WEBVTT NOTE The Economics and Ethics of Discrimination 1 00:00:00.000 --> 00:00:29.000 Murray is irreplaceable, but I'd say from my heart that if anybody can replace him, it would be Walter Block, because Walter Block understood everything that Murray was doing, shared a lot of Murray's work, and is equally capable of explaining all of what he wishes to say, as you will witness in just a moment. 2 00:00:29.000 --> 00:00:38.000 His topic today is discrimination, fact or fantasy. Please welcome Walter Block. 3 00:00:45.000 --> 00:00:52.000 Chuck, thank you very much for that very kind and generous introduction. I hope I'll be half as good as you made me out to be. 4 00:00:52.000 --> 00:00:56.000 I don't think I will, it was so good, but I'll do my best. 5 00:00:56.000 --> 00:01:02.000 Before I begin, let me say that if you can't see this screen, you should move your seat, 6 00:01:02.000 --> 00:01:07.000 because I will be putting up some statistical and logical arguments to buttress my points, 7 00:01:07.000 --> 00:01:10.000 and it's important that you be able to see it. 8 00:01:10.000 --> 00:01:13.000 So please take a minute now, you won't be disturbing me or anyone else, 9 00:01:13.000 --> 00:01:19.000 and move your seat if you can't see it, given that I'm standing where I'm going to be standing. 10 00:01:19.000 --> 00:01:23.000 Okay, my topic is discrimination, fact, or fantasy. 11 00:01:23.000 --> 00:01:27.000 My short answer to that question is that it's mainly fantasy. 12 00:01:27.000 --> 00:01:30.000 There is a little bit of fact, but very little. 13 00:01:30.000 --> 00:01:39.000 On this card which announces the talk, we have Jesse Jackson who is sort of on the affirmative action side 14 00:01:39.000 --> 00:01:41.000 and Clarence Thomas who is not. 15 00:01:41.000 --> 00:01:45.000 And the implication is that I'm going to sort of take one or the other position. 16 00:01:45.000 --> 00:01:48.000 I suppose if I had a pick between the two, it wouldn't be too difficult. 17 00:01:48.000 --> 00:01:51.000 It would obviously be Clarence Thomas. 18 00:01:51.000 --> 00:01:57.500 But the way I see my view, it's a little bit more complicated than agreeing with one or the other. 19 00:01:57.500 --> 00:02:01.100 I guess I see myself taking a third option. 20 00:02:01.100 --> 00:02:07.000 I see private affirmative action as foolish, immoral, counterproductive, but I think it should be legal. 21 00:02:07.000 --> 00:02:11.500 Just because something is foolish and immoral doesn't mean it should be prohibited, in my view. 22 00:02:11.500 --> 00:02:16.100 In my view, we ought to reserve prohibitions of things for very important issues, 23 00:02:16.100 --> 00:02:20.300 like initiation of violence against innocent people. 24 00:02:20.300 --> 00:02:28.300 On the other hand, I will take the position that government affirmative action, or government discrimination, or government prejudice should be prohibited. 25 00:02:28.300 --> 00:02:33.300 The outline of what I'll be saying is first I'll try an economic analysis of discrimination. 26 00:02:33.300 --> 00:02:44.300 I'll go over the discrimination hypothesis, and then what I'll call the main competitor of that, namely the productivity hypothesis. 27 00:02:44.300 --> 00:02:50.300 And I will try to support the alternative or productivity hypothesis by logic and facts. 28 00:02:51.300 --> 00:02:59.300 The second part of my talk will be a critique of equal pay for equal work legislation, equal pay for work of equal value and affirmative action. 29 00:03:00.300 --> 00:03:09.300 I'll try to show that the cure is worse than the disease, indeed that it's a cure for a non-existent disease, the disease of discrimination or lower pay. 30 00:03:09.300 --> 00:03:18.300 And I'll conclude this section by asking what should good-minded people do instead of having affirmative action or all these equal-pay laws. 31 00:03:18.300 --> 00:03:24.300 The third section of my talk will be a legal and philosophical analysis of discrimination. 32 00:03:24.300 --> 00:03:33.300 There I will not be concerned with the effects or the economic analysis of discrimination, but rather with our rights to discriminate or non-rights to discriminate. 33 00:03:33.300 --> 00:03:37.300 This is a very controversial topic. 34 00:03:37.300 --> 00:03:40.300 There's been much heat and little light shed on it. 35 00:03:40.300 --> 00:03:42.300 It's a very emotional topic. 36 00:03:42.300 --> 00:03:45.300 This is a topic about which people disagree. 37 00:03:45.300 --> 00:03:49.300 I'm going to try to reduce tensions and I'll try to do it in three ways. 38 00:03:49.300 --> 00:03:54.300 First, I'll try to have a calm, clear and rational discourse. 39 00:03:54.300 --> 00:03:59.300 Secondly, I'd like to read something to you from John Stuart Mill on this subject. 40 00:03:59.300 --> 00:04:04.300 John Stuart Mill says as follows in his book on liberty, 41 00:04:04.300 --> 00:04:08.300 He who knows only his own side of the case knows little of that. 42 00:04:08.300 --> 00:04:12.300 His reasons may be good and no one may have been able to refute them, 43 00:04:12.300 --> 00:04:15.300 but if he is equally unable to refute the reasons on the opposite side, 44 00:04:15.300 --> 00:04:22.300 if he does not so much as know what they are, he has no ground for preferring either opinion. 45 00:04:22.300 --> 00:04:28.300 Nor is it enough that he should hear the arguments of adversaries from his own teachers, 46 00:04:28.300 --> 00:04:31.980 as they state them and accompanied by what they offer as refutations. 47 00:04:31.980 --> 00:04:36.500 That is not the way to do justice to the arguments or bring them into real contact with his own 48 00:04:36.500 --> 00:04:37.540 mind. 49 00:04:37.540 --> 00:04:41.520 He must be able to hear them from persons who actually believe them, who defend them 50 00:04:41.520 --> 00:04:44.700 in earnest and who do their very utmost for them. 51 00:04:44.700 --> 00:04:48.860 He must know them in their most plausible and persuasive form. 52 00:04:48.860 --> 00:04:54.500 So essential is this discipline to a real understanding of moral and human subjects 53 00:04:54.500 --> 00:05:05.500 He writes that if opponents to all important truths do not exist, it is indispensable to imagine them and supply them with the strongest arguments which the most skillful devil's advocate can conjure up. 54 00:05:07.500 --> 00:05:14.500 Luckily today you have no need for devil's advocate. You've got me. I really believe this stuff that I'll be putting forth for you. 55 00:05:15.500 --> 00:05:23.500 My third point here is that it's really important to discuss controversial issues and I would say you couldn't get much more of a controversial issue than this. 56 00:05:24.500 --> 00:05:35.500 What's the alternative to discussing controversial issues? I guess fighting about them, and it's more fun to talk about them, I guess, and it's more of a learning experience to talk about them and study them and to fight about them. 57 00:05:35.500 --> 00:05:45.500 So I'm glad that I have an audience here that is willing to listen to me. At some time I thought I wouldn't even have that, but I'm glad to see at least so far that that's the case. 58 00:05:45.500 --> 00:05:51.500 I want to give some advice, and I don't mean to patronize, people who disagree with my argument. 59 00:05:51.500 --> 00:05:56.900 My advice to you is don't get angry with me, don't tune out, but rather get down my arguments clearly, 60 00:05:56.900 --> 00:06:01.600 because if you want to refute me, the very least you have to understand what I'm saying. 61 00:06:01.600 --> 00:06:07.400 I myself had this problem with Keynes. I sort of had this visceral hatred for Keynes when I first read him, 62 00:06:07.400 --> 00:06:11.300 and it was hard for me to understand what he was saying, so it was always hard for me to refute him. 63 00:06:11.300 --> 00:06:17.800 And it took me years to understand it, so I would hope that some of you might save yourselves these extra years, 64 00:06:17.800 --> 00:06:24.800 and cool down internally, psychologically, and if you disagree with me, at least listen, the better to refute me. 65 00:06:24.800 --> 00:06:35.800 Okay. What we have to explain, what we have to try to account for is why is it that females earn less than males or why is it that blacks earn less than whites? 66 00:06:35.800 --> 00:06:45.800 And that they do, there can be no doubt. I think it's non-controversial that females earn about 75% as much as males and blacks earn about three quarters as much as whites do. 67 00:06:45.800 --> 00:06:50.800 Well, why is this? Well, we have two hypotheses. 68 00:06:50.800 --> 00:06:54.800 The first hypothesis is I call the discrimination hypothesis. 69 00:06:54.800 --> 00:07:01.800 And here, the view is that it's due to greed, it's due to capitalism, it's due to employer discrimination. 70 00:07:01.800 --> 00:07:06.800 The idea is that most employers are male or white or white and male 71 00:07:06.800 --> 00:07:11.800 and whites and males or white males have this visceral hatred for females and blacks 72 00:07:11.800 --> 00:07:19.000 and Blacks, and since they're in charge, they're going to just shaft the downtrodden people. 73 00:07:19.000 --> 00:07:26.600 Some quotes from this side would say, women are victims of a wage gap or attributed to racism. 74 00:07:26.600 --> 00:07:32.360 Here's a quote from a Canadian feminist who says, jobs held by women are valued less than 75 00:07:32.360 --> 00:07:35.960 those held by men, which accounts for the wage gap. 76 00:07:35.960 --> 00:07:54.960 And they say that a picture can tell a story worth a thousand words, so I'd like to put a picture up here that sort of encapsulates, at least for me, what this discrimination hypothesis is all about. 77 00:07:54.960 --> 00:08:04.960 And I don't know if you can see it in the back, but it's a little baby boy and a little baby girl, and they're looking under their diapers, and the caption says, oh, that explains the difference in our salaries, namely the plumbing. 78 00:08:04.960 --> 00:08:09.960 The fact that one persuasion, the other is the other persuasion, that's it. 79 00:08:09.960 --> 00:08:12.960 And if it was white and black, you'd have a black and white baby 80 00:08:12.960 --> 00:08:15.960 and sort of looking at their skin color and saying, that's the explanation. 81 00:08:22.960 --> 00:08:28.960 The argument here is that with a wage ratio of 0.75, this is an obvious inequity, 82 00:08:28.960 --> 00:08:33.960 it cries out to the heavens for redress, and seemingly the statistics speak for themselves. 83 00:08:33.960 --> 00:08:43.960 The message is we have rampant discrimination and the solution is affirmative action or equal pay legislation or any other of many government initiatives. 84 00:08:43.960 --> 00:08:48.960 The problem is I don't think we can allow the statistics to speak for themselves. They lie. 85 00:08:48.960 --> 00:08:52.960 You know, there's that expression, what is it? Lies, damn lies and statistics. 86 00:08:52.960 --> 00:09:03.960 Statistics. Well, strictly speaking, the statistics don't lie, but they are subject to misinterpretation, and I'm going to try to push an alternative explanation of them. 87 00:09:04.960 --> 00:09:21.960 Okay, I've now explained what the discrimination hypothesis is. Now let me try to explain the alternative, the competing hypothesis, the competing theory, which is the productivity theory, which says that the reason that blacks and females earn less than whites and males or white males is because they have lower productivity. 88 00:09:22.960 --> 00:09:31.960 That's it in a nutshell. But behind that lies a story, and I don't think that we should get in an uproar about this. 89 00:09:31.960 --> 00:09:39.960 We're not saying that anyone is inferior particularly, just that on average women, for example, have different interests, different training, different specializations. 90 00:09:39.960 --> 00:09:49.960 They concern themselves more on average with household activities, and it's no mystery to people knowledgeable about specialization and division of labor 91 00:09:49.960 --> 00:09:54.960 to see that if you specialize in one thing, you're not going to be that great in the other thing. 92 00:09:54.960 --> 00:09:57.960 I mean, if you play the violin all day long, you're not going to be a great chemist. 93 00:09:57.960 --> 00:10:03.960 And if you play, if you study in a chemistry lab, you're probably not going to be a good concert pianist. 94 00:10:03.960 --> 00:10:08.960 Well, if you're with little children and doing diapers and this and that and the other, 95 00:10:08.960 --> 00:10:13.960 it should be perhaps no mystery that your productivity in other things would be less than otherwise. 96 00:10:13.960 --> 00:10:18.960 Let me put some statistics on the table to show you what the facts are. 97 00:10:18.960 --> 00:10:22.960 The facts are, and again, these facts are pretty non-controversial. 98 00:10:25.960 --> 00:10:30.960 The facts are that if you take median weekly earnings for full-time workers, 99 00:10:30.960 --> 00:10:34.960 and in the top row I have female to male, that's F divided by M, 100 00:10:34.960 --> 00:10:39.960 and in the bottom row it's B divided by W, or black over white, 101 00:10:39.960 --> 00:10:44.960 in 1992 they seem to be converging around 0.75. 102 00:10:44.960 --> 00:10:46.960 The female have been increasing. 103 00:10:46.960 --> 00:10:51.960 If we go back a little further, back into the 70s, it was around 0.6, 0.59. 104 00:10:51.960 --> 00:10:54.960 It's been creeping up steadily. 105 00:10:54.960 --> 00:11:01.960 With blacks, it's been going up and down a little bit, but it seems to be converging toward 0.75. 106 00:11:01.960 --> 00:11:06.960 Just to give you a pause for thought, the identical relationship also exists 107 00:11:06.960 --> 00:11:10.960 between never married men or non-married men and married men. 108 00:11:10.960 --> 00:11:40.080 The Theory that I'll be urging upon your consideration is called the Marital Asymmetry Hypothesis. 109 00:11:40.080 --> 00:11:42.080 What is the marital asymmetry hypothesis? 110 00:11:42.080 --> 00:11:46.080 The marital asymmetry hypothesis says that marriage has an asymmetrical effect, 111 00:11:46.080 --> 00:11:49.080 a different effect on female and male earnings in the market. 112 00:11:49.080 --> 00:11:53.080 Namely, it increases male earnings and reduces female earnings. 113 00:11:53.080 --> 00:11:55.080 That's the theory. 114 00:11:55.080 --> 00:11:57.080 Why could this be? 115 00:11:57.080 --> 00:12:01.080 Try to give you a sort of an insight as to why it could be. 116 00:12:01.080 --> 00:12:08.080 Well, because there is unequal distribution of child care or other family activities. 117 00:12:08.080 --> 00:12:14.080 for example, child rearing, cleaning, housework, errands, shopping, gardening. 118 00:12:14.080 --> 00:12:17.080 There's a different, not only labor force participation rate, 119 00:12:17.080 --> 00:12:21.080 but also attachment to the labor force, namely females are less attached to it, 120 00:12:21.080 --> 00:12:24.080 and I'll be giving you some evidence for that. 121 00:12:24.080 --> 00:12:27.080 It's as if we're having a race. Chuck and I are having a race, 122 00:12:27.080 --> 00:12:31.080 and he's carrying a 50-pound sack on his back, and I'm just sort of racing, 123 00:12:31.080 --> 00:12:35.080 and otherwise we're both, you know, middle-aged, bald males, both slow in fact, 124 00:12:35.080 --> 00:12:41.440 But he's got 50 pounds on him and I don't. Who's going to win the race? Well, obviously, I'll win if we're roughly equal before. 125 00:12:41.440 --> 00:12:47.880 Well, the idea here is that females are roughly equal to males. It's just they've got a 50-pound sack on their back and they're racing. 126 00:12:47.880 --> 00:12:58.040 And they're coming in. When the male finishes 100 yards, the female finishes 75 yards, to make an analogy between the .75. 127 00:12:58.040 --> 00:13:04.360 A typical story told by feminists is you'll have a husband and a wife. They'll both go to work. They'll work from nine to five. 128 00:13:04.360 --> 00:13:06.200 They'll have the same preparation. 129 00:13:06.200 --> 00:13:08.840 They'll say both have a master's in chemistry 130 00:13:08.840 --> 00:13:11.160 and they'll work in some chemical lab. 131 00:13:11.160 --> 00:13:13.960 And the husband and the wife both come home at 5.30. 132 00:13:13.960 --> 00:13:15.760 And you know what the husband turns to the wife 133 00:13:15.760 --> 00:13:16.600 and you know what he says to her? 134 00:13:16.600 --> 00:13:19.520 He says, well, what's for dinner? 135 00:13:19.520 --> 00:13:23.720 Well, you know, well, if she's going to be making the dinner 136 00:13:23.720 --> 00:13:25.320 and she's going to be doing the shopping 137 00:13:25.320 --> 00:13:29.600 and she's going to be doing that, that's her 50-pound bag or sack. 138 00:13:29.600 --> 00:13:31.960 And this, forget about having children, 139 00:13:31.960 --> 00:13:38.960 which is a whole other thing that women and men are very differentially attached to children, namely men much less than women. 140 00:13:38.960 --> 00:13:43.960 That's the fact, or at least those are the facts according to this hypothesis. 141 00:13:43.960 --> 00:13:51.960 Nor is this temporary. Let me read you another quote from a bunch of sociologists who try to see if there are changing mores. 142 00:13:51.960 --> 00:13:54.960 Now we're in the 90s and maybe things are different. 143 00:13:54.960 --> 00:14:09.960 To their surprise, the sociologists discover that the social and economic gains won by so many American women during the past decade have had remarkably little effect on the traditional gender roles assumed by the more than 3,600 married couples in their study. 144 00:14:09.960 --> 00:14:18.960 Although 60% of the wives had jobs, only about 30% of the husbands believed that both spouses should work, and only about 39% of the wives thought so. 145 00:14:18.960 --> 00:14:24.960 No matter how large their paycheck, the working wives were still almost entirely responsible for the couple's housework. 146 00:14:24.960 --> 00:14:31.960 Husbands so hated housework, the researcher found, that wives who asked them to help out can sometimes sour the marriage. 147 00:14:31.960 --> 00:14:34.960 I don't see why you have to be a sociologist to know this. 148 00:14:34.960 --> 00:14:41.960 I mean, it's sort of common knowledge among all the people I know that there's this differential attachment between wives and husbands. 149 00:14:41.960 --> 00:14:48.960 Now let me give you some more evidence on the differential attachment, not labor force participation. 150 00:14:48.960 --> 00:14:52.960 Labor force participation is the rate at which people find themselves in the labor force. 151 00:14:52.960 --> 00:14:58.960 Attachment is something different. It has to do with motivation and willingness to move to save your job. 152 00:14:58.960 --> 00:15:04.960 There was a survey by a bunch of sociologists, again, of the XYZ Corporation, which they didn't name, 153 00:15:04.960 --> 00:15:08.960 but it was a large corporation in the South, and they found the following. 154 00:15:11.960 --> 00:15:29.960 Mainly they discussed promotion seeking behavior in the XYZ Corporation and they found that all males had a 53% high motivation and females only 33% but that's only the tip of the iceberg, the bottom of the iceberg is look at what marriage does. 155 00:15:29.960 --> 00:15:39.960 It increases the male motivation to get a promotion from 47 to 60% and it decreases the female motivation from 36 to 30%. 156 00:15:39.960 --> 00:15:44.960 This is compatible with the hypothesis that marriage has asymmetrical effects on income, 157 00:15:44.960 --> 00:15:50.960 boosting the male and reducing the female because of the differential attachments to the home environment. 158 00:15:50.960 --> 00:15:55.960 The next one has to do with occupational primacy. 159 00:15:55.960 --> 00:16:00.960 This is the idea, suppose this husband and wife chemist that I was talking about before, 160 00:16:00.960 --> 00:16:07.960 suppose one of them gets an offer to move to Boston and the other one has to take what he or she can grab. 161 00:16:07.960 --> 00:16:13.960 Grab, whereas the one that was offered the job in Boston knows what they're going to get and has a good job. 162 00:16:13.960 --> 00:16:20.960 Well, the question was asked of males and females, would you give up your job if your spouse's job required a move? 163 00:16:20.960 --> 00:16:24.960 And only 4% of the males said they would, but 53% of the females said that they would. 164 00:16:24.960 --> 00:16:30.960 Next question, would your spouse give up his or her job if respondents' job required a move? 165 00:16:30.960 --> 00:16:36.960 92% of the husbands said yes, their wives would give up their jobs, only 55% of the females said they would. 166 00:16:36.960 --> 00:16:41.960 Next question. Respondent's job is more important to the family than spouses. 167 00:16:41.960 --> 00:16:45.960 90% of the men said yes, only 34% of the women did. 168 00:16:45.960 --> 00:16:53.960 And spouse's job more important, only 4% of the men said yes, their spouse's job is more important, whereas 50% said the other way. 169 00:16:53.960 --> 00:17:01.960 So this is further evidence of the differential attachment to the labor force, the connection to the labor force, if you will. 170 00:17:01.960 --> 00:17:10.460 Now, the case of blacks, obviously you can't utilize a marital asymmetry hypothesis because that has nothing to do with it. 171 00:17:10.460 --> 00:17:14.460 Why is it then that blacks earn roughly 75% as much as whites? 172 00:17:14.460 --> 00:17:24.460 Well, according to the productivity theory, it is because blacks have roughly three quarters of the productivity of whites. 173 00:17:24.460 --> 00:17:29.460 And I don't think that's controversial. I think everyone agrees to that. 174 00:17:29.460 --> 00:17:39.460 There is controversy as to why it's so. Now Charles Murray and Shockley and Jensen have a view as to why it's so. It's got to do with IQ and inheritance and this and that and the other. 175 00:17:39.460 --> 00:17:51.460 Other people have the very opposite view, namely they say it's due to the fruit of slavery, discrimination, joblessness, low education, Jim Crow, whatever it is. 176 00:17:51.460 --> 00:17:56.460 I don't propose to get involved in that issue. That's way beyond my competence. I'm not concerned with that issue. 177 00:17:56.460 --> 00:18:02.460 I'm only concerned to indicate to you that there is no controversy among both sides of this debate 178 00:18:02.460 --> 00:18:09.460 that for whatever reason blacks have three quarters or have less productivity than whites. 179 00:18:09.460 --> 00:18:14.460 And according to the productivity theory, that's why they have lower wages. 180 00:18:14.460 --> 00:18:19.460 Okay, I now move on to the second part of this discussion, namely the logic of it. 181 00:18:19.460 --> 00:18:25.460 And in order to give you the logic of it, I have to acquaint you with a basic premise of economics. 182 00:18:25.460 --> 00:18:31.460 Everyone who got his PhD or her PhD in a school as opposed to with a box top and a Cheerios box, 183 00:18:31.460 --> 00:18:36.460 believes in the marginal revenue product theory of wage determination. 184 00:18:36.460 --> 00:18:41.460 Now that's a big mouthful. All it means is that wages are determined by productivity, roughly. 185 00:18:41.460 --> 00:18:46.460 For example, suppose someone has a productivity of $3 an hour. 186 00:18:46.460 --> 00:18:55.460 Now, that means that if you have 100 people on your factory and now you hire this person, your receipts rise by $3 an hour extra. 187 00:18:55.460 --> 00:18:58.460 Now, what kind of wage offer are you going to make to this person? 188 00:18:58.460 --> 00:19:05.460 Well, if you're a good capitalist pig and you want to exploit, which is great, the first wage offer you would offer is a penny. 189 00:19:05.460 --> 00:19:09.460 You know, you don't want to get the workers uppity, you don't want them to be too rich or something. 190 00:19:09.460 --> 00:19:11.460 You have a penny. That's good enough for them. 191 00:19:11.460 --> 00:19:21.460 The problem with that is that if you offer him a penny, and he can produce $3 an hour, you can make $2.99 pure profit, which is great for you. 192 00:19:21.460 --> 00:19:27.460 But some other capitalist pig is going to say, well, you know, I'm all for exploiting workers. Yes, yes. Don't get me wrong. I love exploiting workers. 193 00:19:27.460 --> 00:19:35.460 However, I'd rather exploit them than let this guy exploit them. So if this guy's exploiting them for $2.99, I'll exploit them for $2.98. 194 00:19:35.460 --> 00:19:39.020 I don't like giving workers wage increases to two cents an hour, 195 00:19:39.020 --> 00:19:42.420 but better that I exploit them than the other guy exploits them. 196 00:19:42.420 --> 00:19:43.700 So the wage goes up to two cents. 197 00:19:43.700 --> 00:19:45.860 But now another capitalist is going to say, well, yes, yes, 198 00:19:45.860 --> 00:19:47.500 but I want to exploit them. 199 00:19:47.500 --> 00:19:49.020 I'll pay three, four, five. 200 00:19:49.020 --> 00:19:50.980 Where does it end? 201 00:19:50.980 --> 00:19:54.420 It ends up around near $3 an hour or as close to it 202 00:19:54.420 --> 00:19:57.940 as is determined by the cost of finding these workers. 203 00:19:57.940 --> 00:19:59.500 And this is a very powerful thing, 204 00:19:59.500 --> 00:20:02.460 which explains why capitalists want 205 00:20:02.460 --> 00:20:04.300 to go down to the Mexican wetbacks 206 00:20:04.300 --> 00:20:15.300 and exploit those workers because they're paid less than their productivity levels and so they'll bring them up to California to pick whatever it is and pay them triple what they're getting down in Mexico and still make a profit. 207 00:20:15.300 --> 00:20:20.300 This is a very, very powerful insight in economics that wages tend to reflect productivity. 208 00:20:20.300 --> 00:20:26.300 On the other hand, if anyone is foolish enough to pay such a work of $4 an hour, what happens to him or her? 209 00:20:26.300 --> 00:20:30.300 Well, they lose a buck an hour, so they'll tend to go broke. 210 00:20:30.300 --> 00:20:34.420 So if I've proven to you that it's unlikely that wages will stay below productivity levels 211 00:20:34.420 --> 00:20:39.140 and it's unlikely that wages will go above productivity levels, I hope you'll agree in 212 00:20:39.140 --> 00:20:44.020 concluding with me that there indeed is something to the economic argument that wages tend to 213 00:20:44.020 --> 00:20:47.340 equal productivity levels. 214 00:20:47.340 --> 00:20:54.980 Further, another introduction to economics 101 business is that profits tend to equalize 215 00:20:54.980 --> 00:20:56.940 in all industries. 216 00:20:56.940 --> 00:21:08.940 If industry 1 is making 50% profit and industry 2 is making 1% profit, people will get out of industry 2 where the profits are only 1% and into industry 1 where profits are 50%, 217 00:21:08.940 --> 00:21:19.940 which will tend to lower the profits in the high profit area and raise them in the low until they tend to equalize except for risk, which is just a complication. 218 00:21:19.940 --> 00:21:24.940 I'm assuming equilibrium, I'm assuming no monopoly, which would take me too far afield. 219 00:21:24.940 --> 00:21:35.940 Okay, with this introduction to basic economics in, you know, three minutes, we now return to our productivity theory of the wage gap. 220 00:21:35.940 --> 00:21:42.940 Now, notice what the discrimination hypothesis is asking us to believe. 221 00:21:42.940 --> 00:21:48.940 What they're asking us to believe, M stands for male, F for female, and we have wage and productivity. 222 00:21:48.940 --> 00:21:52.940 I hope my handwriting is not as bad as it seems to me sometimes. 223 00:21:52.940 --> 00:22:00.340 that you can make out what I'm saying is, you see, if we want to take seriously the discrimination hypothesis, 224 00:22:00.340 --> 00:22:04.140 we have to assume that the productivity between males and females is equal. 225 00:22:04.140 --> 00:22:07.140 Because if the productivity between males and females is very different, 226 00:22:07.140 --> 00:22:11.740 then of course females will get less if they have lower productivity or more if they have higher productivity. 227 00:22:11.740 --> 00:22:16.840 So I'm assuming for the sake of argument, namely that the productivity is 10 in 10 for males and females, 228 00:22:16.840 --> 00:22:19.540 and I'm going to try to be true to the facts. 229 00:22:19.540 --> 00:22:22.260 and the facts are, as I indicated, 230 00:22:22.260 --> 00:22:24.780 that females earn 75% as much as males, 231 00:22:24.780 --> 00:22:27.060 so I'm assuming that the man earns $10 232 00:22:27.060 --> 00:22:28.740 and the female earns $7.50. 233 00:22:29.700 --> 00:22:32.640 And this is roughly what we are asked to believe 234 00:22:32.640 --> 00:22:35.380 by the people who hold the discrimination hypothesis. 235 00:22:36.300 --> 00:22:37.500 But the problem with this, 236 00:22:37.500 --> 00:22:40.420 and this is why I say it's a logical difficulty, 237 00:22:40.420 --> 00:22:43.180 the problem is that you're gonna earn a lot of profit 238 00:22:43.180 --> 00:22:45.420 by hiring females and you'll earn zero profit 239 00:22:45.420 --> 00:22:47.300 if you hire a male. 240 00:22:47.300 --> 00:22:55.300 Profit consists of productivity minus wages, and for a male you're paying him 10 and he's producing 10, you make zip. 241 00:22:55.300 --> 00:23:00.300 Whereas a female, she's producing 10 for you and you're only paying her 750. 242 00:23:00.300 --> 00:23:08.300 It's as if she's got on her lapel a little sign that says, hire me and make it extra 250 an hour. 243 00:23:08.300 --> 00:23:14.300 Now, suppose you're a male chauvinist pig. Your view is, yes, yes, women are fine, but they should be barefoot, 244 00:23:14.300 --> 00:23:18.300 You get pregnant in the kitchen and they shouldn't be working and I'm not going to hire a woman no matter what. 245 00:23:18.300 --> 00:23:22.300 I'm a male chauvinist pig. Got to do it, otherwise they'll kick me out of the club. 246 00:23:22.300 --> 00:23:28.300 So you say, I'm going to hire a man. I'm not going to hire those women. Women are no good. 247 00:23:28.300 --> 00:23:37.300 You get somebody else who is a profit maximizer who doesn't win. Men, women, transvestites, some third sex, I don't care. 248 00:23:37.300 --> 00:23:42.300 I'm just looking to maximize profits. That person will make an extra $2.50 an hour. 249 00:23:42.300 --> 00:23:48.300 Now who's going to undersell who? Who's going to drive who to the wall? Who's going to go broke? 250 00:23:48.300 --> 00:23:55.300 Obviously the person who is paying an extra $250 an hour for what somebody else is paying only $750. 251 00:23:55.300 --> 00:24:02.300 You're paying $10 for it. I'm only paying $750. I'm no longer the chauvinist pig you are. I'll drive you out of business. 252 00:24:02.300 --> 00:24:11.300 So this scenario is untenable. It's nonsensical. It's illogical. It can't last. And if ever it did, it would disappear. 253 00:24:11.300 --> 00:24:16.300 So that's why I come back to the view of discrimination, fact or fantasy. 254 00:24:16.300 --> 00:24:23.300 It's not fully fantasy. There is some fact, there are some male chauvinist pigs, but they go the way of the dodo bird, 255 00:24:23.300 --> 00:24:26.300 because they keep getting ground down by losing profits. 256 00:24:26.300 --> 00:24:30.300 The point, the lesson from economics is, you want to discriminate? Fine. 257 00:24:30.300 --> 00:24:33.300 Go discriminate. You're going to pay for it. 258 00:24:33.300 --> 00:24:39.300 And if you're going to pay for it and there's a competitive market, you're going to lose out and the other guys are going to win. 259 00:24:41.300 --> 00:24:46.300 See, this would imply also that there's more profit in industries that hire females. 260 00:24:46.300 --> 00:24:49.300 For example, banking and insurance. 261 00:24:49.300 --> 00:24:54.300 And industries that hire mainly men, like logging, mining, trucking, steel manufacturing, 262 00:24:54.300 --> 00:24:55.300 are going to make low profits. 263 00:24:55.300 --> 00:24:58.300 But that's nonsensical, because profits tend to equalize. 264 00:24:58.300 --> 00:25:03.300 And if ever there was this vast divergence in profits, there would be some move. 265 00:25:03.300 --> 00:25:07.300 It's simply not tenable. 266 00:25:07.300 --> 00:25:11.300 See, the point is, according to their theory, you're exploiting women. 267 00:25:11.300 --> 00:25:14.300 Well, if you're exploiting women, you ought to have the profits to show for it. 268 00:25:14.300 --> 00:25:18.300 I mean, what's the point of exploiting people if you don't make profits, right? 269 00:25:18.300 --> 00:25:25.300 But we can see that you can't do that. It can't last, because profits tend to equalize. 270 00:25:25.300 --> 00:25:33.300 Okay, the next point I want to make, and this is harking toward or anticipating what I'll be saying about equal pay for equal work, 271 00:25:33.300 --> 00:25:38.300 is suppose now the opposite scenario, namely my scenario, namely the productivity scenario, 272 00:25:38.300 --> 00:25:42.300 namely that the productivity of men and women are different. 273 00:25:42.300 --> 00:25:47.300 Again, not because men are better than women, but because women on average are concentrating on different things. 274 00:25:47.300 --> 00:25:52.300 And suppose that the productivity of men is $10 and of females it's only $7.50. 275 00:25:52.300 --> 00:26:01.300 But suppose the law now is that you have to pay both $10 because otherwise you're evil, you're a monster, you're an abomination, you're a discriminator. 276 00:26:01.300 --> 00:26:07.300 Well, under this scenario, the profit that you'll make on a female is minus $2.50. 277 00:26:07.300 --> 00:26:09.300 The profit you'll make on a male is zero. 278 00:26:09.300 --> 00:26:12.300 In equilibrium there should be zero profits and I don't want to get into that, 279 00:26:12.300 --> 00:26:18.300 but the point is you'll be making $2.50 less on a female than on a male. 280 00:26:18.300 --> 00:26:20.300 Do you know what's going to happen? 281 00:26:20.300 --> 00:26:22.300 Females aren't going to be able to get jobs, 282 00:26:22.300 --> 00:26:26.300 which is roughly what happened to black male teenagers for reasons I'll get into later. 283 00:26:26.300 --> 00:26:29.300 That's why their unemployment rate is like quadruple, 284 00:26:29.300 --> 00:26:32.300 Let's take another case, the case of the haircut discrimination. 285 00:26:32.300 --> 00:26:34.300 Suppose the following. 286 00:26:34.300 --> 00:26:38.300 Suppose, let's say, you're doing women a favor, 287 00:26:38.300 --> 00:26:40.300 but you're not, you're just going to unemployed them. 288 00:26:40.300 --> 00:26:42.300 Better that they be exploited if they have to be exploited, 289 00:26:42.300 --> 00:26:44.300 and I don't think they will be exploited, 290 00:26:44.300 --> 00:26:46.300 but better to be exploited and working, 291 00:26:46.300 --> 00:26:48.300 at least you'll learn something on the job, 292 00:26:48.300 --> 00:26:50.300 then being unemployed you learn nothing, 293 00:26:50.300 --> 00:26:53.300 and you have no money. 294 00:26:53.300 --> 00:26:56.300 Okay, let's take another case, the case of the haircut discrimination. 295 00:26:56.300 --> 00:27:06.300 Suppose the following. Suppose that there is this plot on the part of hair cutters to exploit women. 296 00:27:06.300 --> 00:27:13.300 And the truth of the matter is that it costs $10 to cut a male's hair and $10 to cut a female's hair. 297 00:27:13.300 --> 00:27:17.300 I mean, you can see, looking at Chuck and me, you know, there's no way that that's going to be true. 298 00:27:17.300 --> 00:27:20.300 You know, not much to cut here. But suppose it's true. 299 00:27:20.300 --> 00:27:23.300 That a female and a male, it costs the same amount to cut. 300 00:27:23.300 --> 00:27:28.800 Because we just love to exploit women, we're going to charge them 30 bucks and we're only going to charge 10 bucks to a male. 301 00:27:28.800 --> 00:27:33.800 Now, I ask you, is this tenable? Is this reasonable? Can this last if ever it was true? No! 302 00:27:33.800 --> 00:27:41.300 Because you're going to make 20 bucks extra profit over and above what the profits will make on males by cutting females' hair. 303 00:27:41.300 --> 00:27:47.800 Under such a scenario, all the barbers who are barbering male hair would quit and start barbering females, 304 00:27:47.800 --> 00:27:53.800 which would mean that the prices of females would come down as the supply into beauty shops increases 305 00:27:53.800 --> 00:27:58.800 and males will rise as people leave. So it's totally untenable. 306 00:27:58.800 --> 00:28:02.800 You'll make out like a bandit if you exploit women. 307 00:28:02.800 --> 00:28:08.800 Well, if you'll make out like a bandit if you exploit women, everyone is going to want to be exploiting women. 308 00:28:08.800 --> 00:28:11.800 I'm assuming everyone's a fat capitalist pig type. 309 00:28:11.800 --> 00:28:17.800 You know, no one ever went broke underestimating the selfishness of the capitalists. Fine. 310 00:28:17.800 --> 00:28:23.800 Let's take the next scenario, the one that I find more reasonable. 311 00:28:23.800 --> 00:28:32.800 Namely that the price charge for males and females is $10. 312 00:28:32.800 --> 00:28:38.800 But the real cost, this is, I think it's true, that it costs more for females' hair than males' hair. 313 00:28:38.800 --> 00:28:42.300 Women's hair, men aren't as fussy for this reason or that reason. 314 00:28:42.300 --> 00:28:47.300 My view is that it costs more to cut females' hair, which is why they have to pay more for it. 315 00:28:47.300 --> 00:28:52.300 Well, under these situations, females aren't going to have any beauty parlor operators, 316 00:28:52.300 --> 00:28:56.800 because they'll see a woman, they'll see that they're not going to be able to make any money. 317 00:28:56.800 --> 00:29:00.800 So they'll all shut down. Now, how is that going to help females? 318 00:29:00.800 --> 00:29:03.800 Okay, again, I'm not so concerned with hair cutting. 319 00:29:03.800 --> 00:29:08.300 I'm concerned with the, although I am, but deeper underlying it, 320 00:29:08.300 --> 00:29:26.300 I'm concerned to show you the economic theory of discrimination, which is that it can't exist, that there are pushes in the market that, whenever it sees it, it'll eviscerate it, it'll wipe it out, whether it's haircuts or wages, doesn't matter. 321 00:29:26.300 --> 00:29:32.100 Okay, there were accusations that banks in Boston, as it happens, were lending in a racist way. 322 00:29:32.100 --> 00:29:35.100 They were lending more to whites than the blacks. 323 00:29:35.100 --> 00:29:40.500 And the banking authorities have to get in to shape them up because they're a bunch of racist pigs. 324 00:29:40.500 --> 00:29:42.200 There were a lot of problems with these theories. 325 00:29:42.200 --> 00:29:45.300 First of all, it's true they were lending more to whites than the blacks, 326 00:29:45.300 --> 00:29:48.100 but they were lending more to Asians than to whites. 327 00:29:48.100 --> 00:29:51.000 So it was Asians first, whites second, blacks third. 328 00:29:51.000 --> 00:29:54.900 So if they're such white racists, why are they helping out the Asians? 329 00:29:54.900 --> 00:29:56.660 So that's one problem with the theory. 330 00:29:56.660 --> 00:30:05.660 The second problem with their technology, excuse me, 331 00:30:05.660 --> 00:30:07.940 is that they didn't count people as white or black 332 00:30:07.940 --> 00:30:10.380 based on the color of their skin, but rather where they live. 333 00:30:10.380 --> 00:30:14.020 For example, they counted the rich areas as white 334 00:30:14.020 --> 00:30:16.060 and the poor areas as black. 335 00:30:16.060 --> 00:30:20.740 So if you were a rich black, you got counted as white. 336 00:30:20.740 --> 00:30:22.900 If you were a poor white, you got counted as black. 337 00:30:22.900 --> 00:30:24.860 sort of a little wonky kind of a theory. 338 00:30:26.060 --> 00:30:28.900 The third one is that the default rates were about the same. 339 00:30:28.900 --> 00:30:30.820 If there was truly racism, 340 00:30:30.820 --> 00:30:32.800 white default would have been much higher 341 00:30:32.800 --> 00:30:34.820 because he would have been going way down in the barrel 342 00:30:34.820 --> 00:30:37.540 to get whites because you're anti-black. 343 00:30:37.540 --> 00:30:40.120 But the truth is that the default rates were roughly equal, 344 00:30:40.120 --> 00:30:42.020 which shows that the market is working. 345 00:30:43.920 --> 00:30:47.160 So whether it's haircuts, wages, loans, 346 00:30:47.160 --> 00:30:49.720 it's the same thing, the market tends to work. 347 00:30:49.720 --> 00:30:52.840 Any racism or sexism tends to be, 348 00:30:52.840 --> 00:30:57.400 eradicated by the market because of the profit and loss considerations. 349 00:30:57.400 --> 00:31:01.080 So my conclusion of this section is that there is no discrimination. 350 00:31:01.080 --> 00:31:05.440 Or better yet, if there is any, it's very vestigial, very peripheral. 351 00:31:05.440 --> 00:31:07.640 It's continually ground down. 352 00:31:07.640 --> 00:31:14.900 To get back to my title, discrimination, fact or fancy, very little fact, mostly fancy. 353 00:31:14.900 --> 00:31:20.000 As long as we're talking about private enterprise, a little clinker here. 354 00:31:20.000 --> 00:31:25.000 Because remember, I keep talking about people going broke if they engage in discrimination. 355 00:31:25.000 --> 00:31:27.500 Who can go broke? Only a private enterprise can go broke. 356 00:31:27.500 --> 00:31:31.500 The government can't go broke. If they do something stupid, they just raise taxes. 357 00:31:31.500 --> 00:31:34.500 So this theory only works in private enterprise. 358 00:31:34.500 --> 00:31:41.000 So if we needed any more reasons to prefer private enterprise to government sector, we now have one. 359 00:31:41.000 --> 00:31:46.000 This process only works in the market. It doesn't work in the government sector. 360 00:31:46.000 --> 00:31:53.000 Okay, I now concluded that section of my comments and now I'm on to the third part where I'm going to give you some statistical evidence. 361 00:31:53.000 --> 00:32:02.000 And here is the statistical evidence. 362 00:32:02.000 --> 00:32:10.000 See, the point is here, my theory says that it's really marital status that determines it. 363 00:32:10.000 --> 00:32:16.000 If it's really marital status, then we ought to be able to put this to a test, or at least illustrate this. 364 00:32:16.000 --> 00:32:27.000 So the way I do it is I divide the population. I have two, you see it's all female to male earnings in percentage terms. 365 00:32:27.000 --> 00:32:35.000 And I have different ways, like the first one is Canada in 1971 for people age 30 or more. 366 00:32:35.000 --> 00:32:39.000 Notice the distinction between ever and never married. 367 00:32:39.000 --> 00:32:42.000 Ever married means you were ever married. 368 00:32:42.000 --> 00:32:44.000 You were touched by the institution of marriage, 369 00:32:44.000 --> 00:32:48.000 which remember I claim has asymmetrical effects on male and female income, 370 00:32:48.000 --> 00:32:51.000 raising male income and lowering female income. 371 00:32:51.000 --> 00:32:57.000 So, if you were widowed or divorced or separated or you're presently married, you're ever married. 372 00:32:57.000 --> 00:33:01.000 And what's your ratio? 0.33 or 33%. 373 00:33:01.000 --> 00:33:08.480 ." Whereas if you were never married, the ratio is 99, which shows, I mean, look, now 374 00:33:08.480 --> 00:33:12.860 try these facts on the other hypothesis, the discrimination hypothesis. Now you're being 375 00:33:12.860 --> 00:33:19.160 asked to believe that these male chauvinist pig types, these refusers of humanity, discriminates 376 00:33:19.160 --> 00:33:23.840 against ever married people, but not against never married people. Why? If you're going 377 00:33:23.840 --> 00:33:30.480 to discriminate, have the decency to discriminate. No, discriminate against everyone. What marital 378 00:33:30.480 --> 00:33:41.480 If you hate females, if you have this male chauvinist pig that believes that females should be barefoot pregnant in the kitchen, what are you doing paying never married females 99% as much as you pay males? 379 00:33:41.480 --> 00:33:47.480 Why are you doing that? Well, it's completely unaccountable on that theory. 380 00:33:47.480 --> 00:34:03.480 The next one is Canada 1971 university degree and near the total all people at 61% ever married 56%, never married 109.8, namely females are paid 9.8% more than males. 381 00:34:03.480 --> 00:34:11.480 The point is we're converging very close to unity, that there is no difference between males and females, they have equal productivity except for marriage. 382 00:34:11.480 --> 00:34:16.920 for Marriage. If they've been touched by the institution of marriage, it warps, it creates 383 00:34:16.920 --> 00:34:21.200 the wage gap. If they've not been touched by it, there ain't no wage gap. The third 384 00:34:21.200 --> 00:34:26.080 one is Canada, 1982, high school degree, and we can see that the never-marrieds are 93, 385 00:34:26.080 --> 00:34:31.800 which is pretty close to unity. I try to get stuff for the U.S., but the point is, see, 386 00:34:31.800 --> 00:34:35.480 in order to get this Canadian stuff, they don't publish it. They don't even publish 387 00:34:35.480 --> 00:34:39.160 this stuff. They collect it, but they didn't publish it. And the group that I was working 388 00:34:39.160 --> 00:35:08.160 Well, what I did for the U.S. since I couldn't get it, beggars can't be choosers, what I did is I took the female-male wage ratio for people 25 and above, who I assume have been touched by the institution of marriage, and then people 16 to 24 who I assume roughly have never been touched by the institution of marriage. 389 00:35:08.160 --> 00:35:15.160 It's not exactly true, but by and large, it's sort of what economists call a proxy variable. 390 00:35:15.160 --> 00:35:18.160 Now look, you have a 94% ratio. 391 00:35:18.160 --> 00:35:25.160 Now why is it that females who are 16 to 24 are earning 94% or 95% as much as males? 392 00:35:25.160 --> 00:35:30.160 It cannot be accounted for on the discrimination hypothesis. 393 00:35:30.160 --> 00:35:35.160 It certainly can be accounted for on the productivity hypothesis, 394 00:35:35.160 --> 00:35:40.160 Which is why I say this is evidence for the Productivity Hypothesis. 395 00:35:40.160 --> 00:35:46.160 Let me run another one at you very quickly, the effect of children. 396 00:35:46.160 --> 00:35:54.160 Here we have females to males, hourly earnings, 1987, white people aged 20 to 44 in the U.S. 397 00:35:54.160 --> 00:36:00.160 In the first case, we standardized for age and region, but not for a marital status. 398 00:36:00.160 --> 00:36:04.160 And we noticed that if you have children, you earn 62% as much as a man. 399 00:36:04.160 --> 00:36:13.160 If you don't have children, you're in 86%. Again, very compatible with the marital asymmetry hypothesis, not at all compatible with the discrimination hypothesis. 400 00:36:13.160 --> 00:36:23.160 And in the second one, we now standardize or control for more things, age, region, education, skill level, labor force turnover, but not marital status. 401 00:36:23.160 --> 00:36:31.160 And again, if you have children, you earn 72% if you're a female as much as a man, but if you don't have children, you earn 90%. 402 00:36:31.160 --> 00:36:38.160 They're crying out to say, yes, the productivity hypothesis is what it's all about, the other is ridiculous. 403 00:36:49.160 --> 00:36:54.160 Now, there are very sophisticated studies, econometric regression analysis, they use the residual method. 404 00:36:54.160 --> 00:37:05.160 What this is, is that they measure the wage gap and then they try to attribute it to all sorts of things like age, education, experience, degrees. 405 00:37:05.160 --> 00:37:10.160 They never use marital status. I can't find any studies that use marital status. 406 00:37:10.160 --> 00:37:15.160 Or if they do, they do it single versus married. But single versus married doesn't cut it. 407 00:37:15.160 --> 00:37:21.160 Because if you're single, you can be widowed or divorced. Namely, you've been touched by the institution of marriage. 408 00:37:21.160 --> 00:37:28.160 If you want to do it cleanly, you have to do never versus ever marriage, not single versus non-single. 409 00:37:28.160 --> 00:37:35.160 Other problems with this is that it ignores customer discrimination or fellow worker discrimination. 410 00:37:35.160 --> 00:37:39.160 After all, we're trying to figure out what's going on with an employer discrimination. 411 00:37:39.160 --> 00:37:43.160 Another problem is that the independent variables are very sloppy. 412 00:37:43.160 --> 00:37:46.160 For education, they take years of schooling. 413 00:37:46.160 --> 00:37:52.160 But years of schooling in Harvard are different than years of schooling in Podunk University, and they don't control for that. 414 00:37:52.160 --> 00:37:58.160 Then there's a bias toward the quantifiable, which all econometric regression equations have. 415 00:37:58.160 --> 00:38:01.160 It's very hard to measure perseverance, initiative. 416 00:38:01.160 --> 00:38:12.160 And yet from our sociological studies, you see that married men have this ambition for their kids that women don't have on average because they're more concerned with the children. 417 00:38:12.160 --> 00:38:42.160 Children. Now, some of you might say, well, what about the past? Maybe this is true now. How about in the past? The point is, this theory is true for as far back as we can go. Now, I go back to 1941 here. I couldn't get any good stuff for 1931 and the previous censuses just didn't have what I wanted. They didn't distinguish between never and ever married. The top one is the never married. They're the ones that are up around the 80s, 90s, 418 00:38:42.160 --> 00:38:47.160 50% ratio, female to male, the bottom ones are ever married or the total. 419 00:38:47.160 --> 00:38:54.160 So this thing that I'm talking about, it's not that all of a sudden now in the 90s, since we're so cool and groovy and we don't discriminate now, 420 00:38:54.160 --> 00:39:00.160 we've never discriminated for at least the last 50 years or as far back as I can get statistics for. 421 00:39:00.160 --> 00:39:05.160 And I have no doubt that this was true, you know, back to the beginning of time, 422 00:39:05.160 --> 00:39:20.160 This economics grinds down continually, this profit consideration that I was talking about. 423 00:39:20.160 --> 00:39:26.160 Okay, I now arrive at my second major point. I am now going to criticize equal pay for equal work, 424 00:39:26.160 --> 00:39:30.160 equal pay for work of equal value and affirmative action. 425 00:39:30.160 --> 00:39:34.160 I claim that they are a cure for a non-existent disease, namely the harm of discrimination. 426 00:39:34.160 --> 00:39:42.160 I claim that discrimination is impotent thanks to the magic of the marketplace, which Ronald Reagan gave us that wonderful term. 427 00:39:42.160 --> 00:39:50.160 First, equal pay for equal work. Let me introduce this in the following way. 428 00:39:50.160 --> 00:39:59.160 In South Africa, in the bad old days of South Africa when apartheid was running rampant, they had a thing called job reservation laws. 429 00:39:59.160 --> 00:40:06.160 What were job reservation laws? Job reservation laws were roughly that blacks got the dirty end of the stick and whites got the good end of the stick. 430 00:40:06.160 --> 00:40:14.160 If you wanted to be a chief dynamiter in the diamond mine, you had to be white. If you wanted to be the assistant, you could be a black. 431 00:40:14.160 --> 00:40:20.160 This was the rule promulgated by white racist unions. 432 00:40:20.160 --> 00:40:28.160 But it was continually undermined by the capitalists. The capitalists who don't care white, black, they just care about green 433 00:40:28.160 --> 00:40:32.720 Because otherwise they go broke, as we've seen in the examples I've given. 434 00:40:32.720 --> 00:40:33.840 They kept undermining it. 435 00:40:33.840 --> 00:40:36.520 What they would do is they'd say, yes, yes, you're black. 436 00:40:36.520 --> 00:40:40.220 You can't have the title of Chief Dynamite. 437 00:40:40.220 --> 00:40:44.480 But we're going to get you to do it if you can do it, and they could do it. 438 00:40:44.480 --> 00:40:47.320 So the union, the white racist union, was feeling the pinch. 439 00:40:47.320 --> 00:40:51.360 These job reservation laws were passed, but they were being subtly undermined 440 00:40:51.360 --> 00:40:52.520 continually. 441 00:40:52.520 --> 00:40:54.200 So guess what they came up with? 442 00:40:54.200 --> 00:40:57.280 In a brilliant stroke, they came up with equal pay 443 00:40:57.280 --> 00:40:58.280 for Equal Work. 444 00:40:58.280 --> 00:41:04.800 You see that whites had much higher productivity than blacks in South Africa for various reasons 445 00:41:04.800 --> 00:41:07.320 having to do with you-know-what. 446 00:41:07.320 --> 00:41:10.920 So what they did is they got a law saying you have to pay whites the same as blacks 447 00:41:10.920 --> 00:41:16.360 and all of a sudden the union owners, the mine owners were not giving the blacks any 448 00:41:16.360 --> 00:41:21.200 of these jobs because if they did they would lose money. 449 00:41:21.200 --> 00:41:24.920 Let me make this point in a different way. 450 00:41:24.920 --> 00:41:31.600 In nature there are certain animals that are very, very weak and what they have is a compensating 451 00:41:31.600 --> 00:41:37.580 differential. For example, the deer is very fast. If it weren't fast, it would be gobbled 452 00:41:37.580 --> 00:41:42.640 up by the wolves. The skunk, we all know the compensating differential of the skunk. If 453 00:41:42.640 --> 00:41:49.280 it didn't have it, it would not survive. Similarly with the porcupine. Take away the quills, 454 00:41:49.280 --> 00:41:53.980 The porcupine is not going to survive. 455 00:41:53.980 --> 00:42:00.520 The analogy is that weak economic actors have a compensating differential too. 456 00:42:00.520 --> 00:42:05.080 In the old days, when people read good literature, there were the Horatio Alger stories. 457 00:42:05.080 --> 00:42:13.420 Horatio Alger was this young boy who was very poor and who wanted to claw his way into employment. 458 00:42:13.420 --> 00:42:17.440 And you know what he would do when he wanted to get a job and the owner wouldn't give him 459 00:42:17.440 --> 00:42:18.440 the job? 460 00:42:18.440 --> 00:42:43.440 The point is that the compensating differential of weak economic actors, people who are despised, people who are downtrodden, people who are weak for whatever reason in the economic sphere, have this thing equivalent to the smell of the skunk, or the porcupine quill, or the sweetness of the deer, and that's the ability to work for low wages. 461 00:42:43.440 --> 00:42:50.440 You take that away from them and they are helpless, just as helpless as a deer without speed or a skunk without the smell. 462 00:42:50.440 --> 00:42:58.440 The equal pay for equal work is taking away this compensating differential from these helpless people. 463 00:42:58.440 --> 00:43:07.440 The minimum wage law is a vicious law. Before the minimum wage law came in 1937, I think it was, or maybe 1936. 464 00:43:07.440 --> 00:43:16.440 1936, 38, sorry, we have an expert here. I'm just a dilettante in labor economics. Chuck knows where it's at. It was 1938. 465 00:43:16.440 --> 00:43:22.440 Before the minimum wage law came in, the unemployment rates of whites and blacks was close. 466 00:43:22.440 --> 00:43:29.440 The unemployment rate of old people and young people was close. A little higher for blacks, a little higher for young people, but not much. 467 00:43:29.440 --> 00:43:39.440 After the minimum wage law, the unemployment rate for white males in their fifties, such as myself, is pretty low, four, five percent. 468 00:43:39.440 --> 00:43:51.440 For blacks of that age, eight, ten percent. For white teenagers, oh, twenty percent. For black teenagers, forty percent, fifty percent. 469 00:43:51.440 --> 00:43:55.440 And if you count the fact that, you see, they only count you as unemployed if you're seeking work. 470 00:43:55.440 --> 00:44:01.440 And if you stop seeking work because you never get it, they don't count you as unemployed due to the magic of statistics. 471 00:44:01.440 --> 00:44:04.440 So the unemployment rate for these people is even higher. 472 00:44:04.440 --> 00:44:11.440 This is a vicious, depraved thing that that guy Reich keeps saying, you know, we've got to have higher minimum wages. 473 00:44:11.440 --> 00:44:18.440 Why are they doing this? Well, because the unions are competing with unskilled workers and the last thing they want is good competition. 474 00:44:18.440 --> 00:44:20.440 They'll price them out of the market. 475 00:44:20.440 --> 00:44:22.440 But this is what equal pay for equal work is. 476 00:44:22.440 --> 00:44:27.440 If you do this for females, females will then have the same result as black male teenagers. 477 00:44:27.440 --> 00:44:32.440 We shouldn't do it for females, we should undo it for black male teenagers so they get jobs. 478 00:44:32.440 --> 00:44:39.440 This is just vicious, cruel and depraved. 479 00:44:39.440 --> 00:44:45.440 Why is it that blacks can't get cabs in the inner cities? 480 00:44:45.440 --> 00:44:53.440 There's a very controversial issue and I hope that you'll take my benevolence for granted. 481 00:44:53.440 --> 00:44:59.440 The reason blacks can't get cabs is because blacks live in higher crime areas and the cab drivers, 482 00:44:59.440 --> 00:45:03.440 whether they're white or black or green or blue, it doesn't matter, 483 00:45:03.440 --> 00:45:07.440 they'd rather go to a white area where it's safe than to a black area where it's more dangerous. 484 00:45:07.440 --> 00:45:09.440 It's human nature. 485 00:45:09.440 --> 00:45:13.440 The point is that the law is such that they have to pay the same fare. 486 00:45:13.440 --> 00:45:19.440 So that's why they have trouble going into the black areas. 487 00:45:19.440 --> 00:45:22.440 Why is it then that blacks can get food in the black areas? 488 00:45:22.440 --> 00:45:25.440 That's because the prices can be higher. 489 00:45:25.440 --> 00:45:30.440 The prices in the black areas are usually higher for a can of coffee in the white area or the black area. 490 00:45:30.440 --> 00:45:33.440 It's much higher in the black area because the costs of doing business are higher there, 491 00:45:33.440 --> 00:45:37.440 because the crime is higher there for various reasons which I won't get into. 492 00:45:37.440 --> 00:45:42.440 There now are people like Jesse Jackson who say, well, it's unfair. 493 00:45:42.440 --> 00:45:47.440 You can't allow prices to be higher in the black areas. This is racism. Let's have the prices the same. 494 00:45:47.440 --> 00:45:52.440 Well, if the prices were the same, I don't have to ask you if you want to pass my economics course what's going to happen. 495 00:45:52.440 --> 00:45:55.440 There ain't going to be no food in the inner city. 496 00:45:55.440 --> 00:46:00.440 You know, the black people will then have to go miles and miles away to the white areas to buy food. 497 00:46:00.440 --> 00:46:05.440 That's just economics. It's not racism or anything like that. 498 00:46:05.440 --> 00:46:11.440 There will be people very happy to go into the black areas if they can make the same profit given the risk as anywhere else. 499 00:46:11.440 --> 00:46:15.440 The Market Tends to Equalize 500 00:46:15.440 --> 00:46:18.440 Okay, next one is equal pay for work of equal value. 501 00:46:18.440 --> 00:46:23.440 This, if anything, is perhaps even worse than equal pay for equal work. 502 00:46:23.440 --> 00:46:25.440 What equal pay for work of equal value... 503 00:46:25.440 --> 00:46:27.440 You see, equal pay for equal work is, you know, 504 00:46:27.440 --> 00:46:30.440 sort of all plumbers have to get the same amount 505 00:46:30.440 --> 00:46:34.440 and forget about the fact that there are different qualities of plumbers. 506 00:46:34.440 --> 00:46:36.440 Equal pay for work of equal value is to say, 507 00:46:36.440 --> 00:46:42.440 They say, well, since men are plumbers and women are nurses and plumbers are getting more than nurses, 508 00:46:42.440 --> 00:46:47.440 we have to make them equal because, you know, they're really worth the same amount. 509 00:46:47.440 --> 00:46:54.440 And what they do is they say they'll assign points to things like skill, effort, responsibility and working conditions. 510 00:46:54.440 --> 00:47:02.440 And on that basis, they'll determine which professions or which work gets which wages. 511 00:47:02.440 --> 00:47:07.920 Suppose I shoot an arrow up into the air, a quarter of a mile up, and as it comes down, 512 00:47:07.920 --> 00:47:10.200 I catch it with my teeth. 513 00:47:10.200 --> 00:47:13.880 A little weird, but you know, humanly. 514 00:47:13.880 --> 00:47:17.440 Now I ask you, is there a job that requires more skill than that? 515 00:47:17.440 --> 00:47:18.440 It's pretty skillful. 516 00:47:18.440 --> 00:47:22.360 I mean, you know, if I miss, it goes right through my ear and I'm in trouble. 517 00:47:22.360 --> 00:47:23.360 Does it take great effort? 518 00:47:23.360 --> 00:47:27.000 Yes, I get nervous every time I see the arrow coming down. 519 00:47:27.000 --> 00:47:28.000 Is there great responsibility? 520 00:47:28.000 --> 00:47:30.700 Yeah, I can get dead. 521 00:47:30.700 --> 00:47:31.700 What about the working condition? 522 00:47:31.700 --> 00:47:39.700 So, according to that, this industry of catching arrows with your teeth as they come down from a quarter of a mile should get high wages. 523 00:47:39.700 --> 00:47:46.700 But I just invented this. Actually, I stole it from someone. I footnote him in my work. 524 00:47:46.700 --> 00:47:53.700 But the point is that there is no such industry, there is no such job. It's just a completely made-up thing. 525 00:47:53.700 --> 00:47:55.700 Let me give you another one. 526 00:47:55.700 --> 00:48:12.700 The job of horse trainer in 1885. Was that a job that took great skill? Yes. Was that a job that took great effort? Yes. Responsibility? Sure. Working conditions? Pretty bad. A horse kicks you, bites you. 527 00:48:12.700 --> 00:48:17.700 What happened? All of a sudden this rascal, Henry Ford, came up with the horseless carriage 528 00:48:17.700 --> 00:48:25.700 and the job of horse breaker, which has the same skill, effort, responsibility, working conditions in 1885 as in 1925, 529 00:48:25.700 --> 00:48:28.700 all of a sudden the bottom drops out of that market. 530 00:48:28.700 --> 00:48:35.700 The point that I'm trying to make to you is that skill, effort, working conditions and responsibility have got very little to do with anything. 531 00:48:35.700 --> 00:48:39.700 They're forgetting about something important, namely the demand for the product. 532 00:48:39.700 --> 00:48:51.700 Let me give you one more example. Dentists. Do dentists make a lot of money? Yes, dentists make a lot of money. They have high skill. There is effort. You have to look down people's tonsils. 533 00:48:51.700 --> 00:48:59.700 The working conditions are, I don't know, I'm not really, it doesn't seem aesthetic to me. I don't want to be a dentist when I grow up. 534 00:48:59.700 --> 00:49:04.700 And they make a lot of money seemingly because of the skill, effort, responsibility and working condition. 535 00:49:04.700 --> 00:49:11.700 Now suppose I invent a cure for tooth decay. What happens to the salary of dentists? 536 00:49:11.700 --> 00:49:19.700 It goes way down, and yet the skill, effort and responsibility of working missions are the same before and after my invention of the tooth decay pill. 537 00:49:19.700 --> 00:49:23.700 Again, more evidence that these things are pretty irrelevant. 538 00:49:23.700 --> 00:49:30.700 What this really is, is a recipe for Sovietizing the whole labor force. 539 00:49:30.700 --> 00:49:38.700 You're going to get Hillary or Billery, as I like to call them, and they're going to decide how much wages are worth for each occupation. 540 00:49:38.700 --> 00:49:45.700 They've done this a little bit on the state level. You know, the Republicans ought to be happy about that because we've done it on the state level. 541 00:49:45.700 --> 00:49:49.700 Big deal. I mean, if it's wrong, it's wrong on the federal level, it's wrong on the state level. 542 00:49:49.700 --> 00:49:53.700 Let me read you a report on how this works. 543 00:49:53.700 --> 00:50:05.700 What they've done is they've tried to rank the various professions in various states based on awarding them arbitrary points based on these four considerations, skill, effort, working conditions and responsibility. 544 00:50:05.700 --> 00:50:15.700 Vast discrepancies occur in the job scores for the three states. In Minnesota, for example, a registered nurse, a chemist and a social worker all have equal values and would be paid the same. 545 00:50:15.700 --> 00:50:21.500 be paid the same. However, Iowa's study finds that the nurse is worth 29% more than the 546 00:50:21.500 --> 00:50:26.100 social worker who is in turn worth more than 11% more than the chemist. While the chemist 547 00:50:26.100 --> 00:50:30.540 also receives the lowest point total score in the three positions of the Vermont study, 548 00:50:30.540 --> 00:50:34.900 the social worker and nurse reverse rankings. And this goes on and on with all sorts of 549 00:50:34.900 --> 00:50:40.460 anomalies and the bottom line is that it's just arbitrary and capricious. 550 00:50:40.460 --> 00:50:41.980 Okay, affirmative action. 551 00:50:41.980 --> 00:50:44.720 The third thing to cure this non-existent disease. 552 00:50:46.260 --> 00:50:48.040 First of all, affirmative action suggests 553 00:50:48.040 --> 00:50:50.460 that women are inferior, and I don't think women are inferior. 554 00:50:50.460 --> 00:50:52.820 They're just specializing in different things. 555 00:50:52.820 --> 00:50:54.320 Secondly, it's unjust. 556 00:50:54.320 --> 00:50:57.360 It supposedly helps young women who were never the victims 557 00:50:57.360 --> 00:50:59.180 of discrimination in the first place. 558 00:50:59.180 --> 00:51:00.260 I mean, if you can have a law, 559 00:51:00.260 --> 00:51:02.460 it's supposed to help people who were the victims. 560 00:51:02.460 --> 00:51:05.280 What's the point in helping people who weren't victims 561 00:51:05.280 --> 00:51:07.540 because they look like other people who were victims? 562 00:51:07.540 --> 00:51:08.640 That's not justice. 563 00:51:08.640 --> 00:51:16.640 Third point, what this does is it helps the people who least need it and hurts the people who most need it. 564 00:51:16.640 --> 00:51:24.640 You see, under affirmative action, you're an employer. The last thing you want to do is fire a woman or fire a black. 565 00:51:24.640 --> 00:51:29.640 I mean, you fire a woman, you fire a black, you pull the rest of your hair out. That's why I have so little hair. 566 00:51:29.640 --> 00:51:33.640 I've been pulling it out, thinking that I might have to one day fire a woman or fire a black. 567 00:51:33.640 --> 00:51:39.640 So, if I'm afraid of this, what kind of black or woman am I going to look for to hire? 568 00:51:39.640 --> 00:51:45.640 Obviously, one who comes from Harvard or Princeton or Yale or Cal State Hayward. 569 00:51:45.640 --> 00:51:49.640 Plug for Cal State Hayward. 570 00:51:49.640 --> 00:51:53.640 Namely, the ones that need it the least are the ones that are going to benefit. 571 00:51:53.640 --> 00:51:55.640 Every employer is going to think like I am. 572 00:51:55.640 --> 00:51:58.640 The demand curve for these kind of workers is going to shift to the right. 573 00:51:58.640 --> 00:52:00.640 The salary of these people is going to go up. 574 00:52:00.640 --> 00:52:04.720 Now, what about the marginal blacker woman, the one who I might have given a chance to 575 00:52:04.720 --> 00:52:08.260 if I thought I could fire them if it didn't work out, I'm going to stay away from them 576 00:52:08.260 --> 00:52:13.500 like with a ten-foot pole, because God forbid I have to fire them if it doesn't work out? 577 00:52:13.500 --> 00:52:16.440 And every other employer is going to think the same way, so the demand curve for this 578 00:52:16.440 --> 00:52:18.800 kind of worker will shift to the left. 579 00:52:18.800 --> 00:52:23.720 So the people that need it the least, the ones at the top of the pile will get the help, 580 00:52:23.720 --> 00:52:27.000 the ones at the bottom of the pile will get pushed further down. 581 00:52:27.000 --> 00:52:36.640 Third, fourth point, it harms blacks and women who have made it on their own. 582 00:52:36.640 --> 00:52:41.760 Now what they did many years ago in Harvard Medical School is they took in a whole bunch 583 00:52:41.760 --> 00:52:48.080 of blacks who didn't pass the same entrance requirements that the whites did. 584 00:52:48.080 --> 00:52:51.840 They were just freshmen in the medical school and you know what happened to people, blacks 585 00:52:51.840 --> 00:52:57.280 in the Boston community who had got their medical degrees years before under equal, 586 00:52:57.280 --> 00:53:01.760 even, Steven rules, people stopped going to them. People said, well, look, if they're 587 00:53:01.760 --> 00:53:06.440 letting them in, you know, I'm not going to trust them with my little Johnny's stomach 588 00:53:06.440 --> 00:53:12.240 or whatever it is. So this is unfair to people who made it on their own. 589 00:53:12.240 --> 00:53:17.180 Fifth point, it harms an unqualified minority by placing people beyond their competence. 590 00:53:17.180 --> 00:53:23.180 I think at Berkeley, the difference in SAT scores between the whites and the blacks is 200 points. 591 00:53:23.180 --> 00:53:30.180 Now 200 points on the SAT scores is like, you know, it's a different universe. 592 00:53:30.180 --> 00:53:34.180 I'm a teacher at Holy Cross and Chuck's a teacher. 593 00:53:34.180 --> 00:53:38.180 What do you do if you have one group that's up here and one group that's down there? 594 00:53:38.180 --> 00:53:42.180 Where do you pitch it to? To this group and this group doesn't understand what you're talking about. 595 00:53:42.180 --> 00:53:45.180 To this group and this group is bored. To the middle? 596 00:53:45.180 --> 00:53:47.980 Well, maybe that's the best, but then what do you do when you give out marks? 597 00:53:47.980 --> 00:53:50.380 Do you fail all these people? Do you pass them all? 598 00:53:50.380 --> 00:53:55.680 You know, what you have is great inflation, what you have is great resentment. 599 00:53:55.680 --> 00:53:58.980 And the people that are at Berkeley aren't learning what they could have been, 600 00:53:58.980 --> 00:54:03.580 had they been, say, at a middle level school. 601 00:54:03.580 --> 00:54:06.780 And the people at the middle level school aren't learning what they could have at the lower school. 602 00:54:06.780 --> 00:54:10.480 In other words, you have a mismatch of people. 603 00:54:10.480 --> 00:54:19.780 You have people at Holy Cross, you have people at Harvard who should have been going to Holy Cross, but they're at Harvard. 604 00:54:19.780 --> 00:54:25.280 You have people at Holy Cross that should have been maybe at a community college who can't keep up with the work, and it's unfair to them. 605 00:54:25.280 --> 00:54:32.680 They're not learning. They feel miserable. You know, everyone else in the class learns, they don't learn. This is not doing them a favor. 606 00:54:32.680 --> 00:54:37.280 I mean, it's sort of like putting me in the ring with Mike Tyson. 607 00:54:37.280 --> 00:54:44.280 I mean, I'm not going to learn anything, I'm just going to get knocked out and I'll establish a new world's record, quickness of knockout, one second, that'll be it. 608 00:54:44.280 --> 00:54:48.280 I mean, what's the point of putting me in the boxing match with Mike Tyson, it's ridiculous. 609 00:54:48.280 --> 00:54:55.280 You want to put me in the boxing, give me a chuck, I'll have a chance. 610 00:54:55.280 --> 00:55:00.280 If he has a 50 pound sack on his back, I could maybe mush him a little. 611 00:55:00.280 --> 00:55:06.280 Six-pointed harms those excluded by, they get frustrated, you know, other people are accepted, I'm not. 612 00:55:06.280 --> 00:55:15.280 It exacerbates tension. There's more tension on college communities now between blacks and whites than ever under the previous non-affirmative action. 613 00:55:15.280 --> 00:55:25.280 And then it promotes invidious racism. There was this wonderful case of two blonde, blue-eyed people, about as blonde and blue-eyed as this guy over here, 614 00:55:25.280 --> 00:55:34.280 and they applied to the fire department of Boston as whites, and they didn't make it because of the race norming, 615 00:55:34.280 --> 00:55:39.280 But they would have made it had they been black. So they failed the first two times. 616 00:55:39.280 --> 00:55:44.280 The third time they took it again, and this time they declared themselves black. 617 00:55:44.280 --> 00:55:48.280 They found a grandmother or something, who knows, they declared themselves black. 618 00:55:48.280 --> 00:55:52.280 And now they passed as blacks. Well, what do you do? 619 00:55:52.280 --> 00:55:57.280 What do you do? Open their mouths, look under their nostrils to determine if they are or not? 620 00:55:57.280 --> 00:56:01.280 There is one country that has some claimed expertise in matters like this. 621 00:56:01.280 --> 00:56:04.280 So you know which country that is, South Africa. 622 00:56:04.280 --> 00:56:08.280 Do we want to go the way that South Africa happily is coming out from under? 623 00:56:08.280 --> 00:56:12.280 Well, that's the way we're headed, because now you have to say, no, no, no, you're not black. 624 00:56:12.280 --> 00:56:15.280 Well, who am I to say he's not black? I don't know. 625 00:56:15.280 --> 00:56:20.280 Now, what's the criteria? It's crazy. 626 00:56:20.280 --> 00:56:26.280 There was this wonderful case, well, not so wonderful, very unfortunate case of the Detroit Symphony Orchestra. 627 00:56:26.280 --> 00:56:31.720 Now, the Detroit Symphony Orchestra, up until 1960, had open curtain auditioning. 628 00:56:31.720 --> 00:56:43.440 This means, I'm trying out for the Detroit Symphony Orchestra, I play the violin and you guys are the members of the orchestra and I'm auditioning and you're going to determine how good I am and you see me, I'm playing. 629 00:56:43.440 --> 00:56:47.040 And there were no blacks in the Detroit Symphony Orchestra. 630 00:56:47.040 --> 00:56:55.600 So in 1960, roughly, I forget the exact year, the NAACP came to the Detroit Symphony Orchestra and said, look, 631 00:56:55.600 --> 00:56:59.900 They're not going to say you're a bunch of racists, but look, how about a closed curtain audition? 632 00:56:59.900 --> 00:57:04.200 Close the bloody curtain, let me play, you not hear me, you just hear me squeak, 633 00:57:04.200 --> 00:57:08.000 and you like my squeaks, you take me, you don't like them, you don't take me. 634 00:57:08.000 --> 00:57:11.500 And the Detroit Symphony Orchestra said, okay, we'll do it, it's fair, you know, 635 00:57:11.500 --> 00:57:16.900 we don't want to get invidious distinctions, you know, you're black, you're white, you're female, you're this, you're a Martian, 636 00:57:16.900 --> 00:57:20.400 doesn't matter, you can play the violin, you're in our orchestra. 637 00:57:20.400 --> 00:57:24.800 So from 1960 to 1980, they had closed curtain auditions. 638 00:57:24.800 --> 00:57:29.280 No blacks. I don't know why. No blacks. 639 00:57:29.280 --> 00:57:31.480 Guess what? 1980, they came back and they said, 640 00:57:31.480 --> 00:57:34.520 we want open curtain auditions. 641 00:57:34.520 --> 00:57:35.760 And we want you to hire some blacks. 642 00:57:35.760 --> 00:57:37.880 You see, the point is, you can't have affirmative action 643 00:57:37.880 --> 00:57:41.400 if they can't see who it is, right? 644 00:57:41.400 --> 00:57:45.200 I mean, it just sort of shows what's going on here. 645 00:57:45.200 --> 00:57:51.800 This system is not cool, not a good system. 646 00:57:51.800 --> 00:57:58.300 So in conclusion, I say that you have a right to discriminate as a private individual, not as a government. 647 00:57:58.300 --> 00:58:05.600 I say also that education, public schools, first of all, I'm against all public universities. 648 00:58:05.600 --> 00:58:08.800 I hate to bite the hand that feeds me. This is a public university. 649 00:58:08.800 --> 00:58:11.700 My view is that all universities should be private. 650 00:58:11.700 --> 00:58:14.500 Not only shouldn't they be able to discriminate on race or sex, 651 00:58:14.500 --> 00:58:17.800 they shouldn't even be able to discriminate on the basis of intelligence. 652 00:58:17.800 --> 00:58:20.500 Stupid people pay taxes. 653 00:58:20.500 --> 00:58:24.660 If you're going to have a public education system, why shouldn't stupid people come in there? 654 00:58:24.660 --> 00:58:27.520 Why should Berkeley, you know, pick these and not those? 655 00:58:27.520 --> 00:58:32.820 I realize this would ruin the public university, but I'm quite happy to ruin all public universities, 656 00:58:32.820 --> 00:58:36.460 because I don't think there should be any in the first place. 657 00:58:36.460 --> 00:58:39.020 My point in summary 658 00:58:39.020 --> 00:58:41.020 is that discrimination is impotent, 659 00:58:41.020 --> 00:58:43.260 the market grinds it down, 660 00:58:43.260 --> 00:58:50.380 private discrimination, therefore we should enhance the scope of the private market and decrease the scope of the government sector, 661 00:58:50.380 --> 00:58:59.380 So the only legitimate function is the government, which is to protect persons and property for which you need armies, courts and police. 662 00:58:59.380 --> 00:59:01.380 And I thank you for your attention.