このゾンバルトに対する取扱いは当分変わらないのではないか。マネタリストの大御所である、ミルトン・フリードマン Milton Friedman (彼もユダヤ系である)が、1972年にモンペルラン・ソサエティ Mont Pelerin Society において、「資本主義とユダヤ人」というタイトルの講演を行なっている。その中で彼はゾンバルトの『ユダヤ人と経済生活』の要旨も紹介し、多くの人々がこの本を反ユダヤ的 Anti-Semitism と見なしていること、そして The Universal Jewish Encyclopaedia のゾンバルトの項目では、「彼はユダヤ人が資本主義をつくったと非難している。 “He accused the Jews of having created capitalism"」と記されていることを紹介している。
Stream Milton Friedman, "Capitalism and the Jews" by UChicagoLaw | Listen online for free on SoundCloud
This recording of University of Chicago Professor of Economics Milton Friedman was recorded on October 15, 1978 by James H. Fox, JD '78.
The speech was originally scheduled for the B'nai B'rith Hillel Foundation, but was moved to the University of Chicago Law School Auditorium upon the announcement the week before of his Nobel Prize in Economics .
In the talk, Professor Friedman begins with two seemingly contradictory propositions (namely, "There are few peoples, if any in the world, who owe so great a debt to free enterprise and competitive capitalism as the Jews," and "There are few peoples, if any in the world, who have done so much to undermine the intellectual foundations of capitalism as the Jews.") and then attempts to reconcile them.
h religion and culture stresses charity uh stresses selfishness and therefore the Jewish anti capitalist values have derived from it well that particular explanation of course derives from someone who himself shares the anti capist mentality and therefore is driven to look for for attractive explanations that explanation can be dismissed out of hand for a very simple reason the Jewish anti-catholic mentality is only two two centuries old it dates from the enlightenment in the 18th century but Jewish religions and religion and culture is 2,000 years old now how is it that for 18800 years that culture and values did not generate an anti- capitalist mentality in the last 200 years it did that would leave just as big a puzzle to explain as you started with moreover if you look at Jewish attitudes during those years you will find that they were pro- free enterprise and not anti free entprise
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a German writer verer sombar who in 1911 wrote a book about capitalism in the Jews and I quote from that book throughout the centuries the Jews championed the cause of individual liberty in economic action activity against the dominating views of the time now verer sart's book is in very low repute among Jewish Scholars the reason it's in low repute is because he maintains that a pro capitalist mentality is entirely consistent with the values and culture of the Jews the people who have been criticizing it are themselves people who hold this anti capitalist mentality and they are therefore very unwilling to accept this particular view he has also been criticized justly for some of his later works after World War Two World War I when he flirted and more than flirted extensively with Nazis but this particular book which is a very fascinating and interesting book shows none of those elements in 1911 and is really a rather interesting discussion of the background and the relation between the attitudes and ideas of the Jews and their religious culture so in any event it seems to me that that EXP explation will not hold order a second explanation which has often been offered is that intellectuals are anic capitalist Jews are disproportionately intellectual and therefore this is purely a statistical bi that if I hold constant whether they are intellectual or not I will eliminate this appearance of a disproportionate anti capitalist mentality among the Jews now these statements are true it is true that on the whole intellectual at least in the past Century or so have largely been anti capitalist it is true the Jews have a disproportionate tendency to go into intellectual Pursuit for the for two reasons one I've already cited Jews are driven to go into those areas where there is the greatest competition the intellectual Pursuits have had large measures of free enterprise and the way of freelance journalism writing acting and so on so that it's been attracted to them but there is a second reason dating back to Jewish history from the hundreds and thousands of years why Jews have been attracted to intellectual Pursuits and that is because if you are A persecuted minority who are subject to being forced to flee from where you are you want to accumulate your capital in forms in which you can take it with and the best way of doing it obviously is intellectual that's why today who which people are in the best position to flee Britain not those who have accumulated physical wealth because Capital controls prevent them from taking their wealth out the people who have accumulated brains the bra I can see that all of you being in the process of making that kind of capital accumulation appreciate but in any event well it is true that the Jews have disproportionately been concentrated in intellectual Pursuit and intellectuals have been disproportionately anti capitalist that is only a very partial and incomplete explanation in the first place Jewish intellectuals are more anti capitalists than intellectuals in general if you take the fraction of any capitalist literature authored by Jews it is decidedly larger than the fraction authored by non-jewish intellectuals allowing for this but in the second place non-intellectual Jews are different from non-jews in the same direction they after all if you take the kind of voting evidence I was citing before in recent times please since the New Deal the situation for reasons all come to is different before the New Deal in the United States but since the New Deal in the United States or really
normous emphasis on athletic activity and now to add the absolutely final Capstone to this demonstration the Jews in the diaspora were marvelous Cooks now this reversely Israel of all the characteristics of the Jews in the diaspora I think supports the view that I was ing that what you have is a reaction against the anti-semitic stereotype an attempt by the Jews subconsciously to demonstrate that they were not like the anti-semitic stud let me give you another kind of evidence
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the intern the universal Jewish encyclopedia in quoting SAR writ and I quote I mean in discussing somar the volume I talked about earlier right he accused the Jews of having created capitalism well now if I were writing that I would say he praised the Jews heed them with creating catholism why would I say he accused them only if I had this anti- capitalist mentality and only if I was trying to deny that Jews were like that stereotype which soar which which the antisemites had expressed consider how consider how differently an Adam Smith or a David Ricardo who believed in free enterprise and capitalism would have valued these traits would have considered such a statement as the Jews had a large role to play in capitalism or considered such traits as a good sense of business a willingness to trade cleverness in financial matters they would have regarded those as that would they would have regarded that as praise for the Jews not as blame not as accusation so I conclude that the chief explanation for the anti-semitic the anti- capitalist mentality of the Jews are on the one hand the special circumstances in 19th century Europe which linked promark parties with established religions and so drove Jews to the L and on the other hand the subconscious attempt by Jews to demonstrate to the world the fallacy of the anti-semitic ser now the interesting thing is that this ideology this anti capitalist ideology is strongly opposed to the self-interest of the Jews the it's it's opposition domestically is clear but let me site you one more strong and striking example let me ask you the following question what would be the state of Israel today if every country of the world were socialist where would Israel have got iial support where did Israel get some financial support throughout its life it got it from the capitalist country it got it from the United States it got it from South Africa it got it from Britain it didn't get it from the governments of Britain in the United States and South Africa it got it from the Jewish residents of Britain South Africa in the United States did Israel get any assistance from the Jews more numerous than in any of these countries of Russia were they able to send Capital to Israel to support it were they able to influence their government to send cap to Israel dis support is there any socialist country from which
Explanation by Milton Friedman of his paper: "Capitalism and the Jews" - YouTube
https://www.youtube.com/watch?v=BnBl92sUMwE
and shabbat shalom this is unusual place for H to hold it's uh Friday night program is talks my name is Daniel eer and I'm the rabbi at the H foundation for those of you who don't know me this program is unexpectedly as you know here sponsored by the p h foundation on campus where both we were both surprised and very much pleased with the announcement that was made this week that Professor freedan had bought the Nobel Prize in in economics I don't think Mr freedan needs very much of an introduction to the University of Chicago to students and people in the community he has uh taught here since uh 1946 in the economic Department that has created The Chicago School of economics and raised a generation of teachers and students he uh Mr Freedman as some of you know was born in Brooklyn and raised in I agree with that I agree with that senent raised in New Jersey and I attended rugers in University of Chicago and Columbia University before coming to to teach here at this University he has taught in in many places throughout the world in this country and elsewhere received honorary degrees throughout throughout the world he is is known as you probably all have read in the papers uh for what he has contributed to economic theory and practice and perhaps like to use a a a Jewish metaphor he has done what uh is required of uh teachers and Scholars and sages he's not only had extended branches wisdom and learning but also Roots deeds and action he's com been able to combine the life of the scholar with a light of Life of involvement in the society and politics of our country and world and he's raised as true teachers a generation of students to follow him now we all know that the discussions in the Nobel committee were heated with regarding to to uh giving Mr Freedman the prize no one of course knows what happened in those discussions because they are secret and behind closed doors however I would venture to suggest that what was the clinching factor in the awarding of the a prize to Mr freedan was the work which he had done and presented at the 1963 lka symposium hurrying to the hurrying to our archives and and retreating that paper which I have in front of me now uh in which he dealt with the mathematical form of the relation between the lka and the humas and as he mentioned in the conclusion of that paper he the result of his research was a formula which now Rivals the famous Einstein equation E mc² and I'll read you the last line of that paper the result of that research the result is L equals q h 2 over3 where the Q will I sure will I sure Hereafter be known as the freed manian context it's with great pleasure that uh we can present to continue that in that tradition on the subject capitalism and the jwm
[Applause]
thank you very much you embarrass me and I may say also please me I appreciate your welcome I am amazed however that a hill Association Hill function should attach such a should should attract such a crowd if the award had been made by Israel I could understand understand it but I didn't know those swets had so much influence in Chicago at any rate I appreciate it very much uh I am a I am a product of the University of Chicago which is a great institution not least for its tolerance of its members and its willingness to accept Mavericks as faculty people and as teachers and uh as and us too we have never been I am glad to say it is one of our glories an institution which has a single set of ideas or a single set of values or a single Doctrine if Chicago schools mean anything it means a recognition of variety and diversity and Independence now the views which I am going to express tonight on the subject of capitalism and will I think be in that tradition and I not sure that Hill will be entirely happy about having invited me to express but after all the Jews also have a tradition of Tolerance and diversity as you know it is an old Jewish saying that if there are two Jews in any Community there are always three synagogues my talk tonight is really is really a discussion of two propositions Each of which I shall try to suggest is validated by evidence and the two together are incompatible one with the other the first proposition is that there are few peoples if any in the world who owe so great a debt to free enterprise and competitive capitalism as the Jews the second proposition is that there are so few people if any in the world who have done so much to undermine the intellectual foundations of capitalism as a [Music] Jew and the theme of my talk will be how to reconcile these two apparently contrad proposition but let me start by first trying to document for you each of those proposition consider the first the benefits which the Jews as a people have derived from competitive capitalism the essence of competitive capitalism is that it relies on the market and the market is colorblind religion blind Grace BR when you go to the store to buy a loaf of bread you have no idea whatsoever whether the wheat from which that bread is baked was grown on a farm owned by a white man or a black man a or a Japanese a Jew or a Baptist whether born again or not so the market is colorblind Monopoly whether it be private Monopoly or governmental Monopoly is not color bline because monopolists are in a position to decide whom they sell to whom they buy from to exercise control on criteria other than market performance I was very much struck by this contrast between the competitive character of the market and the effect of Monopoly on discrimination about 5 years ago when I happened to attend in Montreal Canada an international monetary conference this is a conference which meets once a year uh organized by the International Bank uh banking Association I think it's organized by the American banking Association but it consists the people who are present as members are the two leading officials of the banks of the major banks of the world not only the United States but all through the world one banker there who happened to have the same name as mine and got hold of me to talk to me about the problems of antisemitism in B let me let and him to make a little sort of informal census of the members of that country and it turned out that of all the leading Bankers from around the world who were present there so roughly 1% were Jewish that's the effect of Monopoly in every country banking is a monopoly on the other hand the banking Association asks speakers to speak before them it had a panel of supposed experts to present papers and discussions on the various topics of interest in the biking Community now there you had competition because they were choosing what they thought to be the best asked people to present those papers and I made a little census of the people who were on the program and lo and behold 25% of them were Jewish now that contrast is very striking and it really brings out I think in a very sharp and Clear Point Way the distinction between competition in which Choice depends on performance and on products produced and Monopoly where it is possible to criteria other than performance in deciding whom to choose as you all know the Jews were for centuries in Exile the the great diaspora which lasted well over a thousand years during that diaspora the Jews were able to exist largely because of the of the small area of Market elements that persisted it's no accident that Jews during that period were able to do particularly well in the field of international trade and finance because it was in that area that it was most difficult for governments local governments despotic governments to control things in dealings among nations there must be an element of competitive markets and it was in those elements of competitive markets that the Jews were able to find little chinks here and there and perform a valuable economic and social function which enable them to survive it is no accident that in the Modern Age the two most totalitarian countries we have had experience with Nazi Germany on the one hand and Soviet Union on the other have also been the most anti-Semitic of all countries again this is a result that is to be expected from the fact that they are despotic countries that they do not have an effective free market that they have no competition of course it is not inevitable that they be anti-semitic they might be anti some other small group every totalitarian Society every dictatorial society needs a scapegoat it needs to have a small group on whom it can put the blame for its own mistakes and its own uh errors and it's not surprising that the Jews should be that scapegoat because they have been that kind of a scapegoat throughout history as a visible minority with rather special customs and attitude so I would not argue that in every despotic country it will be the Jews who will be the scapegoat I don't know who the scapegoat group in China is I guess it's the capitalist rotors rather than the Jews but I susp that only because there are no Jews there to be the scap but in Germany as I say and not Soviet Union it was a Jew look in the other direction where are the areas in which the Jews have been able to prosper relatively you will find that it is in those countries that had the greatest degree of competitive capitalism in the 16th and 17th century it was holl that was a Haven for the Jews why because Holland was at that time the leading entrepreneurial Nation the leading trading nation in the world it was engaged in trade in World Markets it had a relatively free economy in the 18 19th and early 20th century it was in Britain and the United States that the Jews were able to achieve the greatest measure of Tolerance the greatest opportunity to improve their life and to live free of persecution and the Prejudice a particularly Illuminating example in my opinion is provided by Germany in the 19th and early 20th century when Germany was essentially a free market economy the Jews were very widely accepted there was a tremendous amount of assimilation after 1934 when Germany turned into a totalitarian monopolistic Society you all know what happened to the Jews not only is it true that the Jews have flourished most in those societies which have had the greatest degree of free market activity and competitive capitalism but within individual societies the Jews have done best in the most competitive areas of those societies I suggest to you that you compare the situation in banking which I already referred to to the situ situation in in retail trade banking is a province of anti-Semitism there is you know despite the popular fiction that somehow or other the Jews control the banks and finance with General Brown a few years ago proceeded to express in his unfortunate ignorance despite that belief the plain fact is that I believe believe there is no industry in this country in which there is greater discrimination against Jews at the top levels than there is in banking why because it is a monopoly because in order to have a bank you have to have a franchise you have to get a franchise from the state your fellow Bankers will have to assure you that banking is a uh is that the bank is needed uh one of the episodes I came across at the time that Anna Schwarz and I were writing our monetary History of the United States it was the episode of the bank of the United States it was a bank which failed on December 11th 19303 1930 it was the largest bank that had ever failed up to that day its failure was a major trigger that produced The Great Depression I don't mean to say that the Great Depression might not have come along anyway but there is no doubt that as it happened the failure of the Bank of United States started a series of runs on Banks and that series of runs on banks was a factor that promoted the Great Depression why did the bank of the United States fail there is no doubt the record is perfectly clear because John Kiron Mor was anti-semitic the bank of United States happened to be one of the only two major banks in New York that was controlled by Jews it was also a bank which had as its clientele many of the small Jewish merchants and Traders in New York and many of the immigrants because they mistakenly thought that its name Bank of United States meant it was an official bank but it wasn't it was a bright Bank why was John Pier Pond Morgan antiemetics because back in 1907 or eight or nine I've forgotten what the date was he was uh he was uh uh subject to investigation by a congressional committee which interrogated him at Great length about the uh monopo supposedly monopolistic actions of various groups he was associated with and the leading figure in interrogating him was a famous Jewish law in addition to which brandise later a Supreme Court Justice had written a number of books pillar pillaring whether correctly or not I don't know I have never looked into that of it but pillaring the Morgan interest as unscrupulous monopolis how do we know how do I know all these intimate details because fortunately there was a member of the Federal Reserve Board of Governors of the Federal Reserve System who was a great gossip and he kept it dialing H Mr Hamlin who was one of the early members of the Federal Reserve System the Board of Governors he was the first chairman of the Board of Governors as a matter of fact only they called it then Governor not chairman he uh kept a diary all his life and his diary fortunately is preserved for us in the Congressional library and he records in that in 1917 or 18 at which time there was a great fight about whether to appoint a particular Jewish Banker as a member of the board there was a great fight of that supposedly on the ground that the banker was a German extraction but really on the ground that he was Jewish and and Hamlin has lunch J Pon Morgan Jr the son of Morgan senior and in the course of the lunch Morgan says to ham I'm going to get those Jews for what they did to my father so we know we have documentary evidence on this how did that fit in in 1931 well the standard the B that happen the bank of the United States was a very good bank it was a perfectly sound B it was liquidated during the worst years of the depression and paid off 92 and a half% 92 a. half cents on every dollar of liability despite being liquidated over a period from 30 to 33 but whereas the standard practice at those times was that if a bank got into difficulty as several Banks had a few weeks before the JP Pond Morgan plus the Clearing House Association of New York would get together a rescue fund to tide it over the difficulties and enable it to surmount temporary runs the Federal Reserve Bank of New York made a similar proposal for the bank of the United States it was almost a great until jpon Morgan refused to go along with it I may say it's no accident that their proposal involved merging the bank of the United States with the only other bank in New York that was controlled by Jews at any rate there is no doubt that that causes the failure I only cite this as a small example of the effects of Monopoly in bank now you contrast that with a situation in retail trade or you don't need a franchise to open up a store where you can do anything where the Jews were able to come in with packs on their back and be itinerant uh Traders and then gradually work and develop and open up stores you take the case or you take a very different case consider the contrast between movies and heavy manufacturing the heavy manufacturing iron steel automobile is another case where there are relatively few je because these are the old Industries uh controlled by the establishment not nearly as monopolistic as the banking industry but with some measure of Monopoly power on the other hand any new industry like the movies when they first developed is bound to be competitive because it's wide open you have very large number of Jews who succeeded in the movies a very small percentage in manufacturing or take a different case take the profession where have you had problems of limitation on Jews in the professions I may say I'm talking about Jews but you all realize that everything I'm saying applies to any other unpopular minority it applies just as much to the blacks as it does to the Jews my particular subject happens to be the Jews and just as the Jews have the most gain from a competitive free enterprise Society so the blacks have the most to gain from a free enterprise competitive Society any minority is in the same position well consider the profession where was there the great has there been the greatest degree of anti-Semitic discrimination in the profession there isn't any doubt in medicine why in medicine because you have an American Medical Association which has had a monopolistic power over the medical profession it's the strongest one either the strongest or one of the strongest trade unions in the United States and for many many years it was able to restrict admissions in the medical schools in order to keep down the number of positions in order to keep up the incomes of Physicians and in the process of restricting entry into medical school if you're going to restrict entry how are you going to do it if you've got 500 people who want 100 places there are only two ways you can do it you can auction off the places that's a free market method and that doesn't discriminate anybody who will pay people who will pay the most will get in or since that isn't quite a polite establishment way of doing it when you're allocating places in medical school except unless the unless the auction is underhanded and since that isn't the way to do it well you have to use some irrelevant criteria you may say you'll do it by ability but you and I know that these exams and tests that are made to testability have some validity but they are very far from being perect and they leave a good deal of leeway you can still have 500 people for 100 places each of whom will satisfy the minimum ability standards well then It's Perfectly Natural that you use whatever is your Prejudice if you're prejudiced against blacks you'll keep out the blacks if you're prejudiced against Jews you'll keep out the Jews if you're prejudiced against Seventh Day Adventist you'll keep out the Seventh Day Adventist well if you compare what happened in law for example where until recently there was much less restriction of Entry versus what happened in medicine the situation is very clear well the summary Jews have very seldom benefited from government intervention there have been a few cases if you go back into the 187 16th century there was a group of so-called Court Jews who were protected by particular Kings or princes because they served a useful function in handling their finances or in arranging for loans for them and so on there have been a few cases like that they are very exceptional in the main the Jews have never benefited from government intervention they have flourished they have had a measure of freedom and freedom from Prejudice only where there has been a large measure of free inter now I turn from the question of the uh first proposition that Jews owe an enormous debt to free enterprise and capitalism to the second proposition the Jews have been consistently opposed to capitalism and have done much on ideological level to undermine from Carl Mars to Leon tronsky to our modern version Mr Mar a very large fraction of all the anti capitalist literature has been authored by Jews it's not only anic capitalist some of it antisemitic including of course KL Marx's own writings which have a very strong strain of anti-Semitism but that's a separate issue if you go through any library of anti- capitalist literature Socialist Communist you will find that that a very large fraction of it a disproportionate fraction of it has been author authored by Jud if you look at the various studies that have been made in recent years of voting records you will find that on the whole there are few ethnic groups in the United States that so consistent LLY vote on what is regarded as the left side of the political Spectrum as a Jew if you look at the various books that have been written about communism in America on the membership of the Communist party there were two groups that were important for some reason which I don't quite understand the fins were one I guess maybe the cess of their climate made anything hot of [Music] TR but I really don't there must have been an explanation and I never have researched but they were one as it happens in the early history of the Communist Party of the United States they were a major element but the Jews were the other major element dominantly over and over again and if you look at every so-called liberal but actually non-liberal movement the so-called liberalism has simply meant liberalism with somebody else's money if you look at such movements you will find again that Jews have played a disproportionate role I don't think I need a stress that to you because I think all of you are aware that this is in fact the case and that if you examine the literature you will come to the same conclusion I want to really go on to what is a most interesting question why why this anti capitalist mentality now this I am by no means the first who have been struck by the antic capitalist mentality and there have been numerous books and studies written about this subject one of the books is by fellow by the name of lawence CES I forgot get the name of the book but it has to do fundamentally with his question of Jewish political values and his explanation is a very simple one his explanation is that the anti capitalist mentality of the Jews reflects values derived from Jewish religion and Jewish culture that the Jewish religion and culture stresses charity uh stresses selfishness and therefore the Jewish anti capitalist values have derived from it well that particular explanation of course derives from someone who himself shares the anti capist mentality and therefore is driven to look for for attractive explanations that explanation can be dismissed out of hand for a very simple reason the Jewish anti-catholic mentality is only two two centuries old it dates from the enlightenment in the 18th century but Jewish religions and religion and culture is 2,000 years old now how is it that for 18800 years that culture and values did not generate an anti- capitalist mentality in the last 200 years it did that would leave just as big a puzzle to explain as you started with moreover if you look at Jewish attitudes during those years you will find that they were pro- free enterprise and not anti free entprise
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a German writer verer sombar who in 1911 wrote a book about capitalism in the Jews and I quote from that book throughout the centuries the Jews championed the cause of individual liberty in economic action activity against the dominating views of the time now verer sart's book is in very low repute among Jewish Scholars the reason it's in low repute is because he maintains that a pro capitalist mentality is entirely consistent with the values and culture of the Jews the people who have been criticizing it are themselves people who hold this anti capitalist mentality and they are therefore very unwilling to accept this particular view he has also been criticized justly for some of his later works after World War Two World War I when he flirted and more than flirted extensively with Nazis but this particular book which is a very fascinating and interesting book shows none of those elements in 1911 and is really a rather interesting discussion of the background and the relation between the attitudes and ideas of the Jews and their religious culture so in any event it seems to me that that EXP explation will not hold order a second explanation which has often been offered is that intellectuals are anic capitalist Jews are disproportionately intellectual and therefore this is purely a statistical bi that if I hold constant whether they are intellectual or not I will eliminate this appearance of a disproportionate anti capitalist mentality among the Jews now these statements are true it is true that on the whole intellectual at least in the past Century or so have largely been anti capitalist it is true the Jews have a disproportionate tendency to go into intellectual Pursuit for the for two reasons one I've already cited Jews are driven to go into those areas where there is the greatest competition the intellectual Pursuits have had large measures of free enterprise and the way of freelance journalism writing acting and so on so that it's been attracted to them but there is a second reason dating back to Jewish history from the hundreds and thousands of years why Jews have been attracted to intellectual Pursuits and that is because if you are A persecuted minority who are subject to being forced to flee from where you are you want to accumulate your capital in forms in which you can take it with and the best way of doing it obviously is intellectual that's why today who which people are in the best position to flee Britain not those who have accumulated physical wealth because Capital controls prevent them from taking their wealth out the people who have accumulated brains the bra I can see that all of you being in the process of making that kind of capital accumulation appreciate but in any event well it is true that the Jews have disproportionately been concentrated in intellectual Pursuit and intellectuals have been disproportionately anti capitalist that is only a very partial and incomplete explanation in the first place Jewish intellectuals are more anti capitalists than intellectuals in general if you take the fraction of any capitalist literature authored by Jews it is decidedly larger than the fraction authored by non-jewish intellectuals allowing for this but in the second place non-intellectual Jews are different from non-jews in the same direction they after all if you take the kind of voting evidence I was citing before in recent times please since the New Deal the situation for reasons all come to is different before the New Deal in the United States but since the New Deal in the United States or really since the days of Al Smith in New York the ordinary Jewish population and not simply the intellectuals have been the major source of the membership in the Socialist Party the Communist Party in the leftwing elements of the democratic party and so on it is not really any surprise that the most left-wing members of both the Democratic and the Republican Party in the Congress tend to come from New York which has the largest concentration of Jewish voters of any city in the country so I do not believe that's a satisfactory explanation a third possible explanation and this one also none of these is entirely without some F I don't mean to argue that they're I'm going to be able to come up with single explanation which excludes all others I think each of these has a point but I think that they are not separately powerful enough to explain the phenomenon a third explanation is that it is natural for every group to take good things for granted and to blame the bad things on the system under a capitalist free enterprise system in the United States and Britain Jews experienced far less discrimination than they had ever experienced anywhere else before but there remain anti-Semitism there is no doubt there remained anti-semitic free Prejudice and it is understandable that there is a tendency to blame the residual anti-Semitism on the capitalist system you don't say well look at all the uh how much better off on him than I would have been under so much other system that's next you look at the uh you look at the bad Els I think there's a great deal to them but it's not a very satisfactory EXP ation because why should you blame the bad things on the aspect of the system which is epitomized by capitalism and competitive catholism why not blame the bad residual elements on the church for example or on the attitudes of the aristocracy or on the bureaucrats why pick on the market system as the focus of your attack I think that there are two other explanations that I personally find much more persuasive and much more significant than any of these that I've so far CED one of them is an explanation that was offered in a doctrinal dissertation written by I don't believe it's ever been published but it's a doctoral dissertation written I believe it's the either at NYU or the new school in New York by a man by the name of Berard C and his explanation in is that beginning with the French Revolution in the 18th century the European political movement consisted of a rightwing which was closely connected with the church and with religious movements the Christian Movement the left movement on the other hand the Socialist Party the Communist Party were anti claric as opposed to now very few Jews could find any home in the right the only place for any Jew in any political movement was in the left he was unacceptable to the right they might have been Market oriented but they were also oriented toward particular religion they had the prejudices of that religion and he could hardly be at home there on the other hand the left was explicitly antic clerical and it offered the only place where a Jew could engage in political activity and a political movement without being uh out of plan now the great some I cite one example which may seem to be an exception but I think really illustrates the point I've made and that point is Israeli the English politician conservative politician of the 19th century he was Jewish not in religion however in origin either his I think his father already or certainly he had converted to Ang anglicanism he was himself a devout Anglican had no Jewish upbringing and he didn't conceal his jewishness on the contrary he used it as an effective way to make himself an attractive and mysterious and sort of esoteric figure as you know delli was a great novelist he was a great eccentric and he appealed to the British people as an eccentric uh and the jewishness added to his appeal but it wasn't a jewishness which was in any way inconsistent with his identifying himself with the Anglican church and being as high church as anybody you could find in Britain so I think that's a a very interesting Cas because it is an exception I think that proves the rule now the same principle now I think that con's explanation is extremely important for Europe and goes a long way to explain why in the European context the Jews almost always ended up in the left I should add in a fuller Exposition and discussion uh of the kind that you find for example in some of Han ER books you will find that there was also a socialist anti-Semitism that the anti-Semitism was by no means confined to the r there was a very strong element of it left but on the whole at the intellectual level the left being anyti clerical had home a home not for religious Jews never but for agnostic Jews for Jews who were not willing to accept another religion not to become Anglican like Israel but we're willing to become sort of enlightened uh citizens however that doctrine that explanation is very hard to apply in the United States that situation was not true here it was not true in the United States that anything you would call a party of the right was religious and a party of the leftand and it's very interesting to note that in the United States until the 1920s the Jews were not associated with the Le the great hero of the American Jews in the first several Cent Decades of this century was Theodore Rosevelt a republic and he was a great hero because he made public and open protest against the pums in Russia in the early 20th century he was very influential in keeping the doors open for Jewish immigration from Russia and Eastern Europe to the United States and the Jews who came over regarded Teddy Roosevelt as their great protector and so in fact until Al Smith Rose in New York the study suggest that the Jewish votee was Prim arily Republican so this explanation will not do for the United States it has an impact on the United States because after all the in the The intellectuals Who migrated to the United States carried with them their European ideas they were formed in Europe and they brought them over so the enlightenment effect carried over to the United States but I think for the United States that can provide at most a very partial explanation I think there's a second explanation and here I I this is my own I I can't attribute it to anybody else neither the credit nor the blame my own explanation is that anti-Semitism was based on or produced a stereotype of Jew it was based on the notion the Jews were money grubbing grasping selfish people now there's nothing wrong with paying money grabbing and stuff but popular opinion nobody it's very hard for anybody to immunize himself from the intellectual cultural valal in which he lived and the Jews accepted the values of the society in which they live and those values denigrated those characteristics and the Jews said to themselves if we were were like that the NS smites would be would be right and therefore we're going to demonstrate we're not like that we're going to demonstrate that we're not money grubbing that we're not selfish but on the contrary we were altruistic that we believe in in doing good through government and we believe in a very different philosophy I was first led to this hypothesis the first time I spent some time in Israel and I was enormously impressed by an observation I formed that and has been reinforced in subsequent trips to Israel and that observation was if you wanted to know what was true in Israel you asked yourself what was true of the Jews and the diaspora and reverses this applies over and over again in the diaspora the Jews were predominantly Urban in fact in most countries they were not permitted to own lands they could not be agricultural they were Urban Petty merchants or bouris or Petty manufacturers in Israel the greatest Kudos goes to the agriculturalist it's the kabut with the agricultural activity which is the preferred form of activity in the diaspora the Jews were non-m militaristic a very large fraction of Jews who came to this country from Russia came to avoid the draft to avoid getting into the army so in the D diaspora they were the military were formed from other classes in Israel there is enormous emphasis on the military it's a great and indeed the ablest people in the society go into the military now you can explain those two phenomena not by my interpretation but by saying that after all for a new nation to exist and to be able to develop it was necessary to develop agriculture threatened on all sides by enemies it was necessary to develop military that's true but so let me go on to some other characteristics the language of the Jews and the diaspora was yish the language of the Jews adopted in Israel explicitly rejected Y and accepted Hebrews going back 2,000 years developing and making into a language what had become essentially a dead language adopting Hebrew as the language of the people at the time we were first in in Israel Not only was Hebrew the main language but yish was looked down upon as a language it was sort of not der rigored to speak yish now as a result of a very popular uh politician Lev Esco who used many unish phrases the popularity of ysh apparently revised but even today it's sort of not a real language it's Hebrew that is a dominant language a rejection of the language of the diaspora the Jews in the diaspora were never very athletic if you think there's an overemphasis On Athletics in this country you should go to Israel there's an enormous emphasis on athletic activity and now to add the absolutely final Capstone to this demonstration the Jews in the diaspora were marvelous Cooks now this reversely Israel of all the characteristics of the Jews in the diaspora I think supports the view that I was ing that what you have is a reaction against the anti-semitic stereotype an attempt by the Jews subconsciously to demonstrate that they were not like the anti-semitic stud let me give you another kind of evidence
47:40
the intern the universal Jewish encyclopedia in quoting SAR writ and I quote I mean in discussing somar the volume I talked about earlier right he accused the Jews of having created capitalism well now if I were writing that I would say he praised the Jews heed them with creating catholism why would I say he accused them only if I had this anti- capitalist mentality and only if I was trying to deny that Jews were like that stereotype which soar which which the antisemites had expressed consider how consider how differently an Adam Smith or a David Ricardo who believed in free enterprise and capitalism would have valued these traits would have considered such a statement as the Jews had a large role to play in capitalism or considered such traits as a good sense of business a willingness to trade cleverness in financial matters they would have regarded those as that would they would have regarded that as praise for the Jews not as blame not as accusation so I conclude that the chief explanation for the anti-semitic the anti- capitalist mentality of the Jews are on the one hand the special circumstances in 19th century Europe which linked promark parties with established religions and so drove Jews to the L and on the other hand the subconscious attempt by Jews to demonstrate to the world the fallacy of the anti-semitic ser now the interesting thing is that this ideology this anti capitalist ideology is strongly opposed to the self-interest of the Jews the it's it's opposition domestically is clear but let me site you one more strong and striking example let me ask you the following question what would be the state of Israel today if every country of the world were socialist where would Israel have got iial support where did Israel get some financial support throughout its life it got it from the capitalist country it got it from the United States it got it from South Africa it got it from Britain it didn't get it from the governments of Britain in the United States and South Africa it got it from the Jewish residents of Britain South Africa in the United States did Israel get any assistance from the Jews more numerous than in any of these countries of Russia were they able to send Capital to Israel to support it were they able to influence their government to send cap to Israel dis support is there any socialist country from which Israel has receive support not at all had every country in the world conformed to the dominant theme of Jewish intellectual ideology Israel would never have been able to exist not the slightest Chanel you now I may say let me go back to Israel because I think it's a fascinating case after the first visit I made to Israel I came away from Israel saying that Israel was a society in which there were two Traditions fighting with one another there was 150 year old tradition of democratic socialism soal which called for government planning in central control there was a 2,000 year old tradition of how you get around government regulations and I said fortunately for Israel the second tradition was much stronger than the first so even internally in isra it was a remnant of the pro capitalist mentality and traditions that have enabled Israel to survive economically internally it is the existence of capitalist countries outside the world that has enabled Israel to survive as a result of external support well now when there is such a strong now of course in the United States the contrast between the ideology and the self has been less blatant and indeed in some respects there has been a coincidence who are the people if you look at it the other way who benefit most from an extension of government interven of government control well you ought to know from the building we're in it's the lawyer it's the social worker it's the economist economists have a schizophrenic position from this point of view their intellectual discipline leads them to be in favor of the market because they understand the workings of the market they recognize its virtue their private self-interest leads them to be in favor of government intervention there's nothing that creates jobs fre Economist more readily and more rapidly than an extension of government intervention economists reconcile this schizophrenia in very many cases by being in favor of the market in general and opposed to it in [Music] particular they are very clever at dreaming up all sorts of external effects and distortions and vages of the market to operate which justify special interventions that will create jobs for us the only people who are better at that are the lawyers now it does so happen that these are activities in which Jews have have played a considerable role a large fraction of Jews are employed in these areas and in this respect they're self-interested to some extent coincides with the expansion of the government SP but on this broader level I think it is is worth emphasizing I think it is clear that the self interest of the Jewish community at large is opposed to government intervention but in the main up to now in the United States internally that had not been too serious a matter because most government intervention was in areas where Jews didn't play a large role it was possible for a long time for Jews to have their cake needed too they could be in favor of moving towards socialism in the field of the public utilities and the Telegraph and the railroads and the banks where they don't play a role well at the same time they could prosper in the competitive market of retail trade of the movies of the amusement industry of various aspects of education and the life but increasingly as Government expands its cope that's becoming more and more difficult and the conflict between the self-interest of the Jews in the market and their the effect of government expansion is becoming clearer whether that conflict will in the course of time cause a change in these attitudes I do not know but I think it is helping and will help to undermine those activities in any event I think it would be highly desirable for the Jewish intellectuals to become far more self-conscious and far more critical of these attitudes who say have developed and to understand to a fuller extent the way in which the market is a system and the only system which will permit diverse groups to cooperate with one another which will permit each person to go his own way while every other person also goes his own way thank you accordance with Jewish tradition we should have some questions he didn't say anything about an and I will be glad to entertain any questions who would like to raise a question yes back here yes that the world be improved not there's a world you die you improve the world you can improve but that Messianic is consistent with BL and capitalism in the free market is the most effective way to improve it you let me take you on this issue let me go back for you on this issue because I think yeah go ahead what you go back you said say the world evil andal but why does capitalism epitomize the world why doesn't the government intervention epitomize the world you're begging the question by say you say look at the Messianic tradition because there is certainly a Messianic tradition and now look at at for a moment not at the in but at the charitable activities of the Jews they have been carried on through free enterprise they've been strictly voluntary there are few groups in the world that have done as effective a job in charitable activities and providing institutions of all kinds for going back in the United States to the great inflow flux of refugees or immigrants from Europe in the end of the 19th century there was an establishment on voluntary Arrangements of of of associations to Aid the immigrants you have had the voluntary Jewish hospitals the voluntary Jewish schools and Charities you know the fact is that the free market is a far better and more effective way to do good than government control I give you not only the Jews in this respect but I give you the whole history of the United States what is the period during which you have had the greatest explosion of elimary charitable activities in both the United States and the United Kingdom Britain it's the 19th century when you had the closest approach to free ENC that was a period which saw the development and the expansion of elimary of the nonprofit hospital it saw the University of Chicago was founded in 1890 how by private activity not by governmental activity the middle west and the whole country are peppered with schools and colleges that were founded in the same way the association for the prevention of cruelity to animals the Red Cross the foreign Mission all take back to the 19th century one striking statistic which I has impressed me is that under British socialized medicine 2third of the beds in hospitals are in hospitals that were built before 1900 by the charitable activity of the 19th century so that after all the Messianic tradition is perfectly compatible with the belief in voluntary activity you must interpret the market broadly the market means voluntary cooperation it means voluntary cooperation in economic activities but it also means voluntary cooperation and non-economic activi and the market is a far more effective way to get people to cooperate for for charitable activities and is governmental Arrangement this period of the 19th century when Grace not charitable organization started but weren they started in essence to cope with whether not whether right or wrong with perceptions of the the evil of capitalism no they were because they were established to cope with evils but not evils of tling of course but poverty my God are you going to tell me that poverty has some kind of close relationship to [Music] capitalism where do you have the greatest poverty in the least capitalist Nation the only countries in the world that have come close to eliminating what most people around the world would regard as poverty is the United are the capitalist countries like the United States Sweden Western Europe the the level of income that in the United States the level of income that in the United States by official standard is called the poverty level is high is higher than the average income of all the people in the Soviet Union you must for you know your percent there is no there's been no machine ever developed for eliminating poverty has effective as capitalism look you and I are evidence of this many of the people in this room like myself have parents or grandparents who came to this country in the 19th century with empty hands we are able to have a relatively affluent life because the free enterprise system of the United States in the 19th century provided them with an opportunity of making a new life in this country which was far ior to the one from which they came you know people vote with their feet in a very much more impressive manner than they vote at The Ballot Box and the millions and millions of people who scamed to the shores of this country weren't screaming to become poor who would like to alleviate economic problems like a doctor goes to cure disease which is your excuse for advising the [Music] children better talk better talk we believe in free speech well I wasn't around at that time and I didn't move to strengthen the Y in Chile in the first place I have not advised the Y in Chile I have advise the people of Chile I was in Chile for six days a year and a half ago you know as I say over and over again I don't know whether to be more amused or more flattered by the influence which I am attributed over Chile I was in Chile for six days a year and a half ago I had not never been in Chile before I have not been in Chile S I had not talked before that to any Chilean government official I have had no conversation with any Chile and government official F but I'm running chill but in any event I went to Chile under private offices I gave lectures in Chile in which I the public lectures in which I stated what I believe I went there to advise the people of Chile and also the Government of Chile if they wanted to listen to me I'm as I told this lady before but of course her memory is short as I told her before I have also gone to Yugoslavia and given speeches in Yugoslavia does that mean I'm running the communist state of Yugoslavia or that I'm a communist I have also been in the Soviet Union I'm not a communist either I've been an Indian I assure you I'm not responsible for ende G destruction of fom in India so in any event I think enough said about Chile let that cool down terrible that's right sure I think Sweden is an interesting case the really interesting case is the comparison between Sweden and Great Britain now I should say in the first place that I do not know a great deal about Sweden I I I think I'm going to have an expense pay trip there in s and I will try to extend it for a couple of days precisely to see if I can get some more information to answer your question more fully I think your question is a very real here we have in which government spending at all levels has reached 60% of the national income here we have swed in which government spending at all levels has reached roughly the same proportion Britain is in a state of imminent collapse it has experienced very rapid inflation its standard of living has been going down you have the incredible phenomenon that whereas before World War II the standard of life of the average resident of Great Britain was twice the standard of life of the average German or Frenchman after today it's precisely the other way around the average standard of life of the German or the Frenchman is twice that of the English so you obviously have a tremendous failure in the economic area in addition to which I think Britain is in a very delicate state with respect to the maintenance of his political Liberty I think it will be a miracle if a really truly free Democratic Britain survives the next five years on the other hand in Sweden where supposedly the percentage of government income is the same you do not seem to have those phenomena at all Sweden has had a very high standard of life it's production has been going up until very recent years and uh there does not seem to be any major threat to the political system in swed and the question is what now there are as I say I'm not entirely confident in my answer and what I'm going to give you are my tenative explanations in the first place I believe that the swedes have confined their governmental activities to redistributive measures to a far greater extent than have the British that the British have gone much farther in the direction of nationalization of Enterprises of interfering in the control of the industrial system and this has part ly reflected the fact that the British have much greater barriers to Imports in subsidies to exports than have the swedes the swedes have maintained an essentially free trade society and free trade international free trade is an enormously effective way of introducing competition within a country I often ask people in the United States they I have a kind of a game in which I say people tell me the one law that you pass if you could pass that law and your only objective were to promote competition now most people will talk about strengthening the anti trust law or something like that but the right answer without question is to eliminate tariffs and have free trade that would do more to promote competition in this country than anything else well in Sweden you have had in the second place equally important I think it's a social F I think the extent to which you can carry government control and government intervention depends very critically on the homogeneity of the population the essence of a market system is that it is consistent with diversity it permits people who differ in many dimensions to cooperate with one another on the particular economic Dimension you don't have to agree with the fell you're buying and selling something from all you have to do is to have it mutually attractive for you to buy and sell on the other hand political Arrangements tend to promote home tend to prevent divers they tend to move toward uniformity you have to have bureaucratic rules and bureaucratic arrangements to to treat people on an administrative basis well now the Swedish it's an interesting thing the problems of Britain were very much less before World War II than they have become since World War II and I think a major reason for that change in Brit and this is I'm now analyzing it I'm not saying whether this was good or bad but the major reason for that change is that the British had a very large immigration from the Commonwealth after the war and they are now a much more heterogeneous people than they were before whereas the swedes are an extremely homogeneous people now there may be still other explanations and it may be that the Swedish situation is temporary the fact that the public at large has voted out the social democratic government and put in a coalition of other Pary suggests that it isn't the paradise that we have been led to believe with respect to personal freedom the experiences of bgment and of other people suggest the same but nonetheless so far as I can go I would say those are the reasons now let me emphasize we're not talking about pure cases there is no purely capitalist free market system in the world Hong Kong comes pretty close but it isn't really all the way the United States the 19th century came very close but it wasn't all the way there is no purely collectivist system private Enterprise and the free market are a major factor in Soviet Union the 3% of the land area that is permitted to be used as private plants produces 33% of the food of the Soviet Union you have a recent book which I recommend to all of you by HCK Smith on the Russian which is a fascinating book is sp of stories about the gray Market which exists in Russia if you want if you have trouble with your electric appliances you don't call the state firm you'll be six months before they get there you have somebody on the private come in at night and repair it for you you pay and so there is a very extensive and flourishing free market in the Soviet Union so you don't have cases that are extreme po cases and remains true that in swed it is predominantly Capital so far as the organization of production is concerned not so far as the distribution of income ised merchs inket of D EXP you think the public is generally aware that the Nobel prizes are tical Awards well I am not going to defend the Nobel Prize I'm perfectly willing to accept him but not to defend yes who want to raise a different yeah yeah you back that's right the first grow was a no not you I was he's fashional I don't understand that fashional you know in a free market you take your opportunities as they come well I do not believe that you can distinguish the Quest for economic freedom from the Quest for political freedom in fact it's not entirely clear to me how I make that distinction at all let me ask you a question how many how many professors of medicine at major medical schools in the United States would stand up and talk against socialized medicine at the drop of a hat when most of their research is being financed by the National Institute of Health is that a violation of their political Freedom or their economic freedom how much criticism of governmental activities do you hear from the big businessmen very little big businessmen are very reluctant to speak freely because they are a little worried that if they do the internal revenue will be down examining their books the next day and the antitrust division the day after that how many students St thinking of their future careers as governmental civil servants and bureaucrats even students who are the most independent of all really feel completely free to express themselves politically in every single way is it in in in in countries which have had for example exchange control when Great Britain had exchange control and it's now reimposing it and other countries have Israel has had to change control if you want to buy books that are published abroad you have to get the permission of a governmental office is that a restriction on economic freedom or a restriction on political Freedom now I think the the fact is that it's extremely difficult to make that distinction what you have in mind are the maintenance of the political institutions of the bot now the fact is is that no country of the world has been able to maintain even those institutions those political institutions unless they have had a predominantly free economy I do not know any exception to that rule and I wonder whether you can tell me any and consequently I think that there is not it is not right to distinguish between the search for economic freedom and the search for political freedom I think they are part and partial of the same thing you want is no no come back a lot of people well let me uh let me see if we can examine that in the first place I I deny I think the proposition is almost the rers of capitalism promotes internationalism not National free market capitalism is a system of free trade free international trade the 19th century period of capitalism of the high TI of capitalism saw the greatest extent of internationalism and lack of you know before World War I you didn't need to carry a passport to travel anywhere throughout the European the Western World the United States Britain Europe before 1914 people could come to the United States without having a passport without having to have a Visa without having to be approved by immigration Authority anything like that they just came it was free movement and the same thing was true throughout the continent of Europe free trade there is nothing that is so effective in resolving the barriers of nationalism as free trade and and it's really precisely the opposite nationalism was on the decline during the high tide of capitalism when did nationalism reemerge when the state started to occupy to take it larger allerg Ro what's the point of being nationalistic if you don't have a government that can do something there's no point of being strongly St let's go out of the ordinary ones look at what's happening in Britain as you become more and more socialist you have the development of the Scots and the wealth why because now there are goodies to be divided on and you better get in control of those goodies take a simple example here is the North Sea oil in the capitalist world the government wouldn't be having anything to do with it that would be a private Enterprise activity it might be individual Scotchman who would only the ow it might be Englishman it might be Frenchman it might be Germans it might be us but today everybody knows that that North Sea o is going to be controlled by a governmental and if you're a Scotsman you can therefore see that there is great benefit in having a separate Scotch government which can control that nor in the same way in the Arab countries as long as it's individuals are tra which is the essence of the C Society you don't have any development you don't have any opportunity to exercise nationalism the time you're describing why do you have nationalism in those countries because in every one of them you have it controlled by an oligarchy which has the control over the society you take the case of German and a in the first place the depression of which Germany there's no doubt that the depression in Germany stimulated him but that Depression was a result of a failure of government not capitalist system it was the United States Federal Reserve System that produced that depression which spread to Germany it wasn't any failure of the business enterprise system I know I can't persuade you of that right now but I will recommend to you a very good book so I think if you really look at the evue you will find that it really runs in the opposite direction that the whole thrust of free market capitalism and Enterprise is to emphasize the individual now don't misunderstand me when I say the individual I don't mean the isolated naked individual separate from all this stuff it emphasizes voluntary associations of individual those voluntary associ may be churches there may be charitable groups to get on hpit but the one thing it doesn't impr are fix permanent boundaries corresponding to nation states and the rise of the great nation states the rise of Nationals has been a phenomenon of a growth of government bureaucracy and control and not the opposite I think we have time for one more question and I will itad anybody back there who was go ahead my finger is not very directive I mean the young lady who is no it isn't there is no doubt that every that you always have Tendencies toward everybody will attempt to form a man of course we all want to improve our lot and we'll all try to form them man now the question you're raising is the question is whether there is something inherent in C so that it tends to promote the growth of monopo that's an arguable position in the sense that it could be some but it's also a position which has been extensively investigated and stud and the answer is that unless you get the government in on the side the Monopoly and the Monopoly will try to get the government in don't misunderstand me I'm not saying that the Monopoly will not try to do so unless you get the government in the monopolies will not be promoted but on the contrary will break down almost without exception International cartels to take a particular case which have not been able to get the government on their side have broken down because of competition from outside the only exception of any importance I know of is the De Beers diamond within the United States there have been a number of studies most of them done at this University by George Stigler by Warren Nutters and others which have shown that if you exclude the government dominated Industries or the industries where the government more or less monopolizes the industry there has been no secular tendency for monopolies to increase in importance what happened is that as the economy has gotten larger the firms have gotten larger but that doesn't mean you've had more Monopoly because in a bigger economy a bigger firm you can have more firms of a large size and in a smaller economy you can to have small firms the developments in communication and transportation which capitalism itself has sprad widens the area of the market in a 19th century Society with difficult transportation and communication you could have a great deal of local minority that largely disappears when you widen the market if you could eliminate where and when you can eliminate tariffs and have foreign trade you have the world as competition so I do not believe there is any inhering tendency in a capitalist assern to move toward monop you certainly have people trying to achieve it but you know the bigger they are the harder they fall and when you get a monopoly that tentatively a success that opens an opportunity for other people to undermine of an and there is a tendon there is a force in the other direction you see there are two forces at work one the coalescing force and one the disperson and there is no evidence whatsoever in the to the best of my knowledge empirically in the United States or in other countries that the coalescent force has some kind of innate power provided and that's an important provisor you can keep the government out if you get the government in there's no doubt if you ask where do you have Monopoly in the United States you have it only where you have the government stepping in why is the AMA monopol because you have the government license sh of medicine the uh why are the uh Banks monopolised because you need a government franchise to operate a bank and you're subject to government control how can the uh construction trade unions maintain their Monopoly power because of Davis bake and Walsh healing and so on Down the Line almost everywhere you find a monopolis to government you find government assistance now so your argument you have to make your argument if you will a little bit more sophisticated and there it's a much more difficult argument to handle the argument that you can make is that firms and seeking to become a Noni will seek to expand the role of government by getting political power to come in on their side and therefore via that movement you get into to a problem of government control I have often said that the two greatest enemies of free enterprise are on the one hand the businessmen and on the other hand the intellectuals for opposite reasons every intellectual is in favor of freedom for himself he wants free speech he wants freedom to choose his own research topics if I say to him are you silly felon look at all that waste and research you got 10 people studying the relation between money and income ought we to have a single planning board that will allocate research topics to people to make sure you don't have wasteful duplication and competitive uh way oh no that would be terrible you have to have freedom but when it comes to the businessman the intellectual doesn't want any freedom for him he wants him to be subject to a planning board so you'll have the intellectual wants freedom for himself but for nobody else now the businessman is very different he's all in favor of freedom for everybody else but when it comes to himself H that's a different thing he wants a tariff he wants government to keep out his competitors he wants government to provide him with a guaranteed market and he's a good promoter of expansions of government so that along those lines I really believe there is a very serious problem of maintaining a free society and that one of the forces working to expand government are the pressure from private business in but there's no you if you can keep the government out there is know in here in Tennessee along your line I'm afraid we've overstated our time I appreciate your attention thank you this audio file is a production of the University of Chicago Law School visit us on the web at www. law. chicago.edu [Music]
0:01and shabbat shalom this is unusual place for H to hold it's uh Friday 0:07night program is talks my name is Daniel eer and I'm the rabbi at the H 0:12foundation for those of you who don't know me this program is unexpectedly as 0:19you know here sponsored by the p h foundation on 0:24campus where both we were both surprised and 0:30very much pleased with the announcement that was made this week that Professor freedan 0:37had bought the Nobel Prize in in economics I don't think Mr freedan needs 0:43very much of an introduction to the University of Chicago to students and people in the 0:49community he has uh taught here since uh 0:571946 in the economic Department that has created The Chicago School of economics 1:04and raised a generation of teachers and students he uh Mr Freedman as some of 1:12you know was born in Brooklyn and raised 1:18in I agree with that I agree with that senent raised in New Jersey and 1:31I attended rugers in University of Chicago and Columbia University before 1:36coming to to teach here at this University he has taught in in many places throughout the world in this 1:43country and elsewhere received honorary degrees throughout throughout the 1:50world he is is known as you probably all have 1:55read in the papers uh for what he has contributed to economic theory and practice and perhaps 2:03like to use a a a Jewish metaphor he has 2:08done what uh is required of uh teachers and Scholars and sages he's not only 2:17had extended branches wisdom and learning but also 2:24Roots deeds and action he's com been able to combine the life of the scholar with a 2:30light of Life of involvement in the society and politics of our country and 2:35world and he's raised as true teachers a generation of 2:42students to follow him now we all know that the discussions 2:48in the Nobel committee were heated with regarding to to uh giving Mr 2:57Freedman the prize no one of course knows what happened in 3:03those discussions because they are secret and behind closed doors however I would venture to suggest that what was 3:10the clinching factor in the awarding of the a prize to Mr 3:15freedan was the work which he had done and presented at the 1963 lka symposium 3:31hurrying to the hurrying to our archives and and retreating that paper 3:38which I have in front of me now uh in which he dealt with the mathematical form of the relation 3:43between the lka and the 3:51humas and as he mentioned in the conclusion of that paper he the result 3:56of his research was a formula which now Rivals the famous Einstein 4:03equation E mc² and I'll read you the last line of that paper the result of that research the 4:12result is L equals q h 2 over3 where the 4:18Q will I sure will I sure Hereafter be known as the freed manian 4:25context it's with great pleasure that uh we can present to continue 4:31that in that tradition on the subject capitalism and the jwm 4:42[Applause] 5:08thank you very much you embarrass me and I may say also please me I appreciate 5:15your welcome I am amazed however that a hill 5:21Association Hill function should attach such a should should attract such a crowd if the award had been made by 5:28Israel I could understand understand it but I didn't know those swets had so much influence in 5:36Chicago at any rate I appreciate it very much uh I am a I am a product of the 5:44University of Chicago which is a great institution not least for its tolerance 5:50of its members and its willingness to accept Mavericks as faculty people and 5:56as teachers and uh as and us 6:04too we have never been I am glad to say it is one of our glories an institution 6:11which has a single set of ideas or a single set of values or a single Doctrine if Chicago schools mean 6:19anything it means a recognition of variety and diversity and 6:24Independence now the views which I am going to express tonight on the subject of capitalism and 6:30will I think be in that tradition and I not sure that 6:38Hill will be entirely happy about having invited me to 6:45express but after all the Jews also have a tradition of Tolerance and 6:51diversity as you know it is an old Jewish saying that if there are two Jews 6:56in any Community there are always three synagogues 7:03my talk tonight is really is really a discussion of two 7:10propositions Each of which I shall try to suggest is validated by evidence and 7:17the two together are incompatible one with the other the first 7:25proposition is that there are few peoples if any in the world who owe so 7:30great a debt to free enterprise and competitive capitalism as the 7:36Jews the second proposition is that there are so few people if any in the world who have done 7:44so much to undermine the intellectual foundations of capitalism as a 7:50[Music] Jew and the theme of my talk will be how 7:56to reconcile these two apparently contrad proposition but let me start by first 8:04trying to document for you each of those proposition consider the 8:10first the benefits which the Jews as a people have 8:16derived from competitive capitalism the essence of competitive 8:22capitalism is that it relies on the market and the market is colorblind religion blind Grace BR when 8:31you go to the store to buy a loaf of bread you have no idea whatsoever 8:36whether the wheat from which that bread is baked was grown on a farm owned by a 8:43white man or a black man a or a Japanese a Jew or a 8:49Baptist whether born again or not 9:01so the market is colorblind Monopoly whether it be private Monopoly 9:08or governmental Monopoly is not color bline because monopolists are in a 9:14position to decide whom they sell to whom they buy from to exercise control 9:20on criteria other than market performance I was very much struck by 9:26this contrast between the competitive character of the market and 9:31the effect of Monopoly on discrimination about 5 years ago when I happened to 9:38attend in Montreal Canada an international monetary conference this is a conference which 9:44meets once a year uh organized by the International Bank uh banking 9:50Association I think it's organized by the American banking Association but it consists the people who are present as 9:57members are the two leading officials of the banks of the major 10:02banks of the world not only the United States but all through the world one banker there who happened to 10:10have the same name as mine and got hold of me to talk to me about the problems of antisemitism in B let me let and him 10:19to make a little sort of informal census of the members of that country and it turned out that of all 10:25the leading Bankers from around the world who were present there so roughly 1% were 10:32Jewish that's the effect of Monopoly in every country banking is a monopoly on the other 10:39hand the banking Association asks speakers to speak before them it had a 10:45panel of supposed experts to present papers and discussions on the various topics of interest in the biking 10:52Community now there you had competition because they were choosing what they thought to be the 10:59best asked people to present those papers and I made a little census of the people who were on the program and lo 11:05and behold 25% of them were Jewish now that contrast is very 11:11striking and it really brings out I think in a very sharp and Clear Point Way the distinction between 11:19competition in which Choice depends on performance and on products produced and 11:27Monopoly where it is possible to criteria other than performance in deciding whom to 11:34choose as you all know the Jews were for 11:40centuries in Exile the the great diaspora which lasted well over a 11:46thousand years during that diaspora the Jews were able to 11:52exist largely because of the of the 11:58small area of Market elements that persisted it's no accident that Jews 12:05during that period were able to do particularly well in the field of international trade and finance because 12:11it was in that area that it was most difficult for governments local 12:16governments despotic governments to control things in dealings among nations there must be an element of competitive 12:23markets and it was in those elements of competitive markets that the Jews were able to find 12:29little chinks here and there and perform a valuable economic and social function 12:35which enable them to survive it is no accident that in the Modern Age the two 12:42most totalitarian countries we have had experience with Nazi Germany on the one 12:48hand and Soviet Union on the other have also been the most anti-Semitic of all 12:54countries again this is a result that is 12:59to be expected from the fact that they are despotic countries that they do not have an effective free market that they 13:06have no competition of course it is not inevitable that they be anti-semitic 13:12they might be anti some other small group every totalitarian Society every dictatorial society needs a scapegoat it 13:19needs to have a small group on whom it can put the blame for its own mistakes and its own uh 13:27errors and it's not surprising that the Jews should be that scapegoat because they have been that kind of a scapegoat 13:34throughout history as a visible minority with rather special customs and 13:40attitude so I would not argue that in every despotic country it will be the Jews who will be the scapegoat I don't 13:46know who the scapegoat group in China is I guess it's the capitalist rotors 13:52rather than the Jews but I susp that only because there are no Jews there to be the scap 13:59but in Germany as I say and not Soviet Union it was a Jew look in the other 14:07direction where are the areas in which the Jews have been able to prosper relatively you will find that it is in 14:14those countries that had the greatest degree of competitive capitalism in the 14:2016th and 17th century it was holl that was a Haven for the Jews why 14:27because Holland was at that time the leading entrepreneurial Nation the leading trading nation in the world it 14:34was engaged in trade in World Markets it had a relatively free economy in the 18 19th and early 20th 14:43century it was in Britain and the United States that the Jews were able to 14:49achieve the greatest measure of Tolerance the greatest opportunity to improve their life and to live 14:57free of persecution and the Prejudice a particularly Illuminating 15:04example in my opinion is provided by Germany in the 19th and early 20th 15:09century when Germany was essentially a free market 15:15economy the Jews were very widely accepted there was a tremendous amount of 15:20assimilation after 1934 when Germany turned into a totalitarian monopolistic Society you 15:28all know what happened to the Jews not only is it true that the Jews 15:34have flourished most in those societies which have had the greatest degree of free market activity and competitive 15:42capitalism but within individual societies the Jews have done best in the 15:48most competitive areas of those societies I suggest to you that you 15:53compare the situation in banking which I already referred to to the situ 15:59situation in in retail trade banking is a province of 16:06anti-Semitism there is you know despite the popular fiction that somehow or 16:12other the Jews control the banks and finance with General Brown a few years 16:17ago proceeded to express in his unfortunate 16:24ignorance despite that belief the plain fact is that I believe believe there is 16:29no industry in this country in which there is greater discrimination against Jews at the top levels than there is in 16:35banking why because it is a monopoly because in order to have a bank you have to have a franchise you have to get a 16:42franchise from the state your fellow Bankers will have to assure you that 16:47banking is a uh is that the bank is needed uh one of the episodes I came 16:55across at the time that Anna Schwarz and I were writing our monetary History of the United States it was the episode of 17:02the bank of the United States it was a bank which failed on December 11th 17:0919303 1930 it was the largest bank that had ever failed up to that day its failure 17:17was a major trigger that produced The Great Depression I don't mean to say that the 17:23Great Depression might not have come along anyway but there is no doubt that as it happened the failure of the Bank 17:29of United States started a series of runs on Banks and that series of runs on 17:34banks was a factor that promoted the Great Depression why did the bank of the United States fail there is no doubt the 17:41record is perfectly clear because John Kiron Mor was 17:50anti-semitic the bank of United States happened to be one of the only two major banks in New York that was controlled by 17:57Jews it was also a bank which had as its clientele many of the small Jewish 18:02merchants and Traders in New York and many of the immigrants because they mistakenly thought that its name Bank of 18:09United States meant it was an official bank but it wasn't it was a bright Bank why was John Pier Pond Morgan 18:16antiemetics because back in 1907 or eight or nine I've forgotten what the date 18:22was he was uh he was uh uh subject to 18:27investigation by a congressional committee which 18:33interrogated him at Great length about the uh monopo supposedly monopolistic 18:40actions of various groups he was associated with and the leading figure in interrogating him was a famous Jewish 18:47law in addition to which brandise later a Supreme Court Justice had written a 18:53number of books pillar pillaring whether correctly or not I don't know I have never looked into that of it but 18:59pillaring the Morgan interest as unscrupulous monopolis how do we know how do I know 19:06all these intimate details because fortunately there was a member of the Federal Reserve Board of 19:12Governors of the Federal Reserve System who was a great gossip and he kept it dialing H Mr 19:19Hamlin who was one of the early members of the Federal Reserve System the Board of Governors he was the first chairman 19:24of the Board of Governors as a matter of fact only they called it then Governor not chairman he uh kept a diary all his 19:31life and his diary fortunately is preserved for us in the Congressional library and he records in that in 1917 19:39or 18 at which time there was a great fight about whether to appoint a 19:46particular Jewish Banker as a member of the board there was a great fight of that supposedly on the ground that the 19:53banker was a German extraction but really on the ground that he was Jewish and and Hamlin has lunch J Pon Morgan Jr 20:02the son of Morgan senior and in the course of the lunch Morgan says to ham 20:09I'm going to get those Jews for what they did to my father so we know we have documentary evidence on this how did 20:16that fit in in 1931 well the standard the B that happen the bank of the United States was a very 20:21good bank it was a perfectly sound B it was liquidated during the worst years of the depression and paid off 92 and a 20:28half% 92 a. half cents on every dollar of liability despite being liquidated over a period from 30 to 20:3533 but whereas the standard practice at those times was that if a bank got into 20:41difficulty as several Banks had a few weeks before the JP Pond Morgan plus the 20:46Clearing House Association of New York would get together a rescue fund to tide it over the difficulties and enable it 20:53to surmount temporary runs the Federal Reserve Bank of New York made a similar proposal for the bank of the United 20:59States it was almost a great until jpon Morgan refused to go along with it I may 21:06say it's no accident that their proposal involved merging the bank of the United States with the only other bank in New 21:12York that was controlled by Jews at any rate there is no doubt that 21:17that causes the failure I only cite this as a small example of the effects of Monopoly in bank now you contrast that 21:25with a situation in retail trade or you don't need a franchise to open up a store where you can do anything where 21:32the Jews were able to come in with packs on their back and be itinerant uh Traders and then gradually work and 21:38develop and open up stores you take the case or you take a very different case 21:44consider the contrast between movies and heavy manufacturing the heavy manufacturing 21:50iron steel automobile is another case where there are relatively few je because these are the old 21:56Industries uh controlled by the establishment not nearly as monopolistic 22:01as the banking industry but with some measure of Monopoly power on the other 22:06hand any new industry like the movies when they first developed is bound to be competitive because it's wide open you 22:14have very large number of Jews who succeeded in the movies a very small 22:19percentage in manufacturing or take a different case take the 22:25profession where have you had problems of limitation on Jews in the professions I may say I'm 22:31talking about Jews but you all realize that everything I'm saying applies to any other unpopular minority it applies 22:37just as much to the blacks as it does to the Jews my particular subject happens to be the Jews and just as the Jews have 22:43the most gain from a competitive free enterprise Society so the blacks have the most to gain from a free enterprise 22:50competitive Society any minority is in the same position well consider the profession 22:59where was there the great has there been the greatest degree of anti-Semitic discrimination in the profession there isn't any doubt in medicine why in 23:06medicine because you have an American Medical Association which has had a monopolistic power over the medical 23:12profession it's the strongest one either the strongest or one of the strongest trade unions in the United States and 23:20for many many years it was able to restrict admissions in the medical schools in order to keep down the number 23:26of positions in order to keep up the incomes of Physicians and in the process of restricting entry into medical school 23:33if you're going to restrict entry how are you going to do it if you've got 500 people who want 100 places there are 23:40only two ways you can do it you can auction off the places that's a free market method and that doesn't discriminate anybody who will pay people 23:47who will pay the most will get in or since that isn't quite a polite establishment way of doing it when 23:54you're allocating places in medical school except unless the unless the auction is 24:00underhanded and since that isn't the way to do it well you have to use some irrelevant 24:10criteria you may say you'll do it by ability but you and I know that these 24:16exams and tests that are made to testability have some validity but they are very far from being perect and they 24:23leave a good deal of leeway you can still have 500 people for 100 places each of whom will satisfy the minimum 24:29ability standards well then It's Perfectly Natural that you use whatever is your Prejudice if you're prejudiced 24:34against blacks you'll keep out the blacks if you're prejudiced against Jews you'll keep out the Jews if you're prejudiced against Seventh Day Adventist 24:41you'll keep out the Seventh Day Adventist well if you compare what happened in law for example where until 24:49recently there was much less restriction of Entry versus what happened in medicine the situation is very clear 24:57well the summary Jews have very seldom benefited from government 25:03intervention there have been a few cases if you go back into the 187 16th century 25:09there was a group of so-called Court Jews who were protected by particular 25:16Kings or princes because they served a useful function in handling their finances or in arranging for loans for 25:23them and so on there have been a few cases like that they are very exceptional in the main the Jews have 25:28never benefited from government intervention they have flourished they have had a measure of freedom and 25:34freedom from Prejudice only where there has been a large measure of free inter now I turn from the 25:42question of the uh first proposition that Jews owe an enormous debt to free 25:49enterprise and capitalism to the second proposition the Jews have been 25:54consistently opposed to capitalism and have done much on ideological level to 26:01undermine from Carl Mars to Leon tronsky to our modern version Mr 26:09Mar a very large fraction of all the anti capitalist literature has been 26:15authored by Jews it's not only anic capitalist some of it antisemitic including of course KL Marx's own 26:21writings which have a very strong strain of anti-Semitism but that's a separate 26:27issue if you go through any library of 26:32anti- capitalist literature Socialist Communist you will find that that a very 26:40large fraction of it a disproportionate fraction of it has been author authored by Jud if you look at the various 26:47studies that have been made in recent years of voting records you will find that on the whole 26:54there are few ethnic groups in the United States that so consistent LLY vote on what is regarded as the left 27:01side of the political Spectrum as a Jew if you look at the various books that have been written about communism 27:07in America on the membership of the Communist party there were two groups that were important for some reason 27:14which I don't quite understand the fins were 27:20one I guess maybe the cess of their climate made anything hot of [Music] 27:26TR but I really don't there must have been an explanation and I never have researched but they were one as it 27:32happens in the early history of the Communist Party of the United States they were a major element but the Jews were the other major element dominantly 27:40over and over again and if you look at every so-called liberal but actually 27:45non-liberal movement the so-called liberalism has simply meant liberalism with somebody 27:50else's money if you look at such movements you will find again that Jews have played a disproportionate role I 27:57don't think I need a stress that to you because I think all of you are aware that this is in fact the case and that 28:03if you examine the literature you will come to the same conclusion I want to 28:08really go on to what is a most interesting question why why this anti capitalist 28:13mentality now this I am by no means the first who have been struck by 28:20the antic capitalist mentality and there have been numerous books and studies written about this subject one of the 28:26books is by fellow by the name of lawence CES I 28:31forgot get the name of the book but it has to do fundamentally with his question of Jewish political values and 28:39his explanation is a very simple one his explanation is that the anti capitalist 28:45mentality of the Jews reflects values derived from Jewish religion and Jewish 28:52culture that the Jewish religion and culture stresses charity uh stresses 28:58selfishness and therefore the Jewish anti capitalist 29:05values have derived from it well that particular explanation of course derives 29:10from someone who himself shares the anti capist mentality and therefore is driven 29:16to look for for attractive 29:22explanations that explanation can be dismissed out of hand for a very simple 29:27reason the Jewish anti-catholic mentality is only two two centuries old 29:33it dates from the enlightenment in the 18th century but Jewish religions and 29:38religion and culture is 2,000 years old now how is it that for 18800 years 29:46that culture and values did not generate an anti- capitalist mentality in the last 200 years it did that would leave 29:52just as big a puzzle to explain as you started with moreover 29:58if you look at Jewish attitudes during those years you will find that they were
30:04pro- free enterprise and not anti free entprise a German writer verer sombar 30:09who in 1911 wrote a book about capitalism in the Jews and I quote from 30:14that book throughout the centuries the Jews championed the cause of individual 30:21liberty in economic action activity against the dominating views of the time 30:30now verer sart's book is in very low repute among Jewish Scholars the reason 30:36it's in low repute is because he maintains that a pro capitalist 30:41mentality is entirely consistent with the values and culture of the Jews the 30:46people who have been criticizing it are themselves people who hold this anti capitalist mentality and they are 30:53therefore very unwilling to accept this particular view he has also been criticized justly for some of his later 31:00works after World War Two World War I when he flirted and more than flirted 31:07extensively with Nazis but this particular book which is a very fascinating and interesting book shows 31:13none of those elements in 1911 and is really a rather interesting discussion of the background and the relation 31:20between the attitudes and ideas of the Jews and their religious culture so in 31:25any event it seems to me that that EXP explation will not hold order a second 31:32explanation which has often been offered is that intellectuals are anic 31:37capitalist Jews are disproportionately intellectual and 31:45therefore this is purely a statistical bi that if I hold constant whether they 31:53are intellectual or not I will eliminate this appearance of a disproportionate anti capitalist 32:01mentality among the Jews now these statements are true it is true that on the whole intellectual at least in the 32:08past Century or so have largely been anti capitalist it is true the Jews have 32:13a disproportionate tendency to go into intellectual Pursuit for the for two 32:20reasons one I've already cited Jews are driven to go into those areas where there is the greatest competition the 32:27intellectual Pursuits have had large measures of free enterprise and the way 32:32of freelance journalism writing acting and so on so that it's been attracted to them but there is a second reason dating 32:39back to Jewish history from the hundreds and thousands of years why Jews have been attracted to intellectual Pursuits 32:46and that is because if you are A persecuted minority who are subject to being forced 32:52to flee from where you are you want to accumulate your capital in forms in which you can take it with 33:02and the best way of doing it obviously is intellectual that's why 33:09today who which people are in the best position to flee 33:15Britain not those who have accumulated physical wealth because Capital controls 33:21prevent them from taking their wealth out the people who have accumulated brains 33:28the bra I can see that all of you being in 33:34the process of making that kind of capital accumulation 33:41appreciate but in any event well it is true that the Jews have 33:46disproportionately been concentrated in intellectual Pursuit and intellectuals 33:51have been disproportionately anti capitalist that is only a very partial and incomplete explanation 33:58in the first place Jewish intellectuals are more anti capitalists than intellectuals in 34:04general if you take the fraction of any capitalist literature authored by Jews 34:10it is decidedly larger than the fraction authored by non-jewish intellectuals allowing for this but in the second 34:17place non-intellectual Jews are different from non-jews in the same 34:22direction they after all if you take the kind of voting evidence I was citing before in recent times please since the 34:29New Deal the situation for reasons all come to is different before the New Deal in the United States but since the New 34:36Deal in the United States or really since the days of Al Smith in New York the ordinary Jewish population and not 34:43simply the intellectuals have been the major source of the membership in the Socialist Party the Communist Party in 34:50the leftwing elements of the democratic party and so on it is not really any 34:56surprise that the most left-wing members of both the Democratic and the Republican Party in the Congress tend to 35:03come from New York which has the largest concentration of Jewish voters of any city in the 35:10country so I do not believe that's a satisfactory explanation a third possible 35:18explanation and this one also none of these is entirely without some F I don't 35:23mean to argue that they're I'm going to be able to come up with single explanation which excludes all others I 35:30think each of these has a point but I think that they are not separately powerful enough to explain the 35:36phenomenon a third explanation is that it is natural for every group to take 35:41good things for granted and to blame the bad things on the system under a capitalist free 35:48enterprise system in the United States and Britain Jews experienced far less discrimination than they had ever 35:54experienced anywhere else before but there remain anti-Semitism there is no doubt there remained anti-semitic free 36:01Prejudice and it is understandable that there is a tendency to blame the residual 36:07anti-Semitism on the capitalist system you don't say well look at all the uh 36:14how much better off on him than I would have been under so much other system that's next you look at the uh you look 36:21at the bad Els I think there's a great deal to them but it's not a very 36:26satisfactory EXP ation because why should you blame the bad things on the 36:32aspect of the system which is epitomized by capitalism and competitive catholism why not blame the bad residual elements 36:40on the church for example or on the attitudes of the aristocracy or on the 36:45bureaucrats why pick on the market system as the focus of your attack 36:58I think that there are two other explanations that I personally find much 37:03more persuasive and much more significant than any of these that I've so far CED 37:09one of them is an explanation that was offered in a doctrinal dissertation written by I don't believe it's ever 37:15been published but it's a doctoral dissertation written I believe it's the either at NYU or the new school in New 37:21York by a man by the name of Berard C and his explanation in is that 37:27beginning with the French Revolution in the 18th century the European political movement 37:35consisted of a rightwing which was closely connected with the church and with religious 37:41movements the Christian Movement the left movement on the other 37:48hand the Socialist Party the Communist Party were anti claric as opposed to now very few Jews 37:58could find any home in the right the only place for any Jew in any political 38:04movement was in the left he was unacceptable to the right they might 38:09have been Market oriented but they were also oriented toward particular religion 38:14they had the prejudices of that religion and he could hardly be at home there on 38:20the other hand the left was explicitly antic clerical and it offered the only 38:26place where a Jew could engage in political activity and a political movement without being uh out of 38:35plan now the great some I cite one 38:40example which may seem to be an exception but I think really illustrates 38:46the point I've made and that point is Israeli the English politician 38:52conservative politician of the 19th century he was Jewish not in religion 38:58however in origin either his I think his father already or certainly he had 39:03converted to Ang anglicanism he was himself a devout 39:09Anglican had no Jewish upbringing and he didn't conceal his 39:14jewishness on the contrary he used it as an effective way to make himself an attractive and mysterious and sort of 39:22esoteric figure as you know delli was a great novelist he was a great eccentric 39:28and he appealed to the British people as an eccentric uh and the jewishness added 39:35to his appeal but it wasn't a jewishness which was in any way inconsistent with his 39:41identifying himself with the Anglican church and being as high church as 39:47anybody you could find in Britain so I think that's a a very interesting Cas 39:52because it is an exception I think that proves the rule now the same principle now I think 39:59that con's explanation is extremely important for Europe and goes a long way 40:05to explain why in the European context the Jews almost always ended up in the left I should add in a fuller Exposition 40:12and discussion uh of the kind that you find for example in some of Han ER books 40:18you will find that there was also a socialist anti-Semitism that the anti-Semitism was by no means confined to the r there was 40:25a very strong element of it left but on the whole at the intellectual level the left being anyti clerical had home a 40:33home not for religious Jews never but for agnostic Jews for Jews who were not 40:40willing to accept another religion not to become Anglican like Israel but we're willing to become sort of enlightened uh 40:50citizens however that doctrine that explanation is very hard to apply in the United 40:56States that situation was not true here it was not true in the United States 41:01that anything you would call a party of the right was religious and a party of the 41:06leftand and it's very interesting to note that in the United States until the 41:131920s the Jews were not associated with the Le the great hero of the American 41:19Jews in the first several Cent Decades of this century was Theodore Rosevelt a 41:24republic and he was a great hero because he made public and open protest against 41:30the pums in Russia in the early 20th century he was very influential in 41:38keeping the doors open for Jewish immigration from Russia and Eastern Europe to the United States and the Jews 41:44who came over regarded Teddy Roosevelt as their great protector and so in fact 41:49until Al Smith Rose in New York the study suggest that the Jewish 41:56votee was Prim arily Republican so this explanation will not do for the United States it has an 42:03impact on the United States because after all the in the The intellectuals Who migrated to the United States 42:10carried with them their European ideas they were formed in Europe and they brought them over so the enlightenment 42:16effect carried over to the United States but I think for the United States that can provide at most a very partial 42:23explanation I think there's a second explanation and here I I this is my own 42:28I I can't attribute it to anybody else neither the credit nor the blame my own 42:35explanation is that anti-Semitism was based on or produced a 42:41stereotype of Jew it was based on the notion the Jews were money grubbing 42:48grasping selfish people now there's nothing wrong with 42:53paying money grabbing and stuff 43:02but popular opinion nobody it's very hard for anybody to immunize himself 43:08from the intellectual cultural valal in which he lived and the Jews accepted the 43:15values of the society in which they live and those values denigrated those 43:22characteristics and the Jews said to themselves if we were were like that the 43:28NS smites would be would be right and therefore we're going to demonstrate we're not like that we're going to 43:35demonstrate that we're not money grubbing that we're not selfish but on the contrary we were altruistic that we 43:40believe in in doing good through government and we believe in a very different philosophy I was first led to 43:48this hypothesis the first time I spent some time in Israel and I was enormously impressed by 43:56an observation I formed that and has been reinforced in 44:02subsequent trips to Israel and that observation was if you wanted to know 44:08what was true in Israel you asked yourself what was true of the Jews and the diaspora and 44:16reverses this applies over and over again in the diaspora the Jews were 44:22predominantly Urban in fact in most countries they were not permitted to own lands 44:27they could not be agricultural they were Urban Petty merchants or bouris or Petty 44:34manufacturers in Israel the greatest Kudos goes to the 44:40agriculturalist it's the kabut with the agricultural activity which is the 44:46preferred form of activity in the diaspora the Jews were 44:53non-m militaristic a very large fraction of Jews who came to this country from 44:58Russia came to avoid the draft to avoid getting into the army so in the D diaspora they were the 45:07military were formed from other classes in Israel there is enormous emphasis on 45:13the military it's a great and indeed the ablest people in the society go into the 45:19military now you can explain those two phenomena not by my interpretation but 45:24by saying that after all for a new nation to exist and to be able to develop it was necessary to develop 45:30agriculture threatened on all sides by enemies it was necessary to develop military that's true but so let me go on 45:38to some other characteristics the language of the Jews and the diaspora was 45:45yish the language of the Jews adopted in Israel explicitly rejected Y and accepted 45:53Hebrews going back 2,000 years developing and making into a language 45:59what had become essentially a dead language adopting Hebrew as the language of the 46:05people at the time we were first in in Israel Not only was Hebrew the main 46:11language but yish was looked down upon as a language it was sort of not der 46:17rigored to speak yish now as a result of a very popular uh politician Lev Esco 46:24who used many unish phrases the popularity of ysh apparently revised but even today it's sort of not a real 46:33language it's Hebrew that is a dominant language a rejection of the language of the diaspora the Jews in the diaspora were 46:40never very athletic if you think there's an overemphasis On Athletics in this country you should go to Israel there's 46:48an enormous emphasis on athletic activity and now to add the absolutely 46:54final Capstone to this demonstration the Jews in the diaspora were marvelous 47:15Cooks now this reversely Israel of all the characteristics of the 47:22Jews in the diaspora I think supports the view that I was ing that what you have is a 47:28reaction against the anti-semitic stereotype an attempt by the Jews 47:33subconsciously to demonstrate that they were not like the anti-semitic stud let
47:40me give you another kind of evidence the intern the universal Jewish encyclopedia 47:45in quoting SAR writ and I quote I mean 47:51in discussing somar the volume I talked about earlier right he accused the Jews 47:57of having created capitalism well now if I were writing 48:04that I would say he praised the Jews heed them with creating catholism why 48:09would I say he accused them only if I had this anti- capitalist mentality and 48:14only if I was trying to deny that Jews were like that stereotype which soar which which the 48:22antisemites had expressed consider how consider how differently an Adam Smith or a David 48:30Ricardo who believed in free enterprise and capitalism would have valued these traits would have considered such a 48:37statement as the Jews had a large role to play in capitalism or considered such 48:42traits as a good sense of business a willingness to trade cleverness in 48:47financial matters they would have regarded those as that would they would have regarded that as praise for the 48:53Jews not as blame not as accusation so I conclude that the chief explanation for 49:01the anti-semitic the anti- capitalist mentality of the Jews are on the one 49:07hand the special circumstances in 19th century Europe which linked promark 49:12parties with established religions and so drove Jews to the L and 49:18on the other hand the subconscious attempt by Jews to demonstrate to the world the fallacy of the anti-semitic 49:25ser now the interesting thing is that this 49:33ideology this anti capitalist ideology is strongly opposed to the self-interest of the 49:39Jews the it's it's opposition domestically is clear but let me site 49:44you one more strong and striking example let me ask you the following question 49:50what would be the state of Israel today if every country of the world were socialist where would Israel have got 49:56iial support where did Israel get some financial support throughout its life it 50:02got it from the capitalist country it got it from the United States it got it 50:07from South Africa it got it from Britain it didn't get it from the governments of 50:12Britain in the United States and South Africa it got it from the Jewish residents of Britain South Africa in the 50:21United States did Israel get any assistance from the Jews more numerous 50:26than in any of these countries of Russia were they able to send Capital to Israel to support it were they able to 50:34influence their government to send cap to Israel dis support is there any socialist country 50:40from which Israel has receive support not at all had every country in the 50:46world conformed to the dominant theme of Jewish intellectual ideology Israel 50:54would never have been able to exist not the slightest Chanel you now I may say let me go back 51:01to Israel because I think it's a fascinating case after the first visit I made to Israel I came away from 51:07Israel saying that Israel was a society in which there were two Traditions fighting with one 51:13another there was 150 year old tradition of democratic socialism soal which 51:18called for government planning in central control there was a 2,000 year old tradition of how you get around 51:24government regulations and I said fortunately for 51:32Israel the second tradition was much stronger than the first so even internally in 51:39isra it was a remnant of the pro capitalist mentality and traditions that 51:44have enabled Israel to survive economically internally it is the existence of 51:50capitalist countries outside the world that has enabled Israel to survive as a result of external 51:57support well now when there is such a strong now of course in the United 52:02States the contrast between the ideology and the self has been less blatant and 52:09indeed in some respects there has been a coincidence who are the people if you 52:16look at it the other way who benefit most from an extension of government interven of government 52:23control well you ought to know from the building we're in it's the 52:29lawyer it's the social worker it's the 52:36economist economists have a schizophrenic position from this point of view their intellectual discipline 52:43leads them to be in favor of the market because they understand the workings of the market they recognize its virtue 52:49their private self-interest leads them to be in favor of government intervention there's nothing that 52:55creates jobs fre Economist more readily and more rapidly than an extension of government 53:02intervention economists reconcile this schizophrenia in very many cases by 53:08being in favor of the market in general and opposed to it in [Music] 53:19particular they are very clever at dreaming up all sorts of external effects and 53:25distortions and vages of the market to operate which justify special interventions that will create jobs for 53:31us the only people who are better at that are the lawyers now it does so happen that these 53:39are activities in which Jews have have played a considerable role a large 53:44fraction of Jews are employed in these areas and in this respect they're self-interested to some extent coincides 53:51with the expansion of the government SP but on this broader level I think it is 53:56is worth emphasizing I think it is clear that the self interest of the Jewish community at 54:02large is opposed to government intervention but in the main up to now 54:07in the United States internally that had not been too serious a matter because 54:13most government intervention was in areas where Jews didn't play a large role it was possible for a long time for 54:19Jews to have their cake needed too they could be in favor of moving 54:24towards socialism in the field of the public utilities and the Telegraph and the railroads and the banks where they 54:30don't play a role well at the same time they could prosper in the competitive market of retail trade of the movies of 54:37the amusement industry of various aspects of education and the life but 54:44increasingly as Government expands its cope that's becoming more and more difficult and the conflict between the 54:50self-interest of the Jews in the market and their the effect of 54:56government expansion is becoming clearer whether that conflict will in the course of time cause a 55:03change in these attitudes I do not know but I think it is helping and will help 55:09to undermine those activities in any event I think it would be highly 55:14desirable for the Jewish intellectuals to become far more self-conscious and far more critical of these attitudes who 55:22say have developed and to understand to a fuller extent the way in which the 55:27market is a system and the only system which will permit diverse groups to 55:33cooperate with one another which will permit each person to go his own way 55:38while every other person also goes his own way thank you 56:04accordance with Jewish tradition we should have some questions he didn't say anything about 56:11an and I will be glad to entertain any questions who would like to raise a question yes back here yes 56:35that the world be improved not there's a world you die you improve the world you 56:41can improve but that 56:48Messianic is consistent with BL and capitalism in the free market is the most effective way to improve it 56:56you let me take you on this issue let me go back for you on this issue because I think 57:02yeah go 57:11ahead what you go back you said say the world evil 57:19andal but why does capitalism epitomize the world why doesn't the government intervention epitomize the world you're 57:25begging the question by say you say look at the Messianic tradition because there is certainly a Messianic tradition and 57:31now look at at for a moment not at the in but at the charitable activities of 57:37the Jews they have been carried on through free enterprise they've been strictly voluntary there are few groups 57:44in the world that have done as effective a job in charitable activities and 57:50providing institutions of all kinds for going back in the United States to the great inflow flux of refugees or 57:58immigrants from Europe in the end of the 19th century there was an establishment on voluntary Arrangements of of of 58:07associations to Aid the immigrants you have had the voluntary Jewish hospitals the voluntary Jewish schools and 58:14Charities you know the fact is that the free market is a far better and more 58:21effective way to do good than government control I give you 58:26not only the Jews in this respect but I give you the whole history of the United States what is the period during which 58:33you have had the greatest explosion of elimary charitable activities in both the United States and the United Kingdom 58:39Britain it's the 19th century when you had the closest approach to free ENC 58:44that was a period which saw the development and the expansion of elimary of the nonprofit hospital it saw the 58:53University of Chicago was founded in 1890 how by private activity not by governmental activity the middle west 59:00and the whole country are peppered with schools and colleges that were founded in the same way the association for the 59:07prevention of cruelity to animals the Red Cross the foreign 59:13Mission all take back to the 19th century one striking statistic which I 59:18has impressed me is that under British socialized medicine 2third of the beds 59:24in hospitals are in hospitals that were built before 1900 by the charitable activity of the 59:3219th century so that after all the Messianic tradition is perfectly 59:38compatible with the belief in voluntary activity you must interpret the market broadly the market means voluntary 59:45cooperation it means voluntary cooperation in economic activities but it also means voluntary cooperation and 59:51non-economic activi and the market is a far more effective way to get people to cooperate for for charitable activities 59:58and is governmental Arrangement this period of the 19th 1:00:05century when Grace not charitable organization started but weren they started in essence to cope with whether 1:00:11not whether right or wrong with perceptions of the the evil of 1:00:17capitalism no they were because they were established to cope with evils but not evils of 1:00:24tling of course but poverty my God are you going to tell me that poverty has 1:00:30some kind of close relationship to [Music] 1:00:38capitalism where do you have the greatest poverty in the least capitalist Nation the only countries in the world 1:00:45that have come close to eliminating what most people around the world would regard as poverty is the United are the 1:00:52capitalist countries like the United States Sweden Western Europe the the level of income that in the United 1:00:58States the level of income that in the United States by official standard is called the poverty level is high is 1:01:06higher than the average income of all the people in the Soviet 1:01:11Union you must for you know your 1:01:17percent there is no there's been no machine ever 1:01:24developed for eliminating poverty has effective as capitalism look you and I are evidence of 1:01:31this many of the people in this room like myself have parents or grandparents 1:01:36who came to this country in the 19th century with empty 1:01:42hands we are able to have a relatively affluent life because the free 1:01:48enterprise system of the United States in the 19th century provided them with an opportunity of making a new life in 1:01:54this country which was far ior to the one from which they came you know people vote with their feet in a very much more 1:02:01impressive manner than they vote at The Ballot Box and the millions and millions of people who scamed to the shores of 1:02:07this country weren't screaming to become 1:02:22poor who would like 1:02:34to alleviate economic problems like a doctor goes to cure disease which is 1:02:39your excuse for advising the [Music] 1:02:45children better talk better talk we believe in free 1:02:52speech well I wasn't around at that time and I didn't move to strengthen the Y in 1:02:59Chile in the first place I have not advised the Y in Chile I have advise the 1:03:04people of Chile I was in Chile for six days a year and a half ago you know as I say over 1:03:11and over again I don't know whether to be more amused or more flattered by the influence which I am attributed over 1:03:18Chile I was in Chile for six days a year and a half ago I had not never been in 1:03:23Chile before I have not been in Chile S I had not talked before that to any 1:03:29Chilean government official I have had no conversation with any Chile and government official F but I'm running 1:03:42chill but in any event I went to Chile under private offices I gave lectures in Chile in 1:03:49which I the public lectures in which I stated what I believe I went there to 1:03:54advise the people of Chile and also the Government of Chile if they wanted to listen to me I'm as I told this lady 1:04:00before but of course her memory is short as I told her before I have also gone to 1:04:05Yugoslavia and given speeches in Yugoslavia does that mean I'm running the communist state of Yugoslavia or 1:04:10that I'm a communist I have also been in the Soviet Union I'm not a communist either I've been an Indian I assure you 1:04:17I'm not responsible for ende G destruction of fom in India so in any 1:04:23event I think enough said about Chile let that cool 1:04:28down 1:04:46terrible that's right sure I think Sweden is an interesting case the really interesting 1:04:52case is the comparison between Sweden and Great Britain now I should say in the first place that 1:04:59I do not know a great deal about Sweden I I I think I'm going to have an expense pay trip there in 1:05:13s and I will try to extend it for a couple of days precisely to see if I can get some more information to answer your 1:05:20question more fully I think your question is a very real here we have 1:05:27in which government spending at all levels has reached 60% of the national income here we have swed in which 1:05:34government spending at all levels has reached roughly the same proportion Britain is in a state of 1:05:40imminent collapse it has experienced very rapid inflation its standard of living has 1:05:47been going down you have the incredible phenomenon that whereas before World War 1:05:52II the standard of life of the average resident of Great Britain was twice the 1:05:59standard of life of the average German or Frenchman after today it's precisely 1:06:05the other way around the average standard of life of the German or the Frenchman is twice that of the English 1:06:11so you obviously have a tremendous failure in the economic area in addition 1:06:17to which I think Britain is in a very delicate state with respect to the maintenance of his political Liberty I 1:06:23think it will be a miracle if a really truly free Democratic Britain survives 1:06:29the next five years on the other hand in Sweden where supposedly the percentage 1:06:34of government income is the same you do not seem to have those phenomena at all Sweden has had a very high standard of 1:06:41life it's production has been going up until very recent years and uh there 1:06:46does not seem to be any major threat to the political system in swed and the question is what now there are as I say 1:06:55I'm not entirely confident in my answer and what I'm going to give you are my tenative explanations in the first place 1:07:03I believe that the swedes have confined their governmental activities to redistributive measures to 1:07:12a far greater extent than have the British that the British have gone much farther in the direction of 1:07:18nationalization of Enterprises of interfering in the control of the industrial system and this has part ly 1:07:26reflected the fact that the British have much greater barriers to Imports in 1:07:34subsidies to exports than have the swedes the swedes have maintained an essentially free trade society and free 1:07:40trade international free trade is an enormously effective way of introducing competition within a country I often ask 1:07:48people in the United States they I have a kind of a game in which I say people tell me the one law that you 1:07:55pass if you could pass that law and your only objective were to promote 1:08:01competition now most people will talk about strengthening the anti trust law or something like that but the right 1:08:07answer without question is to eliminate tariffs and have free trade that would do more to promote competition in this 1:08:13country than anything else well in Sweden you have had in the second place equally important I think it's a social 1:08:20F I think the extent to which you can carry government control and government 1:08:26intervention depends very critically on the homogeneity of the population the essence of a market 1:08:34system is that it is consistent with diversity it permits people who differ 1:08:41in many dimensions to cooperate with one another on the particular economic Dimension you don't have to agree with 1:08:46the fell you're buying and selling something from all you have to do is to have it mutually attractive for you to 1:08:52buy and sell on the other hand political Arrangements tend to promote home tend to prevent 1:08:58divers they tend to move toward uniformity you have to have bureaucratic rules and bureaucratic arrangements to 1:09:05to treat people on an administrative basis well now the Swedish it's an interesting thing the problems of 1:09:12Britain were very much less before World War II than they have become since World War II and I think a major reason for 1:09:18that change in Brit and this is I'm now analyzing it I'm not saying whether this was good or 1:09:24bad but the major reason for that change is that the British had a very large immigration from the Commonwealth after 1:09:30the war and they are now a much more heterogeneous people than they were 1:09:36before whereas the swedes are an extremely homogeneous people now there 1:09:41may be still other explanations and it may be that the Swedish situation is temporary the fact that the public at 1:09:48large has voted out the social democratic government and put in a coalition of other Pary suggests that it 1:09:54isn't the paradise that we have been led to believe with respect to personal freedom the experiences of bgment and of 1:10:02other people suggest the same but nonetheless so far as I can go I would say those are the reasons now let me 1:10:10emphasize we're not talking about pure cases there is no purely capitalist free 1:10:17market system in the world Hong Kong comes pretty close but it isn't really all the way the United States the 19th 1:10:24century came very close but it wasn't all the way there is no purely 1:10:29collectivist system private Enterprise and the free 1:10:35market are a major factor in Soviet Union the 3% of the land area that is 1:10:43permitted to be used as private plants produces 33% of the food of the Soviet 1:10:50Union you have a recent book which I recommend to all of you by HCK Smith on the Russian which is a fascinating book 1:10:57is sp of stories about the gray Market which exists in Russia if you want if 1:11:05you have trouble with your electric appliances you don't call the state firm 1:11:11you'll be six months before they get there you have somebody on the private come in at night and repair it for you 1:11:17you pay and so there is a very extensive and flourishing free market in the Soviet Union so you don't have cases 1:11:25that are extreme po cases and remains true that in swed it is predominantly 1:11:31Capital so far as the organization of production is concerned not so far as 1:11:37the distribution of income 1:11:48ised merchs inket of D 1:11:54EXP you think the public is generally aware that the Nobel prizes are tical 1:12:00Awards well I am not going to defend the Nobel Prize I'm perfectly willing to accept 1:12:07him but not to 1:12:16defend yes who want to raise a 1:12:23different yeah yeah you back that's right the first grow was 1:12:29a no not you I was he's fashional I don't understand 1:12:35that fashional you know in a free market you take your opportunities as they 1:12:53come well I do not believe that you can distinguish the Quest for economic freedom from the Quest for political 1:12:58freedom in fact it's not entirely clear to me how I make that distinction at all let me ask you a 1:13:07question how many how many professors of medicine at major medical schools in the 1:13:13United States would stand up and talk against socialized medicine at the drop of a hat 1:13:20when most of their research is being financed by the National Institute of Health 1:13:26is that a violation of their political Freedom or their economic freedom how much criticism of 1:13:33governmental activities do you hear from the big 1:13:38businessmen very little big businessmen are very reluctant to speak freely 1:13:44because they are a little worried that if they do the internal revenue will be down examining their books the next day 1:13:50and the antitrust division the day after that how many students 1:13:57St thinking of their future careers as governmental civil servants and 1:14:04bureaucrats even students who are the most independent of all really feel completely free to express themselves 1:14:12politically in every single way is it in in in in countries which 1:14:18have had for example exchange control when Great Britain had exchange control 1:14:23and it's now reimposing it and other countries have Israel has had 1:14:29to change control if you want to buy books that are published abroad you have to get the permission of a governmental 1:14:35office is that a restriction on economic freedom or a restriction on political 1:14:40Freedom now I think the the fact is that it's extremely difficult to make that 1:14:47distinction what you have in mind are the maintenance of the political institutions of the 1:14:53bot now the fact is is that no country of the world has been 1:14:58able to maintain even those institutions those political institutions unless they have had a predominantly free economy I 1:15:06do not know any exception to that rule and I wonder whether you can tell me any and consequently I think that there 1:15:13is not it is not right to distinguish between the search for economic freedom and the search for political freedom I 1:15:19think they are part and partial of the same thing you want 1:15:28is 1:15:55no no come back 1:16:25a lot of 1:16:50people well let me uh let me see if we can examine that in the first place I I 1:16:55deny I think the proposition is almost the rers of capitalism promotes 1:17:01internationalism not National free market capitalism is a system of free 1:17:06trade free international trade the 19th century period of 1:17:13capitalism of the high TI of capitalism saw the greatest extent of internationalism and lack of you know 1:17:20before World War I you didn't need to carry a passport to travel anywhere throughout the European the Western 1:17:27World the United States Britain Europe before 1914 people could 1:17:34come to the United States without having a passport without having to have a Visa without having to be approved by 1:17:40immigration Authority anything like that they just came it was free movement and the same thing was true throughout the 1:17:45continent of Europe free trade there is nothing that is so effective in 1:17:51resolving the barriers of nationalism as free trade and and it's really precisely the opposite nationalism was on the 1:17:59decline during the high tide of capitalism when did nationalism 1:18:04reemerge when the state started to occupy to take it larger allerg Ro 1:18:10what's the point of being nationalistic if you don't have a government that can do something there's no point of being 1:18:17strongly St let's go out of the ordinary ones look at what's happening in Britain as you become more and more socialist 1:18:22you have the development of the Scots and the wealth why because now there are 1:18:27goodies to be divided on and you better get in control of those goodies take a simple example here 1:18:34is the North Sea oil in the capitalist world the government wouldn't be having anything to do with it that would be a 1:18:40private Enterprise activity it might be individual Scotchman who would only the ow it might be Englishman it might be 1:18:46Frenchman it might be Germans it might be us but today everybody knows that 1:18:51that North Sea o is going to be controlled by a governmental and if you're a Scotsman you can 1:18:57therefore see that there is great benefit in having a separate Scotch government which can control that nor in 1:19:04the same way in the Arab countries as long as it's individuals are tra which is the essence of the C Society you 1:19:12don't have any development you don't have any opportunity to exercise nationalism the time you're describing 1:19:17why do you have nationalism in those countries because in every one of them you have it controlled by an oligarchy 1:19:23which has the control over the society you take the case of German and a in the 1:19:29first place the depression of which Germany there's no doubt that the depression in Germany stimulated him but 1:19:37that Depression was a result of a failure of government not capitalist system it was the United States Federal 1:19:43Reserve System that produced that depression which spread to Germany it wasn't any failure of the business 1:19:48enterprise system I know I can't persuade you of that right now but I will recommend to you a very good book 1:19:57so I think if you really look at the evue you will find that it really runs 1:20:03in the opposite direction that the whole thrust of free market capitalism and Enterprise is to emphasize the 1:20:11individual now don't misunderstand me when I say the individual I don't mean the isolated naked individual separate 1:20:18from all this stuff it emphasizes voluntary associations of individual 1:20:23those voluntary associ may be churches there may be charitable groups to get on 1:20:28hpit but the one thing it doesn't impr are fix permanent boundaries 1:20:34corresponding to nation states and the rise of the great nation states the rise 1:20:39of Nationals has been a phenomenon of a growth of government bureaucracy and control and not the opposite I think we 1:20:46have time for one more question and I will 1:20:52itad anybody back there who was go 1:20:58ahead my finger is not very directive I mean the young lady who 1:21:15is no it isn't there is no doubt that every that 1:21:21you always have Tendencies toward everybody will attempt to form a man of course we all want to improve our lot 1:21:28and we'll all try to form them man now the question you're raising is the question is whether there is something 1:21:34inherent in C so that it tends to promote the growth of monopo that's an 1:21:40arguable position in the sense that it could be some but it's also a position 1:21:45which has been extensively investigated and stud and the answer is that unless you get the government in 1:21:54on the side the Monopoly and the Monopoly will try to get the government in don't misunderstand me I'm not saying 1:21:59that the Monopoly will not try to do so unless you get the government in the monopolies will not be promoted but on 1:22:05the contrary will break down almost without exception International cartels to take 1:22:12a particular case which have not been able to get the government on their side have broken down because of competition 1:22:19from outside the only exception of any importance I know of is the De Beers diamond 1:22:26within the United States there have been a number of studies most of them done at this 1:22:32University by George Stigler by Warren Nutters and others which have shown that 1:22:37if you exclude the government dominated Industries or the industries where the government more or less monopolizes the 1:22:46industry there has been no secular tendency for monopolies to increase in 1:22:52importance what happened is that as the economy has gotten larger the firms have gotten larger but that 1:22:59doesn't mean you've had more Monopoly because in a bigger economy a bigger firm you can have more firms of a large 1:23:07size and in a smaller economy you can to have small firms the developments in communication and transportation which 1:23:13capitalism itself has sprad widens the area of the market in a 19th century Society with 1:23:21difficult transportation and communication you could have a great deal of local minority that largely disappears when you widen 1:23:27the market if you could eliminate where and when you can eliminate tariffs and have foreign trade you have the world as 1:23:34competition so I do not believe there is any inhering tendency in a capitalist 1:23:40assern to move toward monop you certainly have people trying to achieve it but you know the bigger they are the 1:23:46harder they fall and when you get a monopoly that tentatively a success that 1:23:52opens an opportunity for other people to undermine of an and there is a tendon there is a force in the other direction 1:23:58you see there are two forces at work one the coalescing force and one the disperson and there is no evidence 1:24:05whatsoever in the to the best of my knowledge empirically in the United States or in other countries that the coalescent force has some kind of innate 1:24:13power provided and that's an important provisor you can keep the government out 1:24:19if you get the government in there's no doubt if you ask where do you have Monopoly in the United States you have 1:24:25it only where you have the government stepping in why is the AMA monopol because you have the government license 1:24:31sh of medicine the uh why are the uh Banks 1:24:36monopolised because you need a government franchise to operate a bank and you're subject to government control 1:24:42how can the uh construction trade unions maintain their Monopoly power because of 1:24:47Davis bake and Walsh healing and so on Down the Line almost everywhere you find a monopolis to government you find 1:24:54government assistance now so your argument you have to make your argument if you will a 1:24:59little bit more sophisticated and there it's a much more difficult argument to handle the 1:25:05argument that you can make is that firms and seeking to become a Noni will seek to expand the role of 1:25:15government by getting political power to come in on their side and therefore via 1:25:21that movement you get into to a problem of government control I have often said 1:25:29that the two greatest enemies of free enterprise are on the one hand the businessmen and on the other hand the 1:25:35intellectuals for opposite reasons every intellectual is in favor of freedom for 1:25:41himself he wants free speech he wants freedom to choose his own research topics if I say to him are you silly 1:25:47felon look at all that waste and research you got 10 people studying the relation between money and income ought 1:25:53we to have a single planning board that will allocate research topics to people to make sure you don't have wasteful 1:25:59duplication and competitive uh way oh no that would be terrible you have to have 1:26:05freedom but when it comes to the businessman the intellectual doesn't want any freedom for him he wants him to 1:26:11be subject to a planning board so you'll have the intellectual wants freedom for himself but for nobody else now the 1:26:17businessman is very different he's all in favor of freedom for everybody else but when it comes to himself H that's a 1:26:25different thing he wants a tariff he wants government to keep out his competitors he wants government to 1:26:31provide him with a guaranteed market and he's a good promoter of expansions of 1:26:37government so that along those lines I really believe there is a very serious problem of maintaining a free society 1:26:44and that one of the forces working to expand government are the pressure from private business in but there's no you 1:26:52if you can keep the government out there is know in here in Tennessee along your line I'm afraid we've overstated our time I appreciate your attention thank 1:27:18you this audio file is a production of the University of Chicago Law School visit us on the web at 1:27:25www. law. chicago.edu [Music]
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