HARVARD STUDENTS ALSO endorse stopgap measures in national social and economic policy. Not entirely, of course. We hear much about "curing the causes of poverty." Phillips Brooks House Association and the Harvard and Neighborhood Development program do admirable work in many aspects of social service.

Few at Harvard seem to realize, however, the primary reasons why poverty occurs. Every so often, Marxist exploitation theory, in diluted or concentrated form, pops up as an explanation. Exploitation occurs, of course. But exploitation theory fails to explain why workers who should have continued to grow poorer with the rise of capitalism have instead continued to rise into the bourgeoisie.

Market economics--at least some strains of it--understands a little more. The basis of a productive economy lies not in the amount of resources available to a country (the mind-boggling poverty of the dead Soviet Union should convince us of that). Nor even does it lie in the political freedom of a country, although political freedom may be an important element. What is necessary for a prosperous economy is the freedom from coercion and the protection of private property, the freedom of individual persons to make use of personal knowledge for their own benefit and the benefit of others.

Such a formulation of freedom may sound at first like political freedom. Democracy, however, provides only an instrumental freedom in the fulfillment of any human needs. It is a freedom fraught with danger, if democratic government lacks restraints upon its power to direct the individual person's destiny.

If whatever powers the citizens of a democracy delegate to their representatives seems allowable, these citizens may, if they wish, destroy their freedom. And endanger their prosperity in the process.

Although most Harvard students would deny it, this is the very situation which faces the United States today. Our country may indeed be a bastion of individual political freedoms, but our true personal and economic liberty withers further every day.

The freedom of the market necessary for prosperity entails much. What it never should include is the freedom to use the government to protect a group from the results of economic progress. If, as is so much the case in the world today, this "principle" of protection becomes enshrined in law, the power of government becomes (and must become) over-arching and destructive.

Protection of economic interests lies at the heart of many of the world's current problems. In the 19th century, businesses, protected in the interest of economic progress, were isolated from having to pay the costs of their destruction or despoilation of others' property. Allowed to pollute the environment without due regard for others' personal right to property, industry the world over has caused untold environmental damage.

At the same time, exorbitantly high taxes on the accumulation of wealth have, since the end of World War II especially, protected already established businesses from competition. Smaller businesses have been able to open up new areas of wealth creation as new technologies developed. The bumbling corporate giants failed to anticipate these new markets, and smaller firms have been able to grow in these areas into industry leaders. But in many cities, for example, high taxation and other barriers to entry, such as absurdly complicated zoning regulations and high licensing fees, have stunted the growth of small businesses.

In the automobile industry, "voluntary" quotas on the import of foreign vehicles have protected U.S. auto manufacturers from competition, costing consumers tens of billions of dollars and allowing the fossilization of an already stagnant industry to continue.

These same quotas have, in turn, kept Japanese auto manufacturers from competing in the U.S. market with less-established manufacturers from other countries such as South Korea and Yugoslavia. Honda and Toyota, not just G.M., Chrysler and Ford, have thus been able to keep their prices artificially high. Where the money consumers have spent "protecting" these businesses might have gone, in the free market, is anyone's guess. In any case, it would have gone to other productive enterprises, or even into savings or investment.

Protectionist voodoo dominates more than just the auto industry, however. The economic policies of the United States which protect vast portions of our markets harm U.S. consumers and workers, especially the poorest. And they harm the third world economies whose products we often exclude in the name of protecting American jobs.

Clothing and shoe manufacturers, sugar and citrus growers, microchip manufacturers and dairy farmers, all receive some sort of protection or subsidy from a U.S. government seemingly bent on ignoring the long-term prosperity of its people. These economic pressure groups obtain the force of law for the coddling of their interests. In turn, they harm the purchasers of their own products and those in other nations who depend upon these industries for their livelihood.

Domestically, they hurt those businesses and individuals that would market and sell these goods. And "dumping" of cheaply manufactured goods on the U.S. market may harm the short-term interests of some. But it provides underdeveloped or developing nations with sources of capital for fledgling industries. When this occurs, the national and world economies benefit. Only with such attention to allowing the market, which is made up individual persons, to function, can we assure prosperity and economic progress.

If the individual persons who make up the U.S. economy are to benefit, we must remember that those who create our wealth are not the bureaucrats in Washington. The persons who own and create millions of businesses of all sizes do that. And these millions of businesspeople and consumers are adversely affected by every tax and every protectionist and regulatory measure the bureaucrats administer.