All Commentary
Saturday, October 1, 1960

Keeping the Peace

Dr. Curtiss is a member of the staff of the Foundation for Economic Education.


The spotlight has been on rockets to the moon, outer space, and sum­mit meetings. But these bold head­lines divert our attention from im­portant things going on right in our front yard.

In the less conspicuous parts of our newspapers and magazines we read that crime is increasing at an alarming rate. J. Edgar Hoover says that since 1950, the crime rate has increased four times as fast as population. It has been es­timated that crime costs this na­tion some $22 billion a year—$12 for every dollar spent in our churches. Without going into tech­nical and legal definitions, crime is used here simply to mean the breaking of laws.

No doubt about it, crime is big business and a threat to our com­fortable way of life. Earlier this year, Life magazine carried a story on world crime that covered about pages in four issues. Investiga­tions are going on at all levels of government and the conclusion is invariably the same: Pass more laws; tighten up on law enforce­ment; expand the police force; give police more power; have the churches and schools instill more reverence for laws.

In contrast to these solutions, it is here suggested that much of to­day’s crime is directly caused by government action of one kind or another. In other words, the gov­ernment, whose function is to pro­tect life and property, to prevent fraud and stealing, to enforce con­tracts, and the like, in many cases actually promotes the very crimes it is supposed to suppress.

By nature, most men are law-abiding—they want to live ac­cording to the rules. Only a mi­nority are lawbreakers who seem to gain satisfaction by flouting ac­cepted modes of behavior. There comes a time, of course, when normally law-abiding citizens feel moved to violate laws which seem unduly oppressive. A classic ex­ample was the American Declara­tion of Independence. The colonists believed that men are endowed by their Creator with such unalien­able rights as life, liberty, and the pursuit of happiness, and that “whenever any Form of Govern­ment becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to in­stitute new Government…. Pru­dence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accord­ingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abol­ishing the forms to which they are accustomed. But when a long train of abuses and usurpations… evinces a design to reduce them un­der absolute Despotism, it is their right, it is their duty, to throw off such Government.”

The Declaration is quoted merely to show that lawbreakers are not always the thugs and gangsters commonly associated with the term.

Some Examples

A number of examples, some in the United States and some inter­national, will show that certain acts of government encourage criminal behavior as when the fol­lowing conditions prevail:

1. A product or service is des­perately wanted by some of the population.

2. A law prohibits free and open trade in the product or service.

3. A chance of a high profit from the trade if one is not caught by the police.

As a rule, the greater the pos­sibility of profit and the more severe the penalty if caught, the more likely are those in the busi­ness to be desperate and venture­some persons with few qualms about lawbreaking. The problem grades down to the very small pos­sible profit for a very tiny risk such as fudging on one’s income tax about how much went into the church collection plate.

A motivation back of these crimes is similar to that which moves honest men to become great merchants and industrialists. The hope for profits is a tremendous force which may be directed toward good or evil.’


A number of “crimes for profit” involve smuggling. According to the Life story: “More people are engaged in it [smuggling] than in any other form of international chicanery and, in terms of sheer dollar volume, no illegal practice in the world can match the total profits from smuggling. Wherever local regulations create the right conditions, there the smuggler can be found at work. Because of his activities, billions of dollars change hands each year, and sometimes the entire economy of a nation is seriously affected.”

Among the smuggled items are gold into India, chocolate from Switzerland into Italy, nutmegs, precious stones and jewelry, tropi­cal fish, refrigerators, television tubes, Salk vaccine, paintings and statues, U. S. cigarettes, coffee, gasoline, and people.

One can hardly be critical of the police whose job is to apprehend lawbreakers. One might be con­cerned, however, about laws pre­venting the free movement of goods and services. For example: An automobile may be purchased in Germany, taken to South Amer­ica, and sold for six to eight times its purchase price. Profits of this magnitude could not long continue in a free market. But, in this case, the South American government either wholly restricts imports of the German autos or levies an ex­orbitant duty on them. So, in order to take advantage of what appears to be a fine profit, the trader re­sorts to smuggling, and runs the risk of being caught and assessed a high penalty—a kind of business likely to be taken over by the so-called outcasts of society.

In an open society where there is relative freedom to engage in manufacturing, trade, or the serv­ice industries, there is a tendency for man to engage in those busi­nesses that appear profitable. Com­petition with others seeking the same ends assures reasonable prices and a modest profit for those who are most efficient. The profit motive is at work. While considered a noble force in the free market economy, the profit motive also may encourage men to break laws, in which case it becomes an evil force to be dealt with by gov­ernment.

The buying of a car in Germany and re-selling it in a South Ameri­can country would appear on the surface to be an ordinary transac­tion useful to all parties concerned. But, if the urge for profit leads to broken laws and smuggling, then it becomes a dirty business, en­gaged in by the underworld, a case for Interpol—International Police.

Smuggling occurs when a U. S. citizen returns from a trip to Canada with goods exceeding a certain value, which he has not de­clared and on which he has not paid duty. Though the law clearly defines this a crime, one may still ask why it is a crime to do that. And the same question might well be asked wherever smuggling oc­curs.


The prohibition of the sale of alcoholic beverages in the United States in the 1920′s is a classic ex­ample of how government inter­vention may increase crime. It is not our purpose here to pass judg­ment on the evils of “demon rum.” Certainly, intemperance takes many forms, and when associated with alcohol, it is demonstrably evil. How to correct such intem­perance is not being debated here. The point is that the attempt to control the situation by law was a source of a considerable increase in crime. Involved was a product many persons wanted. Some, who weren’t interested before Prohibi­tion, began drinking only because it was illegal or the “smart” thing to do.

When the transportation and sale of alcoholic beverages became illegal, this gave rise to the new and highly profitable trade of boot­legging. The profits were sufficient to cover the pain of getting caught. In fact, the potential profits were so large that an “underworld” was drawn into the business with rival gangs competing for the right to serve certain territories. Under such conditions, crime was ram­pant.

To make matters worse, many consumers thought the restriction violated their rights, and much of the law enforcement was only half­hearted. The setting was perfect for lawbreaking by consumers, for crime among the suppliers, and for corruption of the law enforcement agencies.

As is so often the case, once gov­ernment assumes responsibilities which individuals have theretofore assumed, the tendency is for in­dividuals to relax and assume the government will do the job. Before Prohibition, many educational forces in the country, including schools, churches, and the home, emphasized the evils of the exces­sive use of alcohol. Even with the repeal of Prohibition, these forces apparently have not regained their former effectiveness.

In looking back over the history of the United States, it appears that the advent of Prohibition brought a general winking at law violation that has since spread in­to other fields.

Liquor law violations did not end with repeal of the Eighteenth Amendment. It has been estimated that 55 million gallons of unlaw­ful hooch were produced by U. S. moon shiners during the past year, accounting for about one-fourth of all liquor consumed in the country. This illegal business grosses a fabulous amount of money and is said to be operated by organized gangs which means considerable crime.

What accounts for this illegal business that engages such a siz­able part of our law-enforcement efforts? The obvious answer is that avoiding the exorbitant tax on liquor yields such “profits” that lawbreakers are drawn into the business, much as they were dur­ing the days of Prohibition.

The tax on liquor is designed not so much to raise revenue as to regulate people. It has become so high a percentage of the selling price of the product that a high premium is placed on tax-avoid­ance.


It is not our intent here to pass judgment on the morality of gam­bling. The fact that gambling is the source of frightful tragedies in some families is too well known to require elaboration. Our point, rather, is that much of the crime associated with gambling stems from the government regulations surrounding the practice.

It may be inferred that the State does not consider gambling as such to be either immoral or harmful to its citizens, since it en­courages betting at race tracks. Nor are the organized churches unanimous in opposing gambling. In New York State some churches use bingo and other games of chance to raise money for their activities. A special license from the State is required, which fur­ther proves the point: The evils of gambling are removed if the State supervises it and gets a share of the proceeds.

There can be no doubt that some individuals have a tremendous urge to gamble, however foolish this may seem to others. If gam­bling is prohibited by law, ways will be found to circumvent the law. And persons will pay a goodly sum to wager, even though it is unlawful. As a result, it is highly profitable for “bookies” or others who handle bets to provide the ma­chinery for betting. The potential profits are sufficiently great to at­tract nefarious characters who are willing to risk the heavy penalties of getting caught.

Governor Rockefeller recently stated that illegal gambling is now big business in New York State, conducted by criminal syndicates which use the revenue for other or­ganized rackets. A special commis­sion to investigate gambling dis­closed that one ring in central New York grossed $250 million a year, had tie-ins in 14 states, and netted a profit of 10 per cent or $25 mil­lion. The chairman of the commis­sion testified that “huge profits from bookmaking led to their con­trol by organized criminal groups who too often can be found making substantial contributions to sym­pathetic public officials.” This un­savory situation was confirmed by the Superintendent of the New York State Police.

The commission concluded with suggestions for stronger laws, better-trained police, more severe penalties, more efficient court pro­cedures—in other words, more and better use of present methods of control. A more realistic apprai­sal of the problem by New York City‘s police commissioner Ken­nedy suggested that the citizens of the state are understandably con­fused when presented with our double standard with regard to betting. It is legal to bet on the horses at the track but illegal to bet away from the track.

What is needed, of course, is to remove the exorbitant profits which draw the underworld into illegal gambling. Some say that if we will just enforce our income tax laws, we will take care of the high profit motive in this business. True, once in a while an Al Capone will be caught by this method, but this is hardly a realistic solution for such a problem.

High profits stem from the laws against gambling; repeal of such laws would remove much of the cause of crime, reduce the costs of law enforcement, eliminate much of the prevailing corruption of government officials, and greatly help to restore respect among citi­zens for their government.


As a source of crime in the United States, the narcotics traf­fic is of first rank. Innumerable ex­perts—medical, social, religious, and economic—have written on the subject to little avail. Most of them reach the same conclusion: more laws and stricter enforcement.

The narcotics addict certainly merits the concern and pity of all, and particularly in a country where addiction is a crime. Our purpose here is to help reduce the incidence of addiction and the crime asso­ciated with the traffic.

Because much of the narcotics traffic in this country is illegal, many of the facts can only be esti­mated.

A Turkish farmer produces opium from poppy plants which he can grow legally. He receives about $500 for ten kilograms (22 pounds) which is worth some $16,­000 at dockside in New York. This amount in turn is “cut” and proc­essed to make 70,000 “fixes” of heroin (a derivative of opium) which will sell at around $5 each or a total of $350,000 in the illegal market.

Thus, the Turkish farmer re­ceives less than one cent for a product for which some teen-ager may eventually pay $5. The risk to the smugglers and handlers is great but the potential “profits” are enormous. The opium trade has been called “the cruelest busi­ness on earth.” “The criminal rings are masterminded by some of the most malicious characters on earth.” “The final result is always misery and devastation.”

Contrary to the beliefs of many, the actual use of most narcotics does not directly stimulate crime. In one of its most common forms, opium is a depressant; it induces sleep, allays anxiety, and relieves pain. In countries where it can be used legally, an addict may be per­fectly respectable and pursue a fairly normal life. It is said that crimes are rarely if ever commit­ted by persons under the influence of heroin. It is the dread of with­drawal symptoms which enslaves one to the drug.

In the United States, the use of narcotics is generally illegal, and the crimes are committed to obtain money to get the drugs.

It is said that the use of heroin is so habit-forming that an addict will risk his life to get a single “fix.” Couple this with the rela­tively high price he must pay and it is understandable why crime goes with the drug traffic. It is re­ported that addicts need from $20 to $100 a day to satisfy their crav­ings. Few employed persons could afford this, to say nothing of the unemployed teen-agers and the unemployables among the addicts.

No wonder, then, that such crimes as stealing and prostitution are committed by narcotics users. These, however, are petty crimes compared with the criminal activi­ties of organized rings, under­ground smugglers, and others who market the product and compete for territories to serve.

The creation of new addicts is a business in itself. The profits to the “pusher” are so high that he constantly seeks new customers. Once a new customer is “hooked,” he becomes a slave to the pusher. To get money for his daily “fix,” he may become a pusher himself. And so, the vicious circle continues.

The number of addicts in the United States is unknown, but the U. S. Bureau of Narcotics esti­mates 46,000, nearly half of whom are in the New York area, and more than half of whom are col­ored persons.

A person is listed as an addict once he has run afoul of the law. And, of course, many are not caught. The New York City May­or’s Commission on Narcotics esti­mated 90,000 addicts in New York City alone. A president of the Medical Society of the City of New York said that 200,000 is probably no exaggeration for the number of addicts for the country as a whole.2 Prior to 1925, with the passage of a federal law prohibiting the im­portation and manufacture of heroin in the United States, even for medicinal use, heroin was hardly used by addicts. Now, about 86 per cent of those apprehended are heroin users.

The United States is said to be the best market for dope in the world. By contrast, France and Italy report little addiction, de­spite the fact that much of the drug traffic goes through these countries. Some might conclude that our wealth accounts for the great market here; where else could persons afford $100 a day to support the habit? But since the addicts are not necessarily the wealthy, such an explanation is too simple. One must look behind this to the laws which relate to the traffic.

Much serious study has gone in­to methods of treating narcotic addicts. This is certainly impor­tant. Smuggling of narcotics is given great attention by national and international police. The crimes associated with drug traffic and the treatment of addicts are a tre­mendous expense, to say nothing of the heartbreak and anguish of ruined lives.

A solution, rarely mentioned, is to take the profit out of dope traf­fic. This would quickly eliminate the criminal rings of smugglers and handlers and the “pushers” who live by creating new addicts.

The disadvantages of addiction ought to be known by everyone, and especially young people. With an educational system that reaches practically every teen-ager in the United States, it should not be dif­ficult to accomplish this.

Price Control

Those who remember price con­trol and rationing during World War II will remember that black markets and crime accompanied them. Little of this remains today, but we still have rent control in some areas. The result is some form of rationing of space along with inadequate maintenance and servicing of the property by owners.

Whenever an item is priced, by law, below the figure derived by willing buyers and sellers in a free market, there is certain to be a shortage of that item. In that case, people have more than enough money to spend on that item to clear it from the market. So some method of rationing must be used to allocate the supply. If it is ra­tioned by tickets, there is always the temptation to cheat or steal or seek favoritism from the rationing board. The amount of crime will be in direct relation to the poten­tial “profits” from dealing outside the law.

Tax Evasion

Most persons would look on tax evasion as a minor crime and so it would appear unless one could clearly see the ramifications and tragic effects extending through time.

Historically, most American peo­ple are law-abiding and willingly pay their taxes, even while grum­bling a bit. A sizable portion of our taxes are hidden in the price we pay for things, and if we don’t know, we don’t grumble.

More than one-third of the in­come of most of us now goes for taxes. This affords considerable in­centive for tax-avoidance and a great deal of time, effort, and money is spent in figuring either legal or illegal ways to cut down the take.

While some may think it smart to cheat on taxes, the effect on that person’s character can be tre­mendous. How will a child react who knows his parents fudge on their income tax return? How much juvenile delinquency may be traced to a home where it is “smart” to get away with what­ever one can?

It has been reported that Inter­nal Revenue has paid out $3,000,­000 over the past five years in in­former fees—to persons who “tat­tle” on persons they think have lied on their returns. One man was reported to have turned in his brother because the brother re­fused to contribute to the support of their father. Another case in­volved a young woman who paid an abortionist $75 for an illegal op­eration that was not effective. In spite, and on a hunch, she reported her doctor to Internal Revenue and he was allegedly fined $125,000 and sent to jail.

A society which encourages cheating, informing, and the like is well on the road to moral de­gradation.


In the days when most govern­ment income was collected and spent locally, citizens were able to keep fairly close watch over ex­penditures. Besides, the total amount collected by all govern­ment agencies then amounted to less than 5 per cent of total in­come. Now, with governments tak­ing more than one-third of the in­come—the largest share going to Washington, and billions spent all over the world—it is no wonder that crimes frequently involve politicians and government offi­cials. The power that goes with the control of money in such vast amounts is a great temptation. Mink coats, deep freezers, padded expense accounts, and the like un­doubtedly are minor items.

In spite of repeated attempts to curb it, “patronage” continues to grow as government gets bigger and bigger. And how could it be otherwise? Government, among other things, is today a huge busi­ness, handing out contracts, award­ing franchises, and filling jobs of influence all over the world. These are often rich rewards for favors conferred. It is not surprising that crime finds its way into such an arrangement.

Government has conferred on labor organizations and their lead­ers tremendous political and eco­nomic power. It would be strange indeed if crime did not accompany efforts to grasp and wield this power.


Various types of welfare pay­ments—”something for nothing”—encourage crime in varying de­grees. For example, to remain eli­gible for low-rent housing, a fam­ily may lie about its gross income. Welfare payments to unwed moth­ers encourage the birth of children out of wedlock and discourage thrift and self-sufficiency. Workers are tempted to collect unemploy­ment benefits while on vacation and Workmen’s Compensation for questionable injuries. School chil­dren receive “free” books and other equipment, and miss the lessons of proper care of personal property. Many students take education for granted, because it is free, and waste their own time as well as that of teachers and serious stu­dents.

There are so many ways in which the “something for nothing” philosophy has permeated our lives. One could hardly call it a major source of crime, but any­thing which encourages lying and discourages thrift and self-suffi­ciency must certainly be listed among the causes of the moral breakdown of our society.


Practically everyone is alarmed over the increase in crime in this country and elsewhere. Much of it is highly organized and truly ter­rifying. The story of “How We Bagged the Mafia” told to Stanley Frank by Milton R. Wessel, and published in two issues of the Saturday Evening Post during July 1960, will convince the most naive that organized criminal gangs operate on a big scale, in deadly earnest, and are deeply en­trenched.

Whenever a crime is threatened or committed, the usual response is: “Call a Cop!” But in spite of more laws, more police, and heav­ier penalties, crime seems to be on the increase. Why? And what can be done about it?

In 1956 a Federal Narcotic Con­trol Act imposed heavier penalties with imprisonment up to 20 years on first offenders in dope cases. Mr. Wessel says that this con­vinced the Mafia that they should get out of the dope business and concentrate on gambling. This probably would serve only to shift the traffic from one gang to an­other. When a noted medical doc­tor reports: “Heroin addicts will obtain heroin, ban or no ban,” then it becomes imperative that we seek another remedy.

It is contended here that much of the increase and severity of crime in this country is brought about by unwise legislation which aggravates the problem rather than alleviates it. This is not a proposal to get rid of all police­men and all government. It is properly the function of govern­ment to defend the lives and prop­erty of all citizens equally; to sup­press and penalize all fraud, all misrepresentation, all violence, all predatory practices; and to invoke a common justice under written law.

Neither is it the purpose here to disparage honest law enforcement officers, scientists, and researchers sincerely interested in reducing crime and in contributing to the general welfare of individuals.

Rather, the point here is that in several important instances gov­ernment has created its own en­forcement problems by passing laws which actually encourage rather than decrease crime.

When government passes a “thou shalt not” law and at the same time creates a situation where violators (if not caught) stand to make enormous profits, then an increase in crime can be expected. Glaring examples in­clude:

1. Extremely high taxes on liq­uor which foster bootlegging;

2. Import duties, quotas, restric­tions, and other barriers to for­eign goods which encourage smug­gling;

3. Promotion and prohibition of gambling by the same unit of gov­ernment, with heavy penalties and huge profits for illegal promoters;

4. Taxation in such amounts and with such complexities as to place a high premium on dishonesty and tax-evasion;

5. Outlawing of the narcotic trade, which makes it highly prof­itable for suppliers and pushers and expensive for users, with re­sultant crime, including the cor­ruption of police officials.

In general, the greater the expansion of government through the Welfare State, the more its citizens will rely on “something for nothing,” and the greater is the temptation for some individuals to accomplish their objectives through deception, stealing, and other forms of violence.

Individuals and families may be harmed in a great many ways. Of course, it is foolish to gamble or to use narcotics. But it doesn’t nec­essarily follow that the State should pass laws against such foolishness. One may also be harmed by overeating, by lack of sleep, or in innumerable other ways, against which we have no protective laws. Not only would such laws be ineffective, but, as shown in connection with gambling and the narcotic trade, the laws themselves set the stage for crime which may be far worse than the practice that is forbidden.

As a rule, no others are more seriously and sincerely interested in the welfare of children than are their parents. From the very be­ginning, they try to instruct the children in proper conduct. As a child gets older, he may be influ­enced by his school, his church, and by other families in the com­munity. It would appear that the amoral State would be the last place one would turn for guidance in conduct. Nevertheless, that is exactly what we do in much of our crime-prevention activity. Not only does the State pass judgment on what is right and wrong, but in some of the instances discussed, creates a situation where crime is practically assured because of the potential profits available to the lawbreakers.

The solution then is to remove the temptation of very high profits for engaging in illegal business. This means restricting govern­ment to its proper function of pro­tecting life and property and in­suring equal justice under law for all individuals. It means the return of moral problems to individuals and families, or to other agencies of society like the church and the school, where these problems can be handled in an intelligent man­ner.


1 “Profits” include all sorts of satis­factions and not only monetary or ma­terial gains. In the nonmaterial area, some men gain great satisfaction from having power over others—in enslaving their fellow men. Such a drive must have played an important role in the lives of Napoleon, Hitler, Stalin, and many others. At the other extreme, we find a Schweitzer, a Pasteur, a Gandhi, and numberless unknown persons whose prof­its come from serving others.

2 Berger, Dr. Herbert. “Addiction Is An Illness” in The Freeman, October 1956.



Ideas on Liberty

Lord Lyttleton

To argue against any breach of liberty from the ill use that may be made of it, is to argue against liberty itself, since all is capa­ble of being abused.

  • W.M. Curtiss served as executive secretary of The Foundation for Economic Education (FEE) in Irvington, New York.