V. Orval Watts, one of the leading free-market economists of the World War II and post-war eras, died on March 30 this year. When I first met him, in the winter of 1947, he was a leading economist at the Foundation for Economic Education (FEE), the only free-market organization and think-tank of that era. He was a pleasantly sardonic man in his late forties.

Given one set of ideas, a man may starve himself to death or throw himself before a speeding train. Given other ideas, he may work from dawn to dusk for a pittance.

For man is a creature of ideas. “As he thinketh in his heart, so is he.” What he does today depends on what he thought yesterday. What he may do tomorrow depends on what he thinks now and will think then. Soldiers fight the wars that make headlines, but back of the men of force are thinkers and talkers who tell them whom to fight and when.

UNTIL THE end of World War II, the most widely used economics textbooks in America were still in the classical tradition. They taught that free enterprise was a workable system. It had its faults, they said, such as inequalities and monopolies, but at least it gave us a maximum of individual opportunity and economic progress.

What is this thing called “freedom”?

SINCE KEYNESIANS advocate so many forms of government intervention in the name of “full employment,” it is not surprising to find them favoring it for other purposes. If government should take a man’s earnings because he wants to save too much, why should it not take them on the ground merely that someone else needs or wants them? If government should build power plants to give employment, why not also railways and steel mills? Economists of the new order can only echo, “Why not?”

IN ITS ESSENTIALS the so-called “new economics” is almost as old as the use of money. Again and again it has been used to justify government extravagance and to defend schemes for debasing the coinage or inflating the currency. It was the theory John Law persuaded the government of France to let him try out in the early 18th Century. The result was the Mississippi Bubble, the best-known boom and bust of recorded history up to 1929. In the 19th Century, Lauderdale, Malthus, Sismondi, and J. A.

IT IS A FALLACY that government, which is an agency for coercion, can manage the economic affairs of its citizens. This is what the Keynesian economists propose it do in carrying out a “compensatory fiscal and monetary policy.” In determining the amount and use of currency, government dictates changes in the opportunities and rewards for the individuals using the currency.

ACCORDING to one school of thought, government (or “society”) creates individual rights, and what government creates it may destroy.

SOME PERSONS argue that the Keynesian theory is useful in business forecasting, especially in our present managed-currency world, even though it is unsound as a basis for government policy.

I believe this is a fallacy.