 It gives me a real pleasure and it's an honor to introduce Walter Williams, who I think is one of the great contributors to freedom and libertarianism in the world. Any of you that haven't read his book should do so. And the contribution to Siskay I should mention is that he was one of the people that planted some of the seeds that are now germinating and he planted seeds that are very hard to resist as you'll see now. And I'm sure that those seeds have germinated and I hope will continue germinating. And so let us hear from Walter the kind of eloquence that has increased the freedom of at least two million people in Africa as of today. Walter. This is on. Thank you very much. And I would like to say that I'm very happy that you invited me to the Libertarian International. And there are a lot of things that I'm going to say that perhaps even as libertarians you might not have heard them or they might test your libertarian values to the extent that I might say something that you don't understand or that you disagree with, etc. Feel free to raise questions or comments or, and you don't have to show me any undue courtesy because I'm your guest, just give me a hard time. But keep in mind at the same time I have a black belt and karate for a profession that defended myself. When I was invited to the conference I didn't go to any great lengths. I'm going to talk about minorities and unemployment, but I didn't go to any great lengths to study the institutions of the United Kingdom and the various laws here regarding employment. And I did that because I kind of figure as a physicist, if you had invited me as a physicist, I, you know, and I'm a kind of expert in gravity as a physicist, I probably wouldn't have to worry about whether gravity was any different in the UK as opposed to the United States. So I believe that there are some general principles of supply and demand that apply everywhere in the world. I think that some of the things that we have to say about the problems of, before I talk about that, I would like to say that the next time you invite me, I think rather than talking about unemployment and minorities, I would much rather give a lecture on government intervention and individual freedom. That's a much better lecture in my opinion because I talk about rape and seduction and all these other kinds of things that you want to know about. But be that as may, I was given instructions to talk about minority unemployment. I think that there are several hypotheses that are used to explain the problems that minorities face. One is, it has to do with preferences. People say that, well, minorities are worse off because white people like them less. And that explains their problems. There's another hypothesis that people use and that has to do with collusions. People say that there's some kind of conspiracy against minorities. And that explains their problems of poverty and unemployment. And some people say that good and evil explains it. That is minorities have problems because they're evil people out there and we have to go out and find evil people and then punish them and then everything will be all right. Now, what's wrong with these approaches to the problems that minorities face? Well, I think the good and evil one is the easiest one to dispense with and I don't think that we can explain very much in this world in terms of good and evil because it appears to me that men have been evil at all places and all times but we find different outcomes and different places and at different times and if good and evil could explain things as well as people suggest that it might explain, we would find a little more consistency with respect to the outcomes. Well, what about the second hypothesis that people use to explain the plight of minorities? And before I talk about the second hypothesis, even to use the term minorities particularly in the United States to explain the problems that people face, to use the term minorities is very misleading because in the United States at least we're national minorities. That is the largest ethnic group in the United States are people of English ancestry which constitute about 15% of the population. The next largest ethnic group are people of a German ancestry which are around 14% of the population and then come Black Americans which constitute about 12% of the population then you have Poles, Jews, Arabs, Italians, Armenians, Chinese, Japanese, etc, etc after that so we're a nation of minorities. Now when used term minority you somehow imply that there's majority but it turns out that we don't have much of majority in the United States. Sometimes when I talk to my wife's family I tell them that if they would work a little bit harder Blacks could be a majority in the United States. They have a lot of children those people. But anyway getting back to preferences what's wrong with explaining things through saying that people dislike Blacks and or dislike particular minorities and that explains their play. Well I argue that and goody and if you're a good economist you would say that preferences alone just cannot explain very much of human behavior because preferences or what people like and what they dislike ignores the fact that there are constraints on human behavior. We just can't have all of what we like. There are some constraints. For example if you did a survey around London or in United States and you asked people which do they like the most? Rolls Royces or Pentos? I'm quite sure people say well I like Rolls Royces better than Pentos. Which do you like the most? Fillet Mignon or Chuck State? Everybody would probably say well I like Fillet Mignon the most. Or which do you like the most? Lafitte Rothschild Bordeaux wine or Annie Greensprings wine? People would probably say Lafitte Rothschild. Now having done such a survey you go out and find out what do people actually do? You go and look in their cupboards or look in their garages and any day of the week you would find that Pentos outsell Rolls Royces, Chuck State outsells Fillet Mignon and Annie Greensprings wine outsells Lafitte Rothschild. Now this despite the fact that people say they like the other better. Now but when you try to explain things according to likes and dislikes or preferences you ignore the fact that people's behavior is constrained. That is you must take into account prices and income which represent constraints on human behavior. That is people just can't take all that they want. I can't have all that they want. And there's something known as a downward sloping demand curve which suggests that the higher the price of something the less people take of something or any object of desire and the lower the price the more people take of it. So if we want to look at human behavior if we want to get a good grasp of human behavior we have to look at the cost involved with different courses of action. Now let me give you a racial example of this. Now consider a man like Governor Wallace. Now let's assume that Governor Wallace is the man that got a reputation for standing in the school door back in 1959 or so to prevent blacks from getting in for those of you who haven't heard of our prestigious governor. But let's assume a man like Governor Wallace does not like blacks. I don't know whether he likes blacks or not. But let's just assume it for argument's sake and for simplicity. Now suppose we're in Vietnam. Governor Wallace is not in Vietnam. He doesn't like blacks. You know in civilian life he would go to considerable lengths to avoid physical proximity with me like at a theater. He might go sit on the other side of the theater or at a party. He might go to the other side of the room at a restaurant. He might want to sit in the front and leave me in the back and things like that. But consider that Governor Wallace and I are on the battlefields of Vietnam and the bullets and bombs are flying and here I am in the foxhole. I'm undercover and Governor Wallace is running around looking undercover. Now do you think that he would get up this foxhole and say oops there's Williams. Let me go find another foxhole. Well probably he wouldn't. Now how do you explain Governor Wallace's behavior? Well if you listen to many people you would believe that Governor Wallace likes blacks on the battlefield conditions and he dislikes blacks on the non-battlefield conditions because clearly he would jump into the foxhole. Now but however as an economist if you consider costs of behavior you would explain his behavior by saying well the cost of avoiding physical proximity with Williams has risen and Governor Wallace takes less of it and that is the hypothesis of the downward sloping demand curve. So again preferences alone just cannot explain human behavior because preferences alone ignore the fact that the constraints on human behavior and for those of you who have taken an intermediate course in economics you know that if you draw a preference curve or an indifference map just alone between two goods you know that it will not tell you how much a person will take of it. You need some kind of constraint on his behavior. Now what about collective conspiracies as an explanation to the problems that blacks face or that minorities face if you want to use that term and some people when they start talking about collective conspiracies they almost say that white people have a meeting every night and during this courses meeting they decide how to victimize blacks the next day or if you're talking about sexual discrimination you know men have a meeting every night to discover ways to victimize women and to trick them into working for low pay and things like that the next day. Now what's wrong with collective conspiracy the collective conspiracy hypothesis in terms of explaining human behavior? Well basically what's wrong with it is that the collective conspiracy hypothesis ignores the fact that the attainment of one man's goal or to be more modern I'm still fashioned to the attainment of one person's goal may make impossible the attainment of another person's goal. Consider the following example I normally like to have blackboard for this example but I don't have one so you have to visualize it. Consider that you have a neighborhood a neighborhood of white people and they have a meeting one night and they say well look we're going to agree among ourselves we're going to have a gentleman's agreement not to sell our homes to blacks and you have Mr. A, B, C, D and so forth and they all agree and let's say that Mr. A gets a job and he's going to move to California and the going price of housing that neighborhood is around $40,000 and suppose a black comes along and offers Mr. A $60,000 for his house immediately in Mr. A's mind is a conflict that is he says shall I abide by the agreement with my neighbors or shall I take the extra $20,000 and go. Now of course gentleman's agreements also conform to the first fundamental law of the man that is when the cost of gentleman's agreements are low then people will be more gentlemanly but when they're high they'll be less gentlemanly now so immediately we recognize that the cost of abiding by his agreement with his neighbors is $20,000 namely differential between 40 and 60 that the black has offered him considerable evidence suggests that Mr. A will take the $60,000 and run and some of that evidence is that the fact that in some places and in the United States we used to have restrictive covenant laws that is laws that prohibit the sale of houses in certain neighborhoods to blacks, jews and orientals. Now whenever you see a law your first suspicion is that should be that that law is on the book because somebody would behave differently than the law specifies that is if white people could be trusted among them say if they could trust one another you would not need a law because they just wouldn't sell their house to a black so the existence of law suggests that many whites would ignore the gentleman's agreement and perhaps some more evidence although it's indirect is that if you come to some cities in like Philadelphia, Detroit and Chicago and possibly cities in the UK you might have seen that even during relatively racially hostile times you could not prevent whole neighborhoods from going from white to black virtually overnight. Now you should ask yourself well how did blacks poor people seize the use control of that property how'd they come to take it away to get whites out? Well essentially they broke down whatever conspiracy there might have been through the market mechanism that is they just simply outbid it whites for the land and you can see this if you imagine some of these buildings let's say like in New York the three-story brown stone buildings and it might have been a three-story building being rented by a white family let's say they were paying $200 a month now possibly what six black families came up the landlord and said well look once you cut that building up into six parts and we'll pay you $75 for each part and landlord looking at the potential profits he probably said to himself well look I don't I don't hate blacks that much and so the whites left and of course when they went out to the suburbs the people got tired of the operation of the free market so they made all kinds of laws that said well in order to live in a house or to buy a house that has to be 3,000 square feet inside it had to sit 60 feet from the adjoining property maybe 60 feet from the curb and had to be a single family dwelling etc etc all these laws in the United States called zoning laws or zoning ordinances these laws effectively eliminated the operational market or if you don't accept that they that fact that they eliminated the operation market you'd have to go with hypotheses that poor people and black people don't live in the suburbs don't like to live in the suburbs because they have not inundated suburbs to the extent that they cities now so to kind of recap the collective conspiracy hypothesis ignores the fact that of conflicting goals and the attainment of one person's goal may make it impossible the attainment of another person's goal now now some of you before I start talking about another hypothesis and what does discrimination do some of you might be saying because you know libertarians are moral people you look like a bunch of moral people you might say well is it fair for some people to have to pay a higher price for what they buy that is is it fair for a black man to pay $60,000 for a house and a white pay $40,000 for a house or is it fair that a whole building is rented to a white family for a lower price then it's rented to a black family well economic theory can't tell us what's fair everybody has their opinion on what's fair but economic theory can predict the consequences of not allowing some people to pay higher price for what they buy and or and it can predict the consequences of not allowing some people to receive lower price for what they sell and you can see this if I ask you the following question suppose you see a fat old ugly cigar smoking man married to a beautiful young lady what kind of prediction would you make about that man's income you would you would guess that it's fairly high wouldn't you and and so what is the fat old ugly cigar smoking man doing he's saying to the beautiful young lady look I can't compete for your hand on the basis of a guy like Williams so I'm so he says so he's saying he's he's saying that I'm going to offset my non-pecuniary disabilities or disadvantages by offering you a higher price now some of you might say well is it fair is it fair for beautiful young ladies to charge fat old ugly cigar smoking men higher prices than handsome men and then having maybe reached the conclusion that it's not fair you say well we'll make a law that beautifully young ladies the unequal opportunity law if you will that beautiful young ladies are going to can't charge fat old ugly cigar smoking men higher price than they charge handsome men then having made that law and enforcing that law then ask yourself what then happens to the probability of a fat old ugly cigar smoking man marrying a beautiful young lady it goes the fact that it goes almost to zero unless you find some kind hearted beautiful young lady that is by denying that man the opportunity to offer a higher price for what he buys you deny him his most effective mechanism for competing with the more preferred individual so an economic prediction would be is that if you don't allow people to charge higher prices charge lower price what they sell or pay higher price what they buy you reinforce some of their handicaps now what about discrimination sexual discrimination if we're talking about women or racial discrimination if you're talking about blacks people say well it's racial discrimination that is the villain of the peace well trying to explain things through racial discrimination is like trying to explain fires through oxygen that is if you ask me will Williams what was the cause of the Grand Hotel fire in Las Vegas several years ago that a lot of people lost their lives in and I say to you well that fire was caused by oxygen well some of you might snicker and then I say to you well look had there not been oxygen that wouldn't there would not have been a fire uh how do you like that well what's wrong with explaining the Grand Hotel fire by saying that was caused by oxygen well what I think is wrong is that oxygen is so pervasive that is oxygen is everywhere that it alone just cannot explain anything that is if you say that the Grand Hotel fire was caused by oxygen well your heart put for explaining why the Los Angeles Hilton did not also burn down that night because it too was surrounded by oxygen so oxygen alone just cannot explain anything now discrimination of all forms is so pervasive that it alone cannot explain anything there are all forms of discrimination um there's a sex discrimination race discrimination height discrimination uh weight discrimination you know if you're five feet five forget about becoming a president of the United States because we do not elect rungs the office we discriminate against rungs or try to be a general or try to be an executive of a major organization they just don't have a little teeny people uh as as in these positions we discriminate against them there's movie discrimination etc etc we discriminate matter of fact uh discrimination can be best described as active choice and economic scarcity requires that we all make choices and discrimination is just choice and when you preface discrimination with words like uh sexual race you're just specifying specifying the criteria upon which we choose and there's all kinds as I said all kinds of discrimination you know like when I was when I was choosing a wife to marry I discriminated against other women and uh matter of fact the law requires that I continue to discriminate uh even though I might not feel like it all the time and some of you might say well well Williams you're really being absurd because that kind of discrimination doesn't hurt anybody well I would be take offense at that kind of observation uh the only way that uh I could not have hurt somebody by discriminating in favor of my wife was to be the kind of man that only one woman would want and that's obviously not the case okay so but but some of the evidence of a racial discrimination you know if you uh my colleague comes my colleague and very good friend Tom soul he's done a lot of analysis and he points out that well the Jews that face the history of discrimination but in the places where they're discriminated against they tend to have the higher incomes or Armenians in the post Ottoman Empire they tend to have the higher incomes or Japanese Americans according to 1980 census have the highest family income in the United States and Japanese were discriminated against they were in turn during Second World War the Chinese and Southeast Asia are discriminated against they face massive expulsions and massacres in the past but yet they have the highest income in some of the countries in Southeast Asia while Chinese are tiny minorities they control 60 40 to 60 percent of the GNP uh or they produce 46 percent of the GNP every year so and or in the United States uh West Indian American blacks they have a higher median income than the average white in the United States so if discrimination could explain all that people say it explains well how come you have these groups that are uh uh so successful economically now furthermore I think when you are when people argue with you saying that discrimination explains things like the fact that women get lower pay the 59 percent of male income well these people would have you believe that uh uh you know when people say that women get 59 percent for doing the same uh work that men do these people would have you believe that a an entrepreneur in a competitive environment could survive paying costs that are 70 percent higher than he otherwise have to pay that is uh a slow-witted minority or slow-witted entrepreneur could come into business and drive his competition out by uh uh uh paying uh 70 percent the lower cost he just hire women and drive all this competition out of the market and so that person who would have us believe that kind of stuff uh requires that uh we believe uh that in a competitive market people to survive with such higher paying uh uh costs that are much higher than they uh need but that is people have companies have gone out of business uh paying one percent uh higher costs than their uh competition okay so since I said that discrimination doesn't explain it uh collective conspiracies preferences good and evil well what might explain some of the problems that uh so-called minorities face or blacks face united states or west indians and uh in england and other people around the world well I believe that it has to do with the rules of the game we have to pay greater attention to the rules of the game uh and we have to recognize that the rules of the game determine the outcome of the game that is if you can write the rules of the game you can manipulate the outcome of the game uh now the rules of the game are often ignored by people and let me give you an idea or an example of the rules of the game that influence the outcome of the game and I've been criticized for giving this example but since I have such a rich physical endowment I continue to give the give the example despite the uh uh criticism it's it's probably a correct assertion that if you went around the world you could not find five females that could beat the los angeles lakers in the game of basketball I don't care what the supreme court said about women's equality and things like that that's probably a correct assertion now why well some of you might say well the reason is that men are faster than women or men are taller than women men have more upper body strength than women men run backwards faster than women and things like that well you'd be wrong if you gave those kind of uh answers it has to do with the rules of game or basketball law and you can see this if you say Williams we appoint you commissioner basketball and we give you power to write basketball law and we want you to write how we want you to write basketball law in such a way that you rig the game of basketball in favor of women we want women to win more often it'd be very easy I make a few minor changes in basketball law that is the game would have to be played in high heel shoes or or and you can see Jabbar running down the court in high heel shoes or or or you're having it a tiny duela before you go on a fast break or something like that and by just changing the rules of the game somewhat you can alter the outcome or the makeup of the winners uh and probably if you got slick enough you could make it almost impossible for men to win just by altering the rules of game I believe if I know my history of golf uh uh at all that uh women used to win quite often in in golf and I believe it was some king or some prince either in Spain or in England he changed the rules of the game he made the distance between the holes longer and and where strength played a greater role in one success at golf and so men started winning all the time and it was just clear that women just couldn't drive a ball as far as men on average so just by changing the rules of the game they changed the composition of the winners now I just want to spend a few minutes uh or specify a few uh rules of the game that I've gotten some notoriety in different places around the world and in my own country talking about one I'll just mention very briefly because you're familiar with it is the minimum wage law the minimum wage law changed the rules of the game in a way that uh adversely impacts on on uh people with certain characteristics but I might mention before I say going delve into the minimum wage law just a little bit because most of you've probably read about it um that the essential feature of the rules of the game that hurt blacks or hurt minorities is going to use that terminology is that the the basic feature of these rules of the game is that they deny people the opportunity to engage in voluntary exchange or they prevent people uh from making compensating differences like the fat old ugly cigar smoking man uh he was making compensating differences when he paid higher prices for the hand of the beautiful young lady now the minimum wage law is just like that it prevents people from making compensating differences prevents people from working at a price that will enable them to get uh employment it's like steak you know how does chuck steak manage to sell uh uh sell at a greater volume than uh filet mignon it offers people compensating differences but however if you were to make a minimum steak law saying that uh uh filet mignon and chuck steak had to sell for uh two pounds a pound then people would discriminate against chuck steak that is the cost of discriminating against the less preferred cut would be zero and whenever you went to the supermarket what would you see on the shelves you'd see chuck steak it would be unemployed that is people would uh indulge their preferences now the effect of the minimum wage law in the united states currently the minimum wage is three thirty five an hour plus there's some mandated fringes such as social security and other kinds of uh um uh fringes which you're really talking about four dollars an hour but if you have a law that says mandates that you pay no matter who you hire three thirty five an hour employers are not going to find in their economic interest to hire somebody who's so unfortunate so that his output is only worth two dollars an hour it's a losing economic proposition so that person does not uh get employed and who are those people who are low skilled who might only be able to produce two dollars an hour worth of goods and services well for the most part they're teenagers and teenagers are low skilled because they lack the experience and maturity and other characteristics of adults so economic theory would predict that the minimum wage law would discriminate against the employment of low skilled people and the evidence for this is to go to the unemployment statistics in the united states unemployment currently for uh people 25 years and over is something like uh five and a half percent uh unemployment for teenagers uh in general is around 22 percent unemployment for black teenagers is around uh 45 down from 50 some uh percent now most people are aware of the current uh statistics of these current numbers but they're not aware of the unemployment uh at earlier times back in 1948 uh which is one of which is the beginning year that i used for my report that i gave the joint economic committee uh black teenage unemployment was less than that of white teenage unemployment uh was either equal to or less than that and surely since 1948 in the united states you cannot explain the uh the tier rating labor market conditions of black teenagers relative white teenagers by saying that there's more racial discrimination today in the united states than there was in 1948 you can't explain it by saying well blacks had more education than whites in 1948 you can't even blame it on economic cycle uh it turns out that a major villain of the piece is the minimum wage law uh coupled with other labor laws now the the minimum wage law has been used by many around the world to foster racial discrimination in employment in fact as uh leon mentioned when i during my visit to south africa one of the major supporters of the minimum wage law and equal pay for equal work laws they call a rate for the job law in south africa was uh white racist unions there that would never have a black in their union and their stated purpose behind their support for minimum wage law was something like a following a fellow named beard key i believe uh of the uh construction union uh he said that to see whites and residential construction is becoming more and more rare and he says that the government is no longer protecting the white worker from competition with the black worker and they said that in order to ensure the economic welfare of white workers we need minimum wage laws or equal pay for equal work laws and they made it very clear that uh uh they were not doing it for the blacks they were doing it to protect white workers from uh black competition now of course in united states and other places around the world uh the stated motivation behind support from minimum wage law uh has it was more noble they say that well we're doing it in the interest of the poor we want to help the poor well intentions just don't explain very much of human behavior uh that is uh the effect of human behavior uh doesn't depend on the intentions that underlie human behavior and it turns out in both places united states and south africa the the effect of these uh uh laws that fix price is to cause unemployment for the least skilled worker whether it's in uh south africa or united states or whether it's in great britain or united states the effect of the law is to cause unemployment for the least skilled worker um well you might want to ask some questions about that let me go into some other areas um i might also add one of the things about minimum wage law is that it destroys certain jobs uh one of the rather remarkable things that i observed in south africa was the that uh during the two months stay there we didn't have any any problems out after by the way uh because we were what leon refers to as diplomatic immunity but to which i refer to as you know we were just honorary white people uh for for two months only for two months i don't believe they make it much longer but um in south africa we did not have the occasion to eat out of plastic dishes or or any kind of plastic uh utensils now i'm sure that the reason why we did not uh eat from plastic in south africa was not because the south africans had not discovered plastic the reason was is that the labor costs were relatively low in south african and made sense to wash dishes and uh and to use labor to wash dishes but united states labor costs are so high that we uh don't use it to wash dishes that we have dish washing machines uh so the minimum wage law destroys certain jobs and it doesn't allow certain jobs to be born in the first place um give me another example in united states uh at least when i was a kid when you go to the neighborhood movie you would see two or three ushers to show you to your seat today even in the best of downtown putters there might be one usher now you surely can't explain the demise of ushers over the last 40 or 50 years by saying that americans of 1984 like to stumble down the aisles in a dark to find their seats it's the minimum wage law has destroyed that kind of job uh the western union uh job where boys used to deliver western unions on bicycles and store that kind of job so the minimum wage law destroys uh uh jobs uh and it doesn't cause certain jobs to be born now there are other laws and regulations that uh hand to cat people one that i've just done a lot of research on and you and some of it's cited in my book that i'm chris tane says is on sale here uh you should buy many copies and give to your friends all of your social interests um but occupational and business licensing laws in united states one that i've talked about is tax cab industry where uh one in order to own and operate a tax in new york city you have to go out and buy a 65 thousand dollar license in in chicago it's 40 000 in miami 35 000 in filothia my city it's 20 000 down from 33 000 now the u.s of well what is the effect of a law that generates a 65 000 license price well that law tends to discriminate against poor people getting in the cab business because poor people don't usually have 65 000 dollars laying around nor do they have bank credit that will enable them to get a 65 000 alone now in some of these cities blacks own very few of the cabs in filothia blacks own three percent of the taxis and filothia is a city that's 40 black but if you go to washington dc it turns out that uh 70 to 80 of the taxis in washington dc are owned by blacks um and you might say well why does this guy say you know how come he can't be more precise since he's a professor uh you know how come he can't come up and say 76 well it turns out that when my research assistant and i were doing the study we went to the files and we could tell race by the pictures those pictures were next to the licenses in washington and some of the guys looked kind of shaky we could tell definitely that 70 percent of them were black but some of them had some mixed ancestry and so we weren't that sure so we used a little fudge factor but you say well well how come they have you know how come so many blacks own uh taxes in washington dc as both other cities do you say according to the racial discrimination hypothesis well there's no racial discrimination washington that's what explains it no that doesn't explain it all it turns out in washington dc that the license to own operate taxis under a hundred dollars and a hundred dollars differs significantly uh from 65 thousand dollars furthermore as a result of having an open market in washington dc many people benefit that is washington has the highest quality cab service of any city in united states if you measure quality by the number of taxes per thousand of the population it has 12.1 taxes per 1000 population new york has 2.4 taxes per 1000 population philadelphia has a third of a taxi per 1000 the population furthermore in washington dc taxi prices are among the lowest in united states now but i might mention just as a a conclusion to uh things i'm going to say about taxis is that you shouldn't think of licensing necessarily as a racial phenomenon even though it may have some racial aspects because while i was doing the the study of the tax care industry when i jumped in the cab i would try to get some anecdotal stuff and i'd strike up a conversation with a driver and um one time i landed at dc national airport and a black driver picked me up and i said to him uh uh gee you guys are lucky in washington dc you don't have to go out and buy a 65 thousand our license in order to be in business and he said to me well we've been trying to get a the medallion system or licensing system here uh but congress won't go along with it the congress controls washington dc and so he said to me he says as it is such you know it's so cheap to get into business that we have these damn pakistanis coming in and the west indians and and everybody else haunting in on our business so i say that to point out to you that it's not an issue of race it's more of an issue of the ins versus the outs and the ins want a mechanism to keep the outs out so that they can charge us higher prices and earn higher income and higher wages higher profits so it's not so so if you're trying to deregulate the cab industry let's say in london you wouldn't try to you wouldn't try to organize any black uh uh uh cab drivers not i'm not talking about the uh i mean black right racially or you wouldn't want to organize the minority cab drivers because they're in and they have the same vest of interest as the uh as uh as as white drivers that is everybody likes monopoly and monopoly is okay so long as you don't use government to enforce monopoly in my opinion i mean everybody likes monopoly because that's what marriage is isn't it i mean that's the light marriage license is monopoly and you know like a lot of people say to me and i look at them they say gee he wasn't like that before we got married he was open corridors well of course he was a little more efficient because he was competing but but once you get married i mean once you get married there's less competition supposedly anyway and uh and so you run into all kinds of efficient inefficiencies associated with uh monopoly so uh but people have the right to form those kind of monopoly so long as they volunteer in my opinion okay let me just kind of finish up um because i'm sure there's some questions i don't want to outdo my time um in united states they're roughly uh 900 licensing laws licensing 900 different occupations and they're well over 3000 licensing jurisdictions and they license things from cosmetology to a barbering uh landscaping lightning rod installers auctioneers fortune tellers etc etc and which is not to exclude things like doctors lawyers architect electricians plumbers etc etc now the basic effect of these licensing laws is that of excluding entry and making it possible for those who are already in to charge higher prices and earn higher income a lot of the licensing in united states indeed was racially motivated that is many people do not realize despite the fact that blacks have a lot of trouble entering the trade constructions right now in united states at one time particularly in the southern united states blacks dominated the skill trade such as brick layers carpenters stone masons etc etc and plumbing and if you read through some of the licensing laws and some of the the legislative debate behind some of the licensing laws most notably in the south uh united states the stated intention of those laws was to get rid of blacks that is the whites just could not compete with the cheaper labor services and blacks did a lot of the construction in south the whole cities were built by blacks particularly during the reconstruction period there were eight schools and the markets and in washington in washington dc and other important buildings that were built by blacks under black supervision so how do you explain the fact that blacks aren't very well represented in many trades today is it because well blacks just say hey i'm tired of being a carpenter and just quit on mas no is licensing laws that eliminate them from the trade so again it's rules of the game that determine the outcome of the game and let me just say a few more things do you have about five minutes a few more things that i think i should say and this is kind of a little bit disorderly here but if i don't say them to you if i don't tell you you'll just go to the rest of your life not knowing them and i feel somewhat obligated a good deal of the problem that we face uh as people as human beings in general indeed has to do with race and sex because i think that black people or racial minorities want to use that terminology and women are used as cannon fodder for those who want more state control because after all when people argue for more government control what are they really what are they saying what are they saying they're saying well we need to help the blacks we're doing this we're going to control rents because we want to help black we want a minimum wage law because we want to help black we want equal pay for equal work laws because we want to help women etc etc and what they really want to do they want to help themselves and but they're using the some of the problems of women and the problems of minorities as entry points to get greater control over our lives and i think that as libertarians we need to debunk a lot of the mythology that's um uh that's that's that's used to uh to further these people's ends because after all i believe that most human beings most human beings are decent people and that they are indeed concerned about the problems that blacks or women might face and they fall easy prey to shrivelings and quacks offering these solutions and i think part of the problem has to do with the terminology that we even use and i just want to comment on i want i don't want us to use the language of our enemy that is uh we have confusing terminology like they say well we want more government intervention to integrate the schools or to end segregation in schools well a word like segregation and so far our schools united states today is inappropriately applied and because what people do they they shift the definitions of terms when they go to one subject to another let me give you just a brief i uh explanation if i were to ask the average america um or ask the average londoner um or average britain um are they are the water fountains at the dc washington dc national airport have they been desegregated yet one time blacks weren't allowed not allowed to drink from the water fountains in certain places i say well have they been desegregated i'm quite sure that the average american would say yes they have been desegregated and what would be the test that they would use to determine whether they've been desegregated they just go to the airport and see whether black if you were an airport could drink from the water fountain but when he asked the question have schools been desegregated in the united states well you get a lot of controversy with that some people say yes they have been desegregated and some people say no they're still segregated and they want a lot of supreme court for busting and things like that to desegregate the schools well look what happens to the meaning of segregation and desegregation when you switch from water fountains to school that is nobody in the right mind when you ask them have the water fountains at dc national airport have them in this desegregate nobody in that right mind says well look blacks are 70 percent of the population of washington dc are 70 percent of any of the people drinking at the water fountains at any time are they black and if not then the water fountains are segregated now but however they do do that with with respect to schools they say well blacks are 12 percent of the population somewhere and the school does not have 12 black then it is segregated segregated and we need to have boxing now the they use they give an operational definition to segregation desegregation when we're talking about water fountain and to use a non-operational definition when we talk about schools they're talking about racial balance and things like this and because of the sloppy terminology people come up with sloppy policy because nobody in the right mind you know and you know it's probably yeah i guess when i walked to dc national airport that only 15 percent of the people drinking water at the fountain are black despite the fact that dc is a city of 70 black now having observed that nobody in the right mind would propose busing that is to bus whites from the airport fountains out to anacostia and and bust the blacks on anacostia out to the dc national airport but people do do that in schools because they use sloppy definitions i doubt whether in united states where you can find one public school that does not emit people on racial criteria or if there is one that's just very few then let me just finally give one other definition because i and i don't have really had a nice very nice conclusion because i'm going over time but people say they use the term prejudice that prejudice is a problem well i think prejudice is a very very good word to use when we talk about human relationships but it's it we use it incorrectly now when people talk about prejudice they're typically talk they're they're saying well prejudice represents you don't like somebody or things like this or you use stereotypes or i say what's wrong with using stereotypes i think stereotypes are very good they convey information you know for example now something you might say well look you might say i'm not prejudiced but you probably you either are prejudiced or you're fooled now now when i talk about prejudice i use this latent derivative that means to make decisions on the basis of incomplete information that is you prejudge things you don't wait to get all the information in before you make a decision and economists can just can best understand prejudice as those decisions made on the basis of incomplete information now for example suppose we're getting ready to break in a few minutes but suppose as you're walking out the back door of this room as you turn the corner you see a full grown lion sitting there what would you do most people i would predict it's uninteresting prediction would seek to leave the area in great dispatch wouldn't you well why is your decision to run based on any detailed information about that particular tiger or is it based on tiger folklore what your friends have told you about tigers how you've seen other tigers behave you are prejudging that tiger aren't you now of course if you were not prejudiced you would attempt to get some more information about that tiger before you ran you would come up then pedimonage to a status where they dangerous you know here kitty kitty and struggling and then and only then if he behaved in a medicine fashion would you run but see most people that when they see the tiger there they make a quick or instantaneous cost-benefit implement analysis they say they conclude that the cost of an additional unit of information about that tiger far exceeds the benefit and so they don't search anymore now so you the use the use of stereotypes and prejudice is a very very important part of the optimal stock of human decision-making techniques now the same thing with sexual sexual stereotypes if i'm going to you know the guys say hey williams uh among this group of nice libertarians uh pick a five person basketball team and if you win uh well you'll get a million dollars well i mean i like women as a matter of fact some of my best friends are women but i would not pick any of the females here because i guess i prejudiced judge them as not as being good not being as good in basketball although you could have the olympic team here that i just don't know but on the average i'm right now so what i'm saying is that prejudging or stereotypes and this also applies to employment applies to uh interest uh landing etc etc people use these techniques is i believe the the uh concept of prejudice as a uh it's mislead i mean uh is not defined very well and we shift our meanings on it and we should have at least in our own minds when we talk about people to recognize when we talk to people we should recognize that these words on these terms are being uh used inconsistently and perhaps uh mischievously okay so in conclusion before you raise some questions i think that the problems that minorities face is a problem of government intervention and i believe it as well reagan says which he has not done if if if government were off our backs i think we'd have a much better uh society and i think i think that uh minorities would find a greater upper mobility thank you very much we might be near to grainage but that doesn't mean that we should use grainage mean time i think we'll use libertarian mean time which has tended to be somewhat behind grainage mean time on account i believe of the fact that we're west of grainage right here and that makes a lot of sense so there is time or i declare using my chairman's prerogative that there's time for discussion and questions and uh the uh the before doing so i want to use the another another chairman's prerogative and that's make another point that is interesting here in recent years there've been reforms in south africa in terms of which blacks are now allowed to enter business freely in so-called black areas in sueta and within three years of being permitted to do that the sueta chamber of commerce and the national black chamber of commerce is now the most powerful lobby in south africa for maintaining separate racial group areas in order to keep white traders out of black areas so that uh it is conspicuously not a case of race but a case of insiders and outsiders all of getting in and slamming the door behind you and this is uh happening all over the show anyway one here and then at the back then brian and then dean in fact might i ask walter if you'll just stand here and field the questions yourself in the united states uh there's one case that has been puzzling me in the nursing profession seems to be low paid and yet they're always crying about a shortage and have you looked into that uh for any kind of explanation uh the the question for those of you did not hear in the uh in the nursing profession it appeared in united states appear to be low paid and there are always uh talking about shortages i think that if you're talking about the uh practical nurses uh they have recently over the last 10 years been recent uh they've been uh licensed in united states and the licensing has cut off the supply of many many uh people one i i'm i'm personally aware of of one particular case my wife's uh uh sister was a practical nurse for something like 25 years and then licensing was introduced and she did not have the education she didn't graduate from high school she did not have the education to pass the licensing test and so her doctor came to her told her one day she just couldn't work as a practical nurse anymore and so now she works as a lab technician uh you know counting and making blood counts and things like this but she was uh effectively excluded from uh being a practical nurse and i imagine many other people uh of similar backgrounds were excluded uh from the field of uh practical nurse by nursing by the uh uh licensing laws this explains the shortage but how does that explain the low wages i i think there must be some other kind of intervention causing the low wages okay well i'm not sure i'm not sure whether well you know low wages we can't speak absolutely i don't i don't know about the wage structure but uh uh relative to their other alternatives i think that if i if i have my numbers right that practical nurses at least make around 16 to 17 thousand dollars a year and a fully licensed registered nurse who let's say who's an or operating room nurse you're talking about somebody in their 30s 30 thousand dollars so i'm not quite sure what the that means um as a wage relative to their other alternative i don't know whether that's low or high yeah we have to uh we must adjourn now otherwise we won't have coffee there is discussion later of walters paper the two walters walter block off the coffee so i'm going to use the further chairman's prerogative and not proceed with questions uh but what are in it's remains then for me just to thank walter williams for what has been one of the most entertaining thought-provoking and challenging of the papers we've had here and let me uh mention to give you some suggestions as to how to deal with some kinds of prejudice and that is uh i now routinely in south africa where forms require me to put my race which they don't require of uh washington taxi cab drivers so well they had to look at their pictures uh if it says race i put human and there are a couple of other nice libertarian answers on official forms one of them is if it's if it asks if you want to have the pendants for example i put one million pensioners 300 thousand civil servants uh and then finally when i came into the uk it says their purpose of visit and i routinely put that the purpose of everything i do is to restore the hapsburgs in austria and i think we libertarians need to have some creative form-filling in approaches which gradually will undermine the bureaucracy but now i'm i learned some of these techniques from walter and if you do have the opportunity to talk to him later ask him about his approach for example to military service and you'll find that it's creative and very libertarian and very effective thank let's thank him again in the appropriate way for an outstanding presentation