require all cigarette advertising to warn that “Cigarette Smoking is Dangerous to Health and May Cause Death from Cancer, Coronary Heart Disease, Chronic Bronchitis, Pulmonary Emphysema, and Other Diseases.” Once again, Congress countered and passed the Public Health Cigarette Smoking Act of 1969, which banned all cigarette advertising on electronic media after January 1, 1971,and mandated that all cigarette packages bear a milder statement: “Warning: The Surgeon General Has Determined that Cigarette Smoking Is Dangerous to Your Health.” The ban on radio and TV advertising ended the public-health messages required by the FCC, which had been shown to cut cigarette consumption, and reduced most of the $200 million annual advertising cost for existing tobacco products. The ban also made it more costly for new entrants to gain market share.

In 1998, 46 state attorneys general negotiated a settlement with tobacco producers after several successful state suits against tobacco companies based on recovering the cost of Medicaid payments for tobacco-related illnesses. The settlement yielded payments to the states that totaled $200 billion, which converted to an average annual payment to each state of $180 million in perpetuity. To generate the revenue the tobacco producers were allowed to collude and raise prices, doubling the wholesale price of cigarettes. Total sales volume went down. Profits went up. In effect the tobacco firms became well-paid tax collectors for the states. The settlement also contained a rich set of regulations that affected the marketing of tobacco products to youthful consumers.

Industry-Serving Regulation

No, there is no evidence to suggest that tobacco has until now been “an industry that has gone basically unregulated.” But there is ample evidence that tobacco regulation has served the interests of the industry and the politicians that broker favors to the industry. Meanwhile, consumers of tobacco products, who are generally a lower-income population, have been denied the benefits of competitively determined product information; they also have unwittingly become major sources of revenue for state politicians, who generally provide more benefits to higher-income than lower-income consumers.

One can only speculate about what might have happened had the FTC not outlawed health-effects advertising and had the industry not become one of the more regulated industries in America.

There is a growing subset of consumers who would prefer not to buy their milk this way. They want it unpasteurized, unhomogenized—in a word, “raw.” They would prefer to drink their milk as humans have consumed it for centuries, which is also how every single signer of the U.S. Constitution drank it.

To procure such a basic product, however, these consumers—with some exceptions—are forced to break the law. The basic retail sale of raw milk for human consumption is legal in only eight states—Arizona, California, Connecticut, Maine, Pennsylvania, South Carolina, New Mexico, and Washington. Its sale for human consumption across state lines is illegal nationwide. In some other states raw milk can be sold at the farm site only, sold through “cow share” programs, or legally marketed as “pet food.” Seventeen states completely forbid the sale of raw milk in any way.

How did this happen? We all learned in childhood about Louis Pasteur’s development of pasteurization in the mid-1800s. For mass-produced milk in an age before refrigeration, pasteurization was indeed a godsend. Early in the twentieth century, as people died at alarming rates due to contaminated milk from filthy urban dairy centers, pasteurization caught on as a hot market trend. In a time when milk collection and storage on large-scale farms was unsanitary and unrefrigerated (and when additives as diverse as marigold petals and animal brains were placed in milk to add body), pasteurization helped save lives. Thus people were willing to pay for it. But then one city after another began to mandate the process through legislation. In 1948 Michigan became the first state to ban the sale of unpasteurized milk, and other states soon followed suit. In 1986 a federal judge ordered that interstate shipments of raw milk be banned, further limiting supply for consumers.

Now, despite advances in dairy-production techniques, it doesn’t matter how clean the equipment or how healthy the cow; raw milk is either illegal or highly suspect, and state and federal bureaucracies see it as a threat to the population. Regulation overstepped the free market and did an end run around common sense.

Raw-milk advocates argue that milk in its pure state is quite beneficial to health. According to the Weston A. Price Foundation, a leading natural-foods organization, raw milk reduces the incidence of asthma, eczema, and hay fever in children. Unpasteurized milk also aids the body’s natural digestive system. Pasteurization, the Foundation insists, kills helpful bacteria and breaks down delicate proteins in milk, leading to the dairy intolerance seen in so many individuals in this modern age. Advocates also state that unpasteurized milk strengthens the immune system and provides optimal growth and development for young people.

The opinion of government officials, backed up by the bulk of the medical community, is that every bit of that is hogwash. A joint press release from the U.S. Food and Drug Administration and the Centers for Disease Control, dated March 1, 2007, reminds consumers “of the dangers of drinking milk that has not been pasteurized.” Among the litany of diseases said to be carried by raw milk are “listeriosis, salmonellosis, campylobacteriosis, typhoid fever, tuberculosis, diphtheria and brucellosis.” It is enough to make one wonder how Amish communities manage to survive.

The FDA/CDC claims that “There is no meaningful nutritional difference between pasteurized and raw milk.” The Price Foundation retorts that no research is cited by the FDA/CDC to substantiate such claims. The press release also states that “From 1998 to May 2005 CDC identified 45 outbreaks of foodborne illnesses,” accounting for “1,007 illnesses, 107 hospitalizations, and two deaths.” Aside from the fact that these are minuscule numbers for a population of nearly 300 million being tracked over seven years, there seems to be little evidence to back up the figures. Thomas Bartlett, in an article on raw milk (“The Raw Deal,” October 1, 2006), went looking for such cases of illness. In addition to finding no anecdotal evidence whatsoever, he also asked John Sheehan, then-director of the FDA’s dairy and egg safety division, for evidence linking raw milk to deadly disease outbreaks.

Sheehan admitted that he didn’t know of any such cases in the United States in the past 20 years. Nevertheless, the official line on raw milk is so ingrained as to be farcical. In interviewing a Maryland state health official about raw milk sales, Bartlett was told selling raw milk was as bad as selling marijuana, and the official compared such producers to heroin dealers.

Indeed, the question is far more important than, “Is raw milk beneficial?” or even, “Is raw milk safe?” It is this: What right does the state have to outlaw the sale of unpasteurized milk in the first place?

Imagine the case of Mark Nolt of New Line, Pennsylvania. Nolt was arrested—arrested—last May in a sting operation in which undercover officials purchased raw milk from his farm. Nolt, a Mennonite farmer with ten children, was fined $4,040, had his equipment and products seized, and was threatened with jail if he tried to sell raw milk again. His case is not unique. Nolt’s spokesman at his trial, Jonas Stoltzfus, eloquently summed up the situation: “This issue has very little to do with raw milk and health, and everything to do with freedom.”

Controlling the Milk Supply

But why milk? Indeed, as the 2008 pepper scare has proven, harmful bacteria can find their way to many other food sources. However, milk is different from most other food products. It is a staple among staples. To control the milk supply is to control the food supply.

Pasteurization is not a cheap process, and therefore the legal demand for pasteurization favors large producers. A small, independent dairy farm may very well not be able to afford pasteurization equipment (not at government standards, at least), and thus micro-dairies can rarely operate legally on their own. With the dairy industry more centralized, it becomes easier to track and regulate—and control.

Control of the milk supply has been a primary step in the state’s efforts to control the larger food supply. Agriculture continues to fall further and further under the eye of government regulation, as do businesses as diverse as potato-chip manufacturers and fast-food restaurants. The USDA, FDA, and myriad other state and federal agencies make no bones about their goal of controlling every morsel Americans consume—all for our own good, of course.

And where better to start than with milk? Think of the psychological benefits for the state emanating from such regulation. If a product as central and wholesome as milk can only be safe through government control, reliance on the paternalistic state grows. Has it worked? Ask a random acquaintance if he would consider drinking unpasteurized milk. You may very well get a look of horror in return. Why do people feel that way? Simply because they have been indoctrinated to feel that way. Why not be just as accepting of government regulation over their mayonnaise or their chicken or their lettuce? How about their water supply or the cars they drive or how warm they keep their homes in the wintertime? Though not necessarily a conscious progression, control by the state, when left unchecked, simply grows and expands naturally.

As ingrained in our social conscience as pasteurization has become, it is hard for many to step back and realize just how preposterous milk laws happen to be. One must ask if the many citizen-farmers who valiantly fought for liberty two centuries ago could have ever envisioned a “free” state in which one citizen would be legally barred from selling milk from his cow to another citizen. Even King George III would have laughed at that idea.

We will not let the taxpayers spend their hard-earned money on ailing carmakers unless these companies are forced to reform their bad habits — either inside or outside bankruptcy.

So the way McConnell sees it, we taxpayers want to spend our hard-earned money to save the Big Three, but he is going to stop us — for our own good — if the companies aren’t compelled to reform themselves.I guess that’s Republican paternalism. As a libertarian, I object. If I want to spend my tax money on GM, Chrysler, and Ford, I’m going to do it whether some presumptuous senator from Kentucky wants me to or not. This is a free country!

So they say.

I’m thinking they’ve got this wrong. It’s too clever by half. In fact, there’s nothing libertarian about it.

Sunstein and Thaler are impressed that people are influenced by the context they find themselves in. Marketers and others have noticed this. So, for instance, when people buy something online and are given the option to receive future e-mail offers, they will tend to accept whichever option is already checked—the default. If “yes” is pre-checked, lots more people will receive the notices than if “no” is pre-checked or, I surmise, if nothing is checked.

Sunstein and Thaler sense important implications for public policy. “Automatically enrolling people in a savings plan dramatically increases participation, even though people retain the right to opt out,” they write. So why can’t government do things like that? Leave people free to opt out—but opt them in to begin with. Sunstein and Thaler see great things on the horizon:

“The mounting international interest suggests the possibility of developing a genuine Third Way, one that accepts some of the progressive goals traditionally associated with the left, but insists on the market-friendly means traditionally associated with the right. Libertarian paternalists resist coercion. They think that freedom of choice is an important safeguard against the bias, confusion and self-interest of government. They also think that everyone can benefit from a friendly nudge.”

Libertarian yet paternalistic at the same time. Brilliant!

Not so fast. As Dwight Lee points out in the July 2007 Freeman, Sunstein and Thaler seem in no hurry to apply their revolutionary principle to Social Security and Medicare (http://tinyurl.com/6xm9d4). I’d have to concede that a no-penalty opt-out provision for these government interventions would be an improvement on the current system. So why isn’t it proposed? (Hint: Because the system has no chance of working if everyone isn’t compelled to participate. It can’t be sustained under those circumstances either.)

There’s another criticism. Government by nature is coercive. It is the only group that may legally use nondefensive physical force, that is, force against people who have aggressed against no one. Yet this same group—the one Sunstein and Thaler admit is riddled with “bias, confusion and self-interest”—would decide what the default “choice” would be in a variety of matters. It would decide what is good for everyone and give them a “friendly nudge” in that direction. The government’s inherent knowledge deficiencies don’t much bother Sunstein and Thaler.

Of course, if government permits people to opt out of some programs, there must be programs to opt out of—programs that can exist only because the government has the power to aggress, namely, taxation. Will the opt-outs really see their taxes lowered? What do you think?

So on closer examination, libertarian paternalism is not so libertarian after all. It requires a background of coercion.

Sunstein and Thaler hasten to add that they do not mean that government-by-nudge is sufficient for all things. “We concede that in some contexts libertarian paternalism is not enough,” they write. “. . . No sensible person could argue that government action should be limited to nudges. But too often governments resort to coercion when gentler approaches, preserving freedom of choice, are at least as effective.”

What these authors ignore is that the gentlest approach of all is to preserve real freedom of choice by letting people keep what they earn and spend it as they see best. In a free society, government wouldn’t presume to construct the default environment in order to “move people in good directions.” The “good” is for people to decide for themselves—without the nudges from friendly, biased, confused, or self-interested politicians. Let’s remember that “nudge” is also Yiddish for someone who pesters, annoys, or complains.

Government aid to farmers goes back a long time. If it’s a benefit to some, it’s also a burden to others. But to whom? E. C. Pasour, Jr., shows who pays.

The government’s terrorist watch list ballooned to one million people last summer. Are there really that many people who must be kept off airplanes? Becky Akers takes a look.

Social engineers seize on anything to justify expansion of government control over our lives. So wouldn’t you know that the increase in gasoline prices would summon forth an elaborate land-use-control program? Steven Greenhut exposes the ploy.

The credit crunch has spread to the student-loan market, prompting politicians to want to “do something.” They’ve already done too much, George Leef claims.

Albert Jay Nock is one of the godfathers of the libertarian movement. Who was he and what did he stand for? Joseph Stromberg has the details.

Our columnists have been hard at work. Lawrence Reed explains why inflation is back. Donald Boudreaux discusses the importance of idea retailers. Steven Davies ponders presidential reputations. John Stossel blesses the oil speculators. David Henderson says beware the one who sets the terms of a debate. And Alan Schaeffer and Marshall Fritz, repeatedly bumping into the argument that government can fix education, protest, “It Just Ain’t So!”

Coming under review this month are books on global intervention, nation-building, great libertarians, and famous economists.

Capital Letters features another lively exchange.

—Sheldon Richman
srichman@fee.org

Of course, things were not always this way. And it is worth recalling how this state of affairs came about. The modern welfare state had its birthplace in late nineteenth-century Imperial Germany under Chancellor Otto von Bismarck. In the 1870s the Social Democratic Party gained increasing support from the voters in elections to the parliament, the Reichstag. Fearful that the socialists might win a majority, Kaiser Wilhelm and the conservative parties resolved to thwart this dangerous challenge to their power and the existing order.

In the early 1880s the Kaiser agreed to support the first welfare-state legislation sponsored by Bismarck. A decade later, Bismarck explained to an American sympathizer the strategy behind these laws that guaranteed every German national health insurance, a pension, a minimum wage and workplace regulation, vacation, and unemployment insurance. “My idea was to bribe the working classes, or shall I say, to win them over, to regard the state as a social institution existing for their sake and interested in their welfare,” he said.

But it would be a mistake to view the birth of the modern welfare state simply as a cynical political move to win over the workers by preempting the appeal of the socialists. It was also argued for on the basis of a supposed higher “social good” and a conception of human freedom superior to the “mere” protection of life, liberty, and property.  

In 1915, an American admirer of the German welfare state, Frederic Howe, explained the nature of the system in a book called Socialized Germany:  

The state has its finger on the pulse of the worker from the cradle to the grave. His education, his health, and his working efficiency are matters of constant concern. He is carefully protected from accident by laws and regulation governing factories. He is trained in his hand and in his brain to be a good workman and is insured against accident, sickness, and old age. While idle through no fault of his own, work is frequently found for him. When homeless, a lodging is offered so that he will not easily pass into the vagrant class.  

Howe admitted that under the German system, with its extensive controls and regulations, “The individual exists for the state, not the state for the individual.” But he insisted that this did not mean a loss of freedom. “This paternalism does not necessarily mean less freedom to the individual than that which prevails in America or England,” he argued. “[T]he German enjoys a freedom far greater than that which prevails in America or England. This freedom is of an economic sort. . . . It protects the defenseless classes from exploitation and abuse. It safeguards the weak.” 

If the state were to take on these new responsibilities, how far would the new powers extend? The answer was that there were no limits. The only rule was political expediency. Howe explained this as well: “In the mind of the Germans the functions of the state are not susceptible to abstract, a priori deductions. Each proposal must be decided by the time and the conditions. If it seems advisable for the state to own an industry, it should proceed to own it; if it is wise to curb any class or interest, it should be curbed. Expediency or opportunism is the rule of statesmanship, not abstraction as to the philosophical nature of the state.” 

In this new world there was no place for universal and enduring principles concerning the individual’s rights to life, liberty, and property, or for constitutions to prevent governments from encroaching on freedom. Every policy issue was to be guided by the pragmatic interests of the day. 

This German conception of government and the welfare state slowly but surely made its way across the Atlantic to America. In the late nineteenth century there were very few American universities that offered doctoral degrees. So an American student wishing to earn one as a capstone to his education often had to go to Europe. German universities, in the land of poets, philosophers, composers, and modern progressive thinkers, were especially appealing. Hundreds of young American economists, political scientists, historians, sociologists, and philosophers made the pilgrimage, many of them studying with leading members of the German Historical School, advocates of “state socialism.” The Americans returned home imbued with ideas about the paternalistic state and became leaders of the movement for “social reform” during what is known as the Progressive Era in the early twentieth century.

These American converts to the Bismarckian welfare state believed they were an elite on a mission from God. One such influential person was Richard Ely, a professor of economics at the University of Wisconsin who had studied in Germany and then co-founded the American Economic Association in 1885 to advance the welfare-state agenda. In 1895 he expressed this view in a book on socialism: “Looking into the future we may contemplate a society with real, not merely nominal freedom, to pursue the best; a society in which men shall work together for the common purposes, and in which the wholesale cooperation shall take place largely through the government. . . . We have reason to believe that we shall yet see great national undertakings with the property of the nation, and managed by the nation, through agents who appreciate the glory of true public service, and feel that it is God’s work they are doing, because church and state are as one.” 

Not only would material interests be secured from cradle to grave, but so, too, the spiritual and intellectual interests—education, art, literature. Here was the welfare statist’s alternative to both Marxian socialism and classical liberalism. 

Classical-Liberal Critique

The classical liberals and free-market economists of the nineteenth century were highly critical of state intervention in social and economic affairs. They doubted that the political authority had either the knowledge or the wisdom to manage the complex and ever-changing currents of social and commercial life. And they were suspicious of government’s having the power to regulate people’s lives because while those powers may be couched in the language of the “public interest,” they understood that the actual motive behind them was to serve some special interest at the expense of the rest of society. 

Though not as visually dramatic as the damage done in Eastern Europe, the harm wrought by the welfare state has nonetheless been destructive of our political, economic, and cultural life. It has been and is eating at us from the inside. And to a great extent its success has been due to the fact that, after several generations, people do not even know it for what it is. The welfare state, for many, is a “just” and “caring” society. It is the “American way.” 

Our task in the 21st century is to reverse this trend and restore the ideal of liberty in the hearts and minds of our fellow citizens.