Friedman: From the Victorian novelists to modern reformers, a favorite
device to stir our emotions is to contrast extremes of wealth and
of poverty. We are expected to conclude that the rich are responsible
for the deprivations of the poor __ that they are rich at the expense
of the poor.
Whether it is in the slums of New Delhi or in the affluence of
Las Vegas, it simply isn't fair that there should be any losers.
Life is unfair __ there is nothing fair about one man being born
blind and another man being born with sight. There is nothing fair
about one man being born of a wealthy parent and one of an indigenous
parent. There is nothing fair about Mohammed Ali having been born
with a skill that enables him to make millions of dollars one night.
There is nothing fair about Marleena Detrich having great legs that
we all want to watch. There is nothing fair about any of that. But
on the other hand, don't you think a lot of people who like to look
at Marleena Detrich's legs benefited from nature's unfairness in
producing a Marleena Detrich. What kind of a world would it be if
everybody was an absolute identical duplicate of anybody else. You
might as well destroy the whole world and just keep one specimen
left for a museum. In the same way, it's unfair that Muhammed Ali
should be a great fighter and should be able to earn millions. But
would it not be even more unfair to the people who like to watch
him if you said that in the pursuit of some abstract idea of equality
we're not going to let Muhammed Ali get more for one nights fight
than the lowest man on the totem pole can get for a days unskilled
work on the docks. You can do that but the result of that would
be to deny people the opportunity to watch Mohammad Ali. I doubt
very much he would be willing to subject himself to the kind of
fights he's gone through if he were to get the pay of an unskilled
This beautiful estate, its manicured lawns, its trees, its shrubs,
was built by men and women who were taken by force in Africa and
sold as slaves in America. These kitchen gardens were planted and
tended by them to furnish food for themselves and their master,
Thomas Jefferson, the Squire of Monticello. It was Jefferson who
wrote these words: We hold these truths to be self-evident that
all men are created equal. That they are endowed by their creator
with certain inalienable rights, that among these are life, liberty
and the pursuit of happiness. These words penned by Thomas Jefferson
at the age of 33 when he wrote the Declaration of Independence,
have served to define a basic ideal of the United States throughout
Much of our history has revolved about the definition and redefinition
of the concept of equality, about the intent to translate it into
practice. What did Thomas Jefferson mean by the words all men are
created equal? He surely did not mean that they were equal and/or
identical in what they could do and what they believed. After all,
he was himself a most remarkable person. At the age of 26, he designed
this beautiful house of Monticello, supervised its construction
and indeed is said to have worked on it with his own hands. He was
an inventor, a scholar, an author, a statesman, governor of Virginia,
President of the United States, minister to France, he helped shape
and create the United States. What he meant by the word "equal"
can be seen in the phrase "endowed by their creator".
To Thomas Jefferson, all men are equal in the eyes of God. They
all must be treated as individuals who have each separately a right
to life, liberty and the pursuit of happiness.
Of course, practice did not conform to the ideals. In Jefferson's
life or in ours as a nation, he agonized repeatedly during his lifetime
about the conflict between the institution of slavery and the fine
words of the declaration. Yet, during his whole life, he was a slave
This is the City Palace in Jaipur, the capitol of the Indian state
of Rajasthan, is just one of the elegant houses that were built
here 150 years ago by the prince who ruled this land. There are
no more princes, no more Maharajas in India today. All titles were
swept away by the government of India in its quest for equality.
But as you can see, there are still some people here who live a
very privileged life. The descendants of the Maharajas financed
this kind of life partly by using other palaces as hotels for tourists
__ tourists who come to India to see how the other half lives. This
side of India, the exotic glamorous side, is still very real. Everywhere
in the world there are gross inequalities of income and wealth.
They offend most of us.
A myth has grown up that free market capitalism increases such
inequalities, that the rich benefit at the expense of the poor.
Nothing could be further from the truth. Wherever the free market
has been permitted to operate, the ordinary man has been able to
attain levels of living never dreamed of before. Nowhere is the
gap between rich and poor. Nowhere are the rich richer and the poor
poorer than in those societies that do not permit the free market
to operate, whether they be feudal societies where status determines
position, or modern, centrally-planned economies where access to
government determines position.
Central planning was introduced in India in considerable part in
the name of equality. The tragedy is that after 30 years, it is
hard to see any significant improvement in the lot of the ordinary
Ever since the end of World War II, British domestic policy has
been dominated by the search for greater equality. Measure after
measure has been adopted, designed to take from the rich and give
to the poor. Unfortunately, the results have been very different
from those that were intended by the high-minded people who were
quite properly offended by the class structure that dominated Britain
for centuries. There have been vast redistributions of wealth but
it is very hard to say that the end result has been a more equitable
distribution. Instead, new classes of privilege have been created
to replace or supplement the old. The bureaucracy, secure in their
jobs protected against inflation both when they work and after they
retire. The trade unions, who profess to represent the most down-trodden
workers but who in fact consist of the highest paid laborers in
the land. The aristocrats of the labor movement and the new millionaires
the people who have been cleverest most ingenious at finding ways
around the rules, the regulations, the laws that have emanated from
over there, who have found ways to avoid paying tax on the income
they have acquired. To get their wealth and their money overseas
beyond the hands of the tax collector. A vast reshuffling, yes.
A greater equity, hardly.
The Hoonde Menuhin school in the south of England is also a place
of privilege. Musically talented children from all over the world
compete for a chance to come here to study.
Much of the moral fervor behind the drive for equality comes from
the widespread belief that it is not fair that some children should
have a great advantage over others simply because they happen to
have wealthy parents. Of course it is not fair, but is there any
distinction between the inheritance of property and the inheritance
of what, at first sight, looks very different. These youngsters
have inherited wealth, not in the form of bonds or stocks, but in
the form of talent. That 15_year_old is an accomplished cellist.
His father is a distinguished violinist. It is no accident that
most of the children at this school come from musical families.
The inheritance of talent is no different from an ethical point
of view from the inheritance of other forms of property, of bonds,
of stocks, of houses, or of factories. Yet, many people resent the
one but not the other.
Or look at the same issues from the point of view of the parent
__ if you want to give your child a special chance, there are different
ways you can do it. You can buy them an education __ an education
that will give him skills enabling him to earn a higher income.
Or, you can buy him a business or you can leave him property, the
income from which will enable him to live better. Is there any ethical
difference between these three ways of using your property, or again,
if the state leaves you any money to spend over and above taxes,
should you be permitted to spend it on riotous living but not permitted
to leave it to your children? The ethical issues involved are subtle
and complex. They are not to be resolved by resort to such simplistic
formulas as fair shares for all. Indeed, if you took that seriously,
it is the youngsters with less musical skills, not those with more,
who should be sent to this school in order to compensate for their
When the evening started, all of these players had about the same
number of chips in front of them. But as the play progressed they
surely didn't __ some won and some lost. By the end of the evening,
some of them will have a big pile of chips, others will have small
ones. There will be big winners; there will be big losers. In the
name of equality, should the winnings be redistributed to the losers
so that everybody ends up where he started? That would take all
the fun out of the game, even the losers wouldn't like that. They
might like it tonight, but would they come back again to play if
they knew that whatever happened, they would end up exactly where
they had started?
What does Las Vegas have to do with the real world? A great deal
more than you might think. It is one very important part of our
life in highly concentrated form. Every day, all of us are making
decisions that involve gambles. Sometimes, they are big gambles,
as when we decide what occupation to pursue or whom to marry. More
often, they are small gambles as when we decide whether to cross
the street against the traffic. But each time, the question is who
shall make the decision __ we or somebody else. We can make the
decision only if we bear the consequences. That is the economic
system that has transformed our society in the past century and
more. That is what gave the Henry Fords, the Thomas Alva Edisons,
the Christian Barnards, the incentives to produce the miracles that
have benefited us all. It's what gave other people the incentive
to provide them with the finance for their ventures. Of course,
there were lots of losers along the way. We don't remember their
names, but remember, they went in with their eyes open; they knew
what they were doing; and win or lose, we society benefited from
their willingness to take a chance.
Lance von Allmen has an idea, he is taking a chance. Who knows,
I suppose it is possible that we might all benefit from it one day,
but that isn't why he is taking a chance. He is doing it just because
he wants to get rich. This is his business headquarters in Las Vegas,
empty except for the idea that he shares with his partner who will
handle the production end of the venture when things really get
Lance von Allmen: Well, the idea is that if you have an oil spill
in the ocean or in the river, you want to try to get it under control.
What I am going to simulate here __ I am going to put some of this
oil down __ there is your oil spill of major proportions. This product,
what I can do is unfortunately what I can't show you here is if
you put this product down with an application system, you ring the
oil spill in such a manner. The application system will make it
much finer and it will control this. I don't know if you can see
what is happening to the oil yet, but it is just literally being
drawn into this stuff as I spray it across the top. It is starting
to draw it in. I have way more than I need. This controls ten times
its weight in oil and it will not sink. It has been chemically treated
__ it is cellulose __ it has been chemically treated so that it
will in fact not do anything with the water __it hates water but
it loves oil. I don't know if you can see we have containment devices
and that is what we are going to use this with. You can see that
it has just taken a very little amount of this oil absorbing product
which we call Oileater, to pick this up. The nice thing about it
is that after that oil spill, we have the system to do what I am
doing with my hand and that is pick all this up. There is the oil
out of the product.
Now, if you want the oil back, that is not a big problem, if I can
keep it all under control. The oil will come out and there we go,
allowing it, I don't know if you can see. What I have done is I
have quit my regular job, I have mortgaged everything I've got,
and it is quite a risk to do this, but the product works. You can
see it works.
And when it goes I am going to make millions. It's compatible with
a lot of other products and a lot of other systems that are on the
market. So, the money factor is the main thing. Its the kind of
thing that when you see it you want to take the risk, it's just
that kind of thing. You know you're going to make a lot of money.
People talk to me and they will say, yeah, but you are crazy, you
don't have a job; you don't know where the next pay check is going
to come from; as a matter of fact, I think I have $10.00 in my pocket
right now, but I don't worry about it. I get up in the morning and
it is my world. I own it. I can sit back and say I am losing, or
I can sit back and say I am winning. I can go out and change the
odds in my favor.
Friedman: People who are free, make their own choices. These two
men do a dangerous, noisy, filthy job. They don't do it because
they like it. They do it because it is well paid. That is their
This young man has given up any thought of a steady, well paid
career in order to take a job on a golf course. He wants to become
a professional golfer. It is a big gamble but it is one that he
has decided to take.
When people are free, they are able to use their own resources most
effectively and you will have a great deal of productivity, a great
deal of opportunity. The major beneficiaries are always the small
man. The man who has power who is at the top of society, he is going
to do well whatever kind of society you have. It is the society
which gives the small man the opportunity to go his way which is
going to benefit him the most. That is why if you ask where in the
world do ordinary people have the greatest opportunity for themselves
and their children, it is not in Russian, it is not on the other
hand in India __ it is in places like the United States, like Hong
Kong, like Britain as it was, not so clearly Britain as it is.
For much of this century, the British have tried to use the law
to impose equality, with very indifferent results. The failure of
the drive for equality is not because the wrong measures were adopted;
not because they were badly administered; not because the wrong
people administered it. The failure is much more fundamental. It
is because that drive goes against the most basic instinct of all
In the words of Adam Smith, the uniform, constant, and uninterrupted
effort of every man to better his condition, to improve his own
lot and to make a better world for his children and his children's
children. When the law interferes with that pursuit, everyone will
try to find a way around. He will try to evade the law. He will
break the law or he will emigrate from the country. All of those
things have happened in Great Britain. There is no moral code that
justifies laws fixing prices or fixing wages, or preventing a man
from earning a living unless he joins a union and submits himself
to the disciplines of the union, or forcing you to buy more expensive
goods at home when cheaper goods are available from abroad. When
the law prohibits things that most people regard as moral and proper,
they are going to break the law. Only fear of punishment, not a
sense of justice will cause them to obey the law and when people
start breaking one set of laws, there's a strong tendency for the
lack of respect for the law to extend to all. Even to those which
everyone regards as moral and proper. Laws against violence, theft,
and vandalism. Hard as it may be to believe. The growth of crude
criminality in Britain owes much to the drive for equality. In addition,
that has driven some of the ablest, best trained, most vigorous
people out of Britain much to the benefit of the United States and
other countries that have given them a greater opportunity to use
their talents for their own benefit. And finally, who can doubt
the effect which the drive for equality has had on efficiency and
productivity. Surely that is one of the main reasons why Britain
has fallen so far behind its continental neighbors, the United States,
Japan and other countries in the improvement of the economic lot
of the ordinary man over the past 30 years.
Everywhere and at all times, economic progress has meant far more
to the poor than to the rich. Wherever progress has been achieved,
it has relieved the poor from backbreaking toil. It has also enabled
them to enjoy the comforts and conveniences that have always been
available to the rich.
During the 19th century, and especially after the Civil War and
on into the 20th century, the idea of equality came to have a much
more definite and specific meaning than the abstract concept of
equality before God. It came more and more to mean that everyone
should have the same opportunity to make what he could of his capacities;
that all careers should be open to people on the basis of their
talents, independently of the race, or religion, or belief, or social
class that characterize them. This concept of equality of opportunity
offers no conflict at all with the concept of freedom. On the contrary,
they reinforce one another. It is no doubt that the concept, even
today, is the most widely held.
But in the 20th century, beginning especially abroad and at a later
date in this country, a very different concept, a very different
ideal has begun to emerge. That is the ideal that everyone should
be equal in income and level of living in what he has. The idea
that the economic race should be so arranged that everybody ends
at the finish line at the same time rather than that everyone starts
at the beginning line at the same time.
This concept raises a very serious problem for freedom. It is clearly
in conflict with it, since it requires the freedom of some be restricted
in order to provide greater benefits to others.
The society that puts equality before freedom will end up with neither.
The society that puts freedom before equality will end up with a
great measure of both.
Participants: Robert McKenzie, Moderator; Milton Friedman; Frances
Fox Piven, British Ambassador to the United States, 1977_1979; Thomas
Sowell, Professor of Economics, UCLA
MCKENZIE: We now join our guests here at the University of Chicago.
PIVEN: Mr. Friedman is right, that all over the world people are
beginning to stir and are striving for a measure of equality for
a measure of justice, but I think he demeans and trivializes those
struggles when he tells us all that we can't all have Marlene Dietrich's
legs. Moreover he confuses us by using the term "freedom".
I think what Mr. Friedman means by the term "freedom"
is economic license. And economic license __ the economic license
of those who control property and those who control capital, has
in fact been a threat not only to equality, but a threat to the
freedom of peoples all over the world, and not only in Europe and
in the United States, but in Africa, in Asia, and in Latin America.
MCKENZIE:Let me get two other reactions now to that idea that this
new ideal of equality, equality in this world's goods, represents
a very serious threat to freedom. Peter Jay.
JAY: Well first, as the only British person on this panel, perhaps
you would like _ allow me to say in passing that I think that many
of the things which Professor Friedman says about the British experience
in the last thirty years are a gross distortion and a gross travesty
of what's actually gone on in Britain, and I hope that we'll have
an opportunity to come back in the course of the discussion.
MCKENZIE: Very much.
JAY: But I think that your question brings up what is to me the
absolute central confusion in the exposition that we saw in the
film, and I'm a great admirer of Professor Friedman, I've studied
him, I've listened to him, I've debated with him, and always before
I've found him at least clear, even when he's been wrong. Today
I found him grossly confused, and in this specific and all important
respect: Is he telling us that absolute equality is a mistaken objective,
in which case I think he's tilting at windmills, he is attacking
a straw man, there is almost nobody on the other side of that argument.
Or is he saying that any concern at all by societies and governments
with reducing inequality is mistaken, and is not only in conflict
with freedom and efficiency and other human objectives, but is absolutely
wrong, in which case I think he is talking absolute nonsense. His
arguments tend to support the first rather platitudinous proposition
that absolute equality, still there's absolute sameness, is a foolish
and exaggerated objective. His arguments do not at all support the
second claim that it is wrong to concern oneself with distribution
of income and wealth and reducing in equality at all.
SOWELL: First of all, I would disagree violently with the notion
that the people are stirring. A very small handful of intellectuals
have generated an enormous amount of noise. When I look at opinion
polls of blacks in the United States, most blacks in the United
States do not take any strong position in favor of equality of results.
In fact, most of the polls that I've seen of blacks put them, if
you want to use this expression, very well to the right of most
intellectuals on most of these social issues. It is not the people
who are stirring, it is a handful of intellectuals.
The question is not absolute equality; it's a question of what concept
of equality you're aiming at, whether you're getting it absolutely
or to one degree or the other. Are you aiming at a concept of equality
of opportunity at the outlet, or are you aiming at a concept of
equality of results? It's also not a question of whether it's material
goods only. Whether it's material goods, status, or what not, again
the same question comes back: Are you thinking about equality of
opportunity, prospective equality, or are you thinking about retrospective
results at the finish line? And I think that's the crucial distinction.
FRIEDMAN: What I mean by equality is the concept I would like to
see pursued is the concept that Tom Sowell just discussed of equality
of opportunity. The concept that increasingly is being taken up
by the intellectual community is equality of results. Now nobody
__ and I agree with Peter __ nobody means identity. Nobody __
JAY: You said so. On the film you said so yourself, absolutely.
FRIEDMAN: Excuse me. Nobody__
JAY: All that argument about we can produce one human prototype
and put him in a museum.
JAY: That's exactly what you said.
FRIEDMAN: Nobody, when you press him, will say he means identity.
And yet if I take the logic of their argument, almost all the logic
of such arguments proceeds as if identity were achievable, as if
there were some way in which you could measure individual equality,
as, again, as Tom Sowell was saying. You have to ask: In what direction
are they moving? See, the fundamental distinction between you and
me on this, I believe, is a very different one. I think there's
all the difference in the world between a social or governmental
system in which ninety percent of the people tax themselves to help
ten percent who are in distress, and a system in which eighty percent
of the people in the middle try to tax the ten percent on the top
in order to help the ten percent at the bottom. What you end up
doing is you end up Mr. A and B and the, you know, the ancient story
of the forgotten man. You end up with A and B imposing taxes on
C to help D, and some of it, after all, in the process gets in the
hands of A and B.
JAY: You're dodging the fundamental issue which was brought up by
Tom Sowell. Are you saying to us that the only form of equality
that one's entitled as a society, in your view, to be concerned
with is equality of opportunity and any concern with inequalities
of result is illegitimate. That any inequality, however great, thrown
up by __ provided it's thrown up by a free market system and not
by a caste system or a feudal system, of which kind you disapprove,
that any concern with that is wrong. Are you saying that or aren't
you saying it because it's all important.
FRIEDMAN: Concern with whom? By whom?
JAY: Concern by the society.
FRIEDMAN: The society doesn't have concern, only people.
JAY: It has governments, it has laws, it has parliaments.
FRIEDMAN: Only people have concerns. People do certain things through
government and I'm not gonna talk about society having values. Society
doesn't have values. People have values.
JAY: All right, is it wrong for people to be concerned about inequality?
FRIEDMAN: It is not wrong for individuals in their private capacity
to be concerned. Anybody who is really concerned can do something
about it on his own.
JAY: Is it wrong for them to elect governments which do something
about it. You yourself__
PIVEN: Individuals act __
FRIEDMAN: It is not wrong for them to elect governments.
JAY: You yourself have supported a negative income tax which is
a way of doing something about inequality.
FRIEDMAN: It's not wrong for us to do something through government
FRIEDMAN: But there's a fundamental distinction between relieving
distress and doing something about inequality. I see no justification
whatsoever for cutting down all the tall trees in order that there
be no tree in the forest that is taller than the other.
PIVEN: Mr. Friedman, when you say it could be that, when you say
that it is wrong for government to intervene in the free enterprise
system to do something about inequality, you evoke a model of a
free enterprise system which does not exist and has never existed
to a significant extent in history or anywhere in the world. That
so-called free enterprise system has always used government. The
entrepreneurs of that free enterprise system have always used government
and the question that you raise is whether other people can use
government to achieve their ends.
FRIEDMAN: That is not the point __
PIVEN: The free enterprise system as it has spread around the world,
as it has spread to Asia and Africa and Latin America has spread
through the force of arms among other things and those arms were
wielded by government. That was government intervention under the
name of the free enterprise system, but a government intervention
which destroyed the freedoms of many people not least of which are
the people of Chile.
FRIEDMAN: I agree with you that everything called free enterprise
is not free enterprise.
I agree with you that many things have been done __
PIVEN: Where is it?
FRIEDMAN: __ under the name of free enterprise that are not consistent
with free enterprise. I agree with you and we stress over and over
again in this series that whenever businessmen have the chance they
will, of course, use government to pursue objectives which may or
may not be in the interest of the public at large. But, you always
are talking about mixed systems and I challenge you to find a single
example in history, at any time, of any society, where people have
been relatively free __ and I don't mean merely, what you call,
"merely economic freedom." I mean freedom __
PIVEN: I said economic license.
FRIEDMAN: __ in the full sense. I mean freedom of individuals to
pursue their own objectives, their own values, to live their lives.
I want you to name me any society in which you have had any large
measure of that freedom where capitalism and free enterprise has
not been the predominant mechanism for controlling economic activity.
Not the sole mechanism, but the dominant one. I want you to name
me one exception.
PIVEN: Your conception of freedom, does that apply in Chile today
with the free enterprise system?
FRIEDMAN: Chile is not politically free. Chile today does not have
political freedom and I do not condone __
PIVEN: And yet the free enterprise system __
FRIEDMAN: __ but let me go on for a moment, if you will. You raised
the question, let me answer it. Chile is not a politically free
system and I do not condone the political system But the people
there are freer than the people in communist societies because government
plays a smaller role because the free enterprise that has been emerging
has been cutting down the fraction of the total income of the people
spent by government because unemployment has been going down. Output
has been going up. Food production has been going up. The conditions
of the people for the first __ not the first time, but in the past
few years has been getting better and not worse. They would be still
PIVEN: Unemployment __
FRIEDMAN: __ to get rid of the junta and to be able to have a free
democratic system. What I have said and what I repeat here is that
it's a necessary condition. You cannot have a free society in my
opinion and I know no counter example and I challenge you to produce
one. You cannot have a free society unless free enterprise plays
a substantial role.
PIVEN: But in Chile the free enterprise __
MCKENZIE: Could we hole Chile. We would get beyond that. Let me
come back, though, to your theory of equality, Milton, because I'm
confused about it. You say there is a widespread demand for equality
of material condition.
MCKENZIE: Now I don't know of a political party in a democracy that
advocates that kind of equality.
FRIEDMAN: Well, I look at what __
MCKENZIE: And I challenge you to name one, a major party in a democracy
which is advocating the kind of equality you presented as a major
threat to freedom.
FRIEDMAN: I'm perfectly willing to take your Labor Party. I'm perfectly
willing to take some segments of our Democratic Party which have
certainly advocated programs directed towards that objective, of
course. In the practical political structure of democracies __
FRIEDMAN: __ and there's no question but what Britain, like the
United States, is fundamentally a democracy and among the freest
nations in the world despite the growth of intervention. In a democracy
you proceed slowly. You don't proceed at one fell swoop. If you
take the societies which have ostensibly declared equality as their
basic goal, the societies like China and like Russia, there's no
question we all agree that those are terrible tyrannical societies
and so in a country like Britain and the United States you have
stopped very short of the objective, but there's no doubt what the
objective of the parties has been.
MCKENZIE: Well, I think Peter may want to come here and I should
say that in this one I shall take the opportunity to play a bit
myself because you're right squarely in my area of special interest.
I am __
FRIEDMAN: They ought to let me be the moderator for a change.
MCKENZIE: Yes, indeed.
(Laughter) MCKENZIE: I don't accept for a minute that there has
been a calculated move to absolute equality in the social policy
of Britain since the war. And I've lived there during the time.
I write the history of it. I teach social policy and you're wrong
on this one Milton, but I give it to you Peter.
JAY: Well I think Milton's __
FRIEDMAN: That's what's known as the one-two.
MCKENZIE: Yes. (Laughing)
JAY: Milton is still equivocating as to whether he is attacking
the idea of absolute equality, in which case his examples of the
Labor Party, his examples of some sections of the Democratic Party
just don't stand up; or whether he is maintaining the proposition
that any concern to reduce inequalities of result are right, not
of opportunity but of result is wrong. Now if he saying the second,
it seems to me that his arguments that he's made don't tend to show
FRIEDMAN: Peter __
JAY: It is perfect __ well, just let me finish because we let you
JAY: It is perfectly reasonable for a society to say or for people
in a society to say and together through their political process
to express the thought that there are many objectives that society
has. Efficiency is one. Prosperity is one. Freedom is perhaps the
most important of all. But concern about equality or at least about
reducing inequality is another. And that we should ask ourselves
the question: are all the inequalities that we face, the gross inequalities
described in Dickens, the gross inequalities which you yourself
reported in India, the gross inequalities which you yourself said
in the film were offensive and were unfair. Are all of these justified
by the criteria of freedom and efficiency or are some of them unnecessary?
In other words, we take the principle that there should only be
such inequality as is necessary and justified by one of the other
criteria of the society. Now if you're willing to say that then
you're not in disagreement with anybody. If you're denying that
you've made no arguments to support what you're saying.
MCKENZIE: Now before we have Milton reply, we must bring in Thomas.
SOWELL: I think we're talking at cross purposes. On the one hand
we're talking about results that we're hoping for. On the other
hand we're talking about processes that we're setting in motion.
You're saying, should we hope for certain kinds of lessening of
inequality and so on. The real question, the political question
is: shall we set in motion certain processes because we hope for
that and do those processes enhance or reduce freedom? And I think
the argument that Milton is making and certainly the argument that
I would make is that the attempt at doing these things __ and it
doesn't really matter, it's a complete strawman to talk about absolute
inequality if you're __
JAY: This is the strawman.
SOWELL: __ no, no not at all.
JAY: Yes it is. Absolutely throughout the film this is the strawman
he brings up in order to say how ridiculous to have absolute equality.
And then he goes on to say __
JAY: __ how ridiculous to have __
SOWELL: My whole point is __ as a result, you see, that you set
up processes and the end result may not be any more or less inequality
that exists now, but the question of it is, those processes may
indeed reduce freedom greatly. I would go beyond the question of
equality and put it more generally that any process to ascribe any
status to any group of people, equality, inferiority, superiority,
must necessarily reduce freedom because whatever the government
wishes to ascribe to any group, whatever place, to use the phrase
that was very common in the south that blacks should have their
place, whatever place the government is going to assign to people.
That place will not coincide __ wait __ that place will not coincide
either with what all those people are doing or with how others perceive
all those people because there's too much diversity among human
beings to maintain any system of ascribed status from the top is
going to mean reducing people's freedom across the spectrum. That's
PIVEN: People have an ascribed status. It isn't as if government
by its intervention creates it, people are born into this world
in a given specter of the society and many, many of them are born
at the bottom of the society. The argument of, about equality of
results was an argument that was linked to equality of opportunity.
People recognized that unless there was a degree of equality in
__ a degree __ enough food, enough security, access to education.
Unless these things were available to all children, then equality
of opportunity was merely a mockery. That's why equality of results
became an issue and it became an issue for black people in the United
States and they expressed their concern whatever the opinion polls
SOWELL: You expressed it, dammit, look.
PIVEN: They expressed __
SOWELL: No, they did not. They did not.
PIVEN: They expressed that.
MCKENZIE: Frances finish it and then reply.
PIVEN: They expressed their will by their extraordinary participation
in a protest movement that began in the late 1950s and didn't end
until the 1960s.
SOWELL: I have never __
PIVEN: Intellectuals were not in that protest movement. Black people
were in that protest.
SOWELL: You want me to answer or do you want to keep on? Do you
want me to answer it?
PIVEN: I've finished.
SOWELL: Good. Black people have never supported, for example, affirmative
action, quotas, anything of that sort. Wherever polls have been
taken of black opinion on such matters as should people be paid
equally or should there be this or that. Black people have never
taken a position that you described. So it is not a question of
what black people choose to do. It's what you choose to put in the
mouths of black people and it's what you choose to project. It is
not what any black people have ever said anywhere that you could
put your finger on.
PIVEN: It's what you choose to put into the mouths of the pollsters,
as far as I can see.
SOWELL: I put in the mouth of the pollsters?
PIVEN: Look at the leadership of the black community.
SOWELL: Like most people I have never seen a pollster.
PIVEN: If you look at the leadership of the black __
FRIEDMAN: But I want to go back to the __
FRIEDMAN: __ I want to carry it back to an earlier point. Number
one, there's no question but what equality of results, if it comes
about through a framework of freedom, is a desirable result. Number
two, I argue in the film I've argued here that in point of fact
you get greater equality of actual results by a system under which
people are free to achieve unequal results. That for the poor people
of the world that Frances Fox Piven was talking about, the most
effective mechanism for enabling them to improve their status is
not a governmental program which seeks to ascribe to them certain
positions which seeks to provide them with certain goods and services,
but a governmental program which tries to eliminate arbitrary barriers
to advancement. I would say that in this world the greatest source
of inequality has been special privileges granted by government.
That government, you may talk a great deal, there may be a lot of
talk about how we're going to eliminate inequality. But if you look
at __ go back to your case of Britain. Is there any doubt that one
of the effects of governmental intervention in Britain has been
to create new opportunities for special classes. That the way to
get wealthy in a society that supposedly is aiming at equality,
that the way to get wealthy is to get a special government permit
to import __ to get foreign exchange or to import goods or to __
in this country to set up a television station. Those are the ways
in which you get inequality.
JAY: Well I think, Milton, you grossly misrepresent the British
experience and here perhaps I might make the point. First of all,
the burden of taxation in Britain is lower then it has been for
many years than in any other of the countries of the European community,
the overall burden of taxation. Secondly, you will immediately come
back and say, "Aaah, but the marginal rates of personal taxation
have been extremely high." Perfectly true, but not as high
as they were in the United States until the early 1960s. It's interesting
to note in passing that when the United States reduced its ninety
percent maximum personal rate to fifty percent, the rate of economic
growth in the United States, and I'm not suggesting cause and effect,
fell from the previously very low rate of 2 percent a year to about
naught-point-four percent in the period since. So that any notion
that there is an absolutely one-to-one relationship between the
degree of personal taxation and efficiency is wholly mythical. Thirdly
FRIEDMAN: Well I'll tell you what you can do with statistics.
JAY: __ now let me, __ well, you ought to read. You ought to look
at the facts. It's easy to make glib remarks about statistics, but
look at the facts.
FRIEDMAN: I know, but __
JAY: Look at the fact that in Britain over the last thirty years,
during which period according to you Britain has been crushed by
egalitarianism, whereas the United States has been soaring away
in the glorious state of liberty. The rate of economic growth in
Britain has been faster than that of the United States. How do you
FRIEDMAN: First of all, I have to look at what the figures mean
in Britain. I have to look at the way __
JAY: First you ought to look at them.
FRIEDMAN: I have looked at them and you realize that in judging
output in the government that's judged in terms of cost not in terms
of product. And what I really ought to look at is not the rate of
growth of GNP as the statisticians measure it, but the consumption
available to people in forms, as people value it, ultimate consumption,
if I look at that I get a very different picture. Statistics are
very, very, as you know very well, are very easy to use. They can
be __ they can be used to throw light or they can be used to cast
JAY: Why don't you look at facts.
FRIEDMAN: I agree with you. And facts __
JAY: The facts are that the amount of goods and services consumed
by the government as a proportion of the national output are no
higher in Britain than they are in the United States and haven't
been any time since the war.
FRIEDMAN: They have risen very sharply __
JAY: Which may be the explanation of the low rate of growth in the
FRIEDMAN: They have risen very sharply. It has risen very sharply
in the war, both __ since the war, in both countries. It is higher
in Britain than it is in the Untied States, properly measured.
JAY: Both twenty-five percent in both cases.
FRIEDMAN: The proportion __ excuse me.
MCKENZIE: Well of goods and service.
FRIEDMAN: That again is a statistician's nightmare. We have to look
at total government spending.
JAY: You were the one who was talking about whether or not people
have freedom to choose how their money is spent.
JAY: The transfers, which is pensions and other payments from government,
leave the freedom as to how the money is spent in the hands of private
individuals. It's only the direct consumption of goods and services
where the bureaucrats are making the decisions.
FRIEDMAN: It leaves the decision for freedom in the hands of the
recipient, but not in the hand
MCKENZIE: Can we __ gentlemen, gentlemen__ I'm back in my Chairman's
role. Can we leave this statistical debate, fascinating I'm sure
MCKENZIE: I want to make the point, Milton, it seems to me and
I am not British, I'm Canadian, having lived a great deal in the
U.K., it seems to me that you really have most unfairly used the
U.K. as a whipping boy in the last third of your film, last third
of your film. Because you say for much of the century the British
are trying to use the law to impose equality. Now the Conservatives
have been in office for sixty-five percent__
FRIEDMAN: I am not a partisan, I am not a partisan.
MCKENZIE: No, no, I now you're not. But let me finish it. There
have been three majority left governments in Britain. And it is
not the case at all that unlike other parts of Europe, there has
been consistent policies aimed at equality. Taxation is lower. There's
no wealth tax. There's a wealth tax in eight other western European
countries. Capital gains tax came in only, ten, fifteen years ago.
FRIEDMAN: But let me take your case. First of all, Conservative
Labor, that's not the issue. I have argued again and again, I do
MCKENZIE: Well, the Conservatives have not pursued equality.
FRIEDMAN: I do in a book which is associated with this series. I
make the point that the policy of Britain in the past sixty or seventy
years owes more to the philosophical idea of the Torres of the 19th
century than it does to the ideas of Karl Marx. In the United States
in the 1930s the Socialist Party never garnered more than a few
percent of the vote, but it was the most influential political party
in America because its policies were adopted by both the Republicans
and the Democrats. In the same way, what you have to look at is
not whether the Conservatives or the Labor Party is in power, but
what were the basic philosophy and ideas? The ideas of Fabian Socialism,
of Tory paternalism were being affected by both the Torres __
MCKENZIE: The Torres fought __ Milton, really.
FRIEDMAN: __ and the Labor.
JAY: There will be some very surprised Tory politicians an some
very surprised voters to hear what you say. But let me give you
another example of the way you're playing fast and loose with the
JAY: You talk about crime in Britain. I mean crime in Britain is
a tiny fraction of what it is in the United States and has been
throughout that period __
FRIEDMAN: That's true.
JAY: __ when you say that we're so egalitarian and you're so free.
You talk about able people being driven out of the country. More
qualified people are living and working in Britain than at any time
in the last 150 years of our history. Now this is largely because
of the granting of independence to the colonies, the loss of empire,
as you like, but in fact for example doctors which are endlessly
talked about, more British-trained doctors are now working in Britain
than at any time in our history.
MCKENZIE: And the final example, Milton __
FRIEDMAN: And it's also true __ it's also true that the physicians
leaving Britain, emigrating from Britain __
JAY: Tiny, tiny minority.
FRIEDMAN: __ amount to one-third as many as the number of people
graduating each year from your medical schools.
PIVEN: I think it's a mistake to be arguing this.
MCKENZIE: Milton, I ought to take one __
JAY: Ones coming back.
PIVEN: It's a distortion of the evidence to rest the argument for
the free enterprise system by selectively using the example of England
when you want to, the United States when you want to. The test of
your argument about the free enterprise system and its capacity
to produce both freedom and greater equality to relieve poverty,
the test of that argument has to be made everywhere that the free
enterprise system has been extended, has penetrated. The test of
your argument is not only in what happens in England and the ostensible
decline or not the decline of the English economy or what happened
in the United States. The test of that argument has to look at what
the free enterprise system has meant for the majority of people
who do not live in England and who do not live in the United States,
who do not live in the mother countries, but rather live in that
part of the world where most people live and when __ where most
people have had their lives disrupted. Peasants have lost their
land, traumatic destruction occurs __
FRIEDMAN: Excuse me, excuse me. You've got to compare __
PIVEN: __ because of the free enterprise system.
FRIEDMAN: Excuse me. You've got to compare __
FRIEDMAN: __ you've got to compare something with something. Will
you tell me the alternative which has improved the lot of the ordinary
people? What is the system which in your mind has been successful?
Most people through most history have lived in tyranny and misery.
It's only a very tiny minority, at any time, that have been able
to escape from it. That's the real beauty. That's the real achievement.
Now will you tell me what the alternative system is which has achieved
PIVEN: You say that's an achievement, though, of the free enterprise
system and I say that __
FRIEDMAN: Excuse me.
PIVEN: __ elsewhere in the world__
SOWELL: What is the alternative?
FRIEDMAN: What's the alternative? What's the alternative? What's
PIVEN: The free enterprise system is of itself not an alternative
because as you agree it does not exist. We are arguing really to
defend those interventions which have been made by government on
the behalf of people in an effort to reduce inequality in an effort
to reduce oppression.
FRIEDMAN: And tell me which of those __
PIVEN: We are arguing to defend __
FRIEDMAN: __ which of those are you defending in which of these
countries where those interventions have benefited the masses. In
most of the countries where you have departed from the free enterprise
system. You have had a small class benefited at the expense of the
masses. If you take the African countries, which have become one-party
dictatorships, are you going to tell me they have benefited the
SOWELL: I'm astounded by the examples of the third world that
are brought into here. Those parts of the noncapitalist world in
which the capitalist system has penetrated are typically higher
income places than those parts where they haven't. Are you talking
any kind of testable hypothesis or it's just axiomatic that it's
so. Because the studies that I've seen indicate that those countries
where capitalists have never gone near them are poorer than they've
ever been. They were poor before the capitalists got there; they
were poor while the capitalists were there and they are poor after
capitalists have left.
PIVEN: Your measures of wealth are not measures __
SOWELL: I haven't __
PIVEN: __ of the wealth of a people. They are measures, rather,
of gross national product __
SOWELL: Give me your measures then.
PIVEN: __ which reflect, as in the case of Chile which you don't
want to discuss, which reflect the great advances that have been
made by the middle classes and the upper classes in Chile as of
this date, at the expense of the sharp decline in the income of
working people. The catholic church __
FRIEDMAN: Those are not the facts.
JAY: But I still think Milton has not told us the answer to the
question, "what is he saying?" And it's very important
we should know what he's saying. It seems to that he should accept
the fact that nobody is arguing for absolute equality and disregarding
all other social and human objectives. He should accept that it
is perfectly reasonable, widely endorsed and perfectly logical for
people to say, amongst other social, political objectives reducing
inequality is a perfectly sensible one and that in those cases where
you can show that you can get a big gain in equality for only a
very small loss in freedom or only a very small loss in efficiency.
That is a sensible and legitimate thing to do and if it involves
government actions by, for example, income tax or negative income
tax that is a perfectly proper and sensible thing to do. And if
he's denying that then I still say he has given us no moral or ethical
arguments to explain why he is denying that then I still say he
has given us no moral or ethical arguments to explain why he is
denying that perfectly proper concern with equality along with freedom,
efficiency and other human objectives.
FRIEDMAN: The answer to that is that you can only serve one God.
And that stating that there is __
JAY: You have lots of objectives in you life.
FRIEDMAN: __ excuse me. Stating that there are many, many of these
objectives is evading the fundamental issue. In addition__
JAY: Common sense.
FRIEDMAN: __ as an empirical matter, the attempts to achieve equality
along you line to lessen inequality have generally backfired. They
have generally reduced freedom without in fact __
JAY: In Germany?
JAY: In Japan?
JAY: In France?
FRIEDMAN: Take the Japanese case which is a marvelous case, not
now, but 1867 after the major restoration.
JAY: No right now, right now. Hell with 1867.
FRIEDMAN: Well, the reason for taking it then is because you had
a far greater measure of free enterprise then than you have had
JAY: That's my point.
FRIEDMAN: In almost all cases the way to promote equality is the
same as the way to promote __ as an outcome __ is the same as the
way to promote freedom. If you promote freedom, if you remove arbitrary
obstacles, you open the way for people to use their resources. You
will end up, in my opinion, and I think the empirical evidence is
overwhelmingly on this side, you will end up with both more freedom,
more prosperity and more equality.
JAY: You're a closet egalitarian. You're a closet egalitarian, really,
then. You __
FRIEDMAN: I am not.
JAY: __ you support the objective the.
FRIEDMAN: I would like __ there's an enormous difference between
liking to see a result and being in favor of a particular method
of achieving that result.
JAY: You're willing to__
FRIEDMAN: Because if I were wrong, if freedom led to wider inequality,
I would prefer that to a world in which I got artificial equality
at the expense of freedom. My objective, my god, if you want, is
freedom. The freedom of human beings and the individuals to pursue
their own values. That will also generally be the result __
MCKENZIE: Well, there we leave this discussion at the University
of Chicago. I hope you'll join us for another edition of Free to