Welcome to Keith's night. Don't try to anyone and the
libertarian Institute. Today, I am joined by.
Lawrence W, read of Lawrence W read.com.
He is the president emeritus of the foundation for economic
education. One of my favorite
organizations. Mr. Reed, thank you so much for
your time. Hey, it's my pleasure.
Keith. Thanks again for having me.
Of course, what are historical narratives and why are they
important? Well historical narratives.
Let's say in contrast to a straight documentary tells a
story that has a genuinely true background to it, at least, but
often the characters are imagined or the specific
situations are created and then you write it, you know, as if it
happened that's it's not something it's not the style in
which I personally write, I tend to write nonfiction.
Shouldn't period. But historical narratives,
traditionally blend both fiction and nonfiction.
So why are those so important? It?
Seems like, well, the past is the past regardless of whatever
happened. Let's just focus on the future.
Well, I think they tend to be very entertaining and as long as
people go into them, knowing that, you know, they are not
word for word documentaries, that they do involve imaginary
situations and characters, but with a genuinely accurate
backdrop. I think they can tell stories,
they can make points. They can advance principles with
a background that people can relate to it, because they know
something about history. Karl Marx, would generally say
things like, they're The Narrative of History.
It's we had slavery, and then feudalism, and then capitalism.
Therefore, The Logical move in this, but good direction would
later be dictatorship of the proletariat.
And then communism, abolition of private property, if you want to
give people sort of a narrative to live by who will Advocate
libertarianism or conservatism something in this.
Small, government, voluntary realm, would you more or less a
creative story? Would you have sort of pillars
like, Marx, did where we're sort of moving in this direction?
How would you give someone a kind of story to be a part of
well, to begin with? I would not use the style of
Karl Marx use, because that was more like prophecy by someone
who was not a prophet. He had no idea what the A future
held and to suggest that history is governed by certain
predetermined stages and at some distant point in the future.
One stage will give rise to the next really was just pure
supposition, there's no fact factual case or logic to it,
it's just Karl, Marx deciding he wanted to fit his ideological
narrative into future history, that hadn't happened yet.
And of course, we know how in a Sure.
He was not only in his prophecies for the future but in
the way he understood economics and human nature.
So I wouldn't use his Approach at all.
My personal approach is, I mean, I'm very much of a nonfiction
writer but I see the value in things like novels or historical
narrative that is partially novelized because again, people
can relate to the background in which the Situations and
characters develop because they are somewhat aware of it.
It's not a totally new, it's not like, writing something about
life on some planet, we haven't yet discovered.
I mean, which case everything is made up.
When it comes to the beginning of American History, the New
York Times has sort of pinned the 19th, the 1619 project as
the beginning of American History.
The new beginning. Why?
Because this is, when the first slaves were brought to America.
When it comes to the history of slavery in America, where do
mainstream historians, get it wrong.
If at all Well, mainstream historians by and large will
part company with the 1619 narrative from The New York
Times. That that particular narrative
is a classic example of somebody deciding here is my Ideology.
Now, how do I shape history that already happen to fit my
narrative? How can I pick and choose among
things in the past? So as to seemingly verify the
ideology or the narrative I have, Predetermine.
I don't think that's either history or good storytelling
that's a perversion of History. I think the best approach is to
look at all things to the extent, we can that happened and
try to identify certain patterns or themes or character traits.
That seem to stand out as a determinant of, of events of the
day. If you do that, then the the
episode in 1619 Is, but one of many instances in American
history and Harley defining of what America was or became.
I think you could pick say the Mayflower Compact, which was in
1620 and say, well, that's the defining instance or episode in
American history. That has so much to say about
what came afterwards and Mayflower Compact was between
the Pilgrims and the other half of the crew or the, or I should
say, the passenger list of the Mayflower in which they agreed
voluntarily to a representative form of government once they
landed. That, that tells you more about
really what happened in America afterwards with all of its
flaws, including slavery. But those are flaws in most
cases that we have since conquered and they are not flaws
that are or ever work a killer. ER to this country, America did
more in many cases in many ways to end the slavery of the
individual in one form or another that just about any
other country in the history of the world.
One of the things I noticed when I sort started studying history
was while slavery and colonialism did exist in
America's past. It's one of the probably if they
least unique thing about America or the West in general, It's the
least unique thing. I mean there's a tablet the code
of your namu. I think it's like 2,000 years
old. They're 9 of the 34 laws talk
about slavery. Why is the least unique thing
about American history, constantly being put at the
center of the American discussion?
Well, I think the people who do that, who make that error, try
to make slavery such a centerpiece and determining
factor of just about everything else I think.
They first had decided what their personal agendas are and
then they are taking certain events out of context and
blowing them up into things far, more determined active of our
history than they ever were. Yeah, if you look at slavery, I
mean that's something that has Afflicted almost every corner of
the globe, ever. Certainly every continent but
Antarctica has had at one time or another slavery.
And at one time You could say that the great majority of
people living were slaves or serfs or at least had to live in
constant fear of the people with political power.
That was the order of the day for most of human history.
America came along and not by itself, but with a few other
places as well within a hundred years or so America came along
and said hey it doesn't have to be that way and we're going to
start freeing people up. They we didn't do it all in one
Fell Swoop but We created a system which allowed us over
time to perfect and improve the condition of human Liberty.
And although we still have work to do, we've gone further in
that direction than just about anybody else.
I want to give you a general summary of what I had learned at
Arizona, State University and in high school, you tell me if this
is accurate inaccurate, or what's missing, okay?
In the industrial revolution, you had the robber barons,
Carnegie Rockefeller constantly, the strong exploiting the week.
Finally after all this suffering, Teddy Roosevelt
stepped in with antitrust laws to protect the public from These
exploiters antitrust laws are good because they protect the
vulnerable from the strong. What if anything is wrong with
that? Could just about everything.
I hardly know where to begin. I know that is common mythology
and it's simple it is you just expressed it pretty fully and a
matter of 30 seconds and it sounds plausible but it's one of
those things that when you dig a little deeper and you examine in
particular the Persons and the performance of certain companies
that come under attack. So often you find very
frequently a very different story.
You mentioned Rockefeller. It's for example, he's the great
Boogeyman in American economic history according to those who
are hostile to Freedom free markets or capitalism and the
story goes well he was a monopolist but you look a little
closer and you discover it that's that's a myth, you know,
monopolies are Supposed to be firms or companies or even
governments that restrict output and raise the price and don't
care much about the quality of the product and abused.
The customer. You look at Rockefellers
Standard Oil and you find that the price of Standards principal
product which was kerosene in the first half century of its
existence. It steadily fell, the price
steadily fell dramatically from something like 40 cents a gallon
to Three cents a gallon and the quality of the product steadily
improved and yes, Rockefeller got big, but he always had to
deal with competition, not only domestic but also very fears
foreign competition, but because he earned a lot of money along
the way, which represented a mere fraction of the benefit
that he provided to the world's consumers.
He's often held up as greedy, Robber Baron.
But again, you look at the specifics and the Charge that he
engaged in predatory price, cutting forces that he slashed
the price in order to drive people from the marketplace
competitors and then after they were gone erased the price.
Again there's no factual evidence for that and that was
proven by professor John Magee. All you have to do is look at
the Journal of Law and economics October 1958, you'll find the
definitive study saying that never happened.
Rockefeller would have been foolish even to And yet that
charge is repeated over and over again.
Teddy Roosevelt. As you mentioned is portrayed as
well. Here's the guy who saved us with
antitrust law. The first antitrust law was in
1890 before, Teddy appeared on the scene, so you can't credit
him for that or blame him for that.
It was called the Sherman Act and it was one of the most
nebulous and ridiculous laws Congress has ever passed.
It just simply said, you know, if If you're a monopoly then the
government can come after you when we do for morale at the
morale of down. The point is, it did not Define
what constitutes a monopoly, didn't describe the behavior
that somehow does harm to Consumers and their short,
therefore should be adjudicated or reprimanded.
It was left to subsequent law to try to put some flesh on the
bones. And now we know from A Century
of scholarship that most antitrust has actually Harmed.
Consumers, far more than it has benefited.
Let's talk about a few other people from the robber baron era
when it comes to Cornelius Vanderbilt or Andrew Carnegie
Henry Ford. What do we need to know about
these individuals to have an accurate understanding of what
took place in the past? I think if you look at the I
mean you can make some positions till the cows come home.
But if you look at data that often tells a story very
different from what somebody's ideology would suggest.
The fact is that the service has these guys provided the products
that they produce all during the period, that they were getting
big in the marketplace, steadily improved, the price went down.
Competition was just as fierce when they were done with their
work as when they began their work, you had Cornelius.
Vanderbilt, for instance, engaged in a number of
businesses. He was in railroads he was in
steamships when it was in the steamship business, he had to
compete with a government subsidized steamship company.
And this is chronicled by a great historian and good friend
of mine Burton Folsom in his book, The Rock the middle of the
road. Rubber Barons.
But Vanderbilt kept saying it's a congress.
Hey why are you subsidizing this other guy to build a steamship
line that carry passengers across the Atlantic when I can
do it without a subsidy or do it for half the subsidy, and he
never took the subsidy but he eventually beat the subsidized
one simply because he was better.
And I mean, you could say, well, isn't that evil, he did it for
greedy purposes. Well, What?
He's not in the charity business who is few nonprofits may be.
But the great majority of the goods and services that make us
wealthy as a people are produced by for-profit, bottom line,
accountable and competitive private Enterprises.
Vanderbilt was no exception. So I think a person really has
to shed if they have a bias against successful people, if
they are envious of those who have more than they do, if they
count other people's blessings instead of their own.
Yeah. And they're going to look at
history within a jaundiced light and they're going to find a lot
of villains and victims but history is rarely.
So, simple, as that carers, your would suggest When it comes to
the idea of profit, it seems like people think they're making
a big point when they were a prophet seeker.
And I said yes and these evil customers only come into my
store because they want goods and services for their own
self-interest that as if there's anything horrible with though
with that from an economic standpoint standpoint as the
president emeritus of the foundation for economic
education, what is it that people need to have a general
understanding of when it comes to the idea of What is the
average person missing? It's a great question.
And it's one that I dealt with when I was teaching at Northwood
University years ago. Because I had some students who
came into class as freshman thinking that profit doesn't
that mean greed, and isn't that a bad thing?
And so, here's what I used to do.
I used to say to students? Okay, imagine a hundred dollars
worth of stuff ingredients. Factors of production, whatever
you want to call and some Guy takes those hundred dollars
worth of stuff and he plays with them shapes them a certain way
and puts them in a certain place where he thinks people will want
the end result. And lo and behold, people are
willing to give him $150 for that hundred dollars worth of
stuff that he played around with and change transformed and
putting the right place. Okay, well, we might say, well
he made a profit. Should we be horrified by that?
No should say. He added value.
He took x amount. And made an X Plus, would it
have been virtuous if he had taken that hundred dollars worth
of stuff and turned it into something that people would only
give him $50 for? I mean any numbskull can do
that. All you do is a lot of match to
it and somebody will give you a less for it than what they would
have before. But for you to consistently earn
that profit by adding value is not an easy thing to do and
entrepreneurs will tell you time and time.
Again, they didn't succeed at everything.
I always had to take a risk, they failed at some things, but
they learn from their mistakes. They bounce back, they
persevered. And they please customers along
the way. So profit is sort of a measure
of service to others if you earn it it's because people are in
effect saying by their purchases.
What you did with that stuff is now worth more than if I had
gone out myself and borrow the ingredients on my own one final
thing on the Robert. Ends before we move on, please
remind me of the metrics that we could use to determine whether
these people were parasitic or they were producers to society.
The one that that came to mind was before we determine that,
let's see if whatever they were producing Carnegie steel, was it
going up in price over time? Certainly evil greedy
monopolist. We should see prices always
rising in steel and the workers wages.
Constantly, decreasing. What are some metrics?
We can use to really make sure we have an accurate
understanding. What happened?
Well, certainly the price of the product is one metric over time.
And in the case of Carnegie, the reason he made his money was he
figured out how to make steel cheaper than anybody else and
anybody who had to purchase steel for the construction of
this or that or what? Not greatly benefited by
Carnegie's genius. That's one.
Measure metric. Another one would be to the
extent. You Measure the quality of the
product. I mean, if every time you go to
the store and you buy Campbell's soup, but tomato soup but it has
fewer tomatoes in it than the day before you can say well
maybe the price hasn't changed but the quality of the product
certainly has well in the case of Carnegie not only did his
steel become cheaper, it also became better and tougher and
stronger. Another metric would be return
on investment because, you know, great entrepreneurs, rarely
Start out with a bundle of money, they don't start with
their billions. They often start in their garage
and entered their genius, along with the help of their workers
and investors into something of Great Value.
Well, it's important to know what kind of return that they
pay investors, because investors are what they're taking their
savings and entrusting them to this gentleman or 122.
Engage in business and they deserve a return.
In fact no entrepreneur is going to attract Capital if he or she
never pays a return. So return on investment is
another good measure and there again, you want value creation.
And that's what you get in a free Society.
Those who don't create value, those are subtract from it will
not attract investors and will not attract customers is over
before long, their mistakes are obvious and their history.
Or they go to work for somebody else.
So those are among the metrics now, certainly, you'll want to
also look at conduct, I mean, you can certainly make money if
you cut corners and cheat people sometimes.
But that kind of tactic tends to be short term catches up with
you. And if government is doing its
only legitimate job, it will certainly provide a legal
channel for redress of grievances on the part of
Summers are even competitors. But if you're an honest person
and you're adding value to society and you're taking the
risks needed to build an Enterprise, you will be rewarded
in the marketplace and that is the most important metric of
all, of course. And we can clearly see this when
it comes to the Fortune 500. If you compare it today, too, I
think 1955, I think only 60 companies are still in there,
there's this constant turnover, there's this Student Innovation
that has to take place which of course, the voluntary sector
seldom gets gets the credit. So, that's right.
It keeps my may add, I don't want to suggest that everybody
in business is on the up and up to the that some business people
use their political connections to get a special favor to get
legislators to give them a subsidy you know, as a believer
in Freedom and free markets, me I will suffer slowly against
that I want to Fairfield of no favors no.
I don't want the playing field biased by the intervention of
politicians who try to pick winners and losers with other
people's money. So, all that I've said applies
to Market entrepreneurs, not political entrepreneurs and
certainly not Market entrepreneurs, who mix politics
in with their productive activity.
And you use the perfect example of Edward, Collins verse
Cornelius. Vanderbilt that what?
One of my favorite stories when it comes.
As to the Great Depression, General narrative, you had this
unregulated capitalism, this gave us a Great Depression
because Herbert Hoover basically, sat back and just
said, well, it'll take care of itself.
Fortunately, the voters got some sense into them, elected FDR, he
gave us the New Deal that got us out of the Great Depression.
What is wrong? If anything with what I just
said that is certainly one of the most horrific and Aalto
commonplace incorrect historical narratives where to start again
that narrative, I think was created and propagated over the
years because it fits somebody's ideology or a number of people's
ideology. It fits neatly into the, we hate
capitalism camp. We need bigger government to
take charge of the economy camp. But when you again, look at the
actual facts, you'll find that Already had its depression, its
first sort of the Federal Reserve System which is a
creation of the government. We're still paying a price for
that monster today. They the FED expanded the
nation's money and credit Supply by according to Murray rothbard
65 percent or so. From 1924 to 29, we know that
period as the Roaring Twenties. We had good things happening.
You had Calvin, Coolidge, cutting tax rates so that was
helpful. Very positive.
But at the same time you had the FED spiking the punch, creating
a bubble, driving interest rates to record lows, this easy money
flowing into the system. Creating a boom that would have
to sooner or later be corrected and that began in nineteen late
1929, worth of Boston, the stock market was a classic bubble
caused by the fed. And it was a bubble pricked by
the FED, which had begun to raise interest rates
dramatically as Early is early 1929.
Well this the depression might have been only a recession and
may have ended it a year except there were a series of crazy
interventions there after that took a recession and made it a
depression in June of nineteen. Thirty didn't have a depression
yet but President Herbert Hoover and the Congress seeing nagging
Lehigh on employment. Decided, hey let's close the
borders to trade. Let's raise.
Is tariffs to an all-time high, the smoot-hawley Tariff Act of
1919 30, that that's shut down World Trade.
It led to retaliation by other governments against American
Goods at that. Took a recession, made it a
depression. That's not a free market
phenomenon. That's an act of government 1932
in the midst of depression with unemployment 20% or so, what did
they do? They double the income tax.
Imagine that in the midst of the depression.
Crashing. If you weren't already flattened
by the smoot-hawley Tariff. Now you're really got slammed.
The top rate was raised from 24% to 65% and all kinds of other
taxes were raised. That was very depressing and
then you had an election in which Franklin Roosevelt the
Democrat nominee ran against the incumbent Herbert Hoover, the
Republican and Roosevelt said, some things that I would have
supported. He said Herbert Hoover is the
greatest taxing and spending president in memory and we're
going to balance the budget and cut government spending.
Get it off your back and out of your way.
He was the less a fair candidate if there was one in 1932, so he
wins election. But then does just the opposite
of everything that he promised. And that's why you get seven
more years of depression because Franklin, Roosevelt being
basically an economic ignoramus his own Closer by You're James
Warburg made that plain in his book, hell-bent for re-election,
he starts jacking up taxes, which he is assailed Hoover for
doing. But before he's done, the top
rate will go to 91% piles on the regulations price controls and
so forth. In other words that narrative
that the economy was less a fair hands off, minimal government is
nonsense. The government caused the Great
Depression. Oh, and then we lingered in it
for a decade because of a series of stupid interventions
thereafter. How does something like the
smoot-hawley? Tariff one might say, well, yes,
it restricted trade with foreigners, which is good
because it creates jobs in America and that's how you would
grow the economy. How is it that enacting tariffs
would hurt the domestic economy. A fundamental principle Keith of
trade is that you cannot close the door to Imports without
closing the door to exports. In other words, if foreigners
can't sell here, because our tariffs on their goods are so
high. Well, then how can they earn the
dollars that they need to buy here?
The cars don't come from Japan. If they can't sell them here and
therefore, the boat doesn't go back to Japan with American
grain. That's why for instance,
agriculture in America was particularly hard hit by
smoot-hawley. It was one of our biggest,
export Industries, about a third of what farmers were producing
on American Farms was destined for overseas markets.
But now with smoot-hawley foreigners can Learn Dollar on
farmers are stuck with all this stuff, and no markets to sell
it. And every business that depended
upon the prosperity of the farmer from rural Banks to
fertilizer companies, they go into depression as well.
So it's an easy alluring temptation to think that you
help your economy by forcing people to not buy from a
foreigner, but it immediately boomerangs.
And even if the foreign government does don't retaliate,
which they usually do it boomerangs anyway.
Simply because you've made foreign Goods, too expensive to
sell here, and then for his can turn the dollars, they need to
buy from us. So we get a double-dip recession
in 1937 1939. Henry morgenthau comes out and
says look I've been part of this Administration, we've spent more
than ever and unemployment as bad as it previously was, we've
had all this time and it hasn't given us what what what we need.
So historians have kind of seen this and said okay.
Okay we admit it wasn't necessarily the new deal but we
had to try something. What really got us out was
Entering into the second world war by conscripting 12 million
men. The second world war got us out
of the Great Depression. What what, what do you say to
that? Yeah, that's another very
common, but also incorrect narrative on the surface.
It appears to be plausible because unemployment
dramatically fill with American entry into World War Two.
Well we took 11 million men and drafted them into the workforce.
The government Workforce as Soldiers.
They they were taken out of the domestic Workforce so they
didn't count anymore as unemployed.
So, yeah. You did, you take 11 million
unemployed and and take them out of the equation.
Your unemployment numbers got to look better but if you look at
various measures of standards of living, during the War years at
best, the American standard of living stagnated and that's at
best because you can make a strong Encase that it actually
declined we had. We were instead of making
washing machines and Automobiles for domestic consumption, we
were making airplanes and tanks and guns and arguably we had to
do that to win the war, but don't confuse that with, you
know, an improving economy. We had to suffer through the War
years with an economy at best, that was stagnating.
We didn't really see economic recovery until the war ended and
there are two big factors. Is that help?
Explain why the depression finally came to an end in real
terms as well as in those more artificial ways?
In 1945, we had in 46, we had the biggest reduction in
government spending in American history, largely demobilization
of the military after WWII, you know, a Keynesian Economist
would say, uh-oh, government spending collapsed.
Well then we surely. We're going to have another
depression and some Pilar thought we would.
But we have just the opposite because when government spending
went down what that meant was, you had vast amounts of
resources that now could flow into the far more efficient
private sector. Now, you could make those
washing machines and Automobiles instead of stuff, we're going to
blow up half a world away. That was one very beneficial
thing, a reduction in government spending.
But you also had a new President Harry Truman and you know, I
don't count him as one of our better ones but Was a darn sight
better than Franklin. Roosevelt Harry Truman was not
this new deal, you know, run roughshod over capitalism and
kind of guy. He got rid of a lot of the
radical new dealers and he signed on baby reluctantly, but
he did sign on to a dramatic reduction in the corporate
income tax rate. It went in one Fell Swoop, the
income tax rate on corporate income went from 90 percent down
The 38% immediately after World War Two Harry Truman signed that
into law. Well, just ask yourself if
you're if you're a business and on one day the government's
going to take as much as 90% of what you've earned.
But the next day it says, no we won't take any more than 38,
isn't that going to affect your behavior?
I mean, of course, it will mean, it's a dramatically improve
situation for things like Risk, taking and expansion of your
businesses and the hiring of new workers or so.
Also responsible for their recovery, not the New Deal or
the war spending. That's simply kept us in a
prolonged depression. When it comes to the well-being
of, I hate the term, the workers as if entrepreneurs, don't do
any work, as if people who don't get paid and do work around the
house as if they're not valuable, it's ridiculous.
But when it comes to helping the Working Class People in entry
level jobs up to working in their later years in life.
What is it about? The free market that you
support? That makes it a place where the
workers would greatly benefit from the free.
Market means such things as Choice.
It means that you have more than one option in so many aspects of
life, whether it be as a consumer buying goods, among
competing providers who have every incentive to treat you
well. And or those who don't usually
don't go very far or to where you want to work or even whether
or not you want to start a business yourself.
A free market means that a man or a woman who is a worker ER
today employed by another person can become an employer tomorrow.
I mean, that happens in a free economy all the time.
Everyday, most successful entrepreneurs will tell you that
they weren't always entrepreneurs from H3.
You know, mean, they work for other people for a time, but
they had some creative genius, and some risk-taking
willingness. And they, at one point decided,
they wanted to create an Enterprise, a free market allows
you to do that, the, through the competition among Employers and
the competition among creators of goods and services, every
worker benefits, you get more stuff at lower prices of better
quality. The more competition that you
have is forming a union consistent with the principles
of free markets. It depends on what the union is
going to do. In other words, once again, just
as you would judge a company or should judge a company by its
conduct and performance, you should judge unions on their
conduct and performance. Union can perform a very
beneficial responsibility or activity.
If it brings to the attention of the employer issues in the
workplace, that a that individual workers may feel
reluctant to bring Well, that's a positive contribution.
If they enable the purchase of certain Services by their
workers in bulk at lower price. That's a way that traditional
unions or trade associations have been beneficial, it's where
I draw the line is when a union says, now we want to claim to
represent every worker on this site, whether they choose to be
a part of us or not, we need the compulsion of government to I'm
in here and tell people if we get 50% plus one to join the
union everybody else has to join.
Even though you have the 49 plus percent that might say wait a
minute, it's not for me I'd rather continue to bargain for
myself. No thanks it's compulsory
unionism that does a lot of harm and immediately it insulates to
a considerable degree. Union leadership from the
consequences of their own bad actions because workers can say,
no thanks. I think I'll patronize Union, or
just handle things myself. I'm in favor of choice,
competition, and accountability in every aspect of life.
So when unions employ political coercion, where they use the
state to get special benefits that freeze-out competition, or
compel workers to pay dues, whether they want to or not,
that's that's when they no longer become a, beneficial
Organization for the workers, but become a threat every bit as
much as big taxi government. How is it that capital
investment and competition benefit the workers?
Well, without capital investment, no worker would be
making very much a whole. I mean, think of it, capital
investment can be thought of in two ways.
It's number one, the funds necessary typically from
people's savings to buy the tools of production to start a
business and capital investment also is can be considered those
tools, you know, the the Machinery that enables you to
dig the foundation for a home with a backhoe.
Instead of a spoon. If you if you're employed to dig
a foundation for a home. But the extent of the capital
you have at your disposal is a spoon.
You're going to have to work awfully hard and long before you
ever get to completing the First Foundation.
Whereas with a backhoe you can do in a day or two, your worth.
As a worker is far greater when you have tools like, backhoes to
get the job done, then then you're worth when or you can
produce as what you can do with a spoon.
That I think is one of the most interesting things about the
free market. How it's constantly harmonizing
self-interest saying how I can't get any money out of your
pocket, unless you voluntarily give it to me.
I'm not entitled to any of your time, unless you choose to spend
it with me, and you have the right to withdraw it in the
future. So even these things that appear
to be self-interested or even if they are self-interested, you
still are benefiting people. Besos with books, is probably
the best. Thing it's so funny.
I heard I think it was Pat Buchanan, talking about, you
know, the price of books were a higher number of dollars.
So even forget about inflation when he was younger or when his
first books came out than they are today on Amazon.
They've actually decreased in price in spite of the
quantitative easing that the federal government's given us.
So the capital investment benefiting workers is just the
perfect example of harmonizing interests.
Exactly as if politicians don't benefit yet Nancy Pelosi is
actually a nun who works for a monastery.
She's never profited. Chuck Schumer he's homeless.
He just trying to help us. I'm sorry I interrupted you.
Oo. That's right.
I've often wondered at what point does the politicians
motivations cease to be self-focused ourselves
interested in some suddenly become other feeling and
compassionate and and only Ston others.
It does that happen on Election Day or does it happen on the day
or the day they take office or you know, when does that, what
does that actually happen? But you know, Adam Smith
expressed it so well, 250 years ago when he said, if I can
remember it for Batum, he said it is not from the benevolence
or Goodwill is not from the benevolence of the butcher or
the Brewer or the baker that we get our daily sustenance, but
rather through their own For their own self-interest.
I mean, isn't that true? I made, you want to get somebody
to give you something or do something for you.
There's a couple ways to do it. One, you can take a club and
beat the crap out of them, but, you know, whatever you get is
going to likely be a one-time occurrence or you can say, hey,
I got something for you. And let me say why it would be
worth it to you, to give me what you've got.
If I give you what I've got, I mean.
It's one way or the other folks. Either you can beat the crap out
of people to get what you want. Or you can harmonize your
desires with theirs and find peaceful Cooperative ways to
deal with them final topic on understanding of of History,
actually, two more. When it comes to Lyndon
Johnson's, Great Society. The big ones that come to mind
being Medicare and Medicaid. This sort of was a
transformation from either leaving people to their own
Says, or having unstable things as opposed to ushering in a
social safety net, which we benefit from to this day.
What if anything is wrong with the general understanding people
have of, Lyndon Johnson's, Great Society programs, the Great
Society, of course, encompassed. Number of things only expansion
in in welfare payments at entitlements.
But also increases or new Ventures.
I should say into To medical care for the Indigent.
And for those of elderly age, one of the flaws in the whole
thing was the failure to look at the long-term.
A lot of these kinds of programs.
When government first starts the month, Social Security at first
of course, still lots of people were we took money from a lot of
people and gave it to a very few people.
Actuarially that would pretty good for a time.
But all of these programs, Social Security, Medicare
Medicaid, you're on the road to bankruptcy, and each time it
looked like that was in the offing.
Politicians would patch it up a little bit by raising taxes.
Maybe in a few cases is cutting benefits or at least adding
years to the time when you could first begin to collect and case
of Social Security. But right now the actuaries at
those various institutions know, full, well and have been are
plenty of Articles written about this then in the next decade or
so. Medicaid, Medicare Social
Security are going to face calamitous financial problems
and that's When we may look back and decide maybe it wasn't, such
a good idea in the first place, people who want to have a secure
and free and prosperous future, not only for them, but for their
grandkids need to be thinking long term, not just short-term,
otherwise they'll go in for any, any suckers scheme, that seems
to throw something at you. But what, you know, I often like
to say this, I like sure a lot about Roman history and I like
to point out, if I could go back to ancient Rome, Let's say very
late in the Republic as Liberties were crumbling.
And before long, they were all lost and the empire was created.
If I could go back and speak to the Mob, say 50 BC, I would like
to say to them. Hey folks you know you've been
on this welfare state bandwagon for a hundred years and a lot of
you are feeling pretty good. It seems like you're getting
more than your pay it in so what's wrong with it?
But let me tell you I come from the future and I know where this
is headed. It's Bankrupt society and you
will. So we can yourselves.
You will become so dependent upon politicians future.
Generations will care not a whit about whether they earn their
income by theft from others, through the political process or
through their own efforts. Your Society will so Decay that
in my day will be reading about you in the history books as a
civilization that committed suicide and felt, they were
having a lot of fun along the way.
Is that what you want? And I'd like to think maybe some
of the Romans would have said, maybe we should think long term
if we don't want maybe we don't want to go down unsustainable
paths that's that's one of the central problems of welfare
states. The fact that they make a lot of
people feel good for a time but they set into motion forces
which destroy Society in the long run.
If they're not turn back but I would also like to tell people
hey you know, fundamentally something it's rooted in Wrong
is not likely to end well. And when you Advocate things
like government, forcible redistribution robbing Peter to
pay Paul, you're talking about the theft and even if you're on
the receiving end and it makes you feel good and if it makes
you feel good that other people who seem to deserve it or
getting something you're still justifying theft, aren't there?
Other meat is that this is that as creative as you can get, I
mean, a free Society. The we just throw our He's to
the politicians and in favor of the crumbs that they send our
way and think that's the end of it, a free and creative.
People will come up with plenty of ways to solve problems,
sending your money to Washington laundering it through a federal
bureaucracy that then spits out. A portion of it is the dumbest
way to solve problems that I can think of.
I was thinking of the high administrative costs that you
get with something like this because there's nothing
anti-free Market about pulling your resources together and Back
today because of free-market Innovations, it's easier than
ever. We could have the acacio, Cortez
Healthcare fund where everyone chips in and your names on the
list. So then when you need Healthcare
later in life, well then you get money out of this thing.
That's a, that could be your Single Payer sort of system but
they're not interested in that. I love the idea of taking care
of people when they're older. My only beef is not letting
people opt out and the state monopolizing the money supply
but You get what I'm saying then?
Why is this been such a hard sell considering it's not that
we hate taking care of people. We hate this groups claim that
they have the right to forcibly, take care of people.
Why is that been such a hard sell?
Well it's in so much of Life. The near term Here and Now
forget the future. Short-term focused stuff is an
easier. Sell I wish it wasn't.
But it's just the way things are you but we are given braids
human beings. Each of us has a braid and the
capacity to think and we should be thinking about these things
far more deeply than you, what you can put on a bumper sticker.
But people like AOC, you know, they can barely understand it,
if it'll fit on a bumper sticker, they just don't seem to
care or even think through the long run consequences or the
Alternatives that might be. Viable.
I think that's the shame of it all but you just have to
constantly ask people eighth step up to the plate.
Be an adult, you know, as babies were all socialist.
Think of it. When you were three years old,
you're probably isn't you were socialists?
Why? Because you didn't care what
anything costs. You want it, you want it.
Now, you don't care where it came from, or who paid for it
and you scream bloody murder if you didn't get it.
But part of the Says of growing up is realizing wow.
There are other people on this planet besides me and they have
rights just as I do and maybe I need to find another way to get
what I want instead of just holding them up and see because
if they get too, if I get to do that, what what are they claim?
The right to do it to me? You know, those are things we
have to ponder when we become adults but people like AOC
remain babies. And when they get older, they
simply And get into the political process, instantly
become babies with guns. And you know what?
I don't want to use, you know, the term like well they live in
a fantasy land but if you say something like X should be free,
whatever you think. X is it's literally like saying
the military is free because the government pays for or it could
make we could make houses free. We just give the Catholic Church
a monopoly on Taxation and then the Catholic Church will buy
everyone a house. This way it's free like you
would clearly see through that. Immediately even if money is not
involved every piece of concrete allocated toward this group is
not allocated toward other groups, so it's literally like
they're lying. When they say something is free,
do you have, you found any really good seeds to plant in
people when they think that there's, there's two ways of
there's the freeway and then there's the people like Lawrence
read who make me want to pay for things and that's why I hate
him. Well maybe a number of things
here. You could say that hopefully
prod them to be more thoughtful, people, I would say, well, if
all their stuff was free, how do we get a thirty?
One trillion dollar national debt and what is it about
laundering your money through the political process?
That reduces the cost of something explain that to me,
please. I'm not going to just assume
that you're right about that. Please tell me.
How does that work? I defy anybody to tell me how
laundering your money through the political process makes
things cheaper and you know, other things like, well in the
long run is a, is it better for a person to be as independent as
his abilities? Allow them to be?
Or would it be better if he were dependent upon people in
political power for his livelihood?
I mean, that's a pretty big decision, isn't it?
I mean, it has massive implications at the personal
level, as well as for, Xiety at large and yet we sort of blindly
assumed. Well, what's the difference?
And in fact if we get it quicker and easier for the political
process, well, why not do it that way?
Short again, in short-term thinkers are don't look at all
consequences or the long run. End up likes a snake, oil
salesman, they're pushing all this stuff.
Say look what, look what I'm going to get for you.
It's free. It's just repeating.
Age-old fallacies, that have never ended well.
And again, just Like the earlier example with not looking at the
cost of things, they also don't do it when it comes to
subsidies. So the biggest things that are
subsidized, Health Care, housing and higher education have all
constantly gone up in price to forget college textbooks.
Just something for dick ulis. They doesn't seem to care, but
we can leave it here because we've gone over.
I'm so appreciative of your time.
How does subsidizing something make it more expensive?
Well, first of all, you got the cost of the subsidy and
secondly, the subsidy tends to have an effect on the providers
of that service, which is there less conscious of their costs
after all, they're being under written or their customers are
being guaranteed in some way, their mistakes are being papered
over. So why be careful about such
things. It makes things naturally
inefficient, when you're not having to focus on that bottom
line, because you're not Up to you, not in danger of going
broke if you don't. So, just thinking your personal
life, what when does it proper for an adult to say to their
children? That's enough.
No, I'm not going to continually give you this, let me don't.
We do that all the time. Often parents give in, and they,
you know, do things that you could say, is a kind of subsidy
for their children, but I think most of us understand that.
There comes a point where That's not healthy.
It comes a point where you're going to set that child back if
you continue to do that, that the best thing for that child is
to say, stand on your own, don't expect forever handouts.
So we sort of know that when it comes to our personal lives or
at least most of us do why we think it should be any different
when the government plays the role of national nanny is beyond
me, do you have time for one more question?
Oh yeah. Thank you.
This is one of the big ones that we get that.
When you have this free market, you are free to do bad things
such as discriminate and therefore we didn't see real
achievements from Black Americans until the Civil Rights
Act. What if anything is wrong about
that? That narrative?
A number of things. One is we did see Improvement,
especially after Jim Crow laws which are again laws of
government state and local but still laws of government not
private actors. In a competitive and free
Marketplace. We did see Improvement for
decades in the loss of previously oppressed peoples as
we freed the market freed people, they improve their
standards of living in Time and again, no matter what you're
measuring, whether it be, you know, the rate of intact
Families versus broken families or of economic income, you'll
find those numbers steadily fell until about. 1965 when we
started the Great Society with massive subsidies and then
progress stopped when we started subsidizing both good and bad
behavior. Suddenly the The one measurement
of improvement in standards of living of various groups
stagnated. And that's what things like
subsidies and political intervention do.
There's nothing about being in politics.
It suddenly makes you wiser than when you were in the private
sector. There's nothing about politics.
It says, you're going to be more compassionate than people in the
private sector. But there is a lot about
politics that says your You will do the things that tend to
satisfy your self-interest and your accountability is quite
limited as a politician is long. As you can.
Sell people the snake oil, they'll keep drinking it.
Unless there's a huge Awakening in a free market.
You can you produce bad products that you're going to be out of
business? A lot quicker than politicians
go out of business even when they produce disaster time and
time again. Thank you so much mr.
Read for your time, thanks to everyone for watching the
libertarian Institute and Keith Knight don't tread on anyone.
I want to end with one of my favorite quotes from Thomas,
sole author of civil rights rhetoric or reality.
But the number of blacks in professional Technical and other
high-level occupations more than doubled in the decade.
Preceding, the Civil Rights Act of 1964 in other occupations.
Gains by blacks, work writer, during the 1940s where there was
practically no civil. Legislation.
Then during the 1950s, in various skilled trades that
income of blacks, relative to whites more than doubled, more
evidence that the free market gives us what we need.
And the state is constantly, the parasite on society, mr.
Reed, thank you so much for your time sir or pleasure, once
again. Thank you again.