Market Correction

7 October 2007

Editor, The Washington Times

Al Eisner asserts that undocumented immigrants come to America "for their own economic gains and greed" and "do not contribute to [Montgomery] county in any way" (Letters, October 7).

I recommend to Mr. Eisner a book by Adam Smith entitled An Inquiry Into the Nature and Causes of the Wealth of Nations. In it, the late Professor Smith explains compellingly that voluntary exchanges in market economies generate greater prosperity for all parties to the exchanges even when each party pursues only his own gain.

To allege that immigrant workers in Montgomery County contribute nothing is to allege that their employers are economic imbeciles who pay wages and, in return, routinely get nothing. Were I a resident of Montgomery County, I'd be insulted by Mr. Eisner's low opinion of me and my neighbors.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

6 October 2007

Editor, Reason

I enjoyed Jackson Kuhl's review of books on alcohol prohibition ("Eight Million Sots in the Naked City," November). Greater wartime centralization of power in Washington, along with hostility to the Irish and Italians, surely helped fuel Uncle Sam's willingness in the 19-teens to declare alcohol verboten.

But the spark that ignited prohibition goes unmentioned by Mr. Kuhl and, apparently, also by the authors whose books he reviews. That spark was the national income tax. Prior to the 1914 creation of this tax, taxing alcohol was second only to taxing imports as a chief source of federal revenue. So when, during WWI, the income tax proved to be a revenue-gathering megastar, Congress finally could afford to cave in to the dry lobby. Sacrificed liquor-tax revenues were by 1919 only a tiny portion of the budget.

By 1933 - the year Congress successfully proposed repeal of the prohibition amendment - the revenue situation was reversed. In that Depression year, income-tax revenues had toppled by more than 60 percent from their 1930 level. Addicted to revenue, Uncle Sam ended prohibition so that he could again tax alcohol.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

5 October 2007

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

David Brooks writes that "Neoconservatives...built a creed around the words of Lincoln and the founders" ("The Republican Collapse," October 5). Lincoln, perhaps. But Mr. Brooks too hastily accuses America's founders of being proto-neocons. In his Farewell Address, George Washington advised that "The great rule of conduct for us in regard to foreign nations is, in extending our commercial relations to have with them as little political connection as possible." Washington then asked rhetorically "Why quit our own to stand upon foreign ground? Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor, or caprice?" Thus did this founder counsel against foreign entanglements. And his advisor and father of the Constitution, James Madison, warned that "Of all the enemies to public liberty war is, perhaps, the most to be dreaded."

We can only despair that neocons embrace policies quite at odds with the founders' creed of neutrality and non-intervention.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

4 October 2007

Editor, Washington Post
1150 15th St., NW
Washington, DC 20071

Dear Editor:

I enjoyed George Will's portrait of economist Austan Goolsbee ("The Democratic Economist," October 4). But in that portrayal Mr. Will mistakenly identified the late Milton Friedman as a conservative. Throughout his career Friedman explicitly rejected that label. He insisted, rightly so, that he was a classical liberal - someone who understands that individual decision-making within a regime of private property rights produces maximum, wide-spread prosperity and, more importantly, best enables each of us to pursue our own goals in our own ways.

Because
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University