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The Tyranny of Controls
67
Freedom to own property is another essential part of economic
freedom. And we do have widespread property ownership. Well
over half of us own the homes we live in. When it comes to
machines, factories, and similar means of production, the situa-
tion is very different. We refer to ourselves as a free private enter-
prise society, as a capitalist society. Yet in terms of the ownership
of corporate enterprise, we are about
46
percent socialist. Owning
1 percent of a corporation means that you are entitled to receive 1
percent of its profits and must share 1 percent of its losses up to
the full value of your stock. The 1979 federal corporate income
tax is
46
percent on all income over $100,000 (reduced from 48
percent in prior years). The federal government is entitled to 46
cents out of every dollar of profit, and it shares 46 cents out of
every dollar of losses (provided there are some earlier profits to
offset those losses). The federal government owns 46 percent of
every corporation—though not in a form that entitles it to vote
directly on corporate affairs.
It would take a book much longer than this one even to list in
full all the restrictions on our economic freedom, let alone describe
them in detail. These examples are intended simply to suggest how
pervasive such restrictions have become.
Human Freedom
Restrictions on economic freedom inevitably affect freedom in
general, even such areas as freedom of speech and press.
Consider the following excerpts from a
1977
letter from Lee
Grace, then executive vice-president of an oil and gas association.
This is what he wrote with respect to energy legislation:
As
you
know, the real issue more
so
than the price per thousand
cubic feet
is
the continuation of the First Amendment of the Consti-
tution, the guarantee of freedom of speech. With increasing regula-
tion, as big brother
looks
closer over our shoulder, we grow timid
against speaking out for truth and our beliefs against falsehoods and
wrong doings. Fear of
IRS
audits, bureaucratic strangulation or gov-
ernment harassment
is
a powerful weapon against freedom of speech.
In the October
31 [19771
edition of the
U.S.
News & World Report,
the Washington Whispers section noted that, "Oil industry officials
claim that they have received this ultimatum from Energy Secretary
68
FREE TO CHOOSE: A Personal Statement
James Schlesinger:
`
Support the Administration's proposed tax on
crude oil—or else face tougher regulation and a possible drive to
break up the oil companies.' "
His judgment is amply confirmed by the public behavior of oil
officials. Tongue-lashed by Senator Henry Jackson for earning
"obscene profits," not a single member of a group of oil industry
executives answered back, or even left the room and refused to
submit to further personal abuse. Oil company executives, who in
private express strong opposition to the present complex structure
of federal controls under which they operate or to the major
extension of government intervention proposed by President
Carter, make bland public statements approving the objectives of
the controls.
Few businessmen regard President Carter's so-called voluntary
wage and price controls as a desirable or effective way to combat
inflation. Yet one businessman after another, one business organi-
zation after another, has paid lip service to the program, said
nice things about it, and promised to cooperate. Only a few, like
Donald Rumsfeld, former congressman, White House official, and
Cabinet member, had the courage to denounce it publicly. They
were joined by George Meany, the crusty octogenarian former
head of the AFL-CIO.
It is entirely appropriate that people should bear a cost—if only
of unpopularity and criticism—for speaking freely. However, the
cost should be reasonable and not disproportionate. There should
not be, in the words of a famous Supreme Court decision, "a
chilling effect" on free speech. Yet there is little doubt that cur-
rently there is such an effect on business executives.
The "chilling effect" is not restricted to business executives. It
affects all of us. We know most intimately the academic com-
munity. Many of our colleagues in economics and the natural
science departments receive grants from the National Science
Foundation; in the humanities, from the National Foundation for
the Humanities; all those who teach in state universities get their
salaries partly from the state legislatures. We believe that the Na-
tional Science Foundation, the National Foundation for the
Humanities, and tax subsidies to higher education are all un-
desirable and should be terminated. That is undoubtedly a minor-
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