Politics and Opportunity:
The Background

New priorities and urgencies. Pluses and minuses of the present situation. The welfare state and the media. The political interventionist state. Recreational-landuse special interest. The exploitation of poverty.

This is a historic opportunity. The economic and social advancement of blacks in this country is still a great unfinished task. The methods and approaches currently used for dealing with this task have become familiar over the past few years and they demand reexamination for at least two reasons.

First, the effectiveness of these approaches has been ever more seriously questioned in recent years. There is growing factual evidence of counterproductive results from noble intentions. Some of that factual evidence will be presented here in the sessions that follow. In addition, numerous political trends in recent years indicate declining voter and taxpayer support for these approaches, to which some of the older and more conventional black "spokesmen" remain committed. The events of 4 November were only the most dramatic examples of this. They were not the only examples. In California, we remember Proposition 13; across the country, the defeat of school bond issues and spending proposals. With future elections, the shifting fortunes of partisan politics may change the party labels of those in power. But Camelot seems unlikely to return. And we certainly cannot bet the future of 20 million people on its return. So we have a historic responsibility implied. We cannot simply run around claiming that the sky is falling -- popular as that sometimes seems -- because that implies that there is one approach which is the only approach. It implies that the partisans of that approach have some monopoly of either wisdom or virtue -- which may be a convenient assumption to them, but no reason why the rest of us should take it seriously.

We are here to explore alternatives, not to create a new orthodoxy with its own messiahs and its own excommunications of those who dare to think for themselves

What is a more responsible approach? First, we need to recognize that many methods were failing even before they lost public support. We have to accept the challenge of reexamining why these approaches were failing. We need to accept the responsibility of seeking and devising new approaches for the decade ahead. That is why we are here—to explore alternatives, not to create a new orthodoxy with its own messiahs and its own excommunications of those who dare to think for themselves. The people who were invited to be presenters and discussants here are people who are seeking alternatives, people who have challenged the conventional wisdom on one or more issues, people who have thought for themselves instead of marching in step and chanting the familiar refrains. The various speakers and discussants have varying philosophies and different areas of expertise. Some are Democrats, some are Republicans, and some like myself are neither. We are here to assess where we are, where we are going, and what are our alternatives.

The moral regeneration of white people might be an interesting project, but I am not sure we have quite that much time to spare

We can start by looking at the present situation. We have come through a historic phase of struggle for basic civil rights -- a very necessary struggle, but not sufficient. The very success of that struggle has created new priorities and new urgencies. There are economic realities to confront and self-development to achieve, in the schools, at work, in our communities. The sins of others are always fascinating to human beings, but they are not always the best way to selfdevelopment or self-advancement. The moral regeneration of white people might be an interesting project, but I am not sure we have quite that much time to spare. Those who have fought on that front are very much like the generals who like to refight the last war instead of preparing for the next struggle. What are some of the pluses and minuses of our present situation? On the plus side, a dramatic economic rise of blacks during the 1960s, but which has slowed, in some cases stopped, in the 1970s. Many social problems are worsening. Continued disintegration of families; rising numbers of broken homes -- one-third of all black homes now -- a skyrocketing unemployment rate among black youths, five times as high in the late 1970s as in the late 1940s; runaway crime rates of which blacks are the chief victims (there are more blacks murdered every year than whites, in absolute numbers). There is also a threat of a permanent underclass whose problems seem immune to prosperity, to equal opportunity, or to the advancement experienced by other blacks. We can see on the horizon the rise of racist groups such as the Nazis, the KKK, not only among the ignorant, but in places where you would never expect such groups, where they never had a foothold before. We can at least ask whether, or to what extent, the policies of our times have contributed to these problems of our times.

We need to look not at the noble preambles of legislation but at the incentives created in that legislation

Looking to the future, one of the things that we need to focus on are facts about results -- not rhetoric about intentions. We need to look not at the noble preambles of legislation but at the incentives created in that legislation. Very often, legislation intended to help the disadvantaged in fact pays people to stay disadvantaged and penalizes them to the extent that they make an effort to rise from disadvantage. I mentioned that in the 1960s there was a dramatic increase in black income relative to white as well as a dramatic increase in numbers of blacks in high-level occupations. Much of this has slowed down, and in some cases stopped, in the 1970s. We need to ask whether the policies that were followed in the 1970s had anything to do with this. The question is not whether on the one hand "affirmative action" sounds better than "equal opportunity," but whether, in fact, the results show further progress or slowing down. There are some serious economic reasons why the latter would be so. When we talk about rent controls, we need not be satisfied with clichés about affordable housing. We need to ask the factual question: will there be more housing or less under rent control? When we talk about minimum wage laws, we need to ask not whether a decent wage is a good objective, but whether there will be more jobs at higher pay or no jobs and no pay for increasing numbers of people. If we are going to talk about the future, we have to talk responsibly. We have to have a responsible dialogue with those who disagree with us. If you are serious, it means you are not concerned with scoring points; you are concerned with confronting the actual arguments, not straw men. We don't need to talk about "trickle-down" theories. I know of no one who has set forth a trickle-down theory. I know of many people who set that up as a straw man to avoid confronting the arguments that have been set forth by those who want to depend upon different mechanisms and different processes from the ones that are in fashion.

The problem is that the government creates too much harm to the poor

One of the other clichés of our times is the "bootstrap" theory: the notion that those who don't support the current political agenda believe that people should lift themselves by their own bootstraps, should be left to their own devices, that the government is doing too much to help them. There is no such theory. I have been around a few conservative economists in my time and I have listened but have never heard it. I have not seen it anywhere in history. But I see it as a convenient straw man for people who do not want to confront opposing views. The issue is not that the government gives too much help to the poor. The problem is that the government creates too much harm to the poor. The cost of taking care of the poor is relatively small, compared to the cost of bureaucracy. Some years ago someone figured out how much it would cost the government to lift every man, woman, and child in the United States out of poverty by the simple expedient of giving them money. The amount that they came to was approximately one-third of what is spent on antipoverty programs. My fellow economist Walter Williams has figured out how much the welfare expenditure in this country comes to per poor family. It is $32,000. Very few poor families get $32,000. Another device that is often used to avoid taking unpopular arguments seriously is to argue that those people who are opposed to the welfare-state approach are simply middle class. I wish I had a dollar for every time I have been asked whether I came from an affluent background, and if that is why I have such an unfeeling heart for the problems of the poor. I have never heard that question asked of Andrew Young, who indeed did come from an affluent background. Some time ago I met with a well-known TV newsman, and I asked him why it is that I look on television and see black spokesmen saying diametrically the opposite of what I hear in the black community and what I see in Gallup polls and other polls. For example, blacks in this country support voucher systems two to one; blacks in this country prefer more strict enforcement of crime laws, are opposed to quota systems in employment or college admissions, and have never had a majority in favor of busing. And yet when I look at the TV news, an entirely different world is created before my eyes on that tube. And he said to me, "Well, we can put Ben Hooks or Jesse Jackson on TV, but we can't put the Gallup poll on TV."

Uniqueness is never sufficient reason to avoid learning at someone else's expense rather than your own

One of the consequences of this is that we are having, in addition to the usual conflicts among groups that any multiethnic or multiracial society has, artificial polarization. We are having polarization between a handful of black leaders and a handful of white leaders, many saying things which have very little to do with the beliefs of the people in whose name they are speaking. If we are looking at the future and looking responsibly, we can learn much from the experience of others -- which does not mean blind imitation; sometimes it means avoiding the mistakes that others have made. Many of the various policies that I hear being urged as the royal road to salvation for blacks today are policies which were tried and failed repeatedly by the Irish in the nineteenth century. It is true that the black history is unique. But of course, you would have to make comparisons even to know that. And uniqueness is never sufficient reason to avoid learning at someone else's expense rather than your own.

There is no political capital to be made by robbing Peter to pay Paul if you get Peter's vote and lose Paul's vote

One of the problems that I see is the problem of the political interventionist state. I pose it in categorical terms, as if there is some noninterventionist state. We are really talking about differences of degree. There seems to be a notion that political interventionism that produces earmarked benefits for this or that group necessarily makes those groups better off. But when you think of it, no politician gets elected by sacrificing 90 percent of the voters for the benefit of 10 percent of the voters. One thing that all politicians can do -- whatever the party -- is to count votes. They may create the illusion that they are helping 10 percent. Indeed, the ideal politician creates that illusion ten times. But since the government is not generating any wealth, government programs mean nothing more or less than robbing Peter to pay Paul. Now, there is no political capital to be made by robbing Peter to pay Paul if you get Peter's vote and lose Paul's vote. The real trick is to rob Peter to pay Paul on Monday, Wednesday, and Friday, and rob Paul to pay Peter on Tuesday, Thursday, and Saturday and get both their votes. Fortunately, the government is closed on Sunday. By following this strategy, you can give a little bit to this group, a little bit to that group, and none of them ever ask if what is given to A is taken from B and what is given to B is taken from A. Let's look at some of the losses that blacks suffer from the interventionist state. I think the greatest single loss is that the minimum wage laws promoted by labor unions protect their members by pricing black young people out of the market. There is no way to rise up a ladder if you can't get your foot on the ladder in the first place. Environmentalism, to use the word they like to use -- I call it the recreational-land-use special interest -- means that, for the benefit of a relatively small group of people, we have set aside vast areas of the United States, an amount equal to one-third of this country, which is to say equivalent to all of the United States east of the Mississippi. Clearly, you cannot set aside that much land, take it off the market, without having the price of the other land rise and having that rise reflected in rents and mortgage costs all across the country. Of course, the government can come to your rescue with projects and subsidies. But, of course, these don't begin to add up to what you have lost by this vast giveaway to a handful of affluent people. One of the great coups of the whole environmental movement is to avoid talking about people and tradeoffs. You would never dream that there are people who have alternative demands for the same resource by reading the environmental literature. You hear about protecting the environment and preserving "fragile areas." It is very touching. You would never dream that what that means is that one group of people will use the power of the government to put those vast resources at their disposal far below cost and keep them out of the hands of other people who have other uses for them. The recreational land that is set aside is land from which you do not build homes, from which you do not get energy, from which you do not create jobs. We have a protection of endangered species act that is concerned with every weed and reptile. We also need to recognize that human beings are an endangered species, and especially those who are poor. There seems to be a notion that Darwinian evolution may have been a good idea at one time, but we are going to bring it to a screeching halt in our generation. Despite thousands of years in which all sorts of creatures have come into existence and gone out of existence, in which all sorts of ecologies have evolved, totally different from one another, for some reason the particular creatures that we have seen -- even if there is only a handful of us who have ever actually seen them -those creatures are to be preserved forever, at all costs. The particular kind of ecology that happens to exist at this moment must be frozen for all future time.

The poor are very useful as an entering wedge for programs which ultimately benefit other people who, by no stretch of the imagination, are poor

One of the problems in dealing with the politics of poverty, and the programs for the disadvantaged in general and blacks in particular, is that vast empires can be built on these programs. These programs definitely prevent poverty among bureaucrats, economists, statisticians, and many others. The poor are also very useful as an entering wedge for programs which ultimately benefit other people who, by no stretch of the imagination, are poor. In New York City, for example, open enrollment was hailed as a great way by which blacks and Puerto Ricans could get into the free municipal universities. It became, instead, a means by which middle-class people who were paying tuition at NYU and Long Island University could now put that cost on the taxpayers. It is true that a handful of blacks and Puerto Ricans did, in fact, get in, but they were swamped by many others. There's another serious problem, closely tied to the issue of state interventionism, and that's the notion that the poor, that blacks, are guinea pigs. They are subjects out there for every "innovative" idea that pops into the head of some academic. That they are there to provide raw material for surveys and schemes of various sorts. Above all, that their freedom of choice is to be denied in order to correspond to the grand designs of people who think they know better. One of the more remarkable editorials that I saw a few years ago appeared in The New Republic as an argument against vouchers. The argument was that if you had vouchers, then those black parents who were most concerned about their children and most knowledgeable would pull their children out of the public schools, leaving behind only those whose parents didn't care. The New Republic thought that was a terrible thing to do. While every other group in this country has risen layer by layer as different people began to seize opportunities, blacks alone must all be held back until such time as the very last person in line has understood the value of education. What this betrays is a proprietary conception of blacks somewhat at variance with the spirit of the Thirteenth Amendment. Insofar as we are going to enlist the intelligence, the desires, and the commitments of blacks themselves, we have to do so by offering more choice in more areas to let them decide what is best for themselves and not turn that job over to academics and government officials.


Dan J. Smith: "Black Objectives for the 1980s"

A prominent member of the black community was quoted recently as saying that he is looking for words of comfort from the new administration. I would suggest that that is exactly what we have been having for too long from Democratic administrations -- words of comfort, but no action on the real problem of black Americans. I think Tom Sowell provided the excellent keynote for our conference in paying special attention to some of the clichés and myths that have pervaded conservative approaches to black issues -- the trickle-down theory, the bootstrap theory. When he talks about broken homes, rising unemployment, and other black concerns he is, I think, focusing rightly on the key issues that concern blacks today. But as we try to fulfill the title for tonight's discussion, "Rethinking the 1980s," we should look at certain objectives that we ought to be pursuing for the next ten years.

Develop our own wealth

One—and I am very pleased to say that President Reagan has announced his endorsement of this objective—is to make black Americans more economically independent during the decade of the 1980s. For too long we have been tied and subject to governmental support programs, either welfare or CETA, that too often are subject to political influence and do not put us in position to develop our own wealth. And the development of black wealth needs to be a major objective of this decade.

Formulate a coherent black strategy

A second objective is to formulate a coherent black strategy to confront many of the problems that Tom Sowell outlined in his remarks, such as unemployment, poor education, pervasive crime, poor health, and inadequate wealth. As a result of some research done by Richard Allen's Institute for Economic Research, it appears that the capitalization gap in the black community is perhaps as large as $200 billion, with that gap growing at a rate of over $13 billion a year. What that represents is the difference in the number of dollars that are available to the white community and the black community for economic development, private economic development. Clearly we have to close that gap if we are serious about putting black Americans in a stronger economic position.

Avoid obvious misconceptions

A third objective is to avoid the obvious misconceptions about who black Americans really are. In the presidential campaign I think we had a presentation of blacks that may not have been as realistic as it should have been. We hear a great deal about blacks who are unemployed, who are on welfare, and we hear also a great deal about black entrepreneurs. But the interesting thing is that those groups do not really reflect the black community in toto. If we are realistically to speak to the issue of making black America more economically independent, the needs of the average black American must be considered. It is important that we know what this oftenoverlooked person looks like. Some would be surprised that the average black cannot be associated with poverty, welfare, or unemployment. Indeed, according to the latest Urban League report on the status of blacks in America, 83 percent work for a living, 77 percent are not on welfare, and 62 percent do not live in poverty. This is not to say that we should not be about the important business of rescuing the 16 percent who are unemployed, the 23 percent who are on welfare, or the 38 percent who do live in poverty. It is only to say that we must be careful not to leave the impression in the minds of blacks and whites, particularly the young ones, that most blacks play no productive role in the economic life of this nation. This is not true. Anyone in this country who needs to know that the economic condition of black Americans is far more complex than we would gather from tapping common knowledge, viewing situation comedies, or even studying the economic policies of the Carter administration, will know that black Americans have played and will continue to play an important role in the economic life of this country.

Create new leaders and new alliances

A fourth objective must be to create new leaders and new alliances. I think Tom is entirely correct in suggesting that a number of the major civil rights leaders who are speaking for black Americans today may not really be reflecting the thinking of the black community. Here in California, just a few years ago when Proposition 13 was being considered, we had a number of individuals running around the state suggesting that it was a racist measure. And yet, astonishingly, some 44 percent of black Californians thought that measure had enough merit to give it their vote.

Relate to just being an American

A fifth objective must be to foster black experts and authorities in areas not commonly associated with black concerns. Quite frankly, as I read articles in the Wall Street Journal and other publications that discuss, for instance, the ideas of Tom Sowell, all too often I have the impression that -- at least as far as the media are concerned -- Tom Sowell only has value as an economist in relation to black issues. But clearly Tom Sowell has done work in other areas, and I look forward to the day when Tom Sowell and other blacks who have demonstrated expertise in research are asked their opinions on issues that do not directly relate to being black but do directly relate to just being an American. It's an interesting historical fact that of all the blacks who have ever served in the federal cabinet only one, to my knowledge, has been in an area that is not more or less directly related to needs of black Americans, and that was the appointment by Gerald Ford of William Coleman to be secretary of transportation. Too often such slots as Health, Education, and Welfare, Housing and Urban Development, are reserved for blacks and it ends there. I look forward to the day when blacks are selected for such positions as secretary of defense, secretary of the treasury, attorney general, and secretary of state.

Come forward with new ideas

I would like to close with one of the objectives I mentioned, and that is the creating of new leaders and new alliances. Tom was correct in pointing out that the reason a number of unrepresentative black leaders are often quoted is that you cannot put Gallup polls on TV. If we had black leaders who were willing to stand up for unorthodox views, however, I think that there would be people that the media could go to. Too often those of us who oppose liberal nostrums have been associated with ideas we have never uttered and causes that we have never supported. But I think the obligation is on us now, as we look toward the decade of the 1980s, to come forward with new ideas, new proposals, new concepts of how to improve black issues. I look forward in this conference to talking more specifically about how we can achieve these objectives.

Oscar Wright: "Community Responsibility and Community Control"

As we talk about alternatives for blacks in the 1980s, my main concern is that whatever program, whatever policy, whatever directions are taken for black people, those things are done by black people as well as for them. I say "by black people" because any meaningful change must emanate from within the bowels of the black community. Certainly we do not believe in handouts, public assistance to the extreme that it has been given, but we do believe in handshakes with private industry to help us get the kinds of skills blacks need. It saddens me to see young men and women -- black, eighteen and nineteen years of age -- who cannot fill out adequately a job application. If you do not have an adequate education in this age of high technology and communication, then how are you going to compete? So you see, before the government even makes their pronouncements, in many cases black youth has lost. And that saddens me.

Reawaken black America

Another area that I think we should take a long, hard look at -- and it is beginning to change for the better right now -is the reawakening of black America. I would rather use "reawakening" than "revitalization" or "rethinking," because there are black leaders whom I consider to be spiritually dead. They do not see, hear, nor feel the pulse of the black community. There are others of us who are more or less, let's say, spiritually paralyzed; we can see the problem but we cannot do anything about it. So that, too, has to change. One of my better analogies is that if you had a cup with no bottom to it and you poured the entire Atlantic Ocean in that cup, what would you have at the end of the day? I believe you would have an empty cup. Such is the case in the black community today. We have this cup, but we do not have a foundation. So whatever government assistance comes from, say, the Republican administration or any other humanitarian sector, unless there is a receptacle within the black community it is wasted dollars.

Discrimination is not a matter of law

I was approached by a reporter the other day who said, "Oscar, how do you know that you represent the black community?" He said, "You are against forced busing, you are against public assistance programs. Are you black, colored, or Negro?" It was a black reporter who asked me that. Needless to say, I am somewhat of an outcast among the black leadership coalition in Los Angeles. But my point is that you do not need new special laws to protect black people. Racial discrimination is not a matter of law. The Thirteenth through Fifteenth Amendments to the Constitution made the legal barriers null and void. You do not need social legislation for American citizens. Blacks can certainly sit at the table with whites. But, as Malcolm X put it a long time ago, "Just because you sit at the table doesn't make you a diner."

We must have a say

My last point is this: the most grave concern for black America, as we seek alternatives and reevaluation in the 1980s, must be neighborhood revitalization. It must be a direction by which we control those institutions most closely affecting us, political as well as economic, where we control our social discipline in many areas, our education. We must have a say. I certainly look forward to the day when President Reagan will help us in that respect. When he talks about local control, I think about community control. And when he talks about helping all the people in this country, I do not see colors. I see myself as an American citizen striving for the same goals as other American citizens. And I freely join you in our endeavor.

Preface Table of Contents II. Economic Issues