Latest / Gil I Am / Milton Friedman...Is Capitalism Humane?

Transcript

Milton Friedman...Is Capitalism Humane? · Gil I Am

0:10
Speaker 1: It is my very great pleasure to present to you
0:12
Speaker 1: our speaker today, Professor Milton Freezer.
0:32
Speaker 2: What I want to talk about is really an issue
0:35
Speaker 2: which is very much related to the whole problem of
0:38
Speaker 2: human freedom. It has to do with the question of
0:41
Speaker 2: whether capitalism is humane and what you mean by that.
0:46
Speaker 2: I am sure many of you have heard the funny,
0:48
Speaker 2: the old story about the two poles who met one
0:52
Speaker 2: another and one poll said to the other, tell me,
0:55
Speaker 2: do you know the difference between capitalism and socialism? And
0:58
Speaker 2: the other pole said, no, I don't know the difference
1:01
Speaker 2: in the first poll said, well, you know, under capitalism,
1:04
Speaker 2: man exploits man.
1:06
Speaker 1: The other fellowship his head.
1:08
Speaker 2: Well, under socialism, he said, it's vice versa. Well, now that,
1:18
Speaker 2: as a matter of fact, in the present intellectual atmosphere
1:23
Speaker 2: of the world is a relatively favorable evaluation of capitalism.
1:28
Speaker 2: The interesting thing to me about this is that the arguments,
1:32
Speaker 2: the issues in this debate which has been going on
1:36
Speaker 2: for so long about the form of government have changed.
1:40
Speaker 2: The argument used to be about strictly the form of
1:42
Speaker 2: economic organization. Should we have government control of production and
1:47
Speaker 2: distribution or should we have.
1:49
Speaker 1: A market control?
1:50
Speaker 2: And the argument used to be made in terms of
1:53
Speaker 2: the exposedly greater efficiency of centralized government and of centralized control.
2:00
Speaker 2: Nobody makes that argument anymore. There is hardly a person
2:03
Speaker 2: in the world who will claim that nationalized industries or
2:08
Speaker 2: socialism as a method of economic organization is an efficient
2:12
Speaker 2: way to organize things. The examples of Great Britain, the
2:17
Speaker 2: examples of Russia, the examples of some of the other
2:20
Speaker 2: states around the world that have adopted these measures, plus
2:25
Speaker 2: the domestic grown examples of the Post Office and its fellows,
2:29
Speaker 2: have put an end to that kind of talk.
2:32
Speaker 1: But the interesting thing is.
2:35
Speaker 2: That nonetheless there is widespread opposition fourk hattoo capitalism as
2:41
Speaker 2: a system of organization, and there is widespread support for
2:46
Speaker 2: some vague system labeled socialism. The most dramatic example of
2:52
Speaker 2: the change in the character of the argument and the
2:54
Speaker 2: paradox that I'm really bringing out, is Germany. Germany, which
3:01
Speaker 2: experienced all the horrors of the Nazi totalitarian state in
3:04
Speaker 2: the nineteen thirties. Here is Germany, which, after the war,
3:10
Speaker 2: under the Earhart policy of socio marked veerschaft social market economy,
3:16
Speaker 2: had an economic miracle, with an enormous rise in total income,
3:20
Speaker 2: enormous rise and the well being of the German.
3:23
Speaker 1: People, of the ordinary people.
3:25
Speaker 2: And yet in Germany, despite the demonstration of the horrors
3:31
Speaker 2: on the one side of a totalitarian state and on
3:36
Speaker 2: the other of the benefits of a relatively free market,
3:40
Speaker 2: here in Germany you will find a very large fraction
3:42
Speaker 2: of all intellectuals, not only remain have become even more
3:47
Speaker 2: strongly anti capitalist, have become proponents of collectivism of one
3:52
Speaker 2: form or another. Only a small number have gone into
3:56
Speaker 2: the more extreme versions that you've been reading about in
3:58
Speaker 2: the paper of the of the terrorists, but a very
4:06
Speaker 2: large fraction of the intellectuals, those who write for the newspapers,
4:10
Speaker 2: those who are on television and so on, are fundamentally
4:13
Speaker 2: anti capitalists and their mentality. And the question is why,
4:17
Speaker 2: what is it that has produced this shift now one
4:21
Speaker 2: of the most.
4:22
Speaker 1: Or not the shift.
4:24
Speaker 2: What is it that produces this consistent attitude of anti
4:29
Speaker 2: capitalism on the one hand and pro something called collectivism
4:33
Speaker 2: on the other among intellectuals. One of the most interesting
4:37
Speaker 2: analyzes of these problems I know is by a Russian
4:41
Speaker 2: dissident mathematician named Shafaravich. His essay, which has never been published.
4:49
Speaker 2: Needless to say, in Russia. But it appears in English
4:56
Speaker 2: translation in a book called Under the Rubble, which has
5:00
Speaker 2: been edited by Alexander sol Zanitsen, and I strongly recommend
5:04
Speaker 2: that particular.
5:05
Speaker 1: Pay per to you.
5:07
Speaker 2: In it, he discusses the appeal of socialism over the ages.
5:10
Speaker 2: He goes back a thousand or two thousand years, and
5:13
Speaker 2: he comes out with a conclusion that, just as Freud
5:17
Speaker 2: pointed to the death wish in individuals as a fundamental
5:21
Speaker 2: psychological propensity, the appeal of capitalism. He argued, I'm sorry,
5:27
Speaker 2: the appeal of socialism, the opposition to capitalism is really
5:31
Speaker 2: a fundamental sign of a death wish for society on
5:34
Speaker 2: the part of intellectuals. It's a very intriguing, strange, and
5:41
Speaker 2: at first sight, highly improbable kind of an interpretation. Yet
5:46
Speaker 2: I urge you all to read that essay because you
5:48
Speaker 2: will find that it is very disturbing, by having a
5:52
Speaker 2: great deal more sense to it than you would suppose
5:54
Speaker 2: such a position could possibly have.
5:58
Speaker 1: I'm not going to take that line.
6:00
Speaker 2: Maybe he's right, but I think there's a very much
6:03
Speaker 2: simpler analysis, a simpler reason for this, and that simpler
6:07
Speaker 2: reason is a combination.
6:11
Speaker 1: Of a supposed emphasis on moral values.
6:16
Speaker 2: And ignorance and misunderstanding about the relationship between moral values
6:21
Speaker 2: and economic systems. I may say the emphasis on moral
6:25
Speaker 2: values is almost always on the part of people who
6:28
Speaker 2: do not have economic problems. It's not on the part
6:32
Speaker 2: of the masses. But the problem with this approach the
6:37
Speaker 2: problem of trying to interpret and analyze a system either
6:43
Speaker 2: pro or come in terms of such concepts as the
6:46
Speaker 2: morality of the system or the humanity of the system,
6:49
Speaker 2: whether capitalism is humane or socialism is humane, or moral
6:53
Speaker 2: or immoral. The problem with that is that moral values
6:57
Speaker 2: are individual. They are not collective. Moral values have to
7:01
Speaker 2: do with what each of us separately believes and holds true,
7:06
Speaker 2: what our own individual values are. Capitalism, socialism, central planning
7:13
Speaker 2: are means, not ends. They in and of themselves are
7:18
Speaker 2: neither moral nor immoral, humane nor inhumanity.
7:22
Speaker 1: We have to ask what are their results.
7:25
Speaker 2: We have to look at what are the consequences of
7:28
Speaker 2: adopting one or another system of organization. And from that
7:34
Speaker 2: point of view, the crucial thing is to look beneath
7:37
Speaker 2: the surface. Don't look at what the proponents of one
7:40
Speaker 2: system or another say are their intentions.
7:42
Speaker 1: But look at what the actual results are.
7:46
Speaker 2: Socialism, which means government ownership and operation of means of production,
7:53
Speaker 2: has appealed to high minded, fine people, to idealistic views
8:02
Speaker 2: because of the supposed objectives of socialism, especially because of
8:07
Speaker 2: the supposed objectives equality of equality and social justice.
8:12
Speaker 1: Now, those are fine.
8:13
Speaker 2: Objectives, and it's a tribute to the people of good
8:17
Speaker 2: will that those objectives should appeal to them. But you
8:21
Speaker 2: have to ask the question, does the system, no matter
8:24
Speaker 2: what its proponents say, produce those results, And once you look.
8:29
Speaker 1: At the results, it's crystal clear that they do not.
8:32
Speaker 2: Where are social injustice's greatest. Social injustices are clearly greatest
8:39
Speaker 2: where you have central control. The degree of social injustice
8:43
Speaker 2: and torture in a place, and incarceration in a place
8:48
Speaker 2: like Russian is of a different order of magnitude than
8:52
Speaker 2: the is in those Western countries where most of us
8:55
Speaker 2: have grown up and in which we have been accustomed
8:58
Speaker 2: to regarding freedom as our natural heritage. Social injustice in
9:03
Speaker 2: a country like Yugoslavia, which is a much more benign
9:08
Speaker 2: communist state than Russia. And yet you asked Jilos, who
9:12
Speaker 2: languishes in prison for having written a book. You asked
9:16
Speaker 2: the people at the University of Belgrade who have been
9:19
Speaker 2: sent to prison, or many others who have been ejected
9:23
Speaker 2: from the country. Social injustice in China, where you have
9:28
Speaker 2: had thousands of people murdered because of their opposition to
9:34
Speaker 2: the government. Again, you look at the question of inequality
9:39
Speaker 2: of equality. Where do you have the greatest degree of
9:41
Speaker 2: inequality in the socialist states of the world. I remember
9:46
Speaker 2: about fifteen years ago, my wife and I were in
9:49
Speaker 2: Russia for a couple of weeks. We were in Moscow
9:53
Speaker 2: and we were going with our in tourist guide and
9:59
Speaker 2: happened to see I happened to see some of the
10:00
Speaker 2: fancy Russian limousines up there, the Ziv's. They were sort
10:04
Speaker 2: of a takeoff on the nineteen thirty eight American packers.
10:09
Speaker 2: And I asked our interurist guide out of amusement, how
10:11
Speaker 2: much do those sell for? Oh, she said, those aren't
10:15
Speaker 2: for sale. Those are only for the members of the
10:18
Speaker 2: polit bureau. You have in a country like Soviet Union
10:24
Speaker 2: enormous inequality in the immediate literal sense that there is
10:28
Speaker 2: a small select group that has all of the services
10:33
Speaker 2: and amenities of life, and very large masses that are
10:36
Speaker 2: in a very very low standard of living. Indeed, in
10:39
Speaker 2: a more direct way, if you take the wage rate
10:42
Speaker 2: of foremen versus the wage rate of ordinary workers in
10:44
Speaker 2: the Soviet Union, the ratio is much greater than it
10:48
Speaker 2: is in the United States. I am reminded again of
10:53
Speaker 2: another if I seem somehow to be referring to Poland.
10:57
Speaker 2: But on this same trip that we took to Russia,
11:00
Speaker 2: he stopped in Poland, in Warsaw for a while, and
11:02
Speaker 2: we met there a marvelous man, a man by the
11:05
Speaker 2: name of Edward Lepinsky, who was in this country a
11:07
Speaker 2: year ago at the age of eighty three or four.
11:10
Speaker 2: I believe, was arrested when he got back to Poland
11:13
Speaker 2: because he had been one of those who had signed
11:15
Speaker 2: and authored a declaration against the suppression of freedom of
11:20
Speaker 2: thought and speech in Poland. But at the time we
11:23
Speaker 2: met Edward Lepinsky, he seemed to be fairly free. He
11:28
Speaker 2: was a man who had been a socialist all his life,
11:31
Speaker 2: and this was really very hard for he was now
11:33
Speaker 2: in his seventies, I may say when we saw him,
11:35
Speaker 2: he was retired. Very hard thing for a man to
11:38
Speaker 2: go back on all of his lifelong beliefs. And so
11:41
Speaker 2: he said as follows to us, he said, you know,
11:44
Speaker 2: he said, I used to believe in socialism. I still do.
11:47
Speaker 2: But socialism is an ideal. We can't have it in
11:50
Speaker 2: the real world. He said, until we're rich enough to
11:52
Speaker 2: be able to afford it. And he said, socialism will
11:56
Speaker 2: be practical when every man in Poland has a house
12:01
Speaker 2: and two servants. And I said to him, including the servants,
12:06
Speaker 2: and he said yes.
12:11
Speaker 1: Now.
12:11
Speaker 2: Capitalism, on the other hand, is a system of organization
12:15
Speaker 2: that relies on private property and voluntary exchange.
12:19
Speaker 1: It has repelled people. It's driven them away.
12:22
Speaker 2: From supporting it because they have thought it emphasized self
12:27
Speaker 2: interest in a narrow way, because they were repelled by
12:32
Speaker 2: the idea of people pursuing their own interest rather than
12:36
Speaker 2: some broader interest. Yet if you look at the results,
12:41
Speaker 2: it's clear that the results go the other way around.
12:45
Speaker 2: In the capitalist societies of the world. Only where capitalism
12:49
Speaker 2: has prevailed over long periods, if you had both freedom
12:52
Speaker 2: and prosperity, the greatest measures of freedom. If you look
12:57
Speaker 2: at the Western countries where freedom prevails, it doesn't prevail perfectly.
13:01
Speaker 2: We all have our defects, but by and on the
13:05
Speaker 2: large few would deny. And in the United States, in
13:09
Speaker 2: Great Britain and France, in Germany and Western Europe, we
13:13
Speaker 2: have a greater degree of freedom on an individual and
13:16
Speaker 2: personal level than you do in most other places around
13:18
Speaker 2: the world. In Australia, Japan to a considerable extent today,
13:23
Speaker 2: though not two hundred years ago. Few luck you will
13:26
Speaker 2: find that freedom has prevailed where you've had capitalism, and
13:30
Speaker 2: that simultaneously so has a well being in the prosperity
13:34
Speaker 2: of the ordinary man. There's been more social justice and
13:38
Speaker 2: less inequality. Now the question is that you have to ask,
13:43
Speaker 2: and you have to ask the proponents of these two systems.
13:46
Speaker 2: Has socialism failed because its good qualities were perverted by
13:52
Speaker 2: evil men who got in charge. Was it simply because
13:55
Speaker 2: Talin took over from Lenin that communism went the way
13:59
Speaker 2: it did. Has capitalism succeeded despite the immoral values it pervaded.
14:06
Speaker 2: I think the answer to both questions is in the negative.
14:10
Speaker 2: The results have arisen because each system has been.
14:15
Speaker 1: True to its own values.
14:17
Speaker 2: Or rather, a system doesn't have values. I don't mean
14:20
Speaker 2: that has been true to the values. It encourages, supports,
14:26
Speaker 2: and develops in the people who live under that system.
14:31
Speaker 2: What we're concerned with in discussing moral values, here are
14:36
Speaker 2: those that have to do with the relations between people.
14:39
Speaker 2: It's important to distinguish between two sets of moral considerations.
14:43
Speaker 2: The morality that is relevant to each of us in
14:45
Speaker 2: our private life, how we each individually conduct ourselves, behave,
14:53
Speaker 2: and then what's relevant to systems of government and organization
14:56
Speaker 2: are the relations between people, and in judging relations between people.
15:03
Speaker 2: I do not believe that the fundamental value is to
15:08
Speaker 2: do good to others.
15:10
Speaker 1: Whether they want you to or not.
15:13
Speaker 2: The fundamental value is not to do good to others
15:15
Speaker 2: as you see their good. It's not to force them
15:20
Speaker 2: to do good as I see it. The fundamental value
15:24
Speaker 2: in relations to among people is to respect the dignity
15:28
Speaker 2: and the individuality of fellow men.
15:31
Speaker 1: To treat your fellow men not as.
15:33
Speaker 2: An object to be manipulated for your purpose, but to
15:38
Speaker 2: treat him as a person with his own values and
15:40
Speaker 2: his own rights, a person to be persuaded, not coerced,
15:45
Speaker 2: not forced, not bulldozed.
15:47
Speaker 1: Not brainwashed.
15:49
Speaker 2: That seems to me to be a fundamental value from
15:53
Speaker 2: in social relations. In all systems, whether you call them socialism, capitalism,
15:59
Speaker 2: or anything else, people act from self interest. The citizens
16:05
Speaker 2: of Russia act from self interest in the same way
16:07
Speaker 2: as the citizens in the United States do. The difference
16:10
Speaker 2: between the two countries is in what determines self interest.
16:16
Speaker 2: The man in the United States who is serving as
16:19
Speaker 2: a foreman in a factory, his self interest leads him
16:23
Speaker 2: to worry about not getting fired. The man in Russia
16:27
Speaker 2: who is acting as foreman in a factory, his self
16:30
Speaker 2: interests leads them to worry about not being fired at
16:41
Speaker 2: Both are pursuing their own self interest, but the sanctions,
16:45
Speaker 2: the effects what makes it in their self interest is
16:48
Speaker 2: different in the one case than in the other. But
16:51
Speaker 2: self interest should not be interpreted as narrow selfishness. I
16:55
Speaker 2: quote a man who speaks much more eloquently than I can.
16:58
Speaker 2: This is thora, and I quote him from Walden. Here's
17:03
Speaker 2: what Thorrow said about unselfishness as a moral virtue. He said,
17:08
Speaker 2: there is no odor so bad as that which arises
17:12
Speaker 2: from goodness tainted. If I knew for a certainty that
17:17
Speaker 2: a man was coming to my house with the conscious
17:19
Speaker 2: design of doing me good, I should run for my life.
17:25
Speaker 2: Philanthropy is almost the only virtue which is sufficiently appreciated
17:30
Speaker 2: by mankind. Nay, it is greatly overrated and it is
17:36
Speaker 2: our selfishness which overrates it. If anything ail a man
17:42
Speaker 2: so that he does not perform his functions, if he
17:45
Speaker 2: have a pain in his bowels, even for that is.
17:48
Speaker 1: The seat of sympathy.
17:51
Speaker 2: He forthwith sets about reforming the world. Being a microcosm himself,
17:57
Speaker 2: he discovers, and it is a true discovery, and he
18:00
Speaker 2: is the man to make it that the world has
18:02
Speaker 2: been eating green apples to his eyes. In fact, the
18:06
Speaker 2: globe itself is a great green apple, which there is
18:09
Speaker 2: danger awful to think of, that the children of men
18:12
Speaker 2: will nibble before it is right and straightway. His drastic
18:16
Speaker 2: philanthropy seeks out the Eskimo and the Patagonian and embraces
18:21
Speaker 2: the populous Indian and Chinese villages. That's the row on
18:26
Speaker 2: unselfishness as a moral value. More important and more fundamentally
18:33
Speaker 2: whenever we depart from voluntary cooperation and try to do
18:38
Speaker 2: good by using force, the bad moral value of force
18:44
Speaker 2: triumphs over good intentions. And you realize this is highly
18:49
Speaker 2: relevant to what I am saying, because the essential notion
18:52
Speaker 2: of a capitalist society, which I'll come back to, is
18:55
Speaker 2: voluntary cooperation, voluntary exchange. The essential notion of a socialist
19:02
Speaker 2: society is fundamentally force. If the government is the master,
19:08
Speaker 2: if society is to be run from the center, what.
19:13
Speaker 1: Are you doing.
19:14
Speaker 2: You ultimately have to order people what to do. What
19:17
Speaker 2: is your ultimate sanction? Go back a ways take it
19:21
Speaker 2: on a milder level. Whenever you try to do good
19:24
Speaker 2: with somebody else's money, you are committed to using force.
19:30
Speaker 1: How can you do good.
19:31
Speaker 2: With somebody else's money unless you first take it.
19:33
Speaker 1: Away from them.
19:35
Speaker 2: The only way you can take it away from them
19:37
Speaker 2: is by the threat of force. You have a policeman,
19:39
Speaker 2: a tax collector who comes and takes it from them.
19:42
Speaker 2: This is carrying much farther if you really have a
19:44
Speaker 2: socialist society, if you have an organization from the center,
19:48
Speaker 2: if you have supposed government bureaucrats running things that can
19:52
Speaker 2: only ultimately rest on force. But whenever you resort to force,
19:59
Speaker 2: even to try to good, you must not questions people's motives.
20:04
Speaker 2: Maybe they're evil sometime, but look at the results of
20:08
Speaker 2: what they do.
20:09
Speaker 1: Give them the benefit of the doubt, assume their motives
20:12
Speaker 1: are good.
20:13
Speaker 2: You know, there's an old saying about the road to
20:16
Speaker 2: hell being paved with good intentions. You have to look
20:19
Speaker 2: at the outcome, and whenever you use force, the bad
20:23
Speaker 2: moral value of force triumphs over good intentions. The reason
20:27
Speaker 2: is not only that famous aphorism of Lord acton. You
20:32
Speaker 2: all know it, you've all heard it. Absolute power corrupts.
20:37
Speaker 2: I'm sorry, power corrupts. Absolute power corrupts. Absolutely, that's the
20:42
Speaker 2: whole aphorism. That's one reason why trying to do good
20:47
Speaker 2: with methods that involve force lead to bad results, because
20:51
Speaker 2: the people who set out with good intentions are themselves corrupted.
20:56
Speaker 2: And I may add if they're not corrupted, they're replaced
20:58
Speaker 2: by people with bad intentions who are more efficient at
21:02
Speaker 2: getting control of the use of force. But also the
21:08
Speaker 2: fundamental reason is more profound. The most harm of all
21:15
Speaker 2: is done when power is in the hands of people
21:18
Speaker 2: who are absolutely persuaded of the purity of their instincts
21:23
Speaker 2: and of the purity of their intentions. Thorro says that
21:30
Speaker 2: philanthropy is a much overrated virtue. Sincerity is also a
21:34
Speaker 2: much overrated virtue. Heaven preserve us from the sincere reformer
21:40
Speaker 2: who knows what's good for you, and by by Heaven
21:43
Speaker 2: is going to make you do it, whether you like
21:45
Speaker 2: it or not. That's when you get the greatest harm done.
21:48
Speaker 2: I have no reason to doubt that Lenin was a
21:51
Speaker 2: man whose intentions were good. Maybe they weren't, but he
21:55
Speaker 2: was completely persuaded that he was right, and he was
21:58
Speaker 2: willing to use any methods at all for the ultimate good. Again,
22:03
Speaker 2: it's interesting to contrast the experience of Hitler versus Mussolini.
22:07
Speaker 2: Mussolini was much less of a danger to human rights
22:11
Speaker 2: because he was a hypocrite, because he didn't really believe
22:14
Speaker 2: what he was saying.
22:15
Speaker 1: He was just in there for the game.
22:17
Speaker 2: He started out as a socialist, he turned to a fascist.
22:19
Speaker 2: He was willing to be bribed by whoever would bribe
22:21
Speaker 2: him the most. As a result, there were at least
22:25
Speaker 2: some protections against his arbitrary rule. But Hitler was a
22:30
Speaker 2: sincere fanatic. He believed in what he was doing, and
22:33
Speaker 2: he did far greater harm.
22:35
Speaker 1: Or.
22:35
Speaker 2: If I may take you on too, a minor key
22:38
Speaker 2: in which you may not join me, I realize Ralph
22:41
Speaker 2: Nader is a modern example of the same thing. I
22:44
Speaker 2: have no doubt that Ralph is sincere, I have no
22:47
Speaker 2: doubt that he means what he says.
22:50
Speaker 1: But that's why he's so dangerous. A man who is
22:52
Speaker 1: threatening our.
22:53
Speaker 2: Freedom in in the past few decades. In the past
23:07
Speaker 2: few decades, there has been a great decline in the
23:10
Speaker 2: moral climate. There are few people who doubt the decline
23:15
Speaker 2: and the moral climate. We see evidences of it here,
23:19
Speaker 2: the lack of civility and discussions among people, the resort
23:26
Speaker 2: to chance instead of arguments. These are all evidences on
23:31
Speaker 2: one level of a decline in moral climate. But we
23:34
Speaker 2: see it also in the rising crime statistics, in the
23:37
Speaker 2: lack of respect for property, in the kind of rioting
23:40
Speaker 2: that broke out in New York after the blackout, in
23:46
Speaker 2: the problems of maintaining discipline and elementary schools.
23:50
Speaker 1: Why why have we had such a decline in moral climate?
23:55
Speaker 2: I submit to you that a major factor has because
23:59
Speaker 2: it been because of a change in the philosophies which
24:03
Speaker 2: have been prominent in society, from a belief in individual
24:07
Speaker 2: responsibility to a supposed belief in social responsibility, from a
24:12
Speaker 2: tendency to get away from the individual from his responsibility
24:16
Speaker 2: for his own life and his own behavior. If he
24:19
Speaker 2: doesn't behave properly, that's his responsibility and he's to be
24:22
Speaker 2: charged with it, to a belief that, after all, it's
24:26
Speaker 2: society that is responsible. If you adopt the view that
24:30
Speaker 2: everything belongs to society, then it belongs to nobody. Why
24:34
Speaker 2: should I have any respect for property if it belongs
24:36
Speaker 2: to everybody.
24:39
Speaker 1: If you adopt the view that.
24:40
Speaker 2: No man is responsible for his own behavior because somehow
24:44
Speaker 2: or other society.
24:45
Speaker 1: Is responsible, well, then why.
24:48
Speaker 2: Should he seek to make his behavior good? Now, of course,
24:51
Speaker 2: don't misunderstand me. On a scientific level. It's true that
24:56
Speaker 2: what we are is affected a great deal by the
24:58
Speaker 2: society in which we live and grow up.
25:00
Speaker 1: Of course, all of us are different than we would
25:03
Speaker 1: have been if we had grown up in a different.
25:05
Speaker 2: Society, So it's not I'm not denying in the slightest
25:11
Speaker 2: the effect on all of us of the social institutions
25:14
Speaker 2: within which we operate, both on our values and our opportunity,
25:18
Speaker 2: on our opportunities. But I am only saying that a
25:22
Speaker 2: set of social institutions which stresses individual responsibility, which stresses
25:29
Speaker 2: the responsibility of the individual, given the kind of person
25:33
Speaker 2: he is, the kind of society in which he operates
25:35
Speaker 2: to be responsible for himself, is the kind of a
25:40
Speaker 2: society which is likely to have a much higher and
25:43
Speaker 2: more responsible moral climate than the kind of a society
25:47
Speaker 2: in which you stress the lack of responsibility is the
25:51
Speaker 2: individual for what happens to him. Let me note the
25:54
Speaker 2: schizophreniaan that talk about social responsibility.
25:58
Speaker 1: There's always a tendency to excuse the.
26:02
Speaker 2: People who are harmed by what happens, or the people
26:08
Speaker 2: who are regarded as the victims.
26:12
Speaker 1: There's always a.
26:12
Speaker 2: Tendency to excuse them from any responsibility. They didn't riot
26:16
Speaker 2: in Harlem because they had no control over their emotions,
26:20
Speaker 2: because they were bad people, or because they were irresponsible.
26:23
Speaker 2: People know they rioted because of what society did to them.
26:27
Speaker 1: That's the argument, but nobody ever turns it around and
26:31
Speaker 1: argues the other way. If the people who rioted.
26:35
Speaker 2: Are innocent of guilt because society who did it to him,
26:39
Speaker 2: then aren't the people who are singled out as the
26:43
Speaker 2: oppressors also free of guilt. Do you hear these same
26:47
Speaker 2: people say, oh, no, we mustn't blame those bad people
26:51
Speaker 2: who trample the poor under their feet because they're not
26:53
Speaker 2: doing it out of their own individual will. Society is
26:56
Speaker 2: making them, forcing him to do it. If you're going
26:59
Speaker 2: to use it, the doctor's social responsibility ought to be
27:02
Speaker 2: even handed both ways. It excuses both the victim and
27:10
Speaker 2: the person who is who I can't say responsible, because
27:13
Speaker 2: that would be inconsistent. The person who is alleged to
27:17
Speaker 2: be responsible for the victimisays, and similarly, you must be
27:21
Speaker 2: even handed on both sides. We must all of us
27:25
Speaker 2: be individually responsible for what we do to our fellow men,
27:29
Speaker 2: whether that be harm or good. There's an additional reason
27:37
Speaker 2: why you've had a decline in the moral climate. You'll
27:40
Speaker 2: pardon me for returning to my discipline of economics, but
27:45
Speaker 2: there's a fundamental economic law which has never been contradicted
27:49
Speaker 2: to the best of my knowledge, and that is, if
27:51
Speaker 2: you pay more for something, there will tend to be
27:54
Speaker 2: more of that something available. If the mounch you're willing
27:58
Speaker 2: to pay for anything goes up somehow or other, somebody
28:02
Speaker 2: will supply more of that thing. We have made immoral
28:08
Speaker 2: behavior far more profitable. We have, in the course of
28:13
Speaker 2: the changes in our society, been establishing and greater incentives
28:20
Speaker 2: on people to behave in ways that most of us
28:23
Speaker 2: regard as immoral. On each of us separately, we've all
28:26
Speaker 2: been doing it. One of the examples that has always
28:30
Speaker 2: appealed to me along these lines is the example of
28:32
Speaker 2: great Britain, not now, but in the nineteenth century and
28:38
Speaker 2: eighteenth century. You know, in the eighteenth century Britain was
28:42
Speaker 2: regarded as a nation of smothers of law, of voids,
28:46
Speaker 2: of people who broke the law. In the nineteenth and
28:49
Speaker 2: early twentieth century, Britain got the reputation for being the
28:53
Speaker 2: most a law beating country in the world, an incorruptible
28:56
Speaker 2: civil service. Everybody knew about the fact that you couldn't
29:01
Speaker 2: bribe a civil servant in Britain the way you could
29:03
Speaker 2: want to say Italy or New York.
29:10
Speaker 1: How did that come about?
29:12
Speaker 2: How did a nation of smugglers with no respect for
29:16
Speaker 2: the law get converted into a nation of people obedience
29:19
Speaker 2: of the law?
29:19
Speaker 1: Very simply by.
29:22
Speaker 2: The less affair policy adopted in the nineteenth century, which
29:25
Speaker 2: eliminated laws to break.
29:30
Speaker 1: If you had complete free trade.
29:32
Speaker 2: If you had complete free trade, as you did after
29:35
Speaker 2: the abolition of.
29:35
Speaker 1: The Corn laws, there was no more smuggling.
29:39
Speaker 2: It was a meaningless term. You were free to bring
29:41
Speaker 2: anything into the country you wanted. You couldn't be a smuggler.
29:43
Speaker 2: It was impossible. If you didn't need a license to
29:47
Speaker 2: establish a business, you didn't need a license to open
29:50
Speaker 2: up a factory.
29:51
Speaker 1: What was there to bribe a civil servant for?
29:54
Speaker 2: The civil servants became incorruptible because there was nothing to
29:57
Speaker 2: bribe them for.
29:59
Speaker 1: Now.
30:00
Speaker 2: Well, of course, these patterns there's a cultural lag, as
30:02
Speaker 2: you have all learned in your anthropology courses, and these patterns,
30:06
Speaker 2: once they develop, last.
30:07
Speaker 1: For a while.
30:08
Speaker 2: But what has been happening in Britain in the last
30:10
Speaker 2: thirty and forty years is Britain has been moving away
30:12
Speaker 2: from essentially less they fare in toward a much more
30:15
Speaker 2: controlled and centralized economy. This reputation for law obedience is disappearing.
30:22
Speaker 2: You've had repeated scandals about ministers of the government, about
30:27
Speaker 2: members of parliament, about civil servants who have been bribed,
30:30
Speaker 2: about the rise and gang.
30:32
Speaker 1: Warfare and the rest.
30:34
Speaker 2: Why, because you're establishing an incentive you've got more laws
30:38
Speaker 2: to break.
30:38
Speaker 1: Now, it's much more fundamental. When the only laws.
30:44
Speaker 2: Are those laws which everybody regards as right in valids,
30:49
Speaker 2: they have great moral force. When you make laws that
30:52
Speaker 2: people separately do not regard as right and valid, they
30:56
Speaker 2: lose their moral force. Is there anybody in here who
30:58
Speaker 2: has a moral compunction to speed. I'm not saying you
31:02
Speaker 2: may not have a prudential objection to speeding. You may
31:05
Speaker 2: be afraid you'll get caught, But does it seem to
31:08
Speaker 2: you immoral to speed?
31:10
Speaker 1: Maybe? If so, you're a small minority.
31:12
Speaker 2: I have never yet found anybody who regarded it immoral,
31:16
Speaker 2: as immoral to violate the foreign exchange regulations of a
31:20
Speaker 2: foreign country. Here are people who would never dream for
31:25
Speaker 2: a moment of stealing a nickel from their neighbor, who
31:28
Speaker 2: have no hesitancy on manipulating their income tax returns so
31:33
Speaker 2: as to reduce their taxes by thousands. Why because the
31:39
Speaker 2: one set of laws have a moral value that people
31:42
Speaker 2: recognize independent of the law of the government having passed
31:45
Speaker 2: these laws the other sense, do not appeal to people's
31:49
Speaker 2: moral instincts, so I believe. Well, let me give you
31:53
Speaker 2: some more examples from the United States prohibition of liquor,
31:56
Speaker 2: which was attempted, as you know, had disasters effects on
32:00
Speaker 2: the climate of law obedience in Moron. Something which had
32:03
Speaker 2: been legal to buy and drink some alcoholic beverages became illegal,
32:08
Speaker 2: and you converted law abiding citizens into bootlegers. I heard
32:12
Speaker 2: over the sixty minutes on the program last Sunday ninth
32:16
Speaker 2: a great story on butt legging. This has to do
32:19
Speaker 2: with the fact that the New York state tax on
32:22
Speaker 2: cigarettes is very much higher than the tax on cigarettes
32:26
Speaker 2: in the state of South Carolina. So you have people
32:29
Speaker 2: going down to South Carolina and buying the South Carolina
32:33
Speaker 2: low taxed cigarettes and smuggling it into New York State
32:38
Speaker 2: and forging New York State tax stamps on it and then.
32:43
Speaker 1: Selling it to publicly.
32:45
Speaker 2: A large fraction of all cigarettes told in New York
32:47
Speaker 2: State are butt legged. Now there, you've provided an incentive
32:52
Speaker 2: for people to break the law, so they break the law.
32:54
Speaker 2: It's like prohibition in a different form. The obvious answer
32:58
Speaker 2: is for New York State to law or its taxes,
33:01
Speaker 2: and you will eliminate butt legging overnight and be able
33:04
Speaker 2: to take whatever may be the number of policemen who
33:07
Speaker 2: are devoted to enforcing that kind of thing.
33:09
Speaker 1: You will be able to take them and turn them
33:11
Speaker 1: to useful work.
33:14
Speaker 2: I go back, however, to the essence of capitalism and
33:19
Speaker 2: its relevance to the question of humanity. As I say,
33:24
Speaker 2: the essence of a capitalist system in its pure form
33:27
Speaker 2: is that it is a system of cooperation without compulsion,
33:31
Speaker 2: a voluntary exchange, a free enterprise. Now I hasten to
33:36
Speaker 2: their No actual system conforms to that notion. In the
33:41
Speaker 2: actual world, you're always dealing with approximations with more or less.
33:46
Speaker 2: In the actual world, you always have impediments and interferences
33:50
Speaker 2: to voluntary exchange. But the essential character of a capitalist
33:55
Speaker 2: system is that it relies on voluntary exchange. And you're
34:00
Speaker 2: agreeing with me that you will buy something from me
34:03
Speaker 2: if I will pay you a certain amount for it.
34:06
Speaker 1: The essential notion is that both parties to the exchange
34:09
Speaker 1: must benefit.
34:11
Speaker 2: This was a great vision of Adam Smith in his
34:13
Speaker 2: Wealth of Nations, that individuals, each separately pursuing their own
34:18
Speaker 2: self interest, could promote the social interest because you could
34:23
Speaker 2: get exchange between people on the basis of mutual benefit. Now,
34:28
Speaker 2: I want to emphasize to you here for this purpose
34:32
Speaker 2: that this notion extends far beyond economic matters narrowly conceived.
34:38
Speaker 2: That's really the main point I want to get across here,
34:41
Speaker 2: and I want to give you some very different kinds
34:43
Speaker 2: of examples.
34:45
Speaker 1: Consider the development of language. The English language.
34:50
Speaker 2: There was never any central government that dictated the English language,
34:54
Speaker 2: that set up some rules for it. There was no
34:56
Speaker 2: planning board that determined what words should be now OANs
35:00
Speaker 2: and what words vowels and I mean what words adjectives?
35:04
Speaker 2: Language grew through the free market through voluntary cooperation.
35:08
Speaker 1: I used a word, you used a word.
35:11
Speaker 2: It was mutually advantageous to us to keep on using
35:14
Speaker 2: that word.
35:14
Speaker 1: We keep on using.
35:15
Speaker 2: The language grows, it develops, it expands, it contracts through
35:19
Speaker 2: the free market. Consider the body a common law, not
35:24
Speaker 2: legislated law, which is a very different thing, but the
35:27
Speaker 2: body of common law. People voluntarily chose to go to
35:31
Speaker 2: a court and allow the court.
35:33
Speaker 1: To adjudicate their dispute.
35:35
Speaker 2: In the process there arose and developed the body of
35:38
Speaker 2: common law. Again, no central plan, no central coordination. You
35:43
Speaker 2: are here in an academic institution. How did scientific knowledge
35:46
Speaker 2: and understanding arise? How do we get the development of science?
35:52
Speaker 2: Is there, somehow or other a government agency that decides
35:55
Speaker 2: what are the most important problems to be studied that
35:58
Speaker 2: prevents cooperation on Unfortunately, there are developing such agencies. But
36:02
Speaker 2: in the history of science, that isn't the way science developed.
36:06
Speaker 2: Science developed out of free market exchange. It developed on
36:10
Speaker 2: occasion with the patronage of an authority, but voluntary cooperation
36:17
Speaker 2: among the scientists. I read voluntarily the work that is
36:20
Speaker 2: done by economists and other lands. They read my work,
36:23
Speaker 2: they take the parts of it they like, they disregard
36:25
Speaker 2: the parts they don't. In the process, you build a
36:28
Speaker 2: more and more complicated system through voluntary, free voluntary exchange
36:33
Speaker 2: based on the principle of mutual benefit, similarly to a
36:36
Speaker 2: free market in ideas. Again, that is a free market
36:43
Speaker 2: of exactly the same kind as economic market and no
36:46
Speaker 2: German and the two are very closely interrelated. Is it
36:50
Speaker 2: a violation of the free market in goods or the
36:54
Speaker 2: free market in ideas?
36:56
Speaker 1: If a country, as Great Britain.
36:58
Speaker 2: Did immediately after the war has exchange control under which
37:03
Speaker 2: no citizen of Britain may buy a foreign book unless
37:06
Speaker 2: he got authorization from the Bank of England to acquire
37:09
Speaker 2: the foreign currency, is that any restriction on and economic
37:13
Speaker 2: freedom or is it a restriction on ideas on the
37:16
Speaker 2: free marketing ideas. I want to give you a final
37:20
Speaker 2: example which goes back to the fundamental question we've been raising,
37:24
Speaker 2: and that's voluntary charitable activity. I want you to ask
37:29
Speaker 2: you a question. Go back to the nineteenth century in
37:31
Speaker 2: the United States. It was a period when you had
37:35
Speaker 2: about the closest approximation to a capitalist society you can
37:39
Speaker 2: imagine in which the federal government was spending roughly an
37:44
Speaker 2: amount equal to roughly three percent of the national income,
37:47
Speaker 2: almost entirely on the army and navy. State and local
37:51
Speaker 2: governments were spending about six or seven percent of the
37:53
Speaker 2: national income, mostly on schooling, very little of what has
37:59
Speaker 2: come to be red guarded as welfare activities. Yet the
38:02
Speaker 2: nineteenth century was a period of the greatest burst of
38:06
Speaker 2: voluntary charitable activity that we have seen in this country
38:09
Speaker 2: or any other country at any other time. When was
38:12
Speaker 2: Cornell established, how it was established by the voluntary benefaction
38:17
Speaker 2: of the man who gave you your name sometime what
38:20
Speaker 2: was in eighteen sixty something. That period of the nineteenth
38:24
Speaker 2: century saw the emergence of a host of private colleges
38:29
Speaker 2: universities throughout the country. My own University of Chicago was
38:33
Speaker 2: established in eighteen ninety on vol by voluntary elamotionary activity.
38:38
Speaker 2: It was also the period which saw the growth and
38:40
Speaker 2: development of the non profit charitable hospital. It saw the
38:44
Speaker 2: establishment of foreign missions of the Society for the prevention
38:49
Speaker 2: of cruelly to animals, of the Boy Scouts, you name it.
38:53
Speaker 2: There is hardly a voluntary active, the Karnegie libraries, the
38:58
Speaker 2: free public libraries. Why was it that voluntary activity flourished,
39:04
Speaker 2: because again the free market, voluntary cooperation among people cooperating
39:10
Speaker 2: to pursue their common interests, is a far more effective
39:14
Speaker 2: and efficient way of producing charitable results than any other
39:18
Speaker 2: known demand. I ask you what is a common element
39:23
Speaker 2: in all.
39:23
Speaker 1: Of these cases?
39:24
Speaker 2: I've mentioned language, common law, scientific knowledge, ideas, charitable activity,
39:32
Speaker 2: the development of an elaborate and complex structure without any
39:36
Speaker 2: central planning and without coercion, no central planning, and language
39:41
Speaker 2: and common law and scientific knowledge and idad involuntary activity.
39:47
Speaker 2: And yet you developed complex mechanisms, complex structures with order,
39:53
Speaker 2: with structures which, after the event you can analyze in logical.
39:56
Speaker 1: Terms, without coercion.
39:59
Speaker 2: You have progress through harmony rather than the attempt to
40:06
Speaker 2: impose progress through courcion. Capitalism is often reproached as being materialistic.
40:14
Speaker 2: It's often reproached as erecting money as the chief motives.
40:18
Speaker 2: But yet again, look at the facts. I may say,
40:21
Speaker 2: you know, money is not a very noble motive, but
40:24
Speaker 2: it's cleaner than most.
40:27
Speaker 1: But look at the facts. Who has produced the great
40:29
Speaker 1: achievements of mankind?
40:31
Speaker 2: Can you name me a great play that has been
40:33
Speaker 2: written by a government committee. Can you name me an
40:38
Speaker 2: invention that was produced by a government bureau.
40:42
Speaker 1: The great works that are the great.
40:45
Speaker 2: Achievements of mankind have all been the achievements of individuals
40:49
Speaker 2: of a Shakespeare or a George Bernard Shaw. George Bernard
40:53
Speaker 2: Shaw is a beautiful example because, of course, as you know,
40:56
Speaker 2: he wrote the book, the famous book, The Intelligent Woman's
40:59
Speaker 2: Guide to Socialism. He regarded himself as a socialist, but
41:04
Speaker 2: his career, in his performance, is a striking demonstration of
41:09
Speaker 2: the virtues of the capitalist system he opposed. Again, in science,
41:16
Speaker 2: it's Einstein, Copernicus, Galileo who are the great contributors of
41:24
Speaker 2: scientific ideas, not through government central organization, but mostly in
41:30
Speaker 2: spite of it. In Galileo's cases, you know, despite persecution
41:35
Speaker 2: by the centralized authorities of his time. Again in the
41:39
Speaker 2: areas of charity, Florence Nightingale was not a government civil servant.
41:46
Speaker 2: She was a private individual, human being who was seeking
41:50
Speaker 2: to achieve the objective she held dear.
41:53
Speaker 1: She was pursuing her self interest.
41:56
Speaker 2: The plain fact is that in any society, whatever may
41:59
Speaker 2: be its form of organization, that people who are not
42:03
Speaker 2: interested in material values are a small minority. There are
42:07
Speaker 2: no societies in the world today that are more materialistic
42:12
Speaker 2: than the collective of societies. It's the Russian societies, it's
42:16
Speaker 2: the Chinese societies, it's the Yugoslav societies that put all
42:20
Speaker 2: their stress on materialism, on achieving economic goals and five
42:25
Speaker 2: year plans that destroy the non materialistic achievements of mankind.
42:31
Speaker 2: Why because they are in a possession of a position
42:35
Speaker 2: to suppress minorities. What we want for a society that
42:40
Speaker 2: is at once humane and gives opportunity for great human achievements,
42:44
Speaker 2: is in a society in which that small minority of
42:48
Speaker 2: people who do not have materialistic objectives, who are interested
42:53
Speaker 2: in some of these other achievements, have the greatest degree
42:55
Speaker 2: of freedom. And the only society that anybody has ever invented,
43:00
Speaker 2: that anybody has ever discovered that comes close to doing
43:04
Speaker 2: that is a capitalist society.
43:07
Speaker 1: When you hear people objecting to.
43:08
Speaker 2: The market or to capitalists, and you examine their objections,
43:13
Speaker 2: you will find that most of those objections are objections
43:17
Speaker 2: to freedom itself. What most people are objecting to is
43:21
Speaker 2: that the market gives people what the people want instead
43:25
Speaker 2: of what the person talking thinks the people ought to want.
43:29
Speaker 2: This is true whether you are talking of the objections
43:33
Speaker 2: of a Galbray to the market, whether you are talking
43:36
Speaker 2: of the objections of a Nator to the market, whether
43:39
Speaker 2: you are talking of the objections of a Marx or
43:42
Speaker 2: an Angles or a Lenin to the market. The problem
43:46
Speaker 2: is that in a market society, in a society in
43:50
Speaker 2: which people are free to do their own thing, in
43:53
Speaker 2: which people make voluntary.
43:55
Speaker 1: Deals, it's hard to do good.
43:58
Speaker 2: You got to persuade people, and there's nothing in this
44:00
Speaker 2: world harder. But the important thing is that in that
44:05
Speaker 2: kind of society it's also hard.
44:06
Speaker 1: To do harm.
44:09
Speaker 2: It's true that if you had a concentrated power in
44:11
Speaker 2: the hands of an angel, he might be able to
44:14
Speaker 2: do a lot of good.
44:16
Speaker 1: As he viewed it.
44:17
Speaker 2: But one man's good is another man's dead. And the
44:21
Speaker 2: great virtue of a market capitalist society is that it
44:25
Speaker 2: preventing a concentration of power.
44:28
Speaker 1: It prevents.
44:30
Speaker 2: People from doing the kind of harm which really concentrated
44:34
Speaker 2: power can do. So that I conclude that capitalism per
44:39
Speaker 2: se is not humane or any humane. Socialism per se
44:42
Speaker 2: is not humane or any humane. But capitalism tends to
44:46
Speaker 2: give free reign much freer reign to the more humane
44:52
Speaker 2: values of human beings. It tends to develop a climate
44:56
Speaker 2: which is more favorable to the development, on the one hand,
45:00
Speaker 2: of a higher moral atmosphere of responsibility, and on the
45:05
Speaker 2: other to greater achievements in every realm of human understanding.
45:09
Speaker 1: Thank you,