Footnotes

 

1. Until some time in the first half of the Twentieth Century, "liberal" was the word most commonly used for what we now call "conservative" or "libertarian." Today, of course, "liberal" means the opposite. That the defenders of freedom and limited Government had the very word that described them stolen by the enemy may speak volumes about the problem that Nietzsche and Jefferson identify. In any case, the terms "liberal" and "conservative" have their modern meanings throughout this text, unless otherwise noted.
2. "The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing this strength and dexterity of his hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbor is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper. To judge whether he is fit to be employed may surely be trusted to the discretion of the employers whose interest it so much concerns. The affected anxiety of the law-giver lest they should employ an improper person is evidently as impertinent as it is oppressive." Adam Smith, The Wealth of Nations, 1776.
3. Thomas Hobbes, De Cive, 1642. In an irony that might have surprised Hobbes, today’s "war of every one against every one," as he phrased it in Leviathan (1660), is fostered precisely by the all-powerful State he thought would end it.
4. Paul H. Rubin, "What Do Economists Think about Antitrust?", chapter three in The Causes and Consequences of Antitrust, The Public-Choice Perspective, edited by Fred S. McChesney and William F. Shughart II, 1995. The author and the book’s editors seem to take comfort in the "statistically significant" decline in the size of majorities supporting the statement between 1976 (85%) and 1990 (62%) as a sign that economists may be waking up to their errors. I don’t. The decline merely shows that economists are becoming more sophisticated in shaping their arguments in support of antitrust to realistically include acknowledgement of its imperfections. By so doing, the profession has made it more likely that, regardless of the number that agree with a hawkish statement, the number agreeing that some level of antitrust enforcement is appropriate approaches 100%.
5. David B. Yoffie and Mary Kwak, Wall Street Journal op-ed, "Microsoft Isn’t out of the Woods Yet," July 2, 2001. "With the shadow of future antitrust action hanging over Microsoft’s every move, Messrs. Gates and Ballmer must change the company’s culture and make antitrust second nature. It won’t be enough to give every person a pamphlet and a lecture. Management will have to get everyone in the organization to live the right behavior through repeated training, role-playing and drills. Only then will they instinctively do the right thing. In addition, Microsoft has to sweat the small stuff. When it comes to antitrust law, you have to toe the line 100% of the time." [Emphasis added.]
6. "The Congress that enacted the Sherman Act intended to make naked price-fixing agreements illegal per se, and the courts from the beginning have, with only occasional aberrations, faithfully adhered to that policy. A rule of per se illegality for naked agreements not to compete means that no defenses are permitted once the agreement is proved to exist. The judge is foreclosed from considering the appeal of a shorter working day, the hardships visited by competition on small traders and worthy men, or any other value that might arguably be forwarded by the cartel. . . The per se rule against naked price fixing and similar agreements not to compete is the oldest and clearest of antitrust doctrines, and its existence can be explained only by a preference for consumer welfare as the exclusive goal of antitrust." Robert H. Bork, The Antitrust Paradox; A Policy at War with Itself, 1978.
7. Friedrich A. Hayek, Law, Legislation and Liberty, Vol. 3, The Political Order of a Free People, 1979.
8. Friedrich A. Hayek, Law, Legislation and Liberty, Vol. 2, The Mirage of Social Justice, 1976. "For a proper understanding of the character of this order [the "market order"] it is essential that we free ourselves of the misleading associations suggested by its usual description as an ‘economy’. An economy, in the strict sense of the word in which a household, a farm, or an enterprise can be called economies, consists of a complex of activities by which a given set of means is allocated in accordance with a unitary plan among the competing ends according to their relative importance. The market order serves no such single order of ends. What is commonly called a social or national economy is in this sense not a single economy but a network of many interlaced economies. . . The confusion which has been created by the ambiguity of the word economy is so serious that for our present purposes it seems necessary to confine its use strictly to the original meaning in which it describes a complex of deliberately co-ordinated actions serving a single scale of ends, and to adopt another term to describe the system of numerous interrelated economies which constitute the market order. . . [From] the Greek verb katallattein (or katallassein) which meant, significantly, not only ‘to exchange’ but also ‘to admit into the community’ and ‘to change from enemy into friend’ . . we can form an English term catallaxy which we shall use to describe the order brought about by the mutual adjustment of many individual economies in a market." See also Ludwig von Mises, Human Action, 1949, for a discussion of catallactics. In a footnote on page 3, Mises attributes first use of the term to Whately in his Introductory Lectures on Political Economy, 1831.
9. Friedrich A. Hayek, The Road to Serfdom, 1944. Hayek’s early classic, perhaps the most passionate and eloquent defense of freedom I have read, nonetheless contains many references to the need for coercion to "create" the conditions in which competition can flourish. As near as I can tell, his willingness to accept "certain kinds of government action" in this regard stems from the following factors. First, Hayek is suspicious that the group actions of labor unions and corporations seem so likely on the historical evidence to involve Government that he has difficulty imagining them remaining private and uncorrupted. Certainly, as he chillingly describes in The Road to Serfdom, Hitler’s Germany made powerful political use of socialist economic theories regarding the inevitability of monopolies and, therefore, the wisdom of bringing Government in to formally enhance and organize them. Second, Hayek has great respect for the naturally evolved institutions and attitudes that provide us with rules of social interaction, the history and basis for which we have no way of knowing, but which endure because they made us more successful than alternative rules that died out with extinct societies. Antipathy toward monopoly appears to be one such attitude, which may explain why, according to some, it is found in such breeding grounds for freedom as the common law and in some fragmentary comments by Adam Smith. This, in any case, seems to me why he is comfortable with a variety of coercive measures, including enforcement of the prohibitions on "aimed discrimination" that he articulates in Volume Three of Law, Legislation and Liberty (1979).
10. I am on an advisory board for this group, which conducts research and experiments for both scientific and educational purposes. Its principal members have long been associated with the field of "experimental economics," which tests the structures of various market institutions by simulating their incentives with payments to participants in laboratory games. The results are used both to test the efficiency of the various institutions against each other, and to teach students fundamental economic principles, like those of supply and demand. It is hoped that at least some of their research findings will be used to inform and implement conservative policies.
11. Stephen J. Rassenti, Vernon L. Smith, Bart J. Wilson, "Using Experiments to Inform the Privatization/Deregulation Movement in Electricity," 2001. The centerpiece of their plan is a "decentralized" electronic trading system. Although they were not direct advisors to California, something similar was adopted there. According to the authors, however, California made several mistakes, such as leaving out demand side bidding and flexible time of day pricing, and by allowing hidden non-system trades.
12. Industry Standard Magazine, June 26, 2001. Opinion attributed to Kenneth Lay of Enron. [Emphasis added.]
13. Industry Standard Magazine, June 26, 2001. Quote from Tyson Slocum, senior researcher in Ralph Nader’s group, Public Citizen. [Emphasis added.]
14. The New York Times article, "Ex-Workers of Generator Testify on Power Output," June 23, 2001.
15. The New York Times article, July 19, 2001, "California’s New Problem: Sudden Surplus of Energy:" "After months of warnings about power shortages and forced blackouts, an unusually cool July and surprisingly effective conservation efforts have put California in a stunning position: it has so much electricity on its hands that it is selling its surplus into a glutted market. . . . [The] Department of Water Resources, which became the state's main buyer of power after soaring wholesale prices pushed private utilities toward bankruptcy this year, would not provide exact figures on how much the state was selling or how much money it was losing. . . . But the department has said it was paying on average $133 per megawatt-hour this month, much of which it is obliged to buy whether it needs it or not, under long-term contracts signed in recent months. By contrast, officials say, the department at times has sold some of that power back into the market at prices as low as $15 per megawatt-hour. . . . ‘This state agency has no expertise in trading,’ said Harvey Rosenfield, an official at the Foundation for Taxpayer and Consumer Rights. ‘It is amateurish at best and sometimes incompetent, negotiating with a bunch of M.B.A.'s whose goal is to soak California. The state was panicked into leaping into this business, and it is being outwitted.’ . . . [Rosenfeld added,] "They goofed, and it looks like taxpayer money is being thrown down the toilet."
16. Industry Standard Magazine, June 26, 2001.
17. Wired Magazine, "The Energy Web," July, 2001.
18. I am perhaps too hard on Governor Davis; New York under Governor Pataki is headed in the same dumb direction. The point is made in the following excerpts from a New York Times article, "New York Turns Into a Lab on the Future of Electricity," July 25, 2001. "The New York area, particularly Long Island and New York City, is emerging as a laboratory for new approaches. . . Even the very concepts of supply and demand are getting a second look, as a new state program allows large energy consumers to behave like suppliers, by selling their reduced use of power on the wholesale electricity market. The state government, which had been poised to abandon its historic role of regulating the electricity industry, is playing a huge, if ambiguous, part as both an electricity generator and an investor through its conservation rebates and other incentives." "Last month, Gov. George E. Pataki announced that he would require all state buildings to have at least 20 percent of their electricity supplied by renewable, nonpolluting sources like wind or solar power by 2010." "Many energy company officials have been outraged as the New York Power Authority, a state-chartered agency that supplies power to government and other customers, has built 10 small emergency power plants around New York City this summer. While private companies wait in line for the state to consider their plant proposals — spending millions of dollars in some cases just to complete the preapplication process — the state itself has leapfrogged ahead of them."
19. The Atlantic Monthly Magazine, "Freedom of the Skies" by James Fallows, June 2001.
20. The Wall Street Journal article, "Too Many Choices," April 20, 2001. In a study by Mark Lepper, chairman of Stanford University’s psychology department: "Of the shoppers who faced 30 choices, only 3% actually bought jam; of the shoppers who had 6 choices, 30% purchased jam. ‘Too much choice is not a good thing,’ he concludes. People also feel bad when choosing from a broad selection because they second-guess their pick and worry they have made a poor selection."
21. The Wall Street Journal article, July 12, 2001. Some excerpts: "the Federal Energy Regulatory Commission ordered the formation of four big electric-transmission organizations to optimize the flow of juice in the Northeast, the Southeast, the Midwest and the West." "The federal orders are intended to jump-start development of electric-transmission organizations that the FERC permitted in a landmark decision called Order 2000, issued in December, 1999. In that order, the FERC urged the utilities to voluntarily surrender control of their transmission systems to grid organizations that would run daily markets for power and manage the flow of electricity across broad regions. The agency said the nation would benefit from larger, more efficient wholesale-electricity markets, in which transmission owners no longer would be able to favor their own power sales over those of competitors."
22. The Atlantic Monthly Magazine, "Russia is Finished," May 2001. The article describes "the unstoppable descent of a once great power into social catastrophe and strategic irrelevance." One highlighted quote sums it up: "Russia will soon concern us no more than any third world country. Internal contradictions in Russia’s thousand year history have destined it to shrink demographically, weaken economically, and possibly disintegrate territorially." See also Richard Pipes, Property and Freedom, 1999, in which he describes Russia’s 20th century socialist experiment as the most massive confiscation by Government of private property in history.
23. Ludwig von Mises, Human Action, 1949. Mises basically fingers ancient antitrust for the collapse: "What brought about the decline of the empire and the decay of its civilization was the disintegration of this economic interconnectedness." "It was deemed unfair and immoral to ask for grain, oil, and wine, the staples of these ages, more than the customary prices, and the municipal authorities were quick to check what they considered profiteering. Thus the evolution of an efficient wholesale trade in these commodities was prevented. The policy of annona, which was tantamount to a nationalization or a municipalization of the grain trade, aimed at filling in the gaps. But its effects were rather unsatisfactory." "The marvelous civilization of antiquity perished because it did not adjust its moral code and its legal system to the requirements of the market economy."
24. From a press release for Kahn’s 1988 book, Letting Go: Deregulating the Process of Deregulation, or: Temptation of the Kleptocrats and the Political Economy of Regulatory Disingenuousness: "Alfred E. Kahn, the Robert Julius Thorne Professor of Political Economy Emeritus at Cornell University and one of the most influential figures in public utility deregulation, says to current regulators: ‘Do the bare minimum and then let go.’ As the ‘father’ of airline deregulation when he was chair of the Civil Aeronautics Board from 1977 to 1978, and the author of the landmark two-volume set The Economics of Regulation, Kahn applies his experience and perspective to evaluating the regulatory process and policies now transforming the telecommunications and electric power industries. He shows how current regulatory efforts are biased toward producing immediate results and offers concrete suggestions on how to deregulate for optimal long term success."
25. Letter to Wall Street Journal, "Airlines Need Freedom Of Competitive Entry," by Alfred E. Kahn, July 12, 2001. "The standard economic test of whether the latter, demand-inelastic customers, are being exploited is whether the charges to them exceed the costs of serving them alone. There are only two ways of ensuring that that stand-alone limit is not exceeded. One would be by direct regulation of the fare differentials – which we properly abandoned 23 years ago. The other, the only one consistent with deregulation, is freedom of competitive entry." [Emphasis added.]
26. An excerpt from the ad on p. A25B of the Wall Street Journal, July 9, 2001, reads: "Through the Power Your Way program, you can now buy electricity and gas supply directly from the energy services company (ESCO) of your choice. Shop around for savings, evaluate various ESCO offers, compare prices and find the energy supplier that best meets your needs."
27. "But industry experts say the public remains dissatisfied, still acutely conscious of delays. And the Air Transport Association, the trade group for the major airlines, is trying to shift attention away from calls for Congress to enact a ‘passenger bill of rights,’ and toward creating a national consensus for new runway construction. The airlines see that step as crucial to improving their on- time records in the years ahead, as air traffic continues to grow. The airlines and the controllers' union, the National Air Traffic Controllers Association, are drafting a letter to President Bush seeking a strong statement from him that building new runways is a national priority. John M. Meenan, vice president of the Air Transport Association, said the airlines would like Congress to create incentives for local and state governments, where authority for runway construction typically rests, to pay attention to the needs of the carriers and their passengers. One method, Mr. Meenan said, would be to threaten loss of federal highway funds for cities that will not build new runways that Washington thinks are needed. The controllers' union and the Air Transport Association will sponsor what they call a ‘summit meeting’ here on Thursday that will include an unusually broad group, including the biggest union of airline pilots and organizations representing airports, regional airlines, cargo airlines, owners of private airplanes and business airplanes, and aerospace manufacturers. The F.A.A. administrator, Jane F. Garvey, will give a speech praising the cooperation that has helped reduce delays this year, a spokesman for the agency said." The New York Times article, "As Flight Delays Ease Off, New-Runway Push Begins," July 26, 2001. It is doubtful that Ms. Garvey’s speech will mention that, if "cooperation, which now includes conference calls every hour among the airlines and air traffic control headquarters, has played a role in easing delays," then an obvious solution to delay problems is to allow natural consolidation of the airlines by getting rid of antitrust laws.
28. It is clear that competition and antitrust generally are significant drivers of danger in the skies. The primary problems are: 1) sloppy maintenance on the part of small or new airlines with little reputation stake to protect and a strong financial incentive to deliver cut-rate fares [The Wall Street Journal article, "Alaska Air Crash Probe Unearths Lapses in U.S. Design, Maintenance Regulation"], 2) the competitive pressure on all airlines to take off even in bad weather [The Wall Street Journal article, "Cold Calculation: Trial of a Sacked Pilot Offers Inside Look At Airlines Safety"], 3) the congestion that results from airlines listing more routes than can possibly take off on time just to keep the competition from listing those routes – such congestion leads to sometimes dangerous behavior on the part of outraged consumers, and higher chances of collisions in the sky and on the ground, 4) a flight coordination problem that is many times worse for the multiplicity of competing airlines than it would be for a few or one, and is clearly beyond the capacity of the Government’s air traffic control system to handle, 5) bureaucratic bungling and jealousies that prevent the adoption of simple and cheap radar systems, the lack of which has resulted in numerous in-air collisions and deaths involving small planes from commuter airports [The Wall Street Journal article, "Lost Horizons; Small Airports Covet Cheap Radar System, But the FAA Bars It; Midair Collisions Don’t Sway Agency, Which Supports A Costly New Technology," July 16, 2001]. All of these problems would be minimized if airline consolidation were allowed, such that a monopoly (or a cooperative cartel) could emerge with a reputation stake in safe, efficient and convenient air travel.
29. In an illustrative twist, Chevron, a supplier of one of those inputs, warned the State that, unless it were exempt from blackouts, it would reduce refining production in California. This might not only complicate the task of securing fuel oil as an electric power input, but could also cause gasoline and jet fuel prices in the State to soar. While Chevron’s case sounds compelling, the problem of trying to manage the catallaxy through political processes is complicated by the fact that there are many other applicants for exemptions. "Citrus farms, amusement parks and even tatoo parlors are among the 6,500 businesses that have applied for special status from the PUC." In addition, Chevron, by its own admission, does not meet the PUC’s criteria for exemption, namely that the business would "present ‘imminent danger to public health or safety’ " if it lost power in a blackout. Wall Street Journal article, "Chevron Warns California About Effects of Blackouts", June 6, 2001. Two days later (June 8, 2001) an article in the New York Times put the number of supplicants for exemptions from blackouts at 10,000.
30. Actually it’s not just big industries they go after; some of the industries they find in need of their competition ministrations include, according to University of Mississippi economist William F. Shughart II, "high-priced, non-ethnic frozen entrees"; "noncarbonated, ready to serve, naturally or artificially flavored fruit drinks, fruit punches, or fruit ades which contain 50 percent or less fruit juice and are customarily sold under refrigeration to the consumer"; "direct contract front-loaded trash removal in Dallas." Quoted in James V. DeLong, CEI's 1997 Antitrust Reader.
31. New York Times op-ed, "The New Laws of Nations," July 14, 2001.
32. That the choice is, indeed, based on a false distinction is hardly doubted anymore by anybody. In fact, the whole deregulation movement could be thought of as springing from a recognition that the dichotomy was false all along. Now the thinking is that we can just subject all of these industries to antitrust, even if they are natural monopolies.
33. The telecom stocks accounted "for more than 90% of the net loss in stock wealth in that period." The Wall Street Journal front page article, "Downed Lines; Telecom Sector’s Bust Reverberates Loudly Across the Economy; Impact on Jobs and Investors is Proving Much Bigger Than That of Dot-Coms," July 25, 2001.
34. "The endgame for these companies was always to sell out. Nobody was looking to run a telecom services company 15 years down the line. The money allowed companies to go out and build networks and go after customers in competition with the old-line telecom companies, which had networks that were 30 to 40 years old. The argument of the New Economy companies was that the Old Economy companies had the customers and the revenue base, but they didn't have the networks. The new guys said, ‘We can borrow money from the markets, build out the networks and then sell to the guys who have the customers’. . . A couple of things caused the endgame to fall apart. . . First, the big guys started consolidating. So, among the long-distance carriers and the Baby Bells, you came down from about 13 companies to seven. So, the number of potential buyers sharply contracted. And second, they borrowed more money to do this. . . Suddenly all these costs became a reality, and the bond market fell apart. . . It became apparent that the ability of the potential Old Economy buyers to take over the debt of the new companies had substantially deteriorated in the past three years." The Street.com Interview with Ravi Suria, April 2, 2001.
35. The New York Times article, "Second-Quarter Loss Hits $4.76 Billion at Corning," July 26, 2001.
36. The New York Times article, "Group Is Said to Accuse Pacific Bell of Monopoly," July 26, 2001.
37. The Wall Street Journal article, "That *%&#)@* Cellphone!" July 23, 2001. "Many customers wonder why service in the U.S. isn’t as reliable and seamless as in many other countries. One reason is that the U.S. system is a hodgepodge of different technologies and competing carriers. In contrast to the unified technology used in Europe, for instance, U.S. carriers employ several incompatible setups. It stems from the fact that the U.S. government let phone companies go their own ways. The result is that most phones need to work on two or even three different network systems. A user who places a call on a modern digital signal can end up being flipped to an old-fashioned, scratchy analog signal, or to a different flavor of digital. Maintaining so many technologies adds to the complexity and cost of providing adequate calling capacity in each community."
38. Ludwig von Mises, The Anticapitalistic Mentality, 1972.
39. Ludwig von Mises, The Anticapitalistic Mentality, 1972.
40. Karl R. Popper, The Open Society and its Enemies: Vol. 1 – The Spell of Plato, 1962.
41. James V. DeLong, Antitrust Law For Dummies – Guest Column, Tech Central Station, April 17, 2000. DeLong demonstrates that there are so many potential definitions of "competition" as often to render discussion of it, even in formal regulatory proceedings, confusing at best.
42. James V. DeLong, Property Matters, 1999. DeLong shows the many ways that property today is undermined by Government restrictions on its use.
43. The devastation wreaked on the cause of freedom by loss of the term "liberal" may be judged by Mises’ justification for using it in his 1966 Foreword to the Third Edition of Human Action, 1949. "First, I employ the term "liberal" in the sense attached to it everywhere in the nineteenth century and still today in the countries of continental Europe. This usage is imperative because there is simply no other term available to signify the great political and intellectual movement that substituted free enterprise and the market economy for the precapitalistic methods of production; constitutional representative government for the absolutism of kings or oligarchies; and freedom of all individuals for slavery, serfdom and other forms of bondage."
44. The Sherman Act, as quoted in Robert H. Bork’s The Antitrust Paradox – a Policy at War with Itself: "Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared illegal . . . Section 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be guilty of a misdemeanor."
45. Richard Pipes, Property and Freedom, 1999.
46. On patents, I agree with Rothbard, who would eliminate them. "[W]hile it is true that the first discoverer benefits from the [patent],it is also true that his competitors are excluded from production in the area of the patent for many years. And since one patent can build upon a related one in the same field, competitors can often be indefinitely discouraged from further research expenditures in the general area covered by the patent. Moreover, the patentee is himself discouraged from engaging in further research in this field, for the privilege permits him to rest on his laurels for the entire period of the patent, with the assurance that no competitor can trespass on his domain. The competitive spur for further research is eliminated." Murray Rothbard, Man, Economy and State, 1962. [Emphasis in original.]
47. "In case after case, scientists closely linked to profit-making companies are applying in the name of nonprofit institutes to obtain multimillion-dollar NIH (National Institutes of Health) grants. In some instances, the same person runs both a nonprofit institute and a for-profit company, and the entities share lab space, equipment and employees. Often, the two entities study the same diseases and drugs, with the nonprofit handling the basic research and the for-profit doing product development." The Wall Street Journal article, How Adroit Scientists Aid Biotech Companies With Taxpayer Money, January 30, 2001.
48. The drug companies say it costs them $500 million to develop each new drug. But a "report by Public Citizen puts the amount closer to $100 million." One big reason for the difference: "Taxpayer-funded research also cuts the cost and risk associated with developing new remedies." The Wall Street Journal article, "Drug Industry Exaggerates R&D Costs To Justify Pricing, Consumer Group Says," July 24, 2001.
49. Except for improvements due to such non-drug-related factors as less smoking and earlier detection, cancer rates have increased 6% since the "war" began. The New Yorker Magazine, The Thirty Years’ War, Jerome Goopman, June 4, 2001. In his article, Goopman expresses his suspicion that some earlier successes with other diseases were achieved precisely because there was no Government support for them.
50. The New York Times Sunday Magazine Cover Story, "A Wholesome Poison," June 10, 2001.
51. Wall Street Journal, front page article, Cystic Fibrosis Gave Up Its Gene 12 Years Ago; So Where’s the Cure? Medical Workers Gain Clues to Workings of Disease, But Most Are Dead Ends. June 11, 2001.
52. The New Yorker, The Thirty Years’ War, Jerome Goopman, June 4, 2001.
53. "Gleevec, the cancer therapy hailed as a wonder drug against certain types of tumors, turns out to have an Achilles heel after all: More than half of the late-stage patients with chronic myeloid leukemia who initially benefited from the drug have seen their cancer return within six months, an often fatal relapse." Wall Street Journal, "‘Wonder Drug’ For Leukemia Suffers Setback," June 22, 2001.
54. Laurie Garrett, Betrayal of Trust: The Collapse of Global Public Health. 2000. Some excerpts from chapter 4 illustrate the now well-known problem: "All evidence indicated that physician’s overprescribing antibiotics was driving up drug resistance, but years of successful American Medical Association lobbying had stripped public health authorities of all powers to affect doctors’ prescription practices." "When the legal authorities of public health were stripped during the mid-twentieth century, nobody anticipated that hospitals would become centers not only for disease treatment, but also for disease creation." "[Dr. Joshua] Lederberg had won a Nobel Prize for demonstrating how bacteria evolve, eluding antibiotics." "[He now says,] ‘We’re running out of bullets for dealing with these infections. . . Are we better off today than we were a century ago? In most respects, we’re worse off. . . Patients are dying because we no longer have antibiotics that work.’ "
55. Wall Street Journal, "Do No Harm – Doctor Creates a Rift With A Radical Notion: Prescribe Fewer Pills," June 22, 2001. "Dr. [David] Morris blames drug makers for America’s ever increasing proclivity for pills. With their legions of sale representatives, sponsorship of the vast majority of research and massive consumer advertising campaigns, the pharmaceuticals industry ‘is driving the practice of medicine,’ he says." The article says that prescription drug sales grew from $65 billion to $145 billion between 1995 and 2000, that prescriptions filled grew from 2 billion in 1990 to 3 billion in 2000, and that drug makers spent $2.5 billion on advertising in 2000.
56. The New York Times Sunday Magazine Cover Story, "The Claritin Effect," March 11, 2001.
57. The Atlantic Monthly Magazine article, "The Heavenly Jukebox," September, 2000.
58. Wall Street Journal, front page article, Cajun Influence, May 28, 2001.
59. J. Patrick Gunning, Understanding Democracy – An Introduction to Public Choice, 2001.
60. Jared Diamond, Guns, Germs and Steel: The Fates of Human Societies, 1999.
61. William McNeill, Plagues and Peoples, 1977.
62. This may sound absurd, but, according to Karl R. Popper, Plato, for one, and Marx, for another, did advocate just such deceptions. The Open Society and Its Enemies: Vol. 1 – The Spell of Plato, 1962. Also see Francis Jennings, The Creation of America, 2001, which, according to its cover, "reveals as war propaganda the revolutionary rhetoric about liberty and virtue."
63. Murray Rothbard, The Ethics of Liberty, 1982.
64. And Carl Menger, the founder of the Austrian School, is credited with developing the idea that property begins with scarcity. Later "Austrians" extended the concept to note that the more dense and complex an economy becomes, the more important the development of property rights to allocate the scarcities thereby generated. Carl Menger, Principles of Economics, 1871, and particularly the introduction to the 1976 English translation by Friedrich A. Hayek.
65. The New York Times op-ed by Richard Manning, "Destiny Revisits the Great Plains," July 10, 2001.
66. New York Times article, "Against All Odds, A Telecom Rebirth," July 15, 2001. The article describes the NextWave debacle, which, in addition to the problems described, is headed toward costing the taxpayer $14 billion: "And despite bitter differences, all sides agree that the main victims have been consumers. Clamoring for better cell phone service as the airwaves have become more crowded, they increasingly find calls dropped or not completed, a problem that could have been greatly alleviated years ago had the licenses at stake here been put to use by now." And "The company [NextWave] has become the nation's largest corporate political donor in recent years, and its lobbying operations are headed by James Cicconi, a former top aide to the first President Bush. It employs a huge group of inside lobbyists, outside lobbying firms and lawyers. Others opposing NextWave, like Verizon, Cingular, VoiceStream and Nextel Communications, have soaked up much of the remaining legal and lobbying talent in Washington. Industry lobbyists include a firm run by Anthony Podesta, brother of John D. Podesta, the former chief of staff for Mr. Clinton, and the firm formerly headed by Nicholas E. Calio, President Bush's top assistant for legislative affairs. A large number of former government officials now work for NextWave's competitors. NextWave and its allies also flexed political muscle. Their team includes Haley Barbour, a former chairman of the Republican National Committee, and Robert L. Livingston, the Congressman who was elected House speaker but resigned before taking the post when it was revealed that he had had an extramarital affair. The company and its allies, prodigious political fund-raisers, persuaded two Democratic Senators, Robert G. Torricelli of New Jersey and Charles E. Schumer of New York, to join three House members in filing a brief in the Washington appeal supporting the company." [Emphasis added.]
67. "The technological turmoil we are now undergoing is requiring us to rethink and refine concepts of intellectual property rights. Obviously, government must be heavily involved in this process. No matter what view one takes about the derivation of property rights, even if one believes that they are a product of natural law and not within the power of governments to withhold, governments must always define them at the margins and enforce them. This is especially true for intellectual property, which is more dependent on government than physical assets. Land or machinery exists independently, whatever a government says, and can be protected by fences and force, but a patent or copyright exists only within the context of a system of law." James V. DeLong, "Intellectual Property and Antitrust Enforcement"; House Oversight Hearing on the Antitrust Enforcement Agencies, April 12, 2000.
68. Article 61 of the Magna Carta (1215) moved significantly toward giving definitional power to the people, when it gave power to determine satisfaction in disputes with the Crown to the barons: "[I]f we, or our justice, or our bailiffs, or any one of our servants shall have transgressed against any one in any respect, or shall have broken one of the articles of peace or security, and our transgression shall have been shown to four barons of the aforesaid twenty five: those four barons shall come to us, or, if we are abroad, to our justice, showing to us our error; and they shall ask us to cause that error to be amended without delay. And if we do not amend that error, or, we being abroad, if our justice do not amend it within a term of forty days from the time when it was shown to us or, we being abroad, to our justice: the aforesaid four barons shall refer the matter to the remainder of the twenty five barons, and those twenty five barons, with the whole land in common, shall distrain and oppress us in every way in their power,--namely, by taking our castles, lands and possessions, and in every other way that they can, until amends shall have been made according to their judgement." [Emphasis added.]
69. For example, the step forward for freedom referred to in the previous footnote was soon reversed: "The famous clause, probably the contribution of Stephen Langton, then Archbishop of Canterbury, was subject to continuous attack by defenders of the royal prerogatives, and was omitted from later versions of the charter when the king regained power." William A. Niskanen, Cato’s Letter #14, "On the Constitution of a Compound Republic," The Cato Institute, 2001.
70. Richard Pipes, Property and Freedom, 1999.
71. Even in Russia, soon after Catherine the Great’s Noble Charter in 1785, Catherine and others were listening to the property-based economic theories of the Physiocrats, which had obvious potential beyond the upper classes. "Although Catherine applied the teachings of the Physiocrats only to the upper class, it did not escape her, and some of her more thoughtful contemporaries, that they were germane to peasants as well. From the middle of the eighteenth century voices were heard arguing that peasants would be more productive and tranquil if given freedom along with title to the land they cultivated. An international contest launched in 1766 by the St. Petersburg Free Economic Society on her initiative for the best response to the question whether the peasant should own land which he cultivated awarded the first prize to a Frenchman, Bearde de l’Abbaye, who answered affirmatively on the grounds that one hundred peasant-proprietors would outproduce two thousand serfs." Richard Pipes, Property and Freedom, 1999.
72. Friedrich Hayek and Bruno Leoni make the best arguments in this direction I have found. Leoni, in Freedom and The Law (1961), for example, says that in order for all new interpretations of law to be accepted universally by everyone, they must, from everyone’s perspective, prevent every person from doing anything that he would not want someone else to do to him. This "negative" Golden Rule allows for only a very slow evolution of law, because all laws must by common agreement be universally applicable to everyone, and always applied. This is what is meant by the Rule of Law, which evolves according to a common law process of passing every potential new interpretation by these principles, and results in universally accepted and acknowledged law. Both Hayek and Leoni warn, quixotically it seems, of the power of "legislation" to avoid this process and produce illegitimate laws that are not only not universally accepted, but are in the end not even accepted by a majority of the people to whom they apply.
73. The New York Times article, The World Gets Tough on Price Fixing, June 3, 2001. "The new policy made amnesty automatic if the company came in before an investigation began and permitted broad amnesty afterward to the first company to offer assistance. It also covered all executives from that company who cooperated, a significant inducement because violations of the Sherman Act carry a potential prison sentence of three years for every count, in addition to virtually limitless fines. ‘The amnesty program is the [antitrust] division's most effective generator of large cases, and it is the [Justice] department's most successful leniency program,’ said James M. Griffin, a deputy assistant attorney general in the antitrust division who heads its criminal enforcement office and plays the pivotal role of deciding which cases will be filed. ‘The program is unique,’ he said. ‘No other U.S. voluntary disclosure program offers as great an opportunity or incentive for companies to self-report and cooperate.’"
74. "The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing this strength and dexterity of his hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbor is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper. To judge whether he is fit to be employed may surely be trusted to the discretion of the employers whose interest it so much concerns. The affected anxiety of the law-giver lest they should employ an improper person is evidently as impertinent as it is oppressive." Adam Smith, The Wealth of Nations, 1776.
75. "[T]his capital has been silently and gradually accumulated by the private frugality and good conduct of individuals, by their universal, continual, and uninterrupted effort to better their own condition. It is this effort, protected by law and allowed by liberty to exert itself in the manner that is most advantageous, which has maintained the progress of England towards opulence and improvement in almost all former times, and which, it is to be hoped, will do so in all future times." Adam Smith, The Wealth of Nations, 1776.
76. James V. DeLong, Property Matters, 1999, and Richard Pipes, Property and Freedom, 1999.
77. The New York Times article, "Microsoft Case Back in Play, And the Lobbying Heats Up," June 30, 2001. In a vivid display of modern rent-seeking, the article says: "Microsoft has catapulted its political activities from a tiny Washington operation to one of the most formidable lobbying and legal powerhouses in town. In the last two-year election cycle, the company and its employees were the fifth-largest political donors in the nation, giving some $4.66 million, according to the Center for Responsive Politics, and another $12 million to lobbyists. By contrast, when the case began seven years ago, the company and its senior executives had given a total of $10,000 to the two political parties and $33,000 to federal candidates and had one lobbyist on the company payroll. Microsoft and its allies have hired a virtual dream team of lobbyists. They have included Haley Barbour, the former chairman of the Republican National Committee; Tom Downey, the former Democratic congressman from Long Island; Vin Webber, the former Republican congressman from Minnesota; Jack Quinn, the former White House counsel; Slade Gorton, the former senator from Washington; C. Boyden Gray, the White House counsel to former President George Bush and his law partner, Lloyd N. Cutler, a counsel to former Presidents Jimmy Carter and Clinton; and Ralph Reed, the former executive director of the Christian Coalition and an adviser to President Bush. On the other side, AOL Time Warner (which owns Netscape, the rival browser to Microsoft's Internet Explorer, and offers a number of other competing products and services) and its allies have spent comparable amounts and retained a list of luminaries. In the appeals case alone, the opponents of Microsoft retained three former United States solicitors general of widely different ideological stripes — Walter E. Dellinger III, Robert H. Bork and Kenneth W. Starr — and their large law firms to put pressure on the government to continue the lawsuit. In the last election cycle, AOL and its executives contributed nearly $2 million to federal campaigns and millions more in lobbying. Other Microsoft competitors have contributed nearly as much in political donations, evening the political matchup."
78. Robert H. Bork and Kenneth W. Starr, "Court Ruling Was No Victory For Microsoft," Wall Street Journal op-ed, July 5, 2000. The authors, often hailed as leading lights of the conservative movement, try to spin the issue against Microsoft with statements like "Microsoft’s bolting of its operating system and browser into a single package was an illegal tying arrangement." Several weeks later in a New York Times article (July 19, 2001, "Microsoft Asks for Reconsideration"), Microsoft was reported to be asking the Appeals Court to change its mind on its conclusion that " ‘such commingling has an anticompetitive effect’ [because] it deterred computer makers from installing browsers made by rivals." The company, perhaps put off balance by yet another word for the practice ("commingling"), said " ‘Microsoft believes the district court's finding [which the Appeals Court confirmed] on this matter is clearly erroneous.’ " Two weeks later the Times uses still another word for the practice in its report of the court’s rejection of the company’s request for reconsideration: "A federal appeals court refused yesterday to reconsider its ruling that Microsoft illegally blended Internet browsing software with its monopoly product, the Windows operating system." The New York Times article, "Court Again Rebuffs Microsoft on Bundling of Its Software," August 3, 2001.
79. Judge Thomas Penfield Jackson’s pique at the untrustworthiness of the Microsoft witnesses is a good example.
80. "In short, it is probable that private price-fixing agreements would be unstable when [a variety of normal conditions occur]. Any of these factors might be enough to limit successful price collusion. And, since a great many markets, at one time or another, display these various conditions, it appears reasonable to assume that generally successful collusion would be of minor proportions even without antitrust prohibition." D. T. Armentano, Antitrust and Monopoly; Anatomy of a Policy Failure, 1982.
81. "The fact remains that rivals can always attempt to compete in the tied-good market by simply lowering their prices in that market." D. T. Armentano, Antitrust and Monopoly; Anatomy of a Policy Failure, 1982.
82. "But whatever the answer in [the Microsoft] case, there is a growing realization among economists and technology experts that Microsoft may be only the most visible symptom of a problem afflicting the Internet economy. What troubles some observers of the world of Internet-enabled software and services – which marches to slogans like "get big fast" and "winner take all" – is that a number of factors make it a breeding ground for monopolies." The New York Times Week in Review article by John Schwartz "The Land of Monopolies," July 1, 2001.
83. Fred S. McChesney and William F. Shughart II, The Causes and Consequences of Antitrust, The Public Choice Perspective, 1995.
84. Actually, the Austrians have been ostracized right from the beginning, when Carl Menger and his followers in the latter decades of the 19th century developed models of human behavior based on subjective perceptions of value, such as might be determined by a good’s scarcity or its marginal utility. These theories lent themselves to explaining the patterns of economic activity and the shapes of economic institutions based on individual choices between alternatives, rather than on the more fashionable notion that the value of a good derived from the labor and/or capital applied to its creation. But if, as Menger believed, the actual value of a good had nothing to do with its historical origin, it followed that there was no benefit and probably much harm that would come from any positivistic attempts to measure and address "mis-allocations," "inefficiencies" and the like. Obviously, this didn’t sit well with interventionists, then or now. German economists of the dominant Historical School in Menger’s time were confident in their policy prognoses, and resentful of Menger’s implied criticism of their interventionism. Gustav Schmoller, the leading economist of the Historical School, "went so far as to declare publicly that members of the ‘abstract’ school were unfit to fill a teaching position in a German university, and his influence was quite sufficient to make this equivalent to a complete exclusion of all adherents to Menger’s doctrines from academic positions in Germany." Hayek’s introduction (1976) to an English translation of Carl Menger’s Principles of Economics (1871). One wonders if the full flowering of historical positivism in Nazi Germany shortly after Menger’s death in 1921 might have been mitigated if Schmoller’s ostracism of Menger’s disciples had not been so successful.
85. James V. DeLong online commentary in CEI Spin, June 28, 2001.
86. James V. DeLong, "Intellectual Property and Antitrust Enforcement"; House Oversight Hearing on the Antitrust Enforcement Agencies, April 12, 2000.
87. CEI On Point article by Clyde Wayne Crews, Jr., "Network Effects: Does Luck or Talent Rule the High Technology Market," Febrary 27, 1998.
88. Stan J. Liebowitz and Stephen E. Margolis, Winners, Losers and Microsoft: Competition and Antitrust in High Technology, 1999.
89. Wall Street Journal review of Winners, Losers and Microsoft by Lee Gomes, "Bookshelf: The Truth About Marketplace Battles," August 26, 1999.
90. New York Times article, "Microsoft Covered Cost of Ads Backing It in Antitrust Suit," September 17, 1999.
91. The unanimous opinion of the seven justices of the Appeals Court for the District of Columbia Circuit, decided on June 28, 2001, touched on the network effect issue as follows: "Rapid technological change leads to markets in which ‘firms compete through innovation for temporary market dominance, from which they may be displaced by the next wave of product advancements.’ . . . Microsoft argues that the operating system market is just such a market. . . . Whether or not Microsoft's characterization of the operating system market is correct does not appreciably alter our mission in assessing the alleged antitrust violations in the present case. . . . The issue is particularly complex because, in network industries characterized by rapid innovation, both forces [those that could justify tougher enforcement, and those that could justify more lenient enforcement] may be operating and can be difficult to isolate. . . . Moreover, it should be clear that Microsoft makes no claim that anticompetitive conduct should be assessed differently in technologically dynamic markets. It claims only that the measure of monopoly power should be different. For reasons fully discussed below, we reject Microsoft's monopoly power argument." [Edited for readability. Emphasis added.]
92. "And anything that a firm does to improve its products, extend its standards, or reach additional markets will look like an attempt to monopolize. It will look like and attempt to monopolize because it is an attempt to monopolize. But where standards or networks or other sources of increasing returns are sufficiently important, such actions might be socially desirable. In fact, these actions are the very things that allow more valuable societal arrangements – standards, networks and new technologies – to replace less valuable ones." Stan J. Liebowitz and Stephen E. Margolis, Winners, Losers and Microsoft: Competition and Antitrust in High Technology, 1999. [Original emphasis].
93. "Of recent fascination to physical chemists, biologists, and economists are nonlinear dynamical systems of the ‘dissipative’ or ‘autocatalytic’ or ‘self-reinforcing’ type, where positive feedbacks may cause certain patterns or structures that emerge to be self-reinforcing. Such systems tend to be sensitive to early dynamical fluctuations. Often there is a multiplicity of patterns that are candidates for long-term self-reinforcement; the cumulation of small events early on ‘pushes’ the dynamics into the orbit of one of these and thus ‘selects’ the structure that the system eventually locks into." "This lock-in-by-fluctuation to one pattern or structure out of several possible has parallels in thermodynamics, ferromagnetism, laser theory, and chemical kinetics, and in allele fixation through genetic drift." W. Brian Arthur, Increasing Returns and Path Dependence in the Economy, 1994. Excerpts from chapters 3 and 7.
94. Demonstrating that they haven’t changed their minds since the book came out, in a chat thread revealed on a Google search of "QWERTY, Network Effects, Lock-in" (1080 hits, July 16, 2001), Liebowitz says: "QWERTY economics is a new theory. The old theory generally worked pretty well. QWERTY aficionados believe we should have the government act on the basis of these theories. All we are asking is a single piece of support for the theory."
95. New York Times Op-Ed, "The Smell Test," by Paul Krugman, July 1, 2001. "Now for the bad news. Even as this case was working its way through the courts, Bill Gates and Steve Ballmer were still up to their old tricks. The next Microsoft operating system, Windows XP, contains Windows Media Player, which – unlike AOL’s RealPlayer – apparently will play music and video in Microsoft’s proprietary formats but not in those of competitors. Now I have generally felt that Microsoft gets a worse rap than it deserves, and I criticized Judge Jackson’s breakup plan from the start. But this looks like sheer arrogance – the sort of arrogance that got Microsoft in trouble in the first place. That arrogance is what drove Judge Jackson over the edge. He concluded that Mr. Gates and his friends could not be trusted, that they would always try to find a way around any court order that limited their conduct, and that the only way to enforce good behavior was a drastic "structural" remedy. It’s now up to Microsoft to prove that he was wrong. Otherwise, we’ll see them back in court – and the next judge will keep his mouth shut but carry a big stick."
96. ECNs are Electronic Communication Networks competing with the old stock exchanges. CLECs are Competitive Local Exchange Carriers competing with the old Baby Bells. ESCOs are Energy Service Companies competing with the old utilities.
97. In practice the monopolies resist the confiscation, often with considerable success. The Baby Bells with their last mile monopolies, for example, frustrate their wannabe competitors and regulators by being less than forthcoming in providing connections or reasonable in pricing them. But, in the end, Government usually gets its way by breaking up or threatening to break up the recalcitrant ones. In a telling role reversal, AT&T is now one of the supplicants begging for antitrust breakups to get a piece of a monopoly’s business. "Earlier this month, Republican Sen. Ted Stevens introduced legislation backed by AT&T Corp. that would break up so-called Bell companies such as Verizon Communications. A few hours after doing so, Mr. Stevens boarded a plane to his home state of Alaska for a fishing trip with AT&T’s chief executive, C. Michael Armstrong. Mr. Stevens’s support represents a rare success for AT&T in its struggle to forge closer ties with lawmakers and regulators as part of its campaign to break into the Bells’ markets. The long-distance company, seeking to enter a branch of familiar territory after a failed foray into cable, argues that the Bells unfairly dominate local telephone-service markets. AT&T and other Bell opponents propose a radical solution: splitting the Bells into separate retail and wholesale divisions, or even into two stand-alone companies." The Wall Street Journal article, "AT&T Ratchets Up Efforts in Washington Pushing Bell Breakup Plan," August 28, 2001.
98. "Robinson-Patman could be a key test case for pursuing reform of antitrust legislation." Clyde Wayne Crews, Jr., "The Antitrust Terrible 10 – Why the Most Reviled ‘Anti-competitive’ Business Practices Can Benefit Consumers in the New Economy," Cato Policy Analysis No. 405, June 28, 2001. [Emphasis added.]
99. "If that law is mistaken in its assumptions and further deformed in its application, as almost all respectable scholarship finds it [Robinson-Patman] to be, the needless deformation of market processes and the destruction of national wealth is enormous." Robert H. Bork, The Antitrust Paradox – A Policy at War with Itself, 1978.
100. Clyde Wayne Crews, Jr., "The Antitrust Terrible 10 – Why the Most Reviled ‘Anti-competitive’ Business Practices Can Benefit Consumers in the New Economy," Cato Policy Analysis No. 405, June 28, 2001. Robert A. Levy, senior fellow at the Cato Institute, "The Microsoft Moral – Repeal the antitrust laws, for starters," The American Spectator Magazine, May 2000.
101. The New York Times article, "2-Parent Families Rise After Change in Welfare Laws," August 12, 2001. Although the preliminary results imply strongly that, just as Welfare critics have always said, the payments were destroying families and creating a permanent, poverty-stricken underclass, the lesson drawn will almost certainly be that Government help in the transition to work and maybe Government "work" itself will be needed. The knee-jerk assumption that continued Government monitoring and assistance is needed to make workfare work will prevent any consideration of the obvious solution to the whole problem: eliminate all such programs entirely.
102. The New York Times article, "President Asserts Shrunken Surplus May Curb Congress" August 25, 2001. "Mr. Bush avoided specific answers to several questions about how he would find the money for his next big initiatives, from missile defense, to overhauling the military, to reforming Medicaid, without dipping into Social Security surpluses that both parties have declared off limits. And he made it clear he would not re-think his tax cut, saying, "I can't tell you how proud I am to be traveling around the country and people say, `Thanks for the $600.' ""
103. The New York Times op-ed by President Bush, "Stem Cell Science and the Preservation of Life," August 12, 2001. "Government has a clear duty to promote scientific discovery – and a duty to define certain boundaries: Under my policy, existing stem cell lines, to be used in publicly supported research, must be derived (1) with the informed consent of donors, (2) from excess embryos created solely for reproductive purposes and (3) without any financial inducements to the donors."
104. The New York Times article, "Abortion Foes Split Over Plan On Stem Cells; Bush’s Decision Divides Realists and Purists," August 12, 2001. " ‘The president’s position contradicts the Nuremberg Code,’ said Wendy Wright, the communications director of Concerned Women for America, a conservative public policy group. ‘We should be horrified at the prospect of participating in research on embryos who are deliberately killed for the same reason that we are horrified that gold fillings were taken from the teeth of Holocaust victims.’ "
105. The Wall Street Journal article, "Bioethics Appointee Says He Is No Indoctrinator," August 17, 2001. I take from the article that our new ethics czar, Leon Kass, likes to think of himself as hard to pin down on moral issues, probably making him the ideal appointment for an age of diversity and moral equivalency. His egalitarian credentials are burnished by his rationale for opposing public eating – "people who do it don’t usually offer to share" – and by his insistence that that view does not reflect any "aristocratic priggishness" on his part. Fairness fanatics will be further reassured by the fact that "In his earlier life, his sympathies were socialistic; in the mid-1960s he worked for civil-rights causes."
106. The New York Times op-ed by Bob Herbert, "High-Decibel Hate," August 20, 2001.
107. Friedrich A. Hayek, Law, Legislation and Liberty, Vol. 3, The Political Order of a Free People, 1979.
108. Friedrich A. Hayek, Law, Legislation and Liberty, Vol. 3, The Political Order of a Free People, 1979.
109. Bruno Leoni, Freedom and the Law, 1991, from lectures delivered in 1958.
110. Hayek’s Model Constitution would provide Golden Rule-like protection as follows: "the individual can be restrained only in such conduct as may encroach upon the protected domain of others, [and] he would under such a provision be wholly unrestricted in all actions which affected only his personal domain or that of other consenting responsible persons, and thus be assured of all freedom that can be secured by political action." Hayek makes the point that such a provision would render any list of specific rights, such as the Rights of Man or the Bill of Rights, entirely redundant and unnecessary. Friedrich A. Hayek, Law, Legislation and Liberty, Vol. 3, The Political Order of a Free People, 1979.
111. William A. Niskanen, "On the Constitution of a Compound Republic," Cato Institute, 2001. Niskanen is chairman of the Cato Institute and is a former acting chairman of President Reagan’s Council of Economic Advisers.
112. Not being a lawyer, much less a constitutional scholar, I may have gone overboard in my attempt to be brief. For example, I have assumed that what is meant by the word "law" is either already understood, or can be made so by external explanations of intent. If not, more detailed descriptions can be used. In any case, what I mean by "law" is law, rule or policy enacted or administered by any elected, appointed or otherwise duly constituted authority of any Federal, State, County, or Municipal Government or delegated agents thereof, including all departments, agencies, commissions and similar bodies. Similarly, what I mean by "alter" is have the intended, expected or actual effect of altering.
113. New York Mayor Rudolph Giuliani put the number of countries who lost citizens in the World Trade Center at 63 on Larry King Live, October 3, 2001. On October 4 the Wall Street Journal article, "In Attack on Terrorism, U.S. Has Early Priority: Managing Its Message," refers to a State Department Web site that pinpoints the location of 81 countries who lost citizens in all the attacks of September 11th.

114. From a U.S. Department of State report, "Erasing History: Ethnic Cleansing in Kosovo," May, 1999:

MARCH 24. Beginning on or shortly after the commencement of the NATO airstrikes, VJ forces reportedly joined police and paramilitary units in systematically expelling ethnic Albanians from both villages and larger towns. Population centers that had not been targeted before and had no KLA presence were now being emptied. Thousands of dwellings reportedly were looted and torched. Serbian forces allegedly significantly accelerated their large-scale confiscation and destruction of documents. Reports of atrocities increased significantly.

MARCH 29. By this time there were reports that the majority of the 1.6 million ethnic Albanians in Kosovo may have been displaced from their homes. Whole towns and villages had been emptied. UNHCR reports estimated that Serbian forces had forcibly expelled upwards of 70,000 persons into Albania over the weekend. Refugees reported the forced separation of military-aged men from groups, summary executions in at least 20 towns and villages, and the widespread looting and burning of homes."
115. The Atlantic Monthly magazine article by Samantha Power, "Bystanders to Genocide," September 2001. The article makes clear that the one time the UN and US could have made a positive contribution to the prevention of genocide, our feckless politicians flubbed it. So anxious were they to avoid a repeat of the Somalia debacle, that they pulled well armed UN troops out of Rwanda just as it became obvious that mass genocide by machete was about to occur. Led by the Clinton administration, the UN members on the ground gave political cover for each other and their retreating coalition by refusing to acknowledge that genocide was occurring, even though they clearly knew that it was.

116. The Atlantic Monthly magazine article by Samantha Power, "Bystanders to Genocide," September 2001.
117. MSNBC was already reporting concerns on September 29, 2001 that food intended for Afghan refugees would feed Taliban soldiers, not refugees. Similarly, it has long been clear that little of the medical and other humanitarian assistance intended for the people of Iraq has made it to its intended recipients, but has been shortstopped by Saddam’s legions. And US economic sanctions have hurt only the people of Iraq, not Saddam, while providing him with great material for propaganda to recruit Muslims worldwide to his cause.

118. Newsweek Magazine article, "A Dictator’s Dilemma," October 1, 2001. "By now, experts estimate that 30 percent of the officers [in Pakistan’s army] consider themselves fundamentalist Muslims." "If large-scale rioting were to break out in Pakistan as a result of U.S. strikes against Afghanistan, the Army might start to totter. That conjures up some scary possibilities. For one thing, imagine what bin Laden and his friends could do with Pakistan’s small but lethal arsenal of nuclear weapons." Also see the New York Times article, "U.S. and Pakistan Discuss Nuclear Security," October 1, 2001. "The focus of the discussions last week was on how to protect weapons and create a new layer of restrictions on personnel handling them. The fear is that if there is a sustained Western attack on Afghanistan, unrest could boil over in Pakistan. Those strains would be reflected in the Pakistan Army, experts say, and there is a threat that Afghan-sympathizers in the military might seize control of nuclear weapons in Pakistan."
119. The New York Times article, "Indonesia Radicals Issue Threats of Holy War," September 29, 2001. "‘As human beings, we are very, very sad about the deaths at the World Trade Center,’ said Mr. Siregar [who is said to have met Osama bin Laden]. ‘But we must take the analysis farther. What happened was the result of American policy that oppresses Muslims. This shows that arrogance will be punished wherever it is. Now America is confused, panicked, broken inside.’ Muhammad Naufal Dunggio, a researcher at an Islamic university who leads an allied radical group said he, too, had studied in the United States and had not liked it. ‘I lived in Virginia’ he said as recruits listened, ‘and I’m telling you, the American people, they do not like Muslims.’"
120. The New York Times article, "Bin Laden’s Journey from Rich, Pious Boy To the Mask of Evil," September 30, 2001. See also the Wall Street Journal article, "Saudi Role in Alliance Fuels Religious Tension In Oil-Rich Kingdom," October 4, 2001. "According to Saudi dissident Saad al-Faqih, real action [by the Saudis to help the US] would break one of the 10 cardinal rules of Wahhabism, under which supporting a non-Muslim against a Muslim is the equivalent of apostasy and deserves death."
121. According to FBI Director Robert Mueller on CNN on September 27 thirty FBI field offices had already opened a total of ninety hate crime investigations of alleged attacks on people that were (or were thought by their attackers to be) Arabs or Muslims.