THE NEWSLETTER OF THE MACKINAC CENTER FOR PUBLIC POLICY • FALL 1998

President’s Message ........ 2

U. S. Supreme CourtAgrees with Center ......... 3

UTTC Heads for Ballot .... 5

Media Impact ................. 5

New Advisory Boards ...... 6

Quality ScholarshipGuaranteed .................... 7

Gelman Supports NewInitiative ........................ 8

Lead by Example ............ 8

Contents:Contents:Social Role of PropertyRights ............................ 9

Free Market Bookstore .. 10

Upcoming Events .......... 11

FEE Chooses Reed ........ 12

new MackinacCenter for PublicPolicy reportcalling for stronger

protection of citizens againstgovernment seizures of theirproperty has drawn praisefrom Republicans and the U. S.House Judiciary Committee’sranking Democrat, MichiganCongressman John Conyers.

The report, written byMackinac Center AdjunctScholar Donald J. Kochan, J. D.,cites abuses of laws thatallow the state and federalgovernments to seize privateproperty without proving theproperty or its owners wereinvolved in a crime. In 1992,more than $14 million incash and property was takenfrom citizens by Michigan

law enforcement agencies in9,770 separate seizures.Federal seizures grew 1,500 per-cent between 1985 and 1991.

Property seized even frominnocent citizens is oftennever returned to them.Frequently, the law allowssuch property to be sold inpublic “government auc-tions,” the proceeds of whichcan go to the law enforce-ment agencies that seized it.

The creation and use ofthese so-called forfeiturelaws is growing, largely in anattempt to strike back at drugdealers by taking their profitsfrom the illegal trade. Butstatistics indicating that 80percent of the people whoseproperty is seized under

Congressman Conyers Calls SeizureReport “Great Public Service”

A

Congressman John Conyers: “I applaudthe Mackinac Center for putting thespotlight on this abuse of power andgrave flaw in our law.”

“The Center has earned its bragging rights.”— The Saginaw News, June 4, 1998, front-page story reporting on the Mackinac Center’s first decade.

federal drug laws are neverformally charged raisequestions about forfeiturelaws’ effectiveness.

ver 4,200 Michi-gan school boardmembers arestarting their

school year better equippedto negotiate labor contractsthat give teachers moreflexibility and studentsgreater learning opportuni-

ties, thanks to a newMackinac Center for PublicPolicy study.

Every school board memberhas received CollectiveBargaining: Bringing Educa-tion to the Table, whichanalyzes contracts between

Study Shines Light on Labor Contractsthat Hurt Teachers and Students

O teachers’ unions and all ofMichigan’s 583 school dis-tricts. The analyses showhow collective bargainingagreements affect adminis-trators’ ability to managetheir schools and teachers’

See “Conyers” on page 4

See “Contracts” on page 4

Lawrence ReedPresident

PRESIDENT’S MESSAGEPRESIDENT’S MESSAGE

f America’s political health is measured by the characterof the public figures that citizens support, then thecountry is surely in need of a doctor at this time. Opin-ion polls suggest large segments of the population are

willing to shrug off sleaze and corruption in the White House as long as theeconomy is doing well. Here in Michigan, a man known not for his knowledgeof state issues but for childish and uncivil behavior has captured a major party’snomination for governor. Does character matter any more?

This is, in part, a social or ethical question and therefore not one that theMackinac Center for Public Policy addresses directly with much frequency. Ourniche is providing the free-market perspective on Michigan public policy issuesthat are largely economic in nature. Other people and organizations in the state,with whom we share a common core of traditional values, are addressing thesequestions on a regular basis because social and ethical questions are theirspecialty. But this does not mean that the Mackinac Center’s economic perspec-tive is irrelevant to the important, soul-searching discussions now taking placeabout matters of character. Indeed, it is probably far more relevant than mostpeople would assume at first blush.

Even in the most morally upright, character-conscious society, bad eggs aregoing to work their way into positions of power. The more power they have,however, the more harm they can do to everyone else. A president who lies,covers up his lies with more lies, and whose lying is not confined to private andpersonal matters, would be dangerousenough if he presided over a governmentthat took and spent a mere 5 percent of ourincomes. When the government he headstakes 40 percent or more and roots around invirtually every aspect of our lives, the harm alying president can do is immensely magni-fied. His corruption becomes our corruption,and he depends upon corrupt associates tohelp him brush aside our criticism andremain in power.

Free markets and the limited governmentthey imply can not guarantee that bad eggswon’t get elected to public office, but theharm they can do to the rest of us is restrained by the limited power they possess.

If you’re concerned about the erosion of character among public officials, youshould start by serving as an example of good character yourself. You shouldspeak out when elected officials betray your trust and hold them accountable atthe ballot box. You should also work to confine government to its proper role insociety—an objective you are helping to achieve in Michigan by supporting theMackinac Center for Public Policy.!

Less Government AmelioratesBad Character

I

“Free markets and thelimited government theyimply can not guaranteethat bad eggs won’t getelected to public office,but the harm they cando to the rest of us isrestrained by the limitedpower they possess.”

Board of Scholars

Board of DirectorsRichard Antonini, ChairmanLawrence Reed, President

William AllenPeter CookHon. Paul GadolaTodd HerrickMara LeticaEdward Levy, Jr.Rodney Lockwood, Jr.

Bruce Maguire, Jr.Richard McLellanRichard MerillatD. Joseph OlsonJames RodneyLinda Shinkle

Joseph LehmanEditor

David BardallisAssistant Editor

Daniel MontgomeryGraphic Designer

IMPACT!!!!!

IMPACT! is a quarterly publication of the Mackinac Center forPublic Policy, a nonprofit, nonpartisan, tax-exempt research andeducational organization classified under section 501(c)(3) of theIRS code.

Mackinac Center for Public Policy140 West Main Street

P.O. Box 568Midland, Michigan 48640

(517) 631-0900 • Fax (517) 631-0964www.mackinac.org • mcpp@mackinac.org

Dr. Donald AlexanderWestern Michigan University

Dr. John AttarianThe Social Critic Magazine

Dr. Thomas BertonneauCentral Michigan University

Dr. Peter BoettkeNew York University

Dr. John BornhofenGrand Valley State University

Dr. William BrowneCentral Michigan University

Dr. Stephen ColarelliCentral Michigan University

Dr. Keith CrockerUniversity of Michigan

Dr. Robert CrownerEastern Michigan University

Dr. Richard CutlerMichigan Association of Scholars

Robert DaddowOakland County Executive

Dr. Stephen DreschJhéön & Associates

Prof. Richard EbelingHillsdale College

Prof. Greg FleckensteinBaker College

Dr. Wayland GardnerWestern Michigan University

Dr. Dale HaywoodNorthwood University

Dr. Ormand HookMichigan Resource Center forCharter Schools

Prof. Harry HutchisonUniversity of Detroit Law School

Dr. David JandaInstitute for Preventative SportsMedicine

Mrs. Russell KirkAuthor, Lecturer

Dr. Robert KleimanOakland University

Dr. George LeefPatrick Henry Associates

David LittmannComerica Bank

Dr. Dale MatcheckNorthwood University

Dr. Paul McCrackenUniversity of Michigan

Prof. Charles MillikenSiena Heights College

Dr. George Nastas IIIMarketing Consultants

Dr. John PaffordNorthwood University

Dr. Mark PerryUniversity of Michigan - Flint

Dr. Karen Potter-WitterMichigan State University

Gregory RehmkeFree Enterprise Institute

Dr. Steve SafranekUniversity of Detroit Law School

Louis Schimmel, Jr.Municipal Advisory Council ofMichigan

James SheehanCompetitive Enterprise Institute

Fr. Robert SiricoActon Institute for the Study ofReligion and Liberty

Bradley SmithCapital University Law andGraduate Center

David SowerbyLoomis, Sayles & Company, L. P.

Dr. John TaylorWayne State University

Prof. Harry Veryser, Jr.Walsh College

John Walter, Jr.Dow Corning Corporation

Dr. William WilsonComerica Bank

Dr. Martin WingGMI Engineering &Management Institute

Dr. Gary WolframHillsdale College

ith the help ofMackinacCenter forPublic Policy

employment experts, theU. S. Supreme Court handeddown on May 26 a historicvictory for union workerswho want to know how theirforced dues are being spentby their unions.

The Court ruled in Air LinePilots Association v. Miller thatdues challenges need not beforced to go through union-controlled arbitration pro-ceedings, but have the optionto go directly to court to holdunions accountable for theirspending claims.

The Mackinac Center filed aFriend of the Court brief(available at Web site

www.mackinac.org/articles/acbNo97-428.htm)advising the Court to upholdthe rights of employees inunionized workplaces tosettle their claims in theforum of their choosing,whether in court or arbitration.

Arbitration is the preferredway to resolve disputes inmany circumstances, but notthose in which the unionselects the arbitrator and setsthe rules. An employee’soption to sue creates anincentive for the union toassure that arbitration isconducted fairly.

Mackinac Center Director ofLabor Policy and formerNational Labor RelationsBoard member RobertHunter heralded the Miller

U. S. Supreme Court Concurs with Mackinac Center Labor Experts

Labor Policy Director Robert Hunteroutlines the process by which unionworkers can obtain an accounting ofhow their unions spend dues money.

decision as a “reaffirmationof employee rights” andadded, “the Court has pro-vided a powerful new tool forMichigan workers to makeunions accountable to dues

payers, which will helpprotect workers from politicalexploitation.”

The Supreme Court has ruledpreviously in CommunicationWorkers v. Beck that thoseforced to pay union dues (themajority of union-repre-sented employees in Michi-gan) cannot be forced to payfor a union’s political orsocial agenda. Only duesthat cover expenses directlyassociated with collectivebargaining can be compelled.

Hunter is the author of theMackinac Center reportsCompulsory Union Dues inMichigan and PaycheckProtection in Michigan, and anupcoming primer on Michi-gan labor law.!

n June 12-13,nearly threedozen educatorsnationally recog-

nized for their talent andprofessional dedicationgathered at the MackinacCenter for Public Policyheadquarters in Midland torecommend systemicchanges to the nation’seducational system.

The first-ever NationalSummit of Teachers forEducation Reform coincidedwith the 15th anniversary ofthe landmark report A Nationat Risk. The report, issued in1983 by a national panel ofpolicy makers, union offi-cials, and education theoristscalled for reforms to thenation’s failing government

schools, but excluded in-sights from the teachers whowork in those schools.

The summit marks the firsttime that teachers themselveshave gathered to recommendfundamental reforms to

Historic Teachers’ Summit Endorses Systemic Change in Education

Mackinac Center for Public Policy IMPACT! Fall 1998 3

W

O

Teachers decide at a breakout session to call for bold education reforms in theirletter to the American people.

See “Summit” on page 10

Attendees from 16 statesdrafted a 14-point action planin an open letter addressed tothe American people andsigned by dozens of notedteacher activists, including1993 National Teacher of theYear Tracey Bailey and 1991New York State Teacher ofthe Year John Taylor Gatto.

Author and Mackinac CenterBoard of Scholars memberAnnette Kirk set the tone forthe weekend event by sharingwith the assembled teachersher recollections as a memberof the National Commissionon Excellence in Education,which drafted A Nation at Risk.

Keynote speaker Mayor BretSchundler of Jersey City,

improve education such asincreased parental freedomin choosing their children’sschools, greater teacheraccountability for what theirstudents learn, and a returnto traditional methods andsubjects of teaching.

Mackinac Center for Public Policy4 IMPACT! Fall 1998

Study author La Rae G. Munk explains to school boardmembers how to take advantage of a 1994 law thatallows competitive bidding of teacher health insurance.

The 39-page report, Reform-ing Property Forfeiture Laws toProtect Citizens’ Rights, warnsthat current forfeiture lawswhich violate the Americantradition of “innocent untilproven guilty” threaten thedue-process rights of allcitizens.

The report recommends ninereforms including disallow-ing seizures of property untilgovernment can prove itsowners are guilty of a crime,requiring police and other

agents to publicly justifyforfeiture proceedings, andprohibiting law enforcementagencies from profiting fromthe sale of assets they seize.

In a front-page Detroit FreePress story, Conyers pledgedto incorporate the Center’srecommendations into anynew laws that are passed.His office issued a newsrelease quoting him assaying, “The MackinacCenter for Public Policy hasdone a great public service

by pointing out an abuse ofpower and a defect in ourlaw,” and “All U.S. citizens . . .owe the Mackinac Center anenormous debt of gratitudefor this important endeavorin protecting their rights.”

Mackinac Center PresidentLawrence Reed said, “Weappreciate CongressmanConyers’s leadership toprotect citizens’ rights andwe’re pleased to be workingwith him on a commonobjective—reform of both

professional flexibility ineducating their students.

The study is the first ever toanalyze all of the collectivebargaining agreements of thehundreds of school districtsin a state.

The 83-page work by attor-ney La Rae G. Munk, J. D., aformer public school teacherand labor union president,contains labor contract andfinancial data from everyMichigan school district.The analyses of contractsfound thatmore than 90% limit theability of school administra-tion to appropriately matchteachers to classrooms;more than 50% establishclass size maximums;fewer than 5% allow anyperformance-based teachercompensation;most require tenured teach-ers to be evaluated only onceevery three years;all subject school employeesto mandatory union duespayments; andnone properly informs

teachers of their constitu-tional rights to refrain frompaying union dues andjoining a union.

More than 90% of the dis-tricts complied promptlywith the Mackinac Center’sFreedom of Information Actrequest to furnish the con-tract documents. The lawprovides for penalties againstgovernment entities thatwithhold such informationfrom the public.

The study recommends thatschool boards bargain forspecific improvements ineight key provisions found inthe vast majority of the laboragreements. They includestrengthening “managementrights” clauses to give schooladministrators more author-ity to deploy teachers andother resources where theycan be most effective;avoiding “union security”clauses that make schools actas union dues collectionagents; andtaking advantage of laws thatallow competitive bidding for

employee health benefits,which are typically thesecond-largest school budgetitem.

“This study will help schoolboard members approach thebargaining table with thesame determination, skill,and understanding exhibitedby the unions’ full-time,professional negotiators. Thebest contracts direct maxi-mum resources to the class-room and create a moreprofessional and rewardingworkplace for teachers,” saidMunk, Mackinac Center

project managerfor education andlabor.

Michigan Associa-tion of SchoolBoards Director ofLabor RelationsSue Dumalapraised the studyin a Detroit FreePress news story,saying it contains“good informationfor novice boardmembers.” The

Michigan Negotiators Associa-tion, a group that helpsschools with collectivebargaining, ordered copies ofthe report for each of its 400members.

Associated Press versions ofthe story appeared in severalMichigan newspapers, andnumerous radio stationscarried reports on the studyand interviews with Munk.Officials from other stateshave asked the MackinacCenter how they can dupli-cate the study’s success intheir states.!

Michigan and nationalforfeiture laws.”

News of the report wascarried in many other Michi-gan newspapers and was alsothe subject of a column byGeorge Weeks of The DetroitNews. Kochan went on theair on several radio newsprograms and talk shows toexplain how to curb abuses ofseizure laws.!

“Conyers” from page 1

“Contracts” from page 1

••

••

••

••

••

••••

••

••

School Choice Ballot Committee Advances Mackinac Center Plan

ighlights of thehundreds of lastquarter’s newsmedia citations:

Editorial endorsements,newspaper articles andcolumns, and radio talk showinterviews poured forth afterrelease of the asset forfeiturestudy. The Lansing StateJournal, The Oakland Press,The Macomb Daily, MidlandDaily News, and The JacksonCitizen Patriot all praised theCenter’s recommendations,which were also reportedstatewide by the AssociatedPress and on the front pageof the Detroit Free Press.Adjunct Scholar DonaldKochan explained to radiolisteners in Detroit, Port

Huron, Midland, and Saginawthat seizure laws should bechanged to require thatcriminal guilt be establishedbefore private property isseized.

Project Manager—Educationand Labor La Rae Munkdetailed how poorly writtenschool labor contracts harmMichigan teachers andstudents to talk radio audi-ences in Detroit andKalamazoo. Her Detroit Newsop-ed recommended specificimprovements to Detroit-areaschool contracts. News ofher recent study was alsocarried in the Detroit FreePress and in Associated Pressradio and newspaper reportsaround the state.

In a Detroit News letter,Director of Education PolicyDaniel Cassidy explainedthat vouchers and otherforms of school choice willremove financial and politi-cal barriers that todayprevent many inner-citychildren from receiving agood education.

Director of Labor PolicyRobert Hunter was tapped byInvestor’s Business Daily, TheDetroit News, WTCM radio inTraverse City, WOOD radioin Grand Rapids, and othermedia outlets to provideexpert analysis of currenthigh-profile labor problemsbetween General Motors andNorthwest Airlines and theirunions.

Editorials Pour Forth in Support of Center ResearchEducation Research AssistantMatthew Brouillette ex-plained in his op-ed pub-lished in newspapers aroundthe state and to WJIM radiolisteners in Lansing thatmassive increases in schoolspending have not trans-lated to increased studentperformance.

Senior Fellow in EconomicEducation Burton Folsomsummarized for radio audi-ences around the countrystories taken from his bookEmpire Builders, whichdescribes the success ofMichigan’s early entrepre-neurs and free-marketpolicies.

Mackinac Center for Public Policy IMPACT! Fall 1998 5

M

H

Kids First America/Africa founderAngel C. Rocker urges Detroit African-American Baptist pastors to support aballot initiative proposed by SchoolChoice YES!

ackinac Centerscholarship notonly shifts publicopinion toward

the free-market perspectiveon regulation, taxes, educa-tion, and other issues, itresults in concrete actionwith the potential to benefitMichigan citizens in power-ful ways.

The latest example is SchoolChoice YES! (SCY!), anindependent organizationformed to place theMackinac Center’s UniversalTuition Tax Credit (UTTC)proposal on the 2000 ballot.

Unveiled in November, theUTTC would help familiesafford better schools byallowing individuals orbusinesses that pay tuitionfor any K-12 student tosubtract a dollar-for-dollar tax

credit from any of three statetax liabilities.

Gary Glenn, president of theMidland-based School ChoiceYES! said, “There are a dozenways to advance schoolchoice in Michigan, but wechose the Mackinac Centerplan because it’s the only onethat’s rock-solid in terms ofeconomics, politics, andeducation.”

A recent Gallup Poll foundthat the Mackinac Centermodel is by far the mostpopular variant of schoolchoice, with 73 percentsupport among public schoolparents.

Originally from Idaho, Glenndemonstrated his ability toorganize support for impor-tant causes when he success-fully defended the rights of

that state’s workers against aheavily financed unionproposal to limit theiroccupational choices.

Glenn and SCY! have alreadybuilt a broad base of supportamong Michigan citizens, 66percent of whom favorschool choice, according topolls. A May 19 meeting inGrand Rapids between Glenn

and local black pastorsspawned a historic schoolchoice endorsement fromAfrican-American religiousleader Dr. E. Edward Jones,president of the four million-member National BaptistConvention of America.

K-12 tuition tax credits alsoenjoy bipartisan supportamong Michigan politicians,including Democratic Con-gressman Jim Barcia, Demo-cratic State RepresentativeBill Callahan, Republicancandidate for lieutenantgovernor Dick Posthumus,and Republican CongressmanPete Hoekstra.

More information on SchoolChoice YES! is available atwww.schoolchoiceyes.orgor by calling (888) 642-4482.!

See “Support” on page 10

••

••

••

••

••

••

“Who’s Who” of Business Leaders Join Advisory Boards

Mackinac Center for Public Policy6 IMPACT! Fall 1998

A

Bruce Beerbower and Cheryl Moore help keep a 17,000-square-foot building and 22-person staff runningefficiently.

“who’s who” ofMichigan busi-ness leaders whoshare a commit-

ment to free-market policieshas formed the MackinacCenter’s new SoutheastMichigan Board of Advisorsand the Grand Rapids AreaBoard of Advisors.

The Boards of Advisorsmembers are business andcommunity leaders andMackinac Center for PublicPolicy “ambassadors” whocontribute to the Centerfinancial support, policyadvice, and help in establish-ing relationships with otherpotential supporters.

Beerbower and Moore Keep Center Humming

T wo new employeesare helping to meetthe explodingdemand for the

Mackinac Center’s growingbody of scholarly researchand the management re-quirements of its new $2.4million headquarters.

Cheryl Moore assists thedozens of legislators, journal-ists, teachers, and otherMackinac Center customerswho call each day to requestup-to-date information onimportant policy issues. She

is able to smoothly processinquiries using the thousandsof issues files stored in theCenter’s extensive policyarchives, which she updatesand maintains.

Bruce Beerbower is respon-sible for the care and mainte-nance of the MackinacCenter’s 17,000-square-footoffice, research, and confer-ence facility, which includesthe Center’s free marketlibrary that houses hundredsof volumes on economics,political theory, law, and

Each board meets twiceannually at Advisors’ Break-fasts. Vice President forDevelopment JamesKostrava said, “Many organi-zations have advisory boardsconsisting of little more thana list of names of people whonever attend the meetings.Hardly anyone misses our

breakfasts. Each memberknows that missing a break-fast means missing a rareopportunity to discuss andshape policy with most of hisor her business peers.”!

history. He alsoprovides supportfor the manyeducationalprograms hostedat the Center,including the free,day-long Freedomin EducationTraining Semi-nars, whichprovide partici-pants with strate-gies for advancingschool choice inMichigan.!

Randolph J. AgleyChairmanTalon LLC

David A. BrandonPresident & CEOValassis Communications, Inc.

Jon C. CosovichFormer Vice President - DevelopmentThe University of Michigan

Martin H. EdwardsPresidentEdwards Brothers, Inc.

Joseph J. FitzsimmonsFormer ChairmanUniversity Microfilms, Inc.

W. Frank Fountain, Jr.PresidentChrysler Corporation Fund

Charles GelmanPresidentPalladium Associates Limited

Terry GriffinPartnerGriffin, Smalley & Wilkerson, Inc.

Robert GustafsonPresident & COOHubert Distributors, Inc.

Thomas HoegExecutive Vice President & COOAmerisure Companies

Albert J. KoegelPresidentKoegel Meats, Inc.

Ilija LeticaPresidentLetica Corporation

Bob LyonsPresidentMichigan Trenching Service

Ronald PalmerCEO & ChairmanHorizon Enterprises Group

William F. PickardChairman & CEORegal Plastics Company

Heinz C. PrechterChairman & FounderASC, Inc.

Leigh RodneyPresidentDetroit Forming, Inc.

Martha R. SegerFormer GovernorFederal Reserve Board

Alice Shotwell-GustafsonChairman & CEOHubert Distributors, Inc.

Robert M. ThompsonOwner and PresidentThompson-McCully Co.

Dennis ToffoloSpecial Assistant to the PresidentCentral Michigan University

James A. WilliamsChairmanMichigan National Corporation

John CanepaConsulting PrincipalCrowe Chizek

Kevin CusackManaging DirectorMcDonald & Company

Betsy DeVosPresidentThe Windquest Group

Dan DeVosPresident & CEODP Fox Ventures, LLP

John DohertyExecutive Vice PresidentAssociated Builders &Contractors, Inc.

David FreySenior Vice PresidentNBD Bank, N.A.

Harvey Gainey, Sr.Chairman and PresidentGainey Corporation

Grand Rapids Board of AdvisorsDick DeVos, Honorary ChairPresident, Amway Corporation

Southeast Michigan Board of AdvisorsFrank D. Stella, Chairman

CEO, The F.D. Stella Products Company

Dan GordonPresidentGordon Food Service

James HackettPresident & CEOSteelcase, Inc.

Richard G. HaworthChairman of the BoardHaworth, Inc.

Doyle HayesPresidentPyper Products

David HookerPresident & COOMazda Great Lakes

Robert HookerVice Chairman & CEOMazda Great Lakes

J. C. HuizengaPresidentWest Michigan Equities

Michael JandernoaChairman of the BoardPerrigo Company

John KennedyPresident and CEOAutocam Corporation

William LaMotheChairman EmeritusKellogg Company

Hank MeijerVice ChairmanMeijer, Inc.

Bob PowersPresident & CEOQuality Air Heating &Cooling, Inc.

Owen Pyle, Jr.PresidentConcord CapitalManagement, LLC

Ambassador PeterSecchiaChairman of the BoardUniversal Forest Products,Inc.

Ginny SeyferthPresident & CEOSeyferth & Associates, Inc.

Harold SimmonsPartnerBDO Seidman

Charles StoddardChairmanGrand Bank

Rex RogersPresidentCornerstone College

Mackinac Center for Public Policy IMPACT! Fall 1998 7

Center Research Guaranteed Reliable

M ichigan policymakers,journalists,and grassroots

leaders have come to relyon Mackinac Centerresearch to help themunderstand and apply thebest scholarship on educa-tion, privatization, labor,and other vital issues tothe state’s most pressingproblems.

Reliable and timelyresearch is foundational tosound public policy. Thatis why every MackinacCenter report, policy brief,and study is backed by theGuarantee of QualityScholarship (GQS), awritten pledge of scholarlyaccuracy that is uniqueamong public policy

organizations, either state-based or national.

Under the GQS, found insidethe front cover of studies,reports, and briefs, theMackinac Center will respondin writing to rare questionsabout a particularpublication’s accuracy. If anerror is found to exist, it willbe corrected immediately inthe publication’s electronicversion at www.mackinac.organd with an errata sheetincluded in future paperdistribution.

The GQS communicatesconfidence in the workproduced by the Center’sprofessional staff and 50-member Board of Scholars,which includes many of thestate’s most knowledgeable

and widely respectedexperts.

The Center’scontinueddedication toreliable scholar-ship stands outat a time whenthe accuracy ofthe written wordis under height-ened scrutiny.Recent headlineshave publicized embar-rassing retractions—andsubsequent resignationsand dismissals—from anumber of majornewspapers and magazines.

“Today’s technology allowsvirtually anyone with acomputer to publish dubiousclaims to the world over the

Mackinac Center Draws on Skills of Brown and Montgomery

B rennan Brownand DanielMontgomery arethe Mackinac

Center for Public Policy’snew development assistantand graphic designer,respectively.

Brown is responsible forestablishing and maintain-ing close contacts with theMackinac Center’s expand-ing membership base. Heinforms contributors andfriends of upcomingstudies, events, andreports; solicits their ideas;and ensures that memberscontinue to be satisfiedwith the Center’s work.

Brown attendedNorthwood University’s

Midland campus, where hegraduated magna cum laudein May with a bachelor’sdegree in economics andbusiness management.

Montgomery applies hisartistic skills to the diverserange of Mackinac Centerpublications, designingoriginal artwork and distinc-tive layouts for the Center’sbooks, reports, brochures,commentaries, and periodi-cals, including the forthcom-ing Michigan Education Reportquarterly journal. He alsocontributes his graphicalexpertise to the Center’saward-winning World WideWeb page (www.mackinac.org).

Montgomery holds a bachelorof science degree in art

education from OlivetNazarene University inKankakee, Illinois.!

Brennan Brown stands in the MackinacCenter lobby next to a display listing thelead givers to the $2.4 millionheadquarters building campaign hehelped to cap off.

The Debate Workshop poster created byDaniel Montgomery was recently sent toevery high school debate coach inMichigan.

Internet and call it research.The GQS is one way theMackinac Center stands abovethe rest,” said JosephLehman, director of commu-nications.!

No one else offers the Guarantee ofQuality Scholarship.

Visionary Innovator Gelman Supports New Policy Initiative

Gelman wants policy tobe based on soundscience, not the soundand fury of politics.

ne of the firstthings that“Management101” students are

taught is to lead by example.Great leaders know that it isalways much easier to askothers to do something ifthey first demonstrate thatthey are willing to do itthemselves.

This leadership style isembodied in the support thatthe Mackinac Center forPublic Policy receives from

its Board of Directors. Ourboard members representsome of Michigan’s topleaders in businessand academia, andtheir leadership asdirectors gives theCenter somethingevery nonprofitorganization longsto have: 100 percentfinancial participa-tion from its board.

The completion ofour new headquar-

ters building campaignprovides the latest exampleof 100 percent participation.

At our last boardmeeting, I re-ported that we hadraised all but$42,000 of our $2.4million goal. Iexplained that wewere havingdifficulty closingthe books on thisproject because wehad alreadysolicited contribu-

Lead by Exampletions from many of ourfriends, some of whom weasked twice. By the end of themeeting, the leaders who formthe Mackinac Center Board ofDirectors stepped forward topersonally contribute theremaining funds needed tocomplete the campaign.

Our board members’ leader-ship does not end there.They also leverage theirinfluence with key leadersJames E. Kostrava,

Vice President forDevelopment

Mackinac Center for Public Policy8 IMPACT! Fall 1998

O

DEVELOPMENT IMPACTDEVELOPMENT IMPACT

E ntrepreneur, inventor,and Mackinac Centersupporter CharlesGelman knows

firsthand how to transformideas into reality. Fourdecades ago his idea for anair sampling device was theseedling that has becomeGelman Sciences of AnnArbor, a multi-million-dollar,internationalfirm specializingin microporousmembranefiltration.

Five years ago,Gelman beganto supportanother growingseedling—theMackinacCenter forPublic Policy—that has become the nation’slargest and most effectivestate-focused policy researchinstitute.

Gelman’s chief policyinterest is the environment.

In addition to the Center’sgeneral operations, Gelmansupports the nascent Science,Environment, and Technol-ogy (SET) Initiative.

When fully funded, SET willcomprise a department offull-time science, environ-ment, and technology policy

experts modeled afterthe Center’s success-ful education andlabor policy depart-ments. SET isdesigned to shapepublic policy basedon sound science andrespect for citizens’rights, not politicsand special privilege.

Gelman, a member ofthe 1851 Society andSoutheast MichiganBoard of Advisors,

said, “I support the MackinacCenter because I believe jobproviders should be active inthe public policy process.Leaving policy only to thosewith short-term, politicalgoals is a recipe for bad laws

that hurt jobs and the envi-ronment.”

Members of the 1851 Societycontribute $10,000 or more tothe Mackinac Center.

Gelman and his wife, Rita,established the GelmanEducation Foundation aimedat improving scientificeducation in secondaryschools. The foundation alsosupports the Mackinac Center.

Gelman holds degrees inchemistry from SyracuseUniversity (New York) and inpublic health from theUniversity of Michigan. Hefounded Gelman InstrumentCompany in 1959, whichbecame Gelman Sciences,from which he retired lastyear after serving as Chair-man and CEO. He now headsPalladium Associates, aconsulting and licensing firm.!

See “Example” on page 11

The Social Role of Private Property Rightsby Gene Smiley

Mackinac Center for Public Policy IMPACT! Fall 1998 9

FREE MARKET FUNDAMENTALSFREE MARKET FUNDAMENTALS

P rivate property rightsare the rights of aperson to use hisproperty in whatever

way he chooses providingthat he doesn’t use force orfraud on any other person.One of the first economists toemphasize the importance ofproperty rights was theAustrian economist CarlMenger. Writing in 1871,Menger noted that for mostgoods the quantities availablewere insufficient to meeteveryone’s needs. Potentiallyevery consumer’s interestwas opposed to that of everyother consumer’s in thestruggle to obtain some of thescarce goods. Menger wrote

Property, therefore, like humaneconomy, is not an arbitraryinvention but rather the onlypractically possible solution ofthe problem that is, in thenature of things, imposed uponus by the disparity betweenrequirements for, and availablequantities of, all economic goods.

Private property rights, then,are a social institution whichtends to bring about peaceand harmony in a society offree people. In fact, they areone of the main foundationsof a free society. There canbe no personal or politicalfreedom without freedom inthe use of one’s property.Limiting one type of freedomlimits all freedoms.

But the social role of privateproperty rights extends farbeyond this. From the early19th century to well past themiddle of this century,Americans had the highestand fastest growing incomesin the world. The majorfactor behind this rising

standard of living was theirsecure property rights.

Frequently it is suggestedthat the reason for this rapidgrowth was not Americans’property rights, but the factthat the United States wasmore technologically ad-vanced than other nations.However, technologicalknowledge tends to floweasily between countries.

Consider, for example,Britain’s failure to preventthe spread of the technicalknowledge needed to massproduce cotton textiles. In1789 Samuel Slater, a me-chanic, immigrated to theUnited States with suchknowledge, and with thecapital of Moses Brown andWilliam Almy began cottontextile production usingBritish innovations. In 1810 aBoston merchant, FrancisLowell, observed Britishtextile machinery on a tripthrough England. He memo-rized the designs and uponhis return to the UnitedStates had a mechanic, PaulMoody, construct machineryfrom the plans he had put tomemory. By 1850 the UnitedStates had become a leadingcotton textile producer.

Or consider the late 19th-century steel industry. Thetechnology developed toproduce steel was no secretfrom producers in othercountries. But the UnitedStates came to so dominatesteel production that itproduced more steel than therest of the world combined.Andrew Carnegie, a Scottishimmigrant, willingly toredown old steel plants to buildones incorporating the latest

technology because he wassecure in the knowledge thatthey were his property. Bythe end of the 19th centurythe Carnegie Steel Companywas the largest in the world.

The Impetus to Invest

The existence of secureproperty rights and laws ofcontract provided the impe-tus for these and otherAmericans to work, create,and invest. Jonathan Hugh-es has written, “People werewilling to make extremesacrifices to acquire propertyrights, to engage in undertak-ings with distant pay-offs—from clearing lands tobuilding steel mills—in thehope of personal or familygain from property owner-ship.” As Hughes has noted,the framers of the Constitu-tion considered privatecontracts so important thatthey were given precedenceover the legislative powers ofthe states. (The SupremeCourt reversed this in the1930s when it allowed thefederal government to makeit illegal for citizens to owngold coins or bullion.)

The American system ofsecure private propertyrights has given the UnitedStates greater social stabilitythan that of most othercountries. The one greatstruggle in the United States,the Civil War, was fundamen-tally due to the perception bySoutherners that their“property rights” in blackslaves were threatened. Ofcourse, Southern slavehold-ers had these “rights” onlybecause they used the powerof government to crush theblacks’ rights to self-ownership.

In many countries laborunions became vehicles topromote social changeseither through the politicalprocess or through revolution.

The dominant labor unions ofthe late 19th and 20th centuries,the National Labor Union, theKnights of Labor, and theAmerican Federation of Labor,generally rejected radicalism.They chose an economicagenda of improving thewages and working conditionsof their members rather thanbecoming a political partywith political objectives.

The basic reason for this wasthat the workers themselveswere property owners withan interest in maintainingsociety and the existingrights to property. They hadreasonable expectations ofaccumulating additionalproperty. Political agendaswhich argued for the alter-ation or destruction ofprivate property rights andcontracts were correctly seenas being against the interestsof most workers.

In a mobile, growing society,private property rights andlaws of contract become whatHughes calls the “social bond”bringing peace and stability.Much of the unparalleledgrowth, prosperity, andfreedom which the citizens ofthe United States haveenjoyed for more than 200years is due to the existenceof secure private propertyrights and laws of contract.!

Adapted from The Freeman,May 1990.

Teachers Deserve GoodBenefits; SchoolsDeserve to Know WhatThey Cost

July 1998 VP 98-20School districts being manipu-lated by union-controlled healthinsurance providers should lookinstead to less expensivealternatives to providing theirteachers with high qualityhealth care benefits.

Market-OrientedApproach to FarmlandPreservation Best Betfor Michigan

July 1998 VP 98-21Over ninety percent of Michi-gan is rural, yet environmentalalarmists want government torestrict the use of land to curbthe loss of farm acreage,creating a solution far worsethan the perceived problem.

Home School Heroes

July 1998 VP 98-22Children whose parents take anactive role in their educationsare among the most academi-cally successful. The thousandsof Michigan parents who teachtheir children at home should beapplauded for demonstrating theultimate in parental involvement.

Dow Didn’t SuePowerful Competitors;He Outsmarted Them

July 1998 VP 98-23Government interventionistsargue that antitrust laws areneeded to protect the publicfrom Microsoft, but a lessonfrom Michigan history showsthat brainpower and some old-fashioned free-market competi-tion can break even the mostpowerful cartels.

Take Out a Contract onDetroit Metro

August 1998 VP 98-24A nationwide survey of airtravelers recently rankedDetroit Metro Airport dead lastin quality and convenience.Contracting out the airport’smanagement to a private firm—as other cities have done—couldsolve Metro’s woes.

The Injustice ofEnvironmental Justice

August 1998 VP 98-25The Environmental ProtectionAgency’s latest edict on “envi-ronmental justice” discriminatesagainst poor minorities bydiscouraging industries frombringing good-paying new jobsto the disadvantaged residentsof inner city neighborhoods.

Teachers and SchoolChoice

August 1998 VP 98-26Increased competition amongschools would not only improveeducation for all children, itwould reward dedicated teach-ers who excel in the classroomwith good benefits and greaterjob satisfaction.

In Wake of Daimler-Chrysler Merger, Michi-gan Needs Labor LawReform

August 1998 VP 98-27Competition for jobs amongstates and other countries isheavy in the global marketplace,but Michigan’s labor market isburdened by a policy of compul-sory unionism that damages thestate’s long-term potential forprosperity and economicgrowth.

Billy Durant and theFounding of GeneralMotors

September 1998 VP 98-28Billy Durant wouldn’t let hisdaughter ride in a car becausehe thought they were toodangerous. So he took advan-tage of Michigan’s free-marketbusiness climate to foundGeneral Motors and make safercars himself, ninety years ago.

The Civil Rights Issue ofthe ’90s

September 1998 VP 98-29Nostalgia for the 1960s civilrights movement runs strong inthe 1990s, and polls show thatMichiganians believe thatgovernment recognition ofparents’ right to choose theirchildren’s schools is today’s civilrights struggle.

What Indianapolis CanTeach Michigan

September 1998 VP 98-30Detroit and other Michiganmunicipalities can learn apowerful lesson from the city ofIndianapolis, which has usedfree-market competition toimprove the quality of overseventy-five governmentservices and dramatically slashcosts to taxpayers.

School Boards ShouldFix Problems in Collec-tive Bargaining

September 1998 VP 98-31Politicians promise to helpchildren learn better by passingnew laws and spending moremoney, but Michigan schooldistricts could improve educa-tion themselves simply bynegotiating better contracts withteacher unions.

“Summit” from page 3 Viewpoint Commentaries

Mackinac Center for Public Policy10 IMPACT! Fall 1998

FREE MARKET BOOKSTOREFREE MARKET BOOKSTORE

New Jersey, inspired thecrowd of attendees with anaccount of his successfulefforts to improve educationin his state, drawing astanding ovation after heexplained that “school choiceis an issue of human rights.”

Gatto and Mackinac CenterDirector of Education PolicyDaniel Cassidy will release theteachers’ 14-point letter to theAmerican people at a Septem-ber 22, 1998, news conferencein Washington, D.C.!

Director of CommunicationsJoseph Lehman outlined theprogress of the Center’sUniversal Tuition Tax Creditproposal in news storiesprinted in The CadillacEvening News and the DenverPost.

An article in the SeptemberAmerican Spectator by JamesBovard cited the MackinacCenter’s Web page(www.mackinac.org) fordescriptions of the MichiganEducation Association’sdefense of unqualifiedteachers and use of deceptivecontract negotiation tactics.!

••

“Support” from page 5

••

scales that reward the efforts ofoutstanding teachers.

The study also describes thehistorical and legal frameworkof teacher unionization inMichigan, analyzes sevenlandmark court rulings thataffect collective bargainingissues, and explains what schooldistricts should and should notnegotiate into their laborcontracts.

Three appendices comparecosts and benefits of varioushealth care plans and presentcontract and financial data fromthe survey of every Michiganschool district. 83 pages.

VIEWPOINTS: Viewpoints onPublic Issues are two-pagecommentaries on currentMichigan policy issues. Threeor four are published eachmonth. Individual Viewpointsare 50¢ each. Please call forbulk discounts.

For telephone orders, pleasecall the Mackinac Center at(517) 631-0900. The Centeraccepts Visa or Mastercard foryour convenience. Please haveyour card and item title(s)handy when calling. If you donot have the Mackinac Centerfor Public Policy’s currentPublications catalog with acomplete listing of all MackinacCenter publications, pleaserequest your free copy whenordering.

Mackinac Center for Public Policy IMPACT! Fall 1998 11

Michigan PrivatizationReport

MPR98-03$3.00

MPR raisesthelearningcurve witha specialback-to-schoolissue oneducation

and privatization, includingfeature articles on school unionsand privatization, howprivatization could help Detroitschools, and private manage-ment of school cafeterias. Otherfeatures discuss privatizing theanti-drug program DARE andcompetitive contracting ofteacher health care benefits. 20pages.

Reforming PropertyForfeiture Laws toProtect Citizens’ RightsS98-03 $5.00Freedom depends upon thescrupulous observance ofcitizens’ rights to own and useprivate property, but Michiganis witnessing an explosion of“asset forfeiture,” which allowsgovernment to violate the veryproperty rights it is supposed toprotect.

Hundreds of asset forfeiturelaws—many intended to stopillegal drug trafficking—givestate and federal law enforce-ment agents the power to seizeproperty even without proof ofthe owners’ guilt.

This report calls on policymakers to implement ninereforms to strengthen theproperty rights of Michigancitizens, including removingfinancial incentives for govern-ment to seize property, eliminat-ing legal hurdles to citizenchallenges of property forfei-

ture, and requiring governmentagencies to publicly justify everyproperty seizure.

The recommendations will helpensure that police can continueto catch criminals while law-abiding Michigan citizens enjoythe benefits of limited govern-ment, individual liberty, andprotection from unjustified andarbitrary seizure of their per-sonal possessions. 39 pages.

Collective Bargaining:Bringing Education tothe Table

S98-04 $10.00This first-ever study of thehundreds of school laborcontracts in any state analyzesMichigan’s 583 school districts toprovide school boards with ablueprint for improving educa-tional quality, enhancing teachermorale, and directing moreresources to classrooms—simplyby negotiating better contractswith teacher unions.

The study recommends thatschool districts bargain forspecific improvements in eightkey provisions found in the vastmajority of the labor agree-ments. Recommendationsinclude strengthening “manage-ment rights” clauses to giveadministrators more authority toput the right teachers in theright classrooms, removingunion security clauses that forceschools to act as dues collectionagents, and replacing unfairseniority-based salary scheduleswith performance-based pay

UPCOMING EVENTSUPCOMING EVENTS

How to Order

Journals

Studies & Reports

National Summit ofTeachers for

Education ReformNews Conference

September 22Washington, D. C.

Annual High SchoolDebate Workshops

September 22Grayling

September 23Jackson

September 24Novi

September 28Grand Rapids

September 29Midland

President’s Councilfeaturing Indianapolis

Mayor Steve GoldsmithOctober 1

Grand Rapids

LeadershipConference

for research instituteexecutives

October 8-10Midland

Mackinac CenterBoard of Scholars

SummitOctober 30-31

Midland

Call (517) 631-0900 formore details.

U P C O M I N G

E V E N T S

around the state to opendoors for the MackinacCenter. With their help, wehave assembled two newboards of advisors (see storyon page 6).

Such outstanding leadershipby example has led to thecompletion of our buildingproject in less than two years:a testimonial to the dedica-tion of the Mackinac Center’s

“Example” from page 8

directors and to all of youwho are likewise inspired tosupport and perpetuate ourimportant work. To thegenerous friends who werepart of this historic cam-paign, thank you verymuch.!

Reed Chosen to Lead Nation’s Oldest Free-Market Institute

Fischer Labors to Inform Michigan Workers of Their Rights

M

Fischer’s recent Viewpoint on theDaimler-Chrysler merger explained theneed for government to be a neutralparty in establishing labor law.

NON PROFIT ORG.U.S. POSTAGE

PAIDMIDLAND, MI 48640

PERMIT #275

A

Lawrence Reed discusses Britain’s privatizationrevolution with Lady Margaret Thatcher at FEE’s50th anniversary celebration in 1996.

140 West Main Street • P.O. Box 568 • Midland, Michigan4 8 6 4 0

ackinac CenterPresidentLawrence Reedhas been elected

chairman of the Foundationfor Economic Education (FEE),the nation’s oldest educationalorganization dedicated topromoting free markets andindividual liberty.

Twenty-two prominenteconomists, businessmen,and scholars who compriseFEE’s board of trustees votedto name Reed to the presti-gious position on May 18,1998, at FEE’s New York

about the principles of a freesociety.”

Founded in 1946 by LeonardRead, FEE is known for itsroster of leading economicthinkers. Reed joins the listof such past FEE scholars aseconomists Ludwig vonMises, Henry Hazlitt, andIsrael Kirzner in advancingcivil society through free-market research and educa-tion.

Reed’s column in The Free-man, FEE’s monthly journal,is read by over 30,000 peoplein 71 countries.!

ttorney MarkFischer is theMackinac Centerfor Public Policy’s

new labor research assistant.

Fischer analyzes legislation,court decisions, and adminis-trative rulings that affect therights and responsibilities ofMichigan employees, includ-ing the state’s one millionunion workers.

Fischer draws on his years asa management consultant toresearch employment issues

such as compulsory union-ism, collective bargaining,and occupational safety. Heputs his knowledge to workanswering hundreds ofinquiries from employersand workers requestinginformation about how toexercise their civil rights andapply free-market principlesto labor disputes.

Fischer is a member of thestate bar of Michigan andreceived his Juris Doctorfrom the Thomas M. CooleyLaw School in Lansing,

headquarters. Reedjoined the board in1994.

“I can think of no onebetter suited to chairour board of trust-ees,” said FEE Presi-dent DonaldBoudreaux. “Larry’scommitment to thecause of libertycombines with hisproven leadership atthe Mackinac Centerto make him the idealchoice to continue ourmission of educating people

where he graduated cumlaude in 1997. He also holdsa master’s degree in interna-tional management.

Mackinac Center Director ofLabor Policy Robert Huntersaid, “Mark’s depth of knowl-edge and experience inemployment issues makehim ideally suited to helppolicy makers, employers,and workers apply MackinacCenter ideas to improveMichigan’s labor climate.”!