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