The Freeman 1991

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164 Transforming the Command Economies Hans R Sennholz
Five steps for reforming Communist economies.
167 Germany: The Promise of Freedom Donald J. Boudreaux and Thomas K. Plofchan, Jr.
Does a reunified Germany threaten world peace?
171 Unsafe at Any Speed: The Case of Repetitive Motion Injuries John Hood
How regulation harms workplace safety.
173 Homosexuality's Legal Revolution Carl R Horowitz
Legal privileges can lead to dire consequences.
182 Should Government Subsidize Higher Education? James L. Payne
It's time to address some basic questions.
184 The Centre Square Water Works: A Monument to Govemment Inefficiency James A. Maccaro
Our first public works fiasco.
186 The Only Failure We Have to Fear Is the Fear of Failure Dwight R. Lee and Richard B. McKenzie
General economic failure stems from the fear of small failures.
189 The Locker Room Is Private Property Donald G. Smith
A business owner has the right to admit anyone he chooses.
190 Affirmative Disintegration: India's Most Dangerous Decade Shyam J. Kamath
"Affirmative action" sets off caste riots.
193 "Acting Black" Crushes Personal Spirit Jason D. Hill
Breaking the chains of racial stereotyping.
195 The Right Not to Live William B. Irvine
The right to die is an inherent part of the right to life.
196 Book Reviews John Chamberlain reviews The Conservative Constitution by Russell Kirk; Steven Yates reviews Unfinished Business: A Civil Rights Strategy for America's Third Century by Clint Bolick; William H. Peterson reviews The Greatest-Ever Bank Robbery: The Collapse ofthe Savings and Loan Industry by Martin Mayer.

1991 VOL. 41


Published by The Foundation for Economic Education Irvington-on-Hudson, NY 10533

President of The Board: Vice-President: Senior Editors:
Contributing Editors:
Copy Editor:

Bruce M. Evans Robert G. Anderson Beth A. Hoffman Brian Summers Bettina Bien Greaves Edmund A. Opitz Paul L. Poirot Deane M. Brasfield

The Freeman is the monthly publication of The Foundation for Economic Education, Inc., Irvington-on-Hudson, NY 10533. FEE, established in 1946 by Leonard E. Read, is a nonpolitical educational champion of private property, the free market, and limited government. FEE is classified as a 26 USC 501 (c) (3) tax-exempt organization. Other officers of FEE's Board of Trustees are: Thomas C. Stevens, chairman; Philip M. Spicer, vicechairman; Paul L. Poirot, secretary; Don L. Foote, treasurer.
The costs of Foundation projects and services are met through donations. Donations are invited in any amount. Subscriptions to The Freeman are available to any interested person in the United States for the asking. Additional single copies $1.00; 10 or more, 50 cents each. For foreign delivery, a donation of $15.00 a year is required to cover direct mailing costs.
Copyright © 1991 by The Foundation for Economic Education, Inc. Printed in the U.S.A. Permission is granted to reprint any article in this issue except "Transforming the Command Economies" and'" Acting Black' Crushes Personal Spirit," provided appropriate credit is given and two copies of the reprinted material are sent to The Foundation.
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Agricultural Policy
Agricultural policy in the United States is in a mess, to put it mildly. It is costly; it is controversial; it is counterproductive.
Federal income transfer payments to farmers have been at near record levels, but news stories persist of farm failures, pressures on agribusiness firms, and the need for new rural development initiatives.
Commodity group is set against commodity group as grain producers seek higher prices and livestock producers grapple with artificially stimulated feed prices.
Our grain and cotton producers are geared to produce for the export market, but they are tied to governmental price and production programs designed primarily for the domestic market. Their first market, too often, is essentially a government bin or a government warehouse.
In several states last year, farmers got more than half of their net cash farm in.come in the form of a government check....
It is instructive to note that only about 40 percent of U.S. farm commodities are under effective price support. Non-price supported commodities include cattle, hogs, poultry, fruits and vegetables and, until recently, soybeans. These commodities, in the main, have been profitable. They don't cost the Treasury large sums of money. Producers are free to expand or contract as they choose. They need not seek "permission" from the county ASCS office to plan the scope of their operation. They have expanded their markets.
The troubled areas are precisely those commodities that have had the largest degree of governmental price intervention. These include feed grains, food grains, cotton, peanuts, sugar, and tobacco. These are the commodities that have suffered market loss and have borne oppressive production and marketing controls.
Basic Observation: The higher the degree of governmental involvement in pricing and marketing, the deeper the economic pit in which the commodity wallows. -EARL L. BUTZ, Dean Emeritus of Agriculture, Purdue University. This is from a summary of his remarks delivered on July 28, 1990, in Abilene, Kansas.


Meeting of the Minds
Drink tea, and you give a friendly pat on the back to the people of India or Sri Lanka. Eat a banana and you stroke the people of Ecuador or Costa Rica. Bite on a bar of chocolate and you help add dignity to the people of Ghana or the Ivory Coast. Fly Lufthansa, Alitalia, or Japan Air and you advance our relations with our former adversaries' the once-Axis Powers of Germany, Italy, and Japan. Motor down the highway and you just may be something of a goodwill ambassador to Saudi Arabia, Venezuela, or Indonesia.
Even local frictions and antagonisms tend to be smoothed over and calmed down through marketplace voting. Catholics and Protestants trade with each other-i.e., vote for each other!-in Belfast, as do Malays and Chinese in Kuala Lumpur, Hindus and Moslems in Bombay, Arabs and Jews in Jerusalem, blacks and whites in Johannesburg. For to a very great extent, the marketplace is colorblind and bias-free in a one-on-one global meeting of the minds.
speaking at Gettysburg College, September 27, 1990
The Chess Men
Adam Smith, in The Theory of Moral Sentiments, compares central planners to chess players:
"The man of system ... is apt to be very wise in his own conceit; and is often so enamored with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices, which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chessboard have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two prin-

ciples coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all-times in the highest degree of disorder."
As we examine U.S. policy in the Middle East, Smith's words return to mind. Do not, in fact, State Department strategists view the Middle East as a giant chess-board, as they decide whom to subsidize, whom to arm, whom to attack, and whom to try to tum against whom?
Central planning has failed around the world. Trying to play chess with nations hasn't worked very well either.
Soviet Freedom of the Press
The current situation is that the state possesses a monopoly on printing presses, paper, and distribution facilities; and the success of a publication depends less on the marketplace than on its relationship with the state. Such freedom of the press is no more than a Soviet propaganda bluff unless the owners of new media enterprises gain entrepreneurial freedom. There is little point in having the right to reach a mass public without also having the right to organize the effort so that it can endure. A free press will not long remain free if its editions appear only on state paper and are printed only on state printing presses at the pleasure ofstate agencies. -ALEXANDER PODRABINEK, writing in the June 26, 1990, issue of the Express-Chronicle, a pro-democratic newspaper published in Moscow. Translation by the Center for Democracy in the U.S.S.R., 358 West 30th Street, New York, NY 10001.
Reader's Digest Reprints .China Article
"Kun Shou You Dou: Even a Cornered Beast Will Fight," by Marcella Smith, has been reprinted in the March 1991 issue of Reader's Digest. This article originally appeared in the December 1990 issue of The Freeman.
Freeman readers may obtain copies of the Digest version of the article by writing to FEE.


Transforming the Command Economies
Hans R Sennholz

T o transform a Communist system into a market order is like trying to reform a per. son suffering from alcoholism or drug addiction. The addict, knowing little of healthful living, has developed a multitude of physical and psychological deficiencies and dependencies. When he finally musters the strength for reform, he soon suffers the symptoms of withdrawal such as weakness, trembling, and mental· depression. The discomfort and pain then cause him to return to his addiction.
Despite all the talk about transformation to a market order, progress is lacking almost completely in the Soviet Union and is limited rather narrowly in the satellite countries such as Poland, Czechoslovakia, Hungary, Romania, and Bulgaria. Although most Communist leaders solemnly acknowledge that an eventual systemic change is necessary, they are afraid of many aspects of the market order of which they know so little. In particular, they are fearful of mass unemployment and other forms of "exploitation of the weak and poor" which, they are convinced, are clear results of capitalism. This fear is echoed by a diverse chorus of ex-Communists, socialists, social democrats, and erstwhile central planners who, despite their free market rhetoric, are addicted to the old order.
President Gorbachev and his followers are deploring the "extremely high costs" of transform-
Dr. Sennholz heads the Department of Economics at Grove City College in Pennsylvania.

ing the command economies. They are warning of the economic crashes and disruptions that "radical restructuring" is said to bring about. They point with alarm at Poland's gross national product which is reported to have declined by 16 percent since an economic reform program was initiated in January 1990; unemployment is said to have risen to one million, and goods prices allegedly outpaced wages by 35 percent. Wherever they look, they seek and find reasons or excuses for delaying and temporizing.
In reality, the costs and pains of transition are minimal provided the transformation is swift and comprehensive. When man is free to improve his well-being he does so without delay, even on the first day of reform. He does so in Budapest as well as in Moscow. Every 1990 reform that actually set him free, therefore, immediately improved his economic condition-no matter what the statisticians want us to believe.
The economic data that the Eastern European governments are so quick to release are flawed for a number of reasons. They rest on the spurious statistics of output and income of the prior command system which are compared with the real levels of productivity in the fledgling market order. Poland's 16 percent decline in GNP is calculated from pre-reform Communist statistics that were greatly overstated. After all, economic command systems, lacking the guidance of market valuation and pricing, always operate in the dark, unable to compare the value of input with the value of out-


put. Their production statistics include much physical but valueless output, such as clothing no one can wear or food no one can eat. Similarly, since the statistics of command production have to meet quantitative norms rather than produce valuable items for the market, they fail to allow for inferior product quality. And finally, Communist statistics are frequently based on faulty reporting-the embellishment of data to meet or exceed the expected quotas. The central authorities then further "improve" the faulty data for propaganda purposes.
Before Communist East Germany was reunited with West Germany, its per-capita GNP was reported at 88 percent of that of West Germany. Recent estimates suggest that the Communist figure was overstated by more than 50 percent. If this rate of overstatement holds true also in Communist Poland, the reported 16 percent decline in GNP since the inauguration of reform may actually signal a significant rise in production and income.
The unemployment statistics that frighten the reformers are equally misleading. They compare the rates of unemployment that become visible today with the make-work, featherbedding, and pay-without-work unemployment that is hidden in all political command systems. They reveal the truth that heretofore was hidden behind the veil of Communist fiction and probably indicate real improvement in productive employment.
Finally, the post-reform inflation that is laid on the doorsteps of the market order is completely misplaced. It actually springs from the hidden inflationary practices of the command regimes. When goods prices are set free after many years of command pricing, they immediately adjust to the true state of affairs. Soaring prices promptly remove the money "overhang" left by the previous system, solve the goods shortage that constitutes a money surplus, and eliminate the long queues of people waiting patiently to buy a few shabby items. The inflation the reformers lament clearly is the inevitable consequence of command policies.
Price inflation may also be the undesirable result of current money creation and credit expansion. The reformers, most of whom are ex-Communists and socialists, continue to wield complete control over their country's money and banking structure. For one reason or another they indulge in massive deficit spending which they easily

finance through the issue of large quantities of monopolistic legal-tender money. The subsequent rise in goods prices is foreseeable and unavoidable. Yet the reformers are quick to place the blame for the rise on the private-property individual-enterprise system.
Reform is a test of beliefs. It must be preceded by a profound acceptance of the values and principles of the market order. Otherwise, all efforts will be futile, and the new social and economic edifice will be built on the shifting sands of the command system.
Five Steps of Reform
To transform a Communist economy to a private-property economy is a formidable but tractable undertaking. The tractability requires five steps of reform that need to be taken simultaneously or in short order:
1) The Communist regime must relinquish direct and indirect control over the people's money and credit. The central bank that issues monopolistic legal-tender money must be abolished or, at least, be prevented from engaging in inflationary practices.
2) The regime must relinquish all manifestations of control over the capital market. Therefore, it must exert budgetary discipline and abstain from draining and mutilating the capital market.
3) All price, wage, and rent regulations, which are really people controls, must be abolished so that consumers rather than politicians and officials determine the mode of production and rewards. Free prices must be permitted to restore the link between consumers and producers and allocate income according to costs and productivity.
4) All means of production now owned or controlled by the regime must be privatized forthwith. They may be returned to the individuals and their heirs from whom they were seized or, if no heirs can be found, be distributed among the workers who use them. The new owners, in turn, must be free to sell their shares in the capital market.
5) To link the transforming economy to the world economy and to international competition, all import and export restrictions must be lifted and the people be permitted to exchange their goods and services with people everywhere.
To focus on one or another of these steps and exclude the rest is to invite failure and disappoint-

166 THE FREEMAN • MAY 1991

ment. It may even lend strength and support to the enemies of reform who would love to repair their power of command and restore the old system. All five steps need to be taken simultaneously or in short order so that the market order emerges unhampered and unimpaired and is permitted to function efficiently.
Omitting a single step may jeopardize the reform. The money monopoly in the hands of government is likely to lead to soaring inflation and monetary disintegration. Continuing control over the capital market may permit government to engage in massive capital consumption, to exhaust and deplete the market, and cause economic stagnation and decline. Price, wage, and rent controls would prevent the readjustment of production to consumer choices and preferences. Government

ownership of the means of production would con-

tinue to breed inefficiency and corruption and pro-

tect officials and servants from the fresh air of

competition. It would deprive the people of com-

petent services and burden taxpayers with the loss-

es incurred by the public enterprises. Finally, con-

tinuation of export and import restrictions would

deprive the people of the tremendous advantages

that flow from the international division of labor.

A move toward reform is simply the result of

ideas of reform taking hold on the mind. Such

ideas are burgeoning throughout the Communist

world, no matter what the detractors may do to sti-

fle them. Many mistakes are likely to be made on

the road to individual freedom and the private-

property order. Yet mistakes provide opportuni-

ties for learning and lessons in wisdom.


1990-91 Essay Contest Wmners
"A World Without Walls: Prospects for Freedom in Eastern Europe and China" sponsored by The Foundation for Economic Education
First Prize ($1500): Joel Frederick Kluender, University of Connecticut, Storrs, Connecticut, "The Prospects for Freedom"
Second Prize ($1000): Paul Cwik, Hillsdale College, Hillsdale, Michigan, "From the Tops of Mountains"
Third Prize ($500): Howard S. Hogan, Georgetown University, Washington, D.C., "The Rewards of Freedom"
First Prize ($1500 Scholarship): Ilya Somin, Lexington High School, Lexington, Massachusetts, "Freedom for Its Own Sake: Liberty and Eastern Europe"
Second Prize ($1000 Scholarship): Candi Delgatty, Jack C. Hays High School, Kyle, Texas, "Opening the Door to a Free Society"
Third Prize ($500 Scholarship): Laura M. Hertel, Brookfield Central High School, Brookfield, Wisconsin, "Free Market Incentives and Freedom"
Honorable Mention: Michael Saller, Glenbrook High School, Glenview, Illinois, "Ulrich"


Germany: The
ProlDise of Freedom
by Donald J. Boudreaux and Thomas K. Plofchan, Jr.

I n September 1990, less than a year after the Berlin Wall came crashing down but before the official reunification of Germany, we visited both West and East Germany as participants in the eighth annual Multiplikatoren Seminar. This seminar, which is sponsored by the West German government, brings together young American and German professionals in order to create personal, cultural, business, and intellectual ties between the United States and Germany. Of cou~se, the fall of Communism and the reunification of Germany dominated the discussions of the 1990 seminar.
Visiting Bonn and Berlin during this very exciting time in Europe's history provided unique insight into the events of the past year in Germany and in those nations that just recently escaped the totalitarian stranglehold of Communist rulers. This essay identifies lessons culled from our visit to Germany-lessons applicable both to emerging and to established democracies.
Lesson 1: Communism failed miserably.
Communism's failures are evident everywhere. The most memorable moments of our visit occurred in Berlin where, because West Berlin's hotels were still filled to capacity with refugees who had fled Communist rule, our German hosts put us up in East Berlin's Hotel Unter den Linden. This hotel is said to be among East Berlin's finest,
Don Boudreaux and Thomas K. Plofchan, Jr., are studying law at the University of Virginia. Mr. Plofchan is also a Ph.D. candidate in the Government Department at the University of Virginia and is the U. S. Director of the Multiplikatoren Seminar.

and indeed, East Germany's premier rock star was a guest while we were there. Upon arrival at the Hotel Unter den Linden we saw firsthand the glories of Communism.
The rooms in this hotel are about the size' of a large walk-in closet. We do not exaggerate. A bed here is nothing more than an elevated piece of plywood with an aged and thin pad laid across the top. The linen is threadbare and stained, as are the towels in the bathroom. Whenever a light is turned on, dozens of cockroaches can be seen scampering across the furniture and the floor. In one of our rooms, the window could not be closed, much less locked. Hot showers had to be taken no later than 6:45 A.M. because by 7:00 all the hot water is gone until mid-afternoon. Of course, less-than-Iuxurious hotels can be found in capitalist societies as well, but such hotels are never billed as being among the finest accommodations available.
Other aspects of our visit provide a more telling contrast between capitalist and Communist societies. Perhaps the greatest testament to Communist "efficiency" is the lack of technical services that citizens of capitalist nations take for granted. When one of us attempted to place a wake-up call to the other, whose room was two floors up, this proved to be impossible. Forget about direct roomto-room dialing; it doesn't exist. So the caller tried to place the call through the hotel operator (who, thankfully, spoke reasonably good English). The caller asked the operator to ring room 602. After several minutes of clicking and clanging, the operator apologized for not being able to complete the call. The operator calmly explained that the

168 THE FREEMAN • MAY 1991

"sixes" in the hotel's telephone switching system weren't working that day!
The lack of modern telecommunications was also apparent when trying to call outside the hotel. One member of our party, dialing direct from West Berlin, made a three-minute call to the United States. The price was $6.50. At the same time on the following night, this person placed the same three-minute call from our hotel in East Berlin. But because there is no direct dialing from East Germany to the U.S., the call was placed through the hotel operator. The price was $28!
Despite our hotel's shortcomings, it had the virtue of being located less than a mile from where the Berlin Wall once stood. (Incidentally, the official East German name for the Berlin Wall was "the anti-fascist wall of protection." The idea was that the Wall was protecting the citizens of East Germany from the capitalist hordes of the West.) Within minutes we were able to walk from ugly and poor East Berlin into attractive and prosperous West Berlin where even the third-class hotels appear to be immensely more comfortable and convenient than East Berlin's finest.
We spent a good deal of time walking between East and West Berlin. It did our bourgeois hearts good to stroll freely through Checkpoint Charlie-now nothing more than abandoned and dilapidated buildings. These buildings, however, still echo their horrible past when Communist border guards barked out commands and stood ready to shoot any East German for the crime of seeking to live as a free man or woman. These same border guards also caused Western visitors to East Berlin to undergo agonizing minutes (and sometimes hours) of interrogation and intimidation before being allowed access into the supposed workers' paradise of Communist East Germany.
But now, standing silent, the buildings at Checkpoint Charlie no longer house impediments to the movement of people and goods. The first time we crossed this former border we were overcome with elation at Communism's recent demise. Millions of people once held hostage in their own land are now free to go where they please, think as they please, work as they please, playas they please, and to own private property and contract freely with others. This thought was inspiring. However, the second time we walked through Checkpoint Charlie anger tempered our elation-anger at the thought of the atrocities committed by the border guards who not

so long ago occupied these crumbling buildings, and even more anger at the thought of the despots who gave authority to these guards.
Lesson 2: People who have experienced Communism prefer capitalism.
Of course, Checkpoint Charlie is not the only part of the Berlin Wall to have crumbled. The entire Wall is now all but completely down. In one of history's great ironies, the Wall is now being sold in pieces to Western tourists by Germans from the east, Poles, and Turks who operate unregulated stalls along its former path. In addition to selling pieces of the Wall, these upstart entrepreneurs are also quite happy to sell to the highest bidder genuine East German and Soviet army uniforms.
An anecdote aptly illustrates the new-found entrepreneurial spirit that for so long was suppressed by Communist government. As may not be known in the U.S., the western side of the Berlin Wall was covered with graffiti while the eastern side was bare. Since the revolution of November 1989, however, the market has revealed a greater demand for colored pieces of the Wall chipped from the western side than for bare pieces chipped from the eastern side. We witnessed entrepreneurs from the eastern section of Berlin approaching the eastern side of the Wall, spraying it with paint, and then chipping off pieces in order to better meet the demands of tourists. Innate entrepreneurial abilities are awakening at great speed in the formerly Communist section of Germany. It is significant that not only is Communist rule dead in Germany, but its symbols are being sold for Western currency in a very free and competitive market.
The overthrow of the Communist regime in East Germany allowed liberty and the free market to gain a toe-hold in East Berlin even before reunification had been officially achieved on October 3, 1990. In East Berlin, just a few yards from Checkpoint Charlie, a new Chinese restaurant recently opened. This restaurant looks like many of the Oriental eateries that are found in West Berlin and all over the free world. Its name is written in bright and bold neon; its interior decor is quite elegant; and its front door sports signs that proudly announce the restaurant's policy of accepting Visa, MasterCard, American Express, and Diners' Club credit cards.
In addition, just across the street from this restaurant is a newly opened travel agency. Dis-


Since the revolution of1989, the market has revealed a greater demandfor colored pieces of the Wall chipped from the westem side.

played in its window was a poster of a beautiful woman lying on the sands of a tropical beach. The poster advertises TWA flights to Hawaii. The travel agency also accepts all major credit cards. The new Chinese restaurant and the travel agency are solid evidence that capitalism has begun to creep into the eastern part of Berlin. It is only a matter of time before capitalism's creep will turn into a surge bringing greater prosperity and liberty to all the citizens of what used to be called the "German Democratic Republic."
Lesson 3: Rejuvenation cannot happen overnight.
Regardless of how bright East Germany's economic future may be, signs of its horrible centrally planned past remain evident. For example, under Communism's iron fist, only 7 percent of East German households had telephones. Though this no doubt will improve in the future, it currently is still quite difficult (as described earlier) to make a phone call from anywhere in East Germany. Another example of socialism's utter inability to provide for its citizens is seen in the bullet holes that today still mark many of East Berlin's build-

ings. These bullet holes-hundreds of them in each building-were put there by the invading Soviet army in 1945. Most of these buildings haven't been repaired, renovated, or even painted since World War II. The amount of capital required to bring this former "Communist jewel" up to minimum Western standards is awesome.
The East German automobile is evidence enough of Communism's grotesque inefficiencies, as well as of the effort required to establish a productive economy in eastern Germany. Called the Trabant, this car was nearly the only personal automobile found on East German roads during the three decades preceding the 1989 revolution. The Trabant looks like an early 1960s economy car. Trouble is, it is far from economical. Its selling price was equal to the average yearly wage for an East German worker. And the waiting list for a Trabant was approximately 10 years for citizens of East Berlin and 15 years for citizens of other parts of East Germany.
Once an East German finally acquired a Trabant, he needed more than 30 seconds to accelerate from zero to 60 miles per hour. According to Car and Driver magazine, this acceleration rate is


"slower than anything not rolling on eighteen wheels." A healthy Trabant's maximum speed is a measly 66 miles per hour. Also, in addition to being a pollution machine, the Trabant is dangerously unsafe.! A West German reported to us that, not long after the fall of the Wall, he was driving on a West German autobahn at night when he saw a flickering light just ahead. He slammed on his brakes. Moments later he realized that the flicker-
ing light he stopped to avoid was a lone candle in
the rear window of a slowly moving Trabant. The candle was serving as the Trabant's taillight! The Trabant undoubtedly makes even the worst American or Japanese car built in the past half-century look like an auto connoisseur's dream.
With production facilities capable of producing only the level of "quality" evidenced by the Trabant, much time, money, and effort must be expended before the eastern part of Germany will be able to compete with the West. Nevertheless, it is promising that eastern Germans now have the opportunity to compete without the heavy shack1es of Communism weighing them down.
Lesson 4: A reunified Germany poses no threat to world peace.
Although there are obstacles to overcome, the Germans want the citizens of other democratic countries to look favorably upon their reunified nation. They want non-Germans to understand that there is little threat of the rise of a militaristic German state. America and the rest of the world's democracies can trust a unified Germany because of two fundamental differences between today's Germany and the Germany of the pre-World War eras.
First, postwar Germany has joined the ranks of the world's most prosperous nations, and is integrated into the world economic order in a way that wasn't true during the first half of this century. Germany is a major exporter. Its economic prosperity is protected and furthered by production and trade with peoples of other nations. As long as Volkswagens and Braun coffee makers are crossing Ger-

man borders into other countries, there is little threat that Germany will send missiles and bombs across these same borders. No economically prosperous nation increases its wealth by bombing its trading partners.
Second, today's Germany is a constitutional democracy in which the military is solidly under civilian control, and a system of checks and balances characterizes the German federal government. Democratic nations with such constitutional safeguards are not likely to be militarily aggressive.
Because of these characteristics, which differentiate present-day Germany from its past, Germans realize that military aggression is unproductive and would only lessen the world economic influence that their post-World War II leaders have worked so hard to acquire. The not-uncommon suggestion that Germans are especially disposed to sacrifice their wealth and position in the world economic order because of some expansionist forces inherent in German blood is nothing more than a reflection of naive racism.

Conclusion: Germany's future is bright for Germans and for all free people.

Of course, the most direct beneficiaries of the

death ofSoviet-dominated Communism in Europe

will be the people who were prisoners of those

totalitarian regimes. But people from every nation

that trades with Germany and other former Com-

munist countries will have their lives improved by

the burial of Communism. Eastern Germany's

future promises hard work, to be sure, but it also

promises freedom and prosperity for a people who

have long been thirsting for both. In their attempts

to quench their thirst, former captives of the Com-

munist regime in eastern Germany will create

wealth and prosperity which, through their trading

practices with other nations, will be shared with the

entire free world.


1. Car and Driver, December 1990, pp. 89-cn. The quotation in the text is found on page 94. This article also reports the result of their Trahant road test. Not surprisingly, the car received an incredibly low score.

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The Freeman 1991