Rights and Income Security

0:30I'd like to welcome you to yet another round of the great Canadian debate on income security. In B.C. we call it something about what about shovels? The essential question of this debate is Should Canadians Be Guaranteed the Right to an Adequate Income and a Predictable System of Social Security? Put very boldly, the two sides of the debate respond as follows. On one hand, some say no to this question. They argue that if we provide such an adequate and predictable system, those who use the system will lose their motivation to contribute to Canadian Society. We've all heard this argument. There is usually one caveat to the argument however. It's namely that some Canadians, by virtue of their age, their health and perhaps their war service, deserve some security. The worthy poor are different than the unworthy On the other hand, some say yes to this question. They argue that our capitalist society creates a group of people who will always be poor, that the system depends on this group to do

2:02the dirty work in society and the unpaid labor in the home. Thus, it is incumbent on society to provide adequately for this group or, alternatively, to change the system that creates such inequality. Between the two positions lies the views of most Canadian politicians and many confused members of the Canadian public. It is the stuff of family Sunday dinner arguments and a lot of Canadian indigestion. The result of these uncertainties is a patchwork system of Income Programs, a safety net with large holes in it for some and security for others.

2:52The purpose of this afternoon's debate is to shed some new light on the argument, to see if we can all get some new ideas for next Sunday night's dinner. Our two panelists are well chosen to present different points of view. Our first speaker is Walter Block, and many of you will know Dr. Block as the Senior Research Fellow at the Fraser Institute in Vancouver. Dr. Block has published numerous popular and scholarly articles on economics. He is a regular contributor to the Financial Post and writes a syndicated column for Sterling newspapers. Recent writings include Focus on Economics and the Canadian Bishops, 1983, Focus on Employment Equity, a critique of the Abella Royal Commission on Equality, 1985, and The U.S. Bishops and Their Critics, An Economic and Ethical Perspective, 1986. He has an upcoming publication on government expenditure facts predicted for next year.

4:05Welcome Dr. Block. Thanks for the introduction. I have just one quarrel with the introduction. It has been alleged that capitalism creates a group of people who are poor. I would say compared to what? I think the poor and the capitalism are usually richer than the middle class or even some of the very rich people in alternative systems. Further, I would deny that it's capitalism that creates the poor. It's rather the vestiges of socialism that we still have in the society that create the poverty, not the capitalist system itself.

4:53Before I start, I'd like to get in a brief commercial, as is consistent with my devotion to capitalism. And let me just mention that these cards have been given out to you, and if you fill them out and give them back to me or mail them to me, to me, we will make you a gift of a free four month subscription to Fraser Forum, which is a Fraser Institute monthly publication. And for those of you out there in TV land who will be hearing this later, let me just mention the address, which is the Fraser Institute 626 Bute Street, B-U-T-E, Vancouver, BC, V6E 3M1. So if you write to me, I will make you 3M1. So if you write to me, I will make you a gift of this splendid publication.

5:41The question of income security has to do very much with the welfare state. And in my view, the ideal situation would be that we have no welfare state at all. I think welfare There is the meaning to recipients. It creates dependency. It reduces self-reliance. And it's morally suspect. It's morally suspect, I claim, because the money that is derived is derived through force, through the tax system. It's not a voluntary payment.

6:28Further, a large part of the perceived need for the welfare state is created by the existence and excessive influence of government itself. For example, minimum wage laws create poverty by creating unemployment, especially for teenagers and unskilled workers. There's occupational licensure, Licensure, Taxi Medallions, Central Control, Government Ownership of Industries such as the Post Office, Air Canada, Ferries, Petrocan, CBC, the Agricultural, Land Reserve, Marketing Boards, Regional Policies, Tariffs, Quotas, International Barriers to Trade, Inter-Provincial Barriers to Trade. In all of these cases it's government that is creating poverty in the first place and then we expect government to come on the white horse riding to the rescue to stop the poverty that it created in the first place.

7:20Surely it's more sensible to ask that the government stop creating the poverty in the first place and hence the felt need for a welfare system. However, even if this is all corrected, even if government isn't busily out there creating poverty as it is, there would still be people, the mentally handicapped, the blind, quadriplegics, ill people, mothers with infant children. So I think we have to have some sort of welfare and as the person who introduced this topic the chairperson said there is usually a caveat or an exception for some people but it's a very limited one it's not one where everyone can get on the bandwagon because by its very nature if you increase security for some people once you get past a certain threshold you decrease security for everyone else because society is insecure the total thing is not given God doesn't say, well, you know, the economy shall be flat like that. Rather it has ups and downs, and if we flatten it for some people, the rest have to vary even more. So you can't

8:20have security for everyone. Given that we have to have some sort of welfare, I would put forth for our consideration three principles. The first principle is that private welfare, or charity, is vastly preferable to government welfare. For one reason, when you give to to charity, you give to charity on a voluntary basis, nobody forces you at the point of a gun to contribute. When you do so through the tax system, you are told in effect that if you don't pay your taxes you go to jail, and that is coercivid. Secondly, most of the money in the private system goes to the poor. General Arnold Brown of the Salvation Army Donald Brown of the Salvation Army estimates that from 2% to 3% of the amount of money that is collected does not go to the poor.

9:14That is the cost of collecting it. The rest, 98% or 96%, goes to the poor. Now this is a record that many people in the public sector would be hard to meet. Soll estimates that if all the money that has been gone for social welfare and helping the poor were just given to the poor instead, the average poor family would have some 70,000 a year. The fact that they don't have it shows that there are great leakages when it's done through the public system. The idea here is corporate welfare bums. It's the rich who get the welfare, the richer the and the Better Organized. It's millions of dollars for bailouts for rich corporations and stockholders and very well organized unionists and pennies for the poor. So if you think if you're in favor of the poor, if you're in favor of the underdog and you have the same goals as I share, then you should look very much askance at public means of channeling money to them because these means do not succeed. All too often, the money is diverted to the people who need it the least. Third, private charities.

10:20Traditionally, private welfare is much more efficient. The emphasis is on getting people back on their feet, not instilling dependency for four or five generations or more, as is done in some advanced welfare states. Traditionally, private charity was a task of the churches and other civic-minded organizations. Churches such as the Mormons, the Hutterites, the Catholics, The Dutch Church, Synagogues, Christian Churches of all denominations have established estimal records of helping the poor. Yet, the main objections to privatizing welfare come from, paradoxically, the churches. In virtually every case where private citizens compete with government or try to, they do so wholeheartedly. They are anxious to show that they can do a better job at a lower cost. This applies, for example, to private sanitation, and even private competitors for mail delivery and police and fire protection, once such private alternatives have arisen.

11:24But there is one glaring exception to this rule. The audiological new class run private poverty centers, which are in the business of providing food for the needy. They are, however, highly ambivalent about their role. According to spokespersons from such groups as the Vancouver Food Bank, the Richmond Food Bank, the First United Church in Vancouver, The New Westminster Unemployment Action Center and the Federated Anti-Poverty Groups of B.C., giving food to the poor should really be a government enterprise. This whole issue arose, you will remember, when Bill Bennett had the downsizing of government and called forth the private sector to make up the difference. In the good society, in the view of these people, there would be little scope for private initiatives such as their own. The public sector should do the job.

12:11The Reverend Alan Bush of the St. Albans Richmond Food Bank even goes so far as to claim that the BC government, in its cutbacks under Bennett, was taking advantage of the kindly and loving people administering to the poor. And according to Sylvia Russell of the Vancouver Food Bank, they have no intention of expanding their base of operation to take up the slack left by government. All this is in sharp contrast to the views of the old-time, long-term private groups in BC which have been on the scene for decades. Supposed needs are so high, even with free enterprise and without government causing the problems, and even with an unstinting church and private effort.

13:08Suppose there are still needs that are unmet, then I would introduce for our consideration principle two, and that is that we have limited state welfare, not welfare that is generous to a fault. The government welfare or whatever kind of welfare should be as little as possible consistent with maintaining adequate financial support. Otherwise, as our chairperson mentioned, Now, perhaps the greatest example of the deleterious effects of Welfareism run amok have to do with the black family in the United States. And I'd like to read some very pithy quotes about what's happening to the black family as a result of welfare. They're being victimized by the welfare state.

13:54The facts about the black family are brutal. More than half the black children born in the US today are illegitimate. Almost half of these, 23% of all black children, are born to unwed teenage mothers. Every year, more black girls drop out of high school to have a baby than graduate from college. Over 50% of all black children are now being raised in single-parent households, meaning by unmarried black women. About 75% of all poor black children are in these families. This is a social tragedy of truly frightening proportions. It has never happened before in history. Mao Tei-Sung's deliberate efforts to break up the nuclear family on the Chinese rural communes didn't have even a fraction of the effect that contemporary American social policies have had on black Americans.

14:45The welfare system makes an irresistible offer to every eligible female over the age of 16. It says to every black female teenager, you may be poor, you may have family problems and you may be discouraged about your future. But if you have a baby right now, we will give you your own apartment, free medical care, food stamps and a regular income over the next 20 years. If you have another baby soon after, we will increase your allotment. Allotment. How many black men, poor or even affluent, can match this offer? How many teenage girls anywhere, black or white, poor or affluent, can afford their own apartment at age 16? These teenage girls who drop out of school and have babies are not ignorant, they are not morally weak, they are not sexually lascivious. They are simply rational human beings making the most intelligent choice on how to improve their economic condition.

15:39Now, a further quote, black families are not really breaking up at all, instead black families are no longer forming. When women start families, they no longer look for a husband, they simply marry the state. Now there are charges that, well, you know, blacks, you know, they never had much of a family structure anyway. That is false. I continue my quote. The black family was more than strong enough to survive the ordeal of slavery. There were cases of black Black men and women walking up and down the countryside after the Civil War, searching for wives, husbands or children from whom they had become separated during the chaos and the conflict. Advertisements for lost spouses and children were still appearing in the black newspapers as late as the 1880s, 25 years after the Civil War. This survival continued right through the 1930s. One study of ethnic groups in Boston in the early part of the century revealed that the rate of broken families among blacks was actually lower

16:37Black social patterns were ruined only when liberals arrived on the scene in the 1930s with their aid to families with dependent children and other blandishments to let the state do for people what they aren't capable of doing for themselves. The tragedy occurred because blacks trusted the system. They didn't have the inherent suspicions to resist government assistance and avoid sympathetic bureaucrats like the plague, as many ethnic groups did then and still do today. No, the black family was more than strong enough to survive slavery, it was just not strong enough to survive the welfare system.

17:26Level Three. Whatever the welfare, however high, however low, whether it's from private or public, it is economically more efficient to give the welfare out in the form of money than to give it out in the form of services. Or money gifts are more efficient than gifts in kind. It's an economic aphorism or an axiom in economics. Let me try to illustrate this in several different ways. During the Bennett downsizing of government, he closed the following operations. This is only a partial list. He closed many more. The Janus Child Care Center, the Consumer Association of B.C., Planned Parenthood, Health Collective, Rape Relief, Rape Crisis Center, Family Places, Vancouver Transition House, Legal Aid and and Postpartum Depression Center either closed or reduced the funding toward these groups.

18:25Which people were hurt by these closures or these downsizing? Who were the real beneficiaries of these programs? Well, one hypothesis is that it's the poor, the needy, the poverty-stricken. I think that this hypothesis is untenable and I'll try to prove to you why it is untenable through a thought experiment. My own hypothesis, it's not original with me, is that the people benefited are similar to the people in this room. White collar, highly educated, articulate, members of the new class, mainly Marxist or leftist intellectuals. Why do I say this? Let me read another quote to you. Quote, the poor or in the minority are less likely to It is unlikely, then, that the poor will be very effective in the competition for political influence. Indeed, if the poor had the skills and attributes that are necessary for effective political action, they would not be poor.

19:27So while the political demands of the poor will no doubt push in the direction of increasing the funding for poverty programs, the magnitude of this influence will probably be small. A more effectively organized and politically potent group with a vested interest in expanding government programs to aid the disadvantaged is made up of those whose employment depends upon these programs. These people include the several million people who are employed either directly by government welfare agencies or who, as private contractors and academic researchers, assist and advise these agencies. With the job security and income of these people tied to the funding of poverty and poverty-related programs, have a common and dominant interest in the continuation and expanding of this funding. When this focused interest is coupled with the relative ease with which people can organize for political action through their employee organizations, poverty professionals become much more effective at obtaining political funding for poverty programs than the poor themselves. Just common sense. In order to prove this to you even the more, let me give

20:37Put forth the following mental experiment. Suppose we take all the money that used to be spent on Janus, child care, rape relief, legal aid, post-partum depression, this, that and the other. Several millions of dollars. And suppose we consider all the people that used to receive the money in, oh, say, 82 or 83. And we divide the one by the other. And we come up with some figure, namely that on a per capita basis, each person got $10,000 worth, say, of services of this sort. And now we do the following experiment. We go over to some lady and we say, Look, Mrs. Jones, previously, before the downsizing, you would have got $10,000 worth of services of rape relief in this crisis and that and the other thing.

21:24And we're going to propose the following to you. We're going to give you the $10,000 right here. Here's a check. Now, you can spend it on anything you want. You can spend it on a new car, a new hat, a food, a vacation, or on rape relief or crisis centers or whatever it is. What proportion do you people think in this room that the typical recipient would spend on these crisis centers? Centers. 90%? No. 80, 70, 60? Whenever I've asked this question, the typical response I get is, oh, 3%, 5%, something like that, which I think is obviously true. The point is then that if the lady would only spend 5% of the money had she had it for herself on these crisis centers, then she is only benefiting from them to the tune of 5%, to the extent of 5%. If she would take the money on her own and spend it elsewhere, this shows that at least in her mind, she values the other things more importantly than the crisis centers or what have you. Other examples of the giving out of services instead of money would include health care, daycare and public schooling. These are all

22:46There are also cases where we give people, not the money and let them choose for themselves, but rather we give them the services themselves and we say, you know, here they are, go use them. The poor are much better off with the money rather than the free services, which aren't free, which cost money. If any of you are economists in the room, you know that by indifference curve analysis we can show this in a very pristine and pure way. The only case where these services are worth as much as the money is if the poor would have taken the money and spend it on the services. If they spend any less, then to that extent they lose out. And the only possible objection is one of paternalism. We know better than the poor what's best for them. So the hell with their decisions. Yeah, they want to buy a TV set.

23:31Well, a TV set isn't what they need. They need counseling services, which we happen to be the providers of. Notice the danger of this kind of an argument. It's certainly incompatible with allowing them the right to vote. I mean, if they're so stupid that they can't make up their minds to spend their money intelligently, why are we allowing them to vote anyway? Why don't we get a leash and let them, you know, walk them like a dog? I mean, this is a very demeaning way to treat people. And yet it's the only conceivable objection to the point that I'm making. Another point with regard to the welfare state that I'm just itching to make to you people People is the internationalized welfare state. Here we have foreign aid, which is a pejorative word because it assumes that some aid is being given. Actually, a non-pejorative terminology would be government-to-government transfers. That's a much more neutral and accurate way to describe it. Unfortunately, the usual function is to prop up dictators by undergirding their

24:29crazy economic planning. For example, in the Soviet Union, the land that's been held in The Public Sector is 97% and it accounts for 75% of the crops. The land that is privately held is only 3% and it accounts for 25% of the crops. In Ethiopia, the reason we have a famine is because of the Marxist dictatorship and the price controls on agriculture. There are three M's, M as in Mary, that I would offer for your consideration as a way to summarize foreign aid. And the three M's are Mercedes, Monuments and Machine Guns. That's what the money really It exacerbates conflict. In many of these recipient countries are tribal. If the government is limited to the night watchman state of Adam Smith, it really doesn't matter who is the government. But when the government is the be-all and end-all, and foreign aid might only be one or two percent here, but there it's a gigantic gap.

25:36I want to conclude by discussing the question of whether welfare is a right. And I deny the contention that welfare, education, health care, daycare are rights. I think this is a perversion of language. In order to show what a monstrous perversion of language we get into when we consider these things as rights, I have to take a break for drugs. It's not steroids though, it's just cough drops.

26:37I want to contrast the negative rights of classical liberalism with the new class idea of positive rights. You know, right to food, right to clothing, right to shelter, right to medical care, right to education, right to daycare, what have you. Now, traditionally, the negative rights were the right to be free of violence. And this was consistent with private property rights and the non-aggression axiom. Namely, you can do anything you want as long as you do not invade anyone else's person or property. And the philosophy undergirding this is limited government or a safety net under income, police, army, courts, fire protection, roads. That's the government's In contrast, we have the positive rights, the right to food, clothing, shelter, meaningful experiences, whatever.

27:28Here are communal rights and you need a socialist state to enforce these kinds of positive rights. Rights, no matter whether they are of the positive or negative sort, operate in such a way that if I have a right, you have an obligation. If I have a right to be left alone, you have an obligation to keep your mitts off me. If I have a right to food, you have an obligation to cough up the food. If I have a right to clothing, shelter, daycare, you have an obligation to give it to me. So rights, whether they're positive or negative, work in that way that if I have a right to it, you've got an obligation to fulfill it. Now, I want to show you six points of contrast to show that the classical liberal concept of rights, of negative rights, just rights to be left alone, are very different than the positive rights. First is time. Negative rights are timeless. The caveman had a right

28:32a million years ago to be left alone. The spaceman a hundred million years from now Now, we'll have an equal right not to be raped, murdered or pillaged. And we nowadays here have a right to go unmolested as we walk down the street. So rights are invariant to time. That is negative rights. But now take positive rights. Does the caveman have a right to a 1988 level of food, clothing, shelter, medical care? I mean, it's absurd. The caveman, I mean, to say that a caveman had these rights is ludicrous. Caveman has no right to running water or electricity, I mean, it was impossible in those days to give it to him. So notice it's not a right, it's something different, because it is time-dimensional, whereas negative rights are time-universal.

29:22They apply at whatever era, epoch of time that you want to talk about, whereas positive rights cannot apply that way. The Realism of It vs. The Utopianism of It We could, with an act of will, if we all resolved to keep our mitts in our pockets and not to murder, rape or commit mayhem on other people, like that, have a land, a universe, a world of no negative rights violations. But could we like that have a land, a world of positive rights obligations being met? No. It's just impossible. People are people. I don't think it matters for the point of view of welfare theory whether they live in Namibia or Canada or Switzerland.

30:09They all are human beings. They all have the same rights. And yet it would be impossible, just sheer impossible, to give everyone in the world, all the people in India and China The same kind of a level of income maintenance that Canadians have in 1988. So notice that there's a very different way that these things are working. The first point is that positive rights are not timeless. They are time dimensioned. And the second point is that they are utopian in the sense that we couldn't have right now. We'd have to work for it, whereas we could have negative rights right now if we had a sheer act of will. 3rd point is human agency. Consider mother nature. Shipwreck, storm, drought. We just had the tropical storm Gilbert or Mary Lou or Joanne or somebody. I get mixed up. And they just beat the hell out of Jamaica and other countries in the Caribbean.

31:04Well, was there any negative rights violation? No, the idea is gross. I mean, it's just ridiculous. Nobody violated their rights in the negative sense because you need a human agent to violate negative rights. But you could say that their positive rights were violated because, look, their houses were smashed to smithereens. They had no food, they had no shelter, they had no clothing, they had no education. Notice the ludicrous results that you get if you take positive rights seriously. Fourth is game theory. If I have more positive rights, you've got less of them. If I have more food, you've got less food. But, it doesn't work that way in negative rights. If I have more peace and tranquility, it doesn't mean that you necessarily have less.

31:52Notice how differently the two concepts work. The fifth is Occam's razor. You people, academics, all know what Occam's razor is, the idea that simplicity is revered in science. Well, we already have a word for positive rights. It's called wealth. The only reason we concoct this thing called positive rights is because we have this emotional intangible, that if it's a right, it has to be equal. And if it's a right, it's good. So let's tie our ideological theories onto something good The sixth point is charity. In a regime of negative rights, it is possible to have a thing called charity. I just give some money to this poor lady over here, and that's charity. But if there are positive rights, and I say, well, here, there's nothing good that everyone reveres, namely rights, well, it's just not etymologically correct. What people mean by positive rights is nothing different than wealth, and they ought to have the courage of their convictions to say that.

32:56My good lady, here's a dollar, go buy a cup of coffee or something as charity. She turns on me and says, what do you mean? Wait a second, that's not charity. I have a right to it. You have to give it to me. I'm collecting it as a debt. So anytime a rich person gives a poor person money, and he says, my good fellow, here's some charity, the poor person can say, uh-uh, forget it, that's not charity. The point is that if you consistently carry through the philosophy of positive rights, It's not just that charity will be less or low. Charity will be impossible to give. We will have, in one fell swoop, eliminated a perfectly good word from the English language. Now, I'm not saying you might agree that it's good to get rid of charity. That's not a point I'm making. I'm making a linguistic point.

33:44I'm making a philosophical linguistic point that the very word charity is incompatible with this philosophy, from which I deduce the fact that since the word charity is a meaningful word, We all know what charity is. If a doctrine eliminates this word from the English language, there's something wrong with the doctrine. Okay, it's time to summarize. What, if any, social services should the public sector provide? Well, my own contention is little or none. In the classical liberal tradition, government was used for defense, judiciary, army, police. and Police, the Fraser Institute philosophy would add a safety net of government as a last resort, not as a first resort, and I would reiterate the three principles, private charity is preferred to government welfare, limited state welfare is preferable to generous welfare, and third, welfare of whatever kind from whatever direction is more efficient and effective if it's given in the form of money than if it's given in the form of Objects. Thank you for your attention.

35:03I'd like to thank Dr. Block for an articulate presentation. It's your obligation right now to sit on your hands and not raise any questions until we've heard from our second speaker who is Jim Rice. Dr. Rice is presently an associate professor and director of the graduate program at the McMaster School of Social Work. He received his BA from Sir George Williams, his BSW and MSW from Calgary, and his PhD from Exeter in 1977. He completed a review for the McDonald Commission on the social security system in Canada, which noted both its resilience and the recent pressures which are assailing it.

35:52He has just finished a two-year study of seriously impoverished families in the Hamilton area and has just begun a study of the child care needs of 2,600 families also in that area. He has written specifically and recently on the right to income security and is an ideal No choice to present the second side of the argument. Dr. Rice.

36:34Well I wondered where to begin in preparing myself for today's talk. And I'm just going I'm going to, Walter, reach over your head and get some notes here.

36:47And I, after Mike sent me a letter, I gave today's presentation considerable thought. And I said, how will I come prepared to defend social welfare, the social security system, in front of the Fraser Institute? We in the East have heard much of this institute. Institute. We have heard of its work and of its dedication to espousing a certain line of analysis in its examination of our society. And I wanted to come prepared in a way that would bring honor to my own discipline. I wanted to come prepared in a way that would allow me to speak with a clear voice, allow me to be a guardian of something that I believe quite deeply in. And your presentation has provided me with a couple of opportunities, I think, to speak to issues that you raise. Let me begin by just saying that I remember a presentation by someone from the Secretary of State when I was, I think, 14 years old. I was in public school and they came along much like this, much like this meeting.

38:09They came along and they said, we'd like to talk to you about the United Nations Declaration of Human Rights. And the person who spoke at that conference spoke in an extremely powerful way. They made me feel, as a Canadian, very proud. I felt honored that my country had been one of the signatories to what they described as a unique set of rights that were developed in 1948 and that represented a landmark in the development of societies and that Canada was a signatory to that declaration. And I felt very proud.

38:56In fact, I must say it was the first time I was ever moved by a public address, 14 year The rules aren't moved by public addresses, moved by a public address to actually have goosebumps, to sit there and say that this is something that affected me. And here I am now, some number of years later, being asked to come to Victoria and to speak about how well Canada has done in the provision of rights for income security in the 40 years since the signing of that declaration. And so I'm finding it quite an interesting idea to be here to speak about these rights.

39:42I'd like to begin maybe by addressing the notions, they say in a debate you should always speak to the last speaker, that you should try and pick up the points that they've provided you to debate against. So I would like to pay respect to Walter in doing that and I would like to pick up on and the question of negative and positive rights. And I think it's a very important issue for us to think about in terms of how well we're doing in providing income security for citizens in Canada. And to ask on one side about the negative rights of freedom and the ability to act as a free entity. On the other hand, the positive rights that say that we, as individuals, have some sort of social guarantee that we will live a good life, that we have a right to a good life.

40:40And on the negative side, we have, if my reading serves me well, we can go back to John Stuart Mill, in the classical book and in that classical statement put forward that premise that you have all of the liberty that you need up to the point that it infringes with my life and that this was a fundamental principle that we fought for as we fought for freedom from the sovereign. It wasn't each other that we were fighting. We weren't fighting so that I could be free of you. We fought for negative rights so that we could be free of the sovereign to live in a free society. A powerful argument, a wonderful argument, and an argument worth taking seriously. That we shall be free individuals. The difficulty with Mill's statement is that statement is that we cannot find any area in human endeavor where I am free of you and you are free of me. At every point of our analysis, our lives intersect and we touch

41:56each other. There is no concept that we can think of, be it education or health or housing or employment or jobs or security or police or firemen or armies. There is no area in our life that we can think of in any rational way that separates your activities from my activities. So although in principle, although in theory we may talk about the right to freedom, that Negative right, we discover that there is no fact in which it can be allowed to have free reign. I think this is quite important for us to think about, that negative rights are important for the structuring of society. They're an extremely important principle for us separating ourselves from the sovereign, but they're a very poor principle for organizing the way that we live.

43:01That is, we need it to be set out here as an idea and then to understand its implication as policy analysts, as people concerned about, other people in our society, about how we interact. The second notion I think that was identified in the notion of negative rights was that wealth, wealth in negative rights, represents welfare. That is, all you have to do is leave people to be free and they in fact will create their own wealth. And I think, again, this is a very important notion that we must take seriously, but we must examine it carefully.

43:48Not as has been suggested in some abstract way, but in some real way that affects us. I think it was Adam Smith who said that wealth flowed from four factors, land, labor, capital and cooperation. It was conveniently and has been conveniently forgot by economists, particularly economists who wish to shape a certain notion of production, that the fourth factor in the production of the wealth of the nation, cooperation, would go unattended to. And that the three factors of production, land, labor and capital, would capture all that wealth produced.

44:33And I too, like Walter, am prepared to have wealth represent welfare when cooperation has an equal voice at the table of distribution. When wealth, when cooperation can make its demand upon wealth, then I believe we can talk about wealth representing welfare. The third notion, contained in the negative rights, talked about by Walter, was the notion of individual production, at least implied. And this is that we are self-reliant individuals able to take care of ourselves, that in fact there's no need for us to interact in a way that would allow us or necessitate us from taking care of each other.

45:36I believe that in our productive capacity, where we actually produce wealth, we have no choice but to interact and cooperate. So I would put it to you in this way, that on the negative side of rights, in the notion of freedom, self-actualization, and the production of wealth based on land, labor and capital, That the argument has yet to be made that we are not in need of a social welfare system. That is a system that identifies and recognizes that we are an interdependent society.

46:23And therefore, it is on that base that I would set aside the negative rights, not in denying them, not in saying that these are not notions that we can think about, but simply in saying to you, they are not useful notions around which one can organize a society. They do not provide a useful line of analysis around which one can organize a society that distributes the fruits of the wealth of the nation in a way that is fair and equitable when you leave out certain other factors that appear to me to be a description of reality. I was unable, and I am unable, to comment about the blacks in America. I think it was an interesting story. I can talk a little bit about poor people in Hamilton. Most of them were white and women. And these were women who had come through our education system and who were, in a sense, participating members of our society, but who had, for many reasons, I believe in the same way that blacks have been excluded from the productive process in America, although I must say I can't speak clearly about that because I've not studied issues of black families.

47:50But I can tell you that in the Canadian situation, we had families who were disabled, not so much by the welfare they received, but by the social situation in which they found themselves. and the social system which was to provide them, the market system which was to provide them with job opportunities or access. They were closed out of that entire system. They could not go down to Firestone Retire Company and get a job or to Kmart or to many of the opportunities in Hamilton that were there. They simply did not have the skills or the education or the knowledge or the experience to take advantage.

48:39They were disadvantaged in many ways, some physically, some emotionally, some disadvantaged psychologically, some disadvantaged because of their connection to children. These women were excluded from the system that was described as excluding blacks in America. I don't believe that, personally, that people are excluded by the form of provision that that they receive through the welfare system.

49:25Let me then talk for a moment. I've tried to address at least, Walter, two of the points that you raised. Let me move from you to me and talk then about my evaluation of the welfare And I asked myself, Jim, how are we doing? Give your country a mark. Are we an A? Are we a B? Are we a C? Are we a D? Are we an F in the way that we're treating our fellow citizens? And the first thing that came clear to me, and I'm sure it's clear to you, is that there is no right, Walter said it clearly, there is no right in our country to social security. There is no right.

50:11There are some programs, there is legislation, there is an implied social contract, but there are no rights. So as far as rights to social security, we've got an F. There are no rights. Let us then say, wow, Jim, soften your marking scale. It's awfully punishing. You've taken an awfully hard line on this. And we can back up a little to say, all right, we will include the social contract as a soft notion of rights. How are we doing if we include the social contract? And I said, well, it depends on where you stand in the system. If you're at the bottom, it stinks. It's an F. If you're in the middle income group, it's not too bad.

50:59You kind of get what you pay for. And if you're at the top, it stinks. Because you feel like you're paying for it. You feel like you are the person carrying the system on your back. So, from two points of view, our right to social security appears to me to be failing. I said, oh Jim, that's an awfully negative message. Could you lighten it up a little? Could you go to Vancouver with some good news, at least feeling good about yourself, about the discipline you're in? And it made me reflect on what has been called the failure of the welfare state.

51:46Well, that's awful negative, I said, Jim, the failure of the welfare state. But it made me think about what is it that we can do as social policy analysts, what is it that we can do that can address some of the failures that we're seeing now? The fact that our social security system is allowing people to plunge through holes Are there any indexes, any indices that you can look at, Jim, and bring them forward to the audience and say, here's an indices that indicates that we're doing well, or that our social security system is working? And I think that it's fair to say that the Canadian social security system has stopped 25% of our population I think this is quite important. It's held them in poverty, but it's stopped them from falling into abject poverty.

52:49I remember talking to my grandmother, whose greatest fear was growing old and living in poverty. My grandmother, she's dead now, but it's now my mother's fear, has been caught up, if you will, by the social security system. She never earned enough money to do the classical thing, and that was to save for her own retirement. She never earned enough money to save for her own retirement, so she feels quite pleased that there's a social security system to catch her. I think in the same way unemployment insurance has caught and held up 25% of our population from falling into abject poverty, from being pauperized. So I think we've done quite well in that sense.

53:36The difficulty is we've not yet developed the skills or we've not yet developed the analysis as policy analysts that allow us to develop a system which will rise people out of poverty and provide them with a stake in our society. We've not yet done that. I've heard it said that if we abandon the system, the production of wealth as we have it now in a capitalist society will do it for us. I've heard none or seen no evidence that this is in fact true. In fact, it appears to me that the capitalist system has gloried, grown, prospered, expanded because of the existence of the welfare system.

54:24because the working 25% did not fall through and in fact were the engine of the capitalist system. So the news is quite good there that we've stopped the plummet. But I put the challenge to me, mostly to me and partly to you, that as people concerned about the life space of those who are disadvantaged in our society, We have not done well in articulating a new vision for their right, their constitutional or charter right, to have resources in our society. We have not done well. And we need to do better.

55:12We need in this room and in rooms like this across the country to develop a vision, to articulate a vision connected with a theory, not an economic theory, they've not served us well, they've in fact served us poorly. But a vision and a theory that allows us to understand each person's right to resources, so that we can think about building a social system that responds to these rights, not out of charity. I wish the word were gone. I would wipe it out of my vocabulary. I would be happy to let it go. I would much rather us enter the arena, the fight, the struggle to find a theory and an explanation that allowed us to build a society of cooperation, of integration, of connection, of liberty.

56:13We're back to freedom again, we don't want to lose freedom, but a system which ensured liberty and freedom for all of those within the social structure. The GNI coefficient, an interesting measure, an economic measure of the redistribution of wealth. The Lorenz curve is kind of a sexist notion of the distribution of resources in our society. These have all been used as indices of the movement of income from upper income groups to lower income groups. I want to leave... Have I taken my time? I've got two minutes. I just heard a buzzer. I'm okay? I would like to just draw for you a couple of other indices that in coming out here I've been thinking about.

57:06I've looked at the limousine to food bank indices. I don't know if you've noticed it. I actually haven't seen any in Victoria. I haven't been here long enough. In Tirana and in Hamilton, we have an explosion of limousines. And these limousines aren't your Cadillac limousines. These limousines are about a block long. And some of them are so large, they have four wheels at the back. And I've noted that there's been a correspondence between the growth of limousines and the number of food banks. This is not scientific. It's not scientific. I've just noticed it. I've just noticed it. I noticed another indices that's bothering me. There's been a connection between the development in the East of $400,000 homes and the homeless.

58:00I don't understand it. I'm ignorant of these facts, but as the number of $400,000 homes go up, the number of homeless goes up. And somehow, they're saying something to me and I'm trying to figure out what it is that they're saying. I'll leave with this note. If Walter wants to give me $10,000, I probably wouldn't spend it on my welfare in terms of some of the things he talked about, either. I probably would buy a new car. I don't know if I'd buy a limousine, Walter, but I would buy a new car. Maybe. But he made an interesting point that we need to hear carefully.

58:45He said that these people would be prepared to spend 3 to 5 percent of the $10,000 on providing rape crisis centers

59:23I think we would, Walter, have a relatively humane provision of social services with a relatively adequate array of responses to social problems that we're facing.

59:53Thank you very much Jim for the other side of the question. It's now up to the audience to have at it and I hope you've been inspired to ask questions I see you have. I'm going to ask you if you have a question to come to the microphone and here we go. Walter has just said about responding to each other. Maybe we'll take a couple of questions and perhaps conclude with the panelists having the opportunity to respond. I don't want to lose the audience. Go ahead, sir. First of all, I'd like to declare myself as a happy and successful participant in free enterprise.

1:00:44I'm not a Marxist or a radical leftist, but I say to you that it's irrelevant to me whether or not a caveman has a right to 1988 levels of food and comfort. The real question to me as a member of this community is whether a child born or living Banking in our community in 1988 has a right to food and comfort. Secondly, I'd like to question what is the sort of involvement you have had in the lives of the poor to make you think that welfare is currently a first resort rather than a last resort. The current levels of welfare incomes in our country must not be glorified as a wonderful Thirdly, quite apart from questions of philosophy, if you are in need and I give to you, or I am forced to give to you, some of what I have, my response as an ethical and moral being is not that I have less because you have more.

1:01:55The issue is whether you now have enough to live your life in dignity. And finally, having worked in the past with a decidedly unglamorous segment of the community, the chronically mentally ill, I have seen firsthand the dynamics of our economic system on the marginally able employee. I am not impressed by arguments of untrammeled freedom when it means, in effect, the freedom to be hungry and homeless. Where are all the jobs to allow everyone in our society to achieve their own wealth? My comment is to Dr. Black.

1:02:51I wasn't saying that the caveman was relevant to today. I was just trying to illustrate the difference between positive and negative rights. that negative rights or rights are timeless. If a person has a right, if human beings have a right, that right is not time articulated. It continues forever back to the past and to the future. If it's right, if it's wrong for me to kill someone and violate someone's negative rights now, it was wrong for me to do it 10,000 years ago and it's wrong for The reason I brought up the caveman is to show you that it operates very differently. If you want to say that a Canadian has a right to, you know, $400 a month in terms of goods in 1988 dollars, this was impossible to give to a caveman because we didn't have the wherewithal. Therefore, I appeal to your sense of logic to relearn your sense of logic.

1:03:57There's nothing wrong with wealth distribution. It's much more honest. But to call it a right seems to me to be hypocritical and dishonest. Now, one evidence you ask, well, what evidence do I have that welfare is considered a first resort? One evidence is furnished by Jim. One evidence is furnished by Jim. Jim, if I can quote him, I don't know if I get the exact quote, but certainly a paraphrase of what he said. He said, take the word charity or the concept charity. I would stomp on it or, you know, get rid of it. It's a bad thing. Well, if we don't have charity or the possibility of charity, which he wants to get rid of, and I saw the people's faces in the audience and it was pretty much sympathetic to what he was saying about charity.

1:04:48Well, then that shows that welfare or government welfare is a first resort, not a last resort. What I mean by government welfare as a last resort is first you apply to charity. You try the voluntary system. You try the system where people interact on a voluntary and peaceful means. Only if that fails, for extreme hardship, do you go to a coercive system, a government tax system. With regard to the homeless and the marginal employees, these are both examples of exactly what I was talking about. Government ruining the thing in the first place and then posing as the savior. Take the case of the people in Hamilton who can't get jobs. As far as As far as I'm concerned, this is almost entirely, not completely entirely, but almost entirely traceable to the minimum wage law.

1:05:43Now, we just had a battle in this province over the minimum wage law. It used to be $3.65 an hour. Now it's $4 an hour. And Premier van der Zandt was once publicly musing that he'd get rid of the whole thing entirely. And then he raised it instead of getting rid of it. Well, a little bit of an economics lesson in the economics of minimum wage, if I could do that to answer this question, then I'll get to the homeless. The minimum wage law is not an employment law. Strictly speaking, it's an unemployment law. It stipulates that anyone who will not be paid $4 an hour in this province, and in the province of Ontario it's $4.65 or even $4.75, anyone who cannot be paid this amount, it's illegal to hire them at all.

1:06:28It says that if I would offer Jim a job for $3 an hour, he could go to jail and I would certainly go to jail. I mean, I would go to jail. It's illegal to do that. Now, why is it that an employer wants to hire an employee? I put it to you that the reason the employer wants to hire an employee is because of his productivity. He wants to get something out of him. He wants him to make widgets so that he can sell the widgets to consumers. Well, suppose you get a teenager or a single woman with very little skills whose productivity level is $3.00 an hour. What do you think the effect of a law requiring that she be paid $4.00 an hour will be? Well, obviously, if the woman can create $3.00 an hour's worth of widgets and you have to pay her $4.00 an hour, you're going to lose a dollar an hour for every hour you employ her. You might employ one or two out of charitable impulses, but

1:07:22Dr. Block, just excuse me for a moment. The last questioner did raise a number of issues. And I'm wondering, given the number of questioners that we have here, that we ask future questioners to ask only one question. And if I could be so rude as to interject right now and have the next question. The last questioner did raise a number of issues, and I'm wondering, given the number of questioners that we have here, that we ask future questioners to ask only one question. And if I could be so rude as to interject right now and have the next question. Could I just take 30 seconds for the homeless? Yes. Studies have been shown that the reason we have more $400,000 homes and more homeless, or the reason that we have homeless period is because of rent control. There is an econometric regression evidence that shows that those provinces or cities or places that have rent control and make it impossible for landlords to supply low cost housing increase the rate of homeless.

1:08:11So here is another example of government causing the problem which we are now expecting government to solve. Dr. Black, I have a comment. The Federated Anti-Poverty Groups of B.C. and many of the organizations you mentioned are affiliated members, do not want the government to take over the food banks. They believe that the government should give hungry people an adequate income so that there will be no need for food banks. And that's what we're wanting to correct you. I take it as something that supports what I said. I agree with the person who just made the comment that that is true, that they do not, that they do want the government to take over that role, not of providing food banks but of providing enough income so that food banks won't be needed.

1:09:06That's precisely the point that I was making, that they don't want food banks, they don't want to expand food banks to take over the government, they want it the opposite way. I have a question for Dr. Rice, I believe. The question is, what is your definition of cooperation, because it seems to me that cooperation is voluntary interaction by individuals united for a common goal. But you said that cooperation can make its demand upon wealth. But when you begin to speak of demanding, you're talking about compulsion. not cooperation. I mean, if we analyze this sentence, you know, a little deeper, it's interesting because, you know, of course cooperation doesn't demand upon wealth, cooperation is a concept.

1:09:55You can't demand upon anything, you know, wealth is a concept. But what you mean to say, I believe, is that one group of people in the name of cooperation, of this concept of cooperation, demands and coerces a second group of people. That's not cooperation. It seems to me that's compulsion. So how do you define cooperation? What do you mean by cooperation making its demand upon wealth? Just quickly, in the same way that the factors of labor, capital and land contribute to the wealth of the nation and therefore have a reasonable demand upon that wealth. That is, can claim their share of it, and in fact do claim their share.

1:10:44Even though we know it's not a fair contest in the claiming, they each make their claim. The difficulty is there is not three factors of production, but four factors of production that have to be paid for out of the wealth of the nation. The fourth factor is the factor called cooperation. And what we've done in structuring our society is forget about the factor of cooperation. My argument is if we took that into consideration along with the other three, not a rejection of the other three at all, but along with the other three, we would have an entirely different distribution of resources than we have now. That different distribution of resources would change the nature of welfare in our society.

1:11:31What's the definition? Cooperation? You gave a lovely definition of it.

1:11:45I have read a reasonable amount from the Fraser Institute, I have never had the dubious pleasure of meeting one of you in real life and I was looking forward to it. I am disappointed. I had hoped that you would be more logic, but you make leaps in logic I just cannot follow. I had hoped for an insight and a way of thinking that I could follow and that I could connect with. There is no connection. I find you ignore emotions, ignore progress, ignore inequality, ignore responsibilities most of all. And I was very glad we had a second speaker because that reassured me in my values and I needed that very much very much because being left with no connection and no logic left me no vision of, no impression of your kind of vision how the world would work. And I disagree with your observation that government is the evil. I thought government was us trying to protect us, trying to promote I would like to ask you, what is your vision? Who would give us the rights we feel we need to be decent people?

1:13:18Who would or what force would create a world where we can indeed be decent and respectful people? Well, that's a rough question of what force would guarantee it. I guess the force of logic or rationalism or ethics, because to me what a decent world is, is that people leave each other alone, allow them to do anything they want consistent with upholding their own rights. It's not that I'm against cooperation. On the contrary, I regard the marketplace as a cooperative tool. It's a competitive tool, but it's also a way that we cooperate with each other.

1:14:04I mean, when you think of the thousands of different people that cooperated in making just a graphite pencil, the lead comes from different places, the wood, the binding, the rubber, everything. People cooperate through the market to do things that could not be done without the market. I think I've misled you if you came away with the impression that I consider the government as evil incarnate. I think the government is like a fire. As long as the fire is in the fireplace, it warms us. It warms our house. It warms. It heats our food. It's a good thing. Only when the fire gets out of the fireplace and starts consuming the house that the fire becomes an evil.

1:14:50So I think government in its proper limited role is a very good thing. It's just I'm opposing excessive government. I don't think government is necessarily us. I'm not that much a believer in democracy to believe that government is us. After all, Hitler came in through a democratic process. He won a plurality of a democratic vote. Therefore, I can't say that anything that comes about through democracy is, per se, good. I don't think government is us. Government is shifting majorities. And sometimes these majorities are immoral, as when, well, I don't have to convince us, majorities have done evil things. With regard to equality, I'd like to discuss that just briefly. I think there's an awful lot of hypocrisy that goes on in these Sunday night discussions.

1:15:38You have people that might not have limousines, but have late model automobiles. They live in homes that would be the envy of people around the world. They have wristwatches, they have TV sets, VCRs, Nintendos, all sorts of fripperies and frivolities. And they piously mouth off about, well, the poor. Well, how do they reconcile their views with the fact that they still have that money? If they really, seriously believed in this stuff, how do they have all this wealth? Why don't they give it away? I think there's certainly an element of hypocrisy there. Another element of hypocrisy is distinguishing between Canadians and people in India or Afghanistan or Ethiopia. Why is it that a Canadian is more deserving of welfare than any other person?

1:16:24I mean, if we're talking about human rights, surely the person who's in Bangladesh is just as much human as a poor person in Canada. Why that hypocrisy? Another hypocrisy. Why just with wealth? Why just with money? Suppose we had a machine that could transfer beauty, or IQ points, or hair. I mean, Jim has got a lot more hair than I. Is that fair? Suppose we had a machine that could transfer hair from his head to mine, or IQ from him to me, since he's so much smarter or more beautiful, or has a greater musical appreciation. Would we force him into that machine and make him disgorge excessive IQ points, or excessive beauty, or more hair than I have? Well, that's real equality. I mean, equality in terms of money is just sort of wimpish.

1:17:13Let's talk about real He-Man type of equality, stuff that leads us into a Brave New World kind of a situation. That's where the philosophy of forced egalitarianism is leading us to. Could I interject just for a moment and make sure that we move to the next question? Just before we do, I'd like to just talk about cooperation for one more moment. I agree with Walter as he picks up the pen and says that a great deal of cooperation went into making the pencil. That's an important notion for us to understand. What it doesn't, however I'm going to suggest, recognize is that not only the people who worked in the company and at the lead mine and all of that, not only did they cooperate, but their spouses at home cooperated in raising the children, the people who agreed to be unemployed were unemployed and cooperated in agreeing to be unemployed.

1:18:07Cooperation went much further than the simple manufacturing process of producing a pencil. It is that second form of cooperation that demands some compensation within any social order. And it is that second form of cooperation that we fail to recognize in our social structure as having a legitimate right upon the wealth of the nation. I make the claim that it has a legitimate right upon the wealth of the nation and this is not yet being addressed. As to the question about hypocrisy, it's very difficult and it's a demanding challenge because I sit here in my blue suit and my tie and I do know that there are people in our country who are starving.

1:18:58And it's a challenge that's hard to look in the eye. It's a challenge that's very difficult to say, Jim, you live in a very comfortable house, and some of the people that you know live in no houses. How do you sleep at night? Not comfortably. Why at all? Why not change your views or change your actions? That's no response. That's a fairer response. Well... The next question, please. Yeah, I was really torn about getting into the security question, you know, like real security or some kind of minimum security for everyone. And also the charity, you know, the holier than thou, the, you know, I'll give something to you. But my third thing I decided was maybe more important because it's real and it's especially relevant to British Columbia.

1:19:47And I would like to hear from Dr., is it Dr. Rice or Mr. Rice? Jim? Okay, from Jim on this. Here in V.C. there's a real push for privatization, and this seems to be happening in everywhere where they have this neoconservative politics. The idea of the entrepreneurial poverty business, or what I assume there was some kind of reference to the poverty professional, I find really, really frightening. The whole idea that providing welfare services should be balanced with profit is scary.

1:20:34The problem being is that these institutions then have no moral or no ethic. Ethic, you know, like John Kenneth Galbraith talked about corporations and when they went from being a one person, a one person business, they had some ethic and when they went to this board where no one held the ultimate responsibility, they lost their ethics. Now, I was talking to a friend yesterday, there's Home for Battered Women going in across the and then there's the piecemeal thing about privatization that you've got this little society and that little society and that little society rather than some kind of a basic. I wonder if you would comment on this.

1:21:36I generally believe that any one of the forms of social structure, that is, the provision for the sake of profit, the provision out of a non-profit notion, or the government can organize itself to provide a service. I don't believe any one of them are more righteous So it appears to me that we have to ask a different type of question. Where do we want the resources to flow that we pay for in protecting certain aspects of a person's life? And let me just think of the elderly. Do we want to pay $100 for someone to take care of the elderly and have 10 of those dollars flow into profits? Well, we may decide that that's an efficient way to do it.

1:22:23We may decide, however, that we want all $100 to flow to the elderly. Ethan, though, you didn't answer the ethics part, though. There's no ethics in these profit enterprises.

1:22:58Many businessmen who would say, excuse me, I'm an ethical person and I run an ethical business and I do it in a way that enhances the quality of life in my community and I happen to believe them. So I cannot speak for the ethics of business. I'd like to reply to this also. With regard to the holier than now attitude, I don't think that this is a monopoly of private charity. Yes, there are certain private charities that have that holier than now attitude. And then there are other charities, say the Salvation Army, which I think is completely absent from that as it's possible for human beings to be. Looking at the other side of the street, there are bureaucrats that have a holier-than-thou attitude also. And then there are bureaucrats that don't have it. So I don't think that you can make such a facile equation between holier-than-thou and private.

1:23:47And that goes for ethics as well. I think there are immoral businessmen that lie and cheat and steal. And then there are grafters in government, and there are honest businessmen and there are honest bureaucrats, so I don't think a facile equation can be made in that regard either. With regard to the privatization, countries as disparate as the United Kingdom with a neoconservative government and New Zealand with a socialist government are now engaging in privatization. Not only that, but countries behind the Iron Curtain, Perestroika, with the Soviets and the Chinese, the Chinese have more free enterprise zones than Canada. All the world around there is a revolution in thinking in terms of privatization, more reliance on freedom and economic liberty and less reliance on state planning.

1:24:38The sole exception seems to be the intellectuals in the universities in the West. I think people have learned the lesson that East Germany and West Germany were just a laboratory experiment, the same people, the same blood, the same country until too long ago, and one of them had to put up a wall and kill people for leaving, and it's the same thing with South Africa. The blacks keep moving into South Africa. I mean, there were no Jews that moved into Nazi Germany, but the blacks keep coming into South Africa, because bad as apartheid is, and it's very bad, it's better, it's a better system than the frontline states, the black African Marxist dictatorships. So I think that privatization is a very good thing. It's certainly more efficient. The private enterprise system can do the job usually at one-third or one-half the costs of the government because of the incentives. It's because in the private sector, if you don't produce the widget, you lose profits and ultimately you have to go bankrupt. In the public sector, if you do badly, like in the post office, you have a monopoly, you just raise your revenue through taxes. Now if we privatize the

1:25:51Post Office, it's guaranteed that we'd have postal service twice as good at half the cost. So countries all around the world are following this, even the Soviet Union for goodness sakes. It's only people, as I say, in the western universities who have been somehow unaffected by this revolution in thinking. I just can't be one statement made, sorry. I think that private enterprise is efficient and works through a system of competition. I just think it needs a passing comment that the evidence, the evidence is that there is collusion at every level in the capitalist system. This notion of competition really must be set to rest.

1:26:38Since you called me a name, I'll call you a name. This is another lie. This is another lie, another fabrication of the kind of social order. I don't want to get into name calling because it does none of us any good, but this notion of the myth of competitiveness and therefore the efficiency of the marketplace is a lie. What they do is raise the price. That's all. It's a simple matter of raising the price. Now, when you raise the tax, you're gouging, you're stealing, you're taking, you're distorting. When you raise the price, you're being competitive. This is nonsense to me. Just excuse me, please. I wonder if we could move to the next questioner, please.

1:27:23I don't know whether to laugh or cry about some of the things I've heard here today, Okay, but the discussion about excessive government, and I'm just wondering how responsive the phrase of your attitude is for excessive intervention of government in some aspects. One of the things that I found interesting was the discussion of the word charity. In B.C. we are witnessing a phenomenon of an industry promoted, the gambling industry promoted on the basis that this is a mechanism, charity gaming is a mechanism for providing funds for the welfare of those in lower income brackets. And I'd like to have both of your comments on the legitimacy of this, even as a useful interpretation of the word charity, much less as a mechanism.

1:28:25Jim, we're talking bingos here. I know, I know. We're talking the numbers games on the streets of New York, and we're talking lotterio in Ontario. We're really talking about the profits from gambling. I've tried to think this through and it's very tough from a welfare perspective. It's like the numbers game goes on on our streets. The numbers game goes on. What do we do about it? We can't close it down? Well, in British Columbia, the government is promoting it. We promote it like crazy in Ontario too. I hate to say it, I bought a ticket. I bought a ticket. I did. It was at $10 million and I bought a ticket.

1:29:15The difficulty is it goes on and if it's going to go on, the state should have a hand in regulating it. That may sound like lunacy. Well, to my way of thinking, there are lots of things that I personally don't do and wouldn't want my children to do. Gambling, smoking, drinking alcohol, things like that. But I think that I'm not a paternalist. I'm not willing to, at the force of a gun, impose my views on people with regard to things that affect them. I am willing to use the force of the law to stop rapists and murderers because I think they are transgressing and they are violating other people's rights.

1:30:06But I think that if an adult ingests tobacco or whatever drug or alcohol or engages in gambling, they are harming themselves and I would engage in my rights of free speech to try to counsel them against it. I don't think it's proper for a government to use the force of law to stop it. Now, in a free society, if a church wanted to hold a bingo or a lottery or what have you, and part of the proceeds, or a lot of the proceeds, much more a percentage of the proceeds than in government would go to the poor, I see no intrinsic evil or immorality in that, but I do see the government as being a bit hypocritical. are critical. On the one hand, the government passes laws against private people advertising smoking, and on the other hand, the government subsidizes tobacco growers. On the one hand, the government stops private gambling. Several native people's tribes, Indian tribes, have wanted to have gambling on their tribal grounds, and the government won't allow them to. And yet the government promotes all this, you know, lotteries and, you know, win 10 million and this, that, and the other. So it's just another example of government hypocrisy, and I would certainly

1:31:18My question is to Dr. Rice. You indicated that at present we have no system to help people out of poverty. Can you comment on your ideas for how this might come about, how we might change the system.

1:31:59I believe in the right to property and I believe we should develop a new social right and that is the right of every Canadian to have access to property and whether that property is in the form of land or not, I'm not I wouldn't go so far as to say it should be in the form of land, but it should be in a guaranteed right to resources. That is, we should have people in our society having a stake in our society, and they should have a guaranteed right to the resources of the wealth of that society, since they are there as a member of it and contribute to its make-up. I believe it takes all kinds of things to get us through the day. We have to raise kids, and we have to work, and we have to make fun, and we have to do all kinds of things.

1:32:45All of those activities add to the wealth of our nation. I believe therefore all of those activities have a right to call upon the wealth of that nation. And therefore we could rise people up out of poverty by identifying that right and recognizing it as a property right, guaranteed in some constitutional guarantee, a right to property. I think that property should not be the exclusive domain of certain income classes or social classes in our society, but should be provided as a right for everyone in our society. Can I comment on that? Yes. In 1776, Adam Smith wrote a book called An Inquiry into the Wealth of Nations, where he asked why is it that some nations get rich, become wealthy, and other nations don't.

1:33:33He was attacking the mercantilism of his day, which still unfortunately we have with us. My answer to the way that we can cure poverty is by creating wealth and the best way to create wealth or to cure poverty, which is the same thing, is to get that institution out of the way which stops this process and that is the government by creating all sorts of unwise interferences with the market system, it creates poverty, it creates unemployment, it creates homelessness, it creates joblessness, it creates economic inefficiency. The less government The more intervention we have in the economy, the more we will have a solution for the cause of poverty, as shown, just look around the world. The countries on the face of this earth that have had the fewest interferences with the market system are the richest.

1:34:21There are no exceptions or very, very few exceptions. And the ones that have had the most interferences with the economic system have had the poorest case. is usually brought up as the one counterexample. It is not. If you consider the Swedish economy very carefully, it is a welfare state. It engages in a vast redistribution of wealth. But in terms of interferences with the economic system, it has no tariffs. It has no interferences with the market of a micro nature of the sort that we have in Canada all too much. So Sweden is not a counterexample. I really don't know of any counterexamples. I mean, Cuba is not rich, and they've got Well, in some ways you've answered my question, but I'm still going to raise it, Dr. Block.

1:35:31I disagree really strongly with your interpretation of the origins of the welfare state in Western democracies. I think I'm right in remembering correctly that you suggested that it was some kind of socialist invention. In fact, the welfare state was pioneered originally by a Chancellor of Imperial Germany, Bismarck, hardly a socialist. Furthermore, the original programs were developed by governments that were either conservative or liberal rather than, as often is claimed, by social democratic governments. Now the question that interests me is why did these parties who accept the market economy or capitalism intervene in the field of social welfare?

1:36:25I'll give you my answer and then I'd like to ask you to repeat why you think the welfare state developed. I think there was a realization among every western nation except the United States towards the end of the 19th century and earlier in this century that the market mechanism wasn't a fair allocator of resources. If you leave capitalism unregulated, what you're doing is creating freedom just for a minority of people. So that the welfare state is an instrument designed to provide everybody with an equal chance to be free, to make meaningful choices, an equal chance to compete with one another. Now, I don't know how you can claim that it really is more unfair than the market when the historical record suggests that in fact left to itself the market is a very unfair mechanism.

1:37:24I'd like your comments, please. Well, it's a very intriguing question. I confess that I didn't think I was discussing it in my opening remarks. What I thought I was discussing is who benefits and who is very much behind this now. Is it the poor or is it the people in the poverty industry? And I was saying the latter. But still, it's a very interesting question. And I certainly agree with you that Bismarck was the modern creator of the welfare state. As to whether he was a socialist or not I think is a lot more controversial than you think it is. I think he was a socialist or an interventionist much more than you might believe. I take a somewhat of a revisionist history view on this.

1:38:09You might be aware of a book written by Piven and Cloward on this, and to some degree I subscribe to their views that this was a creation, if you will, by the ruling classes or the business gentry, what have you. Not so much to promote fairness. I didn't read any of that in their book. I read to promote their control of the whole society, which is a lot more believable from my point of view. See, many people think that if you favor the free enterprise system, you ipso facto favor large businesses. The way I see it, it's not exactly the opposite, but it's almost the opposite. Some of the biggest enemies of the free enterprise system are large businesses, these corporate welfare bums, who are using bailouts and subsidies by the hundreds of millions of dollars for every 10 cents received by a poor person.

1:39:00So I see it in a much more cynical way than many people do. I don't see it in terms of fairness. But in terms of fairness, I don't know where you get the idea that it's always more fair to take from the rich and give to the poor. It seems to me that it's very important to ask, how did the rich earn it? If they earned it honestly by helping the poor in a way that the government never could have helped the poor, then it seems fair to me to allow them to keep it. On the other hand, if they earned it through bailouts and subsidies and protections and unfair means, non-market means, then it's fair to take it from them, not because they have a lot, but because they're thieves. So I think the reality is a lot more complex than is sometimes thought of.

1:39:48We have just hit upon something that we agree on, and that is that I also agree that large corporations are in fact a limiting factory in the growth of the economy. I didn't say all large. I didn't say all large either. Some. Some. I'm trying to find just one point of agreement. We've made it. We've got a contact here. And it may be that smaller social structures are better at producing wealth, the wealth of the nation. Competitive smaller social structures, competitive social structures are good at producing the wealth of the nation. They are still not particularly good at distributing those resources.

1:40:33And you need some other mechanism to help with the distribution. We have time for two more questions. I think there are two more questions. Madam Chairman, could I just break in? I must, I'm afraid in this society I don't have the right to set the airline schedules and we're still working on that. I would like to, on behalf of the BCMA, thank the organizers of this conference and all of the presenters and the questioners. I think they've all taught me a little bit and I hope I can take it back to our organization. Excellent, thank you. That's almost a closing, but we do have one more question. I just wanted to say that I think that the libertarian view that Walter Block espouses is trying to divert attention from social reality with a sort of series of intellectual distortions, and I only focus in on what I think is the big intellectual distortion.

1:41:26And that is this whole notion that government only intervenes when it redistributes property, it doesn't intervene when it acts to protect existing property rights. And that's the whole vision that you set up to try to convince us that we should have less government. But in fact, that is a distortion because the existing regime of property depends intricately on government intervention. Government intervenes and coerces all the time in protecting existing property rights. If I go for a walk and I walk on a corporation's land and the corporate director who happens to be there tells me, get off, and we both go to government, government isn't making a choice as to whether or not one will be coerced or, sorry, government is not making a choice as to, that can simply be put in terms of protecting one person's freedom without interfering with another.

1:42:16Government has to make a choice as to who is being coerced here. Is it going to be the landowner who's going to be coerced, in a sense, by limiting the property right? Or is it going to be me who's going to be coerced by being told to remove myself from that property? Government intervenes in a very coercive way whenever it protects existing property rights. And once that is realized, this whole gobbledygook about government intervening less is exposed for what it is, simply an ideological proposition that must be defended on its own terms. Patrick Monahan has taken the same position with you, I think, as well.

1:43:16Your government protects extant property rights, it's intervening, but we have to be very careful to see in any case if the existing property rights are justified. For example, in the pre-Civil War South, when they were protecting property rights, they were obviously protecting the wrong property rights, namely the ones with the slaveholders. And that was the sort of argument I got with Milton Friedman. It wasn't just the slave owners, it was also If you don't hold it, how can you continually talk in terms about government not intervening in the economy, when what you really mean is government should continue to intervene to support existing countries?

1:44:12The reason I do that is because I was given a brief, in this debate, a half hour to talk about welfare systems. I can't talk about every subject under the sun. Now, you're raising an entirely different question, one that is easily worthy of a whole panel debate also, namely the question of how do you justify property rights titles. I think it's very important, but I don't think we can justify minimum wage What you're really talking about is property rights and land, mainly, and all I can say is that I paradoxically, or maybe surprising to you, take a view very similar to your own or at least what I am able to understand. No, I'm serious. And if you want to pursue this further, get the citation and let's communicate. Let's not just leave it to yes, yes, no, no, your mother's this or your father's that. Let's do it seriously and systematically.

1:45:12Thank you. The last questioner. I was wondering if you would comment on what you said before about the rich acquiring their money honestly, if they acquired it honestly, and in your vision that would mean if they don't ask for any aid from the government. Is that your only criterion for honesty, that you would not be disturbed if business were involved in endeavors which would cause harm to humanity, generally?

1:46:00I mean, you would support any business providing the business did not get government support and did not cause any, even if it did cause some undue harm to humanity. For instance, would you support companies that are producing chemicals, pesticides and various other chemicals that could be harmful to humanity? Do you feel that they would be performing an honest role in society? And if you do feel that companies would be performing an honest role in society by doing things that could be potentially harmful, do you feel that they have any obligation in any way to humanity to help in some other ways? Would they have any obligation to the people that they might have harmed in some way through their fulfilling their honest obligation to society by not requiring funds from government, et cetera.

1:47:00No, that's not exactly my view. Let me explain it in two minutes or so, because I think the chairperson is breathing down my neck. I don't dare go into my half-hour discussion of ecological and environmental issues. That's a topic for another day, and if I'm invited back on that topic, I'll elaborate on that. Well, by extension, it would not only be environmental. Let me try to answer your question. I would first of all recommend a series of books by Gabriel Kolko, K-O-L-K-O, who is a devout Marxist, and yet who I think has got a very good slant on the revisionist history of businessmen. One book is called The Triumph of Conservatism. It's a magnificent book. What I oppose businessmen doing is, one, taking favors or subsidies or special privileges from government, and, two, engaging in fraud. I mean, if they, in effect, steal from people, that's a bad thing.

1:47:51Only steal, but what about other forms of harm? Don't you want to let me finish? Yes, sorry. Okay. There are some harms that I think businessmen have a right to perpetuate and others that I think they don't have a right to perpetuate. For example, the manufacturers of chocolate, I think, create harm because I believe that chocolate is harmful. It just, you know, creates heart disease and fatness and obesity and all sorts of other problems. And yet, I think, at least for adults, if not for children, that that harm is not a rights violation. With regard to pesticides and pollution, I think that that is a rights violation. It's a violation of property rights, and it should be stopped, and it should have been stopped, except, and the only institution that could have stopped it was government.

1:48:36Only government in a series of court cases in the 1830s and 1840s took the exact opposite view to the upholding of private property rights and took the view that it was legal for these people to pollute, in effect. And I think that was a mistake and I would oppose that. So when I say an honest business, to me it doesn't matter whether it's big or small, any more than a person. You can't determine whether a person is virtuous just looking at his height or his weight. You can't determine whether a business' virtue is looking at its size. It has to be what does it do? And whether it colludes or not colludes is just a morally neutral word for me. Collude is just a synonym for agreeing. I want to know what they're colluding to do. If they're colluding to raise prices, that's fine.

1:49:22Someone else can outcompete them. And who would we just say what prices they should charge? If they're colluding to gain favors or privileges from government to prevent competition, to prevent competition, that's a very different kind of collusion and I would oppose that. Not because it's collusory or collusive, but because it's doing something improper. So to answer your question very specifically on the ecological and environmental questions, I would be much tougher than most people in stopping these abuses of large, small and every other kinds of businesses. I think that it's government's responsibility and government has not upheld its responsibility. Would you not also then extend that to causing harm by preventing, by not allowing people enough food, by not allowing people enough, by not allowing people housing if, if the, if business in some way contributed to the fact, you seem to only suggest that it's government that is contributing to all of this.

1:50:27What if businesses, what control do you think there should be if you feel that businesses are also contributing to the harm of humanity in other areas, not just environmentally? If businesses contributed to homelessness or to lack of food, I would oppose them depending upon how they did it. If they just, you know, burned food or clothing that belonged to other people, I would oppose them. If they burned their own food, that's their business, it's their food. But look, the people that are preventing people from getting food in this society are the marketing boards. They're the ones that say to the farmer, look, don't grow over there. Or in the U.S., the people that have these agricultural price supports. The people that are preventing housing from being built are the legislators and bureaucrats that uphold rent control and agricultural land reserve laws.

1:51:15Well, what about during Expo, for instance, when so many of the hotels were turned over to private establishments? and so many of the previous hotels in which poor people lived were turned over to become hotels for the wealthy during the expo. Would that upset you that industry or business was doing that sort of thing? Do you feel something should be done? No, I don't think anything should be done. I don't think that the poor have any right to live in any specific place. I mean, suppose that the oil is... But yet you would protect the environment though. You feel the harm to the environment and... Suppose a diamond mine is discovered right under the downtown east side in Vancouver, which is the place where the poor live. Okay? Maybe not a diamond mine. Let me give you a better example. The cure for AIDS is discovered there. And what they've got to do in order to get the cure for AIDS, which is a resource, is they've got to get all the people off of that land and dig three miles deep and get it. Could I interject for a moment, please? It seems like we've created another debate.

1:52:18and I think that our time is up and we're not able to do so but the two speakers who have presented I think very eloquently the two sides of the great Canadian debate have asked for just perhaps a moment to conclude and I am going to keep this very limited, I would like them to conclude with what they think is the strongest point of their argument We'll go briefly in the space of a couple of minutes each, please. Thank you, Walter.

1:53:07I think the thing that we have to do as welfare advocates and people who are concerned about the development of social welfare in Canada We have to forge a new vision. We have heard the language of the anti-welfare position. We have heard the language. It is a compelling and strong language. It has a deep historical root. Its root is important to us in as much as it led us away from a certain type of tyranny. It has, unfortunately, led us into a new type of tyranny. And I'm just suggesting to you that as people concerned with social welfare, we must find a new vision. We must find a new vision, we must find a new way of articulating the right to property, the right to the resources of the nation, the right to the wealth of the nation that does maybe three things, provides an adequate livelihood, provides an adequate life, provides it in a way that does not stigmatize those people that utilize, that call upon those property rights and provides it

1:54:16in a way that allows for the greatest amount of freedom, given the nature of cooperation, as is possible. That's where I would end. The reason I asked him to go first is that I went first before and I think it's in proper procedure for debates that we reverse it at the end. I would agree again on another point that we should forge a new vision. The vision I would like to forge is slightly different though. First of all, I don't see my position as anti-welfare. I see my position as pro-welfare. I'm trying to make it more efficient and more effective and privatized. I don't think that government welfare is efficient or effective. Further, I don't see the emphasis on property, on physical land property that only accounts for about 10% of the GNP.

1:55:04Human capital, skills, training, effort, account for 75% of the GNP, so it's much more important. The last point I'd like to make is that his criticism of my system, not that it's original with me, seems to be the claim that the free enterprise system assumes that people are atomistic, that they don't cooperate, that they're not interdependent. I never said anything like that and I resist the very notion. On the contrary, it seems to me that the free enterprise system is a way to voluntarily channel people's cooperative and dependent influences. It's the most effective system known to mankind. It's the reason we have the civilization that we now have. It's the reason that we're now discussing over a Sunday night dinner in opulence what we can do with all this great wealth.

1:55:51The reason we have the wealth is because of freedom, economic freedom and civil freedom. Thank you. I'd like to take this opportunity to thank both of our speakers for highlighting some of the key aspects of the Great Canadian Debate. I think they agree on one thing, and that is that we need some new vision, that we do have to probe for some new ideas on how to to resolve some of the questions around do we have a right to inadequate income as Canadians, and if we do, what is the best way to ensure that? I think the dinner image has been used throughout this debate. I think for me it evoked a lot of my childhood where this argument went on, and where I did end up with indigestion because I didn't get many new ideas out of it.

1:56:53I hope that this afternoon, I think we're a microcosm of family dinners and Canadian society and we presented the different kinds of arguments. I hope you've come away with a couple of new ideas that might provoke you to argue in different ways the next time round.