The Legitimate Role of Government in Free Society

you good evening once Mike Peters allows a professor of economics here at Villanova pleasure to welcome you to tonight's lecture on waterways coordination University before we begin I should take a moment to recognize the people who make today's event on first off for providing funding for tonight's event we are grateful to the Villanova School of Business the Kevin Clarke the College of Arts and Sciences in Jean Anthony the Department of Economics right now Parker Jarrett the Department's civil and environmental engineering products Atherton department chair and Matthew Ryan center college team director also we received a grant from the national headquarters of Omicron Delta Epsilon and they are the international Honor Society for economics and I want to send out a special thank you know those students for liberty they are headed by Matthew the oranges and Venus students delivering those are the gentlemen out there passing out programs and greeting you educated to build over also I like the fact them to for their potential support they they pick up a tab or the perfect program for the next office oh thank you for that thank one more person to think it's very important person way back this is last summer August let's pass on the August 11 I get his email at a move of someone I've never met before as person she introduced herself and said I'm thinking about bringing Walter Williams to campus for a lecture do you think there's any interest in the Economics Department for this make a long story short here we are and so it suffice it to say without the unimaginable tremendous amount of initiatives of shown by Andrea Welker of the department of civil and environmental engineering this whole evening just would not have even taken place and so I'd like to thank her for an atomic-level alright so it is my pleasure to turn the microphone over now to dr. Andrea Walker who will introduce tonight's speaker good evening I'm really thrilled to welcome you all as I went over tonight and I'm sure tonight's going to be very talkative and upper building talk when I reflect in a web brought us here today I realize it was at its core about two people who are willing to take arrest me for reaching out to dr. Williams out of the blue and him for agreeing to meet me even though he didn't know me from Adam and when I thought about this somewhere I really like that this willingness to trust others and this belief in the people being the ultimate resource for Julian Simon term is really one of the things that unites people who love livery and so with our frame of mind I invite you to listen carefully to dr. Williams discuss the legitimate role of government in a free society my pleasure do being at the Villanova again I haven't been on your campus for for a while back in the I guess the the late 80s I used to come here almost every night to the library to do research on the book that I was working on at the time called South Africa's war against capitalism anyway I'm pleased to be here again and now the topic of my talk tonight or the set the title is the legitimate role of government in a free society and those of you in the back there seats up here want to see them now in the course of my comments I'm going to say many things that will break with conventional wisdom on a whole range of topics I'm going to say things that might appear mean insensitive and politically incorrect to the extent that is true you should feel free to raise any kind of question you want during the question answer period you don't have to feel as though you any you owe me any undue courtesy because I'm your guest raised hard questions don't worry about insulting me I am unsalted the only way you could possibly insult me is to suggest that even though I've been living one third of the time our country has been in existence that I'm not pretty good in basketball and and that's a matter of ethnic pride that I take seriously the the the the primary justification for the growth of government of far beyond what the founders envisioned for us is to promote fairness and justice well that's a worthy goal but at the same time we might ask well what is fairness and justice what is the the legitimate role of government in a free society let me spend just a few minutes discussing what the founders of our nation saw as the legitimate role of the federal government and to do that let's turn to the book that they gave us or the rulebook that they gave us namely the United States Constitution most of what the founders saw as the legitimate role for the federal government is found in article 1 section 8 of the United States Constitution and let me just briefly quote sections thereof it says Congress shall have the power to lay and collect taxes duties imposts and excises to pay the debts and provide for the common defense and the general welfare of the United States in article 1 section 8 of the Constitution they have the power to borrow money on the credit of the United States to regulate commerce with foreign nations in among several states and with Indian tribes they're also authorized to coin money establish post office post roads to raise and support armies the framers of the Constitution granted Congress and spending power for these and a few other activities now nowhere in the Constitution can we find authority for Congress to tax and spend for up to three quarters of what Congress taxes and spends for today that is there's no constitutional authority for farm subsidies bank bailouts food stamps Medicare Social Security and a host of other things that the United States Congress does I think that we can safely say that we made a significant departure from the constitutional principles of individual freedom and its main ingredient limited government we've made a significant departure from the ideas and principles that made us a rich nation in the first place now these principles of freedom were embodied in our nation through the combined institutions of private ownership of property and free enterprise now you know some people say well you know Williams is being kind of narrow about the Constitution because they'll say you'll hear some lawyers will tell you well the Constitution is a living document well anybody who says the Constitution is a living document is at the same time saying we do not have a constitution at all because for the rules of the game to mean anything that must be fixed now the framers gave us ways to amend the Constitution namely through article 5 but when somebody says we have a living Constitution it's like it's saying that we don't have a constitution for example how many of you would like to play me poker tonight and the rules be living I mean maybe under certain circumstances my two pair can be two or three of a kind so for the rules that mean anything they must be fixed now through numerous successful attacks private property and free enterprise that the framers envisioned are mere skeletons of their past Thomas Jefferson anticipated this when he said and I quote him the natural progress of things is for government to gain ground and for Liberty to yield the best way of looking at this process of government gaining ground and liberty yielding is to look at what has happened to taxation and spending ladies and gentlemen there's only one way to look at taxes taxes represent government claims on private property indeed if government what a tax private property at 100 percent it would confiscate private property and indeed taxes are going up and even better measure of what government does is to look at what has happened to spending let's go back to the turn of the last century or let's say 1902 expenditures at all levels of government federal state and local levels of government totaled 1.7 billion dollars the average taxpayer that year paid $60 in federal state and local taxes in fact from 1787 until 1920 federal expenditures were only 3% of the GDP except during wartime today federal expenditures alone are close to four trillion dollars or 30 percent of the GDP state and local governments they spend close to three trillion dollars the average taxpayer today spends ten is tax $10,000 a year in federal state and local taxes now what's the significance of all this well the significance is that as time goes by you and I own less and less of our most valuable resource namely ourselves and the fruits of our labor another way of looking at this is that the average taxpayer works from January 1st until mid or late April depending on the state that you live to pay federal state and local taxes that means we're going on four months out of the year and we do not have the rights to decide how the fruits of our labor will be used somebody else makes that decision now keep in mind that a working definition of slavery is that you work all year and it is someone else that makes a decision how the fruits of your labor will be used now in the economic sphere the founders thought that relatively free markets or what is called capitalism was the most effective social organization for the promotion of individual freedom indeed capitalism is defined as a system wherein individuals are free to pursue their own interests so long as they do not violate the private property rights of others under capitalism or free markets there is voluntary exchange there are private property rights held in goods and services indeed much of the original intent of the United States Constitution as seen in the document itself and the Federalist Papers that debated the Constitution was to bring about a climate in which this kind of social organization could occur that is peaceable voluntary exchange now the great benefit of the free enterprise system is that through private ownership and control it minimizes the capacity of one person to coerce another person additionally the coercive powers of the state are minimized they're restricted to the legitimate functions of the state and a free society and what are the legitimate functions of government in a free society well one legitimate function is to protect you and me from international thugs violating our private property rates so that says that there should be national defense another legitimate function is to protect you and I from domestic thugs violating our private property rights so that means that at some level government there should be police services now when I say private property rights I'm talking about in the broadest sense possible that is I am my private property you are your private property so violating private property rights means things like murder rape and theft other legitimate functions are those of enforcing constitutional order the adjudication of disputes and the provision of certain public goods public goods as an economists would define them now in order for these legitimate and constitutionally mandated functions to be carried out each citizen is obliged to pay his share of the federal government's expenses now for the last half century free enterprise and what it implies has been under unrelenting attack in our country Americans from all walks of life whether they realize or not have demonstrated a deep and abiding contempt for personal liberty private property rights and economic freedom free enterprise is threatened today in our country not because of its failure it's threatened because of its success that is capitalism has been so successful in eliminating the traditional problems of mankind such as disease pestilence hunger and gross poverty that all other human problems appear to us to be at once inexcusable and unbearable the desire by many Americans to eliminate these so-called unbearable and inexcusable problems have led us away from the basic ideals and principles upon which our prosperous nation is built in the name of other ideals such as equality of income sex and race balance affordable housing medical care orderly markets consumer protection energy conservation just name a few we have abandoned many personal liberties as a result of widespread control by our government in an effort to achieve these so-called higher objectives we're increasingly being subordinated to the point where considerations of personal freedom are but secondary and tertiary matters ladies gentlemen I'm saying that increasingly our liberties are being treated as dirt now you say well well can you explain this well for exact it for here's a question suppose I write to the United States Congress and I tell them my name is Walter Williams and I am an emancipated adult I am capable of taking care of my own retirement needs if I fail to do so let me go begging or die in the streets but stop taking money out of my Social Security out of my pay for Social Security how do you think they'll be greeted it be greeted with contempt here are some people telling me and you how much we should set aside out of each week's pay for retirement and if we disagree with them we'll go to jail what do you think they how about they're telling us how much we should set aside at a week each week's pay for housing for food for education if they did that then we would definitely say that's tyranny so what's the difference so this is what I mean when our liberties are increasingly being treated as dirt now the ultimate end to this process is totalitarianism which is nothing more than a reduced form of servitude now I'm not saying that we are a totalitarian nation yet but if you ask the question which way are we headed tiny steps at a time are we headed towards more personal liberty or are we added to more government control over our lives it has to be unambiguously the latter now remember if you take tiny steps towards any goal it's just a matter of when you're going to get to that goal or as the great philosopher David Hume said it is seldom that Liberty of any kind is taken or is lost all at once it's always lost bit by bit or my late colleague Leonard read the founder of the foundation of economic education he put it even better he said that if you wanted to take Liberty away from Americans you had to know how to cook a frog and Leonard Reid said you cannot cook a frog by putting on a pot of boiling water and then throwing the Frog in the water because the frogs reflux is so quick that soon as his feet hit the boiling water he'd hop away and be free Lenna Reid said the way to cook a frog is to put on a pot of cold water put the frog in the water and heat it up bit by bit and by the time the Frog realized he's being cooked it was too late that same thing with Americans if anybody came over here talking about taking away all of our liberties all at once we would righteously rebelled but they can talk about taking away our liberties bit by bit now the primary justification for the attack on private property economic freedom and privacy can be found and people's desire for government to do good we all say things like government should care for the poor government should take care of the disadvantaged government should help the elderly government should help failing businesses government should help college students and other deserving segments of our society well it's all nice and to say those things but we have to recognize that government has no resources of its very own that is what I mean by that ladies gentlemen those programs coming out of Washington or out of our State Capitol they don't represent congressmen and Senators reaching in their own pockets sending out their money moreover there's no tooth fairy or Santa Claus giving them the money so when you recognize that government has no resources of its very own that forces you to recognize that the only way the government can give one American citizen one dollar is the first through intimidation threats and coercion confiscate that dollar from some other American now if you believe on being too loose with the terminology intimidation threats and coercion you have April 15th to check me out on that you can tell the ages of United States Congress that you're only too willing to pay for the constitutionally mandated function of the federal government but you're not going to have your money going to farmers or bailing out banks and stuff like this you will see all the intimidation threats and coercion that you want to see and if you act too ugly you'll get shot by the agents of the United States Congress now we Americans we support government doing things that if a person did the identical thing privately we would roundly condemn that person as an ordinary low-down despicable thief let me give an example that I could see an elderly lady sleeping on a grate in downtown Washington town Philadelphia they could be hungry needs medical attention and shelter now I can walk up to Andreea with a gun in my hand like say Andreea give me a $200 then having gotten her $200 I could go downtown and buy the lady some medical attention some food and some shelter would you find me guilty of a crime I'd be guilty of theft regardless of what I did with money what it's built would it be theft if two or three people agreed that I should take Andria's money with that change what about a hundred thousand what about three or four million agreed that we should take the money it's still theft because what is theft theft is taking the rightful property of one person and giving it to another to whom it does not belong now you say Williams well is legal well moral people cannot depend on legality alone to guide them that is because there are many things in this world or that were in that are legal but clearly in mark that is slavery was legal did that make it morrow the Nazi persecution of the Jews Stalin's purges they were legal but did that I make it moral so the moral question that we're confronted with is is there a moral case for taking by force the property of one person and giving it to another to whom it does not belong now I have not come up with a moral case for that now what the average amount what what the government does as I said earlier you and I would get arrested for doing the same thing it's just the only difference in between what the government does is when they take you know when they take money they call it welfare it's just a matter of legality and so so we have to ask ourselves the question should one person be forcibly used to serve the purposes of another is that moral to forcibly use one person to serve a purpose is another and I think it's MRO now before I go on I think that you find American and need a fellow American need I think it is praiseworthy to help them out that is it is laudable to help your fellow man out by reaching into your own pockets to help note reaching into somebody else's pockets to help them out I think is worthy of condemnation and it's despicable now in a free society we want most if not all of our relationships to be voluntary and we want to minimize involuntary exchange you know another way of looking at you know why people get hung up on versus voluntary I always like to say in turn instead of voluntary exchange always like say I love seduction any kind of seduction now I know you young PV hormones and or or and so you know fully understand what I'm saying but what's the essence of seduction seduction is when we proposition our fellow man in the following way in the following fashion we say to him we proposition him if you make me feel good I'll make you feel good now let me give you some examples of that I walk into my grocer with three dollars in my hand and I proposition him I say if you make me feel good give me that gallon of milk I'll make you feel good give you three dollars and if that Trent if that exchange is transacted he's better off because he valued the $3 more than the milk and I'm better off because I valued the milk more than three dollars and we call that a positive sum game where both parties are better off in their own estimation now I'm against rape what's the essence of rape or involuntary exchange that occurs when we proposition our fellow man in the following fashion we say to him if you don't make me feel good I want to make you feel bad that's where I went to my grocer with a gun in my hand I say if you don't make me feel good give me that gallon of milk I'm going to make you feel bad blow your brains out clearly I benefit but he loses and we call that a zero-sum game now by the way you know a lot of people say Williams you know a lot of these things you complain about you mean represents that you know you know we are a democracy where a majority and majority rules well I tell them I don't think gang rape is any better than individualized rape that is just because you vote to rape somebody doesn't make it right or a majority consensus does not establish morality and by the way the framers did not intend for us to be a democracy did they no I mean the word democracy is not found in any of our founding documents the framers of our nation had utter contempt for the idea of democracy because they argued and you read the writings of John of James Madison and John Adams they said that democracy gives an are of legitimacy to acciden tyranny and you think of is it the Battle Hymn of democracy or the Republic oh do we pledge allegiance to the flag for the democracy for which it stands I don't think so no now widespread private ownership and control of resources is consistent with seduction and the minimization of rape widespread government ownership is consistent with rape maximization that is the essence of our relationship with government is that if we don't make them feel good they're going to make us feel badly bad an example this was back in 1959 I was driving a taxicab in Philadelphia I was making about $400 a month and I got this letter and the letter in effect said Williams we want you to stop driving a taxi in making $40 a month and we want you to start making $68 a month well people don't normally voluntarily switch in that direction and so the proposition they were saying given me is that if I don't make them feel good by being in their army they're going to make me feel bad by putting me in jail in other words I was being drafted matter of fact I don't even like to use the term draft that's my labor services were being confiscated by the by the government but we don't have a drafting more by the way don't we but you have to register for it right young guys at the register board sign up and I'll be worried about that because that's like somebody saying hey Williams we're not have slavery anymore but we want you to sign up yeah I'd be a bit worried about that anyway now despite the bigness and the alleged power of industrial giants like IBM General Motors AT&T you people say well yeah because these firms very very big we need a powerful government well despite their bigness what kind of power does Exxon have over you and me over you and you and me that is what can they force us to do in order for Exxon to get a dollar from me what must happen I must voluntarily get out of my chair voluntarily get in my car and voluntarily go to this man's light and voluntarily hand them some money for some gasoline kind of power does have of me big business does not have power over us now I would be remiss if I didn't point out that big business can have power over us but what do they have to do in order to get it they have to go to the United States Congress to get permission to rip us off like Chrysler or General Motors what I'll take the farmers the farmers are having problems now the farmers you know if the farmers having problems they get they can come knock on my door they say Williams can you spare a dime now I probably tell the farmers to go play in the traffic and and they know that so what they'll do they'll go to their senator say senator Dole when he is senator they'll say well if we asked Williams of voluntarily help us out he's going to tell us go play in the traffic so could you use your agents at the IRS and take his money that's how that's how big business can get money from us and they're getting a lot of money from us by the way by getting permission from our legislators to rip us off now the free market and voluntary exchange are roundly denounced by today's defenders of the new Human Rights what I call the new human rates these defenders of new human rates our chief supporters of reduced private property rates reduced rates the profits they are anti competition and Pro monopolies they are Pro control and coercion by government and these people in our country and around the world they believe that they have more intelligence and superior wisdom to the masses and they believe that they have been ordained to forcibly impose that wisdom on the rest of us now of course they have what they consider to be good reasons but every tyrant that has ever lived has believes what he was doing had a good reason these people in our country and elsewhere their plan requires the elimination or at least the attenuation of the market why do tyrants want to attack the market well the market implies voluntary exchange tyrants do not trust that people acting voluntarily will do what the tyrant thinks that they ought to do and so they want to replace the market with economic planning industrial planning now I'll give you a definition of economic planning that will last you to rest your lives it's very simple definition economic planning is nothing more than the forcible superseding of somebody else's plan by the powerful elite let me give an example that I might plan to buy a Honda motorcycle from a Japanese producer the powerful elite will say Williams we're going to supersede your plan through tariffs and quotas because we think you ought to buy a harley-davidson or my daughter I plan to work for the hardware store guy down the street for four dollars an hour her mother says okay I say it's okay she says is okay and the hardware store guy says okay but the powerful elite will say we're going to supersede that plan because it's not being transacted at the prices we think it ought to be transacted at namely the minimum wage now they do this many of them many of these people just plain evil people but many people do all this in the name of good but do-gooders fail to realize that most good in the world is not done in the name of good in other words if you were to ask me Williams what human motivation gets the most wonderful things wonderful things done I would say greed I love greed I'm not talking about ripping off people I'm not talking about fraud I'm not talking about getting government handouts I'm not talking about misrepresentation I'm talking about people try and get as much as they can for themselves let me give me example that because you might not have thought about this way take some take Texas cattle ranchers this winter they might be getting up in blizzards in the middle of night running down stray cows trying to feed them maybe getting kicked by the cows making this personal sacrifice to make sure New Yorkers have beef on their shelves you have either you had Idaho potato farmers getting up in the morning doing back-breaking work Sun beating down and dirt underneath their frig nail bugs biting them making this personal sacrifice to make sure New Yorkers also had potatoes on the shelves now I ask you why do you think they're doing it do you think they're doing that because they love New Yorkers they may hate New Yorkers I'm not that wild about New Yorkers myself but they may hate New Yorkers but they make sure that beef and potatoes get to New York every day single day of the week why because they want more for themselves now I ask you how much beef and potatoes do you think would get to New York if it all depended on human love and kindness and social justice I'd be worried about people in New York now most good things get done because of self-interest and private property rights you know some people say well Williams you know sense you're trying to win friends and influence people instead of saying greed very insensitive word like greed want to say enlightened self-interest well that's okay I like greed better let me give you another example of the virtue of a enlightened self-interest now I have often said that I don't care much about future generations and sometimes people are shocked when I say I don't care about future generations and they shocked today why I asked what have future generations ever done for me I mean some kid that's going to be born in 2050 what has he done for me and if he has not done anything for me how then am i oblige do anything for him but I point out to people well where I live I have a fairly nice piece of property and several years ago I took some money and I bought seedlings for my property you have low trees now when those trees reach their full maturity I'll be dead there'll be some 20 50 kids swinging in my trees eating my apples mrs. Williams when she's a sheepmen she's been deceased for about four years but she built a huge beautiful sunroom and that sunroom she did it with my money by the way and that sunroom is going to live longer than we are lb lb there'll be some 2050 kid tracking mud in my sunroom my beautiful sunroom well if you ask question well why did I make a sacrifice of current consumption to produce something that's going to long outlast me that some 2050 kids going to enjoy answers very easily easy is that the nicer my house is the longer it will provide housing services what the higher the price I get when I go to sell it that is by pursuing my own selfish interest to maximize and use a grown-up language the present value of the house I can't help but make a house available for future generation whether I mean to or not now yes well would I had the same set of set of incentives to care for the house if the government owned it would I had the same set of incentives if there were a 75% transfer tax when I went to sell the house No whatever weakens my private property rights interest in that house weakens my incentive to do the socially responsible thing namely conserve on the scarce resources of our society before I continue let me give you just one other example you people look like nice people I don't know whether you're nicer at all but but you could be concerned about the extinction of various species of animals I don't give a hoot and it's it's a practical matter I mean because according to biologists something like 93% of everything that has ever lived on earth is now extinct I say why getting the 2z over ninety three point two point five or whatever you know and you know some people are concerned with the ball you know the bald eagle becoming extinct and I remember at the Philadelphia Zoo I was 35 years old when I sold first boldly God's looking at the critter in the cage and I was asked myself could I go on another 35 years without seeing and I concluded yes but different people have different values and I can understand it anyway the point I want to make is that I was listening to NPR this years ago and people were picking picketing the UN because they're concerned about the extinction of the of the great apes or extinction of the Rhino extinction of the draft and and they're forming you know Ducks Unlimited save the whale clubs things like this so I wrote down this list of animals that the people are concerned with and you know they're in a tizzy over so I wrote down another list of animals that are very valuable to us I said how can people not marching for the pig how come they're not for me save the cow clubs save the sheep clubs well what's the essential difference between these two lists of animals well in one list of animals cows pigs and sheep they belong to somebody somebody's personal private wealth is at stake with whales and gorillas and elephants they don't belong to anybody nobody's personal private wealth as I'd say so the issue or my suggestion to you is that if you're concerned about the extinction of various animals you try to privatize them No now the despite the virtues of the free market that I've been talking about never mind it was with the rise of of capitalism or free markets that brought about more Humane Societies that is brought about better treatment to women to racial minorities to the handicapped to criminals and the insane there's consider hospital I still the doors markets I was giving lecture at one college and lady stood up and said well the free market and United States capitalism is hostile to women so I asked her I said if you're a radical feminist what country do you want to live in Saudi Arabia China or United States or if you go to jail what country do you want to go to jail is it Turkey or Mexico you want to go to jail in United States so you don't miss your HBO shows in the afternoon that is and it's a whole nother lecture but the rise of capitalism brought about more humane society because prior to the rise of capitalism the way to become very very wealthy was through looting plundering and enslaving your fellow man with the rise of capitalism it became possible possible to accumulate great wealth by serving your fellow man by producing things your fellow man wanted by pleasing your fellow man but many people say well capitalism does work a free-market doesn't work oh I think one of the reasons why it doesn't work many times is because it's not allowed to work almost every group in our nation has come to feel that the government owes them a special privilege or a favor and I might say conservatives are no means exempt from this practice that is manufacturers feel that the government owes them protective tariffs that is to keep foreign goods out so they can charge you and me higher prices farmers feel that government owes them crop subsidies organized labor feels that governments should keep their jobs protected from those who are not union members intellectuals college professors feel that government should give them funds to do research as college professors love to get funds for do research on poverty and have meetings in a nice hotel in Miami during the winter to talk about poor people conservatives rail against food stamps a rail against aid to families of dependent children legal aid but to come out support for aid to dependent farmers aid to dependent banks in aid to dependent motorcycle companies as such conservatives very often don't have a moral leg to stand on they just prove that as a matter of whose ox is being gored that is conserved as well as liberals Republicans as well as Democrats they prove HL Mencken's definition of an election quite correct for those who have forgotten HL Mencken was a he's a political satirist and he worked for the Baltimore Sun and and somebody asked HL Mencken to give the definition of an election in HL Mencken replied not quoting him he said government is a broker in pillage and every election is an advance auction on the sale of stolen goods to the extent that HL Mencken is correct we've identified our problem as a nation that is many of us will blame politicians for our problems and yes we can blame politicians but just a little bit ladies and gentlemen the bulk the problem lies with you and me because politicians are doing precisely what people who elect them the office to do what are they doing they're using their people elect politicians to use the power of their office to take the property of one American and bring it back to them now you say Williams that's pretty insulting you know we in Pennsylvania we don't do that well imagine that I'm running for the Senate in Pennsylvania and I go back and forth across the state and I say my fellow Pennsylvanians I've read the United States Constitution I know what's an article 1 section 8 of the United States Constitution and if it's not there the federal government cannot do it so therefore do not expect if you like me to office do not expect for me to bring back highway construction funds it's not in the Constitution don't expect from bring aid to higher education it's not in the Constitution don't expect for me to vote for prescription drugs it's not in the Constitution do you think the citizens of Pennsylvania would elect me to the Senate no they wouldn't and the tragedy of it is they would be absolutely right not electing me to the Senate why because if I don't bring back all these billions of dollars for people of Pennsylvania it doesn't mean that Pennsylvanians will pay a lower federal income tax all that it means is that New Jersey will get it instead that is once legalized theft begins it pays for everybody to participate and those who do not participate will wind up holding the brown end of the stick and for those of you with a rural background you know what the brown than their sick is so let me kind of conclude by asking the question well what can be done well ladies and gentlemen I don't know what can be done and sometimes people say well how can United States get out of the mess that we're in the fiscal and financial and actually moral mess that we're in well I say well I ask them I throw the question back on them I say well is there any basic difference between Americans and other people that is it's any basic difference between American and the British or the Spanish or the French these are great empires of the past that went down the tubes I mean at Queen Victoria's Jubilee in 1887 I believe if someone had suggested that Great Britain would become a third-rate nation challenged on the high seas by a sixth straight nation such as Argentina and almost lose you would have been put into the insane asylum it was inconceivable that Great Britain would the mightiest nation on the face of earth would ever go down – matter of fact people who say that the Sun never set on the British Empire do you know why they said that one guy said the reason that Sun never set on the British Empire is because God couldn't trust the British in the dark so but I think I think if the founders were to come back today they'd be disappointed in in the merchants they'll be disappointed in our choice to accept what we see as safety in exchange for liberty but I'd also say the only optimistic note that I see I say that it's not too late for us to wake up and do something about the erosion of our liberties you know one of the great things about our country is that we've never done the wrong thing for a long time we've managed to get our act together but I think that we have to get about the task of putting government back to what the framers intended for it to be before we lose our Liberty to do so thank you very much and entertain any place really appreciate especially you've actually made services and look modern with your rendition of very hardcore libertarianism I'd like to bring us back to the question of the founders and their principles and I remind you to link your address people's going back to the founding established the principle was of washington madison and jefferson and so on when he criticized deeper douglas because he said that douglas was striking at the heart of what America meant when he brought forth the idea of self-interest at the fundamental basis of what effect to be in America and Lincoln said you know a test when you criticize the Declaration of Independence and insist there's no just principle of action but self-interest then that is no longer America as we know it so we have to emphasize instead that the very foundation of Liberty dressed in a central idea it has to do with interest if you call a self-interest if you will but that self-interest is always defined with a moral foundation Madison also said this in the letter I believe it was to Monroe said can we to talk about interest in the relationship of interest to justice but he said it doesn't have any bearing unless you qualify interest with every necessary of normal ingredient and that moral ingredient has to do with the idea of recognize other human beings ask you in beings and treating them as such so there's a real positive moral component I think at the basis of Liberty America I wonder if you would speak to that I don't I don't think that anybody would say I don't believe you would say that it's okay for the government to forcibly use one person to serve the purposes of another because indeed that's the ultimate that's what slavery in fact was the forcible use of one person to serve the purpose of another and so what we're talking about is the degrees of that yo and and I think that even before we got to where we were Americans are the most generous people in the face of the earth and that is we do our country does our felt it would be quite proud of our fellow Americans we do eighty percent of all world giving and this was a characteristic of us noted way back in 1840 when Alexis de Tocqueville came here to do a study on prisons and he went back to France talked and wrote democracy in America and where he is he was giving lectures in France saying those Americans just love committees somebody's barn burns down they have a committee somebody becomes widowed and as you're talking about the generous spirit of the American people now I think that for Christians among us we should recognize that when God gave Moses the commandment thou shalt not steal I'm pretty sure he did not mean that thou shalt not steal unless you got a majority vote in Congress and that's what we're doing where we're taking by force what belongs one person and I don't consider that moral at all yeah and and then with give somebody else a chance but I just like you you quoted Madison and I have a quote from Madison and Madison is acknowledged father of the Constitution so he ought to know what's in it now in 1794 Congress appropriated $15,000 to help some French refugees and Madison James Madison stood on the floor of the house irate and he said I'm quoting here I cannot undertake to lay my finger on that article the Constitution which granted a right to Congress of expending on the objects of benevolence the money of their constituents now if you look at the federal budget today 2/3 to 3/4 of of it it's spent on the objects of benevolence which is and then also Madison and others say Jefferson said as well that Congress has there's no legitimate power for them to engage in charity but you read Madison that America is founded fundamentally not himself interest but in the world principle of freedom that has to do also with how we treat one another of course I think how we treat one another does not what I'm saying I think it's evil to treat one another too for me to go up to say Andreea I want you to help them out and if you don't help I'm going to put you in jail if you don't willingly give up your money I'm going to put you in jail I think that's not treating our fellow man very well another question we are and he'll he's about our nose use the word yeah and you're absolutely right and and I was using those terms interchangeably but we have we're we're I guess we are socialist nation he said corporatism well corporatism that's another way of putting it that's like most leaning yeah and and by the way if you read is that I have an article on my on my webpage is Walter Williams dot-com and it's called great myths of the Great Depression and and people like Mussolini praised Roosevelt on the kind of corporatism that he was promoting and also he got compliments from the Nazi newspapers for the kind of things that he is doing in United States and and kind of interesting when you when you think of this is the taking your question a little bit further than what you asked but but if you think about it what government's doing in our country we went from 1787 until 1930 when during the interval we had depressions and recessions these calm panics and nobody thought that the federal government ought to intervene and take care of things to fix things up it wasn't until the Hoover administration then followed by the Roosevelt administration that decided to fix things up and they caused they created a set of circumstances they turned whereby they turned what would have been a two or three years sharp downturn in the economy to an affair that lasted for 12 years they made things worse than they otherwise would be and we're doing the same thing now with the stimulus package and things like this so I think it's very very important towards recognize that we've moved away from a free market system we a matter of fact on terms of the index of economic freedom I believe that we're ninth or tenth in the world we've been slipping down for a number of years yes you but then why are you kindness provide I'm what questions I think it should be German I think that the government handouts is a it's not immoral I mean it's not moral and I think that and if you look at poor people I think that poverty I mean government programs welfare programs have done things to poor people that that would have been otherwise impossible happen for example for black Americans the welfare state has done to black Americans what slavery could not have done what the harshest Jim Crow laws could not have done namely to virtually destroy the black family and when I say that you point out that only thirty percent of black kids live in two-parent families today whereby in the 1880s and the early 1900s up to 85 percent lived in two-parent families even during slavery when when slaves were not allowed to marry most black kids grew up in a in a with mother and fathers in the house much more to a great extent today and so the welfare state has been very destructive of the ambition of people and I might also say that the welfare state is a destruction of white people – that is the illegitimate see rate among blacks is round Oh is round seventy-two percent now and among whites is around thirty percent and thirty percent was illegitimate see rate in 1960 among blacks and so the welfare state has been very destructive in Sweden which is kind of the mother welfare states illegitimate C is 54 percent in Sweden and so I think I'm somewhat like Reverend Ike he's a he was a minister a lot of fun but he says the best thing you can do for poor people is not joining them and I've been working my heart burnt my life try not to be with poor people yeah I had never win someone admired your work and inclined to agree with what you say but have one hesitation it's not about something you sent here tonight but something you wrote a long time ago like in an article about don't confuse what is with what riveting where and you said normative statements are excellent tools for tricking others into doing what you want them to do I simply caution that in the process of tricking others there's no need to trick oneself into believing that one normative statement is better or more righteous than another and as I understand it tonight your discussion about the legitimate role of government is nothing but a series of normative statement statements as you would call so if if all words of statements are saying or none or better than another can you persuade me if you will or seduce me why would I believe you're accountable for whatever the opposite would be because my account is better now when I talk about normative versus a non normative statements in class I'm saying that I'm talking about economic theory and and that you should always recognize the difference between objective and subjective statements because with subjective statements you can argue forever but not with objective statements and I was pointing out you know for example I was telling students you know a lot of people will say oh I just need a telephone well what kind of statement is that that's normative isn't it very subject because you have to prove to me that you need a telephone that cell phone and I tell us soon as I say look George Washington managed to defeat the mightiest nation on the faces earth and he didn't have a cell phone no an automobile so so you don't really need it and now I was telling students we'll look I'm not telling you to purge your vocabulary of needs and and and these normative statements because using normal statements is a good way to trick me into doing what you think they ought to do but in terms of economic theory we want to keep in mind at least in my class that we're only talking about positive statements matter of fact I tell the students the first day of class I tell them that if you find my if you find me saying in class anything that sounds like a normative statement and I don't first say in my opinion you should raise your hand and say professor Williams I am NOT taking your course to be to listen to your opinions because your opinions are no better than those in a man in the insane asylum you know that is not I'm not here to proselytize un's I'm not here to proselytize students because I think that's academic dishonesty but but I love being in the forum like this because I can make all kinds of norms normative statements in my classroom I don't yeah Hotel eteri well well I mean the the founders of our nation found a very good way they just they just rebelled against that grit against the the crown that the mightiest country on the face of earth they just rebelled huh no I I don't know I'm just telling you what the founders did and and if you read if you read on my website I have a bunch of quotes about what the founders said about the right to keep and bear arms and they said they gave us a second amendment not so that we could go Duck or deer hunting they explicitly said they gave us the second Amendment the right to keep and bear arms to protect ourselves against the United States Congress to protect ourselves against government and our founders very very radical people they and they would be very disappointed with you today you know how compliant we are but but see it's more of your problem because as I said I've been living one third of the time our country has been in existence and I probably won't be living another third of it and so it's your problem because you know I'll be dead when when things you really get bad and I'll be looking down heaven at you guys they listen concerns responsible financial crisis telepods disapprove of back the house government what a spectacle financial crisis which scale of Attraction 21 egalitarian about Freeman think that the government should roll before once so my question is if you would before the Federal Reserve fiscal policy responded by natural sizes especially well I wouldn't with empathy I mean they we had the words that qe1 and qe2 and and this quantitative easing of money which other words is a counterfeiting matter of fact I've often suggest the people if you're ever on trial you're in in front of a judge charged with counterfeiting just tell them that you are engaging in monetary policy but I think that that that company's failing you know failing is just as important as success in a market you know making profits and making losses let me they act their signals now a lot of the a lot of the problems that the financial institutions had there are direct result of Congress particularly the what is a Community Reinvestment Act forcing lending and financial institutions to grant mortgages to people that they otherwise would not grant mortgages to and and all the problems the second area problems that that arose with that and I think that you know the idea that some companies are just too big to fail that's a mistake I think that there are several theories that you can look at the failure you can look at one as being the domino effect that's the idea that well gee if we let all these places fail they will all go you knock each other down like dominoes but there's probably really a popcorn effect that is where you you heat popcorn and you see one kernel popping does not make all the others pop you know it's a it's the heat that's making them pop and so we were looking at the problem incorrectly I believe and and then I was I was a you know if you look at at the Federal Reserve the the the and they're in charge of writing handling of money since 1913 at with the Federal Reserve Act and I was just saying to this evening prior to talk that if you look at the Federal Reserve Act and you say well let's look at bank failures before and after they were a greater number after the Federal Reserve Act and price stability was greater before the Federal Reserve Act and if you look at the the the Great Depression again that was perhaps precipitated by the Federal Reserve inappropriate monetary policy that Milton Frieden Friedman and Alice Swartz wrote about so yeah and I think oh now tonight just quick question create congressman if you're president which ex-lawyer did you do though your change to get this free society well probably if if I were fortunate become president a lot of people secum end that I you know they say well gee Williams why don't you throw your hat in the political ring and and I tell people we'll look I'm very flattered by that but in order to become president or become get to high political office in this country I would have to somehow rise above principle and do the right thing and I'm not ready for such a ready to head e track but there there are number of things your spending is authorized by Congress only Congress can tax and spend according to Constitution but a president does have the power like I think one of the things that I would propose to the incoming president is to repeal every single executive order that is fully within the power of the President and there are many executive orders that that are raising havoc with our economic system and and Social Welfare but that's what I would do yeah I was I think I think your observations are exactly wrong and let me let me let me tell you look if you say well what people are the richest people on the face of the earth it's people who live I mean if you if you made a continuum you say look let's rank countries according to whether they're at the free market end of the economic spectrum towards the Capitol's end or towards socialism in okay you rank countries according to the the you know economic system then you go to the UN and get data and rank countries according to per capita income and then you go to Freedom House or international amnesty then rank countries according to human rights protections what do you see you see that the countries that tend towards the free market end they are the richest people and had the greatest human rights protections the countries towards the communist or socialist n they are the poorest countries with the fewest human rights protections and so so yeah you know capitalism is no utopia I mean we're going to have to wait until we go to heaven to get into a utopia but if you say what's the best system on earth it turns out that is the free market system or systems that tend towards capitalism or if you ask the next question people all around the world if they were free to leave their country and come to another country what would that country be probably United States because we're because we love fries well I mean I I think I think that that the that the Chinese and the Russians exploited people far more you know there's an excellent book by Hummel that you should read and call death by government and he points out that the that the 20th century was the most brutal century in mankind's history about a hundred and seventy-two million people have been slaughtered by their own governments now which governments do you think it were huh Russia nobody that's not the king no Chinese Mao Zedong is responsible for the estimated slaughter are leading to the deaths of 65 million people the mall Stalin is around something forty forty-five thousand forty five million Hitler is a piker with a eighteen million but he put no but you're asking the question you say well what country do you want to go to the be the frizz and richest of course yeah because what people do they use the government to rig the market to get things they cannot get through the market and and going back to colonialism a lot of people say well colonialism is the cause of poverty that is utter nonsense that is you ask the question well what's the richest country in the faces earth and was it a colony at one time it was United States right what about Canada what about Australia New Zealand Hong Kong they were all colonies and matter of fact some of the poorest nations were never colonies such as Nepal and some I think some people say well what accounts for our riches is the huge natural resources that we have well natural resources cannot explain riches because if you look around the world the two most natural rich resources riches continents are Africa and South America and they are home to the world's most miserably poor people the countries that have no natural resources such as Hong Kong it has even import water and it is the second richest part political jurisdiction the Far East oh no no no that's because oil and they're dividing a number of people into it but anyway okay you will yeah okay we have two more questions and or three more and then we have to quit yeah yes I don't have a pick for person matter of fact I was explaining that I haven't even looked at the at the at the candidates debate any more than four minutes I probably caught debate the total debate of four minutes and that was because I could not find the remote to change the channel so so III don't listen to them at all and and and from what I what I read about them I don't I don't see a whole lot of difference between any of you and if there is a difference it would be Ron Paul but he doesn't have a SAN chance of making it no no no way in the world yes then then that fellow's final yeah a bad friend long freshman business senior in here nation so that each to pay a share I just wondering what you classify each min sharri is that how should that work should the more wealthy bit more and the less wealthy pay last score is what is your exact of that number of people into the federal budget and send out a check of equal size because you know and you say well you know you take a person a very very wealthy person who pays a million dollars a year in taxes federal taxes what is he getting that a person who only pays 5,000 what is he getting nothing in you so why should he be paying so much well yes I think so what what you might say you know taxes represent the cost of governments the price of government would you charge a wealthy person let's say going away from government would you charge them a higher price for gasoline or for a suit or for a car because which would you bases his price pardon me Yeah right but I know but the government you should not be in the business at least according to Constitution I say should not be in the business of helping anybody out the government should imagine it should enforce the rules of the game you know it's it's like it's like an umpire at a football game the ref at a football game should he help out any team or should he call the rules should he say should he say hey you know the Eagles had a bad year this year and and they're and they're playing the New York Giants well I'm not going to you know holding I'm not gonna call that too much against the Eagles because they had a bad year I mean you would have contempt for a ref like that wouldn't you well that that well that's what government is the government is the Empire never is the umpire it's it has its job is enforcing the rules of the game unbias the rules of the game yeah Reserve I don't think you could know me if the if the government if Congress were to obey the United States Constitution it would get in control because they wouldn't be doing all the things that they're doing now or have it or have a spending limitation amendment to the United States Constitution that the federal government matter of fact I work with Milton Friedman Bob Bork and this back in 1978 and a number of very distinguished economists bill Niskanen and James Buchanan and we wrote a spending limitation amendment the United States Congress come spending limitation amendment to United States Constitution and it was shepherded through the Senate by senator lugar and actually in 1982 it the Senate voted and passed the spending limitation amendment but the house representatives Tip O'Neill would not bring it to the floor and in 1986 when we when I was introduced again Danine passed the Senate and what our amendment said is that the federal government is limited to 18% the spending could not exceed 18% of the GDP and we had a lot a matter of fact the amendment is in the back of Milton it's in the appendix of Milton Friedman's free to choose a book and mad a lot of people were asking me or some news people were asking me during the some of the news press conferences we had because I was pushing for a 10% limit on federal spending and so one news guy asked me well how come you say a 10% and I said well if 10% is good enough for the Baptist Church it ought to be good enough for the United States Congress that was my vision of it look folks thank you very much for coming you

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