I want to look at some of the people that are related to The
mises Institute that. I've certainly learned a lot
from, I'm curious what you have learned from these people and
what you think their greatest contribution is to economics
philosophy or history. What is the most important thing
you learned from our contribution of Hans Hoppa?
Well, hop is interesting. I guess it is the application of
anarchist Theory to maybe its ultimate end point.
I'm not sure there's a ton more to be done in libertarian theory
in libertarian academic work. I think, you know, you can go
all the way back. You can go back to the 1600s.
You can go back to loud Sue and, you know, you can go back to the
levellers but You know, fast forward.
Even in the 20th century. You had people like Morrison,
Linda Tannehill. You had people like Albert, J.
Knock who was Anarchist, you had nozick Robert nozick the
philosopher and then along comes rothbard and he takes all of
these influences and mixes them together and says, you know, Not
only is there a normative justification?
Not merely a utilitarian justification for a lousy
forever economics. I think that can even be
extended to things that we always thought that the state
had to provide namely National Defense.
Police Protective Services fight maybe fire services and also
courts. No, no.
No, we don't even need government for that.
Even these things can be provided privately.
So then hop a comes along. And says, well, you know, not
only do we not necessarily need a utilitarian justification for
laissez-faire or even a normative rothbard e and ethical
justification for laissez-faire, but just on pure logic alone
using our chip argumentation ethics, we can justify a private
or private property Society. You know, that's there are
people in the in philosophy camps, who disagree Leslie with
Hobbes argumentation ethics and there are people in camps of
philosophy and logic, who think it's really a Great Leap
Forward. So I'll leave that to people.
But I think, you know, Hopper took anarcho-capitalism I think
about as far as it could go in the conceptual or theoretical
academic realm. I think we sort of reached the
endpoint. There's plenty to do it in
economics, but on pure libertarian Theory, I think
that's about it. So what's far more interesting
today to me are the potential applications?
Something like uber was anarchic in its outset.
They just sort of went into towns and didn't worry about the
taxi regulations and didn't get permits and didn't tell the city
council and just sort of did it. And before you knew it, people
like doober. And of course, Bitcoin is an
example of Applied anarchism in the sense that people are trying
to create a currency completely outside of any state or Central
Bank system. So, you know these applications
really interest me, but that's that's what I've gotten from
Hop. I think is just the ultimate end
point of a private Law Society. Most important contribution from
rothbard. Oh boy, for me.
That's tough moment. For me.
Personally, rothbard is where I as a lay person have have
learned the bulk of any monetary economics.
That I know, rothbard really demystified money for me, and I
don't think you can do that. Purely by studying economics.
I think you need a lot of history to understand money.
You need to know the history of the gold standard.
You need to know a history of Banks and set before sundra
Banks. And after you need to know the
history of all those things, like, Bretton Woods and
bimetallism, and you need to know the history, even before
that of kings, and monarchs and sovereigns and their debasement
of the currency. So, I would credit rothbard with
my understanding of money including value, including
interest rates. Because, yes, I've read Menger.
Yes. I've read bombard work, but it's
rothbard who really interpreted that for me, so that I
understand money and value and interest rates through really,
through rothbart. Most important thing, you
learned from Ludwig, von mises. Well, I think again, his work on
money is probably the most seminal thing, but viewing
economics as, as a proper social science, which is theoretical
rather than empirical in nature. And and praxeological in method.
I think that's, you know, nobody has done that better than me,
says, I mean, mises praise. Rothbard's man economy and state
on the grounds that it had taken praxeology further than mises
had. But my fundamental understanding
of that still comes from mises. And of course, the theory of
money and credit which he wrote, you know, as a young guy not
even 30 and wrote it back and what came out in 1912 just such
a huge achievement, still, probably the best book on money
ever written. Still one that a lot of people
in. Free market and Austrian circles
turn to. So, you know, money and
praxeology are the two things. I've really enjoyed.
Reading about through mises, and can you explain the importance
of having a theoretical understanding of Economics?
Not just an empirical one, where you sort of rely on
peer-reviewed studies. Why is praxeology in the
understanding Of Human Action and its implications important
for someone who wants to understand the economic world?
Well, this is a huge dispute. And of course, I'm firmly on one
side of it. I don't think empirical work.
Is what economics is? That's his debts data.
That's his that's historic work. That's econometrics.
That's math. That's statistics.
That's all kinds of things. Other than what I would consider
Pure or proper economics. And when you say what's, the
importance of Theory, without Theory, you really have nothing,
you know, you can look at data and just see A jumble, I mean
it's economics is a social science.
We have to start with that fundamental understanding and a
lot of people are critical of social sciences via versus the
physical or hard Sciences. I accept that critique.
I think there's a lot of validity to that, but
nonetheless, it's a social science.
Social sciences are designed to help us understand the world.
The goal of the social scientist is to help us see the Unseen as
best pasta. I would have it.
In other words, you know, we locked down the country for
covid-19, some of the Unseen effects of that.
So, that's what economics is. It's not a matter of observing
data, like you might in a field somewhere, looking at birds and
then, creating a hypothesis from that data.
And then going out and further, testing that hypothesis.
That's not how I cannot mix works.
Or is supposed to work in my view, and I really like
rothbart's and doubt. He said, what if you brought a
martian down to earth? Who had no context for
understanding of Earth or humans at all and just plucked them.
It plop them in the middle of Grand, Central Station in New
York City at rush hour, they'd say, well, you know, they all
these human beings are just rushing around because they're
crazy, and they're bumping into each other in there in a hurry.
This would be like, some sort of crazed ant colony.
So if the Martian didn't understand that what they were
doing, was catching a train home from work or whatever, right?
That they have motivations that they have a psychology that they
have axiomatic preferences. Then that Martian wouldn't
really know all that much about Humanity from observing that.
So, you know, I think there's just a fundamental disagreements
among economists. Whether this is truly a social
science and and therefore, within the realm of social
science method Or whether it's an empirical or data-driven
science, and I'm I'm sure that from my own small perch.
I'm not going to convince the empiricists.
What is the most important thing you learned from?
I always get this name wrong. I think it's you again.
Bomba Virg. Yeah, he's he really took
mangers work to the next level. He was more aggressive than
anger. He really went about building an
Austrian School in Vienna. He was more systematic.
In his approach. And he also wrote more than
mangrum anger was supposed to write another book on method
later in his life. And he did.
Well, he was supposed to write more later in his life.
He did right on method, but he never really got depressed and
despondent and didn't finish all of his work, but I'm very, very
clearly explains capital and interest to us.
He, in the second volume of his big, his best-known three-volume
set, because you got to understand prior to the
austrians coming along, you know, nobody really understood
me. Nobody really understood value
and nobody really understood interest rates.
So that you know, the the Adam Smith types, the classical said
well, why does anyone pay interest?
Well, that's sort of the the cost of capital.
You know, that's the that's the income thrown off from capital.
Okay, but that was a little unsatisfying and the Marxist
conception of capita was, well, capitalist exploit people.
That's how they get capital in the first place.
They steal labor from workers. And with this labor that they're
stealing, and skimming off the top, they turn around and loan
that back to those same workers and charge them interest for it,
you know, so the the Marxist explanation of capital, excuse
me, of Interest, charging interest is that this is pure
exploitation. And I haven't heard a Marxist at
dressed negative interest rates that we have today.
And I mean nominal, actual stated negative interest rates
on, for example, Euros, some Eurozone bonds.
It's like well, what's if If charging interest is
exploitation, what's what's negative interest rates?
Is that capital is subsidizing people.
I mean, this is this is interesting to me subsidizing
borrowers. So Bob ever comes along and says
no, no, no interest is is related to time and the idea
that we want something, we prefer present Goods to Future
goods. And that we have to sort of come
together in terms of Savers and borrowers and figure out an
agreed-upon price to get some To get future Goods today and to do
that, some people have to put money away.
They have to save, they have to produce more than they consume.
And that goes back to our earlier point, with Hapa and
capital accumulation. So barbaric is is a really
interesting cat and quite a character and Brilliant very
driven and probably the The least appreciated Austrian.
And as far as Carl Menger goes, with his sort of a real
contribution of applying subjective value, and
explaining, its implications. Why is subjective value and
important insight? Well, it explains everything
really. And of course mises took that
subjectivity and applied it to money, which it, which is
something that mango didn't quite get easy to say, in
hindsight, of course, but the idea that we value things on the
margin based upon how much of it we have and what an additional
unit means to us is, is so, it seems so simple to us today,
but, you know, going back to the Is this was it was just
conceptually a very different world, economics was not a
standalone discipline. It wasn't a field of study
really a standalone field of study until the 20th century.
I mean economics was just sort of bound up with logic and
philosophy and history, and all kinds of things.
And in many ways. It's probably better off bound
up with those things. I think it was maybe a better
discipline. But so he comes along and says,
you know, Nobody seems to understand value.
Why is it that we would pay way more for a diamond ring?
Then we would have gallon of water.
Well, it turns out that depends the Diamond Water Paradox.
It depends if we're in the middle of the desert.
We haven't had anything to drink for two days.
We would gladly give up our diamond ring for just a glass of
water, much less a gallon of it. So, you know value depends on
the individual circumstances. Circumstances, which is another
way just saying it's subjective. And so everybody values, things
differently value is something that a consumer of something
experiences. It's not really something that a
producer produces. This is a new understanding we
have now in entrepreneurship and that, you know, when we say, why
does it an iPhone have value? Well, it has value because in
the hands of the consumer there's an experience or a
desire there. And so we don't understand how
different people Value things, other than, in order, we don't,
we can't assign Cardinal values to things.
We can only say that I prefer, let's say a Honda to a Toyota
because I looked at both and I bought a Honda okay, but we
can't say how much more I prefer, you know, XU tiles of
haunted to why you tiles of Toyota.
That's just those kind of comparisons really don't work.
And that's that's unfortunately, too much of what economics tries
to do. So generally speaking, we know
that the more you have of something in the world.
Plentiful. It is the less you tend to Value
it. So if somebody is dead broke and
struggling in life. And you give them a million
dollars where they earn a million dollars, their life is
radically changed. Because now they have a house,
they have food. They have future Security money
to live off. They have health insurance.
They have, if they have children, they now have
something to their children like college money or whatever.
It might be. Okay.
So from 0 to 1 million in net worth is a big deal.
But if you give if Bill Gates, wer to urn or to be given an
additional million dollars today, his life would be largely
unchanged because he's a billionaire and so on the
margins and additional million dollars, is he values?
Far less. Presumably than most people do,
we can't know how much less and there are some people who are
just wired that no matter how much they have a something.
They have ten houses. They, they work, you know,
morning till till, you know, Dusk to Dawn.
Have an 11th house because they're just hyper competitive
and that's the kind of person they are.
But you know, these, what mango helped us understand along with
others in the in the 1880s. When the marginalist revolution
happened, along with Leon varis and William, Stanley jevons was
that, you know, value is subjective and therefore,
interpersonal comparisons of value or well-nigh impossible.
And that was that's that was really groundbreaking.
Heady stuff at the time and it still is.
I mean, conceptually, it's still fun to talk about.
What is the most important thing you learned from Frederic
bastiat? Well, you know, the seen and the
Unseen is something that goes through everything.
I mean, it's it, you see it every day.
You've seen it so much in the last year with covid, you know,
these politicians and these would be doctors and scientists
making these pronouncements about how things are going to be
without any understanding of the Unseen.
Right? I mean, you can say we're having
a mortgage and rent payment moratorium.
No one. It can be evicted or foreclosed
upon and if they don't pay their rent or mortgage, you know,
between now and X date. And that's been extended a few
times depending on which they were talking about.
Well, what what seen what's easily visible to us is, hey,
there's that nice family down the street.
They have a couple little toddlers because of co-ed the
husband or wife lost their job. And without this moratorium.
They would have stopped making mortgage or rent payments.
They be out. They'd have to go live on the
streets or they'd have to go live with Grandma or they'd have
to sleep on a friend's couch. And so And I could look at that
and that's the scene we said. Oh, well, you know this, this
this very kind-hearted, compassionate government policy
has made it possible for this lovely family down down the
street, which I like to remain in their home.
Okay? Well, that's good.
It's good that they're in a home.
We all get that. But what you can't see is spread
out across Society is the cost of all these mortgage companies
on these landlords not getting paid.
And that that She's not just in dollars and cents right here
right now, a year after covid or whatever.
I mean that will Ripple out through the economy in
unbelievably difficult ways to to Envision for years and years
to come. I mean, fewer and fewer people
will want to be landlords small landlords because they'll say
what happens with the next pandemic, you know, I don't want
to be in this business of owning apartment buildings or condos or
something. When my, when every time there's
some sort of emergency to It says my my tenants don't have to
pay so that will shift a lot of housing ownership and a lot of
landlording to Big private Equity firms to venture capital
firms to you know, investment Banks, which are already buying
up. Lots and lots and lots of
property because they figure they can get some of the stuff
on the cheap and they can they have enough money on like a
small landlord to ride out the moratorium and then when the
moratoriums over and you know, they'll raise rents, right, you
know, house Will be worth more and they'll make a ton of money.
So that's just the kind of unseen Distortion in.
Just one little sliver of the housing market that that will
result from covid. So, you know, bastiat told us
and and some of our understanding Basquiat us
through the great Henry has it. We can't just look at the, you
know, immediate effects of a policy on one group of people.
The immediate effect is that family down the street is not
tossed out. We have to look at the
long-term. Effects on everybody.
And the long-term effects of this moratorium are going to be
higher housing costs. And so that's going to be born
by everybody and there's going to be some other family down the
road who's perhaps can't buy a house or rent a place because of
this. And so, that's how we have to
look at things. We have to understand that every
policy has ramifications. And frankly, if we hadn't had a
rent and mortgage moratoriums. It would not have been in
landlords interest in most cases.
It would not have been in mortgage companies interest in
most cases just toss people, right out and go.
I mean, you know in the middle of a covid lockdown, there's not
necessarily a bunch of new people with with jobs meaning
credit worthy to move in. So it would have been in their
interest to perhaps negotiate maybe except half rent for a
while. Maybe quarter rent, maybe tack
it onto the future, you know, whatever.
It might be. They're they're men.
In isms that this could have worked itself out.
Not, I always thought that a great private approach would
have been to have these worthless State Bar
association's, which plagued all 50 states have all their
lawyers. Do some free loitering and sit
down at, you know, local City Halls or malls or wherever
people can get together and negotiate help.
Negotiate, you know, Lisa's with people who were unable to pay.
But, you know, instead we had this moratorium, which is a
Heavy-handed one-size-fits-all government edict and you know,
bastiat is going to be Vindicated once again, two more
questions for you. Mr. Dice.
Thank you so much for being generous.
So what with your time? Most important thing you learned
from Walter block? No Walter.
Yes. Yep.
Walter irritates me. Sometimes with his endless
Lifeboat scenarios. What if, what if this and that I
don't like that way of looking at libertarianism because I
think instead of trying to create a purely consequentialist
system. That's got an answer for
everything. I think we ought to be a lot
more humble in our libertarianism and say, you
know, it's not perfect. It's just better.
We're not Utopia nests. We're simply muddling through
that's what human history is about.
It's about muddling through and rather than Grand ideological.
Or statist or nationalist, you know Endeavors, we can simply
allow cooperation through the marketplace to help us muddle
through better in a Kinder and more efficient and fairer and
more just way. So that's you know, where as
Walter is very much in the consequentialist end of
libertarianism and I've started to have some disagreements with
him on the concept of harm. You know, what is harm?
A Libertarian Society, I think in the digital age.
We have to change our thinking, a little bit of that on that.
And that it's not just physical aggression or physical trespass
on land or physical theft. I think in the digital era
there, there are types of harm which ought to give rise to tort
action in. You know, that that so comport
with libertarian legal Theory and I think Walter block very
strongly disagrees with this. But what I've learned I suppose
from Walter is, you know, just Just the ability to make
Arguments for anything because that's that's his specialty and
his privatization of everything is really incredibly intriguing
to me. And so I do have my
disagreements with him on open borders, on defamation to an
extent and on actionable. Tort, you know, what constitutes
harm and a Libertarian legal Theory, but, you know, he's he's
like like hop. APPA.
He's taken it about as far as it can go.
And he's done us a huge service in that sense and that he has
forced us to sort of tease out and consider the implications of
the things we Advocate. And I think that's important.
Final question. If you could recommend one book
for everyone in the world, to read you only get one.
Everyone will read it. What book would you choose?
Everyone in the world. I think it would have to be
Henry had since economics in one lesson because that book isn't
just economics. I mean it's couched as such, but
its first of all it's very readable.
Second of all, it's not ideological e heavy-handed so it
wouldn't turn off a bunch of people.
Necessarily third is that it has Standalone chapters, which if
read without reading the rest of the book would help people
understand minimum wage. Rent, control tariffs full
employment, you know, so that's one of the great achievements of
that book is that, you know, you don't have to read it cover to
cover to benefit from it. And finally, he's a journalist.
He's not an economist now, he's self-taught Economist and a
great Economist, one of the great Economist the 20th
century, but he's not an academically trained Economist
and because he's a hellacious journalist who wrote it by his
estimation, some like 10 million words in his lifetime.
Yo, it's very very readable Lively Pros on every page.
You're not plodding along and it's you know, it's very, very
short. You can read it and in a couple
hours so that if I had to choose one, that would be, it
capitalism is essentially a system of mass production for
the satisfaction of the needs of the masses.
It pours, a Horn of Plenty, upon the common, man.
It has raised the average standard of living to a height.
Never dreamed of an earlier ages.
It is made accessible to millions of people enjoyment.
A few Generations ago or only Within Reach of a small Elite.
Thank you to everyone for watching Keith Knight.
Don't tread on anyone in the libertarian Institute Mister
diced. Thank you so much for your time.
Keith. Thank you.