Dollars Down the Drain; F. A. Harper

It has been said that everyone who works in the City of New York wants his bedroom to be as far from his place of work as he can afford. Far to the north in West chester County lies a typical village community among those near the fringe of possible commutation to New York. It is a pleasant little community, full of good coun try air and airy residences filled with kindly and pleasant people. But in this rarefied rural atmosphere a sewage disposal ce;crisis" has descended upon the good people who live there. The County Health Department has proclaimed that a serious pollution problem exists. Dr. Harper is a member of the staff of the Foundation for Eco nomic Education. [401 ] A disposal system to take care of the problem has been estimated to cost $3,400 per family. Though this is only one-tenth to one~sixth of the value of a common new residence in the area, and no more than the cost of a new car such as the residents frequently buy, the cost has been semiofficially declared to be unbearable" ."exceSSIve.

Aid as the Solution Now what is to be done when an irresistible economic force meets a near-empty pocketbook? Either the person must adjust his appraisal of what are necessities in his life, releasing funds to pay the cost of this particular "neceSSity," or he must find ways of reducing its cost to fit his budget without foregoing other ~~necessities." The first solution-doing without other things-is the more painful process of the two and is usually avoided or ignored if possible. The alternative, then, is either to find someone who will do the job more cheaply or do the work for oneself. But the ingenious residents of this particular commu nity, like their counterparts in untold others in the United States, have discovered yet another way to cut the costs: by obtaining federal aid. By taking the necessary steps to qualify, about one-third of the cost, or $1,133 per family, can be obtained from Uncle Sam. And then the remaining cost of providing this necessity, it is hoped, will be within the reach of these residents whose needs exceed their means.

[402 ] The procedure for federal aid is simple. The gravy train is already loaded, ready, and waiting. All the vil lagers have to do is to ask in the proper way, and it shall be given. If half or more of the residents want to set up the district and appeal for alms-about $100,000 in this instance-Uncle Sam is ready, willing, and waiting. Con gress this year has already appropriated $45 million for aid in such projects, and a bounteous $294 million of it has been allocated to New York. Source of Aid Since Heaven does not send showers of blessings in just this form, any thoughtful and curious citizen may ask: From whence cometh all these federal alms? He knows that Uncle Sam:>s pockets are notoriously full of holes and empty. These alms come from taxes, of course, which may be thought of as just an indirect way by which people pay their bills. There is no source of such governmental funds other than taxes. These are collected from the same villagers and their counterparts throughout the land. In the main, these taxes have to come from persons far less able to pay for such "necessities:>:>than are these particular villagers. They come in part from some poor Negro widow in Little Rock, Arkansas; from some poor orphan in Wyoming; from some young couple in Wood bine, Iowa, who are trying to save enough money to buy a small house of their own. Pepple of such circumstances will find in their tax bills an amount sufficient to allow [408 ] Uncle Sam to be generous and send the $100,000 to these folk.

But it's even worse than that, because while the tax money is .traveling from all these places to Washington and back again, much of it disappears as service fees under one name or another. Not too high a proportion ever gets back to these communities at all. The Service Charge To call this process "aid" is a careless use of language, indeed. When a banker takes a far smaller fee for handling our money and settling payments from one person to another, some are tempted to use harsh words about the banker and his fees. But when the government handles transfers of our money at a much higher fee, we accept it in common parlance as "aid," even com mending the government officials for their" good will and charity." It may seem that this one little project is a trivial mat ter, costing the average family in the United States only one-fifth of a cent. But precisely therein lies the danger. Each little piece added to our. tax bill seems too small to be worthy of concern. And though it is said to be done democratically, about the only people who concern themselves with it are the direct beneficiaries who vote on whether or not they will, in effect, pick the pockets of every citizen of the United States. If over half of the pickers approve, the picking becomes legalized and the policeman is assigned to protect the picker rather than the victim.

[404 ] Drops Make a River Yet we go on and on with projects of this sort. Just as drops of water make a Niagara, it is these little bits of tax added to other little bits which together comprise the terrific tax burden weare now being forced to bear. In the· current year, for instance, these federal grants to the states alone will amount to about $80 per family an increase from only about $30 per family ten years ago. And for next year the Administration has programs of this sort which will cost the average family perhaps $110. Every family, in other words, will have to pay the seemingly trivial separate costs of the equivalent of 55,000 such projects all over the United States-must, in other words, pay for about 200 of them out of its income every working day. The Losing Gamble Some persons understand the process well, however. Not everyone is fooled into thinking that he can win in this gamble at the roulette wheel of federal ((aid." In one other Westchestercommunity the question recently arose as to whether the school board should endorse an increase in government "aid" for the schools. The issue was acute in this community because, like so many others, it had foolishly overextended the citizens' pocket books in building some fancy new schools. The head of a well-known women's organization asserted that it was merely a question of whether "we in this community"

[405 ] will get more in state aid than we have to pay in taxes. In the gamble of government aid, of course, one com munity cannot possibly win except as another loses, even aside from the "house-take." The lady did not bother to consider the moral issue involved in forcing minority objectors to playa losing game which the majority de cides they shall play-a losing gamble called government 4:4:aid." Our moral code in this respect is not very consistent. When Jesse James robbed a bank for the necessities he couldn't afford, we took quite a different view of the matter. Even though a Jesse, the aggressor, votes a full 100 per cent in favor of the project, the rest of the citi zens deny him these acquisitive rights; they do not even allow him one single vote in the matter. Shouldn't we use the same concept in connection with federal aid? Why not in like manner put all such pro posals, like aiding this community in their sewage dis posal project, to the vote of all the citizens who will have to pay the bill? Why not disfranchise the pocket pickers, so far as voting on this matter is concerned? Why give the takers of the money all the seats in the court of justice?

Freedom Lost Highly important in this process is the loss of freedom involved. The citizens of these communities who by majority vote have thrown everyone's pocketbook into the gamble of federal aid may not realize the loss of [406 ] freedom till it is too late. If you go into a gambling casino with a few dollars and later depart with empty pockets, you still have your shirt and your trousers and your freedom. You are free to decide that you will never be a player in this losing game again. But how about federal aid? The law of the land,· as laid down by the Supreme Court, has decreed that you shall lose an im portant part of your freedom as well. Even the minority who objected but are forced to play the game lose their freedom along with the others. For the Court has said: It is hardly lack of due process for the Government to regulate that which it subsidizes.! This means that if federal aid is given for any such concern of your life, the government is thereby empow ered to control that part of your life.

In the light of all this, one wonders if a sewage dis posal problem is really the evil most to be feared. Per haps we should fear most the disposal of our money and our freedom through federal aid. For if this process of federal aid continues to progress as rapidly as it has in recent years, the time is fast approaching when we shall all be largely enslaved to the government. And slaves down through history have always suffered troubles which make our worst sewage problems trivial by com parison. Would you, for instance, knowingly sell a large degree of your freedom for a few dollars of "aid"? Suppose the 1 Wickard v Filburn, 317. U. S. Ill, October tenn, 1942. [407 ] offer were made clearly and in the open in terms of its reality; would you buy it? Would you buy the loss of freedom knowing that even on a purely cost basis the house-take is heavy and you are sure to lose? If we wouldn't buy enslavement as a total package, we shouldn't buy it in enticing little pieces under subterfuge.

[408 ] DO ANTITRUST LAWS PRESERVE COMPETITION? THE ANTITRUST laws are commonly thought to be the institutions that distinguish the economic system of the United States from the rest of the non-Soviet world. But for these laws, it is said, we should be plagued with cartelization as in Great Britain, Germany, or France. Many believe, in short, that the antitrust laws are re sponsible for our having a competitive society. Preserving competition might have been the objective about 1890 when the basic act was passed. But certainly for the past generation the antitrust laws have not func tioned to that end. Rather than preserve, they have through questionable interpretation and administration in fact impaired competition, by subsidizing and pre serving inefficient competitors. By competition, I refer to a situation that exists when the basic rules of the free society are observed-when Dr. Petro,Professorof Law at New York UniversitySchoolof Law, is author of numerous articles and books, the most recent being The Labor Policy of the Free Society (New York: Ronald Press, 1957). This article is a compressed transcript from an informal seminar discussion at the Foundation for Economic Education· in 1957.