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Moreover, taxes and inflation. 
Do not bring about new 

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resources. 
They only increase the amount of

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resources that are consumed 
according to politicians and 

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bureaucrats preferences. 
Welcome to Keith's night. 

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Don't tread on anyone in the 
libertarian Institute. 

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00:00:15,400 --> 00:00:18,100
Today. 
I'm joined by the author of this

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book, titled the broken window. 
Dr. Jonathan Newman. 

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00:00:21,400 --> 00:00:25,900
He is an assistant, professor of
economics and finance at Bryan 

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00:00:25,900 --> 00:00:29,800
College and Associated scholar 
of The mises Institute, dr. 

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00:00:30,000 --> 00:00:31,400
Newman. 
Thank you so much for your time.

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Oh, thanks for having me. 
What is economics? 

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Economics, I like to to Define 
it as a study of individuals, 

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making choices. 
At least that's how I introduced

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it to my students and I like to 
start with that sort of easy to 

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recite definition and then I'll 
get into the to the weeds a 

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little bit about. 
What does it mean? 

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What do we actually do in 
economics in terms of studying 

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individuals making choices? 
It turns out that one could 

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easily conflate that definition 
with perhaps the definition of 

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psychology because psychology is
also looking at people making 

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choices. 
So, the way I narrow it down by 

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saying, in economics, where you 
look at the things that go along

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with all people, all individuals
making choices for all time in 

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any culture in any sort of 
context and those are the sorts 

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of things that we look at in 
economics is, what are the 

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things that apply to everybody 
making choices. 

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And when we look at it, that 
way, the first things that we 

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discover is that, well, we need 
means to attain Our ends. 

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So we've got all these different
goals. 

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We've got Goods around us, and 
what that means is that we've 

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got to make choices about how we
use, this means to attain 

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designs. 
So that's how I usually get the 

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ball rolling. 
When I'm teaching what economics

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is to students? 
What differentiates a good 

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Economist from a bad Economist. 
Oh, man. 

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What an excellent question. 
Really the first thing that came

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to my mind was acceptance or 
rejection of says-- law. 

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I think, I think that's a really
good litmus test. 

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And the reason why is because if
you reject say's law, it means 

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that it means that you deny a 
very fundamental fact, which is 

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that production must proceed 
consumption. 

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We have to produce things 
before, we can consume in order 

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for you to demand something on 
the market. 

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You have to have First Supply 
something on the market. 

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The reason that's so important 
is because if you deny that it 

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opens the door for governments 
to fix problems. 

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00:02:32,600 --> 00:02:35,300
It opens the door for 
governments to fix. 

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What looks like a parent 
imbalances in either a micro 

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economic framework or a 
macroeconomic framework, where 

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the government is now, empowered
to say, hey, there's a mismatch 

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between supply and demand, where
there's there's something is 

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going wrong in the market. 
And so, now we have this 

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justification for intervening. 
So, say is laws that Good one, 

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obviously, If you deny other 
fundamental things like denying 

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scarcity, there are some people 
who do that, if you only employ 

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empirical methods, I would say 
that that's probably indicator 

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of a bad Economist that didn't 
really understand the the 

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epistemological status of good 
economic theory, so there's lots

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of good answers to that. 
But really a great question. 

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I love the answer about focusing
on Supply because usually, after

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Anytime I speak I'll talk about 
the Diamond Water Paradox and 

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say that Supply is. 
So vitally important that 

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anything that artificially 
restrict Supply licensing, all 

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these regulations. 
That means we're getting worse 

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quality in higher prices than 
we, otherwise would so bare 

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minimum. 
You just have to legalize, all 

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capitalist acts between 
consenting adults. 

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For the same reason. 
We should have legal interracial

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marriage and legal homosexual 
acts between consenting adults. 

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We got to extend it to this 
realm, so it feels He's like 

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you're not giving them a big ask
but meanwhile work that's 

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basically everything. 
We're rothbard got couldn't have

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asked for much more. 
I love focusing on the supply. 

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00:04:08,700 --> 00:04:13,700
Let's get into opportunity cost 
and why that is important. 

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So opportunity cost is one of 
those fundamental things that we

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discover when we first start 
doing economic. 

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So if economics is about 
individuals making choices, a 

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choice means that you choose 
something over, something else 

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and opportunity costs, refers to
that. 

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Something else. 
That's, that's discarded or for 

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gone. 
So, if you choose one plan of 

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actions, say you choose to do a 
as opposed to be, it means that 

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you can't do a. 
And so the value of a, what do 

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you For go at you can't do 
because you choose a is B. 

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And the reason that's important 
is because you have, you have to

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think about the true impact of 
policies. 

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The true impact of our of the 
decisions that we make, the true

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00:05:00,600 --> 00:05:05,000
impact of events that happen and
you held up a copy of the broken

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00:05:05,000 --> 00:05:07,300
window and that's really what 
that's all about is. 

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00:05:07,500 --> 00:05:11,300
It's basically just teaching the
lesson that what matters is the 

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opportunity cost. 
What matters is what can we not 

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00:05:14,300 --> 00:05:16,500
now? 
Now, have because of this thing.

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What can we not now, do or have 
or enjoy? 

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Because the window is broken or 
because the government passed 

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this law, or because I chose 
this as opposed to something 

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else. 
And so that's why, that's why 

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understanding what opportunity 
costs are is critically 

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00:05:31,600 --> 00:05:36,000
important because it allows you 
to see exactly what is the 

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impact of this choice or policy.
So when we look at an 

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infrastructure Bill why what's 
wrong with helping people and 

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creating jobs? 
Up, so you could think nothing 

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government has an unlimited 
supply of money. 

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The Janet Yellen just enters 
numbers into an account. 

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Explain how opportunity cost can
help me understand the real cost

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of say an infrastructure bill or
a stimulus package. 

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00:06:00,400 --> 00:06:02,900
Oh great question. 
So if you are just looking at 

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spending if you're just looking 
at the the flows of money that 

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are coming from government. 
It really don't necessarily see 

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the true cost of these massive 
stimulus bills and 

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infrastructure. 
Sure bills and other projects 

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that the government pursues, you
have to remember that underneath

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all of the flows of money is a 
real economy. 

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Real meaning tangible goods and 
services, real Labor's capital 

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goods, producers our own time 
that we have that we can produce

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things. 
And so whenever government does 

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something to to Simply stimulate
one thing to, you know, build a 

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new bridge, for example, it 
means that those resources Go 

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into making the bridge cannot be
used to do something else. 

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So, whenever the government 
decides to build anything, it 

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means that we have to use, 
scarce resources, people's time,

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skilled labor, not to mention 
the physical resources involved.

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We have to use all of that stuff
to make dep thing or repair that

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one thing and we can't do 
something else. 

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That might be more valuable. 
It might, it might be better for

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us to use those resources to do 
a different sort of project. 

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Correct, but when government 
decides we're going to do, we're

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going to do x with all of this 
money. 

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You don't see what we could have
done with all of those resources

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when something is privatized, 
that is really bad because it 

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means people focusing on their 
own self-interest. 

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When something is public. 
That means people who we elect 

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are acting in the collective 
interest of the rest of us, 

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what's wrong with that analysis.
If any well there's there's 

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definitely a lot wrong with 
that. 

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One issue is that we don't if 
you're just using government 

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spending and government power 
means that there's a disconnect 

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between the revenues that are 
collected and what the money is 

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spent on. 
So there's a huge disconnect. 

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00:08:01,000 --> 00:08:04,600
So when government is collecting
taxes, for example, or if 

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they're acquiring resources, 
through the use of monetary 

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inflation, they're getting all 
of that stuff and that's that. 

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And then they decide to spend 
money on a bunch of different 

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things. 
He's and probably the incentives

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of people in government in terms
of how they spend money is 

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probably going to be based on 
re-election or doing favors for 

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friends or doing favors for 
yourself as opposed to supplying

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something that consumers really 
want to demand. 

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So we can contrast that sort of 
set up where the revenues and 

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the in the spending on what's 
being produced or disconnected 

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with what happens in the market 
economy in the market economy 

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businesses only collect revenues
from consumers who decide to 

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spend The on the good that's 
produced by those producers. 

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So I decide I'm going to buy a 
cart full of groceries at the 

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grocery store. 
I have as the consumer. 

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I have to go in and say yeah, 
that's worth it to me. 

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Yes, that's worth it to me. 
I want to put three of those in 

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the cart because those are worth
it to me and that money that's 

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00:09:04,200 --> 00:09:07,700
spent by the consumer, goes to 
the person who is produced it. 

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It goes to the person who has 
made it available to Consumers. 

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And so there's a connection 
between what consumers As our 

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spending and what is is being 
provided by producers 

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entrepreneurs who are in the 
business of making those sorts 

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of decisions or providing those 
kids for consumers. 

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They are incentivized to profit 
meaning that they want revenues 

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00:09:28,300 --> 00:09:32,300
to exceed their costs. 
They want consumers to see art 

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00:09:32,300 --> 00:09:36,000
to, yeah, they weren't consumers
to see that what they're getting

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out of the exchange is more 
important to them than the money

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that they forgo by getting it 
and it's only worth it to the 

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00:09:43,200 --> 00:09:46,800
producers. 
If It cost of production are at 

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00:09:46,800 --> 00:09:50,100
least or at most less than that 
amount. 

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00:09:50,200 --> 00:09:53,100
So there's a profitability 
calculation that entrepreneurs 

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00:09:53,300 --> 00:09:56,500
undertake that there's no such 
connection when it comes to 

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government spending projects. 
And so, as a result we get all 

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00:09:59,600 --> 00:10:04,900
sorts of waste, we get all sorts
of boondoggle Bridges to Nowhere

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00:10:04,900 --> 00:10:08,500
type projects from government, 
but in the market economy, we 

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00:10:08,500 --> 00:10:13,300
see the massive consumers are 
provided with all sorts of their

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00:10:13,300 --> 00:10:18,200
wants and needs in an isn't way 
if we assume that Watchman will 

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00:10:18,200 --> 00:10:21,700
exist in any society Watchman, 
meaning any bad person who was 

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00:10:21,700 --> 00:10:24,700
greedy, who can heavily 
Influence People in a - 

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00:10:24,700 --> 00:10:29,400
mechanism, which sort of society
would we want to, what set of 

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00:10:29,400 --> 00:10:33,200
rules would we want to embrace 
to keep Watchman at Bay and put 

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00:10:33,200 --> 00:10:36,400
them in service to the public? 
Oh man. 

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00:10:36,500 --> 00:10:40,600
That is another good question. 
That was probably above my pay 

184
00:10:40,600 --> 00:10:44,500
grade in terms of my own 
preferences and ideas. 

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00:10:44,600 --> 00:10:49,800
I would say that c to keep 
Watchman. 

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00:10:49,800 --> 00:10:55,700
You said, Watchmen are defined 
as so the robbers, the yeah, but

187
00:10:55,700 --> 00:10:57,600
will usually when Watchman is 
used. 

188
00:10:57,600 --> 00:11:00,800
It's the people in power who end
up being corrupt. 

189
00:11:00,800 --> 00:11:05,100
Almost inevitably. 
So in order to sort of have a 

190
00:11:05,400 --> 00:11:10,100
society that puts Watchman, that
puts Watchman in a place where 

191
00:11:10,100 --> 00:11:13,900
they can only benefit themselves
by benefiting the public you 

192
00:11:13,900 --> 00:11:16,200
would want us to Some of 
voluntary exchange and 

193
00:11:16,200 --> 00:11:18,900
competition. 
But we're as well with the 

194
00:11:18,900 --> 00:11:21,700
state. 
They can basically print 

195
00:11:21,700 --> 00:11:24,800
whatever tax whatever. 
And anyone who resists them is 

196
00:11:24,800 --> 00:11:28,000
an evil terrorist or the of 
solitary confinement. 

197
00:11:28,300 --> 00:11:28,900
Sure. 
Yeah. 

198
00:11:28,900 --> 00:11:33,400
So just to expand on that. 
The the way we keep businesses 

199
00:11:33,400 --> 00:11:36,600
in the market economy 
accountable is with our spending

200
00:11:37,000 --> 00:11:41,100
so we can decide to spend money 
on this good or that good. 

201
00:11:41,400 --> 00:11:43,700
If we don't like what a business
is doing or what? 

202
00:11:43,700 --> 00:11:45,500
There. 
Do you think that we can 

203
00:11:45,500 --> 00:11:47,600
restrict that because say, I 
don't like what you're doing. 

204
00:11:47,600 --> 00:11:48,600
I don't like what you've 
produced. 

205
00:11:48,600 --> 00:11:51,600
I'm not going to spend money on 
your good and so that keeps that

206
00:11:51,600 --> 00:11:54,200
keeps businesses in the market 
economy accountable to what 

207
00:11:54,200 --> 00:11:58,700
people want accountable to 
people's valuations, but you 

208
00:11:58,700 --> 00:12:04,200
write with government actors 
with, with Watchman as you 

209
00:12:04,200 --> 00:12:09,600
described, there's no, there's 
no real way to do that except 

210
00:12:09,600 --> 00:12:13,800
through the rules of thumb 
ad-hoc, sorts of things like we 

211
00:12:13,800 --> 00:12:14,900
can vote. 
Vote. 

212
00:12:15,100 --> 00:12:20,300
We can we can we can say that 
the people who are The Watchmen 

213
00:12:20,300 --> 00:12:23,500
are based on hereditary. 
So like a monarchy sort of 

214
00:12:23,500 --> 00:12:25,800
thing. 
So you have to use those sorts 

215
00:12:25,800 --> 00:12:30,300
of non-market rules to make 
those decisions, but it's clear 

216
00:12:30,300 --> 00:12:32,600
at least is clear to me that in 
a market economy. 

217
00:12:33,100 --> 00:12:37,100
The feedback is much more direct
and it's much more precise in 

218
00:12:37,100 --> 00:12:39,600
terms of as related to Consumer 
values. 

219
00:12:40,500 --> 00:12:44,100
Dealing with the real world 
effects of what market economies

220
00:12:44,100 --> 00:12:47,300
produce. 
Do we see wealth staying in the 

221
00:12:47,300 --> 00:12:50,900
hands of a few for Generations? 
After Generations, but Rich 

222
00:12:50,900 --> 00:12:53,900
getting richer and constantly 
exploiting the poor. 

223
00:12:55,100 --> 00:12:58,600
Well, it sort of depends in a 
market economy, know in a market

224
00:12:58,600 --> 00:13:01,000
economy. 
The only way to stay rich is to 

225
00:13:01,000 --> 00:13:03,700
continue to provide what 
consumers want. 

226
00:13:03,700 --> 00:13:08,900
The only way to hold on to your 
wealth in acquire wealth is to 

227
00:13:08,900 --> 00:13:11,100
serve your fellow, man. 
That's the only way that you can

228
00:13:11,100 --> 00:13:14,200
do it. 
However, with with the with 

229
00:13:14,200 --> 00:13:17,200
government, there's all sorts of
ways that you can explore create

230
00:13:17,200 --> 00:13:20,400
wealth, and increase your own 
income, at the expense of other 

231
00:13:20,400 --> 00:13:24,500
people without having first 
provided, you know, some sort of

232
00:13:24,500 --> 00:13:25,900
value. 
Good to Consumers. 

233
00:13:26,100 --> 00:13:29,200
So like in the case of 
government money printing, 

234
00:13:29,200 --> 00:13:32,900
there's this thing called can 
see on effects where if, if the 

235
00:13:32,900 --> 00:13:35,800
government or if there's an 
increase in the money supply, 

236
00:13:36,100 --> 00:13:38,800
somebody gets to spend that 
money first and they're able to 

237
00:13:38,800 --> 00:13:42,400
use that money to buy all sorts 
of goods for themselves, maybe 

238
00:13:42,400 --> 00:13:47,600
even productive capital goods or
ownership stakes in a company so

239
00:13:47,600 --> 00:13:52,300
that they can now increase their
own income after the inflation 

240
00:13:52,300 --> 00:13:54,000
after the increase in the money 
supply. 

241
00:13:54,300 --> 00:13:56,300
And as The money ripples through
the economy. 

242
00:13:56,300 --> 00:14:00,300
That's what can't see on effects
described then then all of the 

243
00:14:00,300 --> 00:14:03,800
prices rise. 
So being the first spinder of 

244
00:14:03,800 --> 00:14:06,800
new money allows you to 
expropriate wealth from 

245
00:14:06,800 --> 00:14:10,300
everybody else. 
Whereas you wouldn't be able to 

246
00:14:10,300 --> 00:14:13,200
do that if we had a free market 
for money, provision. 

247
00:14:14,300 --> 00:14:17,300
What are counterfactual 's and 
why are they important? 

248
00:14:18,300 --> 00:14:19,700
Oh, we already talked about 
that. 

249
00:14:19,700 --> 00:14:21,800
Actually, when we talked about 
opportunity costs. 

250
00:14:22,100 --> 00:14:25,400
So opportunity cost is a 
counterfactual when you choose 

251
00:14:25,400 --> 00:14:28,900
a, instead of be the, actual 
course of events is a. 

252
00:14:29,000 --> 00:14:32,500
So I choose course, of course of
events or State of Affairs. 

253
00:14:32,500 --> 00:14:36,400
A, and then whatever is for 
gone, the highest-valued end for

254
00:14:36,400 --> 00:14:38,300
gone, or highest-valued State of
Affairs. 

255
00:14:38,300 --> 00:14:42,300
That's for Kong is be, it's 
whatever you don't choose. 

256
00:14:42,700 --> 00:14:47,900
So counterfactual 's are 
important to, to remember, and 

257
00:14:48,100 --> 00:14:52,700
Because we need it to realize. 
What is the true effect of a 

258
00:14:52,700 --> 00:14:57,200
certain policy for example, so 
if we decide to go in with the 

259
00:14:57,200 --> 00:15:00,400
previous example, if the 
government decides to build a 

260
00:15:00,400 --> 00:15:03,700
new bridge, the counterfactual 
course of the Vince's. 

261
00:15:03,700 --> 00:15:06,200
What could we have done with all
the resources that went into 

262
00:15:06,200 --> 00:15:09,900
building that bridge? 
So if we the bridge might be 

263
00:15:09,900 --> 00:15:14,000
nice, it might be a bridge that 
connects two cities that 

264
00:15:14,000 --> 00:15:17,600
otherwise wouldn't be connected,
but we don't know what could 

265
00:15:17,600 --> 00:15:19,300
have been. 
Done with those same resources. 

266
00:15:19,300 --> 00:15:21,200
We don't know if maybe the 
bridge could have been built in 

267
00:15:21,200 --> 00:15:24,800
another place. 
We don't know if the the 

268
00:15:24,800 --> 00:15:28,000
parameters of the bridge like 
its weight rating and its 

269
00:15:28,000 --> 00:15:29,800
length. 
We don't know if it would have 

270
00:15:29,800 --> 00:15:31,800
been better for its have been 
built in a different way. 

271
00:15:32,000 --> 00:15:35,300
Those are all counterfactual 's 
the, it's the Alternatives. 

272
00:15:35,300 --> 00:15:36,900
It's the things that we don't 
see. 

273
00:15:36,900 --> 00:15:39,700
It's the things that could have 
happened but didn't because we 

274
00:15:39,700 --> 00:15:44,900
chose a particular course with 
regard to mainstream economics. 

275
00:15:45,000 --> 00:15:50,500
What are some other shortcomings
in the Empiricism in the 

276
00:15:50,500 --> 00:15:54,600
empirical attempt to understand 
economics for example, in order 

277
00:15:54,600 --> 00:15:57,600
to determine whether or not the 
minimum wage should exist. 

278
00:15:57,600 --> 00:15:59,400
We need to have a number of 
studies. 

279
00:15:59,400 --> 00:16:01,800
We need to engage in a number of
tests. 

280
00:16:01,800 --> 00:16:04,600
What's wrong with? 
Let's look at the studies when 

281
00:16:04,900 --> 00:16:08,600
trying to have a develop a 
significant economic theory. 

282
00:16:09,700 --> 00:16:13,500
So you phrase that perfectly by 
the way, so the problem is 

283
00:16:13,500 --> 00:16:17,900
trying to use observation trying
to use our own. 

284
00:16:18,000 --> 00:16:23,900
Own view of what actually 
happens to inform our Theory. 

285
00:16:24,000 --> 00:16:27,100
So we can't use, observation to 
say, this is what economic 

286
00:16:27,100 --> 00:16:31,200
theory, economic theory is built
by logical deduction. 

287
00:16:31,300 --> 00:16:34,800
So if like I said, economics is 
the study of individuals, making

288
00:16:34,800 --> 00:16:38,800
choices and choices involve us 
for going one end over. 

289
00:16:38,800 --> 00:16:43,600
Another, if the, if we have a 
set of means that could be used 

290
00:16:43,600 --> 00:16:49,100
to satisfy all sorts of wants, 
it means that As we as we 

291
00:16:49,100 --> 00:16:52,200
acquire additional units of that
mean, each one would go towards 

292
00:16:52,200 --> 00:16:55,300
less important ends. 
All of these things are derived.

293
00:16:55,300 --> 00:16:57,700
They're all put together. 
Logically notice. 

294
00:16:57,700 --> 00:16:59,600
I did. 
I just sat in my chair to 

295
00:16:59,600 --> 00:17:02,000
develop that line of thought. 
I didn't have to go out and 

296
00:17:02,000 --> 00:17:05,800
observe people making actual 
choices to come up with the law 

297
00:17:05,800 --> 00:17:08,400
of diminishing marginal, utility
the law of demand the loss of 

298
00:17:08,400 --> 00:17:12,500
why they're there. 
True logically there, there 

299
00:17:12,500 --> 00:17:15,000
apodictic lie as mises like to 
say that politics. 

300
00:17:15,000 --> 00:17:21,000
If we certain that that the 
Relationships are that way as 

301
00:17:21,000 --> 00:17:24,300
opposed to empirical methods, 
empirical methods. 

302
00:17:26,000 --> 00:17:29,200
We could see some relationship 
over one time period in a 

303
00:17:29,200 --> 00:17:32,400
different relationship over 
another time period in when 

304
00:17:32,400 --> 00:17:36,100
we're making observations, we 
don't see all of the confounding

305
00:17:36,100 --> 00:17:38,700
variables. 
We don't see all the things that

306
00:17:38,700 --> 00:17:42,200
are at play that are determining
the outcomes that were looking 

307
00:17:42,200 --> 00:17:44,800
at. 
So one thing that we could see 

308
00:17:45,700 --> 00:17:49,600
Is we could see a government 
implements a new higher minimum 

309
00:17:49,600 --> 00:17:54,200
wage and we could see employment
increase, that doesn't mean that

310
00:17:54,600 --> 00:17:57,500
minimum wage has caused an 
increase in employment. 

311
00:17:57,500 --> 00:18:01,500
We know from economic theory 
that minimum wage is cause a 

312
00:18:01,500 --> 00:18:05,700
surplus of Labor supplied over 
labor demand at the higher wage 

313
00:18:05,700 --> 00:18:08,600
rate, which means that there's 
something else going on. 

314
00:18:08,600 --> 00:18:12,100
Something else has changed in 
our observation period that has 

315
00:18:12,100 --> 00:18:15,000
caused employment the number of 
people employed Zen. 

316
00:18:15,200 --> 00:18:17,700
Increase. 
Well, we can say with economic 

317
00:18:17,700 --> 00:18:20,700
theory. 
However, is that if the minimum 

318
00:18:20,700 --> 00:18:24,200
wage hadn't been enacted, we 
would have even more employment 

319
00:18:24,200 --> 00:18:28,300
than was observed. 
So, so that's the benefit of 

320
00:18:28,300 --> 00:18:32,700
economic theory is derived in 
that logical or praxeological 

321
00:18:32,900 --> 00:18:34,700
method. 
As opposed to just making a 

322
00:18:34,700 --> 00:18:37,400
bunch of observations and seeing
what sort of relationships we 

323
00:18:37,400 --> 00:18:39,800
can we can find with the 
numbers. 

324
00:18:40,800 --> 00:18:45,000
I want to give you three things 
that I learned at, Arizona. 

325
00:18:45,200 --> 00:18:49,500
University in the economics 
Department, you tell me if these

326
00:18:49,500 --> 00:18:52,700
economic narratives historical, 
narratives, are accurate or 

327
00:18:52,700 --> 00:18:57,200
inaccurate. 
America is very wealthy only as 

328
00:18:57,200 --> 00:19:01,500
a cause of result of large 
amounts of cheap labor under the

329
00:19:01,500 --> 00:19:04,300
guise of slavery. 
All right. 

330
00:19:04,400 --> 00:19:08,200
I don't, I don't think so. 
I think, what really drove 

331
00:19:08,400 --> 00:19:12,200
economic growth in the United 
States was the relatively free 

332
00:19:12,200 --> 00:19:14,300
markets. 
It was the, it was the 

333
00:19:14,900 --> 00:19:19,300
individualism, championing 
championing of Entrepreneurship.

334
00:19:19,300 --> 00:19:23,400
And the laws that were pretty 
conducive for anybody to start a

335
00:19:23,408 --> 00:19:26,800
business and grow it, and own it
and take responsibility for it. 

336
00:19:26,900 --> 00:19:30,300
I think that's a better 
predictor of what drives 

337
00:19:30,300 --> 00:19:35,200
sustainable economic growth as 
opposed to As opposed to finding

338
00:19:35,200 --> 00:19:39,400
cheap labor somewhere. 
It's frequently said that health

339
00:19:39,400 --> 00:19:42,400
care costs are very high in 
America and America has a 

340
00:19:42,400 --> 00:19:47,600
heavily privatized Health Care 
system, are there examples of 

341
00:19:47,600 --> 00:19:50,600
products and services, 
increasing in quality and 

342
00:19:50,600 --> 00:19:55,700
decreasing and cost as a causal 
result of being done in the free

343
00:19:55,700 --> 00:19:57,700
market, as opposed to the 
government sector? 

344
00:19:57,700 --> 00:20:03,900
I think we see that when when 
things are left to themselves, 

345
00:20:03,900 --> 00:20:07,100
when an industry is left alone 
by the government, we see, 

346
00:20:07,500 --> 00:20:09,900
Quality increase in prices go 
down. 

347
00:20:10,100 --> 00:20:13,000
Probably the greatest example of
this, that comes to my mind is 

348
00:20:13,000 --> 00:20:18,000
like TVs. 
So ten years ago, a large, you 

349
00:20:18,000 --> 00:20:21,200
know, 65 inch TV that was you 
know, 4K was thousands of 

350
00:20:21,200 --> 00:20:23,900
dollars. 
So like a really nice TV back 

351
00:20:23,900 --> 00:20:26,200
then was was thousands and 
thousands of dollars. 

352
00:20:26,500 --> 00:20:31,300
But if you you know, stroll down
the aisles at Walmart today, you

353
00:20:31,300 --> 00:20:35,300
can see the same TV spec for 
spec as you know, a few hundred 

354
00:20:35,300 --> 00:20:38,000
dollars, and so there's not a 
lot Lot of energy. 

355
00:20:38,000 --> 00:20:41,700
There's not a lot of regulation 
of TV, production in the United 

356
00:20:41,700 --> 00:20:44,300
States, including for imports 
because a lot of those are 

357
00:20:44,300 --> 00:20:47,800
probably produce somewhere else.
But the point is, you see, not a

358
00:20:47,808 --> 00:20:51,000
lot of Regulation, not a lot of 
government involvement and 

359
00:20:51,000 --> 00:20:54,400
product, quality has increased 
tremendously and prices have 

360
00:20:54,400 --> 00:20:57,100
decreased. 
You see the opposite happening 

361
00:20:57,100 --> 00:20:59,400
whenever the whenever the 
government gets involved. 

362
00:20:59,400 --> 00:21:02,400
I mean, for obvious reasons and 
we've already discussed the 

363
00:21:02,400 --> 00:21:06,800
theory of why government can't 
make those efficient choices. 

364
00:21:06,800 --> 00:21:10,100
Like we see Business is making 
in the market economy. 

365
00:21:10,700 --> 00:21:16,200
The main issue being the lack of
the ability to calculate profit,

366
00:21:16,200 --> 00:21:19,100
the lack of the ability to 
Compare costs and revenues. 

367
00:21:19,900 --> 00:21:23,900
So when someone says yes health 
care costs have significantly 

368
00:21:23,900 --> 00:21:29,000
increased and with a growing FDA
a growing CDC growing Medicare 

369
00:21:29,000 --> 00:21:32,700
growing Medicaid, but thank God 
for all those things or prices 

370
00:21:32,700 --> 00:21:34,300
would be even higher than they 
already are. 

371
00:21:34,300 --> 00:21:36,200
Now. 
What do you say to that mindset?

372
00:21:36,700 --> 00:21:39,200
I would simply Please say that 
the theory doesn't bear that 

373
00:21:39,200 --> 00:21:41,600
out. 
And also, all of the, the things

374
00:21:41,600 --> 00:21:43,900
that we can observe all the 
industries that we can see where

375
00:21:43,900 --> 00:21:47,300
prices have decreased without 
government, involvement seem to 

376
00:21:50,000 --> 00:21:54,800
disprove refute that claim 
imperialism, made the West Rich,

377
00:21:54,800 --> 00:21:59,600
true or false. 
He said I would. 

378
00:22:01,300 --> 00:22:03,400
That would depend on the time 
frame. 

379
00:22:03,500 --> 00:22:06,000
Although I would still 
fundamentally reject. 

380
00:22:06,000 --> 00:22:10,000
That claim. 
The main thing that drove. 

381
00:22:11,400 --> 00:22:14,600
wealth creation in the in 
western civilization I think was

382
00:22:14,900 --> 00:22:17,400
it was the rules, the 
institutions that they adopted 

383
00:22:17,900 --> 00:22:21,000
that being private property, 
individualism the rule of law, 

384
00:22:22,000 --> 00:22:26,600
the law treating everybody in 
the in the same sort of way as 

385
00:22:26,600 --> 00:22:30,900
opposed to you know, who's 
winning wars and the expanse of 

386
00:22:30,900 --> 00:22:34,200
an Empire for example as sort of
out of my wheelhouse though, but

387
00:22:34,200 --> 00:22:37,500
that's that's what I would say 
and then just final narrative 

388
00:22:38,100 --> 00:22:41,800
countries are wealthy and poor 
depending on Man of Natural 

389
00:22:41,800 --> 00:22:45,500
Resources, they have I think 
natural resources do have some 

390
00:22:45,500 --> 00:22:50,000
impact, but we have really, 
really good examples of 

391
00:22:50,000 --> 00:22:53,400
countries that don't have any 
natural resources, whatever and 

392
00:22:53,400 --> 00:22:56,400
are very rich. 
Some good examples would be like

393
00:22:56,400 --> 00:23:00,900
small countries in Asia, are 
small regions in Asia, like, 

394
00:23:00,900 --> 00:23:06,300
Singapore and Hong Kong which 
are extremely wealthy, but no, 

395
00:23:06,300 --> 00:23:08,400
real natural resources to speak 
of. 

396
00:23:09,000 --> 00:23:10,500
So, obviously, it's something 
else. 

397
00:23:10,500 --> 00:23:12,300
That's Determining the level of 
wealth. 

398
00:23:12,300 --> 00:23:15,600
And once again, I would point to
the institutions that allow 

399
00:23:15,700 --> 00:23:20,300
entrepreneurs to start and run 
businesses as being the ones 

400
00:23:20,300 --> 00:23:23,400
that determine good sustainable 
economic growth. 

401
00:23:24,200 --> 00:23:27,400
What is subjective value? 
And why is it important? 

402
00:23:28,600 --> 00:23:33,300
Good question, subjective value.
That's the only way really to 

403
00:23:33,300 --> 00:23:36,100
conceive of value in the 
economic sense. 

404
00:23:36,700 --> 00:23:39,000
So subjective meaning that it's 
personal. 

405
00:23:39,000 --> 00:23:43,900
So, one person values something 
in one way. 

406
00:23:43,900 --> 00:23:45,800
And another person values that 
are another way. 

407
00:23:46,300 --> 00:23:50,500
There's no real objective value 
built into our intrinsic value 

408
00:23:50,500 --> 00:23:54,600
built into an object. 
So one opposing Theory to the 

409
00:23:54,600 --> 00:23:57,500
subjective theory of value, use 
the labor theory of value. 

410
00:23:57,500 --> 00:24:00,500
That the A good is dependent on 
how many labor hours are put 

411
00:24:00,500 --> 00:24:03,200
into it. 
That was, that was popular in 

412
00:24:03,208 --> 00:24:06,000
the, but the classical 
Economist, and it's also popular

413
00:24:06,000 --> 00:24:11,200
among Marxist today, but I mean,
there's not, you can show lots 

414
00:24:11,200 --> 00:24:13,500
and lots of examples to show how
absurd that is. 

415
00:24:13,500 --> 00:24:18,500
Like, if I go outside and I dig 
a hole, fill it back up and 

416
00:24:18,500 --> 00:24:21,600
redig it over and over again. 
And so that I've spent a whole 

417
00:24:21,600 --> 00:24:24,700
day digging and feeling back in 
that hole. 

418
00:24:25,400 --> 00:24:27,100
I haven't made something of 
value. 

419
00:24:27,100 --> 00:24:30,300
There's no. 
Value in the whole or in the 

420
00:24:30,500 --> 00:24:31,600
covered ground. 
Whatever. 

421
00:24:31,600 --> 00:24:36,700
I ended up with, at the end 
value, is based on how we 

422
00:24:36,700 --> 00:24:40,100
perceive objects and it's a, in 
a personal sort of sense. 

423
00:24:40,100 --> 00:24:43,500
It's not something that we can 
say is built into an object 

424
00:24:43,500 --> 00:24:46,500
based on it, based on what went 
into making it. 

425
00:24:47,900 --> 00:24:50,700
Lack of government. 
Regulation causes Financial 

426
00:24:50,700 --> 00:24:53,500
panics, recessions and 
depressions. 

427
00:24:53,500 --> 00:24:59,500
How do you respond? 
So, there's an important caveat 

428
00:24:59,500 --> 00:25:01,900
here. 
So I disagree with that. 

429
00:25:02,000 --> 00:25:08,100
I think that there's nothing in 
the market economy that causes 

430
00:25:08,800 --> 00:25:12,800
crises to be inevitable. 
There's nothing in the market 

431
00:25:12,800 --> 00:25:16,000
economy that causes what 
rothbard called the cluster of 

432
00:25:16,000 --> 00:25:19,200
Errors to occur, where they're 
all of the sudden, we realize 

433
00:25:19,200 --> 00:25:22,900
that everybody made these sorts 
of errors in the past. 

434
00:25:22,900 --> 00:25:25,100
And so we have to liquidate our 
investments and we have a 

435
00:25:25,108 --> 00:25:27,400
business cycle. 
There's In the market economy, 

436
00:25:27,400 --> 00:25:30,100
that would cause that. 
Now the caveat that I mentioned 

437
00:25:30,100 --> 00:25:33,700
is that there's this debate 
among economists today over 

438
00:25:33,900 --> 00:25:37,700
whether or not fractional, 
Reserve banking would bring that

439
00:25:37,700 --> 00:25:40,300
about and whether or not 
fractional Reserve banking is 

440
00:25:40,300 --> 00:25:43,000
something that would exist in a 
market economy, in a free 

441
00:25:43,000 --> 00:25:46,700
banking setup. 
I'm of the opinion that if we 

442
00:25:46,700 --> 00:25:49,700
had Free banking, meaning that 
there's no Central Bank, that's,

443
00:25:50,000 --> 00:25:55,100
that's making rules and being a 
lender of Last Resort for all of

444
00:25:55,100 --> 00:25:57,900
the private banks that What 
would happen is that those Banks

445
00:25:57,900 --> 00:26:02,000
would choose to hold 100% 
reserves under Compass under 

446
00:26:02,000 --> 00:26:05,500
competitive issues? 
And the reason why is because 

447
00:26:05,600 --> 00:26:09,300
One Bank could drive another 
bank out of business by simply 

448
00:26:09,300 --> 00:26:11,300
Redeeming the overextended 
notes. 

449
00:26:11,400 --> 00:26:14,200
So if banks are keeping 
fractional reserves in a free 

450
00:26:14,200 --> 00:26:17,700
banking set up, it seems like 
the incentives are built in for 

451
00:26:18,000 --> 00:26:20,900
banks to keep 100% reserves and 
not fractional reserves. 

452
00:26:21,600 --> 00:26:25,100
So I know that's probably not 
what you were attending with 

453
00:26:25,100 --> 00:26:28,300
that question, but but If it's 
true that fracture Reserve 

454
00:26:28,300 --> 00:26:32,300
banking would exist in a free 
market, then it seems like we 

455
00:26:32,300 --> 00:26:36,900
could say that business Cycles 
might occur if that, if that, if

456
00:26:36,900 --> 00:26:42,900
that is in play, but but I don't
think that it would, what is 

457
00:26:42,900 --> 00:26:46,300
Austrian business cycle Theory? 
Great question. 

458
00:26:46,300 --> 00:26:50,000
So Austrian business cycle 
Theory, describes the artificial

459
00:26:50,000 --> 00:26:54,500
or unsustainable Booms that lead
to an inevitable bust. 

460
00:26:55,600 --> 00:26:59,200
The culprit is an artificial 
credit expansion. 

461
00:26:59,300 --> 00:27:04,700
So if we decide to extend more 
loans without increasing your 

462
00:27:04,700 --> 00:27:07,900
savings, in the form of 
fractional Reserve banking or 

463
00:27:07,900 --> 00:27:10,500
with the Central Bank deciding 
to increase the amount of 

464
00:27:10,500 --> 00:27:13,100
reserves. 
So it's that commercial Banks, 

465
00:27:13,100 --> 00:27:17,100
can extend more loans. 
If those new loans are not are 

466
00:27:17,100 --> 00:27:19,500
issued in excess of real 
savings. 

467
00:27:19,900 --> 00:27:22,900
It means that entrepreneurs are 
going to undertake new longer 

468
00:27:22,900 --> 00:27:25,900
production processes. 
They're going to Start all these

469
00:27:25,900 --> 00:27:28,000
new projects and consumers are 
going to increase their 

470
00:27:28,000 --> 00:27:30,600
consumption as well. 
Usually the main indicator. 

471
00:27:30,600 --> 00:27:35,000
This is an artificially low 
interest rate that that allows 

472
00:27:35,000 --> 00:27:37,800
entrepreneurs to Discount future
cash flows less. 

473
00:27:37,800 --> 00:27:39,800
And so they start a bunch of new
projects. 

474
00:27:40,100 --> 00:27:44,000
Lots of new spending on the part
of consumers and producers and 

475
00:27:44,000 --> 00:27:46,300
the types of projects that are 
undertaken, are the ones that 

476
00:27:46,300 --> 00:27:52,300
take a little bit longer. 
The problem is to follow up on 

477
00:27:52,300 --> 00:27:54,800
or to continue a longer 
production. 

478
00:27:55,100 --> 00:27:57,200
Process. 
You need more goods and 

479
00:27:57,200 --> 00:28:00,300
services. 
So if you want to extend 

480
00:28:00,300 --> 00:28:04,100
production, you actually have to
make more Goods available for 

481
00:28:04,100 --> 00:28:06,800
producers to complete those 
projects. 

482
00:28:07,600 --> 00:28:10,400
But if we have an artificial 
credit expansion, meaning it's 

483
00:28:10,400 --> 00:28:14,200
not backed by savings that those
resources don't exist. 

484
00:28:14,200 --> 00:28:17,600
Those resources aren't there for
producers to complete all those 

485
00:28:17,600 --> 00:28:20,900
new products that they started. 
So what happens is interest 

486
00:28:20,900 --> 00:28:24,200
rates eventually rise, probably 
from a central bank deciding to 

487
00:28:25,200 --> 00:28:28,100
Put the brakes on inflation, 
that's happening. 

488
00:28:29,000 --> 00:28:31,200
And we had to liquidate all 
those projects. 

489
00:28:31,200 --> 00:28:34,300
So the entrepreneurs realize I 
cannot continue this. 

490
00:28:34,500 --> 00:28:37,600
This project. 
I I cannot profitably finish 

491
00:28:37,600 --> 00:28:40,300
this production project that I 
started in the past. 

492
00:28:40,400 --> 00:28:43,500
So they have to lay off workers.
They have to liquidate capital 

493
00:28:43,500 --> 00:28:47,300
goods. 
Consumers are also, there's lots

494
00:28:47,300 --> 00:28:49,900
of uncertainties of consumers, 
Universe trip their own 

495
00:28:49,900 --> 00:28:53,200
spending, and we have a, in the 
boom. 

496
00:28:53,200 --> 00:28:55,800
We had lots of increases in 
spending and It increases in 

497
00:28:55,800 --> 00:28:57,700
prices. 
We have the opposite during the 

498
00:28:57,700 --> 00:29:01,100
bus, and it's a painful sort of 
bust because people have to find

499
00:29:01,100 --> 00:29:05,700
new jobs producers have to sell 
their, their lines, their 

500
00:29:05,700 --> 00:29:09,400
capital goods at a loss. 
They have to, you know, start 

501
00:29:09,400 --> 00:29:12,600
from scratch so to speak because
all of the decisions that they 

502
00:29:12,600 --> 00:29:16,000
made during the boom, were 
malinvestments. 

503
00:29:16,000 --> 00:29:19,300
They were incorrect decisions 
about how Capital should be 

504
00:29:19,300 --> 00:29:21,800
allocated in a production 
process. 

505
00:29:22,600 --> 00:29:27,200
So if we have this depletion of 
savings bless savings, then we 

506
00:29:27,200 --> 00:29:30,700
otherwise would have had under 
free market conditions. 

507
00:29:30,900 --> 00:29:36,300
What's wrong with government? 
Giving everyone a Ubi or a 

508
00:29:36,300 --> 00:29:38,900
stimulus check to ramp things 
back up. 

509
00:29:39,500 --> 00:29:42,100
This is often the response from 
governments in the events of a 

510
00:29:42,108 --> 00:29:43,900
bust. 
Usually what happens is governs 

511
00:29:43,900 --> 00:29:48,100
decide to either prop up prices 
or prop up the mound vestments. 

512
00:29:48,100 --> 00:29:51,800
Or as you said, you know, give 
increase the money supply and 

513
00:29:52,300 --> 00:29:55,100
give it to Consumers so that 
they can keep their their 

514
00:29:55,100 --> 00:29:58,600
spending inflated. 
The problem with this is that 

515
00:29:58,600 --> 00:30:00,000
that doesn't address the 
problem. 

516
00:30:00,600 --> 00:30:04,400
The problem is that we don't 
have enough stuff to finish 

517
00:30:04,400 --> 00:30:05,800
those. 
Those projects that were 

518
00:30:05,800 --> 00:30:08,200
started. 
We don't have enough consumer 

519
00:30:08,200 --> 00:30:10,200
goods. 
We don't have enough capital 

520
00:30:10,200 --> 00:30:13,400
goods to finish all of those 
projects that were started in 

521
00:30:13,400 --> 00:30:14,800
the boom. 
Baking. 

522
00:30:14,800 --> 00:30:18,500
A bunch of new green, slips of 
paper doesn't make it possible 

523
00:30:18,500 --> 00:30:21,300
for us to make more houses or 
make bigger houses. 

524
00:30:21,600 --> 00:30:24,700
It doesn't make Possible for us 
to build. 

525
00:30:24,700 --> 00:30:29,200
All these brand new 
manufacturing factories. 

526
00:30:29,200 --> 00:30:33,500
It doesn't it doesn't make it 
possible for us to, to Really in

527
00:30:33,500 --> 00:30:35,200
real sense. 
Increase production. 

528
00:30:35,200 --> 00:30:38,400
All it does is allows us to bid 
up the prices of things that 

529
00:30:38,400 --> 00:30:44,300
already exist on page. 19 of 
economic depressions, their 

530
00:30:44,300 --> 00:30:49,400
cause and cure rothbard says, 
invariably the booms and busts 

531
00:30:49,500 --> 00:30:53,300
are much more intense and severe
in the The capital, goods 

532
00:30:53,300 --> 00:30:56,500
Industries, the industries, 
making machines and Equipment. 

533
00:30:56,500 --> 00:31:00,400
The ones producing industrial 
raw materials, or constructing 

534
00:31:00,400 --> 00:31:03,200
industrial plants. 
Then in the industries making 

535
00:31:03,200 --> 00:31:05,500
consumer goods. 
What does that mean? 

536
00:31:06,500 --> 00:31:09,200
So, what he's referring to there
is, there's more variation in 

537
00:31:09,200 --> 00:31:13,300
the prices of capital goods than
there is in the prices of 

538
00:31:13,400 --> 00:31:15,800
consumer goods in a business 
cycle. 

539
00:31:16,200 --> 00:31:20,800
And one reason why is because 
the capital goods that are made 

540
00:31:20,800 --> 00:31:25,100
during the boom are Specific 
their specific meaning that they

541
00:31:25,100 --> 00:31:28,200
apply to approved. 
It a particular type of 

542
00:31:28,200 --> 00:31:31,700
production process. 
So if we if we make a bunch of 

543
00:31:31,700 --> 00:31:37,600
new, if we make a bunch of new 
trucks that turn and pour 

544
00:31:37,600 --> 00:31:41,100
concrete in the artificial boom,
if that's the sort of 

545
00:31:41,100 --> 00:31:45,100
malinvestment that we make, we 
can't in the bust, phase 

546
00:31:45,600 --> 00:31:51,500
repurpose the concrete trucks in
a way that would that, that 

547
00:31:51,500 --> 00:31:54,900
would say, Satisfy consumers, 
hunger for examples, like we 

548
00:31:54,900 --> 00:31:58,000
can't eat the truck. 
You can't use the truck and 

549
00:31:58,000 --> 00:32:02,400
other production processes. 
Like it's probably not very 

550
00:32:02,400 --> 00:32:05,900
applicable to education which 
people demand. 

551
00:32:06,200 --> 00:32:11,400
So because we make specific 
capital goods in the artificial.

552
00:32:11,400 --> 00:32:13,400
Boom. 
It's harder for us to find 

553
00:32:13,400 --> 00:32:17,500
alternative uses at a similar 
price for those goods in the 

554
00:32:17,500 --> 00:32:20,400
bus. 
However, with more nonspecific 

555
00:32:20,400 --> 00:32:22,700
Goods, like consumer goods and 
also, Neighbor. 

556
00:32:22,900 --> 00:32:26,100
It is a little bit easier for us
to find the alternative 

557
00:32:26,100 --> 00:32:29,400
profitable uses when the 
correction time comes. 

558
00:32:29,400 --> 00:32:32,500
And so that's one reason why we 
see more fluctuation in capital 

559
00:32:32,500 --> 00:32:36,300
goods prices than other prices. 
What is the Socialist 

560
00:32:36,300 --> 00:32:39,200
calculation problem? 
Oh, great question. 

561
00:32:41,500 --> 00:32:45,500
So I mentioned earlier that the 
way that we economize 

562
00:32:45,900 --> 00:32:48,600
production, the way that we 
efficiently produce things that 

563
00:32:48,600 --> 00:32:53,500
consumers value is with the 
profit and loss, accounting by 

564
00:32:53,500 --> 00:32:59,600
comparing costs and revenues. 
If we have a government policy 

565
00:32:59,700 --> 00:33:04,900
that says producers are, are not
going to own factors of 

566
00:33:04,900 --> 00:33:07,600
production. 
It means that they can't 

567
00:33:07,700 --> 00:33:09,600
exchange those factors of 
production. 

568
00:33:09,600 --> 00:33:12,500
We won't have This is for those 
factors of production and it 

569
00:33:12,500 --> 00:33:15,500
means we can't calculate costs. 
We can't add up the costs of 

570
00:33:15,500 --> 00:33:17,700
production. 
So and that's what happens under

571
00:33:17,700 --> 00:33:21,100
socialism under socialism. 
The private ownership of the 

572
00:33:21,100 --> 00:33:24,000
means of production is abolished
under under all varieties of 

573
00:33:24,008 --> 00:33:25,800
socialism. 
That's one thing that's common. 

574
00:33:25,800 --> 00:33:29,700
It's that you can't own 
privately factors of production 

575
00:33:30,000 --> 00:33:32,700
and what that means is, we lack 
prices for those things. 

576
00:33:32,900 --> 00:33:36,700
If we don't have the prices, 
then we can't do that necessary,

577
00:33:37,200 --> 00:33:39,300
economic calculation. 
We can't use that. 

578
00:33:39,400 --> 00:33:41,900
We can't do that. 
Necessary comparison of costs 

579
00:33:41,900 --> 00:33:45,000
and revenues that allow us to 
make sure that what we're 

580
00:33:45,000 --> 00:33:48,500
spending money on is, is 
actually something that will 

581
00:33:48,500 --> 00:33:50,800
make us something that consumers
value. 

582
00:33:51,100 --> 00:33:53,900
So, without that essential 
guide, post without that 

583
00:33:53,900 --> 00:33:57,500
essential piece of information. 
It means that the production 

584
00:33:57,500 --> 00:34:00,100
decisions that we make, where 
the central planner makes. 

585
00:34:00,100 --> 00:34:03,900
In the case of socialism. 
Are there just willy-nilly 

586
00:34:03,900 --> 00:34:06,000
there, they're based on the 
whims and preferences of the 

587
00:34:06,000 --> 00:34:08,800
central planner. 
It's not based on what do 

588
00:34:08,800 --> 00:34:13,400
consumers value. 
If we have a dictatorship of the

589
00:34:13,400 --> 00:34:16,800
proletariat, can we just 
constantly take polls or maybe 

590
00:34:16,800 --> 00:34:19,800
one poll of month? 
Everyone says what they want in 

591
00:34:19,900 --> 00:34:22,900
each industry and the government
produces it. 

592
00:34:23,000 --> 00:34:26,699
And what we don't need money. 
Supply, would just need one. 

593
00:34:28,000 --> 00:34:32,100
One Central planner who has 
people in States representing 

594
00:34:32,100 --> 00:34:34,800
them as people in cities and 
counties. 

595
00:34:34,900 --> 00:34:37,000
What's wrong with Democratic 
votes? 

596
00:34:37,000 --> 00:34:41,800
Replacing a system of money. 
I'll give you quite a few 

597
00:34:41,800 --> 00:34:46,900
responses that one, one problem 
with that is, often times 

598
00:34:46,900 --> 00:34:50,300
consumers, don't even know what 
they want until they're actually

599
00:34:50,300 --> 00:34:54,300
faced with the choice. 
So, one person why it's indicate

600
00:34:54,300 --> 00:34:58,000
on a survey that they like 
apples more than oranges, but 

601
00:34:58,000 --> 00:35:00,200
then, you know, they get to the 
grocery store and they've got 

602
00:35:00,200 --> 00:35:03,300
their cart and they see that the
oranges are looking good in the 

603
00:35:03,300 --> 00:35:05,900
apples aren't looking so good 
and they decide to buy the 

604
00:35:05,900 --> 00:35:10,200
oranges instead of the apples. 
So they've indicated in a survey

605
00:35:10,200 --> 00:35:14,000
or poll that they have one set 
of preferences, but then when it

606
00:35:14,000 --> 00:35:17,200
actually came time for them to 
make a choice that it totally 

607
00:35:17,200 --> 00:35:19,400
changed. 
And I think this happens to all 

608
00:35:19,400 --> 00:35:22,900
of us like we make a shopping 
list and then go to the store 

609
00:35:23,000 --> 00:35:25,800
and what we leave with the store
is not exactly the same as 

610
00:35:25,800 --> 00:35:28,700
what's on the shopping list. 
So we don't even know where own 

611
00:35:28,700 --> 00:35:35,500
preferences well enough to, to 
honestly, and and reliably 

612
00:35:35,500 --> 00:35:37,600
predict what they're going to be
when it comes time. 

613
00:35:37,800 --> 00:35:43,500
For us to make choices, how, how
could we give that same 

614
00:35:43,500 --> 00:35:45,900
information to a central planner
through, like the 

615
00:35:45,900 --> 00:35:47,600
representatives that you talked 
about? 

616
00:35:47,700 --> 00:35:49,900
How could we get that 
information to a central planner

617
00:35:50,100 --> 00:35:52,700
and that Central planner? 
Make good decisions for us. 

618
00:35:52,700 --> 00:35:55,700
It just it's just impossible. 
If we can't, if we can't 

619
00:35:55,700 --> 00:36:00,400
pre-plan our own decisions, then
how could we use that prior 

620
00:36:00,400 --> 00:36:03,500
information? 
Given to a central planner to 

621
00:36:03,500 --> 00:36:05,900
also do the same thing? 
So that's one problem. 

622
00:36:05,900 --> 00:36:07,700
The other problem is there's no 
time left. 

623
00:36:08,300 --> 00:36:12,800
There's the problem of even with
survey data. 

624
00:36:13,300 --> 00:36:17,100
How do you, you still don't have
numbers that you can use to make

625
00:36:17,100 --> 00:36:20,200
the decisions on how something 
is produced or how long their 

626
00:36:20,200 --> 00:36:24,600
production process should take 
or who to employ or what capital

627
00:36:24,600 --> 00:36:29,400
goods to use you still lack. 
The essential price information 

628
00:36:29,500 --> 00:36:31,600
to make those sorts of 
decisions. 

629
00:36:31,800 --> 00:36:35,400
Whereas survey if somebody has 
asked on the survey, which do 

630
00:36:35,400 --> 00:36:39,200
you prefer apples or oranges 
that tells you Nothing about how

631
00:36:39,200 --> 00:36:42,400
do we actually produce all of 
the goods that go into 

632
00:36:42,400 --> 00:36:45,600
producing, all of the goods that
go into producing the stuff, 

633
00:36:46,700 --> 00:36:48,700
does this shortcoming and 
knowledge. 

634
00:36:48,700 --> 00:36:52,800
Also apply, apply to chief 
executive officers of private 

635
00:36:52,800 --> 00:36:55,400
companies who are very far 
removed from the consumption 

636
00:36:55,400 --> 00:37:00,400
products of the services that 
they provide to an extent. 

637
00:37:00,400 --> 00:37:02,900
But but before I answer that 
question, I just want to clarify

638
00:37:03,200 --> 00:37:06,700
the Hyatt called it, a knowledge
problem of central planning 

639
00:37:06,700 --> 00:37:09,700
socialism. 
But what I'm referring to is 

640
00:37:09,700 --> 00:37:11,800
what means is called the 
calculation problem, which is 

641
00:37:11,800 --> 00:37:15,100
that we lack the ability to 
engage in economic calculation. 

642
00:37:15,900 --> 00:37:20,000
It's it's just a slight sort of 
difference in terminology. 

643
00:37:20,000 --> 00:37:21,800
But there is sort of a 
fundamental difference between 

644
00:37:21,800 --> 00:37:24,600
those two. 
It's there is a knowledge 

645
00:37:24,600 --> 00:37:26,500
problem, but I think more 
fundamentally. 

646
00:37:26,600 --> 00:37:29,700
It's the, the lack of the 
ability to engage in economic 

647
00:37:29,700 --> 00:37:33,700
calculation, that causes us to 
not be able to produce what 

648
00:37:33,700 --> 00:37:36,000
consumers value. 
That's your question about the 

649
00:37:36,008 --> 00:37:39,400
CEOs. 
They're Ali is an issue with the

650
00:37:39,400 --> 00:37:42,800
size of certain companies, one 
limitation of the size of 

651
00:37:42,800 --> 00:37:45,100
companies is their ability to 
calculate. 

652
00:37:45,100 --> 00:37:50,800
So one reason why we don't see 
one firm in the entire United 

653
00:37:50,800 --> 00:37:55,600
States economy is because that 
firm would lack the the 

654
00:37:55,600 --> 00:37:59,100
calculation capabilities that I 
talked about before because that

655
00:37:59,100 --> 00:38:00,900
would essentially be a central 
planner. 

656
00:38:01,100 --> 00:38:03,500
So one limit on the size of 
firms is their ability to 

657
00:38:03,500 --> 00:38:07,600
calculate I wanted, I would 
refer interested listeners to 

658
00:38:09,300 --> 00:38:11,100
Works by pure biology talks 
about this. 

659
00:38:11,100 --> 00:38:15,900
He talks about the limitations 
of firms size due to due to the 

660
00:38:15,900 --> 00:38:19,600
fact that if you get too big, it
becomes harder for you to figure

661
00:38:19,600 --> 00:38:23,200
out the efficient allocation of 
resources within your firm 

662
00:38:23,200 --> 00:38:25,700
because you lack meaningful 
market prices. 

663
00:38:26,500 --> 00:38:30,100
So, that along with consumers, 
free to disassociate and 

664
00:38:30,100 --> 00:38:33,000
employees are the great checks 
and balances. 

665
00:38:33,000 --> 00:38:35,000
I think of in the free market 
economy. 

666
00:38:35,100 --> 00:38:37,600
Is there any other check and 
balance that we see? 

667
00:38:37,700 --> 00:38:39,900
See, the reason I think it's 
important as they just see it as

668
00:38:39,900 --> 00:38:42,300
sort of the wild west, where the
rich do whatever they want 

669
00:38:42,300 --> 00:38:45,600
without repercussion. 
So besides consumers and 

670
00:38:45,600 --> 00:38:49,100
employees free to disassociate 
with their time or money on top 

671
00:38:49,100 --> 00:38:52,200
of the diseconomies of scale. 
What are other checks and 

672
00:38:52,200 --> 00:38:56,200
balances in the market economy? 
I think those are those are two 

673
00:38:56,200 --> 00:38:58,200
really good ones, but you're 
right. 

674
00:38:58,200 --> 00:39:01,800
A lot of, a lot of socialist and
people in the left in general 

675
00:39:01,800 --> 00:39:06,600
will say that a purely 
free-market economy tends 

676
00:39:06,600 --> 00:39:08,700
towards business. 
This is getting really really 

677
00:39:08,700 --> 00:39:13,800
big always getting bigger or 
businesses always exploiting and

678
00:39:13,800 --> 00:39:16,300
making bad choices and 
inefficiently allocating 

679
00:39:16,300 --> 00:39:18,400
resources, but you're absolutely
right. 

680
00:39:18,400 --> 00:39:20,300
It at the end of the day, 
consumers are the ones who 

681
00:39:20,308 --> 00:39:22,400
decide to spend their money or 
not spend their money. 

682
00:39:22,700 --> 00:39:25,600
At the end of the day. 
All of the firm choices had to 

683
00:39:25,600 --> 00:39:29,600
be made based on profit and loss
in cancer patients, which means 

684
00:39:29,600 --> 00:39:32,600
that they have to expect to 
provide something that consumers

685
00:39:32,600 --> 00:39:34,700
want. 
So those are exactly right. 

686
00:39:34,700 --> 00:39:37,500
Those are two really good checks
on the size. 

687
00:39:37,700 --> 00:39:42,200
Scope and and decision-making of
firms. 

688
00:39:43,200 --> 00:39:47,400
When you go to a factory or a 
supermarket, the people that you

689
00:39:47,400 --> 00:39:50,800
constantly see their everyday 
are the employees, putting in 

690
00:39:50,800 --> 00:39:55,500
the labor putting in the effort.
This means that stores and 

691
00:39:55,500 --> 00:39:57,800
factories should be owned by the
workers. 

692
00:39:57,800 --> 00:40:01,200
Who occupy those places, not 
people from thousands of miles 

693
00:40:01,200 --> 00:40:03,200
away, who never even visit the 
store. 

694
00:40:03,400 --> 00:40:05,800
What's wrong with that analysis?
If anything? 

695
00:40:06,700 --> 00:40:11,100
Well, I think The only issue 
with that, that scenario, that 

696
00:40:11,100 --> 00:40:15,100
you talked about, is that 
workers do have the ability to 

697
00:40:15,100 --> 00:40:17,200
do that. 
There's, there's absolutely in a

698
00:40:17,207 --> 00:40:21,900
free market Society. 
There's nothing stopping a group

699
00:40:21,900 --> 00:40:25,200
of people from going together 
and starting a new business, or 

700
00:40:25,200 --> 00:40:27,800
going together and purchasing a 
business. 

701
00:40:27,800 --> 00:40:29,700
That's, that's exactly what a 
stock market is. 

702
00:40:29,700 --> 00:40:33,800
So, a stock markets, is an open 
stock market. 

703
00:40:33,800 --> 00:40:36,600
Is when companies say, hey, 
we've got this big company with 

704
00:40:36,600 --> 00:40:38,400
anybody. 
Like a slice of Of ownership in 

705
00:40:38,400 --> 00:40:39,800
it. 
And here's the price that you 

706
00:40:39,800 --> 00:40:41,800
have to pay for it. 
And so they sell off all the 

707
00:40:41,800 --> 00:40:44,800
little, the little slices of 
ownership in a company. 

708
00:40:45,000 --> 00:40:48,300
So we have distributed ownership
of firms through the stock 

709
00:40:48,300 --> 00:40:53,200
market already in a free market 
and we also have some examples 

710
00:40:53,500 --> 00:40:59,100
of firms that that decide to pay
their employees with stock 

711
00:40:59,100 --> 00:41:02,800
options with with ownership 
shares in the company that they 

712
00:41:02,800 --> 00:41:05,200
work. 
For, which actually is probably 

713
00:41:05,200 --> 00:41:08,900
a good idea in some Guard 
because that gives their 

714
00:41:08,900 --> 00:41:13,500
employees a greater stake in the
success of the company. 

715
00:41:14,200 --> 00:41:16,600
So I think that can work to an 
extent. 

716
00:41:16,700 --> 00:41:20,700
Now there there is some some 
literature by Peter Klein who 

717
00:41:20,700 --> 00:41:25,800
talks about the really flat sort
of the really horizontally 

718
00:41:26,100 --> 00:41:30,400
structured firms in some issues 
that arise when it's when it 

719
00:41:30,408 --> 00:41:33,700
goes to an extreme case like 
that, but I think that there are

720
00:41:33,707 --> 00:41:37,100
some good examples of first 
deciding to structure themselves

721
00:41:37,100 --> 00:41:39,900
in a way. 
Way where their employees had 

722
00:41:39,900 --> 00:41:44,000
that sort of ownership stake and
we already have in their free 

723
00:41:44,000 --> 00:41:46,900
market, the capability for any 
worker anywhere. 

724
00:41:46,900 --> 00:41:50,100
It's a purchase to purchase 
stock in any company that they 

725
00:41:50,100 --> 00:41:52,400
would want to work for. 
So there's absolutely nothing 

726
00:41:52,400 --> 00:41:55,100
stopping from stopping people 
from doing that sort of thing. 

727
00:41:55,100 --> 00:41:57,600
That you described been saying 
this for years. 

728
00:41:57,600 --> 00:42:01,700
Stop giving money to Democrats 
and they can get just pop all 

729
00:42:01,700 --> 00:42:05,100
the money themselves or they can
have an Indiegogo or a GoFundMe,

730
00:42:05,200 --> 00:42:07,500
which is still way more 
efficient than giving. 

731
00:42:07,700 --> 00:42:12,200
To the mass murder and 
government is far as someone 

732
00:42:12,200 --> 00:42:17,000
like Jeff Bezos, having so much 
power and so much wealth. 

733
00:42:17,400 --> 00:42:20,800
What are the benefits of 
allowing? 

734
00:42:20,800 --> 00:42:27,000
Let's say, such inequality in 
income property and influence. 

735
00:42:29,900 --> 00:42:35,800
Well, I just don't see any 
particular Authority that I have

736
00:42:35,800 --> 00:42:40,800
personally to to request or take
away the money from somebody 

737
00:42:40,800 --> 00:42:42,500
else. 
I mean, especially if the money 

738
00:42:42,500 --> 00:42:47,100
is earned in an honorable way, 
in an ethical way, you know, 

739
00:42:47,100 --> 00:42:52,500
like without robbing somebody. 
So I think that anything that we

740
00:42:52,500 --> 00:42:58,600
do to try to to mitigate income 
or wealth inequality. 

741
00:42:58,800 --> 00:43:02,800
Only serves to hamper the good 
results that we see in the 

742
00:43:02,800 --> 00:43:05,400
market economy. 
So if we decide that, if you 

743
00:43:05,400 --> 00:43:08,600
make money over a certain 
amount, we're going to start 

744
00:43:08,600 --> 00:43:09,500
texting. 
You hire. 

745
00:43:09,500 --> 00:43:13,600
What that does is it discourages
people from undertaking those 

746
00:43:13,600 --> 00:43:18,300
those production projects that 
would be consumer satisfying, it

747
00:43:18,300 --> 00:43:21,600
actually limits what we produce 
for consumers in general. 

748
00:43:21,607 --> 00:43:27,000
So anything that we do to try to
equalize incomes and wealth, I 

749
00:43:27,000 --> 00:43:28,500
think has a bunch of unintended 
consequences. 

750
00:43:28,900 --> 00:43:31,800
Quences and we shouldn't pursue 
that sort of thing. 

751
00:43:31,900 --> 00:43:33,700
I don't know. 
I think you ask your question 

752
00:43:33,700 --> 00:43:36,000
and more of like, I can't 
remember how you phrased it. 

753
00:43:36,008 --> 00:43:41,800
But like in a more ethical sort 
of sense, even even in the, with

754
00:43:41,800 --> 00:43:45,400
the ethics of income inequality.
I can definitely say that 

755
00:43:45,400 --> 00:43:48,200
government actions, exacerbate 
inequality. 

756
00:43:48,200 --> 00:43:53,300
So if you are one of these 
people on the left who dislikes 

757
00:43:53,300 --> 00:43:57,100
income and wealth inequality, 
you should hate the government. 

758
00:43:57,600 --> 00:44:00,200
You should hate me. 
Money printing in the Katie on 

759
00:44:00,200 --> 00:44:02,700
effects that exacerbate income 
and wealth inequality. 

760
00:44:03,000 --> 00:44:08,600
You should hate all of the 
favors and the spending that's 

761
00:44:08,600 --> 00:44:10,400
done by the government to their 
friends. 

762
00:44:10,800 --> 00:44:14,600
Such that a small group of 
people are in rinsed enriched at

763
00:44:14,600 --> 00:44:20,300
the expense of everybody else. 
So if if income equality or less

764
00:44:20,300 --> 00:44:24,200
income inequality is something 
that you value, you should 

765
00:44:24,200 --> 00:44:27,100
dislike almost everything that 
the government does. 

766
00:44:28,100 --> 00:44:33,200
Assume I completely throw ethics
aside and just want, you know, 

767
00:44:33,800 --> 00:44:37,900
this great win for the working 
class and the proletariat. 

768
00:44:38,200 --> 00:44:42,200
Why not kick Bezos to the side, 
take all his wealth and 

769
00:44:42,200 --> 00:44:45,000
distribute all ownership among 
Amazon employees. 

770
00:44:45,200 --> 00:44:47,900
Same for Elon Musk, same with 
the Walton family. 

771
00:44:48,000 --> 00:44:51,900
If I'm just caring about wealth 
of the masses. 

772
00:44:52,100 --> 00:44:56,100
Why should I not support that? 
Well, I think you're destroying 

773
00:44:56,100 --> 00:45:01,100
the potential for future wealth 
for everybody. 

774
00:45:01,100 --> 00:45:05,200
You're destroying the potential 
for future growth for more goods

775
00:45:05,200 --> 00:45:09,900
and services to be produced. 
So, if that sort of scenario was

776
00:45:09,900 --> 00:45:14,400
in place, nobody would want to 
to become the next very 

777
00:45:14,400 --> 00:45:17,900
successful entrepreneur, because
all it means is I'm going to, 

778
00:45:17,900 --> 00:45:20,400
I'm going to be the next person 
on the chopping block. 

779
00:45:20,500 --> 00:45:24,600
When the, when the lower classes
rise up and decide to to kill me

780
00:45:24,600 --> 00:45:26,800
and take out my stuff. 
So people wouldn't take those 

781
00:45:26,800 --> 00:45:30,100
sorts of entrepreneurial risks 
that are necessary for us to 

782
00:45:30,400 --> 00:45:33,400
actually have all the goods and 
services that consumers value. 

783
00:45:33,600 --> 00:45:36,600
So I just want to clarify, you 
said, throw all the ethics out 

784
00:45:36,600 --> 00:45:38,500
the window. 
What's the problem with that? 

785
00:45:38,500 --> 00:45:40,500
The problem with that is, we 
would have less stuff. 

786
00:45:40,500 --> 00:45:44,100
We would have less goods and 
services that we value, if we 

787
00:45:44,100 --> 00:45:46,900
decided to go about that sort 
of. 

788
00:45:47,000 --> 00:45:49,500
So, even from like a really 
selfish perspective. 

789
00:45:49,600 --> 00:45:53,200
We should want entrepreneurs to 
become wealthy or have the 

790
00:45:53,200 --> 00:45:56,000
opportunity to become. 
Wealthy by taking those sorts of

791
00:45:56,300 --> 00:45:58,300
risks. 
Yeah. 

792
00:45:58,300 --> 00:46:04,200
I'm trying to think of a non 
straw man to way to ask does 

793
00:46:04,200 --> 00:46:07,800
being the head of a company 
require any unique skills are 

794
00:46:07,800 --> 00:46:11,300
some people better at it than 
others and does that justify 

795
00:46:11,400 --> 00:46:13,700
them? 
Having more power in the market?

796
00:46:13,700 --> 00:46:16,600
It just to ask. 
The question is just so obvious 

797
00:46:16,800 --> 00:46:21,400
that I benefit from Eminem being
able to sell more albums than 

798
00:46:21,400 --> 00:46:24,100
Jonathan Newman and Jonathan 
Newman selling more. 

799
00:46:24,200 --> 00:46:27,300
Books than mmm. 
So even though this is an evil 

800
00:46:27,300 --> 00:46:31,100
inequality that we must elect 
George Soros to reconcile. 

801
00:46:31,300 --> 00:46:34,100
I still think there's nothing 
wrong with this at all. 

802
00:46:34,100 --> 00:46:37,900
Is there anything? 
I'm missing about the workers 

803
00:46:37,900 --> 00:46:41,100
taking over the factories as 
Bernie Sanders. 

804
00:46:41,100 --> 00:46:44,200
And AOC are constantly making 
more popular feeding into this 

805
00:46:44,300 --> 00:46:49,500
envious idea. 
I think you're right that the 

806
00:46:50,500 --> 00:46:54,700
Existing entrepreneurial class. 
If we could say, if we could use

807
00:46:54,700 --> 00:47:01,300
such a term exist because they 
have made good decisions on 

808
00:47:01,300 --> 00:47:05,600
behalf of consumers in the past.
So if somebody is successful 

809
00:47:05,600 --> 00:47:11,200
today that indicates that they 
provided something that a lot of

810
00:47:11,200 --> 00:47:15,400
other people valued in the past,
so there's no, there's no real. 

811
00:47:16,600 --> 00:47:19,900
I mean, people will always be 
envious people. 

812
00:47:20,100 --> 00:47:23,400
Always covet what their neighbor
has that's going to exist, no 

813
00:47:23,400 --> 00:47:26,300
matter what. 
But if we're talking about the 

814
00:47:26,308 --> 00:47:29,200
sorts of rules and institutions,
that we should have place in 

815
00:47:29,200 --> 00:47:34,200
society such that, we can 
provide for Consumer values and 

816
00:47:34,200 --> 00:47:37,000
also have you, no morals and 
ethics that. 

817
00:47:37,000 --> 00:47:39,200
We've discarded for this 
discussion. 

818
00:47:39,200 --> 00:47:43,200
It seems like we should have the
sorts of rules that would allow 

819
00:47:43,200 --> 00:47:47,300
people to privately owned even 
large amounts of wealth 11 

820
00:47:49,100 --> 00:47:52,000
issue. 
Good question that comes up in 

821
00:47:52,000 --> 00:47:55,500
these same sorts of 
conversations is that we don't 

822
00:47:55,500 --> 00:48:01,600
make Society more ethical by 
forcefully, taking wealth from 

823
00:48:01,600 --> 00:48:03,400
one group and giving it to 
another. 

824
00:48:04,600 --> 00:48:09,000
There's a common example of 
quitting a government that taxes

825
00:48:09,000 --> 00:48:12,300
the rich and gives to the poor 
as a robber who does the same 

826
00:48:12,300 --> 00:48:15,600
sort of thing who a robber who 
takes from rich, people who 

827
00:48:15,600 --> 00:48:18,200
gives up to poor people. 
That robber doesn't really have 

828
00:48:18,200 --> 00:48:21,500
the right to To do that sort of 
thing. 

829
00:48:22,600 --> 00:48:24,700
Once again, I'm getting out of 
my wheelhouse talking about all 

830
00:48:24,700 --> 00:48:28,800
the ethics and institutions 
here, but it seems to me that it

831
00:48:28,800 --> 00:48:34,200
would be worse for everybody. 
If we had that sort of way of 

832
00:48:34,200 --> 00:48:38,800
going about things. 
One of the trucks often employed

833
00:48:38,800 --> 00:48:42,800
is to just make people bitter 
about the current system to get 

834
00:48:42,800 --> 00:48:47,400
them to sort of justify an 
alternative where the 

835
00:48:47,400 --> 00:48:49,900
shortcomings are equally bad. 
One of the major. 

836
00:48:50,100 --> 00:48:55,400
And I see is often employed by 
say the new school, as I'm 

837
00:48:55,400 --> 00:48:59,900
frequently hearing them called. 
So what they'll say is you are a

838
00:48:59,900 --> 00:49:03,100
business owner. 
If you go to hire someone say 

839
00:49:03,100 --> 00:49:07,400
you pay him $20 an hour, you're 
only doing that because you 

840
00:49:07,400 --> 00:49:11,300
think you can make more than 
twenty dollars an hour off that 

841
00:49:11,300 --> 00:49:15,800
person what you're doing is 
extracting their Surplus value 

842
00:49:16,100 --> 00:49:18,100
and you are engaged in 
exploitation. 

843
00:49:18,300 --> 00:49:22,000
And this is why the free Get 
capitalism is a parasitic 

844
00:49:22,000 --> 00:49:23,900
system. 
What's wrong with that analysis 

845
00:49:25,000 --> 00:49:27,400
could question. 
So what that denies is what the 

846
00:49:27,400 --> 00:49:30,600
employer or entrepreneur has has
done. 

847
00:49:30,800 --> 00:49:34,700
So the laborer might agree to a 
twenty dollar wage. 

848
00:49:34,900 --> 00:49:36,800
That's a voluntary wage 
contract. 

849
00:49:36,800 --> 00:49:38,200
The labor has decided. 
Yes. 

850
00:49:38,200 --> 00:49:42,100
I'm willing to receive that in 
exchange for the services that 

851
00:49:42,100 --> 00:49:43,400
are provided to the 
entrepreneur. 

852
00:49:43,700 --> 00:49:46,700
What the entrepreneur has done. 
They're not just, they haven't 

853
00:49:46,700 --> 00:49:50,200
just, you know, setback and and 
they're just watching the Are 

854
00:49:50,200 --> 00:49:52,400
you coming? 
They're the ones who were taking

855
00:49:52,400 --> 00:49:57,700
the risk of the entire project. 
Whereas the labor is not taking 

856
00:49:57,700 --> 00:50:00,400
any risk at all. 
The labor is concerned. 

857
00:50:00,500 --> 00:50:03,200
The entrepreneur is 
contractually obligated to pay 

858
00:50:03,200 --> 00:50:07,400
the labor $20. 
Even if consumers don't buy the 

859
00:50:07,400 --> 00:50:10,700
final product at all. 
The labor will get their wage, 

860
00:50:10,700 --> 00:50:15,300
no matter what the entrepreneur,
however, may or may not get paid

861
00:50:15,400 --> 00:50:19,900
and so the the extra that they 
get as a result of that. 

862
00:50:20,000 --> 00:50:24,400
At of this sort of setup. 
It's not just Surplus, not 

863
00:50:25,400 --> 00:50:28,500
extortion or expropriation of 
the worker. 

864
00:50:28,500 --> 00:50:32,400
It's the entrepreneur is doing 
something different than what 

865
00:50:32,400 --> 00:50:35,200
the worker is doing. 
The worker might be doing 

866
00:50:35,200 --> 00:50:38,200
something that's more physical. 
And more, is more visual. 

867
00:50:38,200 --> 00:50:42,600
We can see with the workers 
doing, but that doesn't void, 

868
00:50:42,600 --> 00:50:46,200
the fact that the entrepreneur 
is the one who is taking the 

869
00:50:46,200 --> 00:50:48,300
risk, their, the worm. 
They're the ones who have their 

870
00:50:48,300 --> 00:50:51,000
money on the line. 
It's Your livelihood. 

871
00:50:51,000 --> 00:50:55,300
That's that would be taken away 
if the entire business venture 

872
00:50:55,300 --> 00:50:59,000
fails and coming up with what to
sell at. 

873
00:50:59,000 --> 00:51:03,100
What price at what location is. 
I mean, kind of important do the

874
00:51:03,100 --> 00:51:05,300
purchase completely leave that 
out. 

875
00:51:05,300 --> 00:51:08,900
As, as if meeting consumer 
demand, at doesn't really matter

876
00:51:09,000 --> 00:51:12,000
whether whether you make mud, 
pies or iPhones. 

877
00:51:12,000 --> 00:51:14,200
You just the money just starts 
piling up. 

878
00:51:14,300 --> 00:51:17,500
Indiscriminately. 
What are the best? 

879
00:51:17,500 --> 00:51:19,900
Real world examples of free 
markets? 

880
00:51:20,000 --> 00:51:27,700
Helping the poor. 
Free markets tend towards 

881
00:51:27,700 --> 00:51:34,100
capital accumulation, meaning 
that we save and we invest in 

882
00:51:34,100 --> 00:51:37,700
new technologies that increase 
our own productivity. 

883
00:51:38,000 --> 00:51:41,300
So one thing that that 
capitalism and free markets in 

884
00:51:41,300 --> 00:51:46,700
general due to benefit everybody
is that our productivity and 

885
00:51:46,700 --> 00:51:49,900
therefore the wages that we can 
command on the market are 

886
00:51:50,200 --> 00:51:53,200
multiplied. 
The use of capital goods. 

887
00:51:53,300 --> 00:51:57,500
So more capital goods means that
I can get a higher wage. 

888
00:51:57,500 --> 00:52:03,700
I can get paid more. 
Imagine the difference between a

889
00:52:03,700 --> 00:52:08,600
worker who who decided to work 
on a construction site. 

890
00:52:08,600 --> 00:52:13,500
For example, who decides I will 
never ever use a tool, I can is 

891
00:52:13,500 --> 00:52:17,100
one of my religious things, as 
I'm not, I can't use tools. 

892
00:52:17,100 --> 00:52:20,300
I can't use machines. 
Compare that worker to a worker 

893
00:52:20,300 --> 00:52:24,000
who is okay with using to Tools 
and machines, what sort of wages

894
00:52:24,000 --> 00:52:27,400
would those workers be able to 
command in the on that worksite 

895
00:52:27,600 --> 00:52:29,800
the worker? 
Who's not willing to use any 

896
00:52:29,800 --> 00:52:31,500
tools? 
Not willing to use any of the 

897
00:52:31,500 --> 00:52:34,200
big machines that we use to make
buildings these days? 

898
00:52:34,800 --> 00:52:39,200
They would not they I mean, they
might get a job at an extremely 

899
00:52:39,200 --> 00:52:41,100
low wage. 
Just cleaning up the mess 

900
00:52:41,100 --> 00:52:43,600
basically because you can do 
that with your with your own to 

901
00:52:43,607 --> 00:52:47,100
enhance own two hands. 
So, you know, move Rubble, move,

902
00:52:47,400 --> 00:52:50,400
you know, the stuff from a 
construction site from one area 

903
00:52:50,400 --> 00:52:53,800
to another, but Worker who's 
actually willing to swing a 

904
00:52:53,800 --> 00:52:57,300
hammer, the worker who's 
actually willing to, you know, 

905
00:52:57,900 --> 00:53:01,000
climb up a ladder and get on top
of the roof and use a nail gun 

906
00:53:01,000 --> 00:53:04,400
to put shingles in. 
They are much more productive 

907
00:53:04,400 --> 00:53:06,200
because of all the capital 
goods. 

908
00:53:06,400 --> 00:53:10,100
So one huge thing that 
capitalism in general does for 

909
00:53:10,100 --> 00:53:14,200
everybody is with capital 
accumulation in the use of all 

910
00:53:14,200 --> 00:53:16,600
these capital goods. 
Everybody's more productive and 

911
00:53:16,600 --> 00:53:21,100
everybody can Now command higher
real wages as a result. 

912
00:53:21,800 --> 00:53:26,000
I learned that the hard way, 
when our major infrastructure at

913
00:53:26,000 --> 00:53:28,600
work, had to have cost tens of 
millions of dollars. 

914
00:53:28,900 --> 00:53:33,600
One day, it went down and I 
think I helped like 1/30 of the 

915
00:53:33,600 --> 00:53:36,000
customers that I helped on the 
average day. 

916
00:53:36,000 --> 00:53:38,400
That's why I'm like, you know, 
I'd probably get paid about 

917
00:53:38,400 --> 00:53:41,600
1/30. 
Well, what is the wage of 

918
00:53:41,600 --> 00:53:44,200
someone in Bangladesh or Haiti 
or America? 

919
00:53:44,200 --> 00:53:47,100
200 300 years ago. 
Well probably would have been. 

920
00:53:47,100 --> 00:53:49,100
It would have been the same like
that. 

921
00:53:49,100 --> 00:53:52,600
So so often were just called 
people who are Pie-in-the-sky 

922
00:53:52,600 --> 00:53:55,800
libertarian Theory, but in every
scenario. 

923
00:53:55,800 --> 00:53:59,500
I think we're able to have real 
real world examples. 

924
00:54:00,200 --> 00:54:04,900
You have any ideas or tips on 
how economic growth or wealth 

925
00:54:04,900 --> 00:54:10,400
can be measured outside of GDP? 
So I'm glad you said outside of 

926
00:54:10,400 --> 00:54:14,000
GDP GDP has some issues, the 
main issue being that includes 

927
00:54:14,000 --> 00:54:17,500
government spending, which we've
already discussed is not 

928
00:54:18,300 --> 00:54:20,700
connected to Consumer 
satisfaction. 

929
00:54:21,000 --> 00:54:26,000
So, One good measure. 
Besides GDP, is gross, private 

930
00:54:26,000 --> 00:54:28,500
product. 
So if you just take GDP and you 

931
00:54:28,508 --> 00:54:32,300
take out government spending 
that, get that gives you a good 

932
00:54:32,300 --> 00:54:34,700
measure of the the size of an 
economy. 

933
00:54:35,400 --> 00:54:37,400
One issue with that. 
However, is that it doesn't 

934
00:54:37,400 --> 00:54:40,400
include all the spending that 
happens in the structure of 

935
00:54:40,400 --> 00:54:43,300
production, all the spending on 
intermediate goods. 

936
00:54:43,500 --> 00:54:47,400
And so one piece of data that 
you can look at if you're 

937
00:54:47,400 --> 00:54:50,000
interested in that measure is 
called gross output or gross 

938
00:54:50,000 --> 00:54:53,300
domestic expenditures. 
As opposed to gross, domestic 

939
00:54:53,300 --> 00:54:55,400
product or gross private 
product. 

940
00:54:56,800 --> 00:55:03,500
However, if we are interested in
an predicting which economies 

941
00:55:03,500 --> 00:55:06,700
are going to grow and which ones
aren't what we should look at is

942
00:55:06,700 --> 00:55:09,300
not the total amount of spending
especially spending on 

943
00:55:09,300 --> 00:55:11,500
consumption Goods. 
We should look at the total 

944
00:55:11,500 --> 00:55:14,600
amount of savings. 
So our previous topic of 

945
00:55:14,600 --> 00:55:18,700
conversation was the benefit of 
capital accumulation the benefit

946
00:55:18,700 --> 00:55:21,200
of using capital goods in worker
productivity. 

947
00:55:21,700 --> 00:55:26,400
If on like a global scale, we 
wanted to say this economy is 

948
00:55:26,400 --> 00:55:29,200
going to grow and this one isn't
the thing that we should look 

949
00:55:29,200 --> 00:55:32,400
for is the level of capital 
accumulation the level of saving

950
00:55:32,400 --> 00:55:36,100
that's happening real saving. 
Because then we would be able to

951
00:55:36,100 --> 00:55:40,700
say this country is primed for 
lots of sustainable economic 

952
00:55:40,700 --> 00:55:44,500
growth based on increased 
productivity this other country 

953
00:55:44,500 --> 00:55:46,800
that doesn't have as much 
capital accumulation. 

954
00:55:47,200 --> 00:55:50,100
They are not laying the 
groundwork for them to increase 

955
00:55:50,100 --> 00:55:53,600
their own productivity and And 
have more consumption and 

956
00:55:53,600 --> 00:55:58,800
producer Goods in the future. 
One of the charts that really 

957
00:55:58,800 --> 00:56:01,400
stood out to me was from Stephen
Moore of the Wall Street 

958
00:56:01,400 --> 00:56:03,200
Journal. 
Yes, usually bad. 

959
00:56:03,200 --> 00:56:05,400
The point is a seat. 
This was a good contribution. 

960
00:56:05,800 --> 00:56:11,700
He had shown a percentage of 
poor people in 1970, that had 

961
00:56:11,700 --> 00:56:16,200
the following products. 
VCR refrigerator TV dish, 

962
00:56:16,500 --> 00:56:21,500
dishwasher and running pipes, 
and all this other stuff versus 

963
00:56:21,500 --> 00:56:26,800
the The average person in 2012. 
So he said there was an increase

964
00:56:26,800 --> 00:56:31,000
in access to products and 
services and an increase in 

965
00:56:31,000 --> 00:56:35,300
quality and a decrease in price 
and a decrease in the number of 

966
00:56:35,300 --> 00:56:39,700
hours worked in order to achieve
access to those products and 

967
00:56:39,700 --> 00:56:43,100
services. 
As far as number of hours worked

968
00:56:43,300 --> 00:56:46,800
and increase in the general 
populations ability to access 

969
00:56:46,800 --> 00:56:49,900
those products and services. 
Are those two good? 

970
00:56:50,300 --> 00:56:52,800
Are those good measures or Is 
there something I'm missing? 

971
00:56:53,300 --> 00:56:56,700
Oh, no, that's great. 
And one thing one reason why 

972
00:56:56,700 --> 00:56:59,200
that's great is because it takes
into account. 

973
00:56:59,200 --> 00:57:04,400
The fact that labor is not a 
good labor is is a cost or we 

974
00:57:04,400 --> 00:57:06,600
have disutility from from doing 
labor. 

975
00:57:07,100 --> 00:57:11,700
So we a lot of people will 
compare countries by looking at 

976
00:57:11,700 --> 00:57:15,000
the level of employment is 
saying this country has more 

977
00:57:15,000 --> 00:57:17,100
jobs. 
There's are a higher employment 

978
00:57:17,100 --> 00:57:19,900
rate or lower unemployment rate 
in this country versus the other

979
00:57:19,900 --> 00:57:21,600
one, but that doesn't really 
tell. 

980
00:57:21,700 --> 00:57:24,900
Tell you anything all that, all 
that tells you is that there's 

981
00:57:24,900 --> 00:57:28,300
more people working in one 
country versus the other, but I 

982
00:57:28,300 --> 00:57:32,400
mean news, flash every weekend, 
we decide to stop working. 

983
00:57:33,300 --> 00:57:35,100
A lot of people, at the end of 
their careers. 

984
00:57:35,100 --> 00:57:38,200
They decide to retire. 
So labor is not a good. 

985
00:57:38,200 --> 00:57:40,200
Labor is a bad in the economic 
sense. 

986
00:57:40,200 --> 00:57:42,200
And so we shouldn't be looking 
at employment. 

987
00:57:42,300 --> 00:57:45,200
So what you just described takes
into account, the fact that we 

988
00:57:45,200 --> 00:57:49,000
actually don't like working a 
lot to get the things that we 

989
00:57:49,000 --> 00:57:52,000
want. 
We would rather work a Number of

990
00:57:52,000 --> 00:57:56,600
our, a fewer number of hours, to
get the same number of goods, 

991
00:57:57,400 --> 00:58:01,200
looking throughout history in 
the late, 1800's Industrial 

992
00:58:01,200 --> 00:58:05,100
Revolution up to the 1900s. 
We see a lot of children. 

993
00:58:05,300 --> 00:58:10,500
Working in bad conditions later 
on, we get a child labor law 

994
00:58:10,600 --> 00:58:12,600
today. 
We do not have child labor. 

995
00:58:12,800 --> 00:58:17,400
Therefore, the non-existence of 
child Labour is a cause of 

996
00:58:17,400 --> 00:58:19,100
result of government 
intervention. 

997
00:58:19,200 --> 00:58:21,500
Is that accurate? 
I would do. 

998
00:58:21,700 --> 00:58:24,000
Is agree with that. 
Although it's not really my area

999
00:58:24,000 --> 00:58:26,800
of research. 
There's great Economist by the 

1000
00:58:26,800 --> 00:58:33,500
name of Ben Powell who talks 
about the the history of child 

1001
00:58:33,500 --> 00:58:36,900
labor laws and also the decision
making on the part of parents 

1002
00:58:36,900 --> 00:58:40,200
and families that decide for the
children to work. 

1003
00:58:40,400 --> 00:58:43,800
And one claim that he makes and 
it's quite convincing is that 

1004
00:58:43,900 --> 00:58:47,000
child labor laws are only 
implemented once it's 

1005
00:58:47,000 --> 00:58:49,800
economically feasible or once 
it's a non-issue for that 

1006
00:58:49,800 --> 00:58:52,700
economy. 
So once Adults, labor 

1007
00:58:52,700 --> 00:58:56,200
productivity has increased to a 
certain amount, then it means 

1008
00:58:56,200 --> 00:59:00,200
that we don't need to employ 
children, our own children to 

1009
00:59:00,200 --> 00:59:02,900
eat. 
So, I it, if, if a family 

1010
00:59:02,900 --> 00:59:06,200
decides to, you know, send their
children out into the fields to 

1011
00:59:06,200 --> 00:59:09,000
help them with the farming. 
It means that they're probably 

1012
00:59:09,000 --> 00:59:11,300
in Dire Straits. 
It probably means that if they 

1013
00:59:11,300 --> 00:59:13,900
don't do that, they're at risk 
of starving. 

1014
00:59:13,900 --> 00:59:17,600
So, it's like a, it's a last 
resort sort of thing for those 

1015
00:59:17,600 --> 00:59:20,200
families. 
However, if we increase the 

1016
00:59:20,200 --> 00:59:24,700
productivity of V like with 
tractors and with other capital 

1017
00:59:24,700 --> 00:59:28,600
accumulation, as well as all of 
the government or I shouldn't 

1018
00:59:28,600 --> 00:59:31,100
say government, but societal 
institutions in place that 

1019
00:59:31,100 --> 00:59:33,000
protect property rights in those
sorts of things. 

1020
00:59:33,200 --> 00:59:35,600
Once we have those sorts of 
things in place such that we 

1021
00:59:35,600 --> 00:59:39,100
don't need to employ children. 
What we see in history is that 

1022
00:59:39,100 --> 00:59:44,300
children, leave the workforce 
and go to school instead because

1023
00:59:44,300 --> 00:59:46,200
they don't need to be in the 
farm. 

1024
00:59:46,200 --> 00:59:49,200
They don't need to be in the, in
the field producing. 

1025
00:59:49,400 --> 00:59:53,600
So the child labor. 
Laws that we see happening 

1026
00:59:54,000 --> 00:59:58,600
throughout history are usually 
in response to that economic 

1027
00:59:58,600 --> 01:00:01,500
growth already happening. 
It's not that it's not that the 

1028
01:00:01,500 --> 01:00:05,400
laws were actually binding or 
had had an effect. 

1029
01:00:05,400 --> 01:00:08,700
I'm sure that there were some 
marginal families that were 

1030
01:00:08,700 --> 01:00:11,500
affected by it. 
But the point is that it seems 

1031
01:00:11,500 --> 01:00:15,100
like those laws would only be 
put in place once it's 

1032
01:00:15,100 --> 01:00:18,400
economically feasible for 
families to not have the have 

1033
01:00:18,400 --> 01:00:22,400
their children working. 
And schools have kids working 

1034
01:00:22,400 --> 01:00:26,700
five hours a day, five days a 
week or plus homework, 40 

1035
01:00:26,700 --> 01:00:30,100
dollars an hour. 
So I'm not sure why they think 

1036
01:00:30,100 --> 01:00:33,000
they're on such a high horse, 
calling us out. 

1037
01:00:33,100 --> 01:00:34,500
They get no on-the-job 
experience. 

1038
01:00:34,500 --> 01:00:38,900
They get bullied by teachers 
when they don't believe the war 

1039
01:00:38,900 --> 01:00:41,900
for Polish Independence, ended 
with giving Poland to Stalin. 

1040
01:00:42,100 --> 01:00:45,600
If you don't blindly believe 
that, then you're an idiot who 

1041
01:00:45,600 --> 01:00:47,400
needs to sit at the back of the 
class. 

1042
01:00:47,400 --> 01:00:49,900
So no, you're not intimidating 
us. 

1043
01:00:50,000 --> 01:00:53,500
Anymore with the fake child. 
Labor narrative, very nice. 

1044
01:00:53,500 --> 01:00:55,500
Try though. 
Few more questions, sir. 

1045
01:00:55,500 --> 01:00:57,500
Thank you so much for your time.
Why? 

1046
01:00:57,500 --> 01:01:01,200
I oppose occupational licensing?
What's wrong with reliable 

1047
01:01:01,200 --> 01:01:04,000
products and services meeting 
basic standards. 

1048
01:01:05,500 --> 01:01:09,300
Well, it goes back to the 
economic calculation theme. 

1049
01:01:09,300 --> 01:01:12,600
That has emerged in this 
interview in the case of 

1050
01:01:13,400 --> 01:01:17,500
Occupational licensing. 
If there's a government entity 

1051
01:01:17,500 --> 01:01:22,600
that is deciding who can work in
a certain field and who can't 

1052
01:01:22,900 --> 01:01:26,100
and it's not based on like a 
profit and loss decision. 

1053
01:01:26,400 --> 01:01:28,700
It means that they're going to 
make incorrect inefficient 

1054
01:01:28,700 --> 01:01:30,200
choices. 
They're going to, they're going 

1055
01:01:30,200 --> 01:01:32,400
to disallow. 
Some people who should and 

1056
01:01:32,400 --> 01:01:35,100
they're going to allow people 
who shouldn't is that? 

1057
01:01:35,100 --> 01:01:38,700
So It's going to happen because 
you don't have the proper price 

1058
01:01:38,700 --> 01:01:42,900
signals. 
That are that are operating what

1059
01:01:42,900 --> 01:01:46,000
we more often, see? 
However, as opposed to just 

1060
01:01:46,000 --> 01:01:49,600
being incorrect choices being 
made is we see a lot of bias, 

1061
01:01:49,600 --> 01:01:54,600
the people who are in charge of 
of giving out the licenses, or 

1062
01:01:54,600 --> 01:01:57,800
often the ones who are already 
working in that industry, which 

1063
01:01:57,800 --> 01:02:00,900
means they have an incentive to 
not bring competitors in. 

1064
01:02:00,900 --> 01:02:05,100
So like if I'm, if I were in 
charge of deciding who could 

1065
01:02:05,100 --> 01:02:07,200
teach Teach economics in my 
region. 

1066
01:02:07,400 --> 01:02:10,300
I would say just me, I would 
disallow. 

1067
01:02:10,300 --> 01:02:13,400
I would disallow any possible 
competitor from coming in? 

1068
01:02:14,300 --> 01:02:16,900
And so we see those sorts of 
incentives that play with all 

1069
01:02:16,900 --> 01:02:20,000
sorts of Occupational licensing.
It's really interesting. 

1070
01:02:20,900 --> 01:02:25,300
I just watched The Joe Rogan, 
Robert Malone interview, and 

1071
01:02:25,300 --> 01:02:27,900
they're in Robert. 
Malone was talking about how 

1072
01:02:28,300 --> 01:02:31,400
medical licensing has been used 
as a weapon by the government 

1073
01:02:31,400 --> 01:02:32,900
with all this covid stuff going 
on. 

1074
01:02:32,900 --> 01:02:35,600
Where if you go against the CDs 
team, It is. 

1075
01:02:35,600 --> 01:02:39,700
If you go against fauci, then 
you are actually at risk of 

1076
01:02:39,700 --> 01:02:43,300
losing your medical license in 
various in various ways. 

1077
01:02:43,700 --> 01:02:48,100
And so not only is it an 
efficient economically, but 

1078
01:02:48,100 --> 01:02:51,500
you're also by giving 
government, the ability to to 

1079
01:02:51,500 --> 01:02:53,900
allow and disallow people into 
the workforce. 

1080
01:02:54,100 --> 01:02:57,300
You're giving them a huge 
potential weapon against you. 

1081
01:02:57,300 --> 01:03:03,100
If you ever decide to go against
the government narrative, one of

1082
01:03:03,100 --> 01:03:07,500
the benefits of government. 
Allegedly is uniformity. 

1083
01:03:07,700 --> 01:03:11,100
So instead of everyone having 
their own type of money in 

1084
01:03:11,100 --> 01:03:13,900
there, being Bitcoin and all 
these 50, other currencies 

1085
01:03:13,900 --> 01:03:17,200
Wildcat banking. 
We have one currency that we can

1086
01:03:17,200 --> 01:03:19,200
be confident. 
And instead of everyone having 

1087
01:03:19,200 --> 01:03:22,500
every law, that is different 
from one another and us some 

1088
01:03:22,500 --> 01:03:26,000
constantly in Conflict. 
We have uniformity in law. 

1089
01:03:26,200 --> 01:03:28,800
What is wrong with that analysis
of anything? 

1090
01:03:29,400 --> 01:03:33,600
Uniformity is good sometimes, 
but variety is also good 

1091
01:03:33,600 --> 01:03:35,900
sometimes and we see The market 
economy. 

1092
01:03:35,900 --> 01:03:39,500
Consumers are provided with 
uniformity when they value it, 

1093
01:03:39,508 --> 01:03:42,600
and they're provided with 
variety when they value it. 

1094
01:03:42,607 --> 01:03:45,700
So one thing that you notice 
about going to eat at 

1095
01:03:45,700 --> 01:03:49,000
McDonald's, for example, is that
if you go to eat at the 

1096
01:03:49,000 --> 01:03:51,700
McDonald's here in Dayton, 
Tennessee, what you get is 

1097
01:03:51,700 --> 01:03:54,800
probably almost exactly the same
as what you would get from the 

1098
01:03:54,800 --> 01:03:58,900
McDonald's in Alaska or, or in 
in Europe somewhere. 

1099
01:03:58,900 --> 01:04:03,700
So like there's there's a lot of
uniformity in McDonald's 

1100
01:04:03,700 --> 01:04:05,300
offerings and the reason why? 
Why? 

1101
01:04:05,300 --> 01:04:09,200
It's because they have realized 
that consumers value that aspect

1102
01:04:09,200 --> 01:04:12,700
of of their decision to buy from
McDonald's. 

1103
01:04:13,300 --> 01:04:20,400
However, if you go to, if you go
to an ice cream shop, then 

1104
01:04:20,600 --> 01:04:23,800
you've got all sorts of flavors 
that you can choose from all 

1105
01:04:23,800 --> 01:04:25,700
sorts of variety that you can 
choose from. 

1106
01:04:25,900 --> 01:04:27,800
And the people who are running 
the ice cream shop. 

1107
01:04:27,800 --> 01:04:32,000
They've realized consumers value
having all of these choices to 

1108
01:04:32,000 --> 01:04:35,800
make in in deciding what sort of
ice cream dessert that Want. 

1109
01:04:35,800 --> 01:04:38,600
So the market provides 
uniformity when consumers value 

1110
01:04:38,600 --> 01:04:41,800
it and the market provides 
variety when consumers value 

1111
01:04:41,900 --> 01:04:44,000
government is bound to get that 
wrong. 

1112
01:04:44,800 --> 01:04:48,200
I was thinking that the other 
day in the liquor, aisle at the 

1113
01:04:48,200 --> 01:04:50,500
supermarket. 
I look, there's all these 

1114
01:04:50,500 --> 01:04:53,400
bottles of wine that, you know, 
someone who works in a job, 

1115
01:04:53,400 --> 01:04:56,400
like, me can afford. 
And I go how many kings in the 

1116
01:04:56,400 --> 01:04:58,500
past had access to this much 
for. 

1117
01:04:58,700 --> 01:05:01,300
I bet I know they had wines and 
all these castles and everything

1118
01:05:01,300 --> 01:05:04,100
else. 
Do they have this many options 

1119
01:05:04,300 --> 01:05:05,600
and I'm always trouble. 
All told. 

1120
01:05:05,600 --> 01:05:08,800
Well, our choices are restricted
in capitalism work or die. 

1121
01:05:08,900 --> 01:05:11,100
Meanwhile. 
Communism of course, is work and

1122
01:05:11,100 --> 01:05:14,300
die. 
But but but look at all these 

1123
01:05:14,300 --> 01:05:16,300
choices. 
It almost gives us decision. 

1124
01:05:16,300 --> 01:05:20,200
Paralysis to the point where no 
matter what we do, we'll be 

1125
01:05:20,200 --> 01:05:23,000
unhappy because there's so many 
things that we could have done 

1126
01:05:23,100 --> 01:05:25,800
that. 
It puts us in a state of anxiety

1127
01:05:25,800 --> 01:05:30,400
is a shortcoming of Freedom 
decision, paralysis and more 

1128
01:05:30,400 --> 01:05:32,200
anxiety than you, otherwise 
would have. 

1129
01:05:32,400 --> 01:05:35,100
If decisions were kind of nudged
or forced on you. 

1130
01:05:36,600 --> 01:05:39,100
I don't know. 
That's it's a good question. 

1131
01:05:39,100 --> 01:05:42,800
I don't really have a good 
response to that. 

1132
01:05:42,800 --> 01:05:45,900
It's not something that I've 
been estimated to answer before,

1133
01:05:46,100 --> 01:05:50,300
but it seems to me that that's 
not on the businesses. 

1134
01:05:50,300 --> 01:05:54,800
It's not on government to to 
either increase or decrease the 

1135
01:05:54,808 --> 01:05:58,400
number of choices that consumers
have it seems to be more of a 

1136
01:05:58,400 --> 01:06:01,500
personal problem. 
But one thing that you reminded 

1137
01:06:01,500 --> 01:06:05,200
me of in that in your in your 
question was talking about Out 

1138
01:06:05,207 --> 01:06:07,300
how we're better off than the 
kings of old. 

1139
01:06:07,300 --> 01:06:10,600
I think that's absolutely true. 
There's a Matt Ridley talks 

1140
01:06:10,600 --> 01:06:17,200
about that, a lot that the kings
of old had an army of people to 

1141
01:06:17,200 --> 01:06:19,500
prepare to prepare a meal for 
them. 

1142
01:06:19,500 --> 01:06:23,700
And we have the same thing as 
consumers in the 21st century. 

1143
01:06:23,700 --> 01:06:27,500
It, I live in a very rural part 
of the country. 

1144
01:06:27,500 --> 01:06:33,100
But even in this very small 
town, I've got a whole Army of 

1145
01:06:33,100 --> 01:06:37,100
people who are ready to provide 
me with the Meal right now at 

1146
01:06:37,100 --> 01:06:39,700
the snap of my fingers. 
I all I have to do is open up my

1147
01:06:39,700 --> 01:06:43,300
wallet and give them some money 
and they're ready to prepare any

1148
01:06:43,300 --> 01:06:45,500
sort of meal that I could 
possibly want. 

1149
01:06:45,600 --> 01:06:47,600
It. 
Just even, even in this part of 

1150
01:06:47,600 --> 01:06:50,100
the country where there's not a 
lot of, you know, options. 

1151
01:06:50,600 --> 01:06:53,800
I have that ability to do that. 
So you're absolutely right. 

1152
01:06:53,800 --> 01:06:59,500
We indoor plumbing, air 
conditioning, the all of the 

1153
01:06:59,500 --> 01:07:03,200
conveniences and entertainment 
of Modern Life. 

1154
01:07:03,700 --> 01:07:06,400
Make us much wealth. 
Higher than the kings of old. 

1155
01:07:07,700 --> 01:07:11,000
Another criticism is, someone 
could say, you know, what, fine,

1156
01:07:11,400 --> 01:07:15,500
I concede that we are wealthier 
than many kings in the past and 

1157
01:07:15,500 --> 01:07:18,000
even like, have poor Calvin 
Coolidge's. 

1158
01:07:18,200 --> 01:07:21,700
Son got like a blister on the 
tennis court in the White House 

1159
01:07:21,800 --> 01:07:24,000
and died because he didn't have 
access to penicillin. 

1160
01:07:24,100 --> 01:07:26,600
Something we all have now. 
So even like recently the 

1161
01:07:26,600 --> 01:07:29,500
president of America, the 
average person can have a longer

1162
01:07:29,500 --> 01:07:33,700
life expectancy than their kids.
People say, all right, I can see

1163
01:07:33,700 --> 01:07:38,100
it all that but what This 
capitalist free-market does is 

1164
01:07:38,100 --> 01:07:41,500
it gets people obsessed with 
products and services and buying

1165
01:07:41,500 --> 01:07:44,300
and selling and trading. 
I care about the higher things 

1166
01:07:44,300 --> 01:07:48,500
in life, spirituality, family, 
doing what's best for my group. 

1167
01:07:48,500 --> 01:07:53,600
My nation, or the race at large 
capitalism gets people into a 

1168
01:07:53,607 --> 01:07:56,400
dumb primitive mindset, 
stripping them of their 

1169
01:07:56,400 --> 01:07:58,400
Humanity. 
Well, how do you respond? 

1170
01:07:59,100 --> 01:08:02,300
I would say that they're 
probably not mad with 

1171
01:08:02,300 --> 01:08:06,400
capitalism. 
But with consumerism, they have 

1172
01:08:06,400 --> 01:08:09,100
an issue with people's own 
psychology. 

1173
01:08:09,100 --> 01:08:17,300
Not with the economic landscape.
Not not with not with the wave 

1174
01:08:17,300 --> 01:08:21,300
firms who are responding to 
Consumers psychology. 

1175
01:08:21,300 --> 01:08:25,600
So that seems to be a problem. 
If you're if you say people have

1176
01:08:25,600 --> 01:08:32,500
the wrong values, then it's It 
doesn't make sense to blame it 

1177
01:08:32,500 --> 01:08:35,100
on the people who are responding
to people's values. 

1178
01:08:35,100 --> 01:08:37,700
Does it make sense? 
So like if I think people are 

1179
01:08:37,700 --> 01:08:40,300
too, but see, realistic, they 
shouldn't, they shouldn't want 

1180
01:08:40,300 --> 01:08:42,500
to eat at McDonald's. 
They make all these cheap 

1181
01:08:42,500 --> 01:08:44,000
hamburgers. 
They should want nutritious 

1182
01:08:44,000 --> 01:08:44,600
food. 
Suppose. 

1183
01:08:44,600 --> 01:08:48,200
That's a value that I have. 
I, it wouldn't make sense for me

1184
01:08:48,200 --> 01:08:52,300
to blame McDonald's. 
McDonald's is only responding to

1185
01:08:52,300 --> 01:08:54,399
the values that consumers 
already have. 

1186
01:08:54,600 --> 01:08:57,600
So it seems like that. 
It seems like the finger is 

1187
01:08:57,600 --> 01:09:00,399
pointing in the wrong direction.
That sort of criticism, the 

1188
01:09:00,399 --> 01:09:06,100
problem is with with people's 
own values, not with not with 

1189
01:09:06,500 --> 01:09:09,500
the economic framework. 
That gives people what they 

1190
01:09:09,500 --> 01:09:11,399
want. 
If that makes any sense. 

1191
01:09:11,899 --> 01:09:14,300
Yes. 
And a similar but sort of 

1192
01:09:14,300 --> 01:09:18,100
different question, is just 
caring about the ends and being 

1193
01:09:18,100 --> 01:09:21,800
pretty squirrelly about. 
The means that most often the 

1194
01:09:21,800 --> 01:09:25,300
one that most often pulls at. 
My heart strings is, you know, I

1195
01:09:25,300 --> 01:09:29,600
just want to live in a society 
that has the Beautiful Gothic 

1196
01:09:29,600 --> 01:09:32,600
cathedrals of Europe, whatever 
gets me there. 

1197
01:09:32,600 --> 01:09:35,200
Whatever. 
Gives me the sense of sublime. 

1198
01:09:35,800 --> 01:09:38,600
Feeling this great architecture.
Makes me feel one with the 

1199
01:09:38,600 --> 01:09:40,200
universe. 
That's what I want. 

1200
01:09:40,200 --> 01:09:43,100
Someone wants that result. 
Why should they Embrace private 

1201
01:09:43,100 --> 01:09:45,200
property? 
Free exchange and voluntary 

1202
01:09:45,200 --> 01:09:52,000
contracts? 
Well, I don't really have a good

1203
01:09:52,000 --> 01:09:54,300
answer to that. 
At least, there's not one that's

1204
01:09:54,300 --> 01:09:59,800
coming to the top of my mind. 
All I can say is that It seems 

1205
01:09:59,800 --> 01:10:05,300
like if you want if you want 
that universe and people aren't 

1206
01:10:05,300 --> 01:10:09,300
providing it for you. 
The problem might be with your 

1207
01:10:09,300 --> 01:10:12,400
own desires and not with what 
everybody else is doing and 

1208
01:10:12,400 --> 01:10:14,600
producing. 
I don't know. 

1209
01:10:14,600 --> 01:10:16,700
Is that the direction that 
you're going with that question?

1210
01:10:17,800 --> 01:10:21,900
I'm just trying to get at what 
what is really behind the gosh. 

1211
01:10:21,900 --> 01:10:23,800
I hate driving and seeing 
businesses. 

1212
01:10:24,000 --> 01:10:27,700
I want to drive and see beauty. 
I don't care if the Beauties 

1213
01:10:27,700 --> 01:10:30,100
provided by the church. 
The state or the market. 

1214
01:10:30,100 --> 01:10:33,600
I just want it. 
Why should that person be on our

1215
01:10:33,600 --> 01:10:37,400
side instead of theocrats, 
monarchists or Democratic 

1216
01:10:37,400 --> 01:10:43,900
socialists? 
Well, I think, in under 

1217
01:10:43,900 --> 01:10:48,200
capitalism, there's an increase 
in the productivity of Labor and

1218
01:10:48,200 --> 01:10:53,300
so people can live and survive 
easier than under other 

1219
01:10:53,800 --> 01:10:55,500
arrangements. 
Other Alternatives like you 

1220
01:10:55,500 --> 01:10:58,000
mentioned with with other 
varieties of government 

1221
01:10:58,000 --> 01:11:01,600
socialism stuff like that. 
And in that case it actually 

1222
01:11:01,600 --> 01:11:08,100
frees up more time for us to 
focus on the the non-essentials.

1223
01:11:08,300 --> 01:11:12,200
So if we have Increased 
productivity such that we can 

1224
01:11:12,200 --> 01:11:17,300
eat more and all of our needs 
are met it frees up more time 

1225
01:11:17,300 --> 01:11:21,200
for us to do to do the things 
that aren't necessary for Life, 

1226
01:11:21,200 --> 01:11:25,200
Like Making art building, 
beautiful buildings, and 

1227
01:11:25,200 --> 01:11:29,700
churches, making music or 
writing poetry. 

1228
01:11:29,700 --> 01:11:33,400
So all we have more time, more 
ability to do those sorts of 

1229
01:11:33,400 --> 01:11:37,900
things under capitalism, that 
maximizes, the productivity of 

1230
01:11:37,900 --> 01:11:43,100
everybody as Who's the other 
other situations where we're not

1231
01:11:43,100 --> 01:11:45,900
as productive, three more 
questions for you? 

1232
01:11:45,900 --> 01:11:49,100
These usually go much quicker. 
Thank you so much for your time.

1233
01:11:49,100 --> 01:11:51,500
The book, by the way. 
Just a reminder, is the broken 

1234
01:11:51,500 --> 01:11:53,600
window Link in the description 
below. 

1235
01:11:53,700 --> 01:11:57,600
It's a kids book, very friendly.
And in the back you get a real 

1236
01:11:57,600 --> 01:12:01,000
summary that will teach you more
than you could learn at any 

1237
01:12:01,000 --> 01:12:03,500
University that I've come into 
contact with. 

1238
01:12:03,900 --> 01:12:07,000
What is the most important 
intellectual contribution of 

1239
01:12:07,100 --> 01:12:11,600
Joseph Salerno? 
A whole Oh, man. 

1240
01:12:15,900 --> 01:12:19,000
He okay, so I'm not going to 
point to something specific. 

1241
01:12:19,000 --> 01:12:22,100
Although I could point to 
something specific, he is, he 

1242
01:12:22,100 --> 01:12:23,800
has done a lot of great work on 
business. 

1243
01:12:23,800 --> 01:12:28,400
Cycle theory, on monetary 
theory, on analysis of monetary 

1244
01:12:28,400 --> 01:12:32,900
policy, lots of great stuff, but
it personally for me, one thing 

1245
01:12:32,900 --> 01:12:35,400
that I love to see about a 
Salerno. 

1246
01:12:35,700 --> 01:12:42,800
Is he, the way that he goes 
about approaching any topic when

1247
01:12:42,800 --> 01:12:44,900
he's writing? 
And what you'll notice is the 

1248
01:12:44,900 --> 01:12:49,600
theme where he does not 
immediately discard what has 

1249
01:12:49,600 --> 01:12:52,700
been written in the past. 
So he does not immediately 

1250
01:12:52,700 --> 01:12:57,600
discard or try to totally 
construct a brand new framework.

1251
01:12:58,400 --> 01:13:02,100
He what he does is he makes use 
of what has already been 

1252
01:13:03,100 --> 01:13:05,200
developed by other great 
economists. 

1253
01:13:05,200 --> 01:13:07,600
Like Ludwig, von mises and 
Murray rothbard. 

1254
01:13:07,900 --> 01:13:17,100
So he one unfortunate Trend that
I've seen and he's seen in in 

1255
01:13:17,100 --> 01:13:19,300
Austin writing is a lot of 
people try to reinvent the 

1256
01:13:19,300 --> 01:13:21,200
wheel. 
A lot of people try to, you 

1257
01:13:21,200 --> 01:13:24,200
know, start from scratch with 
Austrian economics, you know 

1258
01:13:24,200 --> 01:13:29,300
come up with the theory of 
Austrian business cycle theory, 

1259
01:13:29,300 --> 01:13:35,600
for example, from scratch, what,
what Salerno shows and and I 

1260
01:13:35,600 --> 01:13:39,800
hope I can emulate in my own 
career is that we can simply 

1261
01:13:39,800 --> 01:13:43,400
rely on the good ideas that have
already been formulated by. 

1262
01:13:43,500 --> 01:13:46,600
The great Economist of the past,
we shouldn't try to be our own 

1263
01:13:46,600 --> 01:13:48,200
me sis. 
We shouldn't try to be your own 

1264
01:13:48,200 --> 01:13:51,000
rothbard. 
We should use the wonderful 

1265
01:13:51,100 --> 01:13:55,100
Foundation that they've laid for
us, most important intellectual 

1266
01:13:55,100 --> 01:13:57,800
contribution of Jeffrey her 
burner. 

1267
01:14:00,000 --> 01:14:02,000
My favorite thing. 
I know this isn't what you 

1268
01:14:02,000 --> 01:14:03,400
asked. 
But my favorite thing about 

1269
01:14:03,400 --> 01:14:08,700
Jeffrey, her burner is his clear
articulation of economic theory,

1270
01:14:09,000 --> 01:14:12,800
so I have the pleasure of 
watching him, give lectures at 

1271
01:14:12,800 --> 01:14:13,400
mrs. 
Universe. 

1272
01:14:13,600 --> 01:14:19,000
City almost every year since 
2009 and it's just an absolute 

1273
01:14:19,000 --> 01:14:23,200
pleasure to see him. 
Very systematically, very 

1274
01:14:23,200 --> 01:14:29,800
carefully, start from scratch 
with action to, to proceed into 

1275
01:14:29,800 --> 01:14:31,700
the law. 
Diminishing marginal, utility 

1276
01:14:32,000 --> 01:14:35,800
law of demand subjective value, 
market prices, a theory of 

1277
01:14:35,800 --> 01:14:38,300
money, a theory of economic 
growth. 

1278
01:14:38,300 --> 01:14:41,400
It really needs starts from. 
I know this sort of it sort of 

1279
01:14:41,400 --> 01:14:43,400
contradicts what I just said 
about Joseph Salerno. 

1280
01:14:43,500 --> 01:14:47,900
No, he starts at the very Basics
and builds up the entire 

1281
01:14:47,900 --> 01:14:51,000
economic theory, and it's a very
careful easy-to-follow sort of 

1282
01:14:51,000 --> 01:14:51,900
way. 
All right. 

1283
01:14:51,900 --> 01:14:54,800
So the reason why I'm not 
contradicting, what I just said 

1284
01:14:54,800 --> 01:14:57,800
about what makes Joe Salerno 
great. 

1285
01:14:58,200 --> 01:15:03,400
Is that what her burner is doing
is, he's simply relaying and 

1286
01:15:03,400 --> 01:15:07,300
condensing what he has read and 
pieces and rothbard in 

1287
01:15:07,300 --> 01:15:09,000
particular. 
So he's not. 

1288
01:15:09,000 --> 01:15:12,100
He hasn't he doesn't have his 
own economic theory that he's 

1289
01:15:12,100 --> 01:15:15,300
presenting. 
He is Simply very systematically

1290
01:15:15,300 --> 01:15:20,100
and carefully relaying to 
students the, the body of 

1291
01:15:20,100 --> 01:15:24,000
economic thought that we have 
received from mises and rothbard

1292
01:15:24,000 --> 01:15:26,500
and anger and boom, bovver. 
Get all the great Economist of 

1293
01:15:26,500 --> 01:15:29,800
the past and I was going to end 
it there, but I see you have a 

1294
01:15:29,808 --> 01:15:32,500
copy of man economy and state in
frame. 

1295
01:15:32,500 --> 01:15:35,500
So I got to say what's the most 
important contribution you think

1296
01:15:35,500 --> 01:15:43,800
of rothbart's? 
Rothbart did a really good job 

1297
01:15:43,900 --> 01:15:50,100
of systematizing mises and 
formalizing mises. 

1298
01:15:50,100 --> 01:15:53,700
So if you pick up Human Action 
and you flip through it, you'll 

1299
01:15:53,700 --> 01:15:56,600
notice that there aren't any 
charts or graphs or anything 

1300
01:15:57,800 --> 01:16:03,000
mises was also. 
He spent quite a few pages 

1301
01:16:04,500 --> 01:16:09,000
debating with the economic 
fallacies of his Time in 

1302
01:16:09,000 --> 01:16:12,000
rothbart in many economy and 
state, we see him do the same 

1303
01:16:12,000 --> 01:16:13,700
thing. 
But we also see him draw some 

1304
01:16:13,700 --> 01:16:17,200
graphs. 
We see him draw out a structure 

1305
01:16:17,200 --> 01:16:20,000
of production. 
And so, I think that for 

1306
01:16:20,000 --> 01:16:23,200
pedagogical reasons and makes it
easier to follow and makes it 

1307
01:16:23,200 --> 01:16:27,600
easier for us to work with and 
expand on when we have, when we 

1308
01:16:27,600 --> 01:16:32,100
have those sorts of diagrams and
also it's not just it's not just

1309
01:16:32,100 --> 01:16:35,200
his graphs but it's also the way
he explains it in a much, more 

1310
01:16:35,200 --> 01:16:37,500
formal sense that makes it 
easier. 

1311
01:16:37,800 --> 01:16:42,200
For students, especially like 
myself to to, to expand on. 

1312
01:16:42,700 --> 01:16:44,800
So, that's really one. 
Great thing about rothbard. 

1313
01:16:44,800 --> 01:16:48,800
I think just in general rothbart
has a very clear writing style. 

1314
01:16:49,000 --> 01:16:54,400
The, he was an amazing author 
and Economist and we owe a lot 

1315
01:16:54,400 --> 01:16:58,300
to him book. 
Is the broken window by dr. 

1316
01:16:58,300 --> 01:17:00,200
Jonathan Newman. 
Dr. Newman. 

1317
01:17:00,200 --> 01:17:03,100
Thank you so much for your time.
Thanks for having me. 

1318
01:17:03,108 --> 01:17:04,500
This. 
This has been great.