Government Is the Problem

Ethnic groups and the free market. Schooling, welfare, housing, employment and licensing restrictions. Human problems, rather than ethnic. Community independence, the voucher system. The strength of ideas.

I am glad to be here with all the rest of the outcasts tonight. The theme of my remarks was really set by Oscar Wright when he referred to himself as an outcast. He and I and a good many of us are outcasts in more than one sense. We are both—he and I—members of a persecuted ethnic group. I, of a Jewish group that has been persecuted throughout the ages; he, of a black group that has been persecuted throughout the ages. But we are outcasts in an even more fundamental way, because we are outcasts within our own ethnic groups.

They have profited most where there was the greatest degree of freedom for individuals to pursue their own objectives without hindrance

For a very long time, the Jews, who have benefited more than perhaps any other group from the free market, have been among the foremost opponents of a free market. In that respect I have been an outcast within the ethnic group because I disagree with the idea that the way the Jews or any other persecuted group can benefit themselves or improve their condition is by relying on the goodwill of the majority that is prejudiced against them. Oscar Wright is similarly a minority within—or an outcast within—his ethnic group because he too believes that the way in which the blacks can improve their condition is by fending for themselves, by becoming responsible individually, and not by relying on the Great White Father in Washington or, for that matter, in Sacramento.

It is interesting to note that, with respect both to my persecuted minority and to his, neither has ever fundamentally improved its lot by virtue of the intervention of government. They have achieved what they have achieved despite governmental efforts rather than because of them. They have achieved what they have achieved by relying on voluntary exchange. And they have profited most in those societies and in those areas of the society where there was the greatest degree of freedom for individuals to pursue their own objectives without hindrance.

We have had a great deal of talk here—excellent talk, much of it—about the problems of poverty, of high black teenage unemployment; about the underclass in the black community. They are major—and very real and deep— problems. But I ask you to consider for a moment the basic sources of that poverty and what is responsible for it.

You have bad schooling because it is provided by the government and because the poor people of this country have no other alternative

Number one, bad schooling. Utterly disgraceful that you should have such bad quality schooling in areas which serve—or are supposed to serve—the underclass and the poor in the community, whether they be black or whether they be Hispanic-Americans or Mexican-Americans or whatever.

Why do you have bad schooling? Because it is run by the government. Is there any area in your existence in which the blacks get as raw a deal as they do in schooling? A black who has enough money can buy the same house almost anywhere. He is discriminated against, of course, but he can buy a house which is much better relative to what a white can buy than the kind of schooling he can get. He can buy the same automobile. He can shop at the same stores. But even if he has the money, it is extremely difficult for him to get the same quality of schooling. In order to do that, he has to have enough money to be able to move where he probably does not want to move. I keep asking black leaders around this country, "Where do you send your children to school?" They send them to private schools; they do not send them to government schools.

So you have bad schooling because it is provided by the government and because the poor people of this country have no other alternative. Those of us who are in the middle or upper classes can afford to pay twice for schooling—once in taxes and once by paying tuition. But those in the ghettos and the slums of this country cannot afford to pay twice for schooling; that is why they have bad schooling.

For many, the government has established a culture of poverty that is incredibly difficult to escape

After schooling, what is the next major source of the socalled underclass? Government welfare and public assistance programs—programs which are directed in the name of helping the poor, but which have the effect of encouraging an unfortunate dependency. Instead of the need for help being a temporary problem, it tends to become permanent. Obviously, that's not true of all programs by any means. And I am not saying that it is uniquely a black problem. It is a problem of poor people, whether they are black or white or any other color. Many of them do surmount it. But for many, the government has established a culture of poverty that is incredibly difficult to escape.

What is the next major scourge of poor blacks? Housing. They have bad housing in the first place because the federal government subsidized people to move to the suburbs with veterans' housing loans, with subsidized housing, with the FHA, with Fannie Mae and all the rest. These programs so subsidized homebuying, almost all in the suburbs, and encouraged people to move out of the central city. And then you had an urban removal program—on which Marty Anderson wrote the definitive work, The Federal Bulldozer—which quite properly is now called a "Negro removal program."

A fourth source of poverty is the one that Walter Williams talked about earlier. In the first place, government schools turn out youngsters who are not educated and do not have any skills. Then, to add insult to injury, we say to employers, "You must discriminate against those people; you cannot hire them unless you are willing to give them charity. If they are so poorly educated and trained and skilled that their productivity is not worth $3.10 an hour, you may hire them provided you make up the difference out of your own pocket."

The minimum wage laws, the trade union restrictions, taxicab restrictions—every single one of these sources of poverty is produced by government.

From the point of view of political action, the only problems we have to deal with are human problems

What is the way out of it? And that is where I think I have the greatest difference with many of the statements that were made in this program. If you think that there is a way out of this by getting government to pass laws especially to benefit blacks, you are kidding yourself. That is not going to happen.

I want to read something which I wrote close to twenty years ago for a book called Capitalism and Freedom, in which I was discussing the relation between capitalism and discrimination. I quote:

Fair Employment Practices Commission legislation involves the acceptance of a principle that proponents would find abhorrent in almost every other application. If it is appropriate for the state to say that individuals may not discriminate in employment because of color or race or religion, then it is equally appropriate for the state, provided a majority can be found to vote that way, to say that individuals must discriminate in employment on the basis of color, race or religion.

That is exactly what has happened in the interim, as we moved from the idea of nondiscrimination to the idea of so called "affirmative action." Temporarily, that affirmative action may benefit some blacks, some low-income people. But if you believe that Supreme Court decisions are going to be able to stop a majority of the population that is prejudiced from using its power to benefit itself rather than the people who are disadvantaged, you are kidding yourself. That is not the way out.

What is the way out? There are black problems, problems that are peculiar to the black community, just as there are Jewish problems that are peculiar to the Jewish community and Baptist problems that are peculiar to the Baptist community. But those problems should be worked on by these communities among their own people, by themselves through voluntary activities. And I think the only way we can make progress is by recognizing that, from the point of view of political action, the only problems we have to deal with are human problems.

Promote programs to solve human problems which affect everybody

I come to a point—one of the most important comments made all day: How to make it politically profitable for those people who are in power to alter arrangements? You do not make it politically profitable for them by asking a majority of the people to vote burdens on itself to benefit a minority. You may, for a time, get away with it, but you will not get away with it for long.

You make it politically profitable by using your energies to promote programs to solve human problems which affect everybody so that you can organize coalitions for programs that are not to benefit only the blacks—not to benefit only the Puerto Ricans, not to benefit any special group—but to benefit a wide class of people.

Let me illustrate with the case of schooling. I do not think you are going to get anywhere in promoting schooling by promoting community independence, separation. As I told Oscar Wright, if he goes that way, he is going to end up being a front man for interests he does not want to front for. Unless the separate community can provide its own financing along the lines that Bob Hawkins talked about, if it is believed it is going to be politically independent when somebody else is paying the costs, it has got another think coming.

On the other hand, if you go the way of vouchers, then you are talking about something else. They are completely decentralized, since they go to parents. A group of Catholics is very much interested in that; a group of Jews is very much interested in its schools, as are all the parents of this country. There is a wide consensus that public schooling is not producing what parents expect of it. So a voucher scheme is not a black scheme; it is not a Catholic scheme; it is a scheme to solve a human problem and to provide every parent around the country with an opportunity to have greater control over the kind of schools his children go to. And that is the way, it seems to me, that we can make it politically profitable. We need measures that have widespread appeal so that you can get a coalition behind them.

The same thing is true in case after case. The great virtue of trying to get rid of things like the minimum wage, like restrictions on taxicabs and so on, is that you can formulate your efforts into a general principle. You can get people to adopt and to follow and to pursue general principles because they appeal to a much wider range of interests.

Ethnic groups succeeded by taking advantage of the opportunities that the private market offered to them

If you look at the ethnic groups in this country that have done well—and here the work that Tom Sowell has done outside of schooling is fascinating—you will not be able to name one that has succeeded as a result of special attention by government. The Jews certainly did not succeed because they were getting special government privileges. The Japanese did not succeed on that ground. The Chinese did not succeed on that ground. They all succeeded by taking advantage of the opportunities that the private market offered to them. And I think this is a subject that is gaining widespread interest.

You will not get great support on the part of the community if you ask 86 percent of the people to tax themselves more heavily to help the other 14 percent. But if you say to 100 percent of the people, "We want lower taxes, we want a freer society, we want a smaller government, we want to get government off our backs," then you have a lot of allies. It seems to me that that is the only effective way for us to achieve our objectives.

Ideas—good ideas, bright ideas—really count for something

Now I come back to my initial theme. I have been an outcast for a very long time from many different groups. One of the things in my experience that has fascinated me is the strength and power of ideas as opposed to numbers. Numbers have never counted for anything. Ideas—good ideas, bright ideas—really count for something. And outcasts often become the majority because they are the ones who have what is needed to solve a problem.

The outcasts who are in this room, I think, will be destined to become the majority. Not because you get payoffs in the political scene; not because, by voting for the right party, you get a job that you could not otherwise get, a quid pro quo on an individual basis. If you think that you are going to improve the lot of the minority of Americans which is black by quid pro quos on a political basis—I do not care whether it is Democrat or Republican—you are kidding yourself. The other 86 percent will have more quids. You do not have enough quos for that.

But you can become a majority and be with the majority if you take advantage of the new ideas that are bubbling out of this group, the ideas that you have been talking about today, and if you recognize the extent to which they are appropriate for human problems that reach beyond the black community. In that case, the outcasts will become the majority.

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