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Government, The Market, and Minorities (Walter E. Williams) - The Turney Collection — Transcript

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0:07Professor Walter Williams
0:09who is
0:11certainly one of the
0:13most well-known of all libertarian
0:15economists and author of numerous
0:18extremely interesting works, one of
0:21which is his brilliant book The State
0:23Against Blacks, which I have myself
0:26right now bought one of the 15 copies we
0:28have on sale and will try to pressure
0:30him into signing for me later on.
0:33I'll give YOU WALTER WILLIAMS.
0:44THANK YOU VERY MUCH.
0:47UM
0:49THIS IS GOOD enough like this. Okay.
0:52Um
0:54Okay. All right.
0:58When I was
0:59invited to uh
1:02to address you,
1:04uh the topic had yet to be decided, but
1:07uh
1:08I was
1:10hoping that I could talk about
1:12individual freedom
1:14and uh the effect that government in
1:16intervention has on that.
1:18But what I'm what I've been asked to
1:20talk about is um government minorities
1:24and discrimination,
1:25which will probably lend itself to that
1:28general philosophy uh or a general issue
1:31anyway.
1:33Um
1:35what I would uh like to do, to the
1:37extent that some of you are familiar
1:39with some of my arguments,
1:41I would like to
1:43present the um
1:46an outline of some of the things I want
1:47to say
1:48and
1:49leave most of the time or good portion
1:52of the time allotted to me for questions
1:55and discussions, any kind of
1:58uh questions or comments that you would
2:00want to make.
2:02Um
2:03and you should feel free to raise any
2:05kind of question that you want.
2:08Um as suggested in the precis that's in
2:12your uh book,
2:14um
2:16it is my opinion that when we talk about
2:19matters of
2:20race and or sex,
2:24um
2:26there's very, very confusing language.
2:30And I think that the confusing language
2:33has a lot to do with
2:35uh our policy mistakes
2:39uh when we address the issues of uh sex
2:42and race or any other uh
2:45uh form of
2:47of discrimination on the basis of
2:49attributes.
2:51So,
2:53let me pose a question to you. You can
2:55think about it as I talk.
2:57Um
2:59what are those things that we really
3:01care about
3:03when we
3:04talk about
3:06racial relations between people?
3:09I mean,
3:11should we be
3:12uh upset because one individual does not
3:16like another individual because of his
3:19race or ethnicity?
3:21Uh should we be upset when people make
3:25arbitrary choices based on skin color,
3:29sex,
3:30or uh sexual preference, if you will, or
3:33things like that?
3:36Now,
3:37let's delve into that those things a
3:39little bit or or let me just ask another
3:41question. Should we be concerned that
3:42people are prejudiced?
3:45And if so, why?
3:48Um
3:50my ideas
3:52uh suggest or at least some of my
3:54thinking on the subject suggests that
3:57when we talk about racial preferences,
4:00they're really no different from any
4:01other kind of preference.
4:04That is
4:05at least an economist is not in a
4:07position to say that it is somehow
4:11uh
4:12more righteous to prefer oranges to
4:15apples.
4:16I mean, how can we say that, you know,
4:18it's or we should like them equally.
4:21Uh we just say, well, uh we just take
4:23the human preference as a given.
4:25Well,
4:26can we distinguish or is there anything
4:29uh about race or sex for that matter to
4:33say that people should not have
4:36preferences with regard to race and sex?
4:40Uh is it uh somehow different
4:44from a person having preferences for
4:47uh Bordeaux wine versus uh
4:50uh California uh wine? I assert that
4:52there's no difference.
4:54That is, there's no argument at all that
4:59one can present, in my opinion, that
5:01says that we should like each other
5:04equally by race or sex or nationality,
5:08etc., etc. That is, those are just
5:09preferences.
5:12Now,
5:13um
5:17So, so we we want to think about
5:19if you accept my hypothesis or my
5:22argument, well,
5:24do we really care? Is that the thing
5:26that that we should be concerned with
5:28when we look at racial or sexual
5:29relationships?
5:32Or what about prejudice?
5:34People say that you should not be
5:37prejudiced.
5:38Or if you read sociology books, uh you
5:41get the impression that prejudice
5:43represents some form of pathology that's
5:45needs uh curing by the sociological uh
5:48profession.
5:51Well, I think that prejudice is a very,
5:53very good word when we talk about
5:56racial or sexual relationships,
5:59but it's it's misused. And or we don't
6:02give it an operational definition.
6:05Uh that is
6:06I think that prejudice would be a very,
6:09very good word
6:10if we stuck with the its Latin
6:12derivative.
6:14Its Latin derivative is just to
6:16prejudge.
6:18Now, um
6:20maybe an economist can best understand
6:22this is
6:24uh
6:24when people make decisions on the basis
6:27of incomplete information, they
6:28prejudge.
6:30Or they form stereotypes.
6:33Uh
6:34Now, you might ask, "Well, what's wrong
6:35with prejudging?" Or what's wrong with
6:38forming stereotypes? Or what is what is
6:40what is what are stereotypes really?
6:43Well,
6:45when when economists economists
6:47recognize that
6:49people must prejudge, that is, people
6:52must make decisions on the basis of
6:54incomplete information.
6:56And whenever you make decisions on the
6:57basis of incomplete information, you
7:00prejudge.
7:02And you try to find stereotypes uh to
7:05help you economize on information costs.
7:07To give you a flavor of this,
7:09um
7:11suppose after our meeting here, you were
7:14to leave and go to the cafeteria,
7:16and as you're leaving the room, you step
7:19out the door and you see a full-grown
7:21tiger standing there.
7:23Well, what would you do?
7:25Well, if the uninteresting prediction is
7:28that most people would endeavor to leave
7:30the area in great dispatch.
7:33But but that's not a very interesting
7:35prediction, but if we ask "Why do you do
7:38that?
7:40Why?
7:41Is your decision to run
7:44based on any detailed information that
7:46you have about that particular tiger?
7:50Or is your decision to run based on
7:54what you've seen of other tigers, about
7:57tiger folklore, or what your friends
7:59have told you about tigers?
8:01Probably, your decision your decision is
8:04based on that kind of information.
8:07That is, you are prejudging that tiger.
8:11You are using stereotypes.
8:13Okay, now, some people might say, "Well,
8:15I don't use stereotypes." Well, that
8:18person would go
8:20before he he would not prejudge tiger.
8:23He would try to get more information.
8:27And he would go up to the tiger saying,
8:29"Here, kitty, kitty." Try to establish
8:31whether he's friendly or not, and then
8:32only and only then, if he behaved in a
8:35menacing fashion, then the person would
8:36run.
8:38But, most people make a a a quick uh
8:41calculation. They make a
8:44uh they weigh the expected cost of an
8:46additional unit of information about
8:47that tiger versus the expected benefit.
8:50And you just find out that the expected
8:52cost exceeds the expected benefit, so
8:54they don't search for any more
8:55information.
8:58So,
8:59uh
9:00So, now, if you So, you have to be kind
9:02of careful
9:04if you said that that person was
9:06behaving that way because he did not
9:08like tigers.
9:10But, he's really behaving in a way to
9:14economize on information cost. Let me
9:16give you another example of it.
9:18Now, suppose I had
9:20Suppose there were
9:22uh
9:23a a group of people in a room,
9:26and there were
9:28uh five five white males. I need this.
9:32Okay. Five white males, five black
9:35males,
9:37and five
9:38white females and five
9:42uh
9:44a black females.
9:4620 people
9:48And if I had 20 people standing up here
9:51and you could not differentiate between
9:52those people except by race and sex.
9:57That's the only way you could
9:57differentiate among those 20 people.
10:01That is you had zero information about
10:03any other characteristic and I suggest
10:05to you pick a five-person basketball
10:09team among those people and if you win
10:11the game
10:13you get a million dollars.
10:15Now, how would you choose?
10:18Now
10:19you have
10:21you have zero information about their
10:23basketball playing productivity,
10:25proficiency and they all appear to you
10:28to be equal and you can only distinguish
10:31between by among them by race and sex.
10:34Well, a good Bayesian, he would probably
10:37confine a lot of his choices to the
10:40black males.
10:42Knowing that there is an association
10:45between race and sex, not necessarily a
10:46causal one, but at least an association,
10:49at least in United States.
10:51Now, even Germaine Greer
10:53uh
10:54would not would not say, "Well, I'm not
10:56going to pick men."
10:58And and suppose she did.
11:00Suppose she chose to discriminate
11:01against men.
11:04Well, would we care?
11:06Or suppose you had a guy like Governor
11:07Wallace saying, "Well, look, I'm not
11:09going to give the blacks any chance
11:12to be picked." I would love to play uh
11:15against Governor Wallace's team.
11:18We clean them up all the time.
11:21So
11:22so what I'm saying here
11:24is that
11:26is that
11:27a lot of behavior that is called
11:31discrimination or preferences may not in
11:34fact be that.
11:35That is, you can If I ask the woman in
11:37the audience to If she knows anything
11:39about basketball, to pick out a
11:41five-person team, she would probably
11:42confine her choices to the men and the
11:45and there's and her choice would be
11:46dominated by the black males.
11:48But a man from Mars, observing her
11:51behavior,
11:52would he be safe in concluding that she
11:55does not like females, neither does she
11:57like white males?
11:59No, he couldn't.
12:00That is, you want you we have to be very
12:02very careful about inferring preferences
12:07from watching people's behavior.
12:10Now,
12:11uh similarly, if I were to ask anyone
12:14you or any one of you, let's play the
12:16following game.
12:18And uh
12:19and I tell you
12:21I'll eat that several times here.
12:23And I tell you, look, what we're going
12:24to do, uh we're going to walk to
12:28any university. Let's pretend it's
12:29Stockholm University, and let's pretend
12:31for a moment we can uh it's completely
12:34integrated,
12:35and it reflects the ethnic composition
12:38of Stockholm. Or maybe maybe let's take
12:40the United States because I know that a
12:41little bit better.
12:43And the university that we're going to
12:45be at uh reflects the uh ethnic
12:48composition of our and the sexual
12:49composition of our country.
12:51And I tell you, let's play the following
12:53game. Uh find the integral of x squared
12:55dx.
12:58And I tell you, for each person that you
13:00ask as you walk along the campus
13:03who can integrate this function
13:05correctly, I will give you $2,000.
13:08Each person that you ask
13:10to integrate this function
13:12who does not know the answer, you give
13:14me 200.
13:15Now, if you find the payoff matrix
13:18of this game sufficiently rewarding
13:20rewarding to induce you to play the
13:21game,
13:22then the question is, how will you
13:24choose? You have I'm I'm also
13:26postulating that you have zero
13:28information about the mathematical
13:29proficiency of any of the students. All
13:32you're allowed to do is walk up to the
13:33person and say, "What is the integral of
13:35x squared dx?" How will you choose?
13:38Well, you would choose randomly if you
13:40thought that these skills were randomly
13:43held by the people in society.
13:46But probably a good Bayesian would
13:48confine his choices. He would not pick
13:50women. He would not pick blacks. He
13:52would not pick Puerto Ricans. He would
13:54probably confine his choices to Japanese
13:56males and not those wearing crew cut,
13:59not those wearing sandals and and
14:01looking hippie-like.
14:03But he would probably confine his
14:04choices to Japanese males. Now, again,
14:08the person is behaving on the basis of
14:10incomplete information. He is
14:12optimizing. The same thing with
14:14employment.
14:16That is if you're if you're
14:18if you are a firm hiring people,
14:21then you're going to and it's going to
14:23cost you let's say
14:26$1,500
14:27per applicant that you interview for a
14:29job and you're looking for an applicant
14:32who can perhaps get
14:35let's say 700 on essay on SAT test,
14:41well, would you send your recruit
14:42recruiters to places like Harlem and
14:46Philadelphia
14:47where the where you nonetheless you have
14:50to pay $1,500 per prospective candidate.
14:54That's what it costs you to screen, but
14:56your but your your return is going to be
14:59be relatively small. So, you will
15:02you will choose other schools or schools
15:05that where there's a higher probability
15:07of success.
15:09And indeed, the schools with the higher
15:11probability of success may not be black
15:14schools.
15:15The point that I'm trying to make here
15:17is that by observing people's behavior,
15:21there's very little that you can infer
15:23about their racial preferences.
15:27Um
15:29Now, what about discrimination is
15:31another word that we use
15:33uh in discussion of race.
15:36People uh
15:38say that uh you shouldn't discriminate.
15:40Well,
15:43I think that we can come up with an
15:44operational uh a better use of the term
15:47or a more operational useful uh use uh
15:50more operational definition of the term
15:52discrimination if we just look at the
15:54way an economist might do. That is,
15:56discrimination is a solely the act of
15:58choice.
16:01Okay. Now,
16:02scarcity requires us to make choice.
16:05That is,
16:06when I when I came to Stockholm, I had
16:09to discriminate against other possible
16:11uses of my time.
16:13Uh when I married my wife, I had to
16:17discriminate against other women.
16:19And she unfortunately requires for me to
16:22continue this discrimination.
16:25Uh
16:27Now, you might say, "Well, that kind of
16:29discrimination doesn't harm anybody. I'd
16:30be insulted." Because
16:32uh for you to say something like that
16:34means for me for my marrying my wife not
16:36to harm other women, I would have to be
16:39uh the kind of man that only one woman
16:40want, and that's obviously not the case.
16:45So, that kind of discrimination is
16:48indeed harmful. In fact, we do it all
16:49the time, don't we? That is,
16:51uh any of you women, I know that they're
16:54roughly when you choose to marry
16:56somebody or choosing a mate, they're
16:58roughly 2 and 1/2 billion choices for
17:01you
17:01around the world.
17:03Now, how do you choose that one mate? Uh
17:06do you give each guy a chance?
17:09Or
17:10do you narrow it down on based on some
17:13kind of criteria that the Equal
17:15Employment Opportunity Commission would
17:17not accept.
17:19Uh
17:20and you probably do.
17:21You probably do.
17:24So, so do we care that people
17:27uh
17:28uh
17:29use stereotypes? Do we care that people
17:32have preferences? Do we care whether
17:34people discriminate?
17:37Now,
17:38it seems like all those things are
17:40necessary and common attributes of human
17:43behavior.
17:45So, to tell somebody not to discriminate
17:47is foolish. To tell tell someone not to
17:50discriminate by race is foolish
17:53uh
17:54as a general premise because most people
17:56marry people of their own ethnic group.
17:59Um
18:00matter of fact, it's even worse than
18:02that. They marry people of their own
18:03education and their own income
18:05standards. So, all this does you know,
18:08it makes the income distribution more
18:10skewed or makes inequalities uh more
18:12skewed than they otherwise might be.
18:16Let me just talk about another word
18:17before I talk about what we might care
18:19about
18:20or that we should what we should care
18:21about.
18:22And that's
18:24segregation.
18:26Now,
18:27in United States, if you ask the average
18:29American
18:32uh
18:33whether the airport
18:36the the Washington the Washington DC
18:39National Airport whether the soda
18:42whether the water fountains are
18:43segregated or not,
18:45most Americans would say, "Well, of
18:46course they're they're desegregated, you
18:49know."
18:50And what would it be their test? Their
18:52test for the whether water fountains at
18:55DC National Airport are desegregated or
18:57not, the test would be, "Well, if a
18:59black is there, can he in fact just go
19:02up and get a drink water if he wishes
19:04to?"
19:05Now, on the other hand, if you ask
19:07Americans whether schools have been
19:09desegregated in the United States,
19:13well, there'd be a lot of controversy.
19:14Some Americans would say no, and some
19:16would say yes.
19:18Some would say that they're segregated,
19:19and others would say that they're
19:20desegregated.
19:22Now, unfortunately, the test in schools,
19:25people would ask, "Well, what percentage
19:27of the school population is black?"
19:30And then, if you don't come up with a
19:32magic number,
19:33then they would say that the school is
19:36still segregated, and we need to have
19:37the Supreme Court order some more
19:39bussing.
19:41Now, nobody uses that same definition or
19:44that same reasoning when they ask the
19:45question or when they answer the
19:47question whether the water fountains at
19:49the DC National Airport have been
19:51desegregated or not. That is, no one
19:53says, "Well, blacks are 70% of the
19:55population of Washington, D.C., and if
19:5870% of the people at the water fountain
20:00at any one day are not blacks, then the
20:03water fountains are segregated." Nobody
20:05does that. Furthermore, because they
20:08don't use that sloppy definition, they
20:10don't go out and bus whites from the
20:12water fountains at the DC National
20:14Airport and bring blacks from Anacostia
20:17to the DC National water
20:20airport to drink water.
20:22You don't come up with foolish policy
20:24because they don't use the same
20:26definitions.
20:30Now,
20:33Now, I I think
20:35that the only thing that we should care
20:37about
20:38in racial relations
20:42is whether there's state support
20:46of
20:47preference indulgence.
20:50That is,
20:51we should be very concerned
20:54when the state either explicitly
20:58or implicitly implicitly or directly or
21:00indirectly supports racial
21:03discrimination
21:04of one form or another.
21:08And I'll come back to that when I start
21:10talking about various forms of
21:12government intervention market.
21:14But let me say a few other things.
21:17That
21:19in a kind in the vein of wetting your
21:21appetite to raise some questions.
21:24The
21:25the most the the the most central
21:28premise
21:30of the civil rights vision
21:32um
21:34all around the world, I believe, is that
21:37statistical
21:39disparities in incomes or occupations
21:44or education
21:46are moral injustices
21:49caused by society. That is
21:53these statistical
21:55disparities show that in many people's
21:57opinion that women are discriminated
22:00against because while women are 50% of
22:03the population, they are X% of some job.
22:07Or while blacks are X% of the
22:09population, they're only X minus 1% of
22:12some jobs.
22:15Now
22:17underlying this premise that statistical
22:20disparities
22:21are moral injustices caused by society.
22:26And there's the assumption that
22:28discrimination
22:30leads to adverse effects on achievement
22:34of those discriminated against.
22:37That's one of the minor assumptions
22:39behind the
22:42statistical disparity
22:44um
22:45premise.
22:47Another minor assumption
22:50is that statistical disparities
22:55or
22:55statistical differences imply or measure
22:59discrimination
23:01by race or sex.
23:04And this assumption
23:06depends upon a third,
23:09and that is
23:11and a critical assumption
23:14to the civil rights vision,
23:16that statistical disparities would not
23:20arise and persist
23:23without
23:25uh moral injustices being imposed by the
23:29society.
23:32Now, let's look at some of these
23:34assumptions or premises be behind the
23:36civil rights uh
23:38vision.
23:40The first, before we look at some of
23:41them,
23:43we know,
23:45or at least we should know that
23:47if A is known to cause Z,
23:53we cannot infer Z
23:56when
23:58B, C, and D are also known
24:01to cause Z.
24:03That is,
24:05we know that
24:07smoking, for example,
24:10is a cause of cancer.
24:14But, would we say that everybody who has
24:18cancer smoked?
24:21I think that that would be somewhat
24:23fallacious to say that.
24:27So,
24:28when we see disparities or differences
24:32between statistical differences,
24:35we can't we know that discrimination may
24:37cause those differences, but we cannot
24:40say that when we find a difference that
24:43it was caused by discrimination.
24:46Um let me look at some some of the uh
24:50some things or let me just throw out
24:51some observations
24:53of statistical disparities, and I would
24:55like for you to think whether they were
24:56caused by discrimination.
24:59Uh first,
25:0250%
25:03of
25:05Mexican-Americans
25:07marry in their teens,
25:11while
25:13only 10% of Japanese do so.
25:17Now, that is indeed a statistical
25:18disparity.
25:20But, matter of fact,
25:21Japanese they wait until the median age
25:25for Japanese marrying is somewhere
25:26around 30 31 years old.
25:31Now, given that
25:33statistical disparity,
25:35and I don't know whether anybody can say
25:37that it's caused by discrimination,
25:39but it can lead to some other observed
25:41differences. That is, there surely
25:43different income implications from one
25:46marrying when he's 30
25:48than one marrying when he's a teenager.
25:52There are different
25:53income implications both for that
25:55individual and for his children.
25:59Let me throw another one. Um
26:03In the United States,
26:0575% of all professional basketball
26:07players are black.
26:08And the highest paid ones are black.
26:12Now, surely that is a statistical
26:14disparity. That is, blacks are not 75%
26:16of the United States population.
26:18They are 12% of the United States
26:20population, but 75% of basketball
26:23players.
26:25Can one say that that's caused by
26:27discrimination? Or can one say that
26:28black basketball players are involved in
26:30some kind of conspiracy against white
26:32basketball players? Not to mention
26:34Japanese basketball players.
26:36And
26:38and women basketball players.
26:41Um in baseball,
26:44three of the five highest
26:46home run hitters were black.
26:50Uh
26:51the 10 highest slugging averages in a
26:53season, seven were German Americans.
26:58The five times that more than 100 bases
27:01were stolen in the season,
27:04uh,
27:04all of them were by blacks.
27:08Uh,
27:10you could go on and on. Uh,
27:12you can look at other differences
27:13between people in United States and
27:16probably perhaps around the world.
27:18Um,
27:20look at age differences. In United
27:22States, the median age of all Americans
27:24is 30 years old.
27:26The median age of Russian Orthodox Jews
27:28is 45 years old. Polish Americans, 40
27:31years old. Japanese Americans, 34 years
27:34old.
27:35Uh, black Americans, 22 years old.
27:37Mexican Americans, 16 years old. The
27:40median age, for those of you who have
27:41forgotten your statistics, median is
27:43half above and half below.
27:46Now,
27:47can one trace those age differences,
27:49those rather fantastic age differences,
27:52to racial discrimination? They're
27:54statistical differences.
27:55Would one expect that all ages should be
27:57the same?
27:59Now, furthermore, there also other
28:03socioeconomic, uh, implications of these
28:05differences. That is,
28:09if you if you compare one group, most of
28:12whose members are teenagers,
28:15against another group,
28:17most of whose members are mid-career
28:19adults, would you be surprised to find
28:22significant differences
28:24in income at the median?
28:27You shouldn't be surprised at all
28:28because you're comparing teenagers with
28:31mid-career adults many times.
28:34So, the fact that there
28:36significant income differences
28:38at the median for many Americans, a lot
28:41of people say that this is racial
28:42discrimination.
28:44But, a A of it represents things other
28:47than race.
28:49It represents age, at least in that
28:51case.
28:54Uh what about females?
28:56You hear in the United States there's
28:58this 59% cliche.
29:01That is, they say
29:03that as evidence of sex discrimination
29:05against women,
29:07we have this number. That is, women make
29:1059 cents over male on the male dollar.
29:15And they say, and the assumption is that
29:17women are equally productive to men.
29:20But yet they only make 59 cents on a
29:22male dollar.
29:23Well, first of all,
29:26if you were to accept that,
29:28it would require that you believe
29:30something incredible.
29:33That is,
29:34here we have
29:39uh 59 cents.
29:41Okay, turn it off. Okay, turn it on now.
29:42Okay.
29:43There's 59 cents. That's what a woman
29:45makes, an equally productive woman,
29:48and a man gets a dollar.
29:51Well, what they're saying,
29:53that companies,
29:55in the name of the brotherhood,
29:58or out of just sheer stupidity,
30:01are paying men 71% higher wages
30:07than they would have to pay if only they
30:10would hire this equally productive
30:12woman.
30:14Now, we know
30:17that companies have wound up on the
30:20industrial trash heap
30:22because they had costs that were 1%
30:25higher than their competition.
30:29But here you're talking about firms
30:31wanting to take on labor costs
30:34uh that are 71% higher than they
30:37otherwise would have to.
30:40That makes you suspicious
30:42about this 59% cliche.
30:46Um
30:49That is it makes you wonder why
30:52companies are not just owned by women
30:54and just come in and drive the
30:55competition out of the market
30:57with those kind of cost advantages.
31:02Now,
31:04but I don't believe
31:06I don't believe that women, on the
31:09whole, are as equally productive as men.
31:13And there are some very good reasons for
31:14that.
31:17Uh
31:17first of all,
31:20women have babies and men don't.
31:24Uh and women nurture babies and men
31:26don't.
31:28So, what it means is that women are to
31:31to a great degree are tourists in the
31:33labor market, in and out of the labor
31:35market. So, when you come up with a
31:36median statistic, it's going to reflect
31:38this.
31:41What gives support to this hypothesis
31:45is that
31:47if you take women
31:51If you take If you take women who have
31:53been
31:55continuously active in the labor force
31:57from high school graduation, from 18 to
32:01age 37,
32:04their the median income of this group of
32:07women
32:08is slightly higher than men of the same
32:11description.
32:13Furthermore,
32:15in co- at colleges on college
32:17universities, women who have never been
32:19married Now Now these are women who have
32:21never been married, by the way.
32:24And And women who have never been
32:26married, who are college professors,
32:29and who have the same quality uh
32:31degree,
32:33and the same number of publications, and
32:35the same years of experience, their
32:38median income is slightly higher. It's
32:40not a very significant statistic, but
32:42it's slightly higher than than men of
32:45the same description.
32:48Now,
32:49furthermore,
32:52a very interesting thing to put beside
32:53the 59% cliche
32:55is that
32:57men who are never married,
33:00their income is 61%
33:03of married men.
33:05So, if you believe in the conspiracy
33:07hypothesis affirms, not only do firms
33:10discriminate against women, but they
33:13also discriminate against men who have
33:15never been married.
33:19Now,
33:22Now, there's some very good reasons,
33:24well, at least some of the research I've
33:25seen,
33:27suggests that the major problem for
33:28women is marriage.
33:31That is when women get married, uh they
33:32put themselves at a serious disadvantage
33:35because when a man marries, he gets a
33:37helper.
33:38And when a woman gets married, she
33:39becomes a help e.
33:41And there are different uh human capital
33:44development uh implications of those
33:46roles of different roles. That is, men
33:48come home from work and uh
33:51uh kick off their shoes and read their
33:53journals. A professional woman come home
33:55comes home from work, uh she kicks off
33:57her shoes and gets the kids washed and
34:00fix dinner and etc. etc., which does not
34:02contribute that much to human capital uh
34:04accumulation.
34:07Furthermore,
34:08uh
34:09there's the mentality of with or without
34:11goeth. That is, when a man when a couple
34:13moves, normally when the couple moves
34:16physically,
34:17moves from one city to another or one
34:18country to another, normally a move move
34:20means an upward move for man
34:23and a downward move for the woman.
34:26Uh and I might just make one more thing
34:28before I go into just a uh two or three
34:31issues about government.
34:33And and that is
34:35um
34:42you would predict
34:43that females would tend to make lower
34:45income on the average
34:47because of some rational choices that
34:49they make.
34:50That is
34:52if you look at the distribution of women
34:54among professional occupations,
34:56you'll find they're they're
34:58disproportionately represented in things
35:00like
35:01elementary education, secondary
35:02education, librarians,
35:06and some other fields.
35:08Now,
35:10there's been some interesting studies. I
35:12think the one it's in the 1979 September
35:15issue of the American Economic Review,
35:17and it attempts to measure
35:20skills obsolescence.
35:23And it shows that it it measures the
35:25rate at which skills become obsolescent
35:27with people.
35:29Now,
35:30uh
35:31what it in a sense says
35:33that
35:34if you are a computer technician
35:38or a CPA
35:40or a
35:42um or something like that,
35:45and you've been out of labor market 5
35:46years to take care of kid, to give birth
35:48to kid, or 2 or 3 years even,
35:51then you are not a very good
35:55uh
35:55certified public accountant when you
35:57come back because you have not kept up
35:59with all the laws, legal changes, and
36:01the court interpretation of those laws.
36:03Your skills have become somewhat
36:05obsolete. The same thing with computer
36:07technology. If you are out for 2 or 3
36:10years,
36:11then your skills become uh rapidly
36:13obsolete uh obsolete.
36:16But on the other hand, if you were a
36:17good elementary school teacher
36:20or a good librarian,
36:22in 5 years later, you're just as good an
36:24elementary teacher or just as good a
36:27librarian.
36:28So, there's not much obsolescence of
36:31those skills. Now, if one expected to be
36:36in another labor market,
36:38what kinds of investment would you make
36:40in terms of human capital?
36:43It seems like it'd be a rational
36:44decision to invest in those activities
36:48where the obsolescence rate of the
36:51skills was uh less.
36:54And so, you find people rationally
36:56making choices that are consistent with
36:58their expected uh lifetime uh patterns,
37:02but it turns out that the wages in those
37:05in those fields are considerably lower
37:07than the wages in some other fields.
37:11So,
37:13what I want to just make at this
37:15juncture is just to argue that
37:17statistical disparities
37:20are not necessarily indicative of some
37:25kind of racial discrimination or sexual
37:27discrimination.
37:29Uh and furthermore,
37:31that
37:33that even if they were,
37:36there's a question whether
37:38the remedy
37:39uh lies in government policy.
37:44Now, let me just say some of the things
37:46that I think we should worry about when
37:49we talk about racial relations. I think
37:51that we should be concerned with the
37:53various laws that we all have on the
37:55books in all of our countries
37:58that subsidize discrimination
38:01or subsidize
38:03preference indulgence.
38:05And uh
38:07one that I've done a lot of writing
38:09about that you all might be familiar
38:10with is the minimum wage law.
38:13And
38:15and I'm finding increasing information
38:18as I do research particularly in South
38:20Africa that the minimum wage law
38:23has been and continues to be the major
38:26tools of racist everywhere.
38:29That is racist unions in South Africa,
38:33they are major supporters of the minimum
38:35wage law or the rate for the job law
38:37they call it there.
38:39Now, their stated intention behind their
38:41support for the law is go something like
38:43this and I'm quoting a fellow named
38:45Garrett Bippky of the
38:48of the
38:49construction trades union
38:52is a racist union that would not allow
38:54blacks in as members.
38:56And he says that government apartheid
38:58laws are no longer protecting the black
39:00the the white worker from competition
39:03with the black worker.
39:05And in the face of government not doing
39:09its job and protecting the white worker,
39:11we should have equal pay for equal work
39:13laws or minimum wage laws.
39:18Now, in my back in the United States,
39:21back at the turn of the century, there
39:23were many calls for minimum wage laws
39:25and equal pay for equal work laws to
39:27protect
39:29higher skilled
39:31white workers against competition with
39:33lower skilled black workers.
39:36Now, but however, most nations
39:39that I know of,
39:41most of the western nations, they have
39:44minimum wage laws, but their stated
39:46intention is to help the disadvantaged
39:48worker. So, it's left up to us the
39:50weather to decide whether it's stated
39:53intentions that determine the effects of
39:55minimum wage law or is there something
39:57else or is there a downward sloping
39:59demand curve out there?
40:01It appears to me that in South Africa,
40:04the minimum wage law has the same
40:06effects
40:07that it has in the United States. That
40:09is, it discriminates against the least
40:12preferred worker.
40:16And the racial character of it, why it
40:18why it subsidizes people people's racial
40:21preferences is seen just through
40:24kind of trivial analysis.
40:26And that is
40:28that is if you must pay,
40:31say $3 an hour to no matter who you
40:33hire,
40:35and and 10 people show up for a job, and
40:39five are black and five are white or
40:41five are men and five are women,
40:43well, there's no basis for you make and
40:46let's for certification's sake, let's
40:48say that they're all equal in their
40:49productivity. Well, there's no economic
40:52criteria for from which
40:54there's no economic criteria for you to
40:56choose.
40:57So, of necessity, you must choose your
41:00worker based on non-economic criteria.
41:04You must choose on how you like that
41:06person, how that person appears,
41:09whether he's a member of your church,
41:11whether he's a member of your political
41:12party, or whether he's a member of your
41:14race.
41:15And so, and the reason why the minimum
41:18wage law
41:20uh
41:21uh gives inducement for racial
41:22discrimination is that it lowers the
41:24cost of racial discrimination. The cost
41:26is zero.
41:27Whereby if the blacks black worker,
41:29let's assume this is a white worker is
41:30wanted $3 an hour and a black worker
41:32wanted $2 an hour, well, the the cost of
41:35discriminating against an equally
41:36productive black would be a dollar an
41:38hour. And economic theory predicts that
41:41the higher the cost of something, the
41:42less you do of it. And so, you would
41:45find that the cost would indeed would be
41:47uh a positive instead of
41:49a zero.
41:52Um
41:55regulatory laws, laws uh licensing laws
41:58discriminate against
42:01uh people who might be classed as
42:04latecomers, people without much
42:05political clout, people who are not
42:07liked very much, etc. etc.
42:10Uh examples that I've done uh research
42:12on uh, has to do with the taxi cab
42:15industry and in those areas where taxis
42:17are heavily regulated and and command
42:20very very high
42:21uh, license prices, it turns out that
42:24blacks don't own many of the taxis.
42:27But in places like Washington, D.C.,
42:29blacks own 70 to 80% of the taxis in
42:32Washington, D.C.
42:34Uh, whereby in New York, blacks might
42:36own two or three percent of the taxis.
42:39And you cannot explain that difference
42:42by saying that, well,
42:44in New York, it's the hotbed of racism
42:48and Washington, D.C. is just heaven.
42:51You can't explain it that way.
42:53But it turns out that there's free entry
42:55in Washington. That is a it the license
42:57price is $50 to get a
42:59a taxi medallion license. In New York,
43:02the last one sold for,
43:05let's say last May that I'm aware of, it
43:07sold for $105,000.
43:11And and that's just a little medallion,
43:13that little license that permits you to
43:15legally enter the field.
43:17And so, we know that
43:20poor people don't tend to have $105,000
43:23hanging around or either bank credit to
43:25make a a loan for that amount.
43:28And in fact, if you look through the
43:30history of licensing in some trades in
43:32the United States,
43:34the explicit reason for the licensing
43:36was to eliminate blacks from the trade.
43:38Most notably, this was in the case of
43:40uh, of of South Carolina and North
43:43Carolina in the plumbing and
43:45electrician's union.
43:47And all over the South and the North
43:49with respect to uh, firemen on
43:51railroads.
43:53So, it appears to me that what what we
43:55should be concerned about
43:58is not whether someone is
43:59discriminating, whether someone has the
44:02right numbers of women or right numbers
44:05of the in a particular job or in
44:07particular position.
44:08What we should worry about is
44:11is there
44:13potential to rig the game
44:16through numerous collusive laws. That is
44:19it seems like what we want to fight for
44:22is not the presence or the absence of
44:24discrimination. What we want to do, we
44:26want to make sure that there's free
44:28entry.
44:30And
44:32one of the most remarkable things I'm
44:34finding in my research
44:36on South Africa
44:38and South Africa is an excellent
44:40laboratory to examine racial
44:42discrimination or or or racial problems
44:46because it has codified so much.
44:49And I think that what South Africa has
44:52is an excellent example that the free
44:54market
44:55just does not respect race, sex,
44:58nationality, religion, etc., etc. It
45:01just does not respect it.
45:03And if you want respect for those human
45:05characteristics, you need government.
45:07And the fact of apartheid, and you
45:09should read some of the laws,
45:11uh you know, I mean they're they are
45:12explicit in their definition.
45:15The the job determination laws and the
45:17Group Areas Act and the Bantu Act and
45:19etc., etc.
45:21The fact of apartheid is evidence
45:24that the free market just does not
45:25respect
45:27uh
45:27race and sex.
45:30That is
45:31in order for, you know, these are
45:32white-owned companies in South Africa
45:35the mining companies
45:37and
45:39and the history shows in late 1800s,
45:42early 1900s that there was no great
45:44solidarity between white mine owners and
45:47white African workers, South African
45:50workers.
45:51It seemed like the white mine owners
45:53were only too anxious to hire blacks.
45:55Why? Not because they liked blacks, but
45:57because they liked the cheaper price.
46:00And
46:01and one of the one of things that's
46:03rather remarkable on my visit to South
46:05Africa, I was asking the people there
46:06all the time,
46:07you know, how come you don't have laws
46:10laws in South Africa
46:12prohibiting elephants from flying?
46:15And
46:16And obviously you don't need a law
46:18prohibiting elephants from flying, do
46:20you? Because they can't fly.
46:23So, you know, when you see whenever you
46:24see a law on the books, your initial
46:26suspicion to be it should be is that
46:28that law is there because some people
46:30would behave differently than the law
46:31specifies.
46:33Now, what apartheid richly says you
46:36know, laws where it says
46:38mine owners cannot hire blacks as steam
46:41engine drivers. Well, if mine owners
46:43would not hire blacks as steam engine
46:46drivers, you would not need a law
46:49mandating that. I mean, you find all
46:51kinds of laws, job reservation laws in
46:53South Africa. You find laws saying that
46:56whites can't sell their homes to blacks.
46:59Well, if whites would not sell their
47:00homes to blacks, why would you need a
47:02law?
47:03I mean, that the the the laws in South
47:07Africa are stand as testimony to the
47:10fact that the free market just does not
47:13care very much about racial
47:15characteristics.
47:18Okay, so
47:20so I'm I'm I'm finished unless there's
47:23some questions. I I think my my
47:25finishing conclusion is that
47:27we we should not concern ourselves so
47:29much about uh
47:31uh racial discrimination, sexual
47:33discrimination
47:35uh what we should worry about are
47:37whether those human acts, those racial
47:41or sexual indulgence is subsidized by
47:43government
47:45or is mandated by government.
47:49And we should make sure that there's
47:50open entry.
47:52And let people do whatever they want
47:54otherwise.
47:55THANK YOU VERY MUCH.
48:07YES, THAT LADY THERE.
48:10OH, YOU HAVE TO TAKE A MIC THERE.
48:19WELL, sometimes I think we do have to
48:21worry because a lot of problems are used
48:23as as excuses. What? Pardon me?
48:25Sometimes I I do think we have to worry
48:27about other problems cuz they're
48:28frequently used as excuses for
48:29government action.
48:31Um
48:32I was wondering if you could comment on
48:34Recently there was an article in
48:35Atlantic Monthly by uh
48:37man named Lehman.
48:39Uh
48:40that was trying to explain
48:43um in black ghettos the high um
48:45proportion of uh
48:47of illegitimacy and single-parent
48:49household and so forth. And he was
48:51talking offering a cultural explanation
48:53in terms of
48:55of people who had
48:56emigrated immigrated to cities from
48:59rural tenant farmer backgrounds. And I
49:02was wondering if you were if you were to
49:03read it and what you thought about it.
49:06No, I have not read it.
49:08But there are a lot of exotic uh reasons
49:10to try to explain the high rate of black
49:13illegitimacy in the United States and
49:15the general decline of the black family.
49:17For those of you who are not aware, the
49:20illegitimacy rate in uh United States
49:23among blacks is roughly around 55%. That
49:26is nationally 55% of all black babies
49:28are born out of wedlock.
49:31And in some cities like New York and
49:32Chicago,
49:33um
49:35uh you might find 80 or 90%. New York
49:38and Washington D.C. rather.
49:40Now,
49:41the
49:43the illegitimacy rate among uh uh blacks
49:47is a new phenomena in black history in
49:49the United States. That is, in 1940, the
49:53illegitimacy rate among blacks was about
49:5612%.
49:58In 1918,
50:00the illegitimacy rate among black
50:02teenagers
50:04was less than that among white
50:06teenagers.
50:08So, how do you explain
50:10the increase in illegitimacy
50:13and or out of wedlock marriages or
50:16slovenliness in general?
50:18Well,
50:19I mean,
50:21I think any economist economist would
50:23tell you that if you tax something,
50:25you're going to get less of it.
50:27And if you subsidize something, you're
50:29going to get more of it, whether it's
50:30wheat, cheese, or slovenly behavior.
50:34And indeed, in the United States, we
50:35have been subsidizing slovenly behavior.
50:39That is, we have been making the cost of
50:41illegitimacy or having kids out of
50:43wedlock relatively cheap.
50:46That is, through welfare payments,
50:49through other kinds of in-kind
50:51uh
50:52uh payments, and then the fact that
50:55the modern times of the '60s
50:57uh they're in the '70s, there's there
51:00was a loss loss of the
51:03uh ostracism associated with
51:05illegitimacy. When I was a young kid and
51:09uh keep in mind for all of you, I just
51:11look very young, but uh
51:13I'm much older than that, but
51:16when when the when a when a girl when a
51:19black girl would get pregnant, she was a
51:21disgrace to her family,
51:24and she was sent down south
51:26to live with a relative.
51:29And uh because it was just a disgrace.
51:31Nowadays, I mean, girls are pregnant in
51:33their stomachs and they're just kind of
51:35dancing in the streets, going to school,
51:36and
51:37and uh all the uh
51:40the social penalty penalties have been
51:42withdrawn from it.
51:44And so, what?
51:45Yes.
51:46Applies to to whites, also. That's
51:48right, and the illegitimacy rate among
51:50whites is is higher than what it was.
51:54Uh
51:57So, I I I think that
51:59the
52:00I think one author put it
52:02that the welfare state in the United
52:04States did more to destroy the black
52:06family than slavery could have ever
52:08done.
52:09That is the slavery and reconstruction
52:11could ever done. That is blacks were
52:14black families were far more stable
52:16during the reconstruction period. In New
52:19York in in 1920
52:22in New York, 80% of all black children
52:25live in two-parent families.
52:28And nationally up until 1960
52:31it was 75% of blacks live in two-parent
52:33families.
52:34And it was roughly equal a little bit
52:36less than that of whites. Today, the
52:39number of blacks living in two-parent
52:40families is around 42%.
52:43And it's declining.
52:45And and it's the you know, it's
52:48Yeah, Reagan didn't do that.
52:50I mean, and there's no evil spirits that
52:52explain it. I believe that the welfare
52:53state explains it.
53:01Another question? Yeah. Yes, how do you
53:03feel about
53:05laws which
53:08force access? For instance, laws which
53:10prevent discrimination in hotels,
53:13motels, uh
53:14public convenience things such as that.
53:18Uh the question was how do I feel about
53:20laws that prevent discrimination in
53:22motels and hotels and and other
53:24conveniences?
53:26Now, if they're not state-owned, I
53:29believe that the proprietor has the
53:30right to admit whomever he wants on any
53:32condition that he wants to.
53:34Now,
53:37See, there are a lot of things that
53:38people can do that I find objectionable.
53:42And I find I would find it
53:43objectionable, I would find it
53:45distasteful that someone
53:47chooses to admit a guest
53:50on the basis of his race or sex.
53:53But I think that
53:55that
53:58that one the the true test of one's
54:00commitment to
54:01uh
54:03Milton Friedman points out a lot of
54:04times to want the true test of one's
54:07commitment to free speech doesn't come
54:09when he allows those people to be free
54:10to say those things he thinks that they
54:12should say. It comes when you allow
54:14people to be free to say those things
54:15that you find offensive.
54:18The same thing with freedom of human
54:20action.
54:21That is the true test of one's
54:22commitment to individual freedom comes
54:25when you permit people to be free to do
54:27those those voluntary acts that you find
54:29offensive.
54:31Uh that's when the true test comes. Now,
54:34I would also would like to uh make the
54:36distinction
54:38that just because someone is free to
54:40discriminate
54:42in
54:43in servicing to guests as a restaurant,
54:47a hotel, or amusement park
54:49doesn't mean that he will in fact do it.
54:52That is we have to make the careful
54:54distinction between
54:55uh what people can do
54:58and what people will find it in their
55:00interest to do.
55:02And again, in United States, the very
55:04fact that we had laws on the books man-
55:07mandating
55:09uh separate accommodations and separate
55:12uh
55:12hotels may suggest that hotel owners
55:16would have admitted blacks to their
55:18hotels.
55:20So, I I think that
55:23this see see when in a free market,
55:26discrimination costs something.
55:29And it's likely to impose heavy cost on
55:32the discriminator. And and there's and
55:34there's no note there's no object of
55:36desire that I know of that people will
55:38take at any price.
55:43Is somebody else back there?
55:45Yeah. Well, I
55:47I just wanted to
55:52give a little answer on
55:54a question before.
55:56In Holland, you are not allowed to
55:58discriminate.
56:00And what happened was
56:02uh
56:03last year that the school teacher
56:06was
56:08telling a boy, a Turkish boy,
56:11um
56:12who immigrated a couple of years before,
56:15uh secondary school boy,
56:18that um
56:19his
56:20uh
56:22How do you call that? His Dutch status
56:25is
56:26uh was the best of the classroom.
56:28So, he was very good, and that was even
56:31more
56:32because he was a Turkish boy.
56:34So, the school teacher was penalized.
56:38He was discriminating uh
56:41discriminating the Turks.
56:43So, he uh
56:47tried to do his best to
56:50do what he could for the boy, but uh
56:52he was uh
56:54brought to
56:56court, and uh I think he got 14 days uh
57:01prison.
57:02Uh I didn't follow. Did you say he was
57:04discriminating in favor of him or Oh, he
57:06just told him he was the best of the
57:08classroom. Yeah.
57:10But because he was a just immigrated
57:12Turkish boy who had to learn the Dutch
57:15language within a couple of years,
57:19it was even a bigger uh
57:22thing to be the best one of the
57:24classroom. So, because he was a Turkish
57:27boy, he was stupid.
57:29And that was discrimination.
57:33You hardly can understand it, but it
57:34happened.
57:35Yeah, I I can't understand it either. Uh
57:38I mean
57:41It shouldn't It shouldn't refer to the
57:44fact that the boy was Turkish. Oh, I
57:46see. That is discrimination in Holland.
57:49Mhm.
57:52So, you have to say anything about
57:54Okay.
57:55Thanks for letting me know that.
57:58They've They've uh
58:00progressed far beyond us.
58:03In your country.
58:05Uh yes, the lady there and then that
58:07gentleman there and then you.
58:09Yes.
58:12I'm just curious about your background,
58:14uh where you grew up and if you had any
58:17serious discrimination events in your
58:19past that gave you the impetus to become
58:22the person that you are today.
58:25And how old are you?
58:31Well, I'll start with the last. Uh I
58:33just had my 50th birthday a couple
58:36several months ago.
58:38Um
58:39I grew up in North Philadelphia.
58:41Um
58:43Uh you all know uh
58:46a colleague that I grew up with and all
58:47these stories he tells are true. It was
58:50uh and
58:51and I believe at times my mother said,
58:52"Don't be like that boy. He's silly and
58:54he's never going to get anywhere." And
58:55she was referring to Bill Cosby.
58:59We both grew up in the same
59:01neighborhood.
59:03And uh
59:05and uh you know, we uh we faced uh
59:08I mean, I've seen uh signs in
59:10Washington, D.C. Uh you know, when you
59:11go to the movie, you know, uh when my
59:13mother used to take us down there to see
59:14relatives, you know, uh we do not desire
59:17colored patronage. This is in the early
59:19'40s.
59:21Um
59:23in the army uh I was sent down to
59:25Georgia
59:26from Philadelphia to Georgia without a
59:28good orientation on the Southern way of
59:30life and I had some problems adjusting
59:33to the Southern way of life down there.
59:36You know, court-martialed, the fights
59:37and all that kind of stuff.
59:40And what explains my position today is
59:45and I have not always held my position
59:47all my life. I've probably been a
59:49radical all my life,
59:51but
59:52I haven't been able to intellectualize
59:54the position, but
59:56I think it's looking at the evidence.
59:58That is it's not a faith so much in in
1:00:01free markets, but it's the evidence of
1:00:03free markets. That is
1:00:07there are several things about the free
1:00:08markets. That is
1:00:10less preferred people
1:00:12tend to do better
1:00:14in free markets than in closed markets.
1:00:18Uh also, free markets tend to
1:00:21uh has a tendency to reduce conflict
1:00:24between people among people.
1:00:26And government has the ability to
1:00:28enhance conflict
1:00:30uh
1:00:31uh among people.
1:00:33So, uh I I would guess that uh
1:00:38you you know,
1:00:39I I would I think if in you know, if you
1:00:42really pressed me, you know, I I might
1:00:44you know, I might really like communism.
1:00:47Because then you know, that's the way I
1:00:48run my household.
1:00:51There's no market in my household. You
1:00:52know, we don't exchange dollars and
1:00:54stuff like that. Uh you know, you empty
1:00:56trash and here's $2 and you you know,
1:00:58cuz that's that's it's costly to set up
1:01:00markets.
1:01:01And so, in my household, we have from
1:01:03each according to their ability and to
1:01:04each according to their needs.
1:01:07And communism is wonderful, I think, uh
1:01:10so long as you can keep track of the
1:01:12names
1:01:13and the responsibilities. Now, when you
1:01:15when you begin to forget people's names
1:01:17and their responsibilities, then I think
1:01:19you better go to a market system for
1:01:21efficient accounting and enforcement of
1:01:24relationships.
1:01:26So,
1:01:27uh and then I'm also I support communist
1:01:30people's rights to be communist, but see
1:01:32the problem with most people who want to
1:01:33be communist, they want to make me
1:01:34communist, too.
1:01:36And so, if they would go over there and
1:01:38be a communist
1:01:39and leave me alone, then maybe we could
1:01:41get along great.
1:01:43So, but there's a gentleman there.
1:01:46Yes, I'm from Norway and Norway's got
1:01:48this law
1:01:49against discrimination against
1:01:51homosexuals and guest workers, but
1:01:54especially homosexuals have got a own
1:01:56paragraph in the laws.
1:01:58And
1:01:59there was an example of a fundamental
1:02:02Christian priest. He was having a radio
1:02:04station and he was telling that from his
1:02:08point of view from the Bible that
1:02:11the homosexuals belonged in hell
1:02:14cuz that's the way you and they were
1:02:15said that's what's unnatural and was
1:02:17inspired by Satan. Because of that, he
1:02:20got the
1:02:21they went to trial against him. I don't
1:02:23think that
1:02:25when you
1:02:25put in such a law, for example, that
1:02:27homosexuals should not be discriminated,
1:02:31it means that
1:02:33there's something they can't stand to
1:02:36hear. So, if they hear someone's telling
1:02:39something about them, then they may get
1:02:41to in pieces or something like that. And
1:02:45if you go on further that way, you may
1:02:48may come to that Marxist leninist
1:02:51should not be discriminated
1:02:53or libertarians should not be
1:02:55discriminated. There should be no one
1:02:56speaking against them from any sort of
1:02:58point of view.
1:03:00And I I think I I feel that is a very I
1:03:03don't like
1:03:04that way of going against
1:03:06discrimination.
1:03:07That's the same thing as the you're
1:03:09talking about
1:03:11sexual racism.
1:03:12I think it's like that.
1:03:14Yeah, I I and I think
1:03:15you know, if people want different
1:03:18lifestyles, that's their business and I
1:03:19think we should not interfere with them,
1:03:21but at same time, there should be no
1:03:23mechanism whereby they can impose their
1:03:25lifestyles on those of you of us who
1:03:28object to that.
1:03:30And I think that
1:03:32I think that
1:03:33that's one of the great virtues of a of
1:03:35a market system is that it allows people
1:03:38with different tastes
1:03:40with a diversity of tastes to live in
1:03:44relative peace with one another.
1:03:46Uh that is when uh when I go to store to
1:03:48buy this tie, I mean, that was a
1:03:51totalitarian decision.
1:03:53That is I voted yes, I want to buy this
1:03:56tie. I don't have to consult with
1:03:57anybody else. I don't have to get
1:03:58agreement with my peers.
1:04:00And I buy the tie. Now, imagine if we
1:04:03had a government tie factory
1:04:06uh or government suit factory like we do
1:04:08schools.
1:04:10And we would be fighting all the time.
1:04:12That is we you know, because you if you
1:04:13look around the world, you'll see that
1:04:15most sources of conflict have something
1:04:18to do with government production of
1:04:20something.
1:04:21Uh whereby nobody fights each other in
1:04:24the marketplace over taste. You you
1:04:26never saw a somebody uh petitioning a
1:04:28suit factory uh because it was making
1:04:31three-piece suits
1:04:33or or a jeans factory uh at by this
1:04:37three-piece suit lovers.
1:04:39And I think that that's one of the
1:04:42I think that we as a as libertarians, we
1:04:45don't we we don't make that that point
1:04:47strong enough, I think, that the we all
1:04:50are different, we have different tastes,
1:04:52different values, etc., etc. And it is
1:04:54the free market that allows us
1:04:56to live in relative harmony while
1:04:59maintaining this diversity.
1:05:01And I think that's one of the great
1:05:03understated values or virtues of the
1:05:05market system that we don't use to uh
1:05:09um in defense of our position.
1:05:14That That lady, yes, right there. Yes.
1:05:16She has another question. Um
1:05:19Uh economists are always telling us
1:05:21certain things like internalize the
1:05:22externalities and um Yeah, I didn't tell
1:05:24you that. And and and Pardon me?
1:05:28No, I know you did. I don't use that
1:05:29kind of language.
1:05:30Okay. Well,
1:05:32and and and and the cost of information
1:05:34can be high and so forth. Now, in the
1:05:36initial examples you were talking about
1:05:38of you know,
1:05:39the basketball team and and and the SAT
1:05:41scores and so forth, where people don't
1:05:44have much information. And given that
1:05:46the it seems to be all over the world
1:05:48that people are very ethnocentric and
1:05:50always making always categorizing people
1:05:52uh by race and cultural group and so
1:05:55forth. Um
1:05:57you know, there seems to be that in the
1:05:59Japanese case with the SAT scores, there
1:06:02are some Japanese people who are
1:06:03experiencing a positive externality
1:06:06due to the achievement of of some other
1:06:10Japanese people. And likewise, there are
1:06:13many black people who are experiencing
1:06:16negative externalities due to behavior
1:06:19of of other black people. And I'm
1:06:21wondering if there's a way of
1:06:23internalizing these externalities where
1:06:25you're suffering um
1:06:28from high what may be high cost of
1:06:30information. Well, I don't know. It cuts
1:06:32either way, you know, I'll let you
1:06:34continue your your question, but I
1:06:36But
1:06:37you know, when I I in 1975, I went out
1:06:40to a Hoover Institution at Stanford
1:06:42University on sabbatical.
1:06:44And I spent a year out there and
1:06:46and I had been, you know, really
1:06:48slovenly and I was out of shape and
1:06:51stuff like that. And I go down to
1:06:53basketball court, you know, determined
1:06:54to get back in the condition.
1:06:56And I was the only black guy down there
1:06:59and all these guys fighting
1:07:01to have me on their team.
1:07:04And
1:07:05and I would could barely get down the
1:07:06court, much less do anything when I got
1:07:09down there. I was so bad out of shape.
1:07:11And they were I I I thought that they
1:07:13were quite angry with me. You know, how
1:07:15dare I be a black guy
1:07:17and couldn't play better basketball than
1:07:19that.
1:07:21So, the the as you pointed out, the
1:07:24externalities can go either way.
1:07:27Uh but but
1:07:30But you know, I think that when people
1:07:32make erroneous choices, they pay for
1:07:34their costs.
1:07:37I mean, they they they and I I'm sure
1:07:39that unfortunately, the people who might
1:07:41be incorrectly stereotyped, they pay for
1:07:44their costs. But
1:07:45but if you had Are you an American?
1:07:48Okay. You you know this. And the reason
1:07:51I asked you because you have some
1:07:51familiarity.
1:07:53If you had I mean, given the fact that
1:07:55there's costly information
1:07:58and that people have stereotypes or
1:08:00maybe wrong estimations of black
1:08:02productivity,
1:08:05how could you reinforce this?
1:08:07What seems like our government policy
1:08:10reinforces that. That is
1:08:12Consider this uh
1:08:13uh
1:08:14uh
1:08:16Consider just just a a non-racial
1:08:18example. I mean, suppose you shop at a
1:08:20store. Everybody hear me in the back?
1:08:23Suppose you shop you used to shop at an
1:08:24A&P.
1:08:26Okay, you used to shop at an A&P.
1:08:29Okay? Now, I
1:08:32Here's Walter Williams' store. Anybody's
1:08:33store. Here's Here's a uh X X Y store
1:08:36going to open up in your neighborhood.
1:08:38Now, how is X Y going to get you to give
1:08:42them a chance to experiment, see how
1:08:45their food is?
1:08:46Well, typically, what do they do? They
1:08:48have a sale, don't they? That is, they
1:08:50lower their price, right?
1:08:53Now, you look at many aspects of the
1:08:56labor market, people are not allowed to
1:08:58lower their price.
1:09:00Whether it's minimum wage law, whether
1:09:01it's government regulations, whether
1:09:03it's scales, or whether it's union
1:09:05agreements, or whatever, people
1:09:07who untried people are not allowed to do
1:09:11like XY store. Okay? Now,
1:09:15what's another thing? Well, affirmative
1:09:17action rules, you know, a guy says, you
1:09:19know, let's say I'm going to hire you.
1:09:22I'm going to hire you. And I say,
1:09:25you know, that that woman, I think that
1:09:27she might turn out fairly well.
1:09:29I have a hunch. I mean, she has a
1:09:31resume. I don't know
1:09:32I don't know anything about that college
1:09:34she went to. I don't know anything about
1:09:36her references.
1:09:37But, I have a hunch that she might work
1:09:39out well.
1:09:41Now, but how am I my lawyers come up to
1:09:43me and say, Williams,
1:09:45you better not give her a try because if
1:09:47you try her out and she doesn't work out
1:09:50and you have to fire her, you might have
1:09:52to spend $40,000 defending yourself in
1:09:54court against sexual discrimination
1:09:56suits.
1:09:58You could just accuse me of sexual
1:09:59racial discrimination.
1:10:01And so I say, well, I'm not going to
1:10:03try. I'll stick with people I know.
1:10:04That's the same thing in Alachua County
1:10:06store. Suppose here's your house here
1:10:08and there's a law saying that once you
1:10:11try the store, you have to stick with
1:10:13the store.
1:10:15You could never fire the store.
1:10:18Well, that would reduce your incentive
1:10:19to experiment to try to get out more
1:10:21information. So, I'm saying that in the
1:10:23United States and in other places, we
1:10:26have laws that reduce people's
1:10:29willingness to experiment to get more
1:10:31information, to try out people
1:10:34under circumstances that they haven't
1:10:36tried them out before.
1:10:38And that's one of the big That's one of
1:10:39the big problems. It's just It's
1:10:42I mean, when you make it costly to fire
1:10:45somebody, you also make it costly to
1:10:47hire them.
1:10:49John.
1:10:50Um
1:10:52Charles Murray wrote an article once in
1:10:54which he pointed out that it's almost a
1:10:56mathematical certainty that the
1:10:58affirmative action laws will lead to a
1:11:00perception of black inferiority because
1:11:03there are not enough blacks to go
1:11:04around. And
1:11:07affirmative action requires that
1:11:08everybody have a certain number. And so
1:11:11there's enormous competition for the
1:11:12best top
1:11:14people in every field. And then certain
1:11:18companies will have to then take people
1:11:20who are not really as qualified in order
1:11:23to fill this quota. Mhm. And so that's
1:11:26what happens is that in terms of, you
1:11:29know, the general perception, everybody
1:11:32is fighting the the few best people can
1:11:35only go to a few firms. People are then
1:11:38promoted again in Peter Principle
1:11:41because they become politically
1:11:43necessary. Yeah. Yeah, and and and
1:11:45matter of fact from and I might add
1:11:47something to this
1:11:48Yeah. which you might not have thought
1:11:50of is that there's a bit of
1:11:53perniciousness with this process. That
1:11:55is there are other people who benefit.
1:11:57That is Yeah. For for me like if I'm
1:12:00General Motors or US Steel, I will
1:12:03support affirmative action programs or
1:12:06racial quotas.
1:12:07And I'll get a lot of good public will.
1:12:10But at the same time, I know that well
1:12:12look, I I keep 100 lawyers on retainer
1:12:15anyway.
1:12:17And so there are some of these other
1:12:19competitor firms
1:12:21that I can drive them out of business or
1:12:23I can reduce the probability of their
1:12:24entering because of this system that's
1:12:27going to make it very very costly for
1:12:29them to operate. And I already have a
1:12:31comparative advantage already.
1:12:33And so you find a lot of
1:12:35major companies supporting affirmative
1:12:38action,
1:12:39clean air, and all this kind of stuff
1:12:41because so they use the government to
1:12:43get the competition out of market, yeah.
1:12:47This yeah.
1:12:51Okay, excuse me.
1:12:53My English is not so good, but I hope I
1:12:55will be able to to make understand my my
1:12:57question. It's in fact we as
1:13:00libertarians are against welfare because
1:13:03welfare is bad with
1:13:05money
1:13:06um
1:13:07gathered by coercion.
1:13:09But what you said about the black
1:13:12families
1:13:13may give us a new argumentation. I don't
1:13:16know if I did understand it it totally
1:13:19well. If we take I'm Belgian and in
1:13:22Belgium we we have
1:13:24the every parent that that has children
1:13:26has a right to get a grant a grant every
1:13:29month uh
1:13:31money for for his child. And when we
1:13:34make
1:13:35a little comparison between income of
1:13:38welfare, someone on welfare can every
1:13:41time he has four children
1:13:44double or
1:13:46I mean four children is enough to to
1:13:48double your income of welfare. Mhm.
1:13:50That's why for them it's it's a much
1:13:52better incentive than for people who are
1:13:55very wealthy. And maybe that's what what
1:13:57explains that that wealthy people in
1:13:59Belgium usually don't have children or
1:14:01only have one or two children. But uh
1:14:05if uh
1:14:07we are in favor to to abolish that
1:14:09usually the opponents say, "Well, you
1:14:12you are asocial and you want to hit more
1:14:15low-income people than than
1:14:16higher-income people that not have less
1:14:19children." But if I could you
1:14:22we could oppose to that that in fact
1:14:25those welfare grants are destroying
1:14:28family and that without uh
1:14:32welfare grants maybe family uh should be
1:14:36be favored favored more. But I I cannot
1:14:38fix it totally how I could use that
1:14:41argumentation for the Belgian case.
1:14:43Maybe you can help me.
1:14:44Well,
1:14:46uh there there
1:14:49There's several steps
1:14:51uh, here. I'm using up all the
1:14:53libertarian paper.
1:14:55Uh,
1:14:57First of all, I think that as you point
1:15:00out that welfare
1:15:02is let Okay. That that welfare, taking
1:15:05welfare in the short run
1:15:07is an intelligent economics decision.
1:15:12That is because at least in the United
1:15:14States the after-tax welfare package is
1:15:19uh,
1:15:20for let's say a standard family of two
1:15:23or three, the the value of the cash and
1:15:27in-kind is maybe around $10,000.
1:15:31That's after tax.
1:15:33Now,
1:15:34um,
1:15:35because there's no tax on it.
1:15:37Okay? And in order for a person to get a
1:15:41after-tax income of $10,000
1:15:46he has to go out and make 12 or 13,000
1:15:48before tax.
1:15:50And most And a lot of people who are on
1:15:52welfare,
1:15:53uh, they do not have the ability to go
1:15:55out and make a uh,
1:15:57income of $12,000 a dollars a year.
1:16:00Okay? Now, so uh,
1:16:03uh, poor people are poor, but they're
1:16:05not fools. That is they will make the
1:16:07economic calculation and they and as you
1:16:11point out that's a wise decision in the
1:16:13short run.
1:16:14But it's not a very wise decision in the
1:16:17long run because
1:16:19because getting that first job and
1:16:22gaining on-the-job skills
1:16:25will in the long run get you a an
1:16:27after-tax package that's higher than the
1:16:29$10,000.
1:16:32And I think that's one of the arguments.
1:16:33Then Then furthermore, in the United
1:16:35States
1:16:37the fact that the welfare system gives
1:16:39incentive for single female-headed
1:16:42households, it turns out that
1:16:46uh
1:16:47they could possibly be richer
1:16:50if
1:16:51there was if there wasn't this
1:16:52disincentive to break up the family.
1:16:53That is, by having two-parent families,
1:16:56that would get you out of poverty
1:16:58because in the United States we we're
1:16:59wonderful in the United States. I mean,
1:17:01our poverty level's $10,000 a year for a
1:17:04family of four. I mean, we're just
1:17:06wonderful people here.
1:17:07And
1:17:09uh very rich to afford a poverty level
1:17:11like that.
1:17:13And uh you know, our poor people have
1:17:14cars and televisions and things like
1:17:17that.
1:17:18Uh but it turns out that on a minimum
1:17:21wage job in the United States, which is
1:17:22$3.35 an hour,
1:17:25uh
1:17:26each person on a minimum wage job uh
1:17:28year's wages is close to $7,000.
1:17:33Close to $7,000. And if two people are
1:17:35working full-time, you're really talking
1:17:37about $14,000, you're out of poverty.
1:17:39So, if you had a two-parent family,
1:17:43uh
1:17:44if you if if there weren't systematic
1:17:46disincentives to break down a family,
1:17:48a whole lot of people would not be poor.
1:17:50They would not be on the poor rolls.
1:17:53And that's one of the that's
1:17:55that's one of the other things that the
1:17:57welfare family the welfare
1:17:59system does, it breaks down the family
1:18:02and female-headed families of any race,
1:18:04they tend to be poor.
1:18:06Poorer on the average than
1:18:08than
1:18:09than two-parent families.
1:18:13But then then there's but see, there's
1:18:15another issue, you know, when when we
1:18:17talk about welfare, when I talk about
1:18:18welfare in the United States,
1:18:21I don't talk about the poor getting
1:18:22welfare because
1:18:24I mean, welfare is an epidemic in the
1:18:27United States.
1:18:28I mean, everybody is on the dole.
1:18:31I'm talking about farmers in the United
1:18:34States.
1:18:35Uh you know, we have aid to dependent
1:18:36farmer programs.
1:18:38We have aid to dependent motorcycle
1:18:40companies, aid to dependent banks.
1:18:43And, matter of fact, I would guess that
1:18:47out of our budget, we have a $1 trillion
1:18:50uh federal budget that includes the
1:18:51above-ground government. There's a lot
1:18:53of underground governments and we don't
1:18:55know quite what it is, the so-called
1:18:57off-budget expenditures.
1:18:59That only, in my opinion, only 400 400
1:19:05billion dollars
1:19:07goes towards legitimate government
1:19:08functions.
1:19:10The rest of it is uh an activity which
1:19:13is illegitimate for government. That is,
1:19:15the confiscation of one American's
1:19:17property and giving it to another
1:19:18American. And we have many, many
1:19:20programs. I mean, Social Security, we we
1:19:22spend over $300 billion in welfare for
1:19:25the elderly.
1:19:27And the welfare for the poor,
1:19:29I doubt whether it's
1:19:32I guess it's
1:19:34you know, one of the very interesting
1:19:35things we spend It's estimated that we
1:19:37when United States, if you add up all
1:19:39the spending at the federal, state, and
1:19:40local levels, you would talk roughly
1:19:43around $360 billion in programs that
1:19:46have as their justification uh coping
1:19:48with some aspect of poverty.
1:19:50It turns out that if you divide the
1:19:52number of poor people into this amount,
1:19:55and just gave them the cash, which I'm
1:19:57not proposing doing,
1:19:59each poor family of four would have
1:20:01$36,000 cuz there're roughly uh uh
1:20:06uh how many more how many uh
1:20:09You have 10 million.
1:20:10Uh 10 million poor people. Each poor
1:20:12would have $36,000 a year.
1:20:15Each poor family. And Gordon Tullock,
1:20:18according to his estimates, he would say
1:20:21uh $48,000 uh dollars a year.
1:20:24Uh if you look at his book of The
1:20:25Economics of Income Redistribution,
1:20:29and so what poor people What I'm
1:20:30suggesting is that poor people are being
1:20:32used as cannon fodder
1:20:34to conceal or stalking horses to conceal
1:20:37the income objectives of other people.
1:20:39That is the
1:20:41best way to get money from another
1:20:42American is to say that you're doing it
1:20:44for the poor. I know Thomas Sowell, my
1:20:46colleague,
1:20:48he was telling me that, I don't know how
1:20:50true it is, but a friend of his was
1:20:52visiting driving through Indian
1:20:53reservation and the Bureau of Indian
1:20:55Affairs officer was crying. He asked
1:20:57him, "Why are you crying?" He said, "My
1:20:58Indian died."
1:21:00And the uh
1:21:02and his budget depended on the number of
1:21:04Indians that he had there.
1:21:06And I'm very sure that many poor people
1:21:09are seen in the same light by people who
1:21:11I call poverty pimps.
1:21:15Yeah, yeah, Johnson.
1:21:17Walter, um
1:21:20we have a lot of welfare programs and
1:21:22those have to be adopted by government,
1:21:24so there
1:21:25presumably is a powerful political
1:21:28constituency that exists to get these
1:21:30programs going and of course you've just
1:21:32shown
1:21:33that the poor people
1:21:36by and large do not benefit this,
1:21:38certainly in the long run.
1:21:40Now, given that we all know that poor
1:21:42people do not make up a powerful
1:21:44political constituency because if they
1:21:46were powerful, they wouldn't be poor.
1:21:48Mhm. Uh
1:21:49who is it that benefits and makes up
1:21:52this powerful political constituency
1:21:54that produces welfare programs?
1:21:57Well, I I think it's it's varied. Uh
1:22:00I think that
1:22:01uh
1:22:03civil servants are a beneficiary to the
1:22:07poverty programs, those people who get
1:22:09high incomes from administering them.
1:22:11Uh politicians who are able to buy
1:22:14votes.
1:22:15And then
1:22:17but I would say maybe the primary
1:22:19beneficiary are middle-class Americans.
1:22:22Uh that is who are able to
1:22:25uh
1:22:26to redistribute income in their
1:22:28in the name of the poor. Let me give you
1:22:30just some examples.
1:22:32Um
1:22:33I have escaped the slums of North
1:22:35Philadelphia, and I live in the very
1:22:37high-income
1:22:38suburb of Philadelphia, along the Main
1:22:40Line suburbs.
1:22:42And oh, several years ago, when my
1:22:44daughter was starting school, my wife
1:22:46said to ask me, could she have uh
1:22:49some change, dollars and change for my
1:22:51daughter's lunch. And so, I said, "How
1:22:52much you need?" And she said, I believe
1:22:54it was 75 cents. So, something like
1:22:55that.
1:22:56Now, it's been a long time since I've
1:22:57received a lunch for 75 cents. And that
1:22:59is a subsidized lunch. Now, you wonder
1:23:03why are you know, I don't need the
1:23:05subsidy, my neighbors don't need the
1:23:07subsidy. Why are we getting it? Well,
1:23:09you we say we have the school lunch
1:23:11program in the United States and so that
1:23:13kids won't go to school hungry.
1:23:15But there but however, the school lunch
1:23:17program is given for every kid.
1:23:20Or you look at college, you know, a lot
1:23:22of these subsidies to higher education
1:23:24are to make college affordable and
1:23:27available to the poor.
1:23:29But according to all the statistical
1:23:32information I know, that no more than 5
1:23:36or 6% of the college population across
1:23:38the United States consists of people who
1:23:40come from poor families. The major
1:23:43beneficiaries of the of the income
1:23:45program are are middle-class and
1:23:47upper-class kids. Or you look at farm at
1:23:50the farm program, the justification for
1:23:52the massive subsidies to American
1:23:53farmers from the government is to help
1:23:56the poor family farmer.
1:23:58And uh according to Richard Rahn at the
1:24:00Chamber of Commerce, he estimates that
1:24:04over 60% of all the farm subsidies go to
1:24:08farmers who have operating incomes
1:24:12uh over $200,000,
1:24:15which I mean, operating profits over
1:24:17$200,000.
1:24:19And that hardly qualifies as poor. And
1:24:22matter of fact, the farm subsidy program
1:24:24uh uh probably works to the disadvantage
1:24:26of poor family farms. So, you can go
1:24:28after program Matter of fact, Milton
1:24:30Friedman says, and I and I haven't found
1:24:31any exception to his rules,
1:24:33he says, other than cash transfers to
1:24:36poor people,
1:24:38that if you take any poor program, any
1:24:40poverty program, and and look at the
1:24:44intentions
1:24:46of the or the wishes or the objectives
1:24:48of the of well-intended people, and you
1:24:50turn them on their head on those
1:24:52intentions on their on their head, you
1:24:53get the results of those poverty
1:24:55programs.
1:24:56And I can't think of too many exceptions
1:24:59of uh any government uh poverty
1:25:01programs. So, there's a mass of people
1:25:03who benefit from this. And they're And
1:25:05they're not poor. The poor people See,
1:25:07the poor people will pay the cost of it.
1:25:10That is, they'll For example,
1:25:13and many poor black people will
1:25:15uh poor black people will because I'm
1:25:17very sure that
1:25:20in the United States that if we run into
1:25:22some kind of economic collapse,
1:25:25then and and people are looking for a
1:25:27scapegoat,
1:25:29a politician looking for a scapegoat, he
1:25:31might easily seize on the welfare
1:25:32program saying that those blacks caused
1:25:35the nation to go down in tubes with
1:25:37their down in tubes with their welfare
1:25:39programs.
1:25:40And I think that if you look at the last
1:25:42election in the United States uh
1:25:44not the last, but 1980,
1:25:46when when Ronald Reagan was about to
1:25:49come in, and you found that many uh
1:25:51so-called black civil rights leaders uh
1:25:54were in a panic, and and they got a lot
1:25:56of black people in a panic about Reagan
1:25:57being elected. I think it's it's pointed
1:25:59a sad tragedy that
1:26:01the
1:26:03and that uh to make poor people,
1:26:06particularly poor black people,
1:26:07dependent on uh on on political on
1:26:10government largess is to subject them to
1:26:12every political whim in the market. I
1:26:14mean, the political arena. And one
1:26:17wonders whether there's a wider strategy
1:26:19to make uh uh
1:26:20uh
1:26:21uh poor people, and particularly poor
1:26:23black people, dependent on
1:26:25on on uh the political whims. And I just
1:26:27might make one point since I'm talking
1:26:29about poor black people. It is very well
1:26:31very well advised that to be advised
1:26:33that most black people in the United
1:26:34States are not poor.
1:26:36Most black people in the United States
1:26:37are in the
1:26:39low middle
1:26:41uh uh low middle income on up.
1:26:44That is, there's a large percentage of
1:26:46the black population in the United
1:26:47States, namely 33% who are poor and for
1:26:49whom there looks like there's not much
1:26:51hope. But most black people are not
1:26:53poor. Most black people pay taxes, uh go
1:26:56to work, and
1:26:57and try to get a better living like like
1:26:59you and I.
1:27:01Yes.
1:27:03Uh yesterday I heard you say correctly
1:27:05that $400 billion is probably the
1:27:07maximum amount that the government
1:27:09should be justifiably spending. And if
1:27:12you're going to answer
1:27:13activities.
1:27:13Legitimate activities. So I'd like you
1:27:15to explain that number to me, and then
1:27:17of course I'm going to have a follow-up
1:27:18question.
1:27:22Well, uh most of that number has to do
1:27:25with national defense.
1:27:27Um
1:27:29and
1:27:31uh the court system, adjudication of uh
1:27:34of disputes, enforcing contracts. It's
1:27:36just a rough idea. It could easily be
1:27:38defense plus $5 billion.
1:27:43Um
1:27:44I think defense is a is a legitimate
1:27:46function of a state government.
1:27:48Maybe I'm maybe $400 billion is a little
1:27:50bit too high. Could be more than that.
1:27:53But I was just kind of giving the the
1:27:55state is the benefit of the doubt.
1:27:58Well, I know uh excluding the $6,000
1:28:00coffee pots and all that sort of thing,
1:28:02you know, many of us don't believe that
1:28:04even if the state is a legitimate
1:28:06defense for, you know, externalities or
1:28:08whatever you call it, $400 billion is is
1:28:10a bit much.
1:28:11But I'm wondering if you're familiar
1:28:13with the libertarian
1:28:15uh literature
1:28:17on non-statist external defense, and uh
1:28:21have you rejected the possibility of a
1:28:23free market in defense? Yeah, I think
1:28:25that's very naive. I I I reject it, and
1:28:28I I have an argument with many of my
1:28:30libertarian friends over this.
1:28:33That is,
1:28:34I view the world as a hostile place.
1:28:37Uh
1:28:38I view that we have uh
1:28:42some adversaries around the world that
1:28:43would like to be able to impose their
1:28:45will.
1:28:46And I think that United States If United
1:28:48States cannot defend itself militarily,
1:28:52then you can forget about Western Europe
1:28:54ever having any semblance of freedom.
1:28:55You can forget about Sweden, you forget
1:28:57about all over having any kind of
1:28:59freedom.
1:29:01Now, United
1:29:04It is my opinion that
1:29:07that
1:29:09Yeah, right.
1:29:11Uh and those countries wouldn't let us
1:29:13fly over them. Uh
1:29:15But, I think that we should have
1:29:17military power to make Russia or any
1:29:21other adversary
1:29:23uh glow a nice radioactive green
1:29:27in the dark
1:29:29with no question whatsoever. That is my
1:29:31opinion. That's what That's my
1:29:33assessment because I see
1:29:36a good part of the rest of the good part
1:29:38of the world, the free world, not
1:29:40willing
1:29:41to defend itself.
1:29:43I see all of Europe
1:29:45uh not willing to defend itself. I see
1:29:49uh countries I see in the name of
1:29:52welfare,
1:29:54and if you'll pardon my being impolite
1:29:56guest in your country, I see Sweden's uh
1:30:00Swedes
1:30:01uh just allowing a foreign power just to
1:30:04walk in because they might worry to
1:30:07maintain the capacity to begin to defend
1:30:10themselves might mean that they might
1:30:12have to give up some food stamp program.
1:30:15That is I think that uh
1:30:17as uh
1:30:19as Adam Smith pointed out he said that
1:30:22uh
1:30:24uh opulence without defense
1:30:27is uh is not a very good uh a program.
1:30:31Uh well, actually um we didn't finish on
1:30:34the matter of whether the $400 billion
1:30:36number was as low as it could be because
1:30:40in view of the fact that the Pacific
1:30:42Basin does not defend itself, for
1:30:44example, Japanese families only pay $400
1:30:48a year for defense and American families
1:30:50pay for the defense of Japan to the tune
1:30:52of $4,000 a year per family. Uh do you
1:30:57believe that it is right for America to
1:31:00continue its role as international
1:31:03policeman or do you think it's time for
1:31:05us to pull back and only pay for our the
1:31:08true defense of our borders? Yeah,
1:31:10that's uh that's very emotive emotional
1:31:12word uh
1:31:14international police.
1:31:16But
1:31:17I think that we should behave not
1:31:20according to America's obligation is not
1:31:22to behave according to the way the world
1:31:24should act.
1:31:26Its obligation is the way is to uh
1:31:29behave according to the way the world is
1:31:31acting and I think in the interest of
1:31:33the free world uh we would surely like
1:31:35to uh encourage our allies to
1:31:38uh take a greater role in the defense of
1:31:41their own communities.
1:31:42And I'm sure the Reagan administration
1:31:44wants to work in that direction. But in
1:31:46the interim, I don't think that we
1:31:48should uh give uh the uh Soviet Union,
1:31:52if it so desires, an invitation to walk
1:31:55in.
1:31:58And while we're trying to get them to
1:32:00take a greater role uh in defending
1:32:02themselves.
1:32:04I want to say something.
1:32:10You know.
1:32:14Yes, the gentleman down here. Uh
1:32:16I'm curious do you Oh, thank you. Do you
1:32:20support
1:32:21the proposed Star Wars program?
1:32:26Now,
1:32:28I see I don't look at Star Wars
1:32:31or or or strategic defense
1:32:33initiative
1:32:34as being
1:32:36you know, I don't I don't evaluate it
1:32:37being 100% safe, you know, I
1:32:40So, if it if it's 80% if it has a 50%
1:32:42probability of working,
1:32:44uh I think that it gives the and any
1:32:46adversary second pause. He has to
1:32:49reconsider
1:32:50if we can knock four out of five of his
1:32:52missiles out, well, then he has to think
1:32:55again.
1:32:56But, I think that that what if if I
1:32:58might just not really answer your
1:33:00question Well, I've answered your
1:33:01question already, but if I might add to
1:33:02it, I think that the problems that we're
1:33:05having now
1:33:07show the our weaknesses of the past.
1:33:11That is
1:33:12um
1:33:13in our poor policy policy formulation
1:33:16formulation in the United States. Uh
1:33:19I would have rather
1:33:21than our having the problems today of
1:33:23facing potential Armageddon,
1:33:26I would have rather United States in
1:33:281948 or 1946
1:33:31uh told the rest of the world that
1:33:35if anybody produces
1:33:38nuclear weapons, we are going to bomb
1:33:40your facilities.
1:33:42And at that time we did have that
1:33:44capability.
1:33:46Now, you might say, "Well, as a good
1:33:47libertarian, Williams, why would you
1:33:50offend the sovereignty of other
1:33:51nations?" Well,
1:33:54it's one of those things of expediency.
1:33:55That is,
1:33:57if you want to avoid Armageddon, you
1:33:59have to keep the nuclear club size small
1:34:01because you all we all know that as the
1:34:03club size gets larger, the cost of
1:34:06making decisions gets greater.
1:34:08Uh and to avoid Armageddon, there has to
1:34:11be a unanimity a unanimous decision not
1:34:14to use these weapons. And as the club
1:34:16size gets larger, people have incentive
1:34:18to engage in strategic behavior.
1:34:21And if you think that today is bad, the
1:34:24Vietnam War is bad, and the prices and
1:34:27problems that we have now are bad,
1:34:30wait until there are 50 nations
1:34:33with nuclear capacity.
1:34:35Then you will see. Wait until you find
1:34:37some of these uh nations uh uh
1:34:42I mean imagine what
1:34:44What do you think if if uh Lebanon had
1:34:46nuclear weapons?
1:34:49Or many of these highly unstable places
1:34:51have nuclear weapons, and the cost of
1:34:53getting nuclear nuclear weapons getting
1:34:54cheaper and cheaper. So,
1:34:57uh you'll be around. Most of you'll be
1:34:58young. I see, I don't have to worry
1:34:59about a whole lot of things
1:35:01cuz I only have about 23 more years to
1:35:03live or 25, whatever.
1:35:05And these will be your problems. But,
1:35:08uh
1:35:09you'll see the advantages of keeping the
1:35:11club size small as the club members get
1:35:14larger.
1:35:18Want to change the subject a bit. Ask
1:35:20you
1:35:20Thank you. As an As an economist, as an
1:35:23Austrian economist, what you think about
1:35:26uh current investments? Uh what would
1:35:29you recommend, or do you do that kind of
1:35:30thing at all?
1:35:32Well,
1:35:33uh
1:35:35First of all, I'm not an Austrian
1:35:36economist. I uh I I teach at George
1:35:38Mason University, and we have a crowd of
1:35:40Austrian economists there. I'm kind of
1:35:42eclectic. I I Matter of fact, I'm not
1:35:44really quite sure what an Austrian
1:35:45economist is. But, the ones I've met,
1:35:48I've liked them.
1:35:50But, so far as investment, I always tell
1:35:53people, you know, like I I speak
1:35:55worldwide in the United States and
1:35:57people ask me, "Well, what Williams,
1:35:58what's the interest What is the interest
1:35:59rate on land or do or what should we
1:36:01invest in?"
1:36:02And I tell them, "If I knew what the
1:36:03interest rate was going to be or I knew
1:36:05what to invest in, you know, why would I
1:36:07be making hitting the hustings trying to
1:36:10make money? I'd be sitting out on my
1:36:11yacht, you know, if I knew the answers
1:36:14to all these kind of things."
1:36:16So, uh
1:36:18So, I don't know. Now,
1:36:20if I might just throw out an idea hoping
1:36:22that someone will cap- capture the idea
1:36:26for what I think would make a good
1:36:27investment opportunity,
1:36:30uh and you should surely drop me a
1:36:32letter and let me know once you did this
1:36:34and give me my uh right commission for
1:36:36the idea or my royalty, if you will,
1:36:39that I think people should go around and
1:36:42buy property in unstable countries, have
1:36:45a mutual fund of unstable countries.
1:36:48I got this idea when I was uh in South
1:36:50Africa where uh last month where people
1:36:53are leaving South Africa, you know, uh
1:36:55uh going to New Zealand and they're
1:36:57selling their house they're selling uh
1:37:00$250,000
1:37:01houses for $125,000
1:37:04and uh they're just leaving the country
1:37:06and I figure you pick 10 places like
1:37:07this and kind of have a mutual fund
1:37:10buying these houses and and let's have
1:37:13two of the places get stable and the
1:37:14other places the values don't go to
1:37:16zero, you can make a lot of money,
1:37:17couldn't you?
1:37:19So, that that would be my recommendation
1:37:20to you.
1:37:24Yes. Oh, now that before that lady, uh
1:37:27uh that gentleman there.
1:37:32Okay. I would like you to uh to comment
1:37:35on um another kind of government
1:37:38regulation which, as I see it, has the
1:37:41same effects
1:37:42uh in a in a racial perspective and in
1:37:45other perspectives are minimum wage laws
1:37:48and
1:37:49tax
1:37:51taxi regulations and so on. And that's
1:37:53immigration control. Do you favor the
1:37:56total abolishment of
1:38:00immigration controls? And could you
1:38:02might add the
1:38:04few comments on the
1:38:05economy of on immigration? I mean,
1:38:08how do you see
1:38:09immigration as as an economic factor?
1:38:13Um
1:38:16Well, I I think that migration in
1:38:18general is one of the
1:38:20you know, it's it's it's one of the ways
1:38:21of investing human capital going to
1:38:23places where the wages are higher.
1:38:26Um
1:38:28I I think that
1:38:31um
1:38:33traditionally in the history of the
1:38:34United States at least,
1:38:35we've had fairly open borders.
1:38:38Uh
1:38:39and immigration has always been good for
1:38:42United States.
1:38:43It's always been good. In the matter of
1:38:45fact, it still is good for United
1:38:46States.
1:38:48But there's a problem in
1:38:50in immigration today, at least in United
1:38:52States, that is
1:38:54before the welfare state presents
1:38:57problems. That is before the welfare
1:38:59state,
1:39:00when people are coming to United States,
1:39:01we knew that they're coming there to
1:39:03work.
1:39:04Now, with the welfare state, people can
1:39:07easily come to live off of me, and I
1:39:11have too many people living off me.
1:39:12Matter of fact, I
1:39:14I
1:39:15I not only buy my share of the missiles,
1:39:16I support five American families
1:39:19uh through the IRS and tax code. And
1:39:23one of the disappointing things to me is
1:39:24I don't even get a thank you thank thank
1:39:26you card on Father's Day
1:39:28uh from these families. But the problem
1:39:31is
1:39:32is indeed the welfare state.
1:39:35Um in United States, we have a lot of
1:39:38illegal immigration from Mexico. But all
1:39:41the statistical data on the illegal
1:39:43immigrants shows that there's very high
1:39:45employment rates.
1:39:46And that's one of the advantages of
1:39:48illegal immigration is because with
1:39:50illegal immigration, the people are more
1:39:53likely to work because they are not
1:39:55eligible for many of the programs, the
1:39:57welfare programs, because they're
1:39:58illegal aliens.
1:40:01Uh so, matter of fact, I've testified in
1:40:03Congress uh in the United States that I
1:40:04support illegal aliens
1:40:07and I have some reservations about legal
1:40:09ones.
1:40:19That lady, yes.
1:40:21Um there seems to be a curious tendency
1:40:24to whenever
1:40:26people want to talk about the problems
1:40:29of black people in the United States,
1:40:31they use economic arguments. But when
1:40:34they want want to talk about the
1:40:35successes, they don't use economic
1:40:38arguments. But it seems to me that
1:40:41Well,
1:40:42in instead they use racist arguments.
1:40:45Um For example.
1:40:46Well, for example, all right. You see,
1:40:48you mentioned basketball and athletics
1:40:50and and also the entertainment industry.
1:40:52There's burgeoning of of uh black people
1:40:55at the very
1:40:56top of the entertainment industry. Now,
1:40:58it seems that these are industries where
1:40:59the barriers to entry are very low,
1:41:02where you're relying on your human
1:41:04capital, you don't need money to buy
1:41:06capital.
1:41:07Uh it's easy to get people if you have
1:41:10uh
1:41:11if you develop your own human capital to
1:41:13invest in you and so forth. Nobody goes
1:41:15around explaining, you know, black
1:41:17success in this way in these things.
1:41:20Instead, even black people go around,
1:41:23you know, saying, "Well, making sort of
1:41:25racist explanations for it." And you
1:41:26know, I'm always hearing black people
1:41:28laughing at white people when they dance
1:41:29and so forth.
1:41:30And and but it seems to me that there
1:41:32are very simple economic explanations
1:41:35uh for success in these fields. Why Why
1:41:38doesn't one ever hear these explanations
1:41:41made? And instead by By By not hearing
1:41:44them, it sort of reinforces the sort of
1:41:46racist explanations that that one hears.
1:41:48And And it reinforces the idea that
1:41:50blacks are going to be successful only
1:41:52in these these sorts of areas instead of
1:41:56uh, the view that if you took away the
1:41:58barriers to entry and all these other
1:41:59sorts of things, you'd see a great
1:42:01burgeoning of creative black success in
1:42:03those areas also. Well, well, I think
1:42:05that You're right. And I think that
1:42:08that's increasingly being heard.
1:42:11Uh, there's a raging debate
1:42:14among blacks. Uh, uh, and there's an
1:42:17increasing number of blacks in America
1:42:19who are becoming uh, adherents of the
1:42:23free market. Uh, much more than there
1:42:25was. I know my colleague Thomas Sowell,
1:42:28you know, we are uh, we always say that
1:42:31um,
1:42:32uh,
1:42:33the environmental
1:42:36uh, the EPA doesn't allow us to uh, fly
1:42:39on the same airplane because we're uh,
1:42:42uh, threatened species because we're For
1:42:45a long time we've been the only two
1:42:47black free market economists in the
1:42:48United States. And uh, Tom says there
1:42:50probably is not enough of wasn't enough
1:42:52of of us at one time to have a good game
1:42:54of cards.
1:42:56But now there's increasing number of
1:42:58blacks, uh, young scholars who are
1:43:01questioning the status quo, producing
1:43:03arguments, looking at success,
1:43:05uh, looking at the determinants of
1:43:08success, the compilation of uh, of
1:43:12of non of private schools, that is
1:43:15independent schools that are doing good
1:43:16jobs in education, uh, showing what's
1:43:19necessary. You find uh,
1:43:22um, like people like Bob Woodson is
1:43:24Center for Neighborhood Enterprises.
1:43:26He's producing these arguments.
1:43:29Uh,
1:43:29uh, so I think what you're saying is is
1:43:33not so true today and it'll be less true
1:43:36uh tomorrow.
1:43:37Um, and indeed I I economists have
1:43:40talked about the fact that uh the This
1:43:43is what I said a little bit earlier.
1:43:45That is
1:43:46uh less preferred people do better in
1:43:48markets where there's open entry, where
1:43:50there's free enterprise, where there's
1:43:52less regulation. And this has been
1:43:54identified among as uh
1:43:57uh
1:43:57economists like uh
1:43:59Harold Demsetz wrote this uh in the
1:44:02article in North Carolina Law in North
1:44:04Carolina Law Review several years ago.
1:44:06Armen Alchian uh Becker and any number
1:44:08of economists have pointed out the
1:44:10advantages of free markets. Now, the
1:44:13question is getting it popularized.
1:44:16But, you know, but interestingly, it's
1:44:17not only free market It's a mixture of
1:44:19things. You know, I uh people don't like
1:44:21to hear this, but I say it's genetics,
1:44:23too. I mean, a lot of people say like to
1:44:25say in the
1:44:26in this world we're all equal, but we're
1:44:28not really all equal.
1:44:29Uh
1:44:30Like in uh in basketball, one of the
1:44:32reasons why blacks excel in basketball,
1:44:34not only because it's open entry, but
1:44:36the reason
1:44:38is that um
1:44:40that uh blacks are built nice nicely and
1:44:44mechanical for basketball. That is, we
1:44:46have what they know known in the in the
1:44:48profession as hyper extensibility.
1:44:51Which means uh in in layman's term,
1:44:54double double jointed. It's uh There's
1:44:56there's consistent relationship between
1:44:58the relationship the length of the femur
1:45:00to the tibia-fibula.
1:45:02And that's greater in blacks than in
1:45:04whites, and it means that the it it's on
1:45:06a in a ideal proportion. Means that you
1:45:08can change directions, hang in the air
1:45:09like Moses Malone, things like that far
1:45:11easier than Japanese or Chinese.
1:45:15Uh
1:45:17You know, you you look at like And then
1:45:19in some sports, you know, with
1:45:20basketball, you don't need much money to
1:45:22train. But, the uh uh Uh,
1:45:25but tennis is you know, anybody can pick
1:45:28up tennis racket, but you need a
1:45:29teacher. You know, you're not going to
1:45:30be very good. So, there there other than
1:45:33open market, there are other arguments
1:45:34as well. You know, if you look at the
1:45:35Olympics, you know, you never see any
1:45:37Olympic class black swimmers. Why?
1:45:40Blacks can jump in the water, but we're
1:45:42natural sinkers in the water.
1:45:44That is there there are numerous studies
1:45:46that show the rate at which blacks sink.
1:45:50And they sink faster than whites.
1:45:52Because of a greater bone density and
1:45:55perhaps lower lung capacity. And same
1:45:57thing with women. Women are far better
1:45:59and far efficient swimmers than men. You
1:46:00know, all the long distance
1:46:02the super long distance titles are held
1:46:04by women.
1:46:06Uh,
1:46:06and I believe the first woman of the
1:46:08swam the English Channel was she the
1:46:10first person wasn't a woman?
1:46:12Yeah, they they they have a greater
1:46:13ability to convert fat to energy and
1:46:16they and they have more fat and they
1:46:17float nicer and their bodies have a nice
1:46:19hydrodynamic design.
1:46:23And and so
1:46:25genetics explains
1:46:28a role. You know, like another thing,
1:46:30you know, like when when when there's
1:46:32the Olympics on the 50 yd dash or the
1:46:34100 yd dash, I go get my beer.
1:46:36I say, well, the brothers got this one.
1:46:38We don't I don't have to worry about it.
1:46:39I don't have to sweat this one.
1:46:42So, I can go get my beer. So, so there
1:46:45are there many things to explain, but a
1:46:46free market is part of it.
1:46:48I think.
1:46:51Any other?
1:46:53That gentleman there. And then I'll then
1:46:55I'll get the lady. You've had a chance.
1:46:56Why don't you get the media attention
1:46:58that Jesse Jackson gets or some others
1:47:01of that stripe? Well, I'm I'm I'm
1:47:04I'm beginning to and I mean uh
1:47:07Um,
1:47:08but see
1:47:10I I believe people like Jesse Jackson
1:47:13I mean, they're they're saying what
1:47:14people want to hear anyway with the
1:47:16media as at least according to what I
1:47:19read and and my impressions of it.
1:47:22They have a statist, interventionist,
1:47:24arrogant bias.
1:47:26And and Jesse Jackson would uh
1:47:29would uh supply that much more than I
1:47:32would.
1:47:33Furthermore, uh
1:47:35and I don't mean any I don't mean to
1:47:37insult anybody here by saying it,
1:47:40but
1:47:41a lot of a lot of white people in the
1:47:43media and a lot of white people in many
1:47:46positions,
1:47:47they love to be put on a guilt trip.
1:47:50Uh Jesse Jackson will make make make
1:47:53people feel good, you know, well, he'll
1:47:55punish them. Uh and uh
1:47:58uh and and where Walter Williams won't.
1:48:01Matter of fact, at one department
1:48:03meeting, I'll give this little short
1:48:05little thing that at one department
1:48:07meeting at Temple University, I'd just
1:48:08been at school for about 2 months,
1:48:12uh and we had department meeting, and uh
1:48:14they were talking about adding a new
1:48:16course called black economics.
1:48:19And so I was asking my colleagues which
1:48:20way the demand curve, supply curve slope
1:48:23for blacks and and things like that, and
1:48:25I couldn't get any unambiguous answers
1:48:27from them.
1:48:28And so anyway, they had a department
1:48:30meeting deciding whether to have this
1:48:31course, and so I asked department
1:48:33chairman, could I break parliamentary
1:48:35procedure to make some comments uh
1:48:38because I had to go. And so they voted,
1:48:40you know, being a democratic uh
1:48:42institution, they voted and they voted I
1:48:43could break parliamentary procedure.
1:48:46And I told the people that I wanted to
1:48:48declare full and general amnesty to all
1:48:52white people for both their own
1:48:54grievances against my people and those
1:48:55of their forebears.
1:48:57And the reason why I wanted to grant
1:48:59them this amnesty is so that they would
1:49:01stop feeling guilty and stop acting like
1:49:03fools.
1:49:04Uh because
1:49:06a uh a a lot of a lot of white people
1:49:09accept
1:49:11uh
1:49:11a behavior from blacks that they would
1:49:13not accept from whites, and that is
1:49:15racism in and of itself.
1:49:18That is where you go to Dartmouth
1:49:20University and the black student union
1:49:22has asked for a whole floor
1:49:25to be blacks only in a dormitory.
1:49:28This is the several years ago.
1:49:31Now and the and the dean of permitted
1:49:33it.
1:49:34And he would not
1:49:36put up with that from white students
1:49:39or teachers at colleges accept behavior
1:49:42by blacks
1:49:44that they that they just would not
1:49:46accept by whites. That's that's that's
1:49:47racist.
1:49:49I understand somebody was telling me at
1:49:51lunch that uh
1:49:54if I could somehow get rid of my wife, I
1:49:56could probably walk up to any Swedish
1:49:58girl and and and proposition her and if
1:50:00she said no, I call her racist and she
1:50:02say well come on then.
1:50:07So which is
1:50:09what this is racism.
1:50:13So yeah.
1:50:16Well, Mr. Williams, it's really a great
1:50:19pleasure for me to be able to debate you
1:50:20on this issue which I consider is of
1:50:22prime importance in free market
1:50:24economics. So I'm going to go back to
1:50:27the same thing. Now let's exclude the
1:50:29present day realities
1:50:31and it's now 20 years hence or 50 years
1:50:34hence, however long it takes us and we
1:50:36have a free market in education and we
1:50:39have a free market in the purchase of
1:50:41postage and mail delivery and all that
1:50:43sort of thing and all the free market
1:50:46ideas that we have have proven
1:50:47successful and now we're left with just
1:50:49one thing, defense.
1:50:53And those belligerent Russians
1:50:56who want to take us over and make the
1:50:58world safe for Marxism or whatever it
1:50:59is, okay? I can't believe that Americans
1:51:03are too stupid or too, you know,
1:51:05whatever not in their their own
1:51:07self-defense that sufficient number of
1:51:09Americans would not pay
1:51:13for armies on a voluntary basis. Would
1:51:16not would not pay for SDI voluntarily.
1:51:20No, I wouldn't. And that uh
1:51:22It
1:51:23You know, it's really it's really hard
1:51:25for me to believe that
1:51:26You would not trust the American people
1:51:28to pay for their own national defense.
1:51:31Well, the point is Cuz people have come
1:51:33around people have come around and asked
1:51:35me to contribute to public broadcasting
1:51:37and I say you can't deprive me of the
1:51:39benefits if I don't pay.
1:51:42Yes, but But oh oh no, I know it is.
1:51:50No, no.
1:51:53But
1:51:53I'm sorry.
1:51:54the problem is coercive taxation. The
1:51:57problem is the Internal Revenue Service
1:51:59which acts like a latter-day Gestapo to
1:52:02collect people money from people
1:52:04coercively and do far worse damages in
1:52:07the here and now than the Russians could
1:52:10ever think of doing to us and there must
1:52:12be a better way of funding legitimate
1:52:16social needs including defense
1:52:19when if we would only trust people and
1:52:22the free market. Well, let me you know,
1:52:23my my I can't do a better answer than
1:52:26ask your question.
1:52:28I can't give you a better answer than to
1:52:31than to cite
1:52:33um
1:52:34uh
1:52:36Thomas Paine.
1:52:38And he said that government
1:52:40under the best of circumstances is a
1:52:42necessary evil.
1:52:45Because government implies coercion.
1:52:48Wasn't that what Thomas Paine
1:52:51And he said that government of necessity
1:52:54implies coercion, but we have not become
1:52:57those wonderful angelic people whereby
1:53:00we have learned to
1:53:02uh not like that which is our
1:53:03neighbor's.
1:53:05And so somehow government must restrain
1:53:08restrain us from taking our neighbors or
1:53:10engaging force of behavior.
1:53:12And he pointed out that government under
1:53:14the under the worst of circumstances is
1:53:16an is an intolerable one because it is
1:53:18we ourselves who are the source
1:53:21of our
1:53:23our displeasure.
1:53:25Now so what I'm saying is that I think
1:53:29that I cannot conceive of a state
1:53:31where we don't need the coercive power
1:53:34of government. That is the coercive
1:53:37power to coerce individuals not into not
1:53:41coercing their neighbors.
1:53:43Okay.
1:53:46Now
1:53:47that's a relatively small part
1:53:51of you know that role the legitimate
1:53:53role of government is a relatively small
1:53:56part
1:53:57of our national expenditures on
1:54:00government all over is a relatively
1:54:02small part. Now
1:54:05the IRS has become oppressive
1:54:08as we take off into these grander ideas.
1:54:14That is there is a necessity that is
1:54:17I don't I don't believe IRS would have
1:54:18to be as oppressive if it if it had to
1:54:20raise only three or four hundred billion
1:54:22dollars as opposed to having to raise a
1:54:24trillion dollars.
1:54:26Now see this this is one this is one of
1:54:29the problems that is as we try to force
1:54:32people to do things that are not in
1:54:35their interest that they perceive not in
1:54:36their interest we have to become more
1:54:37and more oppressive and that indeed is
1:54:40one of the great problems with the
1:54:41growth of government and I and I could
1:54:43not agree with you more that the IRS
1:54:46is is is a Gestapo agency. Matter of
1:54:49fact Hitler would have loved to have the
1:54:50IRS.
1:54:52I mean he would have been fairly
1:54:54successful and furthermore the danger is
1:54:56that
1:54:57if some country were to defeat the
1:54:58United States they would love to take
1:55:00the IRS intact
1:55:02so that they have all the information
1:55:03about it. I mean, that is a dangerous
1:55:04agency.
1:55:06And that is one of the good reasons that
1:55:07we need to reduce the size of I agree
1:55:10with you, but I don't go as far as to
1:55:12say
1:55:13a private support of of a national
1:55:16defense.
1:55:18Yeah.
1:55:20I'm sorry.
1:55:22It's now 5:00.
1:55:25I hope
1:55:27Professor Williams agree that he'll have
1:55:29some more questions and answers and
1:55:30discussion.
1:55:33But that we can't put him on at 5:00.
1:55:39Because we have a request for an
1:55:40interview and we thought they would need
1:55:42to do this now. So if it's possible for
1:55:45you to take it at about 5:30.
1:55:50So
1:55:51for this session in this main hall,
1:55:53we'll thank Professor Williams very
1:55:55much.

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