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The Idea Channel
I'm Professor Walter Williams;
John M. Olin distinguished
professor of economics at George
Mason University. While teaching
economics to our students,
undergraduates and graduate
students, I'm also involved in
trying to do research on the growth
of government and the kind of
threat that it poses for our
individual freedom. Walter, how do
you balance this, what seems to be
two activities, the research
activity and the teaching activity?
Well, it's not easy. I have to
allocate my time efficiently. The
research activities occur mostly in
the mornings from 4 o'clock until
around 10 o'clock and then I
roughly, I take roughly about an
hour to write a syndicated column
that is published nationally across
our country. And then on Wednesday
and Thursday I allocate that time
to teaching activities. You said 4
a.m.? Yes. Do you take naps? Well,
once in a while I'm afforded the
luxury of taking a nap say around 1
o'clock for an hour and that
rejuvenates me and then I get up
and I get my nose back to the
grindstone. Insight magazine
selected you as one of the ten best
college teachers in the United
States. Why do you feel you're
successful in the classroom? Well,
first of all, I'm very flattered by
Insight and I'm not quite sure how
they reached that conclusion, but I
will accept their flattering
article. I think that the major
contribution that I have to
teaching and I consider my
teaching, not only in the
classroom, but to Americans in
general through my syndicated
column and then once in a while
have the opportunity to teach the
congress of the United States. And
I think that my forte in teaching
is to be able to explain things to
people who have never taken a
course in economics so that they
understand it. There are many, many
complex things in economics. But a
professor's job is to make those
things comprehensible to the
average individual. And are you
considered an easy teacher, a tough
teacher? Well I rank fairly high in
the student rankings. I think that
I'm normally considered a tough,
but fair teacher. After all I think
that we should demand things of our
young people because they're not
really being challenged enough in
our educational system. Obviously
you have an impact; teachers can
play a really significant role in
student's lives. Did you have any
teachers in high school or college
that particularly impressed you?
Well, yes, I believe that there's
one teacher that might have made a
very, very important difference in
my life. It was Dr. Rosenberg at
Benjamin Franklin High School in
North Philadelphia where I attended
during 1950 to 1954. And one
morning he laid me out pretty good.
I had answered a question and I
made a comment underneath my breath
loud enough for him to hear it, and
he begin to read me the riot act
saying in very, very poetic ways
that Williams teaching you this
material is like casting pearl into
the swine. And he made some other
disparaging comments and that was
my first real challenge in high
school. He insulted me. What I
considered insulted me that gave me
incentive to pull myself up in the
eyes of my teachers. Also, at UCLA
I encountered some very, very
dedicated men like Professor Armen
Alchian, Professor Axel
Leijonhufvud and Professor William
Allen. And those men, they saw my
academic deficiencies and they
challenge and they gave of their
own personal time to help me lift
myself above those academic
deficiencies. Were you at any point
in your college career or high
school career, were you considered
a top student? I doubt it. It
seemed to me that being a student
or becoming a scholar was always a
struggle. That is I had to put in a
whole lot of time and whole lot of
effort and I had to do things many,
many times over and over again. Now
I believe that characterizes most
of us who become scholars or
academicians, we have to put in a
whole lot of time. We have to put
in a whole of time just to reach
mediocrity and if you're going to
go beyond that, it means even more
time and effort. You went from
Philadelphia to California, high
school to college, what led to that
move? Was there any person or
incident that took you across the
country? Well, I guess the major
draw was that I found that I could
go to school relatively cheap and
cheaply in California as compared
to Philadelphia. And then I saw
Philadelphia as a losing
proposition. I had a lot of
aspirations but they just could not
be fulfilled. And, so, when I got
out of the army in 1961, my wife
and I, we managed to save $700 and
we just hitched up a U-Haul trailer
to my 1951 Mercury and we drove to
California never looking back and
actually never really anticipating
coming back to Philadelphia. And I
started school in California, my
wife got a job, and I went to
school continuously for 10, 10 1/2
years. But ultimately, I did come
back to Philadelphia and I took a
job at Temple University and I live
in the Philadelphia area now. In
between high school and college did
you, in addition to the armed
forces, did you have any jobs? Ah,
yes I did. I had many jobs. I
worked as a shipper for a textile
wholesaler. One job which is very
colorful, I was a taxicab driver in
Philadelphia from 1957 until 1959
and then for six months after I had
left the army. And being a taxi
driver was a fairly good education
as well as a very, very good income
earning experience or opportunity.
Was there a particular person who
persuaded you to study economics?
Well, yes there was and that person
was not alive. It was W.E. Du Bois.
I was a sociology major during my
freshman and sophomore years in
college at California State University.
And over the summer I'd
read W.B. Du Bois' Black
Reconstruction and somewhere in
there he says that blacks are never
going to significantly move up the
economic ladder until they learn
how to do something with the
economic system. And I'm merely
paraphrasing what he said. But that
caused some thoughts in my mind and
when school opened up that
September, I changed my major to
economics which turned out to be
quite a struggle because economics
is far more demanding then
sociology. One had to learn how to
engage in deductive logic, one had
to learn some statistics and math
and straight thinking which is not
necessarily a great demand in
sociology. So your approach to
economics, based on your personal
background and your reading of Du
Bois, led you to approach it as
something that might be helpful to
you as a black and perhaps to
understand the dilemma of other
blacks. Were you surprised at what
you found in economics? Well, it's
pretty hard to remember, but surely
some surprises where things like I
thought that the minimum wage, for
example, which I do a lot research
on, I thought that the minimum wage
like many, many other Americans who
have not really thought about it,
was a really good idea, was a good
way to help the poor. And it was a
real eye opener after I took
economics that the minimum wage
was, perhaps, one of the most
devastating things that you could
do to poor or low skilled workers.
So I thought that increasing
government control would be a good
thing or helpful thing to people in
general and it was a shock to me as
a young economic student to learn
that government is the cause of
many of our problems as opposed to
being the solution to those
problems. So there were indeed
shocks, I had to rethink ideas and
in many cases rethinking those
ideas were uncomfortable and
sometimes unpleasant experience.
Well in the United States, today,
in 1987, race still influences
people's behavior. How do you deal
with the problem? Well I'm not
quite sure whether I have a program
for dealing with the problem. But I
know that while race has been an
important detriment to blacks in
general historically, I doubt
whether it is an important or as
important detriment today. I think
for all intents and purposes in United
States that blacks do have their
constitutional guarantees and the
problems that blacks face today are
not really race. That is the civil
rights struggle is over and won in
the United States. Which doesn't
mean that all the problems have
come to an end; but what it does
mean is that they're not civil
rights problems. Civil rights in
the sense of status within the law
and within society. That's right.
That is absolutely right. And I'm
not denying the existence of
discrimination, but what I hold and
what my colleague Tom Sowell holds
is that discrimination just cannot
explain all of what we see. It has
nowhere the explanatory power that
it used to have. What was your-
personally, your most upsetting
confrontation with racism? Well,
well I guess, I guess it was while
I was in the army. I was drafted
and I was sent to, first at Fort
Jackson South Carolina and to Fort
Stewart Georgia and I had
considerable difficulties adjusting
to the southern way of life. And I
had many fights on base, maybe many
is too strong a word, maybe about
four or five. I had many
confrontations with lawyers. I had
a special court-martial, which I
won by the way. And, eventually,
the conflict led to my being sent
to Korea as a way of getting rid of
me. Now a lot of those
confrontations that I encountered
were, you can call them self
inflicted. That is, this is back in
1959 and 60 I recall that when I
was in the Army and I used to
organize the black soldiers that go
to the dance on the wrong night.
That is they had on the army post
they had a white dance and a black
dance. Well I organized the black
soldiers to go to the white dance
and when one of my colleagues asked
a young lady for a dance, the dance
was called to an end and there was
a lot of problems that led to my
being charged with inciting a riot.
But and also I challenged my duties
as a solider in light of the fact
that I did not have constitutional
guarantees. So, had I remained
quiet at Fort Stewart, I would not
have encountered nearly as many
problems as I did. But I decided to
rock the boat. Now looking back on
the situation where I get a lot of
threats, fellows telling me not to
come off the post or telling me
that the Ku Klux Klan would be
waiting for me. But looking back on
the situation, I would've never
done it because when you're young
you tend to think that you're
invincible. But when you get older
you can recognize that one of those
fellows could've taken me to the
Okefenokee Swamp down there and I
would've never have been heard of
afterwards. Well, we're pleased
that you survived that experience.
How does it affect your approach to
economics? Well I don't think that
has any particular connection to my
approach to economics. I think what
I do as a scientist and I believe
it's all scientists obligations,
obligation is to ask questions
about what, how, when, and if,
those kind of questions to separate
subjective issues away from
objective issues. So as an
economist I can ask well, what is
the effect of doing such and such?
Without asking whether the result
or whether the act is good or bad,
just ask what is the effect. You're
very much like a physicist. A
physicist would ask "what is the
independent influence of gravity on
a falling object?" He doesn't say
whether the gravity is good or bad.
He just asks "what is the effect?"
Now that's the job of an economist.
You say "Well, if government
legislates a minimum wage law, what
is the effect or if government
regulates oil prices, what are the
effects?" And, so, I believe that
the duty of an economist is to
supply policy makers with objective
findings so that the policy makers
can make judgements based on what
they might consider what's good or
bad. Well, that context is do you
think economics is more or less
revealing of human behavior then
sociology, for example, where you
started your education. Yes I do. I
think that the basic laws of supply
and demand govern all of our
behavior and I think knowing
something about economics can teach
something systemically important
about human behavior, namely that
we all face constraints imposed on
us by scarcity and that we all seek
to maximize those kind of things
that we want. Now just knowing
those two things you can predict a
whole lot about human behavior much
more so then a sociologist who
tries to get into a person's mind
and act as if intentions,
commitment, obligations, and those
kind of things determine human
behavior. Just for example one can
say well if the price of something
goes down, people will do more of
it. If the price of something goes
up, people will do less of it. Now
that's a very, very simple
principle, but it's very, very
powerful in its predictive
capability. For example, dealing
with crime, that is we know that
criminals also respond to the law
of man. That is if crime costs are
low then we expect a lot of crime.
If crime costs are very high, we
expect less crime. And now, so, the
way an economist would approach
crime would be to raise the cost of
committing crime and raise the
probability of becoming, or being
convicted if you commit a crime.
Now a sociologist might go the
other way. He might want to sit
down and tell a person well it's
not a good idea to rob a bank.
Well, he's absolutely wrong from an
economic standpoint. That is if you
can get away with robbing a bank,
that's a good idea because you have
much more money then you'll get
from working. Now, so, just the
vision of the way the economist
approaches problems is entirely
different from sociologists and I
think that is a more fruitful
approach. You mentioned scarcity.
Is scarcity ever eliminated? Oh, no
way. Scarcity is never eliminated.
That is there's only a finite
amount of everything here on earth.
There's a finite amount of coal.
There's a finite amount of land.
There's a finite amount of time,
etc, etc. So you can't eliminate
scarcity. What people do, they try
to accommodate their lives
considering the existence of
scarcity. So, now scarcity used to
be distinguished from shortages.
Shortages are something that
happens because government imposes
a price controls or other kinds of
regulations. So shortages can be
eliminated by raising the price or
surpluses can be eliminated by
lowering prices. But you can never
get rid of scarcity. Scarcity is
that punishment that was imposed
upon us when we disgraced ourselves
in the Garden of Eden. If I
understand right, though, scarcity
we adjust to ourselves and supply
and demand kind of deals with
scarcity... is that correct? That
is absolutely right. But shortage,
when you say shortage, supply and
demand cannot deal with that
because in a sense the market is
not being allowed to function which
is what creates the shortage. That
is absolutely right. That is, for
example, New York is a classic
example. Or let's say rent control
is a classic example. In New York
they have rent controls. In
Washington D.C. they have rent
controls. The predictable
consequence of rent controls,
wherever they're enacted is that
they create shortages in housing.
They create shortages in one way
that people at the controlled
price, they want more housing then
they would've wanted at the market
price. And then in addition to
that, since landlords cannot make
what they consider a fair rate of
return on their investment, they
withdraw capital from the market,
withdraw some of their housing from
the market and that contributes to
the shortage. For example in New
York, according to one estimate
that I read, approximately 30,000
housing units are abandoned each
year. That is landlords, they use
up the house, that is they don't
make improvements and so when it
becomes uninhabitable, they just
abandon it. And it's tragic because
New York land is some of the most
valuable land in the world and yet
you have a set of circumstances
that would encourage landowners
just to walk away and leave a
building. So, holding prices down
is the best way to get a shortage.
On the other hand, the best way to
get a surplus is to have price
floors such as we have in
agriculture. That is we give
farmers a higher price for their
product, through various government
programs then what the market will
generate. And so, of course,
farmers will produce more. They'll
use their land more productively.
And you'll see shortages. You'll
see mountains of oranges. You'll
see mountains of cheese, mountains
of butter and mountains of all
kinds of goods and it applies in
the United States and it also
applies in the European communities
that have the subsidies of farmers.
And I'd like to add it applies to
even human behavior. That is
basically when you tax something,
you get less of it. When you
subsidize something you get more of
it. I don't care whether you're
talking about subsidizing wheat or
subsidizing slovenly behavior. That
is if we have welfare programs, we
have unemployment compensation,
we'll you'd expect to see more
people on welfare. You expect to
see more slovenly behavior if you
subsidize it. You see more people
choosing unemployment rather then
taking the first job that comes
along if you have very, very
immunitive or attractive
unemployment compensation. It's a
basic principle of human behavior.
With regard to the rent control,
what happens in the situation where
there is no rent control and how
does the landlord then adjust to
the deterioration of his building
in such a way that leads him not to
abandonment. Well, if there's no
rent control, landlords will charge
the rent that will cover the
operating costs and also cover
depreciation expenses. That is a
landlord will- acting rationally-
he will put part of the rent toward
making improvements and repairs in
building. Okay? Now if there's rent
control, well that reduces the
value of maintaining his capital in
a particular form. That is it
reduces the value of keeping his
buildings so that it can produce
useful housing services. So in the
absence of rent control, landlords,
like you and I, will take care of
things. When you have rent controls
they'll have the incentive to do
other things. But beyond that,
human beings are very, very
imaginative. That is when you have
rent controls people will seek ways
around the rent controls. For
example in New York and other
places where they have rent
controls, renters will pay,
voluntarily pay, under the table
payments to the landlord or the
landlord will charge them extra for
services or he'll charge them extra
rental prices for furniture if it's
a furnished place. So what I'm
saying is that human beings always
have the incentive to try to
maximize what we call a utility in
economics which is nothing more
then satisfaction. And, so, they
will try to find ways around
government. If they can't find ways
around government then you'll find
those kind of things that we see in
New York, the massive abandonment
of housing. Can you be thought of
as belonging to a particular school
of economics, particular approach?
Well, I don't identify with any
particular school. I'm rather
eclectic in my approach. There's
the so-called Chicago School of
Economics led by Milton Friedman
and George Stigler and then there's
the Virginia or Public Choice of
School of Economics led by my
colleague Professor Jim Buchanan.
And then there are Austrians led by
Friedrich Hayek. Now I'm not wedded
to any particular set of theories.
I just look at what each school has
to contribute to economics and
perhaps skim if you will, that is
take the best of what these
different schools offer in terms of
approaches to economic problems.
What's your primary interest? Well,
as I said at the introduction, my
primary interest is to examine the
role, and the increasing role, that
government is playing in all of our
lives. Now, so that allows me to
look at a whole lot of things. It
allows me to look at government's
role in taxing. It allows me to
look at government's role in
regulation and/or government's role
in the provision of certain
services, such as schools. So it's
a kind of an entree into many
different subjects. Just by having
an interest in the expansive role
of government in our society allows
me to examine many issues including
minimum wage labor laws,
Davis-Bacon Act and all these other
kinds of regulations. Well
government intervention, as I
understand it, is justified on the
basis that the free market tends to
be abusive. What's you response to
that? Well, that is absolutely
nonsense. That's really turning the
state of affairs on its head. That
is, throughout human history
government has been an enemy of
man. That is no one- if you had to
list the major abuses of man in its
history- it's always done at the
hands of government. I don't care
whether you're talking about Nazi
persecution of Jews or you're
talking about slavery in America or
you're talking about the Maoist or
Stalinist purges, it's all
government as the major oppressive
of human beings. Now, on the other
hand, if you look at what are the
kinds of things that free
individuals, it has to be the
market. That is open markets
without government interference.
That is in the market people get
rich or people do well by serving
their fellow man. And matter of
fact, that's how you, when you see
a rich person most of the times
that means that he has pleased his
fellow man. For example, let's take
just a few examples such as Michael
Jackson. Why does Michael Jackson
make more money then I do? Well he
pleases more of his fellow man then
I do. That is people like his
singing. Or you take Levi Straus-
Levi Straus became a rich man. He
pleased his fellow man. Now, so, in
a free market, the route to riches
comes through, for the most part,
through pleasing your fellow man.
Now before we had a market economy
in the world, the route to riches
is by, was by looting and
plundering and raping your fellow
man. That was the way you became
rich. So, there's a morality of the
free market. That is the free
market suggests voluntary exchange
and what voluntary exchange really
means is that look, you psyched a
person if you make me feel good,
I'll make you feel good. That's
what voluntary exchange is. Or you
can look at voluntary exchange as
seduction if you like that word
better. That is two people trying
to make each, one another feel good
for their own advantage. For
example, let me give you the case,
now when I go into my grocery store
with two dollars in my hand, I tell
the grocer look, if you make me
feel good, give me that bottle of
milk, I'll make you feel good, give
you the two dollars. Now when
there's seduction or voluntary
exchange, both parties are better
off in their own estimation. That
is the grocer gains in his opinion
and I gain in my opinion. Now the
basis of government or the very,
very essence of government is rape,
involuntary exchange. That is and
you can look at involuntary
exchange, as I said rape, that is
where you'd actually tell your
fellow man unless you make me feel
good, I'm going to make you feel
badly. And that would be the case
where I walk into the grocer with a
gun in my hand. And I said to him
unless you make me feel good, give
me the gallon of milk, I'm going to
make you feel bad, blow your brains
out. Now with involuntary exchange
or rape type exchange, in order for
one person to be better off of
necessity requires that the other
person be worse off. Now
government, all over the world, is
the major source of organized rape.
That is government tells people
unless you make me feel good or
unless you make somebody I work for
feel good, we're going to make you
feel bad. For example, the
government tells you and I that
unless we make through the tax
code, the farmers feel good by
giving them some of our earnings as
crop subsidies, the government's
going to make us feel bad, put us
in jail because of violation of the
tax code. So what I'm saying is
that the free market is moral
because it promotes voluntary
exchange. And in the free market
there's what economists call or
statisticians call a positive sum
game. That is the agents or the
actors are all better off. But the
argument is made that as an
individual perhaps with little
education, I'm in a bad position to
defend myself against the wealth
and power of a big corporation
which results from this market
exchange. Well, that's utter nonsense.
Ask yourself, we should all ask
ourselves, you take a big
corporation like Chrysler or Exxon,
what kind of control in a free
market would Exxon or Chrysler have
over you and I? That is in order
for a Chrysler to get dollars from
me, I have to voluntarily give
Chrysler dollars. I have to get out
of my chair, I have to go down to
the showroom and voluntarily give
the man $10,000 for his car. I can
give it to him or I can not give it
to them. Now, that voluntariness
does not explain our relationship
with government. That is government
can get dollars from us whether we
choose to give it to them or not.
They can just send agents and just
confiscate our money. Now, in other
words, Chrysler can charge whatever
price they want for their car. Or
Exxon can charge whatever price
they want. But I decide how much
gasoline or how many Chryslers I'm
going to buy at that price. So what
is the meaning when you say that
Chrysler some big corporation has
power over me. It doesn't have any
power at all. But, I might add,
that Chrysler can get my dollars
whether I want to give it to them
or not, but first they have to go
to Washington. For example, Lee
Iacocca, He could've stopped by my
house and he could say, William,
you know back when Chrysler was
having the problems when they
needed the bail out or farmers who
are having problems right now.
Farmers or Lee Iacocca, they could
stop by my house and they could say
Williams I'm having trouble can you
lend me a dime. Now, Lee Iacocca or
the farmers if they came to my
house I would probably tell them to
go play in the traffic. Now they
know that. So what they do, they
get on the train or on planes and
they go talk to their congressman.
They say senator so and so, I need
some money. If I go to Williams and
ask him to voluntarily help me out,
he's going to tell me to go play in
the traffic. So could you use your
agents to confiscate Williams'
money? So what I'm saying with that
little scenario there, that is
businesses can have power over us,
but they must acquire that power
through the political process. They
must go to Washington and use the
power of government to rape us...
if you will. Let me develop a
different scenario, you come to my
door and I'm white, you're black
and you say sir I want to buy your
house and I say to you, look I
won't sell my house to anyone who's
black. Now isn't that a negative
outcome of a market. No, I don't
believe so. I don't believe that
is, I could walk up to some white
girl walking along the street and I
say well look, lady I want to marry
you and you ought to give me equal
opportunity. And she said well look
I don't marry blacks. Or a white
lady come up to me and ask me to
marry her and I could say look I
don't marry white ladies. So what
you're really talking about is
freedom of choice. That is I
believe that you have the right to
sell your house to whomever you
please. I have the right to sell my
house to whomever you please. Now,
I don't believe you have the right
to use the coercive powers of
government to force your neighbor
through law or through intimidation
to sell his house to who you think
he should sell his house to. Now,
just looking at housing
discrimination for example, I think
it's a very interesting example of
the market. In the United States
there's been discrimination against
blacks, but a lot of times you saw
restrictive covenant laws. Or you
saw other kinds of intimidation,
other intimidation against blacks
from buying houses in certain
areas, violent intimidation. Now
ask yourself, if white people would
not sell their houses to blacks,
why would you need a law? I mean
the very existence of a law
suggests that there are people
around that would not act according
to the way the law specifies. So
there's a real question of whether
you, Bob Chitester, would sell the
house, would refuse to sell the
house to me. Economic theory says
that their existing price whereby
you will sell the house to me. Now
maybe I won't go as high, I don't
want to make the price high, but
there exists a price, basic
economics tells us that. And
furthermore, I might add, that you
look at cities like New York,
Philadelphia, Chicago, Detroit, in
the 1920s before we even had equal
housing act, whole neighborhoods
were going from white to black
virtually over night and nobody
could stop it. That is Harlem
became a predominantly black
neighborhood before there was any
EEOC, before there was HUD, before
there was any of these
antidiscrimination laws. That is
the market took care of much of
this problem. The market made
discrimination very costly. What
limits, if any, would you set on
the exercise of these private
property rights if you would? Well,
I would probably set very, very few
limits. That is, and we really have
to talk about, I'll just briefly
mention what property rights are.
Property rights are the right to
keep, acquire and dispose of
property that's left in the hands
of the owner of the property. Now,
part of my property right, let's
say of my own house, means that you
cannot run your car through my
house because I own the house. Even
though you own the car, it means
that you cannot infringe upon my
property rights. So what I'm saying
is that- that as long as
individuals do not infringe upon
the property rights of others, I
would say they have the right to
use their property anyway they want
to. Well, why is private property
so important? Well, private
property is very, very important
because it forces all of us to take
into account our private or our
current decisions on the future
values of things. For example, I
think that it is a good idea that
houses be available for future
generations. Let's say the kid
that's going to be born in 2050 or
2075, it's probably a good idea
that houses be around for him to
live in. Now the fact that I
privately own my property forces me
to take into account the effect of
my current decisions on the life of
my house. Now the way that it
forces me to do that is that if I
don't make the necessary repairs to
maintain my house, well my house is
going to deteriorate and the
selling price that I can get from
my house is going to be very, very
low. But if I take care of my house
to insure that it will provide
housing services for many, many
years well then the selling price
of my house is going to be very,
very high. Now, so through private
property rights and the right to
transfer without interference, it
holds our personal wealth as my
colleague Armen Alchian says quite
frequently, it holds our personal
wealth hostage to our doing the
right thing. Now ask yourself, well
would people have the same kind of
incentives to maintain their
property or maintain a piece of
property if the government owned
the property. Or would they have
the same kind of incentives to
maintain property if there were a
75% tax on the property when you
went to sell it? No they wouldn't.
And, so, what I'm saying in a nut
shell is that private property
forces people to do socially
responsible things. And matter of
fact, some of our greatest problems
are in areas where things aren't
held privately. That is we hear all
kinds of statements, people worried
about the extinction of the
elephant, they are worried about
the extinction of the whale, they
have clubs, ducks unlimited,
worrying about certain kinds of
ducks. Now, I haven't heard a
single person form a group worrying
about the extinction of pigs and
sheep and chickens and cows, now
why not. Well, in the case of
eagles and buffalos, it is in no
individual's personal, private
interest to spend a lot of
resources making sure that buffalos
and eagles are well cared for. But,
however, it is in somebody's
personal, private interest to make
sure that chickens and cows or
sheep are taken care of properly or
used wisely. So even in that area,
we find that private property plays
a great role. If you look around
ask yourselves, if you're driving
along the highway and look at those
shiny trucks, if you see a very
shiny truck, very well cared for
truck, it's most likely that that
truck is owner operated and you see
a old raggedy truck, it's one that
where the driver is just an
employer of the company. If you
look at who takes care of house, if
you ask who takes care of house
better; a renter or owner? Well,
clearly, an owner has a vested
stake in taking care of the
property; a renter has a reduced
set of incentives for taking care
of the property. So, private
property plays a very, very
important role in conserving on the
scarce resources of our society.
But an issue that has always
confused and troubled us is that
you and I and six other people have
our houses on this street. We own
them. We're struggling to keep them
in good condition because we want
to get a good return when we sell
them. And Joe across the street
suddenly falls on hard times or
whatever and the first thing we
know, we have a real eye sore in
our neighborhood. Well how do we
deal with that in the market place?
Do we all have to get together and
buy it? Gee, we can't afford that.
Sure, that one alternative is to
buy the house, but, and clearly
that's a very, very realistic
alternative. But what we see in
neighborhoods all around the
country is that institutions are
formed to get people to what
economists call their $2 words to
internalize externalities. That is
we get our neighbors to care for
their property by saying, well if
the neighbor doesn't mow his lawn
and do those kind of socially
accepted things, we won't allow him
in the country club. We won't allow
our children to play with them and
we take other sanctions against
people. And, normally, the people
that don't cooperate and normally
this works. Now, in the case where
a person is letting his property
run down, well surely there's one
alternative is to walk up to them
and say well, look, hey, how about
taking care of your property a
little bit better. Or to maybe help
them. There's been this spirit of
cooperation through most of our
history in the United States. And,
finally, buy the house from them or
buy the property and somebody else
will sell it to somebody that will
take care of it. I don't see that
as a very, very serious problem. In
most neighborhoods there's
considerable socioeconomic status,
homogeneity and people tend to
share the same values. So I don't
see that as much of a problem. Do
you agree with the correlation that
is suggested between economic
freedom and personal and political
freedom? Oh yes, I don't believe
one can exist or thrive very well
without the other. I think that
personal freedom in a very, very
important way is economic freedom.
That is a component of my personal
freedom is to be able to set
contracts with whomever I please on
a mutually agreeable basis. That's
a personal freedom, but it's also
an economic freedom. So I think
it's rather artificial to separate
them. That is, I mean I own Walter
Williams and I should have the
rights to use my body, use me,
Walter Williams, anyway I please.
Now that is I have the right to use
it to if you want to hire me to
drive you from place to place or if
you want to hire me to tutor
children. Now, I have the right to
do that if I own me. Now, so, is
that a personal freedom or is it an
economic freedom? Well one can make
the case that it's components of
both in there. Well, let's take
freedom of religion, how's that
dependent on free market capitalism
for example? Well, I think that,
something that comes readily to
mind, if the government owned all
the churches, if the government
owned the printing presses to print
hymnbooks, how much religious
freedom could you have? Well,
aren't human rights as important as
freedom? Well, human rights are the
same as freedom. That is, what I'm
saying is, I think, that people
artificially separate these two.
That is a human right is the right
for me to be able to enter into
contractual agreements with others:
the right to be able to use my
house, to have access to my house,
a right to buy whatever shoes I
want. Now that's a human right.
It's also a personal freedom. It's
also an economic freedom. So I
think that it's a very, very false
distinction to, that leads to
statements like you hear in
political arenas. That when for
example, well when property rights
interferes with human rights well
then property rights have to give
way. Well human rights are property
rights. That is, I own myself. And
that's a property right and I ought
to be free to do with myself as I
please. That's a property right,
but you might want to call it a
human right as well. So it's an
artificial distinction. I believe
that they're only property rights
or that they're only human rights.
But they're both are part and
partial the same thing. But there
are those who would argue that it
isn't enough to have the freedom to
work. That one also ought to have
the right to a job for example.
Well that's utter nonsense. Let's
say the right to a particular job,
that is when you say that, for
example, I'm going to hire a
domestic servant and somebody says
well Williams, I have a right to
work for you. Well that's saying to
me that I don't have a right to say
that you will not work for me. Now,
so I think what you have to
carefully distinguish or you have
to carefully acknowledge is that
when we talk about rights, we're
talking about those things held
simultaneously by all people. What
I mean by that is the right to free
speech, my right to free speech in
no way reduces or attenuates your
right to free speech. But when
someone says that I have a right to
eat or I have a right to food or I
have a right to housing, well what
that means is that you do not have
a right to a certain amount of your
income because in order for me to
get food or housing, the government
has to take away something that
belongs to you which of necessity
reduces your property rights and
gives it to me. So our rights do
not exist simultaneously. And the
same thing applies to when you say
that a person has a right to a job.
I think what you need to say is
that a person has a right to enter
into contracts with other
individuals at mutually
advantageous or mutually agreeable
terms. They do not have a right to
a particular job. You've said that
government could give every poor
person in America- I think the
figure is about $10,000 cash a
year... how? Well, that can be seen
and it's a lot of debate on the
particular amount, but it's roughly
in the right neighborhood. That is
if you add up all the money in the
United States. If you add up all
the money spent in the United
States at the federal, state and
local levels of government- that
have as their full justification or
part justification coping with some
aspect of property if you add up
all that money. And you just,
simply, divided the number of poor
people into that total amount you
could give them if you just gave
them the money which I'm not
proposing, if you just gave them
the money, you could give each poor
family of four somewhere between 36
to $40,000. Now, I think that that
is very instructive of what is
happening in a so-called poverty
programs. That is poor people are
being used as stalking horses to
conceal the income objectives of
other people. That is we know that
poor families of four are not
getting 36 to $40,000 a year. So if
they're not getting the money
that's allocated to the poor
through various governments well
then non poor people must be
getting it either poor or there's
either poor people or non poor
people. Now, considerable evidence
suggests that many, many non poor
people are getting the money in
their roles as GS15s, GS16s,
managing these projects. Professors
or other individuals doing studies
on poverty and getting 3 and
400,000 million dollar grants and
good studies on poverty and perhaps
having meetings in Miami in the
winter to talk about the poor at
some very nice hotel. What I'm
saying is that poor people are
being used to conceal the income
objectives of other people and the
very fact they're not, we have this
huge bundle of money allocated to
poverty programs and the very fact
that poor people are not receiving
it suggests just that. Well, what
about socialism? Why don't we
simply just go to socialism and
divide up all the money evenly?
Well, socialism has not worked in
solving the problems of human
beings wherever it has existed.
Matter of fact even in the United
States, at the early part of our
history we had an experiment with
socialism and we found that it did
not work. If you look around the
world and you ask the question,
where are men freer, where are
people freer, where do they have
the highest income? You'll see it
in those places that have some
semblance of a market system. You
will see the greatest human
oppression in the world under those
governments that call themselves
communists or very, very
socialistic governments. I'm
talking about Russia, China, most
of the continent of Africa. And
Africa is a very, very instructive
place. That is during the colonial
periods, a lot of Africa was, could
be characterized as more market
oriented then government
intervention which is the necessary
consequence of socialism or
communism. Now, after independence,
the governments of Africa bought
the siren song of socialism and
communism and we've seen after that
time that countries had become
poorer and poorer. A classic
example is Ghana. Ghana was the
richest country in Africa at
independence. Now Ghana is one of
the poorest countries on the
continent of Africa. Now, what I
just want to say is that if you
take the international amnesties
book of human rights abuses and if
you take per capita income and if
you make some kind of scale saying
that ranking countries from
socialism to socialistic or through
the spectrum toward capitalistic,
what you will find, you'll find
that countries that the countries
that ranked the highest on
international amnesties, humans
rights protections tend more toward
being the capitalistic or
market-oriented countries. Also,
you'll find that the countries that
rank the highest in terms of human
rights protections, they're also
those countries where per capita
income are the highest. On the
other hand, the poorest countries
in the world have the poorest
records of human rights abuses,
human rights protection. They have
the lowest income and they tend to
be the most socialistic. It's no
coincidence. I mean you compare
Hong Kong with mainland China, East
Germany with West Germany. You
compare Canada. You compare South
Korea with North Korea, Taiwan with
China and there's example after
example- all over the world- of the
failure of socialism to deliver on
its premises. You've spent a good
deal of time in the school of hard
knocks obviously, as well as in
intellectual pursuits. Do you at
this point come to the conclusion
that many Americans are getting too
soft to compete in a competitive
market place? Well, it's a mixed
story whether Americans are getting
too soft. I think that, I think
that Americans are the most
ingenious, robust, imaginative
people on the face of this earth.
But I think that at the same time
many Americans have bought this
siren song that government can take
care of things. But the tide is
changing. That is more and more
Americans are recognizing that
government, far from being this
solution to problems, is indeed the
cause of problems. Now, so what I'm
saying is that what Americans need
right now are the same kind of
things that they had when we were
developing into the world's
greatest power, both militarily and
economically. That is we had
considerable amounts of economic
freedom and our government played a
very, very small role in our lives.
And anybody who's interested can
look at the role the federal
government played in our lives.
That is the federal government
spending as a percentage of the GNP
never exceeded 4% of the GNP except
during war times. Now federal
government spending is roughly 30%
of the GNP suggesting this greater
and greater role that government's
playing in our lives. I think
Americans can out-compete anybody
in the world. You can look at it in
terms of our productive output and
you can look at it in terms of our
intellectual output. That is
Americans pick the Nobel prizes,
almost all of the Nobel prizes and
they've been doing so since,
roughly, 1940. So freedom, the kind
of freedom we have in America, not
only means that we can grow as a
rich country in terms of material
goods. It also says that we can
grow intellectually because
competition in the market place
reduces superior products just as
competition; I mean competition in
the marketplace of ideas, that's
what I meant to say, produces
superior ideas just as competition
in the market place with goods and
services produces superior goods
and services. 
