I heard a capitalism the way people, amassed great wealth was
by looting plundering and enslaving.
Their fellow man capitalism made it possible to become Wealthy by
serving your fellow man. Welcome to Keith's night.
Don't tread on anyone in the libertarian Institute today.
I'm joined by Marcel gautreaux. A PhD student at George Mason
University and a mises Institute research.
Fellow. Mr. Gujral.
Thank you for your time. Where's the best place to find
your collection of research? My collection?
I don't have a personal website yet.
So for those who want to disengage with my content will
say you can follow me on Twitter at enter can black and I have a
sub stack. I've yet to put out, you know, a
personal website. Although I should at this point
of my Studies have one. So for now just follow me on
Twitter, which is just a turkey in Black.
Also just minor point of correction before we move
forward. My last name is pronounced gutro
like that. Not gotra.
Oh, good truck. I was worried about everybody
getting it right. I thought I heard it correctly
before. Yeah.
Don't worry about it at all. Yeah.
It's once it get that straight. Yeah, I'm glad I'm glad to be
here. Thanks for having me on, of
course, links to Marcel's. Look researcher resumes, Twitter
and stuff stacked will be in the description below Marcel.
What is public Choice Theory? Public Choice Theory, you could
also call it non-market decision.
Making is really just the study of, you know, how economics or
economizing decisions are made primarily in the context of
government and bureaucracy, but you can apply public Choice
Theory to a lot of other contexts.
So, Peter, Leeson famously applies from a choice Theory to
Pirates and churches. What is praxeology and why is it
important? So, proctology is?
Okay. Literally, the study of action
is a theory and method of Austrian economics.
It is the way in which we view. Economics is starting from first
principles to its ultimate micro Foundation.
As viewing economics, as the result of individuals
economizing or individuals acting in a world of scarcity
under uncertainty. Now what do you think are some
of the limits of empiricism? For example, when asked about
should we have certain regulations are antitrust or
minimum wage? A lot of people will say, well,
let's pile up the studies, right through them.
And come to a conclusion based on the consensus people like
Walter block would say, no need for the studies.
We have this praxeological approach to things.
What are some of the lyrics, the limits of empiricism that should
make us skeptical about trusting the experts as far as economics
goes? Ultimately a with when working
with empirical data, which I'm not entirely opposed to, but you
know, anybody in the end can say almost anything, they want by
messing with data enough, and when you, you know, you could
weird ones, you can say, as a joke, but you can't see it as
like a serious criticism. But, any academic knows what P
hacking is, Right? Any academic knows.
What cherry-picking sources is everybody understands and we all
laugh with each other about, you know, just continually tweaking,
a paper. And so you get a publisher
result and especially within our own kills it.
Economists know all about this but somehow when we start, when
we take this thing that we all know, we all agree is true and
funny. And then we say, okay.
I have a serious problem with the way that all science is
done, especially in the social sciences, then suddenly this is
seen as, like a straight, but your seems like a neanderthal
who's going around trying to word trick tools.
Mind trick people with with syllogisms, right?
And that's like a common criticism of libertarianism.
The port that we rely on these syllogisms to get what we want.
But, you know, if you want to challenge a syllogism
challenging syllogism, But of course, they never apply that to
themselves, they'll always say things like homophobia is
inherently bad, colonialism, inherently bad.
We don't need to run any experiments.
We just know that these things are inherently bad.
Well, but what happened to having to run the experiments
and measure GDP and see how inequality is affected as a
causal result of colonial homophobia.
They have the highest standards for us, but but no standards for
for themselves or even simple, you know, somebody.
Says, you know, I say something is true.
This year of study to back that up as a give a study that shows
that you require studies to re-check your conclusions.
Yeah. That was great.
I think it was in a book by Steven Pinker where he goes
studies show that studies don't show much at all.
A lot of studies show that a lot of research cannot be reproduced
and is not done properly with the scientific method.
So yeah, great, right answer to what to that one.
What is? Favorite book or essay on
praxeology or a level 1 introductory to economics.
Level 1, intro to economics. So I'll just say this is a bit
of an Austrian heresy. But my first introduction to
economics is actually economic facts and fallacies by Thomas
soul. Who's not an Austrian his
Chicago. And if somebody were to tell me,
you know, what's like a, I just said economics in one lesson,
you know, what is a level one book to give somebody.
There you go. So, Thomas sold to find Zack.
I want to get this, right. He says, economics is the study.
I love them. Economics is the study of the
use of scarce resources, which have alternative uses.
Do you agree with that? Definition reader from one more
time. Economics is the study of the
use of scarce resources, which have alternative uses.
I would say it's a study of the exchange of scarce resources,
not the use of scarce resources and somebody says the study of
the use of scarce resources. I would say is like industrial
organization or something right. Economics is about the exchange
between people. Opal.
But I'm sorry to interrupt you. Otherwise, it's a pretty solid.
Definition economics is the study of something something.
Something scarce resources and I would just say exchange and not
necessarily use does Robinson. Caruso on the island by himself
having a copy of himself. He doesn't have an economy.
Does he face the issue of economizing his scarce time and
access to Goods? Oh, I see.
Yes, I suppose he does and actually now I'm thinking about
it even further. If we go back to what economics,
literally means it's household management.
And so Robinson. Caruso also definitely has a
household himself to manage so I can, we might use a colloquial
term economizing, right? Making the most out of the
least, two Robinson Caruso, although I would still say
Robinson, Caruso May hat. Okay, Robinson Crusoe has to
economize In that sense, but he does not have an economy and the
study Robinson, Caruso. I would strongly object to
calling economics. Got it.
Seoul says without scarcity. There is no need to economize.
Do you agree that scarcity is at the heart of economic decision
making Yes, the reason there are slight.
Yes, because I'm trying to think of certain things that aren't
like, things like, you know, status, but even then you could
say, that's not economics. That's political
decision-making. So yes, if there were no
scarcity, studying economics would be almost completely
pointless. Yet.
The reason I bring up scarcity, multiple times is because we
always hear from politicians that that this scarcity almost
doesn't exist. We have things that can be free.
They're just one law way and then everyone As them.
The police are afraid the military's free healthcare and
education can be free and there's no downside.
I see this almost has like the biggest propaganda Ploy that
that scarcity doesn't exist. And therefore we can have all
these things so long as we give the state enough power to re to
redistribute them. Does it seem like but we're
always called, you know unrealistic and living Pie in
the Sky. Meanwhile.
We're the only ones that recognize the importance of
scarcity living in the real world.
Do you think This is an advantage that Libertarians have
as far as seeing things, as they really are.
Yes. In the sense of realizing that
material scarcity is real. It's a very strange sort of
advantage to have. And that our advantage is sort
of a basic observation of reality.
But in this case, I think it's similar to what I was saying
before about, you know, academics sort of implicitly
understanding, you know, you know, how you can mess around a
reaction. So you actually say it out loud,
you know, every person walking around today except for like a
few. Permitted weird.
I was in Brooklyn understands that we live in a world of
material scarcity. But once you start building a
political position out of this obvious opposite, this
observation then suddenly, we have a problem here.
How do you think it's gotten to the point where people almost
see the state as magic? Like what?
When someone tells me houses should be free?
Or, you know, it's wrong to exclude anyone.
I just put the burden on them. I say you need to build me a
house. You say, people don't respond to
incentives. You have a house for yourself,
but you've built Me 0. Houses, I mean either people are
self-interested or that they're not any time you try and bring
this idea of statism and to any other realm of people's life.
They see it as totally immoral and ridiculous.
How do you think this trick has been played on?
I don't know, seven billion people, so funny.
I remember Deirdre McCloskey. I don't remember exactly when
which book, or what pamphlet, but it was something that I'd
read that she had written where she talks about how her
urbanization was part of the problem here.
She's giving an anecdote about a professor who was teaching
economics in saw in the early nineteen or in the early 20th
century to people who have grown up on farms and was saying how
they all just implicitly got the idea to supply and demand
because to them, you know, just the idea of price changes of,
you know, changing the fund and like Market.
Fundamentals, were just a natural part of everyday lives.
But then once you move into cities and you will sort of
engage in this higher standard of living and you become more
and more, Alized, you know, the economy ceases to be in your
mind. Implicitly something real and
just sort of becomes, you know, something that changes and maybe
affects the employment numbers, right?
And so as America becomes more urban and becomes ice, I really
despise or some separated from reality but becomes more
abstracted from becomes more abstracted from, let's say
direct physical production, the economy becomes more Abstraction
and more more something that can be played with in the minds of
Americans. So, I would say the Turning
Point here would have to have been sometime in the early 20th
century. What is the primary cause of
recessions primary cause of recessions in general?
I'll just say, I just a malinvestments, you know,
recession happens when for one reason or another, whether it's
credit expansion or just cause people, you know, hopped onto a
trend. People have invested as think
that they shouldn't have and there's would have Painful phase
of liquidation. So yes, what is the cause of
recession? People making mistakes in what
they choose to invest in and then the realization of the
mistake, the correction of that mistake is what we call the
recession. And would you say that there's
any, you know, main culprit when it comes to recessions?
Whether it's Wall Street or investors or the Federal Reserve
or the ignorant tumors in our present context, most receptions
that we encounter are caused by credit expansion.
The Federal Reserve. So it's not the only cause of
recession, but now that I properly appreciate your
question. Yes.
So the primary causes of recessions of business Cycles,
you know, people make mistakes all the time, but it would be
very unusual. It suspicious to us.
When we see people making the same kind of mistake all in the
same direction for 15 years continuously.
And this is, yes, the result of easy monetary policy easy-money
policies by the Federal Reserve, easy access to credit people,
just chasing yield and investing in a variety of schemes that
they really otherwise would not have.
And what if I do Sister, why are some Nations wealthy and others
impoverished roof? Some nations are wealth in.
Some nations are poor. I would say at the most base
level because of insecure property rights.
So I hear to Smith's admonition that you know, the only thing
you need to bring a nation. So from the lowest poverty to
the keeps of prosperity are easy, Justice Talbot, easy taxes
piece and a tub administration of justice.
And so for most countries in the world, this point their biggest
Mm is tolerable, ministration of Justice, you know, certain
States more than others, can protect property rights, but
also certain cultures do not protect property rights, and a
lot of people don't see this angle.
But, you know, every once in awhile, you'll have countries,
especially see this problem like sub-Saharan Africa, or yeah,
plenty of, there's no shortage of people who are
entrepreneurial no, shortage of people who are fully capable of
running Farms, or complex businesses, but either because
the state for dates on them or even their own family, see, you
know, this an extended family structure and then Single person
in it. It's like the main Breadwinner
and the more productive this person becomes suddenly The
Wider obligation to send a family become, right?
And so, you know, you'll have foreign aid workers coming to
the country and help this guy irrigated Farm or whatever and
he'll be perfect capable of operating this.
And then the end of the year. They're like, all right.
Now, you gotta save and invest in this next year and it's like,
I can't do that. This is why.
Well, you know, now that I made all this extra money, I am like,
ethically required by my entire family to hold a feast for them
and, like, squander that money. Otherwise, they'll think that
I'm Basically The Reincarnation of Satan.
So there you go, you know? And this is like a culture
problem that needs to be fixed. And I would say for most of the
world, you know, there hasn't really we grew.
We are in a more peaceful world tackle.
A lot of the countries don't have the state capacity to Levy
onerous, taxes. So property protection is the
number one obstacle in one of these places.
If I care only about the well-being of the poor, why
should I be a libertarian? Economic development is making
more things more available. It is increasing the possibility
of options to people, so you should want whatever policy
leads to increased development. Ultimately, and libertarianism
is the policy bundle that leads to the most economic development
in the first world and the third massive wealth inequality is
bad. Therefore, forced redistribution
is necessary. How do you respond actually
massive wealth inequality is good because people are
different in their endowments, a different.
Girls, they're different in their ability to use resources
to benefit others. Wealth inequality is an inhale.
It's a feature of capitalism. Not a bug.
I'm four. I'm actually for more
inequality. Like I'm for raising living
standards for the bottom, but I actually think that the amount
of effort it would take to raise living standards at the bottom
of justify, raising living standards at the top even more,
right? You know, I see Alicia and I
think man, how great is it that we have all of these robots that
can cure all diseases. I'm sure glad that the people
who invented these He's yet to live on a Paradise Island in
space. Sure, if you had to really
communicate it to someone who sees their paycheck, as you
know, you're going out. I didn't hear anything after
sure. Okay, but can I get the
connection dropped? Like a question?
All right? It is it better now?
Yes. Okay, if I'm someone, who sees
that my income is way far below the people like Sam Walton.
Andrew, Carnegie, John D, Rockefeller and Jeff Bezos.
How do you tell me? My paycheck is so much.
Smaller than theirs. How on God's green earth and my
possibly benefiting from people that have billions and billions
of dollars. Well, they must have done
something to get those billions and billions of dollars, you
know, and in some cases Libertarians, kind of like to
take the easy out and they say, well, you know, the reason they
enjoy all those privileges because of regulations or some
kind of government cronyism and to some extent, that's true in
any any liberal economy. There are people who make their
living for dating but these kinds of massive wealth
inequalities, I mean, Jeff Bezos Elon Musk these people.
All are good at industrial organization.
Right? These people are good at
delivering services to lots. And lots of people making lots
and lots of people's lives. Incomparably better.
So, you know, when you are a small part in that division of
labor, you know, you get your paycheck and maybe small but the
fact is that you benefit from all the goods and services
embodied by the wealth. That is a crew to Jeff Bezos and
Elon Musk. I mean, especially we talk about
Jeff Bezos, you know, Jeff Bezos as well.
Isn't like it's just a series of merchants contracts.
You know, Jeff Bezos has almost nothing to liquidate.
I guess if he has the warehouses in the trucks, but warehouses
and trucks, if you really think about that for another second,
really should not be that much. Well, it's it's really just real
estate. Most of it is a fact that Jeff
Bezos has a series of agreements with a bunch of merchants and
producers into this very efficient.
Supply chain. That lets me get almost
anything. I want within two days, right?
And so that series of contracts, that's Almost pure that is
almost pure intellectual Capital, right?
That is his wealth. And so somebody were to say,
well, I think I should have like you want to repossess Jeff.
Bezos is contract with the guy that makes lamps, and I mean,
because that's what it welcomes. What are the potential?
Downsides of the state, nationalizing all corporations
and turning them into Democratic worker?
Cooperatives. Most workers, don't know how to
manage corporations. If they did.
They would be. That would be the biggest
Problem, as I pointed out, in the case, of a lot of American
businesses, especially, especially Amazon, you know,
Geoff Bowes. It's great.
Because if they just like the richest man in the world or like
trades places with Elon Musk from from year to year or
whatever, you know, if you try to repossess, it will just turn
to sand in your fingers, right? There's no thing there to take.
So and and it would cause and you'd see quickly how many other
things just from the act of repossession?
You see how many other things are only valuable because they
are secure in their property rights.
I mean, most people don't care about these things even as I
give this an some think about it, like, you know, only a
Libertarian cares about this since most people that want to
repossess from Jeff Bezos and Elon Musk, actually spiteful
mutants that don't actually want to go better off.
They just want to hurt Jeff Bezos and Elon Musk because you
know evil white male capitalist, whatever.
And so I'd say, you know, hey, if you were to take the thing
from them, it wouldn't actually make anybody better off but
that's not really what matters to these people.
It's really just taking things from Jeff Bezos and Elon Musk.
I know it's like the feds have been I'm not exactly a randian
but one thing randle's 100% right about, it's like the
emotional pathologies that drive these people.
Yeah, yeah. Definitely.
I mean when you point out to them States, been stealing five
trillion dollars every year for a while.
Now, how much more is it going to take for you guys to be
happy. I mean, it's like a trillion
dollars a year and entitlements alone.
And even when you show them, if you take all the Well from all
the wealthiest people it's going to cover like eight months of
next year's federal government budget and even then if you tell
them, they're getting more money, they're going to spend
more. So it's not even going to be
eight months, but they're not. Not too interested in that, less
than that. Even because again, if you
really think about what it means to confiscate Jeff Bezos as
well, right? It shrinks in your hands, right?
It's like putting spinach on a frying pan, right?
So he's like, oh, we just take all databases wealth.
We can find it again really, but really think what you're doing.
Are you financing the government with a bunch of merchants
contracts and trucks, right? Imagine again, this kind of
requires a person who isn't who this argument works on some
engage in good faith, but you know, imagine if you live in a
society City where everybody has a bunch of stuff in then I have
like a rock and it's worth $10. And then, somebody says, you
know, actually Marcel, I'd be willing to pay if I had it or if
I could get some friends together.
We'd all be willing to pitch in and pay you ten billion dollars,
so that rock. And then somebody goes and says,
Marcel, you know, if we were to take that rock from you, we can
use it to pay for my health care is like, no, that's not really
true. Because as soon as you take that
rock for me, all who are going to pitch in for shares on the
rocks, look, we only want to get shares in that rock because, you
know, we can hold on to it, if we know People going to take
that rocket and the moment. None of us wanted right?
None of us want to pitch in so suddenly societies become ten
million dollars poorer. And so now you can't find a
Health Care system with my ordinary stone that I picked up
off the ground. And by the way, what I've
described to you should also be seen as an indictment of like
national income accounting. Mises said that an increase in
real wages is the result of capital investment and increased
worker productivity. Would you agree with that?
Yes, and could you explain that? Maybe if you could explain that
may be used like a real world example to bring that theory
into practice for us or increase Capital?
So the the end result of all capital investment is consumer
benefit right at the end. There's a refrain that we have.
I think bear bile and uses it with almost any Austrian would
use it, which is, you know, bread is not valuable because it
uses wheat. Wheat is valuable because it is
used for bread. Right?
Any capital investment is Use towards the end of making more
things available for consumers, you know, obviously at a profit
right, is it selfish benefit here?
And so when I say that our country has had economic
development, that just means that more things have been
produced on the way you get increased development is through
lengthy or production, processes is through increases in
technology is through savings and investment.
So that's the only way that a worker can become better off.
And, and a real wage increase means not just an increase in
paper money, but, you know, an increase in the value.
Value that paper money, more things to be done with your
paper money. Since we're assuming a Fiat
standard in, these kinds of conversations, right is through
increased material production by entrepreneurs.
We need the state to regulate the average person or else.
We'll have buildings falling such as that as happened
recently in Florida. How do you respond?
There's a building that thing in Florida.
Who is this? Yes, there was a building
collapses before we saw these zoning regulations, but, you
know, yes, in theory, I could also just make several arguments
to say, you know, most people don't want to live in falling
buildings. If this there is a certain
amount of risk that people are willing to Bear, you know,
Somebody were to say that we want, we want buildings to be as
stable as reasonably achievable, which is the say, no use for
like nuclear reactors. You know, what you're really
saying is as soon as there's any innovation in technology to make
buildings cheaper to make, you know, just keep adding higher
and higher regulations on the building until the cost of
making. The building is to get is enough
to cancel out, you know, the the the decrease price and building
materials or whatever. But in fact, we find that most
people are not willing to spend infant amounts of money and
doing he'd like living and cheaper buildings.
So, these are just kind of the risk that you get in a Convent.
Of course, a lot of people say, well, I don't want to engage in
that kind of risk, you know, with children who live in the
buildings or something like that.
But again, these are risks that are economize on by the market.
If you actually do manifest that desire revealed in your
preferences by who you purchase from, you know, a lot of
buildings are not owned by individual people, but by
launching a large property developers, we can just stuck if
it's You about intolerable to you.
We can just start changing. The array of the market will
just, are changing the arrangement of who owns
buildings in Prudhoe, right? You know, if you find that, you
know, bearings are amount of risk of unstable buildings is
intolerable. Then find BlackRock can own that
building and see how BlackRock feels about the level of risk.
That what that was involved here.
But most of us enjoy decrease consumer costs, you know people
watching a plane like what like planned obsolescence, right?
They'll say, you know in the old days, you know your cars and it
is like, you know cast iron and you could drop them off the
Empire State Building and they went The concrete and now
they're made of plastic or whatever and part of that is
different regulation. You know.
Now, cars need to have like a billion to one crumple zones,
but also just people want cheaper cars, right?
And I suppose if you want, you can go ahead and well now you
can't buy a car, made a cast iron because you can't buy, you
know, betamax tapes anymore. Right?
People don't want that. Level of certain is for a car.
They want a car that can get more than three miles to the
gallon, right? You make a trade-off on fuel
economy. You make a trade-off.
On speed and make it right off our price.
So everybody says, oh we need government regulation to stop
buildings. Falling down.
Know, I place pretty high premium on a building that is
not going to fall down in the time.
Scale of me living there, and I'm not interested in paying,
you know, twice the price, so that my building will last
longer than, you know, the United States government.
Exactly. Thanks God willing.
It will only last for, you know, three days from now, right?
But Jonas, yeah. As opposed to look as if these,
all these shortcomings laziness go, Read shortsightedness, as if
they don't apply to government officials as if they don't face
the stress of having to economize as if they don't
subject anyone to risk, you know, 90% of their drones kill
civilians, the other 10% are fake terrorists and and and what
were so terrified that that there could be an era of
voluntary exchange where people have a negative externalities.
How about the case of anti Trust the argument might go something
like in the absence of a state, you might have some people
bullying intimidating, others acting unscrupulously, gaining a
high percentage of an industry. And then once they're in that
high position of power, they drastically increase the prices
making consumers and employees, worse off.
Their for antitrust is legitimate.
How would you respond to that? I would say this is fake.
This is just totally social propaganda.
Made up in the 1920s this literally never have It's a
conspiracy theory. It's total or and this idea of
like predatory pricing is what we call this.
This has a kind of Sighs. Listen up.
This has never happened ever, ever ever.
Ever. If you look at the, you know,
the empirical data, right? We see that the price of oil,
you know, because the we Standard Oil is the case that
used and I kind of forget wasn't Andrew.
Because Carnegie was a steel magnate.
I forget who ransacked the Royal of time.
But yeah, the idea was close. Of course.
There's Rockefeller as. Oh, you know Rockefeller, if he
finds out you're going to open an oil rig, he will, he will
just drop the price of oil down so that you can't do it, you
know, if that were true and some people allegedly did make small
fortunes by just, you know, pretending to set up with
refineries just to bait Rockefeller into buying off, the
assets from them, but in practice, what that just meant
was that Rockefeller was just Outsourcing the construction of
oil, refineries. Right?
Some other entrepreneur just bore all the risk of, you know,
getting the capital investment built up the oil refinery, the
oil rig, or what have you, or, or the oil drill.
And then, once it was all made, Rock Falls, like awesome.
Pick you up, some for that. And this is just, this is just
another very strange kind of business model, but that's not
predatory pricing, that just making consumers better off
because oil just gets cheaper. If somebody delivers on that
threat, they are making oil cheaper.
For however long, it takes to dry.
The other guy bankrupt and of course, we know that we live in
a highly capitalized economy, you know, just because you have
10 times, somebody's production does not mean to give ten times
their cash revenue or that's right.
Just as you have 10 times the productivity of ten times their
cash reserves. And so if every pay period, you
know, they're losing $1. You're losing ten, right?
Each time this happens. And unless you have ten times
with money in the bank as they do, but you definitely don't
because you know, your investors would never stand for that sort
of maneuver. You're just you're going to go
back up before they do. And here we go, we can just
imagine you know proposed if you the kinds of people who say, you
know, nonsense like this, have no business being near any
industrial organization. If you were to propose this at a
board meeting, they think that you were insane, right?
If you said, listen, you know, imagine if you were at
McDonald's, it'll look a Stranglehold on fast food.
And then somebody said, you know, Hey, listen, we heard we
got rumors that some so that there's new company called
Burger King. That's about to hit the streets
and we don't want that to happen.
So I say we start handing out burgers for free.
That's A Burger. King goes bankrupt, right?
We're like that's, that's the most ridiculous asinine
suggestion. Remember I've ever heard in my
entire life? This would fail immediately.
How many other objections do I have to this kind of nonsense?
Oh, if we also, you know, if you have a free trade environment,
especially like you know where there's no tax and other
countries, this kind of regime would also never like, you know,
a collusion monoculars. You would also never work,
right? Because let's say that you have,
you know, all the Standard Oil by eyes are all the oil in
America and has decided not to um, Todd's decided to raise
prices on us. You know, it's Standard Oil.
Also going to buy all the oil in Saudi Arabia or all the oil in
Venezuela and so on and so forth.
Now, as it is OPEC is a pretty stable cartel because you have
one incredibly hegemonic memory foam.
Saudi Arabia which has, you know, almost as many more
resources, rest combined and also you're dealing with
nation-states and you're dealing with nation-states and trees and
things like this, but even then we see constantly that the OPEC
The OPEC, mmm. Give me a second.
The OPEC cartel is not as stable as you think.
Also. We see the OPEC countries often
Lobby, you know, domestic governments to not find
substitutes towards oil. So some of the largest
environmental groups in the United States are backed by
Saudi oil money, right? So not only do you have this
cartel that uses? Not only state power of its
members which state powers of its non-members, right?
To keep this cartel stable. This would not be normally
possible in an internal free trade environment without
antitrust laws. One final Soul quote that I
liked from this one. As far as I could just pause the
like close this picture, you know, imagine Henry Ford has a
monopoly on making cars in America and then you find at the
Henry. Ford is also like lobbying the
French government or lot yet. Imagine Henry Ford gets a
monopoly on cars that America somehow and he tries to keep the
price of Ford cars, very high. And then he said, well, what
about Italian cars? And you know, to have Henry Ford
be like OPEC. In this scenario.
You would have Henry. Ford paying people in Italy to
like, Lobby, the government to make, you know, Maseratis and
Ferraris and whatever more and more expensive.
Like it's very hard to imagine under normal circumstances a
private Corporation lobbying the Italian government to destroy
Italian car companies, but thanks to you know, the
insanity, the US government. We do have the Saudi government
lobbying directly and indirectly the United States government to
be less fuel if to be less energy independent.
What would be a negative downside of the state
monopolizing? The healthcare industry and
declaring all Healthcare needs to be free and paid for by
increasing the printing of the money supply.
Well, okay, that's two that'll do just an increase in the money
supply. So that would just be the price
inflation also, so there's the basic you know it once it's free
people will use it more and you know, you have this overuse and
rationing but the biggest one would be just the bureaucracy.
Of Health Care system, which is already disgusting in this
country. But it, once it were
government-controlled. I can only imagine, you know,
the amount of layers of rocks that would at each level.
But of course again, so the kinds of people that want
universal healthcare, this rocket ization is a feature, not
a bug, right, you know, gotten your nationalism in a in the
present situation not so much a case and you know in the 1950s
and 60s where you had like his post Colonial regimes engaging a
nationalization. In those cases.
They probably really did on ironically think that if they
can just take the Suez Canal. Take British oil, take these
things or take these dams, right?
That would make the country Rich.
I'm sure they are earnestly. Thought that that, you know
these called. But now today, I don't think
anybody really thinks a nationalized, Healthcare System
would make things better off. And what they think is man, just
think of all my liberal friends, that would be able to get hired
with a gender studies degrees, you know, doing diversity
mandates in a Universal Health Care System, right?
That's like the real goal here. One of my songs, you tell me,
you know, oh, you know, what are the downsides?
Y'all listen up the downsides with, I'm assuming like a bunch
of normal person, don't speak until it.
But if this is not going to help you, you know, I'm giving your
audience like a meta-commentary, you know, here are all the
arguments that you can use. We should be aware of the people
that you're arguing with the probably parasites and you only
need to argue with them at all. Yeah.
Well, hey, we're still like
Sisyphus pushing that stone up the hill.
One of my favorite Soul quotes in this book was in reality.
Most of the great Fortunes in American history, have resulted
from someone's figuring out, how to reduce costs.
So as to be able to charge lower prices and therefore, gain a
mass market for the product, and referred to this with
automobiles, Rockefeller with oil, Carnegie with steel, Sears
Penny, Walton and other department chain.
Founders with a variety of products.
How have they been able to propagate the lie that
capitalism equals greed equals high prices equals poverty.
You know, here again, I have to blame what normally I love so,
very much, which is urbanization, since urbanization
is part of process of Economic Development.
This is just kind of an inherent, you know, marks used
to talk about the internal contradictions of capitalism,
you know, everybody's competing in the competition.
Somebody wins and here I'm just thinking about it, you know
internal contradiction of capitalism is that it causes
people to move into cities and you know have these higher
productivity jobs, but then it also that makes them think
stupider and stupider things about economics, right?
And so yeah this This cartoon idea of what entrepreneur does
is only kind of possible when you work for, you know, this
wage labor position with other people always late where you get
paid a wage, anybody else, you know, gets paid a wage and all
the risk is offset to somebody else who lives like in a
different part of town, right? Once you have a class of people
that does not really bear wrists, as the market goes, then
you suddenly see the proliferation of these really
dumb ass ideas. Business owners, pay laborers, a
wage knowing that they will only pay them as much as they can, so
they can profit off of them. Therefore.
This is a relationship of exploitation and is inherently
unjust. How do you respond to that?
The, the the wage earner gets paid upfront, right?
He gets paid with no. With a, he doesn't bear any risk
in this situation, and always the person who Bears the risk
gets a risk premium, you know, the, you know, People on the
payroll not only do they get paid before stockholders.
They get paid before, you know creditors, right?
You know, if you have a firm, so you have a firm and then it has
the people who own shares in the company.
The people who have lent money to the company and people who
work for the company, you know, you can't imagine a business
saying, listen, I'm sorry. I can't make payroll today.
I got to pay dividends to the shareholders.
I mean not only is that, you know, blatantly like it's
illegal and it's unimaginable that just not how firms are
organized. But even sang like this and I
can't make payroll today because I owe, you know, ayo, ayo,
Johnny. Whatever over there, you know
fifty billion dollars. So I got to pay him before I pay
the workers. This too is like completely
illegal and even the absence of like a legal Arrangement here.
It was just an implicit fact of industrial organization.
So workers. Get all these advantages over
the hard working capital is invested the money and all the
hard-working creditors and Latin the money to finance.
The operation workers gets a cut right in the front of line every
other week and say, hold on before you pay anyone else
before you sold anything. I don't care what you sold.
I don't care who, you know, I don't care who you met.
I don't care what Almonds are. I worked 40 hours this week.
You have to pay me first, right? And that's why you get people's
right in exchange for the in exchange for workers and
literally worker privilege, right?
The worker privilege of being paid, first guaranteed, no
excuses. You get people's Exactly.
And the exploitation doesn't account for all of the
businesses that are not profitable and go out of
business, or the fact that consumers are exploiting stores
that they only go to. So they could profit off of
their products and services that they want.
They don't care about those workers where they shop.
So, of course, the exploitation just exhausts me to no.
End with the paper, your audience can read on this.
It's I think it's literally called Marxist and Austrian
class analysis by Hans, Hermann. Hoppa.
I'm where he just talks about viewing the different, you know,
the different tune wage and you know, a hypothetical higher
marginal productivity and saying with that difference is an
interest premium. Yeah, I the recorded an audio
for that. Excellent essay.
I will put that in the description below.
That was one of my favorite papers, just because he starts
out by saying marks has five general claims, by the way, all
of them are correct. And I'm like, oh my gosh, what's
going on here? And then he just makes the solid
case that yeah. These are all true.
Long as the culprit is the state or any aggressor parasite.
Whether small scale or large scale.
That was just so brilliant. Yes.
I'll definitely put that in the description competition in a
free market is actually competing to cooperate.
You agree with that and why? Computing to cooperate.
Oh, I guess sure. Yes, you are competing to
structure the best, you know the best deals right?
You're competing for the best social organizations division of
labor. So yes, you are competing for
the most productive forms of social cooperation.
So yes, competition is competing to cooperate.
What I got from that was in response to the competition
equals dog-eat-dog. It's like, well, yes.
Red Robin is competing with Arden.
But in order for Red Robin to exist in the first place.
They have to cooperate with like a million different people to
buy the silverware and make the tables and build the furniture
and everything else. Why do you?
Do you think the criticism of the free market?
It's dog-eat-dog is Justified and how could you communicate to
someone that? It's not that case?
At the free market is talking talk again here.
If somebody were to say that I was a sort of Nod and say, yes,
right. That you I want a ruthless
dog-eat-dog competition to give me, you know, cheaper food,
right? Ruthless doggy, dog.
Competition in the production of goods is actually a very, very
good thing. I only want the best, most able,
most intelligent, most, whatever people, you know, using up
scarce resources using up man hours using of industrial
equipment to make me my cell phone.
My computer, you know, the food that gets to my table, right?
This is you know, the economy isn't a game, right?
Like this is real life, you know, the 7 billion people on
Earth and we all got to eat some are 0 and you know, I'm not here
for your feelings here. I mean, there are some people
who are going to try to purchase, you know, fair trade
goods, although of course, fair trade goods more often than not
just means like made in America. But I would say, you know, it's
a dog-eat-dog competition like yeah, I'm trying to live, right?
I only want the best people using up scarce resources to
make things for that. What differentiates a good
Economist from a bad economist? I'm a good Economist, you know,
has theories or a good Economist make statements are in
accordance with reality. So an economist that can make
good predictions and Economist that that clarifies things for
those who speaks to and instead of obfuscating.
So as an economist, my goal in particular, this may not be
whatever Congress wants but I want because I want to be an
academic, you know, I want economics to be understandable
to lay people. I want normal people to have an
understanding of how the economy works because when You have this
sort of obfuscation of economic laws through P hacking or
whatever or other ways of empirical games, you know,
people think that the economy something abstract something
that is not understandable selling only this mystery cast
of academic priest knows how to do.
And then they start thinking and saying, things like that.
You can start handing out healthcare for free, right?
So for me, a good Economist is somebody who's a public
intellectual and helps people understand that this is not the
case, and I'm pretty sure this was kind of nice to just
conception. A good Economist is also someone
who clarifies rather than obfuscates, but you could say in
other sense, a good Economist is then one who, you know, gives
good advice to The Sovereign, right?
An economist is going to make good predictions, make good
policy, proposals things like that.
So I would say I'm in the first category or walk to be in the
first category. I want to improve economic
literature of the populace and I'm sure there are others who
want to give good advice for The Sovereign.
Certainly, it's more profitable to give more good advice to The
Sovereign is too. To educate the masses, although
of course, we see that a lot of condiments, give bad advice to
The Sovereign often on purpose. If I had a paraphrase Henry
hazlitt, I don't have it in front of me.
He said something to the extent of Economics is the practice of
being able to see not only the short term effects on one group.
What? The long-term effects on all
groups or secondary consequences on more than the immediate group
affected. What does this mean?
And why is that important? okay, so how's Liz sort of doing
um, Seeing in the Unseen. This is actually a this is
actually very interesting thing for has to say because it kind
of does validate. The I'm not going to say how it
I'm not going to say has it was like a bad economy, but that
means has what sort of viewers into the, you know, advice of
The Sovereign style of Economics as opposed to the educating the
masses of Economics, which again is perfectly valid role to have.
But in this case, you know, most people that are lobbying, The
Sovereign for one policy or another are going to try to get
people just for themselves and They'll try to frame this being
in the public interest. And so in that case you sang the
role of the economist is to be 0.
If to have a heightened sense of awareness of not only who
benefits but who loses in the long run and the short run.
I want to get into your dissertation research.
The development of political Talent.
Is that your dissertation topic. No.
Now it has changed significantly.
So my current line of research is on what are called
developmental States. So developmental States.
Also, be called state director capitalism.
But even that kind of hides it. So, in the normal, in a normal
liberal economy, you see that in the private sector businesses or
lot set their own goals, based on the profit loss metric, but
the mechanism, by which they operate is controlled by the
government, all sorts of regulations on you can hire, who
can fire, you know, what bit, what materials you can use.
And so on who buy from and in developmental States, it's sort
of the opposite where the state sets development milestones.
Stones to reach, you know, we need to have something.
So it's amount of steel production, the country, but the
private sector is wholly free to reach that goal.
However, the desire. And so, a lot of the countries,
we think of as capital success, stories are more on that model.
South Korea was a mental state. Taiwan was a developmental
State. Hong Kong, Hong Kong so much
South Korea, Taiwan and Singapore would have a mental
States. The first one was made to Japan
in the between the 1890s and World War Two.
And then, like the third generation developmental stage
will be countries, like Indonesia countries like to some
extent. Bangladesh, a lot of other South
Asian countries, but Indonesian bangle is probably the two
biggest ones. These are the other big growth
Miracles and what we saw in those cases was a lot of Market
liberalization in the sense that there's a lot of, there's a lot
less predation and Taxation, but you saw a lot more, you know,
government having set like exogenously goal.
Goals for the economy. So the best example of this
would be in South Korea, Park chung-hee, who's a dictator at
the time felt that it was important that South Korea have
it's a significant steel production industry because he
wanted the country to be Sovereign arms, manufacturing
and very few people want to invest in this because South
Korea, has some fuckin a right has generous coal, reserves were
not so much too, generous iron reserves.
And so nobody wants to run up the money, and I think Park
chung-hee ended up diverting money.
That was used that was supposed to be reparation for the victims
of Japanese imperialism. The other government pocket that
and start building the steel mill, but he didn't actually
have like state-owned Industries.
Do this. This is like the private sector
did according to profit and loss, but the state was the
investor often. You'll hear socialist say, oh,
you know, such and such isn't socialism.
It is State capitalism. And in a sense, you could also
characterize this kind of behavior as state capitalism
where, the state is an investor in an investor insert
entrepreneurial goals that are fulfilled almost entirely by the
private sector. And so those things those
countries are what I'm interested in studying and my
dissertation topic. Focuses.
Also, especially on the Syrian Arab Republic.
And my argument is that from 2000 to 2011.
So the president will change your Bashar al-assad so
president right now, but during the Undisputed tenure of
President Bashar al-assad that he was attempting to liberalize.
Your base on that developmental State model, but there was a
certain loss of State capacity in the transition.
Which contribute to the Syrian Civil War.
Yeah, now I'm seeing why Obama said Assad had to go.
It, it all makes sense actually before that.
They're saying, you know, Assad's a great reformer.
They were kind of talking about the fact that Bashar al-assad
was, you know, removing a lot of price controls.
He was entering Syria into a lot of regional trade agreements and
on his during his presidential inauguration speech.
He said that he wanted to transition Syria into a social
market economy. And most people who hear social
market economy. Think it's something like, you
know, Selena like Sweden or something, but really he
Something like West, Germany. But the problem for him, you
know, this is this is now me just advancing my an argument
here, you know, the transition from national socialism to the
social market economy that we saw in West Germany.
Had an intervening step involving killing a lot of
national socialists. Banning them from politics and
then holding the entire country at gunpoint under the US, Army
and the French Army and the British army, right Bashar
al-assad's, like we're going to transfer, we're going to move
from this sort of national socialism to capitalism, but you
can't do that. When like your entire support
base. Are those selfsame socialist,
right? It would be like if Hitler made
a unilateral decision. I'm not compared to Hitler.
I am in this aspect actually write.
It would be as if Hitler sort of made unilateral decision and
it's a 1933. So, in in 1942 that okay,
everybody. No more national socialism.
Now, we're going to prosecute this war with the Soviet using
capitalism is capital, is more productive.
So we're getting rid of all these users parasites, that are
attached to German industry. Re but the thing is all those
useless, parasites. Attach.
The German industry are like high-ranking National Socialist
Party officials. So you have a problem here.
You have actually made the case against us entry and British
entry into the second world war. How do you justify that
position? Yeah, so WWII delivered almost
all of Eastern Europe into the hands of Joseph Stalin.
It's a pretty simple case here. America had no National Security
interest in preserving the British and French colonial
empires. It was forced upon the, it was
not even forced upon them. The American people were kind of
tricked into And so, I think that if you look back with an
objective eye and you think about, you know, the if you
think the public environment in there at the time and looking at
the outcomes looking back and you don't allow yourself to be
sort of enchanted with with, with rhetorical spells about
this or that atrocity being carried out by this.
Is that government, you know? World War Two American entry
into World War 2 was a mistake, right?
The world would have been for all intense far better off if we
allowed Hitler and Stalin to grind each other to death.
And then perhaps after that, you know, we can sweep in.
And then, you know, liberate Poland, and Czechoslovakia, but
as it is an outcome where, you know, the Bolshevik regime is
allowed unchallenged dominion over Ukraine, Belarus Poland,
Hungary, you know, Czechoslovakia.
Eastern, Germany, Latvia, Estonia, Lithuania, uncountable,
atrocities. I recently read an article about
how after the Bolshevik Revolution, several like
thousands of Cossacks who are anti-bolshevik fled West and
then made it into Germany. The end up fighting up with,
with the worm Ox, with the attempt of dislodging, the
Soviets. And then after the War, the
British took these people who'd escaped, this Bolshevik
Revolution, and send them back to Stalin to die.
I mean, this is in my view, like a monstrosity.
It's not justifiable, right? Obviously.
I don't believe that America should be intervening on the
side of Hitler to dislodge the Soviet Union.
Like if we did, if we did that and we were to plunge Europe, if
we were to punch Poland and Europe and Hungary, under the
control of Nazis, this to would be a disastrous outcome, but
there's no reason for us to intercede on behalf of Joseph
Stalin, right? And America was providing, you
know, an unforgivable. I mean even one dollar to
Bolshevik regime is unforgivable any amount of actual Stones
unforgivable with the amount of American American productivity,
that was diverted towards saving people, you know, hood massacre,
you know, the people of Ukraine, the people of st.
Petersburg, you know, killed hundreds of thousands of people
in a Red Terror across the country and said, we know it is
in, it is imperative that we prop up this regime against
Hitler know, this regime deserves to fall, right?
The Bolshevik regime has to fall and America should not be
intervening to save them. And, you know, England and
France are capable, you know, they're big boy countries right
there Cape. If they know that America is not
going to save them. They can engage in normal
politics to get an outcome worthy of them.
Right? The fall of Paris to the Germans
was also a disaster right? Even though, you know, we talked
about stopping German white supremacy.
I mean, the Germans are watching from his regime.
The French are also watching from his regime, right?
The British are also white from sushi, right?
If you think about the atrocities that England was
perpetrating on India and France.
Syria, the idea that, you know, we were fighting for freedom and
democracy for God's sakes. You know, you had the, the Dutch
government in Exile operating out of Indonesia, right.
Fighting for freedom, and democracy of colonial regiments.
No, I don't think so. I don't think that America has
any moral imperative, or practical, imperative to take
sides. In this kind of struggle between
Bolsheviks Nazis, and the foremost Colonial superpowers of
the planet. Yeah, that's a good point.
The war for democracy was led by unelected, Stalin, Churchill was
appointed and never elected. The first time he was up for
election. They voted him out and
Roosevelt's not exactly who you think of as Democratic, you
know, kidnapping hundreds of thousands of Japanese people and
confiscating the nation's gold. So well, those were atrocity.
Sorry. Well, I'm just listing off
post-war Allied atrocities, you know, during World War 2.
When Japan was pretending to be a decolonizing force.
I had the greater the greater East Asia co-prosperity sphere.
First. I'm under no Illusions.
This is actually end to colonialism.
It was a shift from Japanese, colonial rule from French
colonialism to Japanese colonialism puppet regime setup
all out. They were very clear that the
Yamato razors. They call themselves to be the
center of this but you saw the establishment of Of Quasi
independent self-governing institutions in Vietnam and Laos
and Cambodia after Japanese swept through.
And clearly these countries were capable of establishing self
governing institutions, even if they were to throw all of
another, but when the French military reassert control over
Vietnam, they returned it under French Colonial Administration,
and making the argument that colonizes like to make, which is
that these countries were not ready for self-rule, but they
clearly were, there must have been a legion of non-japanese.
Crops and activists who are administrative day to day
operations of Vietnam, but not. So according to the French
military who again brutally reconquered Vietnam and the
result of that. We got to see in America against
one of years later. What is the important difference
between someone on the left and someone on the right?
So this is this is why going by Paul Gottfried's answer that to
be on the left is to believe in human equality and that
inequalities are either artificial or illusory or
otherwise ought to be removed or explained away.
And to be on the right is to believe that some people are
better than others. How can one be both an anarchist
and a capitalist? I believe in private property as
the primary as that property should be the primary form of
social relation. So people can afford private
property without the state. We see plenty of cases of this
happening. I guess I can if I can just give
an example of police and uses the case of bush tribes in
Angola. Who when the Portuguese showed
up on the end goal and Coast, there were people there people
in cities on the coast who would go and trade Caravans all along
the interior. For goods like Ivory.
And when the Portuguese came, they were trading guns of people
on the coast for ivory from the interior.
And so what you sought first was an increase in just bad behavior
to satisfy the Portuguese demand, but what the tribals are
able to do was to Simply threatened to produce only at
subsistence. And what there's a cause would
be the as these giant my guy as he's as he's irate.
And Caravans, we're traveling to the interior for Ivory, you
know, you have to spend money on the mercenaries and so on.
But if there's nothing to take there's nothing to take.
And so you end up with a whole bunch of, you know, very angry
mercenaries wonder where they're going to get paid.
And so this is just an example conceptually.
So what you end up seeing? Sorry the fun.
The second half of this the social Arrangement that resulted
was that these Caravans were have to pay in advance.
So, you know, you imagine this Caravan of people with guns and
mercenaries, which Up to a tribe and say, you know, we're going
to get out. We're going to be back for Ivory
next week or, you know, six months rather and the tribes
Escape you have to pay us right now.
It's like okay pay you and what is like pay us an alcohol and
then they get all the alcohol and then the tribes would all
just drink it like right there in front of him.
Right? No refunds.
Come back in six months, right? And obviously, you know, the
tribes would deliver but the reason is this of the the these
Caravans of Raiders couldn't actually, you know, just take
the alcohol back when they come back later, something like this.
Right in this way, in the absence of a state, you had
private property protected. Now, obviously, we want to live
a slightly more productive in advance a lifestyle than tribes
trading Ivory, for Booze with, you know, Roman Caravans of
Raiders, but conceptually we should be able to see that
private property protection. Is does not require a monopoly
on violence, right? Final questions.
Yeah. Oh, I'm sorry.
Yeah, even in the case of massive disparities in force
capability between one side and another right, you Still see an
agreement in which one side has the ability to alter transfer
destroys property and other side does not and somebody could say,
well, we're in those Raiders be the state, then, no, because
there's multiple raters or multiple Merchants their
merchants and Traders, depending on the time of day, right?
There's multiple groups of these people all trading with the
Dutch, all going around the same geographic area.
And then you might have the same tribe, you know, one Caravan
comes through, give them their booth and says, okay, I'll come
back, six months, your Ivory and then another Caravan Place,
another order. Right.
And then they say well what if Caravan a you know chooses.
Hey, you know, what if we pay you all this booze now and
another Caravan comes and Rob's ooh, and then the tribe says
well, that's kind of your problem.
Not ours, right? We got on it.
It'll be our problem. We get robbed, but we don't want
that to happen. So it's between the two of you
to agree not to Rob Us in the meantime, you know, we have some
Portuguese wine to finish drinking right now.
Final question, automation destroys jobs.
How do you respond? No automation does not destroy
jobs, automation creates jobs, but importantly, it does not
create jobs, you know, dealing with like so sometimes when
people say the automation destroys jobs, sort of
libertarian or pro-market responsibility.
No. Because then you'll be able to
you'll get a new job create like maintaining the robots or
something which is like a very rhetorically on compelling very
not good argument. Automation to the something
that's producer Market reasons why if automation is reduced
because it is profitable, right in the point is to lower costs
or increase productivity for all of the firm's that use that
process as an input. So if you automate the
production of Steel, this presumably makes steel cheaper
and therefore, makes cars cheaper.
So on and increases the number of cars that you can be produced
in that case, anybody who who has been put out of work by
automation should just go to his boss and say boss.
It's tell me the names of everybody.
This firm sells to, right? You automated me out of a job.
So, tell me every firm that you guys have contracts with and
then just go door to door and say, Hey, listen, I'll let you
know, the price of the price of what we produce are gonna get
cheaper. You're gonna have a lot of extra
money on your hands and your real to expand your factory.
When that factor expansion comes, I want you to know that
I'd like a job. Obviously, negotiations will not
happen in such a direct fashion. But this is the way we should
visualize the economics of automation.
You should be going directly. On stream.
I would have a production process is being described.
And this is why, you know, people are most afraid of
automation of trucks, but I'm like no automation of trucks is
probably going to be the best thing that ever happens.
And you know, some some economic profit is going to be listening
like seething, rightly know, think about the tens of millions
of truckers who put out of work, you know, when these trucks are
automated. Yeah, but think about literally
every business in the world or in the country who faces a
significant amount of production costs.
Just waiting for trucks to come through and paying for
deliveries. Right.
Think about all the people. They be able to hire if they're
not dedicating such and such amount towards paying, you know
trucker wages. They're not directly paying
trucker wages. They pay trucking company,
right? But you know, the you should be
seeking out stable employment with those firms.
And in this case, we're talking about almost every firm in the
country one way or another as you're constantly reminded every
firm in the country is partially reliant on Goods delivered by
trucks, so I want to Thank everyone for watching the
libertarian Institute and keep my don't tread on anyone.
Mr. Groucho. Thank you so much for your time.
And your excellent answers. Yep.
Happy to be here. Thanks for having me.