 It has long been said that ideas have consequences, and we have seen the consequences of the ideas of liberty happening all over the globe. And I believe that one of the individuals most responsible for spreading those ideas and directly leading to these consequences has been Dr. Friedman, which is why I consider it one of the greatest honors to introduce to you tonight to speak on a subject which most of us would wonder about how these two words go together, libertarianism and humility. Thank you very much. I'm embarrassed by that introduction and by your welcoming me because I'm afraid at the end of the talk you may not quite be so enthusiastic. The virtue of being among people with whom you agree fundamentally is that you can talk about some of the harder issues which you don't want to talk about in some other circles. And that's what I want to do tonight. As Jim quite properly said, libertarians have a great deal to celebrate. This last year has been an absolutely phenomenal year. I cannot quite agree with his attribution of responsibility. I think the horrors of socialism had more to do with what has happened than the perceived virtues of a free market system. But once it's occurred, it offers an enormous opportunity for free market institutions, and that's the point at which I do believe ideas have consequences. The recognition that socialism as a failure is not the same as a belief in free and more private markets. You need only look at the United States. I believe that in some ways, so far as the United States is concerned, what has happened behind the iron curtain has had a negative effect rather than a positive one because it's created a climate of smugness and self-satisfaction. We're doing everything right. We don't have to change things. Just look at a summit in Washington. What's it dealing with? How to make socialism more extensive, not how to make it less extensive? How to take more of the public's income away from them for government to spend? That summit is not dealing with the real problems of how you get rid of the socialist enterprises that unfortunately are so prominent in our country. So I believe there is an enormous amount to celebrate, but I don't think we want to go too far. However, that's not what I'm going to talk about. I want to talk tonight about a very different issue, basic libertarian beliefs and values. And that's the point of my title. As a long time liberal, I refer to myself really as a liberal in the true meaning of that term, a believer in freedom. Unfortunately, we've had to use the word libertarian because as Schumpeter said, the modern liberals, the socialist of the world, paid free markets the supreme compliment by stealing its word, its name. But as a long time liberal, libertarian, I am puzzled by a paradox. On the one hand, I regard the basic human value that underlies my own beliefs as tolerance based on humility. I have no right to coerce someone else because I cannot be sure that I am right and he is wrong. On the other hand, and this is a paradox, some of our heroes, in particular two of the four people whom you mentioned for Mount Rushmore, people who have in fact done the most to promote libertarian ideas, who have been enormously influential, have been highly intolerant as human beings, and have justified their views with which I largely agree in ways that I regard as promoting intolerance. Equally important as I have observed the libertarian movement. There's a related strand of utopianism in the libertarian movement that I believe is also productive of intolerance and is fundamentally inconsistent with the basic values that I believe we stand for. Why do I regard tolerance as a foundation of my belief in freedom? How do we justify not initiating coercion? Most of you would agree and would say, if I ask you, what is the basic philosophy of a libertarian? I think most of you would say a libertarian philosophy is based on the premise that you cannot initiate coercion, that it's wrong to initiate coercion. What do we base that on? Where does it come from? If we see someone doing something wrong, that we know to be wrong, someone is starting to sin to use a theological term, let alone make just to make a simple mistake. How do we justify not initiating coercion? Are we not sinning if we don't stop them? I know only two answers occur to me that make any sense about that. One is, which I regard as largely an evasion, there's no virtue in his not sinning if he's not free to sin. That may be true. But then, that doesn't apply to me, maybe no virtue for him. That doesn't mean I should let him sin because I'm sinning when I let him sin. How do I justify letting him sin? I think the most persuasive answer is that, can I be sure he is sinning? How can I be sure I am right and he is wrong, that I know what sin is? I think this is a very complicated and difficult problem. Let me give you a very extreme example. I come up here on Golden Gate Bridge and I see somebody getting ready to jump. He's going to commit suicide. Am I entitled to use physical coercion to stop him, assuming I'm capable of doing so? I think on the basis of the libertarian principle of not initiating coercion, one would have to say no. Yet I am sure that if most of you, like myself, if we could would stop him. We'd grab him. We justify that temporarily by saying, well, really, he's behaving, he doesn't really intend to do that and it's irreversible and we've got to stop him from doing something irreversible. Well, we grab him, we hold on to him and he gives a perfectly plausible reason why he wants to commit suicide. Are you going to let him go? I don't think that's very easy to answer that. In principle, we ought to say yes. And in practice, I doubt very much that many of us would really, assuming we had the power to hold him, would just let him go. I think what this demonstrates fundamentally is that no simple principle is really adequate. We do not have all the answers and there is no simple formula that will give us all the answers. That's why humility, tolerance, is so basic, is so fundamental because the only way we can allow a process to go on, whereby we can get a little closer and closer to those fundamental principles, is by being tolerant, by recognizing and welcoming the opinions of people who fundamentally disagree with us. And yet, as I've already said, how do I square that with the example of intolerance on the part of people who deserve to be our heroes as libertarians? There is no doubt in my mind that no one has done more to spread the fundamental ideas of free markets and Ludwig von Mises. There is no doubt in my mind that few people, if anybody, nobody has done more to develop a popular following for many of these ideas than Anne Rand. And yet, there is no doubt that both of them were extremely intolerant. I recall a personal episode at the first meeting of the Montpelerin Society, the founding meeting in 1947 in Montpelerin, Switzerland. Ludwig von Mises, of course, was one of the people who was there. I was also, and we were having, we had a series of discussions on different topics, and one afternoon we had a discussion on problems of the distribution of income, taxes, progressive taxes, and so on. Now, I may say that the people in that room included Friedrich von Hayek, Fritz Machlup, George Tiggler, Frank Knight, Henry Haslett, John Jukes, Lionel Robbins, Leonard Reed, whom you referred to. Hardly a group of people you would regard as leftists. But in the middle of that discussion, von Mises got up and said, you're all a bunch of socialists and stomped out of the room. You need only read Barbara Brandon's book, a fascinating book on Anne Rand to recognize that what I've said applies to her. And she has a story in there which covers both Rand and von Mises. You may remember, but I'll read it to you in quote, one evening the Haslitz, that was Henry Haslitz, whom I mentioned, invited Anne and Frank to dinner with Dr. and Mrs. von Mises. The evening was a disaster. It was the first time Anne had discussed moral philosophy in depth with either of the two men. My impression she was to say was that von Mises did not care to consider moral issues, and Henry was seriously committed to altruism. We argued quite violently at one point von Mises lost his patience and screamed at me. We did not part enemies, except for von Mises at the moment. About a year later, he and I met at a conservative dinner and his wife made peace between us. The important thing to me is less the intolerance in personal behavior than it is that the philosophical doctrines on which they claim to base their views seem to me to be fundamentally a source of intolerance. So far as von Mises is concerned, that has to do with his methodological doctrine of praxeology. That's a fancy word, and it may seem highly irrelevant to my topic, but it isn't at all. Because the fundamental principle, his fundamental idea, was that we knew things about human action, the title of his famous book. Because we are human beings and we have absolutely certain knowledge of the motivations of human action and we can derive, he would have maintained, that we could derive all of our substantive conclusions from our own basic knowledge, that facts, statistical, or other kinds of evidence cannot be used to test, simply illustrate a theory, that they don't test a theory, they cannot be used to contradict a theory, but they, because we know the propositions, we know the theoretical propositions, not because we are generalizing from observed evidence, but because we have innate knowledge of human motives and behavior. Now that converts anything that's done into a religion. It's not a, it's not a scientific proposition, it's not something you can argue about. I have two people who believe that view, who share funmesas as a praxeological view, and one says one thing and one says the other. How are they going to reconcile their difference? The only way they can do so is by argument on that basis, they have to, one has to say to the others, you've made a mistake in reasoning, and the other has to say no, you've made a mistake in reasoning. And now they keep on going and keep on going and they never can persuade one another. There's only one thing left to do, you have to fight. The virtue of a modern scientific approach in my point of view, from my point of view of the kind of approach to name still another name, who deserves some place in the lexicon of, in the, in the catalog of libertarians, is Karl Popper. And I think Popper's approach to methodology, also another Austrian, is, is very different. If you take a scientific approach, we finally disagree and we say to one another, well, look, you tell me what facts, which if, if they were observed, you would regard it sufficient to contradict your view. And the other, and vice versa. And then you go out and see whether the evidence contradicts or supports the view you have. That's a way in which you can resolve issues without conflict. Well, so much for funmesis, that's a very brief statement, and I recognize that it doesn't do justice to the, either praxeology or the my, or Popper. But that's not really relevant here. The same thing is true of iron rand, as that phrase about altruism suggests. Rand did not regard facts as relevant to, as ways of testing her proposition. She derived everything from the basic proposition that A is A. A equals A, and from that follows everything. But if it does, again, suppose two objectivists, two disciples of A and Rand disagree, or a disciple disagrees with her, both agree that A is A. There's no disapproving agreement about that. But they, for one reason or another, have different views. How do they reconcile that difference? There is no way. And that's a basic reason why you have the kind of stories that Barbara Braddon talks about in her book, when she talks about what happened when people disagreed in any minute detail with A and Rand. So as I say, I feel there's an enormous paradox there, and don't misunderstand me. Nothing I say in any way lessens my admiration for the role which they both played in promoting the ideas of liberty and free markets. And yet I think they teach a positive lesson and a negative lesson. And the negative lesson is that we must be aware of intolerance if we're really going to be effective in persuading people. In both Rand and Mises and much libertarian literature, there's a belief that hard questions have easy answers. That it's possible to know something about the real world to derive substantive conclusions from purely A-P-R-I principles. Let me take a very real problem. How many times have you heard somebody say that the answer to a problem, oh, you simply have to make it private property? But is private property such an obvious notion? Does it come out of the soul? I have a house. It belongs to me. Hey, you fly an airplane over my house 20,000 feet up. Are you violating my private property? You fly over at 50 feet. You might give a different answer. Your house is next door. You have a high-fi system. You play your high-fi at an enormously high decibel count. Are you violating my private property? Those are questions to which you can't get answers simply by looking whether A is A or not. They are practical questions that require answers based on experience. Before they were airplanes, nobody thought about the problem of trespass through airplanes. So simply saying private property is a mantra, it's not an answer. Simply saying use the market is not an answer. Let me give you some more recent examples. I take two, and I'll touch them very briefly, vouchers and negative income tax. Re-vouchers, and now speaking of schooling, educational vouchers, schooling is, next only to national defense, the largest socialist enterprise in the United States. And it is clearly as much of a failure as a socialist enterprise as Poland or Hungary or Czechoslovakia or East Germany were failures. And it shares the characteristic features of those failures. The characteristic features of socialist failures is that you have a group de nomenclatura who do very well and you have masses who do very poorly and the system as a whole is highly inefficient. Now that's exactly the case with our school system. Those of us who happen to live in high-income suburbs and well-paid teachers and teacher administrators do very well out of the system. The poor suckers who live in the ghetto or who don't have any money, they do very badly out of the system. And the system as a whole takes two or three times as much resources to operate as are necessary. And it doesn't do a good job when it does. So it's clearly a failure. And now, as Jacob Hornbogenberger wrote, another example, in the future of foundations freedom daily, again, the group that is doing very good work and has nice, is making an impact, I believe. But he wrote about this in his daily for September 1990. What is he, quote, what is the answer to socialism in public schools? Freedom. Correct. But how do we get from here to there? Is that somebody else's problem? Is that a purely practical problem that we can dismiss? Of course, the ultimate goal we would like to get to is a society in which people are responsible for themselves and their children's schooling, and in which you do not have a governmental system. But am I a statist, as I may say, I have been labeled by quite a number of libertarians. Because some 30 years ago, nearly 30 years ago, I suggested the use of educational vouchers as a way of easing the transition. Is that, and I quote Hornbogenberger again, quote, simply a futile attempt to make socialism work more efficiently? I don't believe it. I believe you cannot simply say, oh, to say what the ideal is, this is what I mean by the utopian strand. You cannot simply describe the utopia and leave to somebody else how we get from here to there. That's not only a practical problem, but it's a problem of the responsibilities we have. The same issue arises with respect to welfare, social security, and the rest. It may be that the ideal is, and I think it is, to have a society in which you do not have any kind of a major or substantial governmental system of welfare. Again, nearly 30 years ago, I suggested as a way of promoting a transition from here to there, a negative income tax as a substitute for and an alternative to the present rag bag of welfare and redistributionist measures. And again, is that a status solution? Again, I think not. We have participated in a society in which people have become dependent on government handouts. It is irresponsible, immoral, I would say, simply to say, oh, well, somehow or other will overnight drop the whole thing. You have to have some mechanism of going from here to there. And I believe that we lose a lot of plausibility for our ideas by not facing up directly to that responsibility. It is, of course, desirable to have a vision of the ideal of utopia, far from me, far be it from me to denigrate that. But we can't stop there. If we do, we become a cult or a religion and not a living vital force. These comments, I believe, apply to the largest socialist enterprise in the United States as well. That is, of course, defense, national defense. Like everyone else in this room, I am appalled by the waste of the defense industry. I am sure that if you and I could only run it, we could do it for half the money and do a lot better. But although I have tried for many years to figure out a way in which we could run defense as a private enterprise. And despite the hopes of some anarchist libertarians like my son that we can do it, I have to admit that over 30 years now he's never been able to persuade me that we could. That just shows how intolerant I am. But at any rate, simple slogans like the market will take care of it or non-interventionism do not resolve the hard problem. And where does our interest in preserving ourselves stop and where does it go? Obviously, we may very well agree on the direction we want to go into. But just how we're going to go there, how far we're going to go there, that's a much more difficult problem. Let me close by noting that admirers of Funmesis seldom quote the following of his statements and I quote, government as such is not only not an evil but the most necessary and beneficial institution. As without it no lasting cooperation and no civilization could be developed and preserved. Now that's an idea to chew over. Thank you very much. We'll take a few minutes for some questions and then go on to a few other things on the program this evening. Yes, sir. Well, I have publicly expressed my approval of it. I think it's splendid. This refers to an initiative that's going to be on the ballot in Oregon, providing for a voucher system with a very full, good voucher system, which is, let me stop. One of the problems in the voucher area is the attempt by some of the governmental types, particularly the educationists, the educational establishment, to preempt the voucherist issue by restricting it to government schools. I am not in favor of that and I don't think anybody should be in favor of that because that's just a way of destroying a good idea. So if a voucher system is going to be an effective means of making a transition from our present system to a satisfactory system, it has to be available for private, non-governmental schools as well as for government schools and private schools, I would say of all kinds, profit making as well as non-profit. And that is what the Oregon State Initiative does call for and I think it's a splendid initiative. I may say that in my experience, I have been, I have known of about four different attempts to get a voucher adopted, all of which has started out with high hopes and all of which have been ultimately defeated by the big guns of the educational establishment, who in the end managed to focus their money and their influence more effectively than the proponents of the educational voucher. Yes, it could be, but I think it's very unlikely. I think that the expansion of the present governmental educational establishment is much more likely to be the death of the private school system, as it has proved to be over the past, what, 50, 75 years. But I think your problem is a very real problem. Don't misunderstand me. I don't think there are any easy answers to these questions. Yes. No, they weren't wrong. I don't believe they were wrong. But I don't believe that those are, again, you see you're trying to, you can't make an all for none statement. You can't say it's never right to take an absolutist position. And you can say it's never right to take a gradual position. You know, this issue arises in a much more concrete form than I've met over many years. And this is therapy for inflation. When you have a hyperinflation, a very rapid inflation, I think do you have to take a shock treatment, an absolutist position, not a gradual treatment if you're going to bring it down. On the other hand, when you have moderate inflation, I think you need a gradualest treatment. So I'm not, I'm not prepared to rule out either than one or the other as a matter of, of a priori consideration. Yes. I'm afraid, I'm afraid the price of that crystal ball is too high. That's as I say, that's a very large order and I'm afraid I can't fill it. Oh, sure. I'll be glad to. I have done so in some of our publications in which I've argued that I believe and this is one of the reasons why you can't get full support from some of the churches, that ultimately the voucher system will destroy parochial education. It looks like it's a handout to parochial education. It looks like you're giving them a subsidy. But the situation today is that they have a real advantage in the fullest, in the field of schooling, what you're trying to do with private schooling is to sell something that somebody down the street is giving away for free. You're in a very good advantage if you also can subsidize it. And the churches have been about the only institution except for a few charity schools. They've been about the only major institution that have been in the position where they could provide schooling at considerably less than cost. And as a result, that's why the bulk of so-called private school children are in parochial schools. Now, you open up a situation in which you have vouchers available to everyone. Everybody's operating on equal terms. Everybody has to charge tuition. The church loses a special advantage. And when it comes down to it, I think the market will provide a superior alternative to what the semi-socialist institution of a church can provide. And so my prediction is, my prediction is that in a real voucher system, the parochial schools would decline and not grow. Now, I hasten to say that's a prediction. It's not a prescription. If in fact I am wrong, if people in a free competitive market choose to go to parochial schools, that's their right. There's no reason why they shouldn't. And there's nothing wrong with that. I'm just predicting that that is not what will in fact happen. And that prediction, I think, is supported by the fact that the parochial schools, particularly the Catholics, have been perhaps the favorite resource of blacks and other slum groups that have been trying to get a better schooling for their children. Because they're the ones who have been in the least in the poorest position to pay for something that they could get free. Yes. Go ahead. I understand your point. Sure. There is a very real problem about why people who choose not to have children and so on should be required to pay for the schooling of the children of people who do choose to have children. There's a real problem there from an ethical point of view. As a practical matter, as I say again, that is the situation now. There's not much chance of changing. My opinion has been on that issue as well, that if you get vouchers, it will stimulate a situation in which people, as they can afford to it, to add to the voucher in order to be able to get better schooling for their children. That also, with all governmentally financed enterprises, sooner or later there comes to be very great pressure on trying to divert the money to another governmentally financed enterprise. There's a marvelous article many, many years ago by Alan Wallace on political entrepreneurship versus economic entrepreneurship. The economic entrepreneur produces a product that nobody has tried, nobody knows what it is, and he can do it before he gets a market for it. The political entrepreneur can only produce something for which there is already a market. And the political entrepreneur therefore tends to take something which is already growing and already developing to jump on it and take it over at any rate. That's much more fully developed than Alan's article, which is a very good article. It's in a book, recording a debate between him and I'm not sure who the other one was by the American Enterprise Institute. Go to your point. So what happens is that over time the demand for higher and better schooling will grow as people become more affluent. The willingness of the government to finance it is going to be limited and it's going to be unnecessary because you're going to be getting a good schooling system without it. And gradually non-parents will be less and less willing to finance the parents and as people become more affluent they will take on a larger and larger share of the expenses. And ultimately, hopefully the voucher would wither away. Or rather I would say not wither away but be converted into poor relief rather than universal. What do you mean versus inflation is a form of taxation? What's that? Oh no. As I say inflation is a form of taxation and under some circumstances it may not be the worst form because it is a question of what is the total burden of a form of taxation and without commenting on whether the particular use of funds that you've described as an appropriate or relevant use. Your question has nothing to do with apartheid or anything like that. It applies to the U.S. budget. The U.S. is spending, the federal government is spending something over a trillion dollars a year and I have any number of letters from people who say well the way we ought to handle this and solve this tax problem is why doesn't the government just print the money to pay for it? Well the answer is we do to a limited extent. We don't for the whole thing. And it would be a very bad form of taxation to try to finance the whole thing that way because of the way in which it would operate. So there's no, I don't regard that as really an issue of ethics or principle or anything. It's a question of analyzing alternative optimum forms of taxation. We'll take one more question right here. I think I want to separate libertarian movement from libertarian party. I have not and then do not in any way distance myself from the libertarian movement. It's been my home for many years. The libertarian party is another question. I have never been associated with a libertarian party, not because I have any objection to it. On the contrary, I think a libertarian party is capable of doing a great deal of good provided it remains a party of principle and doesn't put much weight on getting anybody elected. But as I once said at a talk that I gave down at Stanford to the young Republican, to the Republican club of Stanford, there really is such a thing. I started out by saying I am a Republican with a capital R and a libertarian with a small L. That is, I have decided for my own, I'm not making prescriptions for anybody else, but for my own personal reasons, I have decided that I could have more influence and achieve more of what I would like to achieve by working through the Republican party. That would not be true for many other people or most people. And I very much approve of the libertarian party as a party of principle. As Rose and I said on our free to choose, the socialist party was undoubtedly the most influential political party of the 20th century in the United States. And it was that because it never got anybody elected, but it remained a party of principle. And if the libertarian party can remain a party of principle and not get sidetracked by the appeals of being able to command rent through garnering votes, it also is capable of achieving a great deal of good. Thank you.