The Economics and Politics of Race
Two years later, same chair, sharper edges. The arguments here became a book, and then a career.
- Interviewer
- William F. Buckley Jr.
- Program
- Firing Line
- Topics
- Race, Economics
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it is always exciting when Thomas Sowell produces a new book, which means we live in exciting times since he tends to do this quite often, three times in 1981, for instance. The Economics and Politics of Race, subtitled An International Perspective, asks most of the questions we are all asking ourselves about race and progress and politics. What ses- sets Professor Sowell apart from many of his colleagues is that he sets down exactly what his researches indicate without any attempt to conform to fashionable political notions. Thomas Sowell was born in North Carolina, and as a boy, moved to New York. From high school in Harlem, he went to Harvard, where he took his first degree in economics. His second he took in Columbia, and his PhD at the University of Chicago. He went on to teach at UCLA, at Amherst, at Cornell, and since 1980 has resided as a senior fellow at the Hoover Institution, where, during th- this, during this period, he has worked, assiduously. His last, three books were called Markets and Minorities, Ethnic America, and Pink and Brown People. Our examiner today is Professor Robert Lekachman of Lehman College, about whom more in due course. I'd like to begin by asking Professor Sowell if he would tell us about shifting IQs and the relevance of this discovery.
Well, the controversy, of course, is over whether IQs are h- inherited or are a result of the environment. And, over time, IQs do shift. That is, as of the time of World War I, for example, the Jewish IQs were below the national average. it... and in fact, Carl Brigham, who was the author of the College Board SAT, said that this disproved the, popular notion that the Jews were highly intelligent. As it turned out, he was somewhat premature, and a decade later, the Jews had higher than average, IQs. in Japan, the average IQ has risen seven points in the past generation. there's also data on, Black, orphans raised by white families. their average IQ is 106. so the IQs are not set in concrete by any means.
Compared to what?
The national average of 100.
I s- I see. -huh.
and it, and it, and compared to an average IQ of 85 for Black children as a whole.
hmm.
so they're not set in concrete, but neither are they irrelevant because, they measure skills that are very important in terms of, mathematics, science, and many other, intellectual areas. So they're not irrelevant, but neither are they set in concrete.
Let me read a sentence from your book, which I think grabs, at least grabbed this reader, instantly, when you wrote, "The real question is what confluence of circumstances produced the fortunate conditions that a relatively small part of the human s- species enjoys t- today? To what extent can these pecu- peculiar combinations of historical circumstances be analyzed, recreated, or grafted onto other societies?" Now, you tell us that Jews came here and their IQ was at this level.
And just, a little bit later it rose to this level.. This was the impact of America, right? Yes. Or something you call human capital. Yeah. Describe that, would you?
Well, the human capital is simply the whole range of skills, traits, discipline, even physical health that enable people to produce more than other people.
Inherited or learned or both?
I guess would have to be mostly learned, but I think, but almost inherited in the sense that, every generation raises the next generation. And so, it's, it's virtually the same as if it were inherited for most people. Very few people are in a situation such as Black orphans raised in white families. that happens v- very rarely.
well, Professor Vandenhaag quotes a study of zygotic twins-
hmm...
in which, one twin was raised in poor circ- austere circumstances, another in affluent circumstances. One made to go to school, one not made to s- go to school. But they ended up, roughly speaking, with the same IQ. This would not be the same as your research has indicated, would it?
Yeah, I don't know which study he's talking about, but I've looked at some of those twin studies, and unfortunately, those, some of those studies, don't refer to twins that were raised in very different circumstances. -hmm. and in fact, in some cases, they were raised in the same town by different relatives. there's a whole controversial literature on those twins, so, I would have to know which studies he was, he was talking about. -hmm.
Well, to get back to the, to the business of human, the accumulation of human capital-
is, largely passive?
No. I think it's, it's, it's not necessarily a matter of individual merit in the sense that if you're born into a culture and into a family where there are certain values, and particularly if they are families that really insist upon those values, where it's not a matter of doing your own thing, then you will grow up with those values, and you will have whatever the benefits- -hmm happen to come along with those values.
You once told me that w- in your early days at, Harvard, you had a very, dramatic personal travail. You were either gonna make it or not gonna make it.
Yes.
And you shut yourself up and made yourself make it.
Yes.
In the absence of which, you would have been very different today from- Oh, absolutely an esteemed scholar. Now, what was it that gave you that strength? Was it, was it, something that you generated? Was it self-generating, or was it something that, a resource that you inherited, or something that came in through the capillaries of the people who surrounded you at Harvard?
Oh, I suspect that by the time I got there, I was fairly well-formed. I was, 25 years old, as a, as a, as an inter- as a sophomore transfer student. it's hard to know. there were all those factors are there, if I were to look back, and I'm not sure that I'd be the person with the objectivity to, to say. Certainly, having been through adversity before, was some help, because I can remember a number of times in life when I faced tough things, and I said, "For God's sakes, I spent two months at Paris Island." you know? And
it- What else is tough,
yeah. Yes, so you can overcome that. I can remember once when I was dying to be a baseball player, and I injured my right shoulder, and I became left-handed for two years. so those things you draw upon later on. I think many people, in trying to, insulate young people from adversity, insulate them from the things that give them strength.
Okay. Well, now let's, let's, move on to the political implications of some of these, points. One of them is, a continuing war by you against the notion that affirmative action helps people, right?
Yes, but it's more than, it's more than that. It's really a reexamination of the whole set of underlying assumptions- -hmm not only behind this program, but about social thinking in general. One of the things I wanted to deal with in this book, and the reason it's an international perspective, is whether or not a group is, in fact, formed by the society around it, or whether, in fact, the group has its own pattern which follows it wherever it goes. many people who criticized some of my earlier writings said that I arbitrarily attributed to groups characteristics that were really a function of the world they lived in the United States. And so I then looked at groups in other countries, the Germans in Brazil, in Australia, in Russia, the Chinese in, Indonesia, in the United States, other countries, to see do they in fact have their own pattern, or are they simply reflecting what's happened to them in that particular country? And what I found by and large was that they had their own pattern, that the Germans in Australia specialize in very much the same kind of occupations and industries with the same kinds of skills, with the same kinds of, quote, stereotypes, unquote, about them as to their frugality, their hardworking, their thoroughness, their honesty, law-abiding, et cetera, that you find in the United States.
Well, but doesn't that, doesn't that contend a little bit with your notion that the culture is something you go piggyback on, for instance, when the Jews rose in their general level of IQ?
hmm,
hmm. or is it a combination of, bringing your own folkways, mores with you, but also getting on that which is dynamic in the culture you visit? It's,
it's obviously both, as most things are in social causation. But many people came in when the Jews came in, and faced, for example, with the free, public libraries, the free colleges of New York City and so on. many of these other groups never went near those things, or very seldom, whereas the Jews, having a history in which, learning had a certain place that it did not have in other cultures, it was like a gold mine to them. The m- the minute they saw all of this, they seized upon it. at one time, not only were the Jews a majority at CCNY, they were 20% of the, students at, Fordham University, which is Catholic.
So that, what you're saying is that there was something that catapulted them-
hmm...
towards taking advantage of something that our culture provided. Oh, absolutely. And th- therefore, that permitted the ascendancy of their IQ-
Oh, yes...
which would not have been the case if they had found themselves, say, in Brazil.
Or, abso- absolutely. In fact, in Israel, I understand that the Sephardic Jews, who have been in the Arab countries for centuries, have lower IQs than the Ashkenazic Jews- -hmm who have been in Europe and the United States for centuries. So clearly the society has its impact. but it's also true that there are people facing exactly the same situation. For example, youngsters sitting side by side in the same classroom, from different groups, living in the same neighborhood, and yet the IQ differences that you will see will be as large as those among Blacks and whites going to school on the opposite sides of town in Mississippi in the Jim Crow era.
Well now, so the, the, the scare word in any discussion of race is, of course, the word genetic.
Yes.
Because, too often people are delighted to affirm genetic differences-... which, allow for superior and inferior races and so on and so forth. Now how, in fact- is one to distinguish between that which is, genetic and that which is so impacted culturally that it might almost have that effect. You speak about the Ashkenazi Jews- -hmm... and the Sephardic Jews, and the continuing differential is notwithstanding that the melting pot in Israel is now 40 years old.
hmm.
How do you account for that, and is... do you run the danger of the word genetic being used metaphorically to mean also a hard cultural insisted inclinations?
I guess, I guess that the... my emphasis would of course be on the cultural. The Sephardic Jews, for example, who came to the United States and did not have these centuries in the Arab countries, do- are not at any disadvantage vis-à-vis Ashkenazi Jews in the United States. I think that's probably true in places like Brazil or Curaçao as well. so it would be cultural primarily, un- at least in my judgment. Now, there are, there are those who would attribute it to genetics. I had an argument with someone like that last week. The great problem is these things go so much together that taking the Black population of the Western Hemisphere, those Blacks who have a higher percentage of white ancestry, have had enormous social advantages historically. in the United States when there were, when there was slavery, the overwhelming br- bulk of the slaves were Black. But 37% of the free Blacks were in fact mulattos, which is in the, in the American definition, half white or more. In Latin America, there are the countries in which more than half of all the free Blacks were in fact mulattos. -hmm. and in which the great majority of the slaves were Black.
And advantages inured to them?
Hmm?
Advantages inured to them?
Oh, absolutely. Enormous a- well, freedom alone would be one, one big advantage. But even under slavery itself, there were distinctions made between the mulattos and the Blacks. The mulattos being very often the offspring either of the slave owner or of the, of the, of the overseer, and therefore getting preferential treatment. And so throughout the he- Western Hemisphere, those people who are- have higher white ancestry among the Black population have been economically, educationally, and otherwise more advanced. And in many... and in times past, it was quite common for them to attribute their success to genetics, when in fact there were fairly blatant, historical differences. But the question is how would you then separate out the two things, since they always occur together?
So that when Huey Newton went to Cuba and, ended up complaining that all the privates were Black and all the non-coms were mulattos and all the generals were white, he was really making your point.
Absolutely. In fact, I'm amazed with all the, way that the American, performance in the Caribbean has been put under a microscope that no one has noticed that those Cuban soldiers being brought back are Black.
Yeah, right.
And those Cubans who are running the country are white, and the Cubans who are appearing on television, defending, their country are likewise white.
hmm. Well, now, I think people read your book incorrectly who come to the following conclusion, but let me in any event state the conclusions they come to, namely that you o- oppose, efforts political efforts to give equal opportunity, which in fact you do not, correct?
yes.
What you oppose, as I understand it, and as your book very plainly states, is, any preferential treatment that disguises objective standards. Is that correct?
Yes, and particularly since the net effect of the preferential treatment, which is preferential in intention more so than in results, is that those Blacks who are particularly disadvantaged have fallen further behind under these policies, that such policies have, typically benefited those Blacks who are well off, who became better off. And this is true also in other countries. in India, there's, there's a program in Bombay, and someone who wrote about this commented that this program is for the benefit of the, clerks, not the coolies. But that's been true in general, and that's what's true in the United States, that it is not the, it's not the coolies that benefit, it's the clerks that benefit, who then aspire to higher occupations. For example, Blacks who have relatively less work experience, lower levels of education, Black female-headed families, all these groups have fallen further behind during a decade or more of affirmative action. Black female-headed families have had an absolute decline in real income over this span and have fallen further behind white female-headed families. at the same time, Black couples who are both college-educated earn higher incomes than white couples who are both college-educated. so that this whole program makes it, provides incentives to hire Blacks who are safe. Therefore, one will make some effort towards one's quota, but one will not take in people who might not progress enough, for their promotions and discharge patterns to satisfy the government. So you make it risky to hire average Blacks and more, desirable to hire, Blacks who have privilege, not privileges, but, advantages.
Well, now, do you, do you ascribe to the programs of the past 10 years that polarization? Because if so, how does that account for the apparent correlation between those families, those Black families that do not do well, and the increased, vastly increased number of one-parent Black families?
I'm not sure I understand the question.
Well, during the past 10 years, we've had affirmative action.
hmm.
We have also had, - One, we've also had a rise of between 21 to 37% of families, Black families, that have a single parent.
Yes.
I.e., there's been a desertion by the male-
hmm...
by the father.
Yes.
Now, is that a part of the welfare program, or is that entirely coincidental? And to what extent is that, is that the socially causative factor of the phenomenon you're describing?
Well, if I, if I limit my description just to pe- to families that are female-headed, and I compare Blacks and whites, then within that comparison, I see that the Blacks are fall- falling further and further behind. Yet, if I pick almost any measure of more advantaged families, I find the Blacks not only catching up, but in some cases overtaking and passing the whites. -hmm. And there are a number of ways you can look at it, and you get the same result. And what that suggests to me is that those Blacks who have the skills, the experience, the education and so on, are finding things much easier than ever before, whereas those where there's a risk involved in hiring them, the people aren't gonna take that risk. I've, I've seen, heard it ver- explained to me very explicitly in the case of women, and I suspect that they wanted me to draw the same conclusion with respect to Blacks. universities have said, people at universities have said to me, "We will not hire a woman who, for assistant professor unless we're sure she's gonna make as- associate professor, because the cost of legal processes in case she doesn't is so high." I remember telling this to a woman who was a full professor to see what re- response I would get. A
Black woman?
Black woman. -hmm. And her response was, "Yes, that's the way I hire, because I also have no time to waste at the EEOC and in the courtroom."
So therefore, they don't get the same running chance- That's right the white students, the white, scholars do.
If you're gonna hire someone mediocre, they, the employers would be, w- are safer hiring- -hmm... mediocre whites who can be thrown out if they don't work out-
hmm...
without any repercussions.
Okay, now let me ask you this. why when we see on television and when we read the writings of, the overwhelming number of acknowledged Black leaders- Is there no more thoughtful atten- is no thoughtful attention given to such, analyses as your own? Is it because they are b- they are simply wedded to the notion that there is a political solution, or is it because victimization is the easiest way to, for them to account for their plight? What is the dominant reason? Well, b-
b- both of them, because clearly if there is no political solution, then wh- what use are political leaders? people often, emphasize to me the enormous importance of leadership for any ethnic group to get ahead, and my response is often, "Name me three, Japanese American leaders." And, no one has yet been able to do it. But so leadership itself, if you have a, the vision that I have, then leadership itself becomes much less important. And for a leader to say that leadership isn't important is like, you know, a Cadillac saying it doesn't matter what car you buy.
Well, it, suppose we, suppose we take the word leadership away from the political context. -hmm. Gandhi was both. Martin Luther King was both. Now, he had political objectives- -hmm no question about that, but, having achieved those political objectives, on the basis of what you know about Martin Luther King, would he now be saying the same kind of thing that Ben Hooks and others are saying, or would he be saying the kind of thing you're saying?
Oh, it's impossible to know, ob- obviously. certainly, I think, I think it's hard, it's painful for me to hear Ben Hooks mentioned in the same breath with Martin Luther King. but I think that the Black leadership that is currently being so much criticized, I have enjoyed that for, for one reason, that I think that the, declining quality of that leadership is a symptom rather than a cause. That is, if we were in a situation where there were dire and important problems to be dealt with in the civil rights area, that would attract the brightest and the best of the rising generation of Blacks, and you would have a lot better people running, these organizations than Ben Hooks and, Margaret Bush Wilson. -hmm. but I don't think that they are the problem. They are a symptom of the problem. I'm not sure I answered your question.
Let me put it another way. About two years ago, Jesse Jackson made a lot of headlines by saying, "Look, my people are very good at baseball and basketball. I don't see why they shouldn't be very good at math." And then he lectured them about the necessity to spend hours on homework rather than hours in, on television and so forth. He sounded very much like certain passages in your- -hmm... in your own book about self-training. Now, he was, when he said that, something of a leader.
Yes.
But you're insisting on a rather narrow meaning for the word leader. He's got to be sort of an office seeker.
I see what you're saying.
Yeah. is- isn't he, you are a leader- Oh, God help us... without being an office seeker.
In the same sense that Freud was a leader, Darwin was a leader, a man of great influence.
Well, I thank you for the compliment. I'm not sure, how much I can endorse the accuracy of it, but that's for other people. yes, that was a very statesmanlike thing to say. However, m- again, my study of other countries suggests that is not what people want to hear. there was a politician in the Philippines in the '30s who, pointed out that if, the Filipinos were angry at the Chinese, who were dominant throughout the economy even though they were a minority, and wanted to take over their positions, they would have to work the way the Chinese work, as hard as they work, save as hard, live as frugally, et cetera, et cetera. a storm of indignation fell upon this poor man, and no one else wa- wanted to be in his position again. From there on out, people, referred to the dominance of the Chinese as showing exploitation, because that really, is much easier to deal with politically. So the political incentives are really towards saying what people want to hear. And even if you're not an office seeker, if you want to reach a particular audience, you try to reach them with things that they will listen to rather than things they won't listen to. And it's very tough. It's a much longer process to get people to, hear the other kind of message.
And that tends to
require- Jesse Jackson isn't saying that quite as much now as he was.
That's right. That's right, he's not. No, he's not.
And particularly now that he's running for office.
That's right. Hobgoblinization works better.
Oh,
absolutely. Yeah. Well, now George Gilder, points to the study recently released by whatever foundation it was showing this dramatic, - rise in single-parent Black families, and also their failure during the past 10 years to keep pace with white families, and on the contrary, how, Black families with two parents have done so well. -hmm. In other words, the sole thesis, but he blames welfare for this.
hmm.
Do you blame welfare so much for that? I don't... H- how does welfare cause a Black father to desert his family? If-
Well, part of it is, part of it is desertion, but part of it is that the family never existed in the first place. When you're talking about teenage girls who get pregnant and were ne- and never had a, a man in the house, well, n- on a living, you see, there's not even a question of desertion.
Well, but when the figures rise as dramatically as they have done, by 15 percentage points-... what is it that's happening now that wasn't happening then? Just plain more sex, more teenage sex?
Yes, and that, that's happening, I think, in the society at large. Part of the general degeneration of standards in American society.
Well, would a corollary of your proposition that the more we engage in affirmative action, the less we succeed, be that the more we teach sex education, the less we learn?
Oh, abs- absolutely. That, what, what is amazing to me is h- how many propositions there are that are sacred without a speck of evidence and in utter defiance of all evidence, that w-... Sex education was promoted on the grounds that this will reduce-
Illegitimacy...
illegitimacy, teenage pregnancy, which I think is more important than the legal status of the children, and it would also reduce venereal disease. and of course, it was in- instituted, and teenage pregnancy and venereal disease have shot up through the roof. -hmm. I have seen practically no one say, "Let us reconsider this." we have, we have become wedded to certain non-empirical propositions that no matter what happens, these doctrines are so, and they are not to be questioned.
So then if we, if we don't succeed with affirmative action, we need more affirmative action.
I was told that this very morning. I, I pointed, it reminded me of the alcoholic who ha- wakes up with a hangover and figures he has to have a drink to get over this. -hmm.
hmm.
yes, the, there's a tremendous range of these things, not only in the racial area, but, throughout the whole social thinking today.
Well, now do you find that, political activism, which you did not deplore in respect to getting rid of Jim Crow-
Yes...
the political a- activism of the kind that we see today, you, you, you find an inverse relationship between people who engage in politics and people who a- who economically achieve, right?
Oh, absolutely.
Be- because there's a dissipation of effort or because you end up concentrating on the wrong things?
Well, if, historically, those groups that have had alternative methods of rising have chosen those methods. The Chinese in Southeast Asia are, again, a classic example of this. They have avoided politics like the plague, and they have come in usually poor and gone out usually prosperous. in the United States, Germans in colonial America were actually fined because they would refuse to serve in offices to which they had been elected or appointed. Jews in most countries, even when they've been allowed to enter the political process, have done so very late in the game, usually long after they have risen to prosperity by some alternative means. Makes perfect sense as a, in terms of your, re- as, in terms of your options, that clearly if you can do one thing well, you don't wanna do the other thing. But if there's not the entrepreneurship there's not the capital there, then of course this is a very lucrative, thing.
is it a matter of the, ergs of energy devoted or is it simply a matter of the kind of understanding stimulated? The, su- surely if, somebody spends two hours a day in political activism, he's not castrating himself as an effective economic human being, right? It's only if he tu- gets to think politically about his economic situation that there's that ultimate self-destruction, isn't it?
Well, e- except that if he's gonna spend two hours a day in politics, he, the, he's gonna have a pretty strong orientation in that field. Yeah. People don't spend two hours a day doing anything unless that's something that they're oriented towards.
They're gonna politicize their job and politicize their relationship
with
their employers- Oh, yes... and so forth. Oh, yes. Yes. Now, you mention in your book, that perhaps the best example of the relevance of human capital is the rebuilding of Japan and Germany after the war, right?
Yes.
Your point being that there they were, defeated countries w- with no capital, with no credit.
No physical capital.
No physical capital, and no credit.
Yes.
And, here they are.
That's right. That, well, John Stuart... This is not a new thing, although we talk about the German miracle and Japanese miracle. John Stuart Mill in the middle of the 19th century pointed out that countries do often have almost miraculous recoveries from devastations of war. He argued that the physical capital is going to wear out anyway, and it's gonna have to be replaced anyway, and what really matters is do they have the human capital to replace the physical capital? Conversely, you may have all sorts of transfer programs in which vast amounts of physical capital change hands, either because of foreign aid programs or because of confiscations, nationalizations of foreign enterprises and so forth. And yet, if the people who acquire this capital don't have the human capital to ke- to maintain it and reproduce it's only a matter of time before it begins to rust, to wear out, needs spare parts, et cetera. and you've had a one-shot confiscation, but it really hasn't done anything in the long run.
Is there kind of a natural, entropy that whittles away at human capital, or- Are you satisfied that it can be self-generating as, for instance, seems to be in Switzerland, doesn't it?
Yes. There is a tendency of this, human capital to sort of, be like water seeking its own level. -hmm. That is, in a country where there's a great deal of a certain kind of skill, that skill, will not be as productive as in some other country where it's scarce. And so you, for example, find the British, developing the steel industry and the railroads, and then they'll, they'll move to Germany to develop, to build steel industries and railroads in Germany, and even to man them in the early stage because there were no qualified Germans, if you can use those kinds of terms these days. but then at some point, the Germans began to do this for themselves, and then they began to move into Latin America, and much of the industrialization of the southern part of Brazil is, in fact, by Germans, not by Portuguese, and much of the industrialization of Russia, was by people who were not Russian. They were Germans, they were English, they were Jews, they were all sorts of other groups, almost anything other than Russian. Japan is another example where once they were exposed to the Western, technology, they seized upon it and then sort of took the ball and ran with it themselves. There are other cases where they, where the stuff comes in and it sits there and, the people around them don't, don't seize upon it. And again, these are areas where I would like to know the answers, but at this point, I'm happy just to be able to ask the questions because those questions have been ignored so much.
Which is why you question the kind of lazy, formulation of foreign aid, right?
Oh, yes. That there you're simply transferring the wealth that has already been created, but you're not transferring the ability to create that wealth.
What about if you transfer expertise?
Oh, that's easier said than done as well, but I th- I think the expertise, if there is a fertile soil for it, of course that, that can happen. Too often in foreign aid, you're rewarding people for doing all the wrong things. That is, you're, you're willing to s- to lavish foreign aid on Tanzania, because they have bungled so many things and people are on the edge of starvation. You are not willing to send foreign aid to the Ivory Coast because they've done things that worked out. And so you're, you're, you're subsidizing irresponsibility. But I've, s- discovered the very same thing a decade ago in looking at programs for minority students in the United States. It's a certain mindset that you see in every, area, that you want to, n- to give help to those who need it most. And often what that means is not someone who was more disadvantaged at the outset, but someone who was more irresponsible in dealing with the situation.
So that o- on the whole, if you're looking for productivity, you would tend to concentrate on those nations or those individuals who are closest to making it already- Yes
and
needed just that little marginal help.
Yes. But the other thing that happens, too, with foreign aid is that you subsidize counterproductive policies. It becomes easier then for people to oppress those minorities in their countries who have the entrepreneurship. And even in very poor countries, there are often, groups who do have this entrepreneurship, either the m- part of the majority of the society or particular groups like the Chinese, or the East Indians in East Africa, or the Igbos in Nigeria, the Lebanese in a number of countries. And what, and what the political leaders can do is repress, in some cases engage in mass expulsions of those people with all the, who have all the skills that are needed in the country. And then foreign aid will come in and rescue them from the consequences of having done that.
As in Uganda, for instance.
Yes.
Yeah.
Yes.
So, what would have been sensible there would presumably have been to have backed a government that would welcome back those Indians.
Oh, yes. -hmm. And the, the Boat people is a cl- are a classic example, that most of the Boat people were Chinese. -huh. And the reason they couldn't find a home was precisely because they were Chinese, and were so hated. You see, I mentioned earlier that the, skills tend to flow to where they're scarce. But what that means is that there'll be a greater differential between the majority of the people and those who have these scarce skills, and therefore those people who are most needed will be most hated.
Will most hated.
Yes.
Yeah. Yeah. Mr. Sowell, our examiner, is well known to regular viewers of this program. He is as distinguished as a left-wing economist can hope to become. Professor Robert Lekachman teaches at Lehman College. He is the, at the City of University of New York. He is the author of a number of books, including Greed Is Not Enough. Presumably, we need greed and a strong defense, right, Bob? Mr. Lekachman.
I will treat the subject earnestly, Mr. Buckley. Dr. Sowell, we are, it is true, both economists, horrid creatures, as John Maynard Keynes called us, but necessary for a while. What I'd like to explore at the beginning with you is the relationship between, markets and politics. I was struck in reading your book with the very strong view that you take that politics, - broadly are ineffective in altering the condition of any given group, and markets are very powerful.
No, I wouldn't... I, I would have to disagree with that. Politics are very ineffective in improving the position of any groups. They can be very... Politics can be quite counterproductive, for all sorts of groups.
All right, let me accept your correction. Take two groups who have indeed been successful for long periods, both of whom you cite, Jews and overseas Chinese Now, as I read your account of their success, it struck me that what they were lacking was effective politics frequently. The overseas Chinese, time and time again, have been expelled, persecuted, just because they were so successful, which to my mind translates into the proposition that because they didn't organize themselves politically, they were exceptionally vulnerable to the envy and the hostility and the demagoguery, if you like, of, the politicians in the assorted countries, if we're talking about the Jews going back to the 15th century and earlier in Spain, who because they were powerless politically, precisely, were unable to preserve the economic advantages- Or Germany which they had gained.
Or Germany.
Or what?
Or Germany would be an example.
Or Germany, certainly, yes. Yeah. -hmm.
Well, as I think of that, it, the problem is finding examples because the groups that have succeeded as spectacularly as the Jews and the Chinese have done so staying away from politics, and so I'd have to find a counterexample. A counterexample I can think of would be the Chinese after the rise of Chinese nationalism in the 20- early 20th century under Sun Yat-sen, where they exported this to Southeast Asia, where this Chinese nationalism was taught in the schools, where Chinese who had thought of themselves for generations as Thais and Burmese and so forth now began to think of themselves as Chinese even though they lived in Burma or Thailand or what- whatnot. And it's precisely the rise of this that rekindles the hatred against the Chinese in Southeast Asia, which then culminates in the tragedy of the boat people, so that when the Chinese belatedly were dragged into politics, f- in this case, p- provoked from overseas, it blew up in their face. Something very similar happened with the Germans, in Brazil, again, Germans being very apolitical. The k- in f- in the First World War and before, the Kaiser's government tried to make political capital out of them. They began to publish things in, in Brazil, promoting, the Germans and so on. That also blew up in their face and led to, mob riots directed against German businesses and German, residential, neighborhoods. So I can't believe that more of the same would've been better.
But, you know, it leaves one in a very gloomy mood, does it not? Because it does suggest that however hardworking, culturally advantaged in the sense that you've been using the term- Yeah... a group happens to be, in a way, the more successful it is, the more vulnerable it becomes to, you- severe political reprisals. Yeah I don't know exactly what the political solution is, but it does strike me that politics can s- is unavoidable really if a group desires not merely to advance, as you suggest, the Irish in the 19th century in this country used politics to advance their situation, but even to preserve the advantages which, market behavior
has achieved for them. Well, the Chinese haven't had to do that in America, have they?
They've not. but, let me in fact go to a corollary of this, again, on the Jewish, bit. Jews have done well in this country, but they have done well ac- within the confines actually of the politics and the customs of the country. It was very difficult prior to the Second World War for a Jew to become a professor of English. Yes. Lionel Trilling was an instructor practically for eternity at Columbia College before, he was promoted. very difficult until very recently for, Jews to become doctors. Now, they did become successful in alternative ways. But in fact, the markets distorted the use of human capital that would have occurred in the presence of better political arrangements, which leads me to finally a point I wanted to get to on affirmative action Nothing has separated the Jewish and the Black community more- Yes in the last generation than this issue of affirmative action, which for critical Jews invariably is termed quotas rather than affirmative action.
Well, they're different.
What?
They are different.
They are different.. Let me in fact suggest this as a hypothesis. I'd be interested in your comment. Has there not been, throughout our history, a whole set of formal, informal affirmative actions for white males, for Episcopalians, for graduates of Ivy League colleges, pardoning your presence, Mr. Buckley? - Has there not, in fact- Why not him? He- In clubs, I suppose... I'm not sure whether I should include myself. I went to Columbia. -
Oh, yes.
what about clubs like the Century Association in this city, the Bohemian Gr- Grove, the Duquesne Club, - What about them?... the various clubs which are engaged in affirmative action for limited groups of their own members? In all of these clubs, important business is transacted to the benefit of the members and to the discl- exclusion of people who are not members. It doesn't follow. We've had affirmative action of all kinds in this country addressed to the interest of the stronger groups. Now comes a moment in our history when affirmative action for a bit is advanced, for the benefit of groups which have been traditionally at the short end of the distribution of good things in our society, and there is, considerable revulsion against it. Isn't this just a bit of historical justice that's being, as it happens- I'm
afraid I simply do not see the justice in making people who are badly off worse off in the name of advancing them.
Does it... Why do you say it makes them worse off? That neither
does- The figures I just cited, and I could go on if there were a lot, there were many more.
Now wait. That interested me. On page 131, I think... In fact, I'm quite sure. I just looked it up. on page 131, you contrast, as you did in your earlier conversation with Mr. Buckley, you contrast the Black experience in the 1960s and the 1970s. Well, now if I were to interpret the difference, I'd be inclined to point to certain phenomena, notably the oil shock in 1973, the second oil shock in 1979, the sharp recession in '74, '75, another recession in '79, '80. And in fact- What this suggests to me is that the gains of affirmative action are extraordinarily precarious if you run an economy at low levels of activity. that of course affirmative action isn't enough by itself. It would be foolish for anybody, on, even on my side of the issue to argue that. But I would suggest to you that it's a bad comparison because the '60s were a period of expansion with or without affirmative action, given the presence of the 1965 Civil Rights Act, given the 1954 Brown decision and the general climate of opinion, opportunities for minority communities and a majority community, women, -
Question, Mr. Cashin?
What?
Question, please.
We're,... Well, yes. I will come to a question. It's always possible to put speeches into question form. is, in fact, do you really think, these considerations taken into mind, that the '70s disproves the efficacy of affirmative action?
I think that when one, makes a profound change in a society, arousing enormous passions across the board, that the burden of proof should be on those who think that this is beneficial. Because I have been listening very carefully, and yet, I've yet to hear the benefit to disadvantaged Blacks that has been empirically discovered after affirmative action
Well, how quickly do you expect the changes? You know, we're impatient as a people. In fact, as I understand one of your- Well,
we've had dramatic changes in the other direction, Mr. Cashin. For instance, the number of-
Oh, but I attribute them to other cha- to other causes, you see. To
sex.
I attribute the effects to other causes, na- largely to the economic disorders of the 1970s. the problems have been of long-standing in our society. The remedy, if, of affirmative action is a novel one. The University of California, when it presented a, an affirmative action plan, proposed to make about half a dozen women and Black school professors in about 20 years, as I recall the program. -
There were various fractions of people who would have become things in various periods of time.
Various what?
Various fractions. They would, add 3.5 more women and things like that, and I was always fascinated. I had some suggestions of the people I thought would be, right for the.5. But, these suggestions were not, well received. Short people, tall people. No, but it's, it's fascinating that you... See, I see this happening in all sorts of issues from Federal Reserve policies on across the board, that you say, "This here's this wonderful program, and it will do wonderful things." And the burden of proof is on others to show that it will not do those things. And no matter how long it's been going on- It's not long enough... the, it's, it's never long enough. If it failed, it was, there just wasn't enough commitment. The budget wasn't big enough. Should've had a larger staff- True... wider powers. But there's never any sense of a burden of proof on you to say, when you've made this change that has caused such furor in this country and has gotten people at each other's throats, including people who have been allies in the past, such as Blacks and the Jews- -hmm there is never any sense of a need for you to advance the empirical evidence to support what you've been doing.
Oh, on the contrary, Dr. Sowell. I'm perfectly willing to have other people collect the empirical evidence. That's not my bag. but I'm per-... I'm perfectly happy to, to subject the affirmative- action policies to reasonable statistical evaluation given a sufficient period-
Well, what is a sufficient... Because you said for a bit, and now we're talking about a sufficient period. And I have difficulty with these, -
Well-
What temporal units are we talking about? I
would say I-
Centuries or decades?
I would think, I would think of 20 to 25 years as a reasonable period. Because we're talking, after all, among other things, about the progress of just-hired law firm associates, up to the grandeur of partners and
so on. Wait. Mo- most blacks, most blacks are not about to become law firm associates. The real problem is the kid in the South Bronx- Right... who has a tough time getting his first job as an unskilled worker because the employer is scared to hire him because if he doesn't work out and he fires him, he may have to deal with the NAACP, with the EEOC, and God knows who else.
Oh, I have so s- That's- Oh, I have so simple a remedy of, for that, Mr. Sowell. Oh,
this is wonderful.
And I'm happy to share it. Okay. All we need to do is to revert to the goals of the Humphrey-Hawkins Balanced Growth and Full Employment Act.
Gee.
And then employ- Why didn't I
think of that?
Oh, well, that's because you were tired from talking earlier. But, if I, if in fact, if in fact we ran the economy at very high levels of employment, employers would h- be less picky, less choosy, as they were during the Second World War. I don't advocate World War III as a solution to the problem. Good. But it is, nevertheless, we, it is-
Shall I, shall I ask the Humphrey-Hawkins thing? What Humphrey Hawkins represents is doing what we've done in the public schools, promoting people along just because of, you know, it's time for them to be promoted or passed along. And now instead of confining this to the educational system, in which it's been a total disaster, we're now going to extend this into the marketplace so that people will be hired regardless of other kinds of considerations, and passed along, that at no point will they be forced to meet any kind of standards.
Portugal has Humphrey Hawkins- Does it, really?... and
the highest per capita debt in the world.
Well, you know, let me hark back- All in
nine years. It didn't even take 25 years.
I see.
Let me hark back to World War II, where I have the advantage of chronological antiquity to help me- Not that much, really I can recall it. the fact is that during the Second World War, 13 million people were in uniform, I among them by invitation of a group of my neighbors. And, at the same time as we supported a massive military effort, we actually improved the civilian standard of life during the Second World War. Now, how did we do it? We drew into the labor force all kinds of people who had been regarded as unemployable for assorted reasons, good and indifferent, bad perhaps. But it turned out that when there was a shortage of people instead of a shortage of jobs, employers became ingenious.
All right. Let me, let me, let me take that point, you see, because I have made the argument, you see, that the minimum wage law, tends to make it tougher for minorities to be employed. Then by extension, one would say conversely, a maximum wage law would make it easier. And what we had in World War II was a maximum wage law, and therefore we had price and wage controls, and therefore we had a chronic shortage of labor across the board. And under those conditions, women, minorities, et cetera, were hired at unusual rates. So I'm happy to see you agreeing with the, paradigm that I was taught, at Chicago, that indeed the number of jobs and people and so forth are all functions of price.
Chicago has had a malignant influence. -
Not nearly as much as it should have.
It's also, it's also true that after the war, there were n- 9%, Black teenagers unemployed. Now that figure's more like 40%. A- and that's supposed to be after 40 years of progress under your system.
On, unfortunately not under my system because we lacked the time fully to s- sketch my utopia. But it would, it would in fact include, yes, a good many controls, of a kind which any properly educated economist finds repugnant. I therefore identify myself as an improperly educated economist here. Hear. thank you for the applause. I in fact do think that, we can have full employment, let me define it, as the Humphrey-Hawkins target for this year, 4% unemployment. We can have 4% or better unemployment in a climate of considerable governmental intervention in the setting of key wages and prices, which by my lights, and here I find myself in happy agreement with, Ken Galbraith- the friend of our host. which I find indispensable. And your question? And this, I suspect, is something which separates us, among other things that separate us. It's a feeling about how free actual markets are.. I think that there are so many positions, so many situations in which prices are privately set, that I would be happy to substitute public price setters on the ground, the minimal ground- Mr.
Caplan, we must ask a question. We've got a format here that we have
to observe. Ah, well, yes, indeed. I will test my ingenuity once more. I was, I,
I wonder if there's a yes or no answer I'm supposed to give.
given a choice, would you rather have, private price setters or public price setters in markets which are less than competitive?
Well, since I have not seen these, enormous numbers of private price setters that you and, Professor Galbraith have been discovering for so many years, despite having read, your books on this subject, I really have nothing to compare Well, where I see prices set, I see them set by the government.
Only? Really?
I mean, occasionally a few electrical co- contractors get together and they end up, you know- But it's against the law... it's against, it's against the law. Yeah. They are a state re- against the law.
How do you-
We
call it criminal.
That's right. That's right. I mean, we have laws against murder, but murders take place anyway.
How do you interpret, the behavior of the major automobile producers in 1979 and 1980? Dreadful sales years. In both of those years, General Motors and its colleagues raised automobile prices. This is not how they do it on 7th Avenue when the garment business is bad.
I am tempted to say that a- after 25 years of that, I'll be happy to give you my answer, since presumably this is the magic number from which we do our empirical studies. A- and that like you, I haven't bothered to keep up with the automobile industry. and therefore- I'll wait
25 years for you if you'll wait 25
years for me. Oh, it'll be a wonder by then, something to look forward to.
Well, I, I think one obvious commentary is a lot of few pure people bought cars. And al- also, there was automatic indexation of wages.
Yes. - I, I must say the thing that Galbraith strikes me as, his theories in general is showing the utter imperviousness to empirical data, that The Affluent Society told us that we'd reached a level of affluence at which income distribution questions were no longer gonna be important. We then ended upon a quarter of a century of the most intense interest in income distribution questions in the history of the United States. he informed us about the in- industries of the country, that now we had corporations that were immortal, and that really didn't obey the rules laid down in such terrible places as Chicago because they were invulnerable to the marketplace.
Half of
them went bankrupt. W- WT Grant, got wiped out. the Graflex Corporation used to supply 80% of all press cameras. They are now nowhere to be seen on the landscape. neither would Chrysler be anywhere on the landscape but for the intervention in which, so many liberals joined. you know, empirical evidence does matter.
It does. I see less of it than you do. I-
I'm, I'm, I'm willing to believe that because you've said so Evidence... I've, I've been asking you for it, and I haven't gotten any of it, so I'm, I'm perfectly willing to agree with you on that,
but- gentlemen,
we have one minute...
the major piece of empirical evidence that I think you've cited, this hour has really been the contrast between the '60s and the '70s. And I-
No, it's been the contrast between- I suggested that-... well-off people and poor, and barely off people, and that's true in other countries as well, that in Malaysia, where they've had affirmative action for the same amount of time, it's had the same results. It has done nothing for the poor Malays. The lowest level of Malays receive a smaller percentage of all the income received by Malays today than before this program, than before this program was put into effect, as is true of Blacks in the United States. Is
it worthless to do something for anybody but the very poor?
I would like to see the well-off take care of themself. If they can't, who can?
You-
Thank you very much, Professor Laccshman. Thank you very much, Professor Thomas Sowell, author of The Economics of, of Politics and... Is that wrong? The, yeah, The Economics and Politics of Race, and thank you, ladies and gentlemen
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