What I want to talk about is really an issue
which is very much related to the whole problem
of human freedom.
It has to do with the question of whether
capitalism is humane and what you mean by
that.
I am sure many of you have heard the old story
about the two Poles who met one another and
one Pole said to the other: “Tell me, do
you know the difference between capitalism
and socialism?”
And the other Pole said, “No, I don’t
know the difference.”
Then the first Pole said, “Well, you know,
under capitalism man exploits man.”
The other fellow shook his head.
“Well under socialism,” he said, “it’s
vice versa.”
Well now that, as a matter of fact, in the
present intellectual atmosphere of the world
is a relatively favorable evaluation of capitalism.
The interesting thing to me about this is
that the arguments, the issues, in this debate
which has been going on for so long about
the form of government have changed.
The argument used to be strictly about the
form of economic organization: should we have
government control of production and distribution,
or should we have market control?
And the argument used to be made in terms
of the supposedly greater efficiency of centralized
government and of centralized control.
Nobody makes that argument anymore.
There is hardly a person in the world who
will claim that nationalized industry, or
socialism as a method of economic organization,
is an efficient way to organize things.
The examples of Great Britain, the examples
of Russia, the examples of some of the other
states around the world that have adopted
these measures plus the domestic-grown examples
of the Post Office and its fellows have put
an end to that kind of talk.
But the interesting thing is that nonetheless
there is widespread opposition to capitalism
as a system of organization and there is widespread
support for some vague system labeled socialism.
The most dramatic example of the change in
the character of the argument and the paradox
that I am really bringing out is Germany.
Here was Germany which experienced all the
horrors of the Nazi totalitarian state in
the 1930’s, here is Germany which after
the war under the Erhard policy of Sozial
Marktwirtschaft, social market economy, had
an economic miracle with an enormous rise
in total income and an enormous rise in the
well-being of the German people, of the ordinary
people.
And yet in Germany, despite the demonstration
of the horrors, on the one side, of a totalitarian
state and, on the other, of the benefits of
a relatively free market, here in Germany
you will find that a very large fraction of
all intellectuals remain -- not only remain,
have become -- more strongly anti-capitalist,
have become proponents of collectivism of
one form or another.
Only a small number have gone into the more
extreme versions that you have been reading
about in the papers of the terrorists.
But a very large fraction of the intellectuals,
those who write for the newspapers, those
who are on television, and so on, are fundamentally
anti-capitalist in their mentality.
And the question is, why?
What is it that has produced this shift -- not
this shift, but what is it that produces this
consistent attitude of anti-capitalism on
the one hand and pro something called collectivism
on the other among intellectuals?
One of the most interesting analyses of these
problems I know is by a Russian dissident
mathematician named Shafarevich.
His essay, which has never been published
-- needless to say -- in Russia, appears in
English translation in a book called From
Under the Rubble which has been edited by
Alexander Solzhenitsyn, and I strongly recommend
that particular paper to you.
In it he discusses the appeal of socialism
over the ages -- he goes back a thousand or
two thousand years -- and he comes out with
the conclusion that, just as Freud pointed
to the death wish in individuals as a fundamental
psychological propensity, the appeal of socialism
is really a fundamental sign of a death wish
for society on the part of intellectuals.
It’s a very intriguing, strange, and, at
first sight, highly improbable kind of interpretation.
Yet I urge you all to read that essay because
you will find that it is very disturbing by
having a great deal more sense to it than
you would suppose such a position could possibly
have.
I’m not going to take that line.
Maybe he is right, but I think there is a
very much simpler reason for this.
And that simpler reason is a combination of
a supposed emphasis on moral values and ignorance
and misunderstanding about the relationship
between moral values and economic systems.
I may say the emphasis on moral values is
almost always on the part of people who do
not have economic problems; it is not on the
part of the masses.
But the problem with this approach, the problem
of trying to interpret and analyze a system
either pro or con in terms of such concepts
as the morality of the system or the humanity
of the system -- whether capitalism is humane
or socialism is humane, or moral or immoral
-- the problem with that is that moral values
are individual; they are not collective.
Moral values have to do with what each of
us separately believes and holds to be true
-- what our own individual values are.
Capitalism, socialism, central planning are
means not ends.
They in and of themselves are neither moral
nor immoral, humane nor inhumane.
We have to ask what are their results.
We have to look at what are the consequences
of adopting one or another system of organization,
and from that point of view the crucial thing
is to look beneath the surface.
Don’t look at what the proponents of one
system or another say are their intentions,
but look at what the actual results are.
Socialism, which means government ownership
and operation of means of production, has
appealed to high-minded fine people, to people
of idealistic views, because of the supposed
objectives of socialism, especially because
of the supposed objectives of equality and
social justice.
Those are fine objectives and it is a tribute
to the people of good will that those objectives
should appeal to them.
But you have to ask the question, does the
system -- no matter what its proponents say
-- produce those results?
And once you look at the results it is crystal
clear that they do not.
Where are social injustices greatest?
Social injustices are clearly greatest where
you have central control.
The degree of social injustice, torture, and
incarceration in a place like Russia is of
a different order of magnitude than it is
in those Western countries where most of us
have grown up and in which we have been accustomed
to regarding freedom as our natural heritage;
social injustice in a country like Yugoslavia,
which is a much more benign communist state
than Russia, and yet you ask Djilas who languishes
in prison for having written a book, you ask
the people at the University of Belgrade who
have been sent to prison, or many others who
have been ejected from the country; social
injustice in China where you have had thousands
of people murdered because of their opposition
to the government.
Again, look at the question of inequality,
of equality.
Where do you have the greatest degree of inequality?
In the socialist states of the world.
I remember about 15 years ago my wife and
I were in Russia for a couple of weeks.
We were in Moscow with our tourist guide and
I happened to see some of the fancy Russian
limousines, the Zivs, that were sort of a
take-off on the 1938 American Packard.
I asked our tourist guide out of amusement,
how much do those sell for?
“Oh,” she said, “those aren’t for
sale.
Those are only for the members of the Politburo.”
You have in a country like the Soviet Union
an enormous inequality in the immediate literal
sense in that there is a small select group
that has all of the services and amenities
of life, and very large masses that have a
very low standard of living.
Indeed, in a more direct way, if you take
the wage rate of foremen versus the wage rate
of ordinary workers in the Soviet Union, the
ratio is much greater than it is in the United
States.
I seem somehow to be referring to Poland,
but on this same trip that we took to Russia
we stopped in Poland, in Warsaw, for a while
and met there a marvelous man, a man by the
name of Edward Lupinski, who was in this country
a year ago at the age of 83 or 84 and I believe
was arrested when he got back to Poland because
he had been one of those who had authored
and signed a declaration against the suppression
of freedom of thought and speech in Poland.
But at the time we met Edward Lupinski he
seemed to be fairly free.
He was a man who had been a socialist all
his life, he was then in his seventies I may
say when we saw him, and he was retired.
It is a very hard thing for a man to go back
on all of his lifelong beliefs, and so he
said as follows to us: “You know, I used
to believe in socialism.
I still do, but socialism is an ideal.
We can’t have it in the real world,” he
said, “until we’re rich enough to be able
to afford it.”
And he said socialism will be practical when
every man in Poland has a house and two servants.
And I said to him, “Including the servants?”
And he said, “Yes.”
Capitalism, on the other hand, is a system
of organization that relies on private property
and voluntary exchange.
It has repelled people, it has driven them
away from supporting it, because they have
thought it emphasized self-interest in a narrow
way, because they were repelled by the idea
of people pursuing their own interests rather
than some broader interests.
Yet if you look at the results, it is clear
that the results go the other way around.
Only where capitalism has prevailed over long
periods have you had both freedom and prosperity.
If you look at the Western countries where
freedom prevails, it doesn’t prevail perfectly
-- we all have our defects -- but by and large
few would deny that in the United States,
in Great Britain, in France, in Germany, in
Western Europe, we have a greater degree of
freedom on an individual and personal level
than you do in most other places around the
world; in Australia, in Japan to a considerable
extent today, though not 200 years ago.
If you look you will find that freedom has
prevailed where you have had capitalism and
that simultaneously so has the well-being
and the prosperity of the ordinary man.
There has been more social justice and less
inequality.
The question that you have to ask, and you
have to ask the proponents of these two systems,
has socialism failed because its good qualities
were perverted by evil men who got in charge
-- was it simply because Stalin took over
from Lenin that communism went the way it
did?
Has capitalism succeeded despite the immoral
values that pervade it?
I think the answer to both questions is in
the negative.
The results have arisen because each system
has been true to its own values -- or rather
a system does not have values, I don’t mean
that -- has been true to the values it encourages,
supports, and develops in the people who live
under that system.
What we are concerned with in discussing moral
values here are those that have to do with
the relations between people.
It is important to distinguish between two
sets of moral considerations: the morality
that is relevant to each of us in our private
life, how we each conduct ourselves, behave;
and then what is relevant to systems of government
and organization, to the relations between
people.
In judging relations between people, I do
not believe that the fundamental value is
to do good to others whether they want you
to or not.
The fundamental value is not to do good to
others as you see their good.
It is not to force them to do good.
As I see it, the fundamental value in relations
among people is to respect the dignity and
the individuality of fellowmen, to treat your
fellowman not as an object to be manipulated
for your purpose but to treat him as a person
with his own values and his own rights, a
person to be persuaded not coerced, not forced,
not bulldozed, not brainwashed.
That seems to me to be a fundamental value
in social relations.
In all systems, whether you call them socialism,
capitalism, or anything else, people act from
self-interest.
The citizens of Russia act from self-interest
the same way as the citizens of the United
States do.
The difference between the two countries is
in what determines self-interest.
The man in the United States who is serving
as a foreman in a factory -- his self-interest
leads him to worry about not getting fired.
The man in Russia who is acting as foreman
in a factory -- his self-interest leads him
to worry about not being fired at.
Both are pursuing their own self-interest
but the sanctions, what makes it in their
self-interest, is different in the one case
than in the other.
But self-interest should not be interpreted
as narrow selfishness.
The most high-minded people in the world are
acting out of self-interest.
It’s what interests them; it’s their values.
You mustn’t interpret that as narrow meanness.
In any event, I ask you whether unselfishness
itself is a moral virtue, and on this subject
I quote a man who speaks much more eloquently
than I can.
This is Thoreau and I quote him from Walden.
Here’s what Thoreau said about unselfishness
as a moral virtue.
He said: There is no odor so bad as that which
arises from goodness tainted.
If I knew for a certainty that a man was coming
to my house with the conscious design of doing
me good, I should run for my life.
Philanthropy is almost the only virtue which
is sufficiently appreciated by mankind.
Nay, it is greatly overrated and it is our
selfishness which overrates it.
If anything ail a man so that he does not
perform his functions, if he have a pain in
his bowels even -- for that is the seat of
sympathy -- he forth-with sets about reforming
-- the world.
Being a microcosm himself, he discovers -- and
it is a true discovery and he is the man to
make it -- that the world has been eating
green apples; to his eyes, in fact, the globe
itself is a great green apple, which there
is danger awful to think of that the children
of men will nibble before it is ripe, and
straightaway his drastic philanthropy seeks
out the Esquimaux and the Patagonian, and
embraces the populous Indian and Chinese villages.
That’s Thoreau on unselfishness as a moral
value.
More important and more fundamentally, whenever
we depart from voluntary cooperation and try
to do good by using force, the bad moral value
of force triumphs over good intentions.
And you realize this is highly relevant to
what I am saying, because the essential notion
of a capitalist society, which I’ll come
back to, is voluntary cooperation, voluntary
exchange.
The essential notion of a socialist society
is fundamentally force.
If the government is the master, if society
is to be run from the center, what are you
doing?
You ultimately have to order people what to
do.
What is your ultimate sanction?
Go back a ways, take it on a milder level.
Whenever you try to do good with somebody
else’s money, you are committed to using
force.
How can you do good with somebody else’s
money unless you first take it away from him?
The only way you can take it away from him
is by the threat of force.
You have a policeman, a tax collector, who
comes and takes it from him.
This is carried much farther if you really
have a socialist society.
If you have an organization from the center,
if you have government bureaucrats running
things, that can only ultimately rest on force.
You must not question people’s motives.
Maybe they are evil sometimes, but look at
the results of what they do.
Give them the benefit of the doubt.
Assume their motives are good.
You know, there’s an old saying about the
road to hell being paved with good intentions.
You have to look at the outcome, and whenever
you use force, the bad moral value of force
triumphs over good intentions.
The reason is not only that famous aphorism
of Lord Acton.
You all know it, you’ve all heard it: “power
corrupts; absolute power corrupts absolutely.”
That’s the whole aphorism.
That is one reason why trying to do good with
methods that involve force lead to bad results,
because the people who set out with good intentions
are themselves corrupted.
And I may add, if they are not corrupted they
are replaced by people with bad intentions
who are more efficient at getting control
of the use of force.
The fundamental reason is more profound: the
most harm of all is done when power is in
the hands of people who are absolutely persuaded
of the purity of their instincts and of the
purity of their intentions.
Thoreau says that philanthropy is a much overrated
virtue; sincerity is also a much overrated
virtue.
Heaven preserve us from the sincere reformer
who knows what’s good for you and by heaven
is going to make you do it whether you like
it or not.
That’s when you get the greatest harm done.
I have no reason to doubt that Lenin was a
man whose intentions were good.
Maybe they weren’t.
But he was completely persuaded that he was
right and he was willing to use any methods
at all for the ultimate good.
Again, it is interesting to contrast the experience
of Hitler versus Mussolini.
Mussolini was much less of a danger to human
rights because he was a hypocrite, because
he didn’t really believe what he was saying;
he was just in there for the game.
He started out as a socialist, he turned into
a fascist, he was willing to be bribed by
whoever would bribe him the most.
As a result there was at least some protection
against his arbitrary rule.
But Hitler was a sincere fanatic; he believed
in what he was doing and he did far greater
harm.
Or if I may take you on to a minor key, in
which you may not join me I realize, Ralph
Nader is a modern example of the same thing.
I have no doubt that Ralph is sincere.
I have no doubt that he means what he says,
but that’s why he is so dangerous a man
who is threatening our freedom.
In the past few decades there has been a great
decline in the moral climate.
There are few people who doubt the decline
in the moral climate.
We see evidences of it here.
The lack of civility in discussions among
people, the resort to chants instead of arguments
-- these are all evidences on one level of
a decline in moral climate.
But we see it also in the rising crime statistics,
in the lack of respect for property, in the
kind of rioting that broke out in New York
after the blackout, in the problems of maintaining
discipline in elementary schools.
Why?
Why have we had such a decline in moral climate?
I submit to you that a major factor has been
because of a change in the philosophy which
has been prominent in society, from a belief
in individual responsibility to a supposed
belief in social responsibility, from a tendency
to get away from the individual, from his
responsibility for his own life and his own
behavior -- if he doesn’t behave properly,
that’s his responsibility and he’s to
be charged with it -- to a belief that after
all it’s society that is responsible.
If you adopt the view that everything belongs
to society, then it belongs to nobody.
Why should I have any respect for property
if it belongs to everybody?
If you adopt the view that no man is responsible
for his own behavior, because somehow or other
society is responsible, well then, why should
he seek to make his behavior good?
Don’t misunderstand me, on a scientific
level it’s true that what we are is affected
a great deal by the society in which we live
and grow up.
Of course, all of us are different than we
would have been if we had grown up in a different
society.
So I’m not denying in the slightest the
effect on all of us of the social institutions
within which we operate both on our values
and on our opportunities.
But I am only saying that a set of social
institutions which stresses individual responsibility,
which stresses the responsibility of the individual
-- given the kind of person he is, the kind
of society in which he operates -- to be responsible
for himself, is the kind of society which
is likely to have a much higher and more responsible
moral climate than the kind of society in
which you stress the lack of responsibility
of the individual for what happens to him.
Note the schizophrenia in the talk about social
responsibility.
There is always a tendency to excuse the people
who are harmed by what happens or the people
who are regarded as the victims; there is
always the tendency to excuse them from any
responsibility.
They didn’t riot in Harlem because they
had no control over their emotions, because
they were bad people or because they were
irresponsible people -- no.
They rioted because of what society did to
them.
That’s the argument, but nobody ever turns
it around and argues the other way.
If the people who rioted are innocent of guilt
because of the society that did it to them,
then aren’t the people who are singled out
as the oppressors also free of guilt?
Do you hear these same people say, “Oh,
no, we mustn’t blame those bad people who
trampled the poor under their feet because
they’re not doing it out of their own individual
will.
Society is forcing them to do it.”
If you are going to use the doctrine of social
responsibility, you ought to be even-handed
both ways.
It excuses both the victim and the person
who is -- I can’t say responsible because
that would be inconsistent -- the person who
is alleged to be responsible for the victimization.
And similarly, you must be even-handed on
both sides.
We must all of us be individually responsible
for what we do to our fellowmen, whether that
be harm or good.
There is an additional reason why you have
had a decline in the moral climate.
You’ll pardon me for returning to my discipline
of economics, but there is a fundamental economic
law which has never been contradicted to the
best of my knowledge and that is, if you pay
more for something there will tend to be more
of that something available.
If the amount you are willing to pay for anything
goes up, somehow or other somebody will supply
more of that thing.
We have made immoral behavior far more profitable.
We have, in the course of the changes in our
society, been establishing greater and greater
incentives for people to behave in ways that
most of us regard as immoral.
On each of us separately, we’ve all been
doing it.
One of the examples that has always appealed
to me along these lines is the example of
Great Britain, not now but in the nineteenth
century and eighteenth century.
You know, in the eighteenth century Britain
was regarded as a nation of smugglers, of
law avoiders, of people who broke the law.
In the nineteenth and early twentieth century,
Britain got the reputation for being the most
law-abiding country in the world.
An incorruptible civil service: everybody
knew about the fact that you couldn’t bribe
a civil servant in Britain the way you could
one in, say, Italy or New York.
How did that come about?
How did a nation of smugglers, with no respect
for the law, get converted into a nation of
people obedient to the law?
Very simply, by the laissez-faire policy adopted
in the nineteenth century which eliminated
laws to break.
If you had complete free trade, as you did
after the abolition of the Corn Laws, there
was no more smuggling.
It was a meaningless term.
You were free to bring anything into the country
you wanted.
You couldn’t be a smuggler; it was impossible.
If you didn’t need a license to establish
a business, you didn’t need a license to
open up a factory, what was there to bribe
a civil servant for?
The civil servants became incorruptible because
there was nothing to bribe them for.
Of course, there is a cultural lag as you
have all learned in your anthropology courses,
and these patterns, once they develop, last
for a while.
But what has been happening in Britain in
the last 30 or 40 years as Britain has been
moving away from essentially laissez-faire
and toward a much more controlled and centralized
economy?
This reputation for law obedience is disappearing.
You have had repeated scandals about ministers
of the government, about members of Parliament,
about civil servants who have been bribed,
about the rise in gang warfare, and the rest.
Why?
Because you are establishing an incentive;
you’ve got more laws to break now.
It’s also much more fundamental.
When the only laws are those laws which everybody
regards as right and valid, they have great
moral force.
When you make laws that people separately
do not regard as right and valid, they lose
their moral force.
Is there anybody in here who has a moral compunction
to speeding?
I am not saying you may not have a prudential
objection to speeding: you may be afraid you’ll
get caught.
But does it seem to you immoral to speed?
Maybe.
If so, you are a small minority.
I have never yet found anybody who regarded
it as immoral to violate the foreign exchange
regulations of a foreign country.
Here are people, who would never dream for
a moment of stealing a nickel from their neighbor,
who have no hesitancy on manipulating their
income tax returns so as to reduce their taxes
by thousands.
Why?
Because the one set of laws have a moral value
that people recognize independent of the government
having passed these laws; the other set do
not appeal to people’s moral instincts.
Let me give you some more examples from the
United States.
Prohibition of liquor, which was attempted
as you know, had disastrous effects on the
climate of law obedience and morality.
Something which had been legal to buy and
drink, some alcoholic beverages, became illegal
and you converted law-abiding citizens into
bootleggers.
I heard over the 60 Minutes program last Sunday
night a great story on “buttlegging.”
This had to do with the fact that the New
York State tax on cigarettes is very much
higher than the tax on cigarettes in the state
of South Carolina.
So you have people going down to South Carolina,
buying the South Carolina low-taxed cigarettes,
smuggling them into New York State, forging
New York State tax stamps on them, and then
selling them publicly.
A large fraction of all cigarettes sold in
New York State are buttlegged.
Now there you have provided an incentive for
people to break the law, so they break the
law.
It’s like Prohibition in a different form.
The obvious answer is for New York State to
lower its taxes and you will eliminate buttlegging
overnight and be able to take whatever may
be the number of policemen who are devoted
to enforcing that kind of thing, you will
be able to take them and turn them to useful
work.
I go back, however, to the essence of capitalism
and its relevance to the question of humanity.
As I say, the essence of a capitalist system
in its pure form is that it is a system of
cooperation without compulsion, of voluntary
exchange, of free enterprise.
Now I hasten to add, no actual system conforms
to that notion.
In the actual world you are always dealing
with approximations, with more or less.
In the actual world you always have impediments
and interferences to voluntary exchange.
But the essential character of a capitalist
system is that it relies on voluntary exchange,
on your agreeing with me that you will buy
something from me if I will pay you a certain
amount for it.
The essential notion is that both parties
to the exchange must benefit.
This was a great vision of Adam Smith in his
Wealth of Nations that individuals each separately
pursuing their own self-interest could promote
the social interest because you could get
exchange between people on the basis of mutual
benefit.
I want to emphasize to you here, for this
purpose, that this notion extends far beyond
economic matters narrowly conceived.
That’s really the main point I want to get
across here, and I want to give you some very
different kinds of examples.
Consider the development of the English language.
There was never any central government that
dictated the English language and set up some
rules for it.
There was no planning board that determined
what words should be nouns and what words
adjectives.
Language grew through the free market, through
voluntary cooperation.
I used a word, you used a word; if it was
mutually advantageous to us to keep on using
that word, we would keep on using it.
Language grows, it develops, it expands, it
contracts through the free market.
Consider the body of common law, not legislated
law which is a very different thing, but the
body of common law.
People voluntarily chose to go to a court
and allow the court to adjudicate their dispute.
In the process there arose and developed the
body of common law.
Again, no central plan, no central coordination.
You are here in an academic institution.
How did scientific knowledge and understanding
arise?
How do we get the development of science?
Is there somehow or other a government agency
that decides what are the most important problems
to be studied, that promotes cooperation?
Unfortunately there are developing such agencies,
but in the history of science that isn’t
the way science developed.
Science developed out of free-market exchange.
It developed on occasion with the patronage
of an authority, but voluntary cooperation
among the scientists.
I read voluntarily the work that is done by
economists in other lands; they read my work,
they take the parts of it they like, they
discard the parts they don’t, and in the
process you build a more and more complicated
system through free voluntary exchange based
on the principle of mutual benefit.
Similarly to a free market in ideas.
Again, that is a free market of exactly the
same kind as the economic market and no different.
The two are very closely interrelated.
Is it a violation of the free market in goods
or the free market in ideas if a country,
as Great Britain did immediately after the
war, has exchange controls under which no
citizen of Britain may buy a foreign book
unless he got authorization from the Bank
of England to acquire the foreign currency?
Is that a restriction on economic freedom,
or is it a restriction on the free market
in ideas?
I want to give you a final example which goes
back to the fundamental question we have been
discussing, and that is voluntary charitable
activity.
I want to ask you a question.
Go back to the nineteenth century in the United
States.
It was a period when you had about the closest
approximation to a capitalist society you
can imagine, in which the Federal government
was spending an amount equal to roughly 3
percent of the national income, almost entirely
on the army and navy; state and local governments
were spending about 6 or 7 percent of the
national income, mostly on schooling.
Very little of what has come to be regarded
as welfare activities.
Yet the nineteenth century was a period of
the greatest burst of voluntary charitable
activity that we have seen in this country
or any other country at any other time.
When was Cornell established?
How?
It was established by the voluntary benefaction
of the man who gave you your name sometime
in -- what was it -- the 1860’s.
That period of the nineteenth century saw
the emergence of a host of private colleges
and universities throughout the country.
My own University of Chicago was established
in 1890 by voluntary eleemosynary activity.
It was also the period which saw the growth
and development of the nonprofit charitable
hospital.
It saw the establishment of foreign missions,
of the Society for the Prevention of Cruelty
to Animals, of the Boy Scouts.
You name it, there is hardly a voluntary activity
-- the Carnegie Libraries, the free public
libraries.
Why was it that voluntary activity flourished?
Because again the free market, voluntary cooperation
among people -- cooperating to pursue their
common interest -- is a far more effective
and efficient way of producing charitable
results than any other known to man.
I ask you, what is the common element in all
of these cases I have mentioned -- language,
common law, scientific knowledge, ideas, charitable
activities?
The development of an elaborate and complex
structure without any central planning and
without coercion.
No central planning in language, in common
law, in scientific knowledge, in ideas, in
voluntary activity, and yet you developed
complex mechanisms, complex structures, with
order, with structures which after the event
you can analyze in logical terms.
Without coercion, you have progress through
harmony rather than the attempt to impose
progress through coercion.
Capitalism is often reproached as being materialistic.
It is often reproached as erecting money as
a chief motive, but yet again, look at the
facts.
I may say, you know, money is not a very noble
motive but it’s cleaner than most.
But look at the facts.
Who has produced the great achievements of
mankind?
Can you name me a great play that has been
written by a government committee?
Can you name me an invention that was produced
by a government bureau?
The great works that are the great achievements
of mankind have all been the achievements
of individuals -- of a Shakespeare or a George
Bernard Shaw.
George Bernard Shaw is a beautiful example
because, of course, as you know he wrote the
famous book The Intelligent Woman’s Guide
to Socialism.
He regarded himself as a socialist but his
career and his performance is a striking demonstration
of the virtues of the capitalist system he
opposed.
Again in science it’s Einstein, Copernicus,
Galileo who are the great contributors of
scientific ideas not through government central
organization but mostly in spite of it.
In Galileo’s case, as you know, despite
persecution by the centralized authorities
of his time.
Again, in the area of charity, Florence Nightingale
was not a government civil servant.
She was a private individual, human being,
who was seeking to achieve the objectives
she held dear; she was pursuing her self-interest.
The plain fact is that in any society, whatever
may be its form of organization, the people
who are not interested in material values
are a small minority.
There are no societies in the world today
that are more materialistic than the collectivist
societies.
It is the Russian society, it is the Chinese
society, it is the Yugoslav society that but
all their stress on materialism, on achieving
economic goals and five-year plans, that destroy
the non-materialistic achievements of mankind.
Why?
Because they are in a position to suppress
minorities.
What we need for a society that is at once
humane and gives opportunity for great human
achievements is a society in which that small
minority of people who do not have materialistic
objectives, who are interested in some of
these other achievements, have the greatest
degree of freedom.
And the only society that anybody has ever
invented, that anybody has ever discovered,
that comes close to doing that is a capitalist
society.
When you hear people objecting to the market
or to capitalism and you examine their objections,
you will find that most of those objections
are objections to freedom itself.
What most people are objecting to is that
the market gives people what the people want
instead of what the person talking thinks
the people ought to want.
This is true whether you are talking of the
objections of a Galbraith to the market, whether
you are talking of the objections of a Nader
to the market, whether you are talking of
the objections of a Marx or an Engels or a
Lenin to the market.
The problem is that in a market society, in
a society in which people are free to do their
own thing, in which people make voluntary
deals, it’s hard to do good.
You’ve got to persuade people and there’s
nothing in this world harder.
But the important thing is that in that kind
of society it’s also hard to do harm.
It’s true that if you had concentrated power
in the hands of an angel he might be able
to do a lot of good, as he viewed it, but
one man’s good is another man’s bad.
And the great virtue of a market capitalist
society is that, by preventing a concentration
of power, it prevents people from doing the
kind of harm which really concentrated power
can do.
So that I conclude that capitalism per se
is not humane or inhumane; socialism is not
humane or inhumane.
But capitalism tends to give free rein, much
freer rein, to the more humane values of human
beings.
It tends to develop a climate which is more
favorable to the development on the one hand
of a higher moral atmosphere of responsibility
and on the other to greater achievements in
every realm of human understanding.
Thank you.
