Episode Transcript
Speaker 0 00:00:00 Hey, thanks for hosting.
Speaker 1 00:00:02 Absolutely. This is very exciting today. We're going to do an ask me anything with professor Richard Salzman. He is a professor of economics at duke. He is the author of the newly published where have all the capitalists gone. I'm going to put that in our, uh, pinned link. And, um, he is also teaching at the Atlas society, morals and markets. It is a seminar monthly for, um, students and young graduates, but we also make it available as a downloadable podcast. So, uh, I highly recommend that you check it out. So today we are going to do an ask me anything. Uh, if you guys have questions, then go ahead, raise your hand and we will get you up here. Um, we also have a, uh, a backlog of questions from our 63,000 Instagram followers. So we'll, we'll, uh, add a few of those into the next, if we have time.
Speaker 1 00:01:11 Um, I'd also like to make a request of all of you. Uh, we did this yesterday and it helped out a lot. If you can share this room, you can go up to the upper right hand side of your screen, the three dots, uh, we'll give you an option to share whether you are on Facebook or Twitter or whatever social platform. It's a way to make sure that we can have more people have access to the incredible wisdom of professor selves. So we are going to get started. We're also going to be recording this so, um, and we will make it available on our pod podcast platform as well. So we've got a question here from Lawrence.
Speaker 2 00:02:05 Yes. Hello. Uh, thank you for hosting this, uh, Richard, my question for you, uh, sort of comes to this question of morals when it comes to economics. So we hear a lot in the news right now about how there are sanctions being imposed, government, doing these math things of who you can and cannot trade with due to the situation between Ukraine and Russia. Now, taking that aside and looking purely for a moral perspective, isn't there something that we should be concerned about when governments are telling you who you can or cannot trade with, or there are there certain exceptions to that rule?
Speaker 0 00:02:44 And that's a great question. I do have a view on this. Um, I believe that the role, this one sound like economics in the beginning, but I believe the proper, one of the proper roles of the state department or any kind of foreign ministry is to, um, constantly monitor and create lists of call it friends and foes. Uh, if it's, if a state doesn't know this, it's not a very good state. And, uh, uh, this us state department does have this, you know, I ran, for example, would be an obvious case. Now there'd have to be principals involved with this. You know, what, what makes another country of pho? They, it, they can't be perfectly, you know, behaved. They, they can't just mimic our own system, even if our own system was perfect. But this principle Lawrence, they think of it coming up with objective criteria for saying other states are allies of ours versus the enemies or mortal enemies.
Speaker 0 00:03:43 I think in the case of the Soviet union, uh, for 1917 to, uh, to 1991 was a case of this, although, um, FDR recognized the Soviet union as legitimate in 1933. So, I mean, I would have opposed that, but the reason I say all this is once that is done, I do think it is proper for a government then to go to and say to private businesses and individuals, you cannot trade with the enemy, but you realize it really has to be a principled and thought out, and everybody has to know who the enemies are and what the reasons are. Um, allies of course, are in a different situation now in a case where, um, there are, uh, aggressions that occur, you know, unexpectedly, um, you would still have this list, right, but others might make the list like suppose someone was not on the list, but then they joined, well, let's, let's use a case where suppose China was not on that list, um, or Russia in the most recent case, right.
Speaker 0 00:04:45 Um, if, if, if they join an enemy like Iran, then we can immediately declare that they're hostile to us. You know? So any kind of access, any kind of Alliance that moves the country from, you know, not enemy to helping enemy, same thing could happen. So I gather from what you're asking is something like, well, it doesn't F it shouldn't have free economy via free economy. Um, why have sanctions at all? Why should the government be able to say who you can or cannot trade with? But I go on the principle that if the government's proper function and purpose is to, well, if it's proper purposes to protect individual rights, one of the functions is national security, and this would be one of the ways to carry it out. I hope that helps more could be said, but
Speaker 1 00:05:33 Thank
Speaker 0 00:05:33 You. Okay.
Speaker 1 00:05:37 The great Roger is in the room and on the stage, Roger always loved having you in, in our rooms. You asked great questions, and I know you had many yesterday, one of which you were able to, uh, to ask, uh, to Stephen. I'm not sure if you got the answer you, you wanted, I think you did, but maybe you have another one you want to Richard up with.
Speaker 3 00:06:00 Uh, yeah, I guess my question for Richard would be, uh, based on, you know, where we're at right now with, uh, you know, we, we came out of came out of pandemic, uh there's war in Europe, there's inflation going on. Do you have any good news for us, for those of us that are looking for a silver lining, uh, in terms of, uh, you know, an economic, uh, like, like hopefulness, what, what, what can you, what can you point us to, like how far away are we from, uh, you know, from being prosperous again, in, in, uh, in a, in a sense of, as a country.
Speaker 0 00:06:42 Roger, the good question. I think one thing I would say is just looking at the last two years of what I considered to be a horrendous violation of, of individual liberties and Nicholas non-science lockdowns and massive deficit spending and all that kind of thing. I think one bit of good news that I would point to is how amazingly resilient the American economy is. Now that may not be saying much, but when you think about it, that the unemployment rate has come back down. Uh, granted a lot of people aren't working, but, um, the downturn in output was fairly short. It was, it was steep, but it was fairly short in 2020 when they shut everything down. And, uh, so, so just the resiliency of it, even though all these interventions are occurring. And even though there's reckless fiscal spending, but of course, those are all the bad news things you yourself mentioned, but, um, that kind of resiliency is sometimes under appreciated.
Speaker 0 00:07:44 And under-recognized, and the question is, where does it come from? It's still a mixed system. And so it's part nutrition, part poison. The capitalist elements are the nutritious growing, you know, life enhancing stuff. And that, uh, we can be thankful that the freer elements of our system are, are so resilient to all sorts of injections and infections. And I'm using it metaphorically here of statism. Um, maybe building off of that are people recognizing that what I call fascism, which is the fascism of the public health idiots. It was a major mistake. I do see the beginnings of that recognition. I'm hoping that it leads to something like never, again, I'm not sure that'll be the case, but we really have to get to a point of never again, never again, will we let public health officials, you know, my optically focused on that one thing to the destruction of almost everything else, including mental health, not just investment portfolio wealth and stuff.
Speaker 0 00:08:48 And I guess the last not to go on too long regarding war now, you mentioned the pandemic war inflation. Um, let me just say something quickly about inflation I'm encouraged so far, um, that the inflation is largely being attributed to the government. Uh, that isn't an obvious thing. If you remember from the seventies, they immediately went to oil companies, uh, OPEC, uh, Grady labor unions. And, and what did we get price controls? So you get price controls, which are really terrible for the capitalist system. When the culprit isn't, uh, identified accurately you're, you know, in the seventies, they were blaming the messenger, the price centers, not the federal reserve and the treasury for going off the gold standard. I look around today and even though there's widespread economic ignorance, I do, unless I'm looking at narrow sources, I do see people saying not quite, uh, carefully enough, but they're saying the government did it.
Speaker 0 00:09:49 Uh, the federal reserve did it, or all this deficit spending is doing it. The government's spending too, you know, that's the cause of inflation. That's a very good sign. Now, the inflation, isn't a good thing, but the recognition of what caused it is a good thing, because if people really hate inflation, as I think they do, and they see the cost of living go up, if they get the right culprit, they'll start asking or demanding that that culprit behave itself. So there's some glimmer that a cure will be had instead of making it worse with the price controls on the war. Again, I, uh, bad as it may be. I don't think it's as bad as people think, but the good news here, I think, and I think professor Hicks alerted alluded to this yesterday, that there's a principle in political science and in history called the capitalist piece.
Speaker 0 00:10:36 And the capitalist piece is academics. Noticing that wars are not started by free or freer, more capitalist, more democratic, if you will, countries, they're there. They tend to be initiated by brutish. Uh, you know, semi-socialist semi fascist regimes and that's happened again here. I would actually say both Ukraine and Russia are, uh, corrupt. Uh, people are glorifying Ukraine. Now Ukraine's as corrupt as the Soviet union. If you look at the measures of it and their economy, isn't much freer, but again, you've got two brutish brawling brothers in effect in that region of the world. And I think it makes us look good. Uh, so much for the claim that capitalism is the aggressive imperialistic system. No, that other system is. So those are the three things I'd name. If I'm looking for silver linings,
Speaker 1 00:11:31 I'd add to that, that we've seen a, um, an increased adoption in platforms and technologies that help us to communicate and trade. So, uh, you know, three years ago there were still a lot of people say, I'm not gonna do, you know, zoom or I'm against technology. I'm a Luddite. You don't hear many people saying that anymore. They've gotten over the hump. They joined the 21st century. Um, I also agree with Richard in terms of politically awareness, that a lot of people who were just not interested in politics didn't affect them. And, uh, the, the lockdowns mandates show that it does affect them, that it was shocking what government can do to us. Um, and so I think that might've contributed to a political alignment. I also can say that, uh, at the Atlas society, we've seen an enormous growth in our community over the past two years. And part of that is just been the work that we've been doing, uh, for the past 30. But, um, I think that people are, um, animated. They are angry. They are, uh, alert to the fact that, um, these, uh, these problems were caused by bad philosophy, by bad premises. And, um, they're searching for answers and we have, so
Speaker 0 00:13:03 We might add also the recognition in schooling and education that, uh, it should be privatized. Uh, that's not widely believed, but the movement toward homeschooling alternative, they just exposing these school boards and how badly kids are treated and tie with CRT and everything that is much more widely known now. Uh, so that could be a silver lining to, to the extent people are trying to correct that corrupt system.
Speaker 1 00:13:31 Great point, Richard, huge increase in homeschooling over the past two years, uh, and a big move in the needle in terms of support for school choice. So all good things. And I think it's important to, uh, you know, with gratitude is a theme here at the Atlas society. It's not, you know, man has a kind of a hallmark card sentiment, but as an objectivist virtue of, um, giving yourself some balance of finding those things that you, that are working for you, that, that are strengthening you, uh, so that you don't give into despair and a feeling of hopelessness. So it's a very practical virtue to, um, to gain strength and launch yourself into making your life better. So, uh, mark, thanks for joining us.
Speaker 4 00:14:21 Well, hi everybody. Yeah. I've got a quick question here. Um, now it seems to me that the typical, um, features of libertarianism like, um, freedom, individual responsibility, low government, um, uh, I don't think there's enough people who directly, um, resonate with that message in society to create a winning party, a governing party. I mean, there are lots of people that do, but not nearly enough. So my question is what could be missing with the brand of libertarianism? That's, you know, untapped, that's either missing it's wrong or just altogether not even being addressed where the majority of the population would want to be libertarians. Um, even though there's very few people that would actually resonate with your actual, you know, feature is that type of thing talked about.
Speaker 0 00:15:20 Good question. The first thing I would note is that, um, in terms of electoral success, the best thing that could be done is to change one of the parties, not to form a, uh, or expect to have success from a third party. The U S system is just built for having two parties. And when there, there are various technical reasons for that. It's not just ideological, but that makes third parties very difficult to form and to win. But we have seen historically parties change by, um, call it infiltration of either better or worse ideas. For example, I would say the democratic party is getting worse. Uh, not sure the Republican party is getting better, but, um, I would pick the Republicans. I've been a long time Republican. I've never been an independent. And then I'm very anguished about where the Republican party goes, but I'm thinking of them as the most likely to be pro capitalist.
Speaker 0 00:16:14 So mark, my answer would be to get libertarians last objectivist ideas policies into the Republican party, make the Republican party better. I would classify the Republican party by the way as just being anti stuff and that's defensive. So they're, they're anti Democrats they're they used to be anti-Soviet. They used to be anti liberal press and media and press. They need to be pro capitalist. Now, now that's radical obviously to say that some of them don't even want to use the word, but they have to have a forward-looking and active agenda that says, you know, not when Donald Trump said America will never become a socialist country, very nice sentiment, but we need a Republican president who says America must become a capitalist country again. Um, I think the best and the Republican party, by the way, should ha should look at itself as having a very honored and noble history and lineage, uh, especially versus the Democrats, going back to the Lincoln, going back to the founding of the party as a one issue party to abolish slavery, um, and having people like, uh, Lincoln Coolidge and Reagan.
Speaker 0 00:17:30 But, um, another way of looking at this is that the American people love still, I believe the founding fathers, uh, now, which one you pick as a favorite? My favorite is Hamilton. I know others want Jefferson, but just in general, the founding fathers were, uh, libertarians for all intensive purposes. They were classical liberals. So that's a building block as well. And notice by the way, the left wants to totally, and to have for years for smirch the image and the names, reputation of the founders to eviscerate the constitution that they gave us to pack the court, to get rid of the electoral college, all this kind of stuff to make America a pure democracy, meaning a pure mob rule and Mo most Americans, uh, don't like that. So I'm not as pessimistic as a libertarian might be about, you know, the electoral success of these ideas. I just wouldn't go with the libertarian party. I think they've demonstrated since 1972, when they started that they've had no success, whatever, but I don't think it's because the American people don't want Liberty. That that would be my answer to that question. I hope that helps mark.
Speaker 4 00:18:39 Yeah, I guess the only thing I have to say is that even nevermind whether it's a libertarian party or a conservative party, the thing that gets me is that these features that we're talking about, about freedom. If they become popular and the majority of the people want to vote for that, it can be stolen by anybody. It can be stolen by Democrats. Democrats could just put their thumb in the, in the air and say, oh, we're freedom. You know? And, and they can get all their people like that. So I guess my question is what is the, and this may not have an answer. It may just be something to think about and just go on from here. But basically what is the brand that can never be stolen, uh, as opposed to features,
Speaker 0 00:19:20 Well, you mentioned a stolen. I mean, if we had two parties, you know, clamoring to be the Liberty party, I don't think that's a problem. We need them competing to say we're more for Liberty than anyone, but they don't. Neither of them are really advocating that one wants complete equality or what they call equity. And the Republicans almost never say Liberty, except maybe for Cruz and, and, uh, Senator Paul and Senator Mike Lee. And there's only like three senators even talk this way on the Republican side. But the other thing I would stress is that this argument has to be on the ground of morals. It isn't just leave me free, but that, um, leave me creative, pursue my rational. Self-interest you know, you can't tell me what to do. I'm my own person individualism. Uh, so, so sometimes libertarians downplay the underlying moral principles that underlie Liberty because they want a big tent and, and that doesn't work.
Speaker 0 00:20:13 It hasn't worked for, for a long time. So, and, and of course it goes without saying, I think that no libertarian, no libertarian who flirts with anarchy can get anywhere, because we're talking about political parties, we're talking about electoral success and you just shoot yourself in the foot. If you start with, you know, the state is evil, um, but let me be in charge of it. That that makes no sense. So the whole wing of the Republican libertarian party, I don't know how big it is that that is for anarchy. Isn't going to help either. And the American people do have a feel like when they hear libertarian, they say, oh, those anarchists that's a problem. So, um, so that, and or that they're into minor issues, like, you know, drug legalization, not the big issues that people care about. Okay. I'll just put a link in your, into a message to showing what I think is a brand. Great. Thank you, mark.
Speaker 6 00:21:08 Yeah. Hi Richard. I know, I don't know. I think I saw that you were maybe on the current events webinar with us yesterday. Um, I don't know if you got to, to hear much of that, but I did. Okay, good. So you're going to kind of know what I'm talking about. There was a lot of talk, there was talk about capitalist peace theory, as you mentioned. And then also what I would call maybe a sort of broad support for the U S role in NATO. And I think, you know, as a younger person who has no memory of sort of the, the Soviet union or the cold war, sometimes our generation questions us out stated role in NATO and you know, how much we put up most of the funding and most of the troops. Uh, and I just, I guess I'm looking for your thoughts on, on what our role should be and what we should demand of our allies in the future. If we stay in the NATO Alliance.
Speaker 0 00:21:57 Well, that's a good question. And it noticed, it goes back to the issue earlier of how to identify friends and foes and who are allies and who are not, um, NATO was formed, uh, after world war two, uh, as a group of nations, mostly backed by the U S to stand up against the Soviet union and its satellites. And that, that was called the Warsaw pact on the other side. So the Soviet union, plus 12 or 15, um, satellites where the Warsaw pact now what's odd is, uh, the us won the cold war. Um, it was just undeniable Reagan and Thatcher Mulrooney on the knee called them the neo-liberals that won the cold war, shock the hell out of the left and the Soviet union. And, uh, so you could argue that for all intents and purposes, at that point, maybe it should have taken a couple of years, both the Warsaw pack and NATO should have been unwound reduced.
Speaker 0 00:22:52 Uh, the threat was gone. Uh, the Warsaw pact did go away, but it had to go away because the Soviet union went away and all those Eastern European countries that were in the Warsaw pack, you know, we all remember if we're old enough, they all had their own independence movements. They all got start, started establishing freer systems. The world got more peaceful. It was wonderful. So the nineties were a great decade, precisely because the Soviet union was no longer and no longer a threat. But, uh, it was, I have to say the U S went back on its word and NATO went back on its word. It did promise the ex Soviet that they didn't promise to unwind NATO. Although the Russians and others said, unwind NATO, we don't want to feel like there's a military threat on our borders. Um, but short of that NATO said, we will at least not expand eastward.
Speaker 0 00:23:42 Now, what does that mean? That it would have stopped it at where it was Britain, uh, France, Germany. And instead there was, if you look it up NATO expansion, and this is again, not to have a brief for Putin, but one of the legitimate things he's actually been saying since the 2007 Munich speech is NATO was expanding toward me. And I don't like it. I don't want NATO on my border. Um, it's almost like when Kennedy said, I don't want Soviets in Cuba. Now I know there's a moral difference between the U S and Russia. I'm not trying to draw out moral equivalents here, but, but NATO has expanded. They've added, I dunno, 15 countries. And the most recent, uh, Ukraine was trying to get in. So Poland is in, which is just to the left, just to the west of Ukraine. So, so Abby, I think more philosophically.
Speaker 0 00:24:34 So I think this is a problem with, I am not a big advocate of the U S propping up and being the biggest player in NATO, I believe truly sovereign countries should be grownups with their own military. And what they're really doing is outsourcing their military to the U S taxpayer. It's outrageous. There's nothing in the U S constitution that says the U S government has to provide national defense to places like Astonia or Poland or Bulgaria. It's just ridiculous. It's not proper, but you can have Alliance. I don't have any problem with the us having alliances with countries that are allies and might need help against folks, but the idea of hundreds of thousands of us troops, permanently stationed in places like South Korea and Poland and elsewhere to me is an abomination. It's just improper. And, and, and by the way, it just makes all those other countries like children, like dependent on us military.
Speaker 0 00:25:32 So when shit goes down, they have nothing. I mean, look at how pathetic the, uh, the Ukrainian military is. They're literally putting guns in the hands of, you know, teachers and gas station attendants and bakers and stuff. I mean, it's, it's, it's criminal that a country like Ukraine would not have developed sitting right on the edge of Russia with this maniac, threatening them for decades would not develop a military defense. It's ridiculous. What's good. But what's it got to do with the U S I think there's too many people in the U S at the Pentagon and elsewhere who liked this setup. They love the idea that they can be a military all over the world and be a cold quote, unquote, policeman of the world. But if you look at how many jobs they have botched in Iraq, in Libya, in Egypt, it's incredible. They can't even beat the Taliban. It is outrageous 20 years in the Pentagon could not defeat a ragtag group of cave dwellers called the Taliban. And then they left all the military equipment in their hands in Afghanistan. This is a, this is a us that's going to take on Russia. It's ridiculous. There I'll stop there before I lose my temper.
Speaker 1 00:26:46 Thank you, Richard. That was a very good I have yet to see Richard lose his temper. So, Um, all right, well, we won't, we will try not to make you too mad, uh, to Nate next. Uh, we have had a few more people join again, favor to ask, uh, for those who haven't done it yet. The awesome. If you could share the room, just, um, you can do that with three dots at the top right hand of your screen, and let's get some more company name.
Speaker 7 00:27:19 Hi, thanks. Hi, Richard being here and speaking with us, I've got, actually, I have two questions and I'll give you the option on which one you want to answer. You don't have to answer both, but I would say, could you give me either your best, uh, debunking of modern monetary theory or your best debunking of the labor theory of value?
Speaker 0 00:27:45 Wow. How about both of them very quickly, the labor, the labor theory of value, which was held, uh, unfortunately by, by the great Adam Smith and the wealth of nations, 1776, the guy who kicked off the, the field of political economy, it's basically the idea that the economic value of goods is determined by the quantity of labor that goes into making the goods. Uh, and, and not just that it emphasizes manual labor, it emphasizes muscles. So if you, if you get that and, and Mark's took this over of course and said, wow, Adam Smith is right, but he shouldn't, you shouldn't be free market about this. I too believe in the labor theory of value. I'm speaking like marks now, but I see that there's exploitation because who gets best paid, who gets compensated most at not the physical labor, but the skilled labor, you know, the one that can use tools or the mental cerebral labor that goes on, you know, when an entrepreneur is running a business or when a financier like JP Morgan is financing those businesses.
Speaker 0 00:28:49 So this labor theory of value leads people to believe that anything beyond physical labor or the sheer quantity of labor put into the is exploitation is a, is a rip off, uh, of manual labor, the positive argument against it, of course, there's that wealth is primarily an intellectual thing. That wealth is created by the mind, by the creative mind and not by muscle. The world had seen, uh, eons of muscle without much wealth being created, not until the Renaissance and the enlightenment liberated the human mind. Did we get the industrial revolution, the scientific revolution, indeed, the political revolutions of America and elsewhere. So, um, it's still out there today. The labor theory of value is not really taught as legitimate in universities, thankfully, except by a few Marxists, but it is still in some policy like the minimum wage laws, an example of why some people still believe in the labor theory of value it's in that law.
Speaker 0 00:29:45 Modern monetary theory says that a government can create money and debt almost without limit, without cost. That's the bit, that's the best summary I can give to you, but, but it means now money supply would be what would be the effect of too much money, high inflation, and what would be the effect of too much borrowing very high interest rates. Uh, so the last time we saw very high interest rates and very high inflation, uh, like double digit forms is 1970s. I attribute that to the world going off the gold standard in 1971, but these modern monetary theorists have been able to point Nate in recent years to, well, look, there's been massive money creation and no great inflation. And look, there's been massive government borrowing us national debts. Now 30 trillion and interest rates are still low say so on a, on a superficial level, it seems plausible to them that you can do this, but modern monetary theory is not modern.
Speaker 0 00:30:45 It's leftover actually from the canes early Keynesian. And even earlier than that, what used to be called monetary cranks, people who thought prosperity could be had by just printing money. And, uh, they, they're almost 100% behind the idea of the big state, any their status through and through. None of them are free market types. So what they're looking for is a way to finance the welfare state, the burgeoning welfare state without taxation, because taxation would throw you out of office, right. And a peep there'd be tax revolts, things like that. Right. So they, so instead of taxes, they're trying to say no, print the money and borrow it. Don't tax people, print the money and borrow it. And if you see any inflation then tax people, because it sounds like they have too much money to spend. So I hope that helps appreciate it, Richard. Thank you. You're welcome. You're welcome, Nathan.
Speaker 1 00:31:42 All right. So I'm going to use my moderating pro prerogative here to jump the line a little bit, uh, because we have my dear friend and, um, friend of the Atlas society, Dale, up on stage. We rarely have that treat. So, Dale, do you have a question for professor salesman?
Speaker 8 00:32:01 Yeah. So, you know, I'm an older guy, a boomer and a, you know, I remember when I was at a very leftist university and the seventies, you know, there was even there, there was debate and concern about, you know, the, the very small net, um, you know, budget deficits that we were running, uh, the, the, um, the national debt. And you know, now it's like, nobody is, nobody's talking about this. Neither party is talking about it. And th th and then along with that, we have the looming crisis and social security and Medicare they're running out of. And, uh, you know, how do we wake up people to the, to the, uh, it's, it's like an abstraction. You, you try to talk to people about this and they just don't, they just don't understand. So that's just my question. How do we wake people up? Because this is, I am so concerned about this and the burden we're leaving for younger people.
Speaker 0 00:33:00 Uh, Dale, it's a good question. And I puzzled with this myself because in, within economics, my specialty is what's called public finance. So anything dealing with, um, spending taxes, borrowing government debt, the federal reserve, monetizing debt and all that kind of thing. These, this is probably one of the more abstract areas of economics. So one of the challenges, and when you scratch your head and say, why people don't care, but sometimes their eyes just glaze over. They have no idea what a budget deficit is versus a debt versus, you know, when is debt too much when to, when, to governments default, when do they not have to fall? You know, if you ask the average person what the federal reserve is and what it does, they have no idea. I even university students, I find very smart, uh, are clueless about this stuff. So part of it is part of it is they're not being educated as to what as to what's going on, but the other thing is the politics of it is just, and I come back to this theme a lot, and I mentioned it earlier.
Speaker 0 00:33:58 The welfare state is on, is unsustainable. It just is. It's not, it's a system of almost, uh, I would put it as democracy, out of control. People just voting away the wealth and rights of other people, and being told that they can do it without cost. And the key is the real key. Uh, and this is why both sides won't go. There is you cannot in a, in a democracy like that, raise taxes because people will throw you out. So what is left? They want the spending, they don't want the taxing, the only other two methods for the government to get its hands on any money is to print it or borrow it. And that's why the printing and the borrowing are skyrocketing. Now, if I were to say, Dale, well, you know, if we had sky high interest rates and, you know, people taking out mortgages mortgages at 20%, which you re you'll remember that from there 8, 19 80, right?
Speaker 0 00:34:54 Or, or if they were facing 14, 15, 16% inflation, you know, would it be easier to say to them, see the welfare states going bankrupt? It's this is terrible. I'm not sure I'd want to wish that on the economy, but that is ultimately what's going to happen that either those rates and inflation will skyrocket, or they'll just be a flat out default, certainly on things like social security and medic Medicare things that are unfunded, they'll just renege on those obligations. But, but I think another way of looking at this would be, and again, this is somewhat technical when interest rates get so low and then sometimes go negative. I mean, think of that, the government borrows, and it's not paying you an interest rate at all, that that to me is kind of default. You know, they don't technically not pay the interest, but the interest is so ridiculously low is as if they're borrowing without paying you.
Speaker 0 00:35:45 So it is, we are seeing what I call it an implicit default on the U S debt. And, uh, one last thing I would say, Japan is a good leading indicator of what this might look like. Now, if you ask people, how is Japan doing that? Japan did not collapse and fall into the ocean with their massive government spending and money printing. They've just stagnated. They've actually literally not grown at all that economy, its productive capacity for 30 years and the population is getting older and they're losing all their vitality and, and that's where the U S could go. It's not, it's, it's not so much a story of things blowing up and systems crashing and, and things like that. But a long prolonged stagnation where nobody sees living standards going up. And if anything, they're going down and then lifespans go down and then people's expectations of whether there'll be better off than their parents goes down. All those, the kind of the American dream going sour. And then it's just an issue of whether people figure out what the causes are not. I hope that helps.
Speaker 1 00:36:53 Alrighty. Uh, we have our founder, David Kelly in the room, David, you want to chime in, but I warn you. I might be asking you about popper and Kuhn.
Speaker 9 00:37:08 Um, I actually, I, we were, I had a question, a point about Ukraine, but we're well past that and I don't want to belabor the point. Um, but you could ask me about popper anytime, seriously. Uh, I didn't um, um, I'm going to let Richard go forward on the questions he's got on economics.
Speaker 1 00:37:33 Okay. All right. Well, I'll call you afterwards.
Speaker 9 00:37:37 That's all
Speaker 1 00:37:39 Scott.
Speaker 10 00:37:41 Thank you. Uh, thanks for doing this, Richard. Um, you know, I saw something about, uh, whether Republican should run on something specific or just run on not being Democrats and, you know, um, there, there's kind of debate in the Senate between Rick Scott and, uh, McConnell on that. But I'm just curious from your perspective, if there's one or two issues, um, that you think might be good to push from a Liberty perspective for, uh, people running for Congress or statewide office this year.
Speaker 0 00:38:18 Well, I'm not sure I have much on that. I'm looking a little longer preterm. I think the most important thing is to privatize the schools, um, and get some more intellectual diversity in the universities. Now that's not necessarily a political platform thing, but that is really the root of all these other bad ideas and policies. So, um, but the main thing is I think the Republicans have to start speaking of a system that they consider ideal and work toward that they're and they're totally defensive now, but whole bunch of things need to be privatized. That that's, that was a dirty word when Thatcher tried it, but you did succeed and it's, you know, you say, listen, this is capitalism has to be private ownership and control of the means of production. And we're losing that all over the place or any kind of plan that moves us in that direction is a good thing.
Speaker 1 00:39:16 Thanks, Richard. Roger.
Speaker 11 00:39:21 Hey, thanks. Hey, um, I had to jump in. I just want to say, you know, I, I, I, I hope one day to have enough time to talk about modern monetary theory and, and labor theory of value. Um, and, and I not going to do it right now, the way I've formulated the question is what would you consider is the fair distribution of surplus? Um, on the one hand you could have like one person deciding who gets it all and that determine what's fair. On the other side, you can just say surplus exists and everybody fights to the death for it. Um, and so the question is, do you think surplus is fairly distributed now and if it's not, how do you think, what do you think what measures should be in place that would distribute surplus fairly
Speaker 0 00:40:10 Well? If my surplus, you mean, um, net production, it's, it's distributed unfairly now because it's redistributed by the state. It's not left to the private market to decide what people's marginal productive contributions are that the capitalist defense of income and wealth should be first. It should be free, voluntary exchange. Then when you look at disparate effects and differential income, as long as there's voluntary exchange, it's due to productive capacities, being different. Uh, the wealthy, you know, short of things like, uh, states, uh, it comes from people contributing more to production, creating more value than others do. So to me, that's fair if it comes out that the top 1%, you know, earn 30% of the income. So what the key is earned, they didn't, they earned it, they didn't steal it so that the critique of inequality, you know, looks at overall, uh, income, wealth creation profits, and then sees it as a kind of pie and then says, well, where should these pieces of pie go?
Speaker 0 00:41:18 And if they're not the kind of pie slices I liked, and I think the whole system is unfair, but the current system is so mixed. And so distorted by redistribution, then I would say that itself is unfair that when you see, as we do today, you know, the top 1% who earn, say 30% of the income paying 70% of the taxes, uh, the idea that the rich are not paying their fair share, they're paying way more than they should. There should be a, a flat tax. If there's any kind of tax, there should be a flat tax, not this punitive graduated income tax rehab. So I hear from what you're saying, that it's more of a kind of not to just label it, but a more marks is going to leftist critique. Uh, even the word surplus is the kind of word that, uh, anti-capitalists would use to say, you know, this is made by labor and then taken by others who didn't labor and isn't that unfair.
Speaker 0 00:42:15 And what should we do about it? That that thinking is, is what's given us the current system, which is so unjust. So we need to go back to the system where people earn, even if differential wealth, because they've done it voluntarily with others, exchanging with others. When you get a mixed system, you get half or more of the transactions, basically being mandated or regulated, or, or, you know, distorted and twisted by government manipulations of money and credit and government manipulations of regulations and tax rates and things on that, all that part of the burgeoning welfare state.
Speaker 11 00:42:51 Can I just say that? I think, you know, my big issue is with people passively earning things. I'm not a big fan of passive income.
Speaker 0 00:43:01 Yeah. I've heard that. I've heard that before. And I reject that idea, but it's a very, uh, marks and teams themselves said, nobody should be able to earn money with money. So they have this idea that if you accumulate capital and you accumulate savings, you know, from your prior production that, you know, unless you're working and sweating and laboring with your muscles every day, you don't get to keep any of that. You don't get to earn money by lending out your capital to others. You don't get to make any money by, you know, renting your apartments out to renters. And that, to me, that's that part of the private ownership of the means of production control. Yeah. Once you accumulate assets, of course, you should be able to rent those assets to others for a fee. And, and that's, it's weird cause that's considered passive, meaning it goes back to the labor theory of value saying, Hey, you're just sitting there managing an investment portfolio.
Speaker 0 00:43:59 You're not digging ditches or you're not working on an assembly line, sweating. You know, they said this about Romney when he was running in 2012, they said, how can he just sit there and earn dividends interest in income? You know, off his portfolio. The answer is because it's his, because it's his wealth and it's invested meaning lent to others who were themselves engaged in productive activities. So the idea of passive the IRS treats income this way too, this is passive income and they'll call it unearned income. So interest dividends, capital gains are considered unearned and what's considered earned wages and tips and things like that is a very labor theory of value approach to income, but the activity or passively of someone, uh, the, the, the demand for them to be active, laboring, muscular, sweating, or else they didn't earn. It is very labor theory of value. It's a very crude, pre 17 hundreds view of how wealth is created.
Speaker 1 00:45:04 Some of these other questions, um, as somebody who has passive and not really passive because I've put a lot of work into it, uh, income from Airbnb, from renting my house out for shoots, uh, you know, there's these innovations that have allowed, um, so many homeowners to, to be able to rent out their property. And, um, also, you know, if you have been successful and you're able to invest in somebody who has a good idea, new platform, where people in India and all over the world are going to be able to learn how to code. Um, and Hey, Marc Andreessen, will you give me some income, you know, your, uh, capital to invest and Hey, Peter teal, and those guys are gonna get, you know, big streams of passive income, but without it, um, those, those enterprises wouldn't come to fruition. So, all right. We, we got a few more people I want to also welcome. Of course, our wonderful professor, Jason held in the stage. Thanks for stopping by Alan. You have a question.
Speaker 12 00:46:17 Yeah. I think that brings us to, uh, the good hopping off point too. Um, it seems that comparing the left and the right that the left really has in terms of the political discourse captured the market on the moral argument or what I call the fluffy kitten narrative, which is essentially, you know, the left says, oh, look at that little fluffy kit and it's poor and defenseless. We have to do something now about it. And if, and if you don't agree with that, then you must be a bad person. How could you not want to help that kid and obscuring the fact that, excuse me, obscuring the fact that, uh, that the government may or may not be the best way to do it to, to help that particular cause, and that there may be other more efficient ways to do that. So you see that all the time, whether it be welfare or, you know, even, even in Paul foreign policy, what I'm seeing a lot of when it comes to Ukraine is, oh, the poor Ukrainian people as the United States needs to help them because they are poor and defenseless against this huge country, Russia.
Speaker 12 00:47:55 And, and I'm wondering. Yeah. Yeah. So I'm wondering how that, that political messaging seems to be, seems to be lost and how do we sell how we, how can that be sold in terms of what we, what people were talking about earlier in terms of promoting libertarianism,
Speaker 0 00:48:23 Relative to me is the only solution to that is not primarily focusing on libertarianism, but focusing on rational egoism, because the problem you're talking about is widespread acceptance of the idea that altruism is a moral virtue or a more morally virtuous approach that has to be rejected, but on the grounds of being more positive than negative people have to say, no, our ethic is rational. Self-interest egoism pursuit of happiness. If you will, that's the American kind of expression of rational egoism, I think. And, um, altruism people have to realize is not just being kindly toward those in need and altruism emphasizes, victimology emphasizes need emphasizes and preoccupied with suffering. And it is the entire basis, not just of the burgeoning welfare state, which itself is an abomination, but it's the underlying ethic of a really serious forms of collectivism, uh, like socialism and fascism, which have murdered and maimed and impoverished, literally hundreds, tens of millions of people.
Speaker 0 00:49:28 So why that's considered furry kitty stuff? I don't know. People either don't know the history of altruism in practice, or they just think it's still means kindliness, but that that's the only solution. It's not just leave me free. That's part of it. If you want to just go on a very superficial level, whenever you get a claim like this, or, or a call like this, all you have to do is say you are perfectly free in a capitalist economy to give to voluntary private charity. It's got nothing to do with me. If this is a cause for you, if you feel someone's in need through no fault of their own or whatever, go ahead. But the minute you start holding a gun to the head of others and saying, they must support your little furry kitty project. I don't know why anyone would see that as moral.
Speaker 0 00:50:14 I don't know why anyone would get away with, uh, any kind of reputation that said, look how moral I am. I'm forcing everybody else to give to my, uh, to my special, cause I do agree with you, by the way, on what's happening with Ukraine. I don't think we should be helping Ukraine, but I do think they're getting a, um, help. They're getting support on these altruistic grounds. Look how much they're suffering. Therefore we should do something for them. Well, what if they're suffering on their own account? They didn't provide for their own national defense. Uh, yes, so there's suffering, but, um, what's it got to do with us?
Speaker 1 00:50:53 Thanks, Richard. Okay. Just time check here. We've got eight more minutes. Uh, we have of course professor, uh, hell I don't know if he had a question or if he is just keeping us company as he's grading papers, but of course he's always welcome and invited to unmute if he can. Uh, there wise, I'm going to go to Ben.
Speaker 13 00:51:21 Yeah. Question for Richard thinking about some things in the news lately and some large, very large, you know, famous multinational corporations that control areas like e-commerce or communications. What do you think about when those groups start to have powers that could resemble more of an authoritarian sovereignty versus a company, and actually start to deteriorate freedom? From what I would like to imagine a small colonial village of people trading equitably with each other.
Speaker 0 00:51:52 Well, Ben I'm in the camp that says there no danger at all. Um, but by the way, one of the best interviews on this, uh, Jennifer gave recently with the Rabi suave on this, he had some really good answers on this. He specializes in media and stuff like that. I do not believe the quote unquote tech giants like Facebook and others are squelching. People's freedom. I do believe they act stupidly sometimes. And, and I wouldn't use the word sensor, but, but, but shut down voices that, you know, they shouldn't be doing, but that's their business model and you don't have to go on any of those sites. You don't have to pay. I don't think anybody has to pay anything for those sites. It's basically an advertising driven thing. And I'm impressed by the fact that there's been pushback in recent years, to the point of people developing a alt tech, I guess it's called alternative, uh, platforms and media and other still growing.
Speaker 0 00:52:48 But, um, it reminds me by the way of the nineties, when people were complaining that there were only three networks and PBS and they were all left leaning well, then someone like, uh, Murdoch started Fox. Now Fox is considered the devil today by other media outlets, but, but that's the solution to the problem. The pro the solution is go build your own media. Uh, if you think Facebook and Google and Twitter and other things are non objective then, uh, or, or oppressive, um, create your own platforms. And, and I think that is being done as long. We have a capitalist system that's more likely to be done. Uh, I, I also agree with Robbie. He had a very controversial point about not repealing. I think it's called section two 30 of the telecom act of 96. I do think that that's not a special favor to grant immunity to those platforms, not being able to Sue for example, Facebook, because some crazy person goes on and defames someone on Facebook. If you go on Facebook and defame, someone who should be sued, but the idea of sewing Facebook as the equivalent of sewing a gun manufacturer, uh, because some guy misuses the gun. So just some thoughts there, uh, um, uh, w we should be, we should be a lot more confident about the ability to express our views on alternative forums and to build alternative forums. There's a lot of people in the Liberty movement who are tech savvy and wealthy and stuff, and they're beginning to do things, uh, as alternatives.
Speaker 1 00:54:24 Thank you. And then I put the link up there too, to that interview. I do think you raised some interesting points, particularly now that we see, um, the current government regime, uh, pressuring companies to change their policies and pressuring companies to sensor. So at that point, you know, this line of whether or not it's, uh, actual censorship or, um, or if it's a private company doing it, I, I do think it becomes a little bit more complicated, but, uh, anyway, we've got another four minutes and Damien welcome back. Oh, Jason, did you have something to add?
Speaker 11 00:55:07 Yeah. To make sure that today's my teaching day, but I had to cancel classes because of a horrific migraine. So I was able to just jump in. I just wanted to ask Richard a very, very brief question, um, that is following Rand's argument that, um, taxes in, uh, in and of themselves are inappropriate, but given the fact that we do need government and we do need, um, to finance the government, if you did a sort of qualitative analysis of all forms of taxation, you know, property tax, sales, tax, um, income tax. Um, my sense is that the most pernicious form of taxation would be the income tax, because it's sort of penalizing you for the translation of your values into concrete form. Um, I was wondering if you were to sit down and do an analysis of the different forms of taxation, well, what would your position be on that? And what do you think about the abolition of the, of the income tax?
Speaker 0 00:56:10 Well, uh, I think that I agree with you on the income tax. It's pretty bad in that regard because you're, yes, expressing your values and creating, creating values. I think the cruelest tax that I've ever is the estate tax. So the idea of taxing people who do their entire life, I've earned income, and it's been taxed and they've saved it anyway and invested it. Now they're trying to pass it on to, to heirs or to donor, to endowments and things like that. It's so cruel to just steal that money at the end of their life. I, I would say that the least onerous tax is one where you can decide to pay it. So that's, uh, what would be called a consumption tax or a retail tax where you pay it only when you buy retail goods, but, but to reduce or get rid of the income tax today, um, you would have massive deficit spending unless you reduced government spending along with it.
Speaker 0 00:57:04 So I'm not against, uh, you know, Perry pursue reducing both of them dramatically, but you'd need a philosophic revolution to shrink the size and scope of government spending, you know, before you just go in and cut taxes. So I'm a supply sider, but one of the things I disagree with about supply siders is their view is cut taxes everywhere, and always no matter what else is going on. And so they, they are reluctant to go to a spending reduction and things like that. But maybe just like in the two minutes we have just to throw out good, an entire new session could be done on this, Jason, but I actually have a different view. And the objective is community. And I don't actually think it's inconsistent with Rand's view, but it might be, I don't think taxation is theft. I think taxation is seen as theft only because the government is so huge and is engaged in improper things.
Speaker 0 00:57:55 But I believe as long as we're not anarchistic and we're not as long as we believe government should exist and we do. But then also as long as we believe that government should only do a, you know, a fixed range of things having to do with defending individual rights. I think once you have that kind of government, people should finance it and I'm even willing to say people should be compelled to finance it, because if they're not, they're basically free. What's called free riding. They're basically freeloaders. They're what Iran would call moochers. And, um, that, that troublesome Objectivists are libertarians, but it sounds like they're being compelled. But if you look at it the other way, they're compelling others to provide them with a government, uh, protection that they didn't pay for. So I know that's a brief answer. It will convince a lot of people, but we could, we could do a whole session on that. Whether even in a free ideal society, how do you finance the government?
Speaker 1 00:58:50 That's a good one. We should do a section on his taxation craft. Yeah. So, uh, here we are two o'clock. I absolutely have a hard stop, so I I'm going to hop Damien apologies. Thank you for coming though. Always love seeing you in the room and, uh, we are going to have plenty of chances to get to your question and others next week we have, uh, three, well, wow. Yeah, we have three clubhouses. Um, we have on Monday, Jason, Hill's going to be doing the first of the two part series on Iran and sex. Uh, then on Wednesday, Rob Krasinski will do and ask me anything. Uh, no, that's on Tuesday. Okay. Then on Wednesday, um, I, Jason's going to be doing the second part of his, uh, series on iron Rand and sex, including tiring, uh, same sex, love and relationships. Uh, I have got as well, a, the Atlas society asks interview that day with Kenny Zhou, who has been on the forefront of all citing that against race based admissions, particularly in the Ivy league and the particular burden that places on high achieving Asian students. So it's going to be a busy week and I'm looking forward to seeing you guys back here next week. So see you. Thank you, Richard. Thanks, Roger.
