SECURITIES AND ~~~EXCHANGE COMMISSION t . \

Washington, D. C. 20549 ~ •( 2 0 2) 7 5 5 4 8 4 6 CO~S;\O~

For Release: 7:30 P.M., Tuesday, September 26, 1978

"EGALITARIA~ISM AND MARKET SYSTEMS"

An Address By Harold M. Willi~~, Chairman

The Columbia University/McGraw-Hill Lecturesin Business and Society

New York, New York~s.~lPP~1"-~!.ill

-

when I was invited to participate as the firstspeaker in this series of Columbia University/McGraw-HillLectures on Business and Society, I was, of course, bothhonored and anxious to accept. The sUbject matter of theseries--"Egalitarianism and Market Systems"--seemed tobe sufficiently broad and amorphous that I could treatvirtually any subject relevant to the contemporary economicor social environment which happened to strike my fancyand still fall safely within its parameters. Certainlythe topic of corporate governance, on which I have spokenoften during the past year, would, it seemed to me, fill thebill quite well. All-in-all, the opportunity to speakto you here this evening for a half an hour or so appearedto be pleasant and stimulating, but not especially onerous.

Several weeks ago, however, I began to appreciate fullythe complex labyrinth into which I had unwittingly permittedthe sponsors of this series to lead me. Several attemptsto relate both the century-long trend in this country towardgreater individual equality and the free--or relativelyfree--market system which undergirds our economic systemto current topies of interest, such as corporate governance,the persistance of infl~tion, or the restructuring of the

- t-I

!1

- 2 -

securities markets wnich Congress has mandated, provedfruitless. Or, perhaps more accurately, that exerciseproved too fruitfuli any attempt to relate egalitarianisffiand tne dynamics of the marketplace to a particular topicali3sue rapidly seems to embroil one in broad questionsae3rir.g 0n the future of our society. It was at that pointthat I f~lly realized that the title "egalitarianism andmarket systems" captures the two most fundamental setsof forces and dynamics which define our society. In joiningthem together, rather than placing them in oppositionas choices, the sponsors of these lectures have, I think,recognized that it is the continuous interaction, conflict,and fusion of notions of egalitarianism with the free?lay of the marketplace that determines tne true healthand vitality of our society. The extent of ourunderstanding, or lack thereof, of this interactionunderlies the perspective which each of us individuallybrings to economic, social, and political thinking.Indeed, the manner in which our society as a whole~ucceeds in striking a balance between these two forces~aj well deter~ine whether it survives into the next.;entury.

For that reason, I want this evening to share withyou some of my thoughts concerning this com?lex challenge.

- 3 -

The theme of my remarks can be easily summarized: Inmy view, our society today l~cks a well-developed,coherent philosophy or theory within which toview the interaction between what we have traditionallyviewed as a free market economic system andincreasing governmental and political involvementaimed at promoting individual equality. We are,unconsciously for the most part, developing a newpolitical, social, and economic order. The economicforces of the free market and the political andsocial forces of democracy have always been somewhatconflicting and at odds with each other. But,increasingly, the political forces that democracylays on top of the economic achievement of a societywhich promises at least a minimum level ofhuman dignity and opportunity have begun to exerta greater influence. The impact of these social andpolitical forces on the economy is a subject ofever-greater attention. What we need to achieveis an equilibrium between the enormous energies ofthe free market and the compassion, equal opportunity,and social justice associated with democracy, in sucha way that we do not fetter the market and prevent it

,,-J

- I1,

~j- 1

I

- 4 -

from continuing to provide the healthy, growingeconomy necessary to achieve the promises of democracy.

I have no simple solutions to offer, and I will leaveto another day, or at least to the question period followingthis talk, any effort to relate the resolution ofthis challenge to any particular substantive issue--suchas, for example, who should serve as the directors of ourlarge public corporations and what their responsibilitiesshould be.. The inter-relationship between egal itarianismand market systems has obvious implications in that area,as well as in many others touching both business andgovernment. If some of the thoughts I throw out thisevening stimulate you to reflect on that relationship,I will have more than accomplished my purpose.

Market Syst~It is, I think, logical to begin with a brief

description of some of the critical attributes of both~market systems" and "egalitarianism" as those conceptsmanifest themselves in our society today.

The market system--and by this I understand thesponsors of these lectures to refer to the concept of aneconomy in which resources are allocated according to

- 5 -

the free inter?lay of supply and demand resulting from theoverall impact of the decisi~ns of individual businessesand consumers--has tre~endous strength and power, as theeconomic and industrial history of our nation attest.And, it is because the market system is value neutralthat it is so efficient an allocator and "so prolific awellspring of goods and services. Unless hamperedby external forces, the market responds equally to equalbuying power or talent or creative genius regardless ofthe ancestry, social philosophy, race, or religion ofmarket participants. At the same time, however, the freeplay of market forces is oblivious to any concepts ofwhat might be called ~social justice." If the market doesnot value what one has to offer, one receives nothingin return; and if the result is breadlines, rioting, orpolitical upheaval, that is of no direct concern to theimpersonal forces of demand and supply.

Of course, our market economy today is nowhere nearthat free. In fact, a large part of the story of the20th Century has been the quest to round the sharp edgesof ~free market" economics. That effort legiti~ized theidea that the state--as the expression of a society'spolitical will--must always retain the right to overrulethe market's informal decisions. Beginning ?erhaps with

- 6 -

the Sherman Act in 1890 and extending through theenactment of the federal income tax, the minimum wageand fair employment laws, occupational safety statutes,and a whole catalog of other laws, much of the workof the political system during the last 90 years hasbeen directed toward using law to temper the powerand efficiency of the free marketplace with notionsof social justice. We are today, however, beginningto realize that, as more and more "extra-economic"demands are placed on the market, there is acorresponding loss in efficiency and effectiveness.The impact of that realization is visible in everythingfrom Proposition 13 to the rhetoric concerning biggovernment which you are likely to heat in anyCongressional district across the country this Fall.

My point is not that we are about to or ought toreturn to the sort of unbridled private economic freedomwhich characterized the 19th Century, even if that werepossible, but rather that we need to develop decision-making processes which are capable of recognizingexplicitly the trade-offs involved in substituting"fairness" for "efficiency." And, in developing thoseprocesses, it may also be necessary to define moreclearly the goals--the values--which those trade-offs

- 7 -

seek to attain. Significantly, the debate about therole and importance of the free market has been conductedin the past mostly in terms of economic institutionsand seldom in terms of moral philosophy. Discussionof the merits of greater governmental economic control,for example, is centered around the distinctionbetween private individuals and firms operating in afree market versus governmental agencies planningfor the entire economy. As important as this distinctionis economically, socially, and politically--and aslarge as it looms in popular jargon--it overlooksthe question of goals, ends, and priorities--the basicmoral questions involved in economic action. The problemis not merely who should make the decisions in theeconomy--private individuals and firms or governmentalagencies--but what decisions should be made. Thequestion of ~ should be decided is neglected infavor of the question of ~ should be the decisionmaker.This is due, in large part, to the historic perceptionof the free market philosophy as value neutral. Wehave become so accustomed to assume that a free marketwill coordinate randnm individual decisions and actionsand channel them in the right direction that we concentrateon the mechanism of allocation but not on its contentand results.

. I

I

;!J

.\

. ..i

.1

. 1- - ~ J

iI

- 8 -

EgalitarianismBefore I pursue that thought, however, it is necessary

to describe some of the attributes of egalitarianismand to compare and contrast those attributes to thecharacteristics of the marketplace.

The type of democratic process which our politicalsystem embodies tends to be egalitarian, consumption-oriented, and concerned with the common man and equaldistribution of income and benefits. The marketplace,on the other hand, functions by incentive and reward,is hierarchical, rewards risk-taking, and fostersuneven distribution. Democracy is concerned with values--the free market is essentially value-neutral. Themarketplace encourages and rewards self-interest,while democracy focuses on the common purpose. Democracyinclines towards compromise and conciliation. In itspurest form, the phenomenon we call the "free market"is intolerant and uncompromising .

As a result, our political system is anagglomeration of conflicting interests which have tobe balanced and reconciled. This reflects, as doesthe "free market," a value neutral theory. The

- 9 -

political system relies on a mechanism, the pressureof group interests, which is much like the theory ofmarket competition. In both cases, the "market" isregulated by a countervailing force. Competition inone case--countervailing power in the other.

One consequence of the operation of this mechanismin the political arena is that our society as a whole,and business as a part of society, is being compressedbetween competing claims and goals, each of whichcould be achieved individually, but none of which canbe,achieved all at once, without adversely impactingthe health of both the society and the market system.What our priorities should be, where our scarce resourcesshould be ap9lied, and what systems impacts we canaccept are questions which must be resolved throughthe democratic process. Unfortunately, much of thedebate often is characterized by an abundance ofemotion and special interest and a shortage of reasonand concern for the overall good. Self-righteousness,simplistic thinking, and idealogical haranguing oftentake priority over balanced consideration.

interest society. Too many lobbyists and interest groups

today either care absolutely nothing about the national

interest as long as they get theirs or blithely assume

that getting theirs is in the national interest. This

happens today in the name of egalitarianism--which has

been misdefined to mean that everyone should get his

or hers or its, and that value judgments should not

be made. This fragmentation marks not only an absence

of community --a lack of a sense of shared values--but

also an absence of consensus--an inability to reach

agreement despite differences.

The result has been an increasing polarization

pitting those identified as supportors of the "public

interest" against backers of "private interest" as I €

the two were neatly and simply defined and opposed. A t

its most complex, this polarization pits each pressure group's

self-interest, labeled "public interest," in comoetition

against all other "public" and "urivate' interests in

the society. In reality, of course, the oublic interest

- 11 -

protection but also energy conservation and job creation;not only assuring worker health and safety but alsoproviding goods and services at a reasonable cost;not only consumption for today but also investment fortomorrow.

That concept--the need to consider the investmentwhich our future will require--highlights anotherimportant consequence of the intersection of a marketeconomy and an egalitarian 90litical system. In boththe economic and social spheres, the idea of unlimitedand cheap resources has always been basic to our hopesand designs for the future. Any view to the contraryhas been, and continues to be, rejected by manybecause it requires rethinking virtually all ofthe social thought of contemporary science and publicpolicy. An egalitarian society can hardlycontemplate limitations without realizing the greatconstraints that the concept entails; our national goalsare inconsistent with such a concept. Yet, I believethat the constraints are not only growing in number, butthat they may well portend a very basic change in our wayof life. It is a v irtua I certainty that we are movingfrom an age of affluence to one of greater austerity.

],

!

I1-,

i-11,j

- I

i1

- j

"J- }

. 1- j

J

- 12 -

The potential political and economic implications ofthat change are enormous.

The Role of Institutions

In addition to the power, efficiency, and neutralitywhich characterizes our market economy, and the acceleratingtrend toward egalitarianism with an attendant "right"to governmental benevolence which defines our politics,there is a third component which ought to be borne inmind in trying to predict and encourage the futurevitality of our society. Over the past decade, thepublic has reflected a continuous and growing cynicismand distrust of our institutions. In fact, each ofour major institutions has suffered a serious declinein public confidence.

Consider first nublic attitudes toward business..

Opinion polls since 1965 have showed consistently thatthe reputation of both business generally and of particularindustries and companies have declined, often precipitiously.Only a minority of Americans now profess much faith inbig companies. In 1968, for example, Yankelovich,Skelly, and White found that 70 percent of the respondentsin a national survey agreed that business tries to

~

- 13 -

strike a fair balance between profits and the publicinterest. Only two years later, in 1970, that figurehad dropped to one-third. It reached a low of 15 percentin 1976--an 80 percent loss of support over eightyears--and stayed there last year. In a similar vein,pollster Lou Harris found that public confidence inleaders of major companies dropped from 55 percentin 1966 to little more than 20 ~ercent--only one infive--in his most recent survey.

Yet, the public loss of confidence in business doesnot appear to involve a questioning of the fundamentals ofthe free enterprise system. In 1976, 74 percent of thoseresponding to a Yankelovich survey disapproved ofthe view that the country would be better off if bigbusiness were taken over by the government. In 1977,Yankelovich found that the public disagreed by 52percent to 16 percent with the statement that "Thefree enterprise sytstem benefits the few." Over 90percent oppose nationalizing any industry, and two-thirds

--,;;,

, :,j

I---: -I~'~- j": ~

J

- i

'. 1: -,j- I..~

- 14 -

reject the idea of national economic planning if itmeans more government control of the economy.

Moreover, any conclusions that things are bad forU.S. business must be tempered by the realization thatbusiness, government, and labor all have sufferedcomparable losses in public esteem, and that governmentand labor unions show up in all polls as significantlyless popular than business. It appears that major crises,such as the events of the late '60's and mid '70's,lower confidence levels in all institutions. ~or example,between 1966 and 1971, the Vietnam involvement, racialconflict, anti-war protests, and the rise of militantsocial movements seem to have worsened the perceptionsAmericans had of their country. According to theHarris poll, confidence in Congress, the press, themedical profession, the military, religion, the federalexecutive, organized labor, and major companies alldeclined in public esteem during this period.

Levels of confidence seemed to stabilize brieflyin the early '70's, but then fell again between 1973 and

- 15 -

1976, a period marked by Watergate, the energy crisis,and the worst recession since the '30's. The first pollconducted after President Carter took office in 1977suggested an increase in confidence compared to the prioryear, but the recovery did not last. Between 1977 and 1978,the combination of continued high inflation and apparent concernabout the President's ability to lead the country renewedwhat appears to be a crisis atmosphere. A Gallup surveyin 1978 revealed lower levels of confidence in seven majorinstitutions.

What does this trend mean? Most importantly, itreflects a major change in the terms of the social contractunderlying the relationship between individuals and theinstitutions of our society. The change in essence isthat, increasingly, the individual eX9resses less personalresponsibility to institutions and less willingness orsense of obligation to sublimate personal needs or desiresto those of others. At the same time, the individualexpresses greater expectations of institutionalresponsibility to him--rising to the level of rights--and is willing and able to enforce these new rights,at least in part through the political process.

- 16 -

Clearly, the respect which our society accordsto the individual and to his right to think, develop,and live as he chooses--with as little interference as ispossible from government and other large institutions--is our chief strength. If anything promises to make usvictorious in the competition with societies in whichinstitutions are more potent because they can commandgreater subservience from individuals, it is the social,artistic, scientific, and cultural inventiveness whichmarks a nation which protects the individual. Yet, atthe same time, our increasing zealousness in fosteringthe rights of individuals against the demands ofinstitutions exacts a price: The social institutionsthat have held us in balance internally have eroded.They were personal structures--of family, church, smallcommunity, face-to-face contact, and training byapprenticeship, for example. They have been replacedby impersonal, massive aggregates, which may be goodschools for developing skills, but not for developingcharacter. The scale has shifted, too. What was oncea human scale and therefore the measure of a man, hasbecome a scale of gigantism against which the man hasshrunk in size.

- 17 -

In the business sphere, the separation of ownershipand management is another part of the growing separationand distance between the institutions and the individuals.But this is not a special problem of the corporatesector of the economy--it is a phenomenon connected withmass society, mass organizations, with bureaucratization,and with the complexity of technology. All these factorsseem to have generated doubts about the meaning of"representation." How can the representatives, bethey elected or appointed public officials, leadersof trade unions, or corporate directors and managers,be made more responsible or more reponsive to the needs,interests, and aspirations--to the "will"--of thosethey represent? But this is, again, value neutralreasoning. It does not ask whether the representationof the will accomplishes something that is "good" inthe context of total society. That is left to thesupposition that in society as a whole, as well as inthe economy, an invisible hand will somehow bring aboutthe "good" by the integration of individual and specificgroup self-interests. It assumes that representation--political, social, and economic--in a democracy requiresmerely that the representatives should faithfully representthe "will" of the represented, regardless of its content.

.1• 1

.\- ]

- 18 -

And that is an assumption which, in a complex, technologicalsociety in which the art of persuasion and pUblic relationsare highly refined, is increasingly open to question.

Stated differently, we must be concerned about thedegree to which we politicize the economic decision-makingprocess. Yet, that kind of politicization is exactly what isbeginning to appear. Henry Simon, the economist, ex~resseda similar idea back in the 1930's:

RThe petty warfare of competition withingroups can be kept on such a level that itprotects and actually promotes the generalwelfare. The warfare among organized economicgroups, on the other hand, is unlikely tobe more controllable or less destructive thanwarfare among nations. Indeed, democraticgovernments would have hardly so good a chanceof arbitrating these conflicts tolerably ashave the League of Nations and the World Courtin their field.R

Our society is, in my view, rapidly reaching the limits ofits ability to arbitrate between the warring interest groupsSimon envisioned.

Toward a Philosophy For DecisionmakingLet me summarize the dilemma I have tried to outline

thus far. Increasingly, the political processes in oursociety are injecting considerations of fairness, equality,

- 19 -

and social justice into our market system. This isentirely understandable. Indeed, if the operation of themarket place were permitted to continue without regard to

social consequences and impact, it is probable that--like much of the balance of the world--our societywould have been reshaped by other forces during thiscentury. But, just as society is no longer preparedto accept that the marketplace can be permitted tofunction in a value neutral vacuum, the assumptionthat a democratic society can and should simultaneouslyrespond to and serve the demands and expectationsof all special interests creates an equally unacceptablevalue neutral vacuum. We must somehow address both vacuumssimultaneously, with a full appreciation of what ittakes, philosophically, to keep our society evolvingalong a healthy course.

What do we do with this dilemma? One piece of theanswer is to take stock, reflect upon our condition, tryto understand how we got to where we are and where afuture extrapolation would lead us. It may notsound like much, but if you believe in the democraticprocess and want to oreserve it, a conscious understandingof our dilemma is the first and critical step towards

1

~j]

j

J~~

\~1

-j

j~J..1

- ,

- 20 -

some form of resolution. The leverage of consciousunderstanding is so enormous that a slight shift in theintellectual climate can and will--over time--bringabout enormous change, just as it has in shaping themajor institutions of American society today.

Consider, on the other hand, the consequencesof the failure to develop such an understanding, theprice of embarking on the future without a coherentset of guiding principles. In the interests of equalityand fairness, we are becoming so enmeshed in regUlationthat we may hobble, rather than reshape, our institutions--whether they be business, the community, the university,or whatever. Stated differently, while we permit thepolitical process to impose necessary egalitarianismon the market, there is no corresponding mechanismwhich encourages the political process to considerthe impact of its actions on the economy. For example,in my view, the high rate of inflation and low rateof capital formation which we are experiencing todaycan, in large measure, be traced to a tax code which

- 21 -

has tilted too far in favor of equality of after-taxincome and too far against permitting risk-takersto retain the rewards of successful investment: tothe inability to agree on an energy policy capable ofreconciling the need to stimulate and reward conservation,development of oil and gas and the commercializationof alternate sources of energy, with the social dislocationof higher energy costs: to safety and environmentstatutes which have taken necessary, even essential,concepts and permitted them to be developed to absurdextremes: and to a host of similar political decisionspremised on the assumption that the market systemis indestructible and infinitely resilient. The errorin that assumption is beginning to emerge.

Indeed, if we focus just on the shrinkingpurchasing power of the dollar, the problem becomeseven more clear. Inflation--widely characterized asour most pressing economic 9roblem--is primarily apolitical phenomenon. At bottom, its cause is thefailure of our political system to contain the growthof social demands within' limits tolerable to the market.

-J

-1

J

-1

- 22 -

Rising social expectations are intrinsic and inherentto our society. Moderating the rate at which weundertake to satisfy them is, however, rapidly becominga 90litical necessity--if not a practical reality.

Similarly, in the interests of equality, ourlegal system subtly discourages legitimate risk-takingand fosters an attitude of "playing it safe." Thecosts of uncertainty and honest mistakes may be toohigh. We foster the notion that society is capableof "zero-defects" and that, for every malfunction,there must be, as a matter of ~rinciple, a redressand corrective action to assure that it never happensagain. In addition to reducing risk-taking, thisspirit of strict liability erodes the sense of personalresponsibility and induces a tendency to blame "someoneelse" for our own failures, losses, insecurities,and incom~etence.

It would be neat and convenient to have an accepteddividing line between where the market should be allowedto prevail and where government intervention is considered

- 23 -

appropriate and helpful. In the absence of a cleardividing line, it is essential to a healthy and freesociety that it have a process whereby the evolvingsocial standards may be established and changed andthat it have a set of shared values to guide thatprocess. It is the lack of that process and the absenceof that philosophy which must be corrected.

Law does not provide the solution. It lags ratherthan leads. Im?lemented by the political system, itsprimary role is to articulate the pre-establishednorms of a society. As Alexander Solzhenitsyn put it inhis momentus Harvard talk, "Western society has givenitself the organization best suited to its purposes, based,I would say, on the letter of the law." He went on topoint out that the absence of an objective moral orderleads to a legalistic system in which the goal is foreach one to get the most out of the system for his ownadvantage. People have acquired considerable skill inusing, interpreting, and manipulating the law. If oneis right from a legal point of view, nothing more is

i

1iII1

"J1

j

- 24 -

required. Nobody may mention that one might still notbe entirely "right," and urge self-restraint or counselrenunciation of such legal rights. Solzhenitsynconcluded:

"I have spent all of my life under aCommunist regime and 1 will tell you thata society without any objective legalscale is a terrible one indeed. But, asociety with no other scale but the legalone is not quite worthy of man either ••••Wherever the tissue of life is woven oflegalistic relations, there is anatmosphere of moral mediocrity,paralyzing man's noblest impulses ••••Life organized legalistically hasshown its inability to defend itselfagainst the corrosion of evil."

Unfortunately, however, we seem to have falleninto precisely this trap. We have become a litigioussociety where individuals and groups--in dramaticallyincreasing numbers--bring suits to resolve issueswhich previously would have been settled privately--evento the point of a son suing his 9arents for not rearinghim properly. A litigious society breeds consequencesno one would intentionally bargain for--confusion,ambiguity, and lack of subtlety in the law with attendant

- 25 -

injury to institutional autonomy and leadershi?--andthe creation of institutional paralysis whilelitigation winds its laborious way through the proceduralmaze likely to characterize such a society's judicialsystem.

If the legal structure cannot provide either theprocess or the philosophy we lack, where can it be found?What is required is that we bring a sense of responsibility,of values and morality, transcending those articulated by tpelaw, to our economic and political decisionmaking, andthat we insist upon and support leadership beyond therhetorical. In an environment of value neutral reasoning,we must not overlook the fact that there is a role forinner normative restrictions on both institutions andindividuals, restrictions based on ethics and morality.Such checks are a necessary compliment to externalrestrictions. Only the combination of an internalizedvalue system and external constraints can assure thatinstitutions act in a truly renresentative anddemocratic way.

~,,

- 26 -

We need some set of values held in common byour citizenry, values which give a certain shape tothe institutions of our society--or at least a moreeffective process for arriving at consensus.For nearly as long as this country has been inexistence, social critics have been warning us thatwe were living off the accumulated moral capital oftraditional religion and moral philosophy. Thatlegacy is depleted and needs to be replenished. Itwas the cultural and religious institutions whichinfused positive values. The basic belief was thata life led according to these values would maximizepersonal liberty in a context of social and politicalstability and would increase the likelihood that theexercise of everyone's gersonal liberty would add upto a decent and good society.

Today, that assumption is increasingly in needof rethinking. Economic growth, efficiency, andprofitability alone are not adequate unifying values.Nor is the commitment to i~provement in the humancondition and in the level of individual freedom.

- 27 -

And precisely at the time when the trust andcredibility of our leaders is at an all-time low andwhen survivors in leadership feel most inhibited inexercising the potentiality of power, we most needindividuals who can lead. We need people who can shapethe future, not just barely manage to get through the day.

In terms of business, for example, the leaders ofour large private economic entities must accept andact on the fact that the social contract with businessis changing to include an ever enlarging set ofexpectations beyond business's traditional role--suchas affirmative steps to protect the health and safetyof its workers, customers, and society at large, andto deal openly, honestly, and fairly--and coveringthe full spectrum of corporate activities from productquality to fair employment, from advertising to politicalactivity. If business does not respond to this challengevoluntarily, the political processes will continue tosee to it that there is an involuntarily response.But, as I have stated, government-imposedresponse is far less lik.~ly to be fashioned with

1J

- 28 -

due regard to the health of the market place. ~nd,similarly, consumers, environmentalists, unions, andother groups which have increasingly cast themselvesin the role of business's opponent must recognizetheir own obligation to temper the demands of theirinterests with consideration for the health of themarket system so vital to the overall objective ofa strong society.

Conclusion

I want to conclude with the reminder thatours is a fragile society, but that fragilityis its very strength and the source of sensitivityto the tensions which society brings to bear on itsinstitutions. This is not the first time that ~mericaninstitutions have had to deal with new demands andwith the creative tensions that come with theneed to adjust. ~ free and open society will becharacterized by on-going conflict~ it must, in turn,also have the ability to compromise. One of thedifficulties of our system is its imperfection, itsinefficiency, its cost, and the disorderly way in which

- 29 -

it makes progress. That very disorder is the essenceof our freedom. It makes it difficult, if notimpossible, for us to arrive at a consensus as to whatthe "common good" might be. Yet, I believe that '11anis much better off in a society shaped by the interplayof public opinion and individual preferences than in onedominated by government establishment and enforcementof anyone set of "official" values.

Similarly, a strong and viable economic market system--with substantial freedom--is as vital a component of oursociety as is the individual. Without our egalitariangoals, our economic achievements would lack purpose. Andwithout economic achievement, our egalitarian goalswould not be possible; egalitarian rights can existonly so far as the fabric of the society is strongenough to provide and protect them. Egalitarianismis the product, not the antithesis, of economic health.

If we accept, as I do, Daniel Boorstin's definitionof democracy as a process and not a condition, a questand not a system, the~ we can appreciate that we arein process and that the present time is not the climax.

jII

~

I

- 30 -

We must, however, also accept the burden of individualresponsibility which that fact carries with it. If eachof us is able to succeed at the very difficult taskof balancing what we draw from society against whatwe pay back, then--and only then--will the vitalityand strength of both our market system and ouregalitarian values be assured.

Thank you.