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 about
strictly the form of economic organization:
should we have government control of production
and distribution, or should we have a 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 industries, 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 1930s, here is Germany which after the
war under the Erhard policy of Soziale 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 a very large fraction of all
intellectuals remain- not only remain, have
become- even 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've
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, but it appears in English translation
in a book called 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 capitalism,
he argued- I'm sorry-the appeal of socialism,
the opposition to capitalism 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 an 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's 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 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. Now 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's 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 and 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, you 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. And we were
going with our tourist guide and I happened
to see some of the fancy Russian limousines
up there, the Zivs that were sort of a takeoff
on the 1938 American Packards. 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 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 are in a very, 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 am reminded again of another- 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 we met
there a marvelous man, a man by the name of
Edward Lipinski, who was in this country a
year ago at the age of 83 or 4, and I believe
was arrested when he got back to Poland because
he had been one of those who had signed and
authored a declaration against the suppression
of freedom of thought and speech in Poland.
But at the time we met Edward Lipinski he
seemed to be fairly free. He was a man, who
had been a socialist all his life, and this
was very hard- he was then in his 70s I may
say when we saw him, 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, he said, "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."
(laughter)
Now capitalism, on the other hand, is a system
of organization that relies on private property
and voluntary exchange. It has repelled people-
it's 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's clear that the
results go the other way around. It's in the
capitalist societies of the world- only where
capitalism has prevailed over long periods
have you had both freedom and prosperity.
The greatest measures of freedom...if you
look at the Western countries where freedom
prevails, it doesn't prevail perfectly- we
all have our defects- but by and on the 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...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.
Now, the question is 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 doesn't 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're concerned with in discussing moral
values here, are those that have to do with
the relations between people. It's 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 individually
conduct ourselves... behave; and then what's
relevant to systems of government and organization,
are the relations between people.
And 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 fellow men, to treat your fellow man 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 in 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.
(laughter and applause)
Both are pursuing their own self-interests,
but the sanctions, the effects- 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.
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 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 forthwith 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 supposed government bureaucrats
running things, that can only ultimately rest
on force. But whenever you resort to force,
even to try to do good,
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. But
also, 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
said 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.
(applause)
In the past few decades... 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 had 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? Now of course- 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 a 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.
Let me 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 fellow men, 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 on 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.
Now of course, these patterns- 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 and 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 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
"butt legging." 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, and
smuggling it 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
butt legged. 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 butt legging 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. Now, 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 language- 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
legislative 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 prevents 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've been
raising, 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 roughly 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 1860s. That period of the nineteenth
century saw the emergence of a host of private
colleges- 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 interests- 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 put 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 want 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 per se
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.
