Vernon Smith: “America the Beautiful” In Dissent: 1st and 14th Amendment Expansions of Freedom

– Well, I often tell people of my age, it’s a pleasure to be anywhere. (audience laughing). But it’s a really special
pleasure to be here. Many good years I’ve GMU and still come back on various occasions. And hope to do it many
more times in the future. And my wife, Candace
Smith has accompany me, she’s sitting down here, and
we always travel together. She doesn’t go I don’t go, okay. And now I think she
doesn’t go unless I go, she has independently various things that she does and connection with her teaching about rules and
order around the table and on social occasion, it’s okay. Well let’s… The title here, which is not displayed, but it is America the
Beautiful in dissent, and in first and 14th amendment
expansions of freedom. Now, this is really an
exercise in oral history, a lot of what I’m going to talk about of. The stuff has come out of
my personal experience. But I want to reach
for a little bit larger intellectual framework, okay. To better understand
the experiential part of my participation in the
American experiment. My experience. And that’s now over 90 years, but I go back there’s some important events in my
life that actually happened for 10 years, about 10
years before I was born. So I’m gonna be going back to this. Now, if there’s a theme
here it is that we live in dangerous times. But from our colonial beginnings
with its British roots, we’ve always lived in dangerous times. That’s the story of America
story of our political, social and economic processes. It’s the story of our
constitution and all the changes have been made in it. And I don’t want to say that
there’s nothing new today. But the point is that
much of it is part… What’s going on is really
part of our heritage. And I believe we sputter and muddle through all these times because there are forms of social rationality and a
culture of freedom that help us to sort through temporary versus lasting forms of adaptation. I think there’s always that
tension- people wanna take in the short run and
in different directions because of the immediate circumstances. But the question is how
much should be that part of the permanent change? Now, I think the source of the
idea I want to try out on you is that the source of this
rationality is in our commitment to order through rules
as against only searching for best apparent outcomes under whatever are the current prevailing conditions. The result is a conflict to be resolved, or continued until we are
ready for a resolution, okay? And it’s- almost all of our
theorizing is about outcomes. And it’s not really the
deep the roots that may be the driving the rules
we follow and you see that particularly in
economics, where utility is essentially utility
for everything, okay? You got action produces an
outcome produces a utility. And it’s kind of an if
and only if statement. So all our models tend to
have utilitarian basis. Now that’s new within the
neoclassical revolution, intellectual revolution of the 1870s. And I’m not gonna talk about it today. But we abandoned a lot of
truth when we did that. So I’m saying the neoclassical tradition. And that’s not my subject today, but something that I’m busy
writing and researching now. And the thing is context
matters, and action. And not only the rewards and
the distribution of rewards, and there’s no place
better to learn that than in Adam Smith’s first book,
“The Theory of Moral Sentiments” because that’s all about the
emergence of our sociability out of ancient rules, that kind of emerged by consent in groups, okay? And those become on… Some of those rules became
in the civil order of things, what we call the rule of law. And some of the evidence
for this is experimental. In the 1980s and 90s, we had a
lot of two-person-single play games played anonymously that we couldn’t understand the results at all. These were trust and ultimatum games. And those games people were
co-operating way more than they should have been because
they had this wonderful opportunity to anonymously
take all the money and they weren’t doing,
and I didn’t have a really satisfactory explanation
for any of that until I finally started to understand
what Alan Smith was saying in his first book, and
then it all became clear because his, propositions
easily predict those and a bunch of new stuff now, because he’s modeling relationships, and the context matters, and context and the game means all the payoffs, okay? And so… But also wanna ask what’s
the cultural evidence? Is there any cultural
evidence that for Americans along with others in
the Western tradition, our concern is for
rules, not only outcomes. Let me give it to you in the
17th and 18th century English, the word fair meant fair play, not fairness of outcomes. The opposite of fair was foul. More over and many of you
are not going to believe this but you can get the
references and read it, more over fair is a unique English word. It is not translatable
into any other language. Look and see what the
German word for fair is. It’s English fair, that
just borrowed the word and some of them in Polish, and the French won’t borrow worlds’ religious don’t have that word (audience laughing).
– Okay. But all the others do. And this comes the best source
on this is (mumbles) Becca, get her great book the picture
is written several things several pieces on English
and some of its uniqueness but just her… The one I go back to is the
one just entitled “English” and she will… You read that and you will see that it is really quite convincing. So any action was fair,
if it was not a breach of the accepted rules
of socioeconomic order. In the civil order. It meant that actions were
subject to the rule of law, but what I’m trying to suggest is that it’s sources are far deeper. Okay? Remember these English language
settlers who had this notion of fair play, in their language? They moved to North America,
okay to Australia, New Zealand, Hong Kong about the same time
that they were having starting this resurgence and a
big upsurge in growth and an economic welfare per capita which historians have
abundantly documented. Well, that tradition, I
think, among many others, for example, the alien
ability of land took the form of first and 14th Amendment
protections of freedom of speech, or now that is widely
interpreted as expression. Okay? Association and assembly
and protections of that from invasion by state
and federal lawmaking. And these freedoms became
instruments of exploration, I think and of discovery of new relations among deserve people. That’s the thing that
freedom does for you. Okay. Now the 14th amendment
was ratified in 1868. And it essentially
extended first amendment of freedom to all citizens
after the Civil War. And then in 1873, the Supreme
Court tested its meaning in a famous slaughterhouse
case in Louisiana in 1873. And here’s the ruling. The essential part of it… Said the first clause in the 14th article was primarily intended to confer citizenship on the Negro race. Secondly, they give
definitions of citizenship of the United States and
citizenship of the states. And it recognizes the
distinction between citizenship of the states and citizenship
of the United States by these definitions, okay. The second clause protects
from the hostile legislation of the states, the privileges
and amenities of citizens of the United States, as
distinguished from that the privileges and amenities
of citizens of the states. These latter, the privileges
and amenities of the states embrace generally those
fundamental civil rights for the security and establishment of which organized society is instituted. And they remain, with
certain exceptions mentioned in the federal constitution under the care of the state government. So what this is saying
is, essentially is that civil rights protection, the
four civil rights protection, state citizenship had
priority over US citizenship. And this ruling then enabled
laws in the former slave states to figure- to favor segregation
and discrimination until it was finally challenged
in Brown versus Topeka famous case, of course, 1954 in Kansas. In which separating children
and public schools on the basis of race was declared unconstitutional. Now that took over 80
years for that to happen and happen in Kansas,
which was a free state. And I’m going to come back to
Kansas, the free state because that’s where I grew up. Now we’ll have a lot to
say about what it was like if you were concerned
about racial discrimination and growing up there. Well, I was born in 1927,
and to give you the context, that’s Babe Ruth 60 home runs in 1927, and a very distinguished
French Catholic priest, who was a physicist, Lamont Ray published “The Big Bang Theory.” It wasn’t called at that time, but he took Einstein’s
general theory and showed that you could implied an expanding universe. And it was another 15 or 20
years before the term “Big Bang” was invented, and it stuck and that’s what he called ever since. So, and also it was the 200th
anniversary of the death of Isaac Newton 1927,
so it’s a great year. Now I was raised in a
family and extended family with several unique characteristics. And we were largely
indigenous American socialist. American socialism became
something very different than it did elsewhere, I’ll
talk a little bit about that. We were anti-war. We opposed all forms of
racial discrimination. And we were committed to first
and 14th Amendment rights. And as we also held very
strong ethics for work, saving and innovation. And you see the reason why
these commitments freedom could live within the context
of supporting socialism is that none of us
believed that work ethic, innovation, the incentive to innovate, none of us believed that would change. You see, that’s part of the culture. And it was believed that (whispering) there was no one understood
how that might have come out of the economic freedom we had and so that’s kind of the ethic for work, for example, my father was laid
off from he was a machinist worked for the Bridgestone
Machine Company in Wichita. He was laid off in 1932, and
then there were several times during the 30s when he had the
opportunity to go on relief. And that was the W-P-A. Well, it refused the door. It was demeaning. The attitude of a lot of
people was that, my grandfather said WPA that means we piddle around. (audience laughing). It was make work, and so you
had these interesting people who were revolting a socialist candidate, and refusing to go on relate. Now my mother thought my father
was being very unreasonable. Of course it wasn’t as if
there was some argument in the family but he
wasn’t about to do it. Okay, now I want to talk
about Eugene Victor Debs. And my family, it was Jean
Debs he was like a member of the family. My grandfather, my mother’s
father was an engineer on the Missouri Pacific. His twin brother was an
engineer on the Santa Fe, and their brother-in-law
was on the Rock Island road as an engineer. My mother who was married when she was 16 was married to Grover
Bougher who went to work. He was a fireman on the Santa Fe He was killed instantly in 1918. At the time my grandfather was
recovering from a leg injury. Okay that hit him up for about six months. A leg injury accidents were very common. Debs was a labor organizer,
particularly work at the railroad workers and the main thing that he was emphasizing
is working conditions. These were terribly dangerous times they had no infrastructure. Everything had to be
coordinated with watches. There’s a penalty if your
watches not running on time. If you’re an engineer
there’s a penalty if you are moving too fast, there’s
a penalty if you’re moving too slow, because all of these
things had to be coordinated and was coordinated with lights, with signals, flags, torpedoes. If the engineer fails to see
some flags or red lights, and he’s approaching a dangerous
thing, there’s torpedoes on the track that explode
and maybe you’ll hear those. Okay, this is the way it
worked, so he was really… Debs was actually a real icon
of a Railroad workers family. Well he was arrested, sent
to Atlanta prison after a generic anti-war socialist speech that he made in June 1918. This was just two months after
the start of World War One. And he was found guilty under
the Espionage Act of 1917, which is still enforced and I’ll come back to that if there’s time. I want to talk a little about Dan. The Pentagon Papers, okay. The Daniel Ellsberg. Dan was… I knew him slightly but
not well at Harvard. And I want to say a little
bit about that because that’s all part of this anti-war. And here’s what… Anyways a quote from
Deb’s tantrum Ohio speech. He said, “I realized and speaking to you “this afternoon, that there
are certain limitations placed upon the right to free speech. “I must be exceedingly
careful prudent to what I say. “And even more careful and more
prudent as to how I say it. “I may not be able to say
all i think but I’m not going “to say anything that I do not think.” Well, he said enough things that he thought that he was
arrested and it was appealed to the Supreme Court
and he lost that ruling. Now, there was a lot of civil
resistance to World War One. And many believe that the
repression of that resistance probably strengthened them. And for example, as socialists candidates for president running from his jail cell in Atlanta Debs polled
almost a million votes. My mother was 24, this was
the first time she voted. The women got the right to vote in 1919, and she cast her treasured first vote for Eugene Victor Debs in jail. There was about 350,000 draft
age man that fail to report to register for the draft
in the First World War. Some 2000 cases in the courts were charged under the Sedition Act. Now the Sedition Act was passed in 1918, a year after the the Espionage Act,. And it forbade the use
of disloyal, profane or abusive language about the
United States government’s flag or its armed forces or
that caused others to view the American government or
institutions with contempt. Now, Warren Harding,
the Republican candidate who won the election,
commuted Debs sentence had been sentence for 10 years. He commuted the sentence,
and this was a healing act the conditions had changed the attitudes were very different. And he freed Debs along
with 23 others in prison for their opposition to World War One. Now, two of them were
communists who were released on condition that they
go to the Soviet Union. Well, you know what
happened to them there? They were executed. Okay, and this is the sort
of thing that turned Debs and American socialists very
much against the international Marxist movement and started to become a more independent affair. So there’s an interesting… The Sedition Act was repealed in 1921, less than three years after it was passed. Now that gives you an idea
of how fast popular sentiment can change. And people are now looking
back on the First World War and its carnage as a grave mistake. Okay. Then Norman Thomas comes on the scene. Debs died in 1928, Norman Thomas took over the Socialist Party and ran
for president six times. Okay, he had been president of the fellowship of reconciliation. That’s the leading
Christian pacifist group in the United States and I
believe still as the other is the non Christian is
the war resisters league. He was the co-founder of the
American Civil Liberties Union and a vigorous defender
of rights of free speech. For example, Norman Thomas
was very anti-communist anti-Nazi, in the 1930s. He always said we should let them speak. But it shouldn’t be suppressed, we should we should hear them out. He had a certain confidence
that American people were not going to accept that stuff. And he was willing to
run that sort of risk. And in fact, that is kind of
a part of the some, I believe some of the Supreme Court
doctrine and this sends the question is whether there
is a clear and present danger. And if in some sense there’s
not a clear and present danger, you let people speak
okay, and that’s them. Head of variable life and
its a great points decision. In 1939 Thomas was a prominent critic of President Roosevelt’s decision to turn away a boatload of Jewish refugees and forced to return
to their Nazi fate in Europe. After Pearl Harbor,
Thomas indeed most of us in the anti-war movement
supported our entry into World War Two. This was in keeping with
Bertrand Russell’s dictum. Bertrand Russell had been
a conscientious objector, the philosopher in the First World War in the United Kingdom. And his dictum was that
they’d only been two wars in History worth fighting. The American Revolution
and the Second World War. I would ask you to see if you
can find any others that were. So… In 1942, Thomas nearly broke with ACLU because they supported the
enticement and dispossession of about 110 to 120,000
Japanese American citizens. His friends persuaded him
to stay in the organization that he could do more within
it and then on the outside because the California Chapter
of the ACLU had not gone along with the National and
so Thomas became an important part of the defense
that was mounted against some of the Japanese American
citizens that got their cases got in the courts. Now he campaigned for arms
control and kind of peacemaker issues after the war
and American socialism as a political movement faded away. But the contribution towards
freedom I think lives an ecologically rational Americana. You see what stuck about
the Socialist Movement, is the part that has lasting benefit, benefits as seen by most Americans. And I think the libertarians
don’t, I think don’t fully appreciate the extent to
which there was a socialist heritage, in many of the policies that libertarians espouse. Okay, now, I want to turn to dissent against racial discrimination
and growing up as in Kansas, we were trying to fight
racial discrimination. It was like pushing on a string. Okay. We had for it was a free
state we have First Amendment protections from invasion by
state law but discrimination against blacks, Hispanics, Asians, or Native Americans. It was widespread, okay. Supported not by law, but practices, okay. Now I was a member of CORE
that’s the Congress of Racial Equality that was formed
in 1940 by James Farmer and George Hausner, they were at… George was at the University
of Chicago a student and James Farmer was a citizen,
a black citizen of Chicago. And the first breakthrough
on kind of, on the problems of widespread practice of
discrimination occurred in 1943 in Chicago. CORE` mounted a successful sit
in the Jack Sprat restaurant. So what they did a mixed
group of blacks and whites go into the restaurant,
sit at a table, wanting to be served, the manager
comes over and says, “I can’t serve you.” He says, “the blacks I’ll
serve in the kitchen.” If you come around to the
back door, that was a standard way that blacks could get
food from a restaurant, go to the back door, it
feed us in the kitchen. But he said “I can’t serve you out here.” They refuse to move or to be served. So they call the police
manager call the police “Please come out.” They say “there isn’t any
law being broken here. “We can’t do anything about this.” So the manager served him. And that was that after then
people went to Jack Sprat. And he served him and it began to spread. Now, there’s something about
that model that I really like. It’s coming right from the bottom. And you’re going after the
people that are in the trenches that are doing the discriminating, and you’re challenging
that in a non violent way. They don’t have the law on their side. And that really, it
was small in the 1940s. We in Wichita, we were
trying to do it with the theaters break down
the the discrimination in theaters. But they would give in
but they wouldn’t change their policies. And then I want to talk about
the University of Kansas, which is in Lawrence, Kansas. And now I’m coming up
to, after I’ve graduated from Caltech, I went to Kansas and I got a master’s degree in economics. So I was there from 1949 to 1952. Now, campus housing for student housing at the University of Kansas was reserved for members of the Caucasian race only. So that meant Asians, Hispanics,
blacks, all of it, nobody could never and there
were some of the students at the University of
Kansas but they couldn’t live all on campus. Well, we had six private all
off campus, co-op houses, the co-op houses for the moment
Which was a private endeavor was very strong and there and they and five of them were interracial. The one that wasn’t… we used to call the poor
girls five tie, okay. And… So I lived in a men’s Co-op with 17 men, we had one black and two Hispanics and that was easily exceeded
the ratio on campus, okay? And that gave me the
privilege because I had a black housemate of
going to the Green Lantern and north Lawrence, which
is an all black bar. I could get in there with him. Once I went there when… And wasn’t with me, and the manager meets me at the door, and he says, “I’m sorry, I can’t be
responsible for you in here.” I just say ” I’m not gonna take a minute.” “If Andy’s with you, I can let you in.” So there’s a Hispanic bar
about three blocks away. So I go over to that one. And it’s interesting, I
could go to the Hispanic bar without Benny Sanchez,
one of my housemates, no way that my black pal house might get in to a Hispanic bar, not with anyone. There was a divide there that was just… And it was everywhere, it’s amazing. I don’t understand all that. But… Anyway that’s the way we lived. We didn’t have trouble
with the university. We had trouble with our neighbors. In fact, with the help the of university we formed the couples Co-op. Because several others had
gotten married and we decided to form a couple’s
Co-op and rented a house and added that to the set of Co-op houses. And the university said… They approached us and said “we have a black blind student
that has to live close. Of course she can’t live on campus. But would you take her?” So the housemates, that’s
unanimous we’ll take her and we also decided to
give her a scholarship. We’ll just absorb her costs. So Billy joined us. And then later the
graduate girls moved in. That’s what we call them. The Graduate girls Co-op. I’m sorry. That was the name and graduate girl… And one of them were black. My neighbor stops me one day
and says one I can understand the first one, the blind. But why did you let that other one in? You see in this sort of thing
that you constantly lived with We had two forces for that guy. Had nothing to do with
any of these issues, but it had to do with
harboring a barking dog. I mean, you get harassed
and they can’t get anywhere with that issue. But there’s something on the
law books you’d see in the city about a barking dogs that you raise. So anyway, we some action
in the local courts. But let me say something
about Dan Ellsberg and the Pentagon Papers. I overlap. Dan Ellsberg graduated summa cum laude and economics at Harvard. And his senior thesis, two
articles were published out : one in the American Economic Review and one in the Economic Journal. I mean, this guy was something I met him he was about
to leave for the Marines. And he impressed me as
a very kind of naive sort of patriotism. Dan was really devoted to the
American military enterprise. And interesting thing about
his papers in economics were always finding some kind
of a flaw in economic theory and exposing it and giving
you the argument against it. And it was done. These got published
because they had really interesting things to say. Well, his fourth publication
of the Pentagon Papers and he found a flaw. His whole career is interesting how his whole career is oriented to that. And in a recent interview, he was asked, “What did it take to get
you to make that step?” Okay to take… He copied, I know it was
tens of thousands of pages and he did it one copy at
a time, smuggle them out of the round and he got
them to the New York Times. And then the publication was
held up by Nixon challenge it in court and so didn’t
get published right away. Anyway, what did it take to
get you to take that step, Ellsberg? It wouldn’t have occurred to
me simply to do something that would put myself in prison
for the rest of my life, which is what I figured it would would do. That was not an obvious decision to make. Except once I’d seen the example of people like Randy Keller, and Bobby and he mentions another
guy, David Harrison. I don’t know who these people are. But these were a low level, a
young men who conscientiously refuse to serve, and
then realize, my gosh, I can have a whole lot
more impact, can you see? So he did. Now I don’t know. And of course, Ellsberg
Dan was charged under the Espionage Act, and would no doubt have been found guilty. But we had one in one of the
many misbehaving presidents we’ve had as the head of this country. Nixon was sure that the
Pentagon Papers probably had something to do with
some of the Vietnam decisions that he had made with Henry Kissinger. It didn’t. It only covered the earlier years, but he thought it probably did. And so he got the plumbers
to break into Ellsberg psychiatrist’s office
to see if they could get some dirt on him. Well, if you know Dan
Ellsberg it wouldn’t make any difference if they had. But anyway, they got caught. All of that got blown. And so as a result, Dan was scot free because the government
had blown its case, okay. So okay. Now I’ve covered 75 years
of change and adaptation. I’m starting when I was 19… When I was 16 years old. When I was first in
Wichita, involved in sort of breaking down some of the
practices in Wichita theaters. So race relations in
2018 have hardly a trace of the features so prominent
in which Appall 1943 and Lawrence 1949. At Harvard 1955 we had one black classmate who distinguished himself
Johnson, appointed Andy Bremmer to the Federal Reserve
Board and he had a quite distinguished career but
that was terribly unusual. Oh, virtually impossible. If like Andy, you were born in
a poor southern black family, sharecropper family. So a dissent on American adventurism. Broad though is still alive,
if not always listened to and ever present fact
with each new excursion. So these truths, I think, have been part of the American experiment,
the ones having to do with race relations, and the
anti-war movement have been part of the American Express
experiment since 1776. Is basically the reason why
I’m optimistic about the future and why I think we’re
going to outlive Trump, we’re going to be okay. Because this is an aberration. And it’s… I think you have to make
the case that somehow it’s different this time, and maybe it is. But it’s hard for me
to believe in the light of this history, that this is going to be the permanent imprint. Thank you, ladies and gentlemen. (audience applauding) – Right, I have the privilege
of moderating the Q and A now. There are microphones on either side, so please, form an orderly line. If you’d like to ask a question. Can you start with your
name and affiliation and please phrase your question
as the question and keep it pithy rather than
pontificating definitely. It looks like Nigel Ashford is gonna have the first question. – We don’t a microphone sir.
– Although Bob can… Great.
– Thank you. – [Nigel Ashford] Do you
think that improvements in race relations would have
occurred spontaneously due to the grassroots type changes you suggested? Or to what extent did
it require some degree of federal state intervention
to improve race relations? – And I don’t think the
mic was actually on. So the question, if I may paraphrase is, do you think that race
relations would have come up spontaneously? – [Nigel Ashford] Should I do it again? – Sure. – [Woman] Yes. – Well, that’s a really good question. I can tell you that I believe and I think that would have been
a better way to do it. I think the problem and Brown
versus Topeka 1954 was getting into enforced busing, and all the things. And I realized that would
have been very slow. But I think the right approach
would have been for black and white groups to start form
educational opportunities. And the segregation was based… In the schools was based
upon housing segregation. In Wichita, all the blacks
lived up around Ninth Street on north of the main part of Wichita, and that’s where their elementary schools that were all black were
there and the black woman who challenged on the ground
that her child deserved the kind of education where
she would be able to learn about other people’s and
go to school with them. And see that was kind of
the much of the argument. And I think we can’t be sure, because it certainly women slow and look, it was set back with the
slaughterhouse case by 75 years. But we don’t see if that
happened, hadn’t happened. What we don’t know is what
would have been a consequence at that time, but it certainly
for those of us that were in the movement, we looked
upon that as a huge handicap with state law actually
favoring segregation. So I don’t know. I believe, because to me,
the thing is we did see that model working in restaurants,
eventually in theaters, all kinds of places. And of course, those
places didn’t involve, the housing segregation. And the schools tied up with
local living arrangement. – If I may, I have a question. So you told about stories of individuals who challenged the law and helped to move the anti segregation movement forward. But do you think, to some degree,
you need those individuals who are willing to make that step, as well as organizations
such as fellowship of reconciliation to be able
to provide that backing. – Yes, those organizations
existed because there were individuals like this,
but there was a lot plenty of individual actions by
people that really cared. And I think that’s been
true in our entire history. From its beginning, there’s
been people who were dedicated to the American experiment and actually made incredible
personal sacrifices. And I saw that whereby, for example, to give you I didn’t mention
this was another illustration of it is Kansas had German
immigrants who left Germany under Bismarck, because of militarism. They were in the United States precisely to escape militarism. One I knew very well Harry
Grabber as a young child and in the 1930s, Harry had
been a conscientious objector In the First World War, well,
he was of course suspected of being a spy and all that kind of stuff. It couldn’t have been almost honest. So he went to, prison
and solitary confinement. And the farm I lived on
was a German community, the Hamburgers were how escaped
Germany because they came to the United States
because they were leaving the militarism that was growing. And of course in the First
World War there was a… For the German population in
the First World War was like the Japanese population
and the Second World War. They were all suspected. So anyway– – [Woman] Great thank
you for your talk Vernon. So you talked about What you’d
like to see is the bottom up kind of approach to social
change and cultural change. Can you talk about the
state of public discourse through that lens? And if there’s something that
you would want to see changed from through a bottom up
process, what would it be? – The state of what? – [Woman] Public discourse. – Public discourse. I think it’s… Well, I would like to see
us find ways to have more open discussion on campuses. Because there isn’t that
is bad, being challenged. A lot of people don’t want
anyone to speak, who may have something hurtful to say
about some particular group. And well, if that’s your standards it’s as if almost no one can speak okay. So I think if there’s anything
we can do as individuals to just persuade our classmates
to say, look, we’re going to listen you don’t have to
agree with these people, Okay? You don’t have to agree what
they say but let’s listen and you can ask questions
you can you can engage them. And I think a lot of what made
that bottom up approach work was non violent to see Martin Luther King, James Farmer of core all these people were committed to non violent action. And that was really important,
I think, in the early years because that would have
been taken as an excuse for much more severe repression. And that was… Now of course later it did become violent. I mean, the Watts riots in 1965 was in many ways, a turning point. And although you can’t
approve of the the violence, I think there is… What was happening that
I saw that a change came out of my experience
and trying to break down discrimination in the theater. And that is it was always
hard to get blacks to join us. It happened that there was a
black family that their name happened to be Smith that
we knew that my mother would invite to our home for dinner that we got to know quite well. Well, the Smiths would
participate in these action, but it was very hard to
get blacks to participate. And I regret say that it was, I think not just a simple matter of fear. What I saw was too much
of acceptance of that of the condition that blacks
lived in a sense, believing that maybe there was
something to it, Okay. And I think that’s the thing
that changed in the 1960s, a young black saying
they weren’t just going to take any more crap. Andy Bremmer, my classmate at Harvard, I would run into him at
meetings from time to time. I remember, San Francisco meetings of the American Economic Association. This was in the 1965 so
and then we started talking and he said, “you know Vernon, “I like to help my people and
so I do a lot of speeches, “I do a lot of traveling on everything. But he said, “I’m getting
a lot of trouble because “from the young blacks
are the young Negro. “I’m getting a lot of
attack because I refer to my race as Negros.” And I said, “well, Andy,” I
said this, “what they’re saying “is really fairly simple. “There are saying that if they’re Negros,” why aren’t we Caucasians? If we’re whites, they’re blacks, and never going to be proud black. So it’s that simple, that
was a double standard in talking about Negros and whites. They were… And it took a Honkey here to explain that to Andy,
because he’s so credible law insulated from all that stuff on the Federal Reserve Board
and everything and I think that’s the point is that the
black community were now gonna take responsibility and do
something about their condition. And I think a group that’s
being discriminated or abused that is not willing to do that
is very hard to do anything about. I now look back on those
experiences in the 40s as just middle class whites trying to
do good in the black beauty and not getting very far. And they have to be part of it. And I think that same rang
true for the women’s movement all of these movements. I think it’s the responsibility
belongs to the people who have who have rights. – [Bob] Thank you,
professor, my name is Bob, I work on the comms team for Mercatus. You’re activism that you
engaged in when you were young is is very admirable. Say, instead of being born in
1927, you were born in 1997 or 2003, something like that. What kind of activism as a
young person today, you imagine that you would be involved in. And if you have any advice
for young people today on how they can make a meaningful
difference in the world. What advice would that be? – That’s really hard
because I’m I can’t… it’s very hard for me to look on the 1990s from the perspective of a young person, without my background,
however, I would expect them to be very sympathetic to socialism. Young people are always
sympathetic to socialism. Hike was a socialist as
a young man growing up, and you’re coming out of a very successful socialist community, the
family and where there’s a lot of sharing and also socialism sounds good. And if it sounds good, it must be okay. You see, so I’m not
surprised that Bernie Sanders has got a following. I’m also not surprised he has a reputation of having some integrity,
because that’s a very strong thing among American socialists. So Debs and Thomas there
is anybody that ever would have question their integrity
no matter how much they may have been political enemies, they have incredible reputations. Thomas was very active in
social community as well as political affairs. All his life are involved in cases, helping prepare evidence on cases and he was what he was
well known for that. So, I’m sorry, I can’t
help very much. (laughs). (audience laughing)
– But I’m not… I’m just not at all
surprised that Bernie Sanders gets support from from
young people, of course. – [Bob] Thank you. – Okay. – Well go ahead and go with the order in which they came say
you’ll be after this. – [Walter] Hi, my name is
Walter, I’m one of the MA fellows with the Mercatus Center. I was heartened to hear
your optimism regarding our country going forward. And today, you talked about racial divides to certain extent. And I was wondering as
someone that has lived most of his life in big cities, but I was born in a small town in Montana. If you thought that
there was also a problem with a rural urban divide
in this country, as well, as some people have pointed to, in light of the this past election,
and whether or not that is also something another
divide that we will have to address from the
bottom up going forward. – Yes, I think it is
a divide and of course it surfaced in Trump’s election. One of the reason why it was
so surprised such a surprise that there were all kinds
of people who felt they have no voice in a political process and saw Trump as an outsider who could change those
things and of course he still plays to that… That constituency And I think that of course,
except that with some… Except for the sub-urban movement and some reverse migration, by and large it’s diminishing
because we now have… I lived on 160 acre farm in
the 1930s those are now been consolidated into 600,
800,000, 1500 acres, all created by the
combine and all of these, technologies that so that
we need almost no one living on those farms in order to
produce a huge amount of food. Thank you.
Thank you. – [Michael Fairmont] Thank
you very much, Dr. Smith. My name is Michael
Fairmont research fellow at the Mercatus Center. So building on what Nigel opened up with and on a Nobel- another
Nobel Prize winners work George Stigler on the
“Economics discrimination.” This is more of a theory related question. One of the criticism of Stigler
his work as he actually dug into the economics of how discrimination might actually come about. And he showed that the market
itself provides incentives for ending discrimination. With the singular exception of
when the majority has a taste for discrimination. It may be an enduring kind of thing. So do you see situations
to essentially use the law or other means to kind of coerce some type of economic exchange in
situations where the bottom up approach is less likely to
work because the majority does hold these misanthropic preferences? – I said George Stigler. I think you meant Gary Becker. – [Michael Fairmont] Yeah, I’m so sorry. – Oh, I think Gary is… His approach… Discrimination there’s all kinds of ways in which it doesn’t pay. And money is being left on the table, And Jack Sprat restaurant found that out. In Chicago in 1943. That once they started
to serve mixed groups, it worked and moreover, they enjoyed a huge a flood… A crescendo of business
coming to Jack Sprat because they were one
of the first to change and it takes demonstrations like that. I think more than anything
demonstrations where people can actually see that it is not a problem. And the concern was
that if in my restaurant I start serving blacks,
whites will quit coming. And I’ll end up being… There was this belief out there? Well, certainly there
were people are now going to make choices maybe on those
grounds but lots of people, especially in the free states for which that was not a major consideration. See I went to a high
school that was integrated. And the reason is fairly simple. Wichita couldn’t afford a
separate school for blacks. (Audience laughing). There weren’t that many
in the elementary schools it was different but there would have certainly been pressures. And Hispanics and of course,
one of my closest friends was Raymond Reyes in high school. Interesting I went back from
my 20th high school reunion. So that was in 1964. Well, Raymond wasn’t there
because he wasn’t invited. He wasn’t Welcome. 20 years later, I went
back from my fiftieth and he was there. But even though we went to
school together the people in charge of the social
affairs in high school and you are how that can be. (Audience laughing). You see worse we’re actually still calling the shots 20 years later. (Audience laughing) But it was just all a big bad
error which is now I think even recognized by a lot of my classmates Those of them are still alive. Anyway, there’s precious few of them. But as of my 50th reunion,
you’ll see changes of change. Things have changed quite a lot. – [Cesar] Thank you, Professor Smith. My name is Cesar. I’m with the finance group
by Chess and Mercatus. And my question is, to what extent if any, do you think World War
Two, Korea, Vietnam, advanced the civil rights movement and advanced racial integration? – I’m sorry, I didn’t get– – To what degree if any,
do you think that… You listed several wars like… – World War Two.
– World War Two. – Korea
– Korea, Vietnam War. Advanced racial integration? – Well, we have segregated Black and the Japanese for
in the Second World War and so they were segregated. More recently that has changed but down to the second World War there
was still a lot of segregation because the military was practicing it too That didn’t change in the military until it was changing in our society. And then it changed and there’s nothing better than a good example, okay. And also exchanging on sex
identity things like this, these are all… To me, welcome changes and changes that… Would have been just
unthinkable in my day, although there was no shortage of people that you knew were gay. And generally was not,
including my own family. And… But my family it was just… Well, that’s the way it is for
some people, but it wasn’t… It was that, the
willingness to go to be open and for society to be
sufficiently accepting that people could be
open on those matters. That’s the thing that’s dramatically new, and I think it’s much to be welcomed. – Thank you. – [Alex] I’m Alex Tabarock
Vernon, there’s a story going around, associated with the Nancy McLean,
“Democracy in chains” book, that public choice is a southern
reactionary sort of racist, kind of a reactionary kind of push back. And as someone who worked with
CORE and who has also been president of the public choice society. (Audience laughing) I wandered if you’d speak to that. – Well, it’s not but I’m
not surprised that people are making those charges,
anything to try to smear you on matters that really are orthogonal to the intellectual
contest of public choice. You see, Jim McCann was a (mumbles). Well, so what? It doesn’t mean he couldn’t
do great public choice. And I thought it was a southern gentleman. – If I may ask a second question. We have about 15 minutes left. You talked about challenging,
and dissent, generally. But you didn’t quite talk about dissent within the economics profession. And could you say more about
some events that you think were monumental throughout your lifetime? And people challenging the
core assumptions of economics and the state of the profession today? – Oh, yes, I mean that’s… And in some ways that
those changes, of course, I’m really close to those
in some ways those changes are more dramatic than the others. The ones I’ve generally
been talking about. When I finished my PhD
at Harvard in 1955, we… Everybody believed that the notion of competitive markets was kind of… It was a very abstract idea. That supply and demand
theory could only work. If you had complete information, everybody had complete
information on supply and demand. And of course, that was all
of neoclassical economics game theory was predominantly
dealing with those sorts of… Those kinds of background conditions. And when I did my first experiment, it came out of the feeling
that I didn’t know anything about the connection between
supply and demand and kind of what people do on the ground. So that’s sort of what
motivated the experiment, but I never had any doubt but
what all of this was true. And in fact, the first experiment
I did although in addition to complete information, you
have a really large number of buyers and sellers a sea of them, everybody very small
compared with the whole. So they all were a price taker. Everybody was surprised taker. Well, my first experiment was
a two sided bid ask market so everybody was as much as
maker of prices as a taker and it had 22 people. So that was a small number
and no one knew anything about supply and demand except
their own little piece of it. And many of you probably have
now been in one of those than one of these experiments
because they’re used widely in teaching. Well, the first one converge
to the competitive equilibrium very quickly, and I thought
there was something wrong with the experiment. – Mm-mmh – So I figured it was because
there was too much symmetry. So I did a very asymmetric
supply and demand converge. So I realized I was learning
stuff that was just… That was completely contrary
to what was being taught. And it got me hooked. You’ll say I started I
never didn’t set out to do experimental economics, I got
hooked because I was getting these results that were
completely contrary. And moreover, they made sense. And you start to think
about conversion processes. Now what was going on? We could
see what people were doing. Made a lot of sense if they
had an opportunity to adapt and change and see in response
to the prices out there. Well, that ended up leading to say a whole experimental
program and then 20 years my paper was published in 62. So… Well 25 years later,
we’re no longer running experiments by hand. We’re doing them electronically on a computer that was in the 70s. Okay, so that’s maybe 15 years later, but that was in the 70s. That grew out of teaching. I mean, it was an undergraduate
in my class, who said, “Professor Smith, do
you know anything about this Plato computer
system over in the Library at the University of Arizona?” No. He said, “Well, I think
that’d be a good… Might be an interesting
way to do experiments.” So it was a class where we were all knives around not lectures, but projects. So the class went out. Well, we ended up that became our project, and a number of students and
they went on after that class and took another three six
nine hours in special studies. And so we started. So I published papers with
undergraduates in that class and the American Economic Review. Okay, we were just
picking all these little apples all over the place. (Audience laughing) I mean, and moreover, the
profession was hungry for that because it was new there
were nobody else doing that. And then… So that was the market stuff. But the biggest problem I
mentioned at the beginning of my talk that they are
real confrontation with and all that is reinforcing
the notion of utility theory, utility outcomes. The utility maximization was
working in those environments, and then we go to these
two person anonymous games and none of that works. And we compared since we
did graduate workshops and experimental economics
from time to time I’ve run some of these things
same I mean only graduate but I’m sorry faculty. I would run these same games with faculty. They didn’t play the games at all. They played like that. I’m not Game Theorists. As a result, I’m not making any money. (Audience laughing) The undergraduate making
more money than faculty. Can’t be irrational. So.. But we didn’t have and as
I mentioned until I began to really get serious
and trying to understand what Adam Smith talking about
in Material Moral Sentiments. We don’t model relationships,
we model outcomes, all the economics were modeling outcomes. And because we want to make
statements about outcomes, policy statements about
outcomes, but as a result, we’re not going into the causal roots that bind a lot of action. And so… And the behavioral economists and many experimental economists say, “if people are not
maximizing their own utility, the thing to do is to put
the other person’s payoff in the utility function.” Well, you get the right
answer there that way, but why is the other person’s payoff in the utility function? How did it get there? Why isn’t an anonymous conditions this a wonderful opportunity to
just take all the monies? See none of those are being… You’re not even addressing
those questions. If you rescue utility theory by putting this other stuff in it. I mean it’s the world’s worst science. But there’s people out there doing it. (Audience laughing). What can I say? And so they talk about social preferences. As my colleague, Bart Wilson
says, in one of his papers, “social preferences aren’t preferences.” And you go to Adam Smith,
everybody is strictly self loving, in the Theory of Moral sound. But you soon find out
that that’s not the way you can get along with your neighbor okay? And Adam Smith says, starting, “when we go to school or when
we first have play fellows. we find that those play fellows are not as indulgent as our parents.” (Audience laughing). And they don’t like it
if we do things hurtful. And they let us know. And as Adam Smith says,
that’s when we enter the great school of
self command, age five. And we learned to become rule followers. And it’s not because
we are self interested. But we… And in fact, if you look at all
of the applications of this, of what Smith is talking about, We’re automatically assuming that others are all self interested. Why? Because we right away know
from an action who’s hurt, and who’s made better off. How do we know that to be hurt is to get less to be made
better off is to get more. So in our thinking about the
games even we’re using… But that doesn’t mean
being self interested, doesn’t mean all your
decisions are driven by that. And so then the rule following
comes in and you get out of that very powerful
propositions that are testable. And most of them… And they work in the lab, here’s
something 250 years later, and I think most of the
economics profession is in the maximizing utility. In this new social preferences play and I think they’re planning nothing. But that’s my opinion. And it probably won’t get very far. (Audience laughing). But there’ll be some people pick up on it, and maybe we’ll see how far it goes. – Anne Hopson – [Anne Hopson] Thanks, Dr. Smith. – Yes.
– My name is Anne Hopson. I work for the Mercatus Center,
I run the MA fellowship. My question for you is do you
think that there is a role for oral history like you presented today, narrative and sort of
qualitative approach to sort of researching collective action problems? And what is that role? – Well, is a good example
of that, the making of experimental economics has
been a detailed oral history and interactions of them,
maybe a dozen of us that were have been involved in. And the development of
experimental economics and I think there’s just all sorts of… All sorts of questions
and issues that come up in that conversation that’s not written down anywhere in a paper. And even experimental methodology is not something you’ll
learn by reading about it. It’s something you’ll learn by doing it. It’s like learning to play the
piano, you got to practice. And all the experimental
sciences are like that. They have… In physics and geology, chemistry, all of these there’s a body
of knowledge that has to do with the techniques of you
applying and testing theories. And those techniques have
little if anything to do with the theory and
with the main astronomy. My colleague when I was at
the University of Arizona, Roger Angell is a great
astronomer, but even more, he’s a great inventor. He over and underneath
the football stadium at the University of Arizona. He took that over and he
manufactures telescopes there. He’s got engineers, he’s got
machines, an army of people involved and creating the
stuff he needs for observation. And now that’s rare. Usually there’s kind of separation, but it’s a beautiful example. Where the scientist
himself is concerned enough about all his instruments
that he takes an active part in their design and their development. But anyway those kinds
of things do come out in oral history that you don’t. Because Roger doesn’t
publish papers on all… About that enterprise over
and because it’s something… The body of knowledge is
something that’s largely like in experimental economics. Body of Knowledge having
to do the techniques of running experiments. Students learn it from the other students. They graduate students
learn it by doing it and it becomes a part of
their culture that is sort of independent in many ways
of what the mainstream of that science may be doing. – So you’ve been so gracious,
giving your presentation and, and the questions. I wonder if you would be
gracious enough to go over time for one more question rule. – Sure I have plenty of time. – Thank you. – [ Jackson] Hello, Professor Smith. My name is Jackson. I’m an
outreach associate Mercatus. Do you see the same similarities that I do between the Alien Sedition Acts
and some of the President’s policy decisions over the past few years. So his public shaming of what he sees as anti-American news outlets, the shaming of the
kneeling football players and most specifically the
travel ban that he placed on a number of countries. I sort of see that as being
similar policy statements in addition and if you agree. Did you see them as being short lived like this sedition acts? – Well, we have a president
that’s not very tolerant of dissent. When he is antithetical to his own… Kind of purposes. And I think… The thing that’s refreshing
about Donald Trump is tell you what outrageous
thing he’s gonna do and then he does. (Audience laughing) I mean, Dick Nixon would never tell you. I mean, most presidents tell
you one thing and do another, and actually that appeals to
a lot of his constituents. Who feels that that’s part of
challenging the establishment. They like that. And I don’t know what percentage that is, but it’s probably… I wouldn’t be surprised that
it’s a pretty hardcore of 35%. And we’ll see how he does
on the upcoming election. – We are at time but your friend would a question so… – That’s my friend Robby Ashley. He will introducing himself. – [Robby Ashley] Hi, Vernon.
I’m Robby Ashley. (laughing). I tell you what’s was fascinating to me is you’re giving that little oral history of socialism from your standpoint. What has changed now
is the great succession has ended right? You start with Deb’s and then
go to Thomas and you go to Michael Harrington almost
in quick six succession and there are authors and their academics and their political leaders. And then when you get to
the end of Harrington, a couple things happen. Number one, the Soviet
Union is no longer there. So you’re no longer opposing
some international socialism that you don’t like. And then number two, a couple
of changes that I’ve noticed. You mentioned the problem
of people on the left being anti-free speech now
and you would never have that I don’t think in the Debs or the Thomas or the Harrington era. And the second thing that I noticed is that intellectual growth,
which used to be so prevalent, it may be apparent in you or in hierarchy. Or if you look at the list of Reagan Medal of Freedom winners, right. Whitaker Chambers, or James
Burnham, or Sidney Hook. Our socialism was a great training ground for anti-socialist
academics in previous days but that’s not happening either. And surely that might have something to do with the fact that socialism
is now anti-free speech. So there are three trends,
no more Soviet Union, much less support for free
speech and much less evidence of academic growth in
the socialism post 1990. Post Michael Harrington, explain that as the
world’s reigning genius. (Audience laughing).
– Wow. (Audience laughing). – Well, I’m going to rest
with that as a challenge. (Audience laughing) And I know that Rob himself, by the way, has been doing interesting
stuff on kind of forms of rationality
that emerging from our… Judicial system that have to do with kind of notion rationality that is coming out of… Sort of a collective wisdom. And it’s… And I think… And in fact, Rob gave a talk
at the University of Alaska that was back… In some ways it’s kind of background to what I talked about
because it helped me to, I think helped me to channel
me into thinking in terms of kind of my experiences
and what kind of… And all that good stuff that
filtered out of the bad. And I think that’s really is very much the American experience
and I believe it will… It’s here to stay. – Well thank you so much
for your time and… (Audience applauding).

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