To discuss the case for private property we
have two guests. George Roche is the president of Hillsdale
College in Michigan, a venerable, small, coeducational institute unabashedly devoted to the cultivation
of the moral imagination and the presumption in favor of the private sector. Dr. Roche received his B.A. from Denver’s
Regis College and his advanced degrees in history from the University of Colorado. He joined the staff of the Foundation for
Economic Education where he wrote five books before joining Hillsdale College. Our second guest is the senior libertarian
economist in the world, Nobel laureate Friedrich von Hayek. Professor Hayek, born in Vienna, became known
in America after the publication of his triumphantly successful book, The Road to Serfdom, which
– published toward the end of the second war – warned against the implications to
human freedom of the statist course being set by Great Britain and other countries. But he had already performed the prodigies
and technical economics that won the Nobel prize for him two years ago, and he left the
London School of Economics to resume his studies at the University of Chicago where he wrote
his classic The Constitution of Liberty. He returned to the University of Freiburg
and continues to write definitive economic studies and essays for the technical journals
at Hillsdale College. At a special meeting of the Mont Pelerin Society
two years ago to celebrate his work, a book issued celebrating that event published by
the New York University Press. It is called Essays on Hayek in which, as
it happens, I have a chapter. Such is the notoriety of Mr. Hayek’s opposition
to state centralism that they even compose limericks about him on college campuses. Last week at Berkeley I heard this one. There was a young man from Nyack
Who slept with a girl on a kayak. To do this while tanning
Requires central planning In spite of the writings of Hayek. I should like to begin by asking Professor
Hayek what would he do if he prevailed in Congress in order to diminish unemployment? Well, we must be clear about what you call
unemployment. There is a current view which is not completely
wrong. That’s what makes it so dangerous. That all you have to do is to increase expenditures
and that, of course, leads to the use of inflation to secure full employment. But that’s only a short-term relief which
in the long term makes things worse because what it amounts to is to stimulate certain
misdirections of labor. Particularly in this period where all they
want is growth. It draws more and more people into producing
capital goods. Now they can be kept employed there by continuing
inflation – in fact, continuing inflation at an accelerating rate. So the dreadful position is that the politicians
can always temporarily say, “Well, we’re going to reduce unemployment by spending more.” But in the long run they make these misdirections
of labor only worse and we buy the short-term remedy at the price of greater unemployment
later on. Now we have had the longest period of inflation
behind us which this country’s ever experienced, and we must expect that a very large proportion
of the labor force has been drawn into occupations where they cannot be permanently employed
unless we have continuing and accelerating inflation. The consequence is that we must go through
a very bitter period of unemployment in which people are induced to shift their occupation. Now in a normal market system that works fairly
easily because the relative wages indicate where the chances of occupation are. But we have on top of inflation a system where
the whole wage structure is almost entirely politically determined by trade unions, so
this normal mechanism of relative wages which tells people where good employments are no longer
works. But I think as a result of civic policy in
the past, we are bound to go through a much longer period. Now note the mistake is not our present government
policy that is wrong. It’s wrong in a sense – it’s their
attempt to try again to stimulate it by a little more than inflation. The mistake is in the past and we have to
pay for mistakes already made in the past. Well, what sort of shifts do you anticipate
would take place if we had a totally mobile market responding to –
Well, I think very largely a shift away from producing capital goods into producing consumers’
goods, but in detail that’s impossible to predict. You know the whole point of the market price
system is that it tells us of an infinite number of particular facts and amounts which
nobody knows. They can find out a stable situation only
by letting the market work – using the signals which the prices constitute to draw people
into which occupations which are really employed that would work if we had a tolerably free
market. Well, is it a part of your position that unemployment
compensation is enough of a disincentive to neutralize the force of the market place? I can’t speak about this country; that is,
I don’t know enough about how important it really is. I mean the country which I know much better
– England, of course – it’s a main factor, and there you have such a ridiculous situation
where unemployment compensation is paid to the wife of people on strike. Even though the people go on strike to push
up for higher wages, they don’t run any risk. The government has to look after their families. Now to a minor extent I think the same thing
is probably operating here, but I can’t speak very definitely. I mean the American trade union is of course
– Well, let me put the question to you generally. Is it a part of your position that the adjustments
required to make up for past mistakes cannot take place alongside unemployment compensation,
or is it only when unemployment compensation becomes too lucrative? The latter. You know I have no objection against a flat
minimum – secure to everybody who cannot earn enough in the market – but the same
for everybody on the condition that he cannot earn more in the market. That need not interfere with the price mechanism
with the free play of market forces. But once, of course, you make it more attractive
to pay unemployment compensation than to work, even young people who cannot expect to earn
more than little when they begin, there's a temptation to remain unemployed and to earn
unemployment compensation is really large. I’ve no idea, but I suspect that a comparatively
large part of the unemployment, statistically, isn’t generally unemployment. It’s just a preference of people to draw
unemployment compensation rather than to work. Is that your experience, Mr. Roche? We have almost a case study of this in the
United States in miniature because here in this country, Professor Hayek, we have states
like Michigan – where Hillsdale is located – that are major industrial states with
major union pressures present. And in the case of Michigan we find that unemployment
compensation and workmen’s compensation in general are on a rather higher level than they
are in most other places. This has the effect of not only causing people
to not wish to be employed as you pointed out, but has also had the effect of driving
business out of Michigan over the state line into other places where these other very negative
forces on business don’t prevail. So we have a situation where a major industrial
state like Michigan – presumably a leader in industrial growth – is now forty-eighth
out of fiftieth among the fifty states in rate of industrial growth as directly the result of
pushing the very program that you decry. Well, how would you account for the almost
unanimous opinion of liberal Democrats that in order to reduce unemployment it is necessary
for the government to pursue vast spending projects? Since you speak of this as being almost manifestly
ill-advised, the question arises why such superstitions should survive? Well, it’s almost entirely the work of one
man – in a way a genius, Lord Keynes – who is much more concerned about influencing current
policies than about advancing the rights or the theories, and he was operating then in
a very peculiar situation. Now in Great Britain a successful attempt
was made about World War I – which brought a good deal of inflation – to bring prices
down to the pre-war level. Prices came down but wages did not, so you
had in the 1920s a position in Great Britain where wages were internationally too high
and Britain had become noncompetitive on the world market. The problem in Great Britain was to make Britain
competitive again and it was clear that this required a reduction of real wages. Notice these real wages had been artificially
increased by increasing the value of the pound. So because the pound was part of its former
level, people receiving the same wartime wages, or inflated wages, could buy much more. Wages had not come down. Now his first argument was wages must come
down. Then he found that was politically impossible,
so we must find another way. Instead of getting money wages down, we must
depreciate the pound so that given money wages should correspond to a lower level of real
wages and then by a curious intellectual somersault, I would almost say, he led himself to believe
that even bringing down money wages was not of any use. It involves a very complex economic argument
and all he concluded was that – well, we must inflate, in short. Now notice several things. Keynes was a genius, but a genius will spend
only a fraction of his time on economics – one of the busiest men I ever knew. But he knew very little economics except particularly
the Cambridge tradition, and he was much more concerned to influence policy at a particular
moment than develop a true theory. In fact the last time I talked to him was
after the war. I knew him very well. When I asked him wasn’t he getting alarmed
about what his pupils, who had swallowed all this theory, were doing after the war when
the danger was clearly inflation, his answer was, “Oh, don’t mind. My theory was frightfully important in the
1930s. Then we needed an expansion to correct a situation. Do trust me. If this theory becomes dangerous, I’m going
to turn public opinion around like this.” Six months later he was dead. And as usual what happened is that the very
doctrine – pupils of this man did apply to a completely different situation a theory
which was designed to influence policy in a particular situation. The only thing I blamed Keynes for is to making
his theory more attractive than defective. He called it the general theory. In fact he knew precisely that it was not
a general theory, but it was an argument to persuade government in the 1930s to do particular
things. It was an ad hoc apparatus–
It was entirely an ad hoc effect. He was one of the most fascinating men I knew,
but the personal magnetism of this man not only persuaded the younger generation of economists. And if I had been a much younger man and a
student, I probably would have been swept off my feet as were most of the people. Like Nixon. No, no. What did Nixon mean when he said he was a
Keynesian in your understanding, Mr. Roche? Well, I hope that he meant only that these
policies had become so widespread in our time that they had to be dealt with as a part of
our considerations. I hope that he did not mean that he literally
thought that spending more money somehow created more wealth. The thing that I would like to address myself
to for just a moment is that the reason that the Keynesian policies were so successful
and so all pervasive in Great Britain was essentially because of the ultimate political
pressure that the organized labor forces brought to bear. The same thing’s been true to a lesser extent
here in the United States. Things like minimum wage and the rest that
have obvious effects of keeping people out of the labor market are all essentially labor
oriented, and I think that may be changing. The practical politics that once caused the
average working man to be aggressively oriented toward organized labor might not be working
any longer. For example, if you go into a bar in Hamtramck
in our time and try and hear what UAW worker at General Motors is saying these days, he’s
very concerned about inflationary wage increases which appear to give him more money but which
only keep him about even in purchasing power. Meanwhile he’s being pushed up into a higher
and higher tax bracket as a result of this, and on that balance he has considerably less
purchasing power than has been the case previously. In other words the ability of organized labor
to hold its troops together on these issues and put on the kind of pressure necessary
to push for this may be coming to an end. You’re perfectly right, but I’d like to
add one thing. You see, another political element was that,
of course, politicians just lapped the argument and Keynes taught them if you outspend your
income and run a deficit, you’re doing good to the people in general. The politicians didn’t want to hear anything
more than that – to be told that irresponsible spending was a beneficial thing and that’s
how the thing became to influential. Well, let me ask you this. Are you prepared to say that Keynes did not
come out with a general theory of income and employment, or are prepared to say that nothing
that he said is generally applicable? Concretely, is it or is it not correct that
in a free society you will not have downward, mobile wage rates to help to adjust business
cycles? Well, it depends very largely on policy and
what is being told to you. I think Keynes’ claim to have provided general
theories just wrong. There’s no question to me about this. In spite of his extreme intelligence he just
made one or two fundamental mistakes. Largely you respect the information before
you. He wasn’t mainly an economist. He was a great figure who was concerned about
public affairs who had spent half of his university studies on economics and thought he was competent
to advise on this thing, and in fact they didn’t construct one theory – the most
characteristic thing of the man was he constructed theory after theory to justify the same policy
he instinctively believed was the appropriate one, but he happened to be wrong. It was one of these that you challenged, as
I remember, in the early Thirties. Well, I did challenge his first theory. I spent a lot of time to criticizing his treatise
of money which came out before the general theory in two long journal articles, but when
I published a second one, Keynes told me, “Oh, never mind. I no longer believe that.” So when he came out with his general theory,
I thought I was not going to waste my time against criticizing, but that book was he
one which became so frightfully important. I’ll regret it for the rest of my life that
I did not return to the charge then. Well, Mr. Roche, how do you account for the
cordite at Harvard University that was touched by the book when the labor union pressures
were by no means as acute as they were in Great Britain? Why did the whole of the Harvard Economics
Department – with one or two valiant exceptions – go up in flames with enthusiasm over this? What is the explanation? Is it psychological or intellectual? One of the really interesting situations of
our time rests in the reaction of the liberal, intellectual community to various problems,
and this is a perfectly good case in point. It’s something that I hope somewhere in
the course of our time together Professor Hayek has a chance to discuss this because there’s
an enormous change between 19th century liberalism – classical liberalism – and 20th century
collectivist liberalism, and in that change I think we see just the methodology that you’re
describing. There are some things that are so deeply believed
that we’ve reached the point where you say, “Don’t confuse me with the facts. My mind is made up.” So whatever the political pressures or absence
in that spectrum, there is a kind of intellectual in our time who is determined to see only
one side of the issue until he is absolutely shaken from it. We may be seeing that now incidentally. The same changes that are recurring in organized
labor seem to be occurring in the intellectual community as well, but wisdom takes time. Well, Mr. Hayek, you wrote a very famous essay
on the intellectuals and socialism in which you attempted, I think quite successfully,
to show why socialism is so nubile for the intellectuals. What is that thesis of yours, and do you still
defend it? Oh, certainly, yes. Well, it's a very interesting story intellectually. Among the dominant ideas which have governed thinking since the 18th century is the idea we can make everything to our pleasure, that we can
design social institutions in their working. Now, that is basically mistaken. Social institutions have never been designed
and do much more than we know. They have grown up by a process of selection
of the successful. Result - people frequently know why it was
successful. That applies to the market. The market is - I was going to say most ingenious,
but ingenious without having been designed - instrument which enables us to utilize knowledge
which is distributed among hundreds of thousands of people. It's an adaptation to thousands of circumstances
which nobody ever can know as a whole and where the prices formed on the market tell
the individual what to do and what not to do in the social interests. And I know that you understand this. You have to know economics. The naive person who imagines all the distribution
of income is determined by somebody deliberately - It seems that if this is the responsibility
of a particular guy, it is evidently done very unjustly. The fact is it's not being done unjustly because
we achieve all that we do achieve by having come to agree to play a sort of game in which
the gamers of the market are likely to call it and which - because we are utilizing more
information, more facts, than anybody knows - the outcome for a particular individual
is necessarily unpredictable. Now an outcome which is unpredictable and
undesigned by anybody cannot be just, just as little as the outcome of a game of chance
can be a just game, but people resent this. And the people who imagine, oh, it should
be possible to design all this, to arrange this, expect the government to do this in
a manner in which the distribution is just. That is literally impossible because it would
require that all this widely dispersed information about particular facts and particular circumstances
and particular gifts can be used and controlled by a central authority. Why couldn't the role of the justicemaker
come at the end of a process by taking from someone who has more than he needs for the
purpose of satisfying somebody who has less than he needs? Because if he knows that part of his income
is going to be taken from him, there's no inducement for him to do that particular thing. If I know that if I do a thing which would fetch a
very high price, two-thirds of it are being taken from me and I can do something much
more pleasant for a third of the income without paying any income tax, I'm going to do that
and I'm not going to do what's most beneficial to society. Well, but in point of fact a great many people
who are taxed at the two-thirds rate continue to be very productive. Well, I doubt whether they are as productive
as they could be. All right. But let's say they are less productive than
they could be, but how do you answer the question that the demands of justice are perhaps approached
after you have permitted a natural distribution of the proceeds (through the market mechanism)? There are no possible rules of a just distribution
in a system where the distribution is not deliberately the result of people bringing
it about. I mean justice is an attribute of individual
action. I can be just or unjust towards my fellow
man, but the conception of a social justice - to expect from an impersonal process which
nobody can control to bring about a just result - is not only a meaningless conception, it's
completely impossible. See, everybody talks about social justice,
but if you press people to explain to you what they mean by social justice, also what
they accept as justice, nobody knows. I'm telling you because I've been trying for
the past 20 years, asking people, "What really are your principles of social justice?" Well, the fact that people may disagree as
to the definition of social justice does not in and of itself argue against the right of
a society to attempt to extract a consensus –
I have been trying to do this, but I haven’t got anything like a consensus –
Well, in all democratic societies there is an operative consensus because of the codification
of the redistribution laws. There is a consensus of entrusting a particular
authority with redistribution. Yah. But then you ask how it’s being done. It’s being done not by agreeing with any
principles but being bias as a part of particular little groups. The people who get more are not determined
by an agreement of the majority – the people who by withholding their particular group
might endanger the governing party. There’s nothing like agreement of a just
distribution. The distribution which government effects
is the price it pays, or rather the concessions it makes to the extortions of particular little
groups who say we will not support you if you don’t give us an extra benefit. Well, what if you were to remark a correspondence
between the flow of philanthropy and the flow of redistributionist money, would that just
be a coincidence? It would be a coincidence. Suppose 50 percent of Mr. Roche’s college
fund were supplied by individuals and 50 percent of it was supplied by government. Would you say that there was a natural correspondence
between the ideas of justice as screened through the distillery of free minds and as screened
through the representative government? Our possibility of being charitable is limited
by the extent of our knowledge of particular people and particular needs. The benefactors of your college will do so
for an institution they know, for a group of people they know. But, see, the great the problem is that we
have developed what’s called a greater open society which deals with an infinitely much
larger number of people than anybody can know. Nobody can form an idea – what a steel worker
in Indiana compared with a cotton worker in South America – in the Southern states – deserves
it in a sense. We have no instinctive feeling about this. When we believe that we have this sense of
social justice, that’s an inherited trait which we have developed from the life in the
small group in which man can live for a million years before it develops to an open society. Of course in a little hunting band of 50 people
or so it was essential that you assigned an appropriate share to each member. But this native instinct which we had to overcome
in order to form a large society is suddenly coming up again when the great majority of
people operate in large organizations no longer understand the market, and so we are reverting
to very primitive instincts, the instincts which we have overcome when we emerged from
the little group into the open society. Well, are you saying that a state the size
of Bermuda can make intelligent exercises of charitable redistribution? Whether it would be intelligent, it could
be principled and could pursue clear aims. I don’t know what’s the population of
Bermuda. It’s probably already too big for the purpose,
but a state consisting - I think it’s about 50 thousand. - of 10 or 20 thousand people could probably
do it. There you still have visible, conceivable
needs of known people whom you can ascertain. But the whole advance of society is that we
have created an order in something very much bigger than any single mind can conceive,
can survey, and we’ve created some sort of order and created conditions in productivity
by applying to their individual actions universal rules and then letting them play what I call
this game which is partly a game of skill and partly a game of chance and that the outcome
of this game is the other rewards – the prices – which tell people what they ought to do
both in their own and in the general interests. Prices, after all, tell people what they ought
to do in order to make the greatest contribution to the social product. Well, Mr. Roche, let me ask you this. Is it your notion that a society ought not
to undertake redistribution because it cannot define justice or because it has no legitimate
authority to engage in the act of redistribution? Both, as a matter of fact, but before I answer
– Please don’t leave the impression in anyone’s mind, Bill, that half of our money
at Hillsdale comes from the federal government because, as you are already perfectly aware,
none of our money comes from the federal government or the state government. You disdain it. In any event as to the question of justice
it occurs to me that such a thing as social justice becomes almost a contradiction of
terms because if you examine the philosophic roots that produce the modern egalitarian
ideal, those roots contain all sorts of departures from the idea that it is possible to establish
a difference between right and wrong. They deny the operation of a moral framework
and ultimately come to the utilitarian goal that all ideas and all values are to be considered
essentially on their own merits, and the same people who have said that and are busy then
undercutting the more traditional values in Western civilization are the same people who
then go on and parade about social justice as though somehow the assignment of numbers
of quantification will tell us something about justice, and, in fact, it will not. So I don’t think that you can define social
justice. You can define social injustice. You can produce a socially unjust situation. But to do so, what you’ve really done is
undercut individual morality and the opportunity to make those choices that have a genuine
moral content. Well, why is it inconsistent for a logical
positivist to say on the one hand, “I decline to accept as just that which the majority
ordains, but I agree to back that which it does because this is an attempt – a conscious
attempt – at the workings of justice by people who are as instructed as any society
can hope to be at a given moment?” Well, I don’t think that this definition
of social justice carries that kind of validity. When people begin to talk about justice or
of a certain kind of definition of right and wrong, it’s always a fair question to ask
the source of their ideas, and that same man who is so determined to provide this egalitarian
wave of the future that’s planned for how other people should conduct their affairs
has denied the idea that there can be a source, and for him simply to say that the majority
constitutes that source or that he has a degree of enlightenment denied the rest of us is
arrogance. That’s not proof. Well, let me ask you a concrete example and
perhaps you and Dr. Hayek can address yourselves to it. Suppose you have a state in which extreme
conditions exist. In one area of the state 50 dollars a year
is spent towards the education of a child. In the other end of the state a thousand dollars
per year is spent towards the education of the child. Is the concept of justice invocable in the
society that says, “We must do what we can to diminish that antipodes. We must pay more for the education of the
child down in the Southern region even if it means diminishing the grant to the child
in the upper region.” Is this as thus far described, a rough attempt
at (quote) “justice”? No, because justice after all still, as we
heard earlier, is essentially an individual idea. Morality is the difference between right and
wrong in concrete, specific decisions and transactions between and among individuals. When this is elevated to a social plain, it
ceases to have any particular recognizable content as justice. But is that terminologically subjective if
an individual decides to give succor to a hungry person? Why is that different from ten individuals
giving succor to ten hungry people? Oh, privately to the individual? No, no. Even if they use the instrumentality of the
tribe. Because at that point I become the succor
for them because it’s my taxes that accompany theirs. It’s fine for you to decide to be charitable. It is not fine for you to be charitable with
my resources as opposed to yours. In fact there’s no charity connected with
them. Well, this really depends on the rules of
society, doesn’t it? Let’s raise the question what is the society? I’m acquainted with your essay that says
that no such thing exists. I mean is the fact that people of Oklahoma
and the people of New York find it convenient to have a common system of law and of rules
that justification of the people of Oklahoma can demand that the people of New York, out
of their pocket, assist the people of Oklahoma? It’s a question which once you ask it will
agree there’s nothing like a moral agreement which creates such a right. It’s really the fact where there is the
power and once we have a common state that is the power, it is accepted as legitimate
that this power takes out of the pockets of the rich – Now does it mean that if we have
a world government, we can tax our Americans to 80 percent of their incomes in order to
maintain the Chinese? I mean that same principle applied once you
have an international government – that is an international power – then we have
to claim that it is perfectly legitimate if the international government decides to tax
all Americans of 80 percent of their income, hand it over to the Chinese, and feed the
Chinese. Whatever we may think about desirable future
rules of morals, there’s no doubt that the existing rules of morals do not justify this. And I would maintain that in fact when today
when the parts of the United States are heavily taxed in favor of the poorer parts this is
not the result of any moral agreement of the majority of the American people, but surely
they think that whatever party is in power needs the rules of Oklahoma and pays for the
rules of Oklahoma. It’s the costs of the people of the welfare
parts. Nothing else. Well, but the motivations of the people who
pass those laws are not necessarily the motivations of people who are propelled by demagogic pressure,
are they? You’re not denying disinterested generosity
exercised in the legislature, are you? It’s an entirely different matter as disinterested
generosity determines voluntary action. But to claim that there is a consensus of
the American people which authorizes the legislature to bring about a certain redistribution of
income is in fact not true. The American people have never asked the principles
that ought to be applied in this. All they ask – all they are told – is
that in fact the Republican Party or Democratic Party who promises you such and such will
be in power only if it buys the support of the people in Oklahoma. And since you know that you will get from
the Democratic Party only what you expect from it - you would from it and you take into
account the necessity that only the Democratic Party gets into power, it has to pay special
benefits to the people in Oklahoma. That’s what it comes to. Judges by the results, this idea of disinterested
generosities is the one thing that we cannot expect from the public sector. Pick your legislature and you’ll see a series
of special interest groups operating in a variety of ways contending essentially for
power and, I think, proving the very point that it’s impossible to be generous with
other people’s resources even if it were morally possible, which it is not. Well, it seems to me that Aristotle tackled
that problem where there was no question of a democratic base, and he simply talked about
doing the right thing, and he was talking about a class of people who exercised power. But he also said that a democracy in a state
of more than 10 thousand people is impossible. That’s right. And his numbers were probably high at that. No, no, no. I know, I’m aware of that, but Aristotle
was also talking about the obligations of those in power and assuming that the obligations
of those in power gave them authority over people other than themselves and defined – or
attempted to – the right thing to do and the wrong thing to do. How do the lines go? Power into will, will into appetite, and appetite
and universal wolves so doubly seconded with will and power must make per force a universal
prey and last eat up himself. You know an equally great philosopher, Immanuel
Kant, has once said, “Welfare has no principle and therefore we cannot involve welfare of
different people because there are no known rules by which we can do it.” When we do this, aren’t we making a wrong
expectation? Let me give you a working example. I was raised in the mountains of Colorado
in a very rural community and attended an eight-grades-in-one-room rural schoolhouse. The public school was publicly financed, but
the people supporting the school were the ranch families living there who simply felt
that their youngsters, myself included, had to have an education, so the teacher brought
in and local taxes collected, but this was the clearest kind of extension of the responsibility
of the parent to do something for the education of his own children. And eventually of course what happened in
Colorado, what happened all over the country, occurred. Consolidation – it was called there – came
along, and the little local school gave way to the bussing of children many miles away
to larger schools, presumably at the time because of all the benefits that were going
to be derived to the children – the benefits in the form of chemistry laboratories and
swimming pools and the things simply not available in this little country school. The actuality of that was of course while
the taxes went up four or five hundred percent in intervening years and the local communities
were caused to pay a higher and higher price, the quality of the education the youngsters
were receiving in the larger and larger schools actually became more inferior, the reason
being that it was moved further away from the basic responsibility of the individual
parent and with variations something like that could be said about virtually every aspect
of our lives – the responsibilities that we have as individuals which are presumably
exercised and discharged collectively but in fact never are and I think never can be. Well, are you saying that the Bronx High School
of Science has an inferior record to the local school in New York? Of course not, no. There are obvious special cases. It’s possible to subsidize the Vienna Opera
House, too, but that is not – Well, I think the exception almost proves the rule. Well, may I comment on this. Although I am by birth an Austrian and I love
the Vienna Opera, whether it is really justifiable to tax 7 million people or to give half a
million the chance to have a first class opera I’m very doubtful indeed. Our examiner today is Mr. Jeff Greenfield,
familiar to viewers of this program. Mr. Greenfield is a graduate of the University
of Wisconsin where he was the editor of the student paper. He’s a graduate of the law school at Yale
University. He was a speech writer for Senator Robert
Kennedy and for Mayor John Lindsay before belatedly retiring to become a freelance writer. Also an alumnus of the Bronx High School of
Science, I might add. I know. My first question is why are you all wearing
the same tie? Is this some cabal, some collectivist plot
– I won’t talk. Okay. Then on to more trivial concerns. First let’s start with this concept of social
justice. If a state within a federal republic such
as ours were to deny, as they did, citizens the right to vote because of the color of
their skins, I would assume you would regard that as an example of injustice. Yes, right. Permitting federal intervention, even though
it perhaps overwhelmed local traditions. Now, it seems to me that there is an easy
case where one can define an example of social injustice and to define social injustice requires
a norm from which there is a departure. Hence, one aspect of social justice we could
all agree on is skin color is not a legitimate basis on which not to vote. So my question to you, and I suppose also
to Professor Hayek is – is your skepticism about social justice confined to the sphere
of economics or are you skeptical about any ability to define it? Well, I’m highly skeptical when government
extends its authority into areas where it simply is not properly qualified to judge
and where there is no basic definition of how it should be performing. Your example, of course, refers to the political
process. Obviously for the state to determine the conditions
under which people should vote is an area where the state must make the rules. Now, I want to elaborate on that and ask Dr.
Hayek one because now I’m going to get into economics here. I’m afraid I have a lot to say on this subject
if you start me on it. And the point we must start from is that the
classical demand is that the state ought to treat all people equally in spite of the fact
that they are very unequal. You can’t deduce from this the rule that
because people are unequal you ought to treat them unequally in order to make them equal
and that’s what social justice amounts to. It’s a demand that the state should treat
the different people differently in order to place them in the same position. The rule of equal treatment applies only to
things the state has to do in any case. But, to make, making people equal, a goal
of governmental policy would force government to treat people very unequally indeed. Let me, though, pursue an area where we get
into the field of economics. In the field of politics, once again, people
with access to a great deal of money are frequently said to have a tremendous advantage over people
without money when competing for public office, given the demands. Now, if the state taxes us or indeed as they
have done in current federal income tax gives us the opportunity to check off on our income
tax forms that we wish some of our money – 5 dollars or 2 dollars – diverted to public
financing which is then distributed to candidates who meet equivalent standards for qualifying,
so that they can be brought up to a level of equality, does this offend your sense of
– How are they being brought up to a level of
equality? They are being - Let me limit it. They are being brought up to a level of equality
in the resources they may commit to the goal of getting elected. It diminishes the inequality between rich
and poor people to buy advertising time, print speeches, attend rallies, the panoply of politics. This bother - Does this offend your sense
of what the government ought to be doing? Yes. You see what you are discussing is a case
where government ought to make people observe the same rules, and I’m all in favor of
that. But if the different people observe the same
rules the result for them will be very different. What you are suggesting – the whole theory
of social justice is suggesting – is the government ought to treat the people very
differently in order to put them in the same material position. That has nothing to do with your original
claim for equality of the rules which government forces all people to apply. This idea has only been imperfectly achieved
I admit, and let’s push on in the direction that government must force all people to obey
the same rules. Well, it seems to me that in the absence of
redistribution in at least this area you are left with the Anatole France observation about
the rich and poor equally being forbidden to sleep under bridges and beg in the park. Yes, but is that wrong? I think the fact that it is right in some
perverse sense indicates how wrong it is. I think in the field of politics if access
to political power depends on who has the greater amount of welfare, something’s indeed
wrong with that. Yes, but I mean the government prohibits a
great many people from a great many things which only young and strong people can do
and which I can no longer do. If the government prevents me from climbing
some difficult peak – 50 years ago I would love to do it – it doesn’t affect me because
I no longer try – it's equally a discriminating rule as a general rule. Equally? If we’re looking for social justice, let’s
not keep looking in political places. Let’s look in social places and see some
examples of governmental policy directly applied there, in which case we get a very different
kind of a set of answers. I’d like to ask Mr. Buckley, in fact, just
that kind of question. At least I think it’s that kind of question. I’m sure he’ll let me know if it’s not. The abortion controversy – If we assume
that the Supreme Court decision will stand – that is to say that the state may not
limit abortions in the first three months – then does it offend your sense of justice
– social or individual or otherwise – that we are now going to say that public money
will not be available for this particular medical procedure which has been legitimated
at least by the Supreme Court such that wealthy person or a middle-class person might terminate
a pregnancy and a poor person may not? Not in the least because it is in no way to
be distinguished from other rights protected by the Supreme Court which are enjoyed uniquely
by those who have the resources to enjoy them. The Supreme Court 15 years ago denied to the
State Department the right to withhold a passport. This was a meaningless gesture as far as millions
of Americans were concerned who simply didn’t have the resources to use a passport to go
to the Vienna Opera House. But nevertheless, the finding of the Supreme
Court may or may not have been defensible. The notion that the discovery of a right by
the Supreme Court is tantamount to bequeathing of the means is, I think, a mistake that is
often made by you types. After what you just said, I would think there
would be a sense the right to travel or publish a newspaper or to eat caviar and drink wine
or whatever resource is functionally equivalent to the right not to be compelled to carry
a fetus to term against a woman’s will? Is this the precept? Is this what you have just said? Well, it is, everything is subject to caricature. Who is the artist in this case? Well, Mr. Bertrand de Jouvenel in his book
“The Ethics of Redistribution” said that it is the height of arrogance – and I agree
with him – for anybody to presume to know what deprivations mean to individual people. For an individual who loses his Mona Lisa,
let us say, we are simply not in a position to say that he is less anguished than the
person who has to sleep under a bridge at night. And I think it’s very important for you
to meditate that. In fact, if you want to take a few minutes
off, you may. No, no. I must say I think that statement ought to
go absolutely unchallenged. Let it just sit there for a moment for what
it is. Let me ask Dr. Hayek another question which
I think gets back to something Mr. Buckley was asking you in his more lucid discussion. “The Road to Serfdom”, the book that most
of us know you for, was particularly eloquent about the dangers or the folly of massive
and particular intervention in an administrative sense, at least that’s what I recall. What Mr. Buckley, I think, was asking you,
and what I’d like to pursue is, would a simple redistributive policy on the part of
government offend you or make you as concerned as the warnings you raised about a state that
was intervening specifically all throughout our lives? In other words, a simple statement – make
your money how you see fit. We will take X percent of it to heal the wounds
of the poor. Is this dangerous of policy? The answer is very definitely yes. Any redistributive policy requires a discriminating
treatment of different people. You cannot so long as you treat all the people
according to the same formal rules – forcing them to act only to observe the same rule
– bring about any distribution of incomes. Once you decide that government is entitled
to take from some people in order to give it to others, this is automatically discrimination
of a kind for which there can be no general rule. They are purely arbitrary. Why isn’t the general rule all those in
Class A – 20 to 30 thousand dollars a year – pay X, all those in Class B pay Y, all
those in Class C receive X? Why is it not a general rule as opposed to
the general rule – Because X doesn’t equal Y. A very difficult question, how to define a general rule. I mean after a long discussion in jurisprudence
it has come out that the essential point about a general rule is that you cannot predict
who will profit from it and who will suffer from it. Any rule where you know before that who will
be the gainers and who will be the sufferers is in that sense not a general rule. But, now, does this fact that it is not a
general rule make it nonetheless inadvisable? Inadvisable because once you authorize government
to act arbitrarily there’s no limit to it. Now, I think we, – I want to make sure I
understand this. The word arbitrary all of a sudden came in
there. Why is it arbitrary –
Not acting according to rule is arbitrary. I'm sorry? Not acting according to a general rule is
arbitrary. That’s the only way in which you can define
arbitrary. I don’t see why if one understands exactly
the premises on which one is making distinctions. Why is it arbitrary? I distinguish between rich and poor when I
tax them because rich people have more discretionary income. Well, you distinguish between the people whom
you want to have more and the people whom you want to have less. But why is it arbitrary? I’ve given you what I think at least is
a plausible and defensible reason for distinguishing among them. Well, the distinction is between – I can
only say between a general rule which applies equally to all and rule which distinguishes
between different groups. Arbitrary does not necessarily mean thoughtless. I understand that part, but it seems to me
that one is moving from a descriptive to a normative judgment in an effort to set forth
rules which will make it impossible for government to treat different people differently. Let me come up with perhaps a suitable example. If you went back to an earlier time in American
history, the goal – always imperfectly realized – was that the blindfolded Goddess of Justice
stood before us all dispensing her favors equally to all who came before her. If you take various governmental programs
– arbitrarily conceived as Professor Hayek is using the word – take affirmative action
in our time. Now we have a law which says come before the
blindfolded Goddess of Justice, but now she’s encouraged to peek. And she says first tell me your color, tell
me our sex, and then I will tell you how we are going to treat you. Well, now there are Lithuanian minorities
as well as black or whatever. The only majority in this country that I know
of, of course, are women. There are more women than men. But every other grouping – ethnic or otherwise
– into which we can break ourselves turns out to be a series of minority relationships,
but it is highly arbitrary to select some of those to say these are the people whom
we single out for special treatment and these are the people whom we penalize. There’s only been one minority in American
history that I know of that was legally enslaved. Yes, and it was a legal process which made
that possible. Yeah. Enslavement came as a direct result of the
state determining the affairs of men. It was arbitrary. Yes. But would you accept that arbitrary –
I’m terribly sorry, Dr. Hayek, but we have to say good night. Thank you very much and thank you, Mr. Roche,
and thank you very much, Mr. Greenfield, and thank you, ladies from the Sacred Heart at
Yonkers.
