This- is the reason for episode. Forty three of the Jordan Be Petersen Podcast, I'm Mikhail Petersen, this episode, was recorded on May nineteen, twenty twenty one, Jordan and Doktor Robert Murphy discuss austrian economics. They discuss free trade, private property, business cycle and more this nothing that they teach in schools and probably necessary for everyone to hear regardless of age, Doktor Murphy also discusses his books, choice and less to a young economist which our Superman full for those looking to rather knowledge in economics, dad's fuel better by the way it was. as a severe autoimmune flare up and now that he's back on our ridiculous all beef and lamb lion diet. The reaction, his dying down, no idea explain, it defies logic, seems to work ass, though so he's feeling better, thank God and that what's important new?

I'd cast out soon. I hope you enjoy this episode and have an excellent weak, hello, everyone. I am pleased to have with me today, Doktor Robert P Murphy Doktor Murphy has a phd in economics from New York University he's a real which, fellow with the Independent Institute, an essay your fellow with MRS Institute he's held academic positions at hills, they'll, college and Texas Tech University, He is the author of choice, cooperation, enterprise and human action. which is a modern distillation of Lou big VON Mrs important treatise on the austrian School of Economics, he's the author several other economics books for the lay person as well, including lessons.

for the young economist and the politically incorrect guide to capitalism. In addition to a scholarly work, he hosts the Popular Party the Bob Murphy show concentrating on economic and political issues. Thanks very much for agreeing to talk to me today docked Murphy. How are you doing I'm doing great thanks so much on the shoulder computers, my pleasure, a lot of my listeners have mentioned their belief. My work is somehow reminiscent of work done the Austrian School of Economics and after reading I didn't really anything about the austrian School of economics. After reading the bulk of choice, cooperation- an enterprise in human action. I unjust and why there is an emphasis on value I so I suppose a lot of my work is predicated on the idea that it's not my idea, but on the idea that human beings, our goal, directed actors,

and that much of our motivation, much of our behaviour, can be understood in that light. Profitably understood that light so to speak and Missis insisted upon the primacy of human action really as its starting point. Why did you write choice, cooperation, enterprise and human action and and and maybe we'll walk through it. I wanted to talk to you because

wanted us to our lesson in Austria, Nick Economics, and I suppose I felt that this was the fastest way to do it, and I could share my intellectual endeavour with all of my audience, and so I'm hoping we can manage that today. So let's go to the book, location, searcher thing and I am happy to do it. Let me just mention that before I forget that I have listened to a bunch of you're lectures as well, and there was one besides what you mentioned: the affinity with no value. In that connection, you often talk about how people get feedback from social queues of others, and it helps people regulate their behaviour and that's a very lets. A hierarchy in person, did likewise, when I heard that I thought all that sort of like how the price system gives producers feedback as to whether they're using resources profitably and then the curtain a socially right advantageous manner. So anyway, I as I did have an uneconomic

even in mind or an economic analogy in mind. When I formulated that argument, I would say no it's it's very difficult for us to compute our way through life life, because life is so complex and so uncertain, and so multi factory and all the factors continually change, and so in Yang, beyond order. In my second book in particular, I stressed the role of responsiveness to feed back as a means of opening the individual to the corrective feedback from up distributed. Computational device essentially mean each of us, our calculating madly in an attack to minimize catastrophe in and peace. some degree of satisfaction and, and hopefully pleasure and we're all doing that independently and Cumuli thirdly, that makes for an incredibly complex computational system. It only makes

and to avail yourself of the outputs of that system. If you want orient yourself properly in life and so on, I made the case that what what The things you want to do with children, for example, is to make them socially receptive, because, way, they can avail themselves of the computational resources of the CIS around them and keep them. In sync with other people and hopefully to some degree with the natural world. I didn't think of that relationship. So, ok, so, let's, let's, let's move into the economic field in and sure. So, yes, you had asked what. Why did I write the book? So what it is attempting to do is to take saluting than me says, is a giant and the austrian School of Economics and me, and his Magnum Opus is called human action in its that's a masterpiece. That's really in terms of modern austrian economics. People can read that, but unfortunately, it's some like nine hundred pages long, even though he wrote in English. It's a very germanic, formal style on the vocabulary is difficult

and he assumed the reader is like a renaissance man or woman, and no one else, latin in various fields- and me suggest, mix offhand remarks as if the reader already knows all these things. So what I try to do with my book choice was to take the essentials of human action and make it about three hundred pages are so ended. They did in the independence of the publisher. They told me make it so that it could be assigned plausibly to an undergraduate class, and so that's what we do

to do, and the thing in particular I want to make sure the reader, God of it, was knowing the austrian theory of what causes the business cycle cause to mean in our times. That's the essential scientific findings of the Austrians that even other free market schools are missing. Well, let's start with the, but let's start with a basic. So look at pouted, MRS In'T and in your book. How do you construe the basics of the economic system? How do you define it defined the individual actors within it? Ok, so the way MRS Proceeds is, he says that it pays storage Lee there was that the classical economies we block Adam Smith in when he wrote the wealth of nations and just the title of that shows that what the

school school was focusing on- was the production of a wealth of physical things that people value and that's where they are focused on, and then there was the so called marginal revolution when the austrian school was born, and that happened in eighteen. Seventy one Carl Linger was one of the three people credited with are sharing in this. What's call the subjective, marginal revolution and economic thought, and I gave us what's called modern value theory right, and so you could you good there there's different series about why something is worth something, and one theory would be that something has a price because it took a certain amount of labour to produce it took a certain amount of goods to produce at the price has to reflect the labour and the goods ice. I think it's, no, its not unreasonable to point out that that would be the fundamental presupposition of

marxist economists and then, and then an alternative to that would be well. Actually, if you produce something that no one wants, it doesn't matter how much work and how many resources went into it it's at prices essentially zero. If there is no market demand, and so the economists that you talked about flipped out on a tad and said, while the price of something isn't it and on the nature of the resources that went into it it's dependent. Instead, The demand of the public Patients served for that particular good and then Utah but the marginal revolution which transform that theory that that pricing, curse at the margins, and that would be something very much worth explaining. Ok, reassured

So let me just sarber these. That is perfectly correct, but let me just some people might have the Miss conception that then the labour theory of value is specifically marxist invention, which makes sense, because it marks, cares about the working class and thinks that the capitalist skim off the workers, but the classical economist, also like Adam Smith, thing heroes of the free market tradition. Also it here too what we would call a labour theory, what costs theory of value- and it goes back- I want, I think, even like Aristotle, so the old conception was the. If, if a state, coach trades for so many chickens in the marketplace. There must be some quantity, that's equal in both of them. You don't get letters and let the market prices are a measuring rod of something that's in the objects and what is that and so marks that it must be congeal labour power or something like that and so the the marginal subjective revolution of eighteen. So

we won realise that no, when, when a stage coach trades for a gold coin, nobody there's that it's not saying a stage coach equals a gold coin. It saying the person who gave up the stagecoach valued the gold coin more than the stagecoach. That's why that person agree to the trade in the four. The buyer was the other way around. They value the stagecoach more than the gold coin in that's why they did it. So there is no equality going on it's a difference in subjective measurements on them so there's inequality from both parties. The just is lining up differently and white ass. My margin, ok, so that the need to deal with saying margin is so others that this objective element which, like I said it, is what's in people's heads and then the margin of the region's called the marginal revolution is that they realise that any given exchange is

particular units, some the word margin, meaning like on the edge of the margin on a piece of paper, so to accept that the famous waited mode This is to say in a. Why is it that diamonds have a higher market value per unit than water does, because war is essential for life, so you would think water should have a higher power. eyes with the reason, is in any particular exchange you're, not trading all the water in the world, for all the diamonds, if you were in the water, would be more valuable it just like that. Gown of water, verses that diamond and so on. The margin that one diamond can satisfy a lot more of your needs. The net reticular gillenwater water, as most people already have enough water dizziness ETA it means in the pre, in that particular circumstance or under those particular conditions right it rather than make some claim about universal value yet and to give it a very trivial. But I think illustrative examples of applying this. people go the grocery store, you not to say all but

cans of culture on sale. we buy some? That's a good deal, you don't empty out your bank account and back the truck up and get every last poland- is you only by a certain amount and then at some point you stop and so on What does it to explain that have to reason on the margin you have to say all the first can of pork is worth more to me than my last quarter and the second can of cobras worth more to me than my second last court. If the price is a quarter per, can it, but it some point after you ve got sixteen Cannes in your car using not. The seventeenth can, of course, is not worth more than my eighteenth last quarter, my videos or something

you stop, and so then you ve harrowing. I was you're making decisions on the margin. You're not saying is coke worth more than a quarter. A can. That's that question is a mean anything. You me which, how many kinds of hope do I have right now is the next one worth more than my last quarter is so that's the how the thinking is on the March Kate dude. What rule I mean? The labour theory of value seems to be all these theories of value in some sense seem to be intuitively obvious, although there are different and so that strange that they can all be intuitively obvious mean it seems that when you decide to do something before you ve been able to price it. You you you. Apps do something like an internal calculation to determine whether your labour is worth it is we for before. You can I been monetary value to it. You might think, while this seems to be worth doing- and maybe you sort out the pricing later, maybe that accounts for some of the attractiveness of the labor theory

does, and it does seem to be some association between the amount of work done in the and the value of output right, so that the classical economist we know they weren't stupid. There was a reason that they I thought that was a good explanation. If you go on read their writings, it's not that what they're saying is wrong. It's just there's only somewhat you can do with it. So it's true in a market where there is a good, that's easily reproduced, and you know we have access to all inputs or whatever its true that if it were selling above the cost of production, then more people would produce more of it and that would put down the price and it would raise the prices of the inputs until you know that huge mark, what was was wiped away. So it is true that for easily reproducible goods where all the inputs are available in the law, run. The selling price has to be very close to the price of the

I can go another round, it's if people just stopped buying it cuz I didn't like it anymore. Then people would stop making it and the only reason they would resume making. It is if the price fell. So then that was a both to me so that there is that element. But then that is all sorts of counter examples like like use mentioned. If, just because I put a lot of effort into something or were making a car and we all tire left hand behind our backs, so it takes longer to make it. We can't charge more for the same product, because we took more hours like that. The consumer does care how much time went into it and then things like you know a Rembrandt painting or something like there's, there's no way to apply that logic, to explain the market price of a work of art worthy of you know where the artist is now dead, so there all sorts of things like that or we're just walking in the woods and we come across. Some object is useful to us, and then we want to go to sell it to others. We have no idea how many labour hours went into it as we just found this thing.

We're not gonna have survival selling it so part of the problem with the labour theory of value. Isn't that its outright wrong? It's that there are all sorts of there are all sorts of exceptions to it. general applicability, and so it can serve as a universal theory of price. And rode out a little trousseau. Yet that's it! That's what like manner and links and jellies and Liam or ass, the the founders of the money of the marshal relative, that's what they did. They, they showed here's the egg, the exact thing that explains all market prices and then the stuff, the patterns of the classical economists discovered for certain sinner. goes we can also handle in this new framework, but this can always it means everything which is it reasonable, then, to suggest that The marginal utility theory of value is the uppermost bucket in some sense and then inside that

There's the theory of utility any inside that there's the theory of labour there. There, though supply on only under certain preconditions, whereas the marginal utility theory applies generally, it's more comprehensive right. Yes, that do its first and foremost to explain a market price. You can, Marty utility beer theory period and then, if you want to say more about particular circumstances like why isn't that the marginal utility would tend to be such and such under these conditions, you can invoke the sorts of things that the classical comes would have used to explain in other price, ok or some ok. So it's it's it's something like a classic p algerian revolution in thought mean when p o J looked at stage theories

He believed the children develop cognitive caught their cognitive apprehension of the world in stages and that each stage would account further everything. The previous stage accounted for plus a little bit more and the same reasoning has been assigned to scientific revolution, that Mean Einstein Physics explains everything that newtonian physics explained plus a little bit more. So that's what makes it a better theory, and so the same thing might be said about the marginal the theory of general utility, it has more explanatory power yeah, and I think the analogy with relativity compared to newtonian mechanics says, is correct, that that, yes, the class those will. They could explain a small subset of market phenomena, whereas the margin utility approach explains everything and it doesn't mean anything. The classical condoms could explain. We can explain the new framework, but we can also explain a whole bunch of things.

The other union, other class comes here to say well, yeah, that's just scarcity and they drop their hands that that's that's a different thing. We cannot we're not talking about that. Ok, so I guess one of the thought that kept going through my mind, and this is not a critique, but it is, I think, more. The consequence of being ignorant about the field is that I kept thinking well. Why should why? Is it that people should care about this? Now you make a case for that in the bark, and so did MRS. He believed that it was absolutely necessary for people to be formed about economic matters and about economic theory, but the reason for that is self evident. So perhaps you could do is the favor of explaining why we should care.

Both this and what? What is it by us as individuals and as a society to have our to have an economic theory and, more importantly, to have this particular economic theory? Let's say: ok great, so I think just stepping back to the reason is so important, and certainly this is what MRS thought for the general public to at least be aware of the basics of the findings of economic science. Is that politically, so much of harmful government policies are imposed in the name of helping disadvantaged groups or of avoiding bad things, and this is why we have these policies in place, and so, if the either they don't help or the bad things that are allegedly being solved by these policies are actually being caused. Are exacerbated by those same policies. Ah monsieur again for an odd eve, me talking about Elysium, and you guys know that dad and I tried Elysium Health and a deal

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So you cite Keens John Maynard Keynes in the Balkans, and you say that the quotation goes something like those who care nothing for economics are generally the slaves of some defunct economic theory. the proposition is we make decisions based on our. Economic theories, whether we know it or not- and it's better to have the theories laid out explicitly and appropriately, so that we make decisions consciously rationally and and this little errors possible. That's, basically, the rationale for dinner, I think some expertise in this area were right, exactly that it can also be so if, for example, recently Quantum Physics, the General doesn't need to know that are even believe and that, in order for your computer to worry about me, they can just go by the computer. It works are doesn't, but with economics it is important, I would argue, and MRS would argue, for the public to at least know the basics, because

as like something like minimum wage laws. If, MRS is right, then that actually makes it harder for teenagers, no job skills to get hired, and so if the public is supporting a hike in a minimum wage to fifty dollars an hour in the? U S thinking this is gonna help young people will not. Actually hurting a lot of them. So things like that, where a let's walk through that, just as, in fact equal example before we go back to the to the general outline so yeah, the Democrats have been pushing, at least on the on the edges. Let's say they ve been pushing for a fifteen dollars an hour minimum wage and people object to that for various reasons. Now, on the face of it, seems like it would be a nice thing if people who were faded to

toil away and minimum wage positions had a living wage of, let's say, fifteen dollars an hour, which is hardly the the income of attack Kuhn, and you can understand that people who some sympathy, for those who are relatively dispossessed would just as soon see them thriving economically and then you can I also see that it seems mean spirited on the surface of it, to objective such a thing. Cuz, it's easy to say. Well, what is it you dont want? Poor people, too, living wage, which is the the instant black and white objection that emerges when any such discussion takes place now. Is it would it be a proposition of the austrian school that. Instituting a minimum wage of that sort would be an error and it even for the people it purports to serve and if so

Why, and how confident? Can you be in that criticism? Okay, so great question, the strictly speaking I should be. We're the austrian school as such is value free you of its it. It's an objective, positive statement of facts about reality, so that it can the last Ostrog Economics per SE, can't say the minimum wage hike is good or bad. It can just say it. The consequence will be that this is what happens. It's ok you're. So what what

it means we can certainly say, is workers if their productivity is below fifteen dollars an hour if by the employer, hiring them if they're, not increasing revenue to the firm. If we ve put aside the issue of how much they get paid for the moment, if their boosting the firms revenue by less than fifteen dollars an hour, then if it there's a loss- and you have to pay this worker at least fifteen dollars an hour within the firms necessarily losing money if they hire that person. So, to the extent that you think employers our profit seeking and aren't hiring workers out of charity, but are doing it because it makes a smart business move then by our two. We could all you say, then that bit because it makes them able to do it. I mean, if I may, forty thousand dollars a year. I can't afford to pay someone. Fifty thousand this year, whether I want to or not it's just not within my power and so is the proposition that

There is a relationship between supply of jobs like that and their their wage, such that if you increase the minimum wage to fifteen dollars an hour, you necessarily de limit the number of jobs that are going to be produced big because because of the problems that you're describing. what was certainly you can say if you put on the caviar other things equal right and so this is how all these things got, so it could be in on time that it just so happens. There was a technological innovation that somebody invented some new tool and now, even when

higher seventeen year old, with no job experience. You put this tool in their hands in their creating somewhat product, let their Uruguay extra thirty dollars an hour by higher in them, so that just happened to be invented right when the minimum wage happened. The data would not show a drop in unemployment right, but the idea is that, because there were some examined is shocked, but did the claim is other things equal? Yes, if you make it artificials more expensive to hire some actor input, firms will tend to hire less of it right just like something. So let me throw objections to the your way in and tell me what you think, because this is a pretty crucially important issue, so maybe I could say Why wouldn't firms merely reduce the

MT they're, paying their other, employs the more highly paid employees by fractional amount to increase the wages pushed down to the bottom and thereby compensate by what would essentially be something like In turn, internal tax mean these systems are so complex that there's a theory that that we apply the theory in the austrian school about at least to some degree about why producing a minimum wage hike would deliberate jobs. But. There is a big difference between how a system works in reality and how it works in theory, and so what do you do? You think that deal propositions put forward by the strewn school are of sufficient integrity that predictions about the consequent

something like a minimum wage height can actually be made with some degree of accuracy rather than merely being theoretically consistent, but we're right, ok, so great question. Let me first just use a quick analogy or nationality, but another example when progressives. Why, businesses to emit less carbon dioxide. One of the go to policy measures is a carbon tax. So in that Rome you don't move people on the left. You know the date they want other measures to, but. When you say hey, we put a hundred dollar a ton tax on carbon don't start making up all these reasons why firms dont want to save money and known, although still use just as much carbon, is before, though just pay less to other things, to come up with the money, it's all straightforward earlier or if if you want to get people to not smoke as much what you do, let's put a really big tax on cigarettes that woman ok, so you ll run all the other areas. People respond to incentives, but for some reason, with labour, the same

firms that are money, grubbing all they care about jobs, nil, outsource factories did to Indonesia to save two cents. I'm labour, if you make tee measures, in the? U S twice, expensive by more than doubling the minimum wage. Not with this a right wing lie that the higher fuel so I'm just noting the allocation doesn't you're. Ok, so you're proposition is that the same people who formulate these theories allow me an exception in the case of those exceptions they want to see, but they abide by the general principles that the that the austrian school roles, or that the marginal theory, the marginal the theory of my general utility proposes in others, situations used carbon taxes, for example right. So so the bay proposition is, if you make something more expensive for he'll be incentivize to use less of it right and even in the car just labour again say, oh if, if it turned out lit they ran the numbers and they could shut down the factor in the. U S lay off all those people in open the factory

you know Indonesia in save a buck an hour most even love us, of course them money for our companies, would do that. But yet wouldn't you double the price of? U S, teenage labour, all of a sudden. Now they don't care about money, though the employers thought. So Ok, so let me ask you a personal question yet and let's, let's jump outside the realm of theory here a minute: do you prefer I mean I understand the attraction of coherent and powerful explanatory theories. But I'm always balance that against the terrible complexity of the real world. Right and so do you believe that than that instituting a minimum wage hike would in fact be detrimental to the poor, or do you think the system would flexible enough to adjust to that and that the net benefit would be positive. Despite I understand the theoretical prediction, but just

with margin of error, writers, right, and I also understand the objections you laid to it, you're, absolutely right that people assume lemme corporations will maximize their profit seeking behaviour. And why wouldn't they do that in the case of the minimum wage? But, but still you know the Lee the ethical argument for cod picking up the amount of money that poor people are paid for doing minimum wage jobs. It's really quite compelling emotionally, and so you have to be pretty damn certain of your first I'm supposed to say well hold on their you're actually to do people more harm than good, and so are you confident enough in the way,

if these theories lay themselves out. So you do believe that that would be bad policy even for the very people that it purports to serve. Ok, so athlete I'm against it, because I believe in property rights, and I dont think the government has the authority to tell people. You know all you if you're in a higher, so when you have to pay- and this amount like as long as their voluntary contracts, you know it's not a six year old who does know what they're going to eat. I dont think the governor has the right to do so. For that Kazan. I would never be informed in terms of the economic impacts, I think, for a modest minimum wage x. I think everybody agrees that they set the minimum wage it three hundred dollars an hour that would be devastating right did that we have in the economy, I sell em, buddy agrees. If you did it too much all the stuff, the Austrians in Chicago school types are warning about would be true, so what our quibbling about is, could you do it a little bit so

The net benefit strikes out of its exactly so I didn't. I do gray Emmi. They have raised the minimum wage in the past, and it's not that all of a sudden, you don't know teenagers and get a job anywhere, but it is true empirically that the unemployment rate among You know young people are much higher than oblation right, and so this is partly to explain why that would be. Is its, I think, you're right in practice There are other considerations that come into play and that's. It could all ultimately work through the issue of productivity that phrase in small minimum wage hike. The firm like the Mcdonald's franchise is probably not just gonna, lay off everybody, because that would be bad for morale, but I What is true is knowing minimum wage hikes on the horizon. They have revamp their operations to have more key asks to have

Oh right now, instead of having a teenagers on the unease shift, they ve got ones thirty, five year old manager, who's got. You know the thing taken: orders from drive through they get the machines that optimum dates, but the drink there hit the size and the majority Does it up the running? Ok, so giving sandwich through all right, so we can say with some certainty, then that there is a price to be paid for increasing the minimum wage and the prices that minimum wage workers are more expensive and will therefore and therefore that will incentivize the search to replace them in some manner right, and how much there replaced. Well, that's not easy to calculate, but the incentives Van push in that direction yet, and I owe to also mentioned there's winners and losers? I would I would say so it's I can't make a blanket statements. All this is necessarily bad so yet

they raise the minimum wage. When the dust settles, there will be workers who are earning fifteen dollars an hour who, in the alternate timeline, would have only been earning eight hundred and fifty an hour. Let's say but there is also a lot of workers that never had a job in the first place that mean usually young a chance to get hired in, never showed that. Ok, that's interesting, because that means that in some sense there is a more there's a hidden moral hazard there which drives that's behaviour because you can imagine this scenario is like every single and who has a job. That's a minimum wage job who gets a boost to fifteen dollars. An hour is going to be very happy about it, All those people who don't have jobs won't know that The reason why right right, they might you know attributed to radio, Likud, attributed to ten things right to fifteen, do not necessarily going to point to that decision and say well, it's that specific decision. That means that I too,

have a job at all, and I should also mention two no actually nor the canadian data better cause, I've done some work for the Fraser ensued up there, but it's the there's called a low income cut off threshold is, is like the canadian government's measure of of poverty. You novella, households that are above or below power and these are the exact numbers, but it's in the eighties percent, where eighty percent of the people who make minimum wage and Canada are in households above that poverty threshold and vice versa. Eighty percent of the people were in households that are below the poverty threshold make more than the minimum wage. So it's not correct to think of minimum wage earners is like so

Mothers who are struggling with kids it it's like suburban teenagers, who are homeless from college for the summer, who are going to work in a Mcdowell for summer job. Like that's, you know the more prototypical minimum wage worker, it's not some being a blue collar person who another thing tutors dimension. Most people earn more than the minimum wage, so the very crew The notion of power bargaining in the employer has all the bargaining power. That's why we have read if that worldview are true just about everyone on the minimum wage? And yet most people earn more, and so once you single, why is that whilst cause of competition and people's skills are twenty dollars an hour. They're gonna get paid more than seven twenty five. you realize you ok, so it's really important actually to figure out. Who is it that only qualified for a minimum wage job Does that also drives the narrative of the utility of of re, The minimum wage rates and- and your claim is that it's mostly people from households that are above the poverty line,

They are, not people, they aren't. The minimum wage earners aren't the people upon whom multiple children are dependent, typically brightens in. So that's. Why, like just to give you an example that could be approved? thing. If two writ significantly raise the minimum wage thinking, you're helping poor people could end up. Largely raising wage rates of middle class workers. But making fast food, more expensive for a lot of poor households that that's just what you know the man's coming home from work and she runs the Mcdonald's to get some for the kid. And now some of the preying on some of the minimum wage height got pass through

to make that food more expensive, whereas she already was earning more than the minimum wage right. That reminds me of some of the controversy that surrounded Walmart, because Walmart pays its employs a relatively low wage, but they also provide food at below what the market was was charging for four groceries, basing groceries at that point, and so you could make the case that they were a net benefit. two people who were in poverty because they drastically they lowered they materially lowered the cost of groceries so depends on whether you look at the wages they paid her well, and they also provide jobs for that matter, and I'm not necessarily trying to provided defence for Walmart, I'm just pointing out that there are multiple factors that need to be taken into account when you're analyzing the consequences of such decisions,

So so I was thinking too about the your book philosophically again trying to solve the problem of why this is important, and now there is a philosophy that goes along with each xx, what school and the philosophies in many ways have pronounced effect on the nature of the public debate in right now we we seem to be falling prey to a pretty intense ideological battle between those who claim that our socialist, oceans, are functionally functionally predicated on. The suppression of arbitrary power, which is in my view some in some manner related to the labour theory of value and the notion that capitalists skim off the extra value, which is something we should return to and there's an entire critique

if the structure of society that goes along with that now, MRS predicated, his ideas, and that this is partly why these works or philosophically important and ethically important means is predicated his work on different, a primary principle. So he believed that people were capable of free action. That was our determined character stick and that we banded together cooperatively to maximize the. What would you say to to maximize the consequence of our free action? Is not it? theory. That's predicated on the expression of arms.

hurry power, but yeah. So in this evening, monetize back towards some of the minimum wage debate, then I think the fundamental divide between people like me, who are warning about the negative consequences and people or ignore all the firms which, if you force him at gunpoint, to pay more, they will cause they go buckets of money and why I was saying: well, that's whites, if that's the person's worldview, where they think it's all just a matter of the year. The employers have all the power if you're a star,

Are you guys accept whatever they give you? If that were really the full story or most of the story, everybody should be earning the minimum wage, and yet most people are earning more and so that so that shows no. It's really not just about bargaining power. It's if, if your labor are time, produces twenty dollars an hour of stuff for your employer in a market economy, you you might not get paid twenty, but you're not going to get paid. Seven hundred and twenty five cuz somebody else to come along and offer you ten and you would take that offer and they're still in there making the gap. So so yeah, it's like likewise hear the marxist conception.

me: there's lots of things wrong with it, but but yet MRS thought. No, if you study economics- and you see how is it level? Why do you say? Why would a why wouldn't employer hire workers in the first place and it's not out of generosity? It's because the worker by adding that the operation, the firm, makes more money, but then, when she realized? Ok, that's why? So if a worker can boost your revenue by certain amount, will other firms want that too? And that's as long as there's competition did you know that workers can I get paid accordingly? Right is so hypothetically. What happens is as that sort itself out. Is that the managers, and the executives in the entrepreneurial types who are providing employment, get paid for their man. General administrative and entrepreneurial ability in organizing firms and the workers. I mean not that there is a clear distinction, which is something else. You point out, there's not a clear distinction between worker and me

major worker, an entrepreneur, but in any case the workers pay. The entrepreneurs and the managers providing the structure within which they labour, essentially rather than the manager and entrepreneurs skimming off the excess labor of the of the worker and That distinction between workers manager. The fact that that distinction is not so clear is also of paramount importance. I think, because it's very difficult categories, the world into oppressors and oppressed if the categories of oppressor, nor pressed, aren't so clear to begin with a right? Yes, you do. You have a bunch of things there so yeah, MRS, was, I think, one of the better economist and stressing that, yes, we have these. I think he call him Cadillac

functions meeting like yet, you got your entrepreneur, your your worker, your landowner, your capitalist and those are sort of ideal types that we can, but using yes in the real world, every action is entrepreneurial, so even a worker who takes a job with- firm in you sell? That's, not entrepreneurs will know. It was because the worker headwind forecast the future and say do I want with this firm or maybe I can go with this startup over here who maybe he's right taking their taking a risk right because in some sense their purchasing a career. and so they have to analyze the general marketplace and decide well, first of all, where they're going to get best value for their money. But they have to look into the future and say well. Is there a future with this firm? And so it's my entrepreneurial in some sense, because it only determines the course of their career and maybe their family well being moving forward. So it's a different

scale rather than type rights are just like you know some brash start a person go into outside funders to say: hey. Can you put money into my new software? Firm and you know that the capitalist are wondering- do we want a risk and invest in, as everyone knows, that's an entrepreneurial decision, but by the same token, yet they go and get a bunch of programmers and say come work with don't go work for Google or whatever work for us, as will give you stock options, and yet we can't pay you anything Raina again, so that it's like you were saying these everybody has to be entrepreneurial in a sense, and MRS talked about that to go back there. What you're saying Reed's right too, about the notion that always to capitalist skimming off the workers, because it there is a certain possibilities of that that the sense in which would ye who makes the cars will the workers go into the factories

it is in their hands and whereas the you know that the fat cats are just sit in getting their dividend, checks looking at the stock prices are not making the cars. So there is this sense that it's the workers who are making everything, and so why don't they get to keep the fruits of their labour, but- and this goes back to bombard- who is like a second generation Austria, He pointed out that it is the time element that, in a sense, really the workers when they get paid their wages, are getting it advance on. What there were labour is ultimately gonna bring down the road, and so he was saying in a workers if they wanted to, they could do Warm together and they will do everything in and sell it down the non stop and that, while doing that, but they want to get pay right front well, they made they may also be stopped from doing that because they dont know how to do it. I mean: again there's an intuitively obvious phenomenon at stake there that you described, which is that you know where the rubber The road is the motion of hands and when you build

something. Well, that's that's the sort of point at which the thing manifest itself as the operation of hands, but to say that what hands do what manual labor does is the only of labour is to completely limit the notion that abstraction is useful and also laborious, and that would mean that thought itself is of no utility and that abstraction itself is of no consequence, and that seems mean that's an extraordinarily primitive theory of labour. To think that thought itself isn't labour, given that we know- and we have to decide we accept this proposition. Thought is a labour multiplier. Otherwise, why bother with it right right? So so, if you're good at thinking, you think you think up a. More efficient way of doing something, and maybe that's your managerial. What would you say? Contribution

and that's not a matter of exploitation. That's a matter of providing a structure in Manual labour can be done in a manner that competitive, and so that enables people to hire other people and it's it's absolutely ridiculous, not to give people at all levels of the abstraction hierarchy. There do with regard labour. I don't understand why marks was but to get away with that like is it? Is it just the fact that. It's so obvious, where the rubber hits the road so obvious that when you working with your hands that that's work, that that obvious just overrides other, more abstract considerations, more detailed considerations. I'm not sure if I might just.

Emphasised that you made a great point there in dismay, drive and home for people right. So it's that the fact that the debt factory is sitting there. Someone had to make that decision in that something that MRS focused on with a social calculation, a bit that I'm sure we'll get into later in this russian, but people just take it for granted the factories just sitting there in the workers. Will you write chauvinism all these tools that somebody you Henry Ford, whoever they came up with idea of the assembly line approach to meet your mass producing things like that. Someone had to invent that, we are and so you're right, and so you might think Henry Ford thought that up in fifteen seconds, and so the labour theory value falls apart, pretty damn hard air, because that such a stunning technological advancement that the segregation of labour to its constituent elements, and it also enabled Ford to pay as workers much more than workers been paid previously, and he was on board with that for all his other flaws. He wanted

is workers enough, so they could by what they were producing so, and you could call that enhanced form of selfishness, I suppose, but it worked out quite well for the workers, and so you do get these situations where revolutions in thought produce something of almost incalculable value and no labour theory, while any labour thier any theory of economic value that can't take that account is severely flawed, but it still doesn't count for why it so damn attractive. Yet, and I do when it comes to buy it, but just another thing to consider. It also explain or. To just merely explain anything, but always the workers produce everything innermost skims off the top. But why is it, though, that so many

People around the world are desperately trying to get into your advanced conflict, your first world economies and column. It's because of an average. Our labour in Bangladesh is not worth as much as it is in the United States, and so there is something about the fact that the infrastructure in the? U S or Canada or you know Europe labors more productive there than it is on the other places on the globe? So it's? U other clearly is more to this story than just the corral, and then you know that also raises a question. Too, is just exactly what constitutes that productive infrastructure? and a lot of that is actually conceptual right, because we don't know, for example, how much the idea that each individual, is a sovereign value is worth economically. But it looks like it's worth a lot, because cultures that are prey kate it on that presupposition tend to be incredibly productive, economically and cultures that aren't don't, and so we can see that abstractions of the sort that may

the philosophical basis for economic theorizing, actually determine the economic course of the country and all the individuals within it. So so, let's go back to first principles again what I'd like to do If we can manage, it is, to contrast, say a radical left, this view of economic function and individual psychology with the austrian School of economics. So this going to be difficult, but maybe we can manage it, so we We kind of delved into the labour theory of value versus the marginal tilities theory of value. And then we took a bit of a foray into the idea that well mere you can't easily sub I'd people into manual labor and those will be the oppressed class. and those who skim off the top, because while we should also note that even manual labor takes a certain amount of our attraction and intelligence. I'm saying that a no no mean

whatsoever to be denigrating. We don't have robots that can bus tables, for example, because bussing tables actually turns out to be an incredibly complex cognitive task and requires a fair of organizational ability to do efficiently, especially under high load, and so ok. So we ve talked about. We talked about the theory of marginal utility and the idea that where labour resides is not so obvious in the notion that those higher in the hierarchy or just skimming, is it unsustainable proposition, but there's other fundamental differences between Let's say the marxist viewpoint and and the viewpoint of other economists, including the austrian school. So let's delve into those notion of the person, for example, so it marks presume that our consciousness was determined by our society right that we were downstream from society, in some sense- and that's not

opposition that MRS was particularly fond of or right. So I think, I can do is at some point, I'm in a recent limits of my knowledge of the marxist worldview. But I think I can safely say that marks thought the material forces of production were love. The prime mover in history, and so You know you had slavery in ancient times and they gave rise to feudalism, and then they gave rise to capitalism or or mercantilism, let's say, and then capitalism and then the next stage of b socialism and communism it said each stage and headed develop to its fullest potential who would burst asunder the next one that at each stage the end agenda would come in and given ideological superstructure to justify the current system, but it was a bit of it. The productive forces were the driving thing and then they did idea. People came in to just

got a story to explain, rightness and then assist, and the story was to justify the exploitation is part and parcel of skimming off the excess labour rights. But that isn't how MRS looked out it is that people didn't band together to exploit each other. It is crucially important right because you're The criticism is directed at patriarchal structures, let's say predicated on the idea that their fundamentally exploitative, the relationship between people is one of power and the location of that, especially if its arbitrary power, the implication is. anybody who occupies anything but the lowest tears in a given organization, is in consequence and oppressor and and and but that me, This insisted that people banded together for purposes of cooperation and multiplication of effort and that's a completely different view. So can you can you provide some justification for that shirt? So

the stark contrast with what MRS responding to that marks as worldview. Is he thought that no ideas are That the primary motivation that new human action starts, always with a thought you people have a goal and they use the reason to choose a means to try to attain it. They might fail that's? What purposes behaviour rights, what he meant by showing rational sovereign actor rank and which the charter own course right and so for him to explain. For example, you know why is it that we went from feudalism too, that the industrial capitalist age, MRS with its because ideas of individual sovereignty- and you know in people have rights in April for various historical reasons in western Europe that emerge, whether because of Christianity or just the squabbling in the terrain, but the idea that

you know that the king can't come into your house your ear, the castle, your house's your castle notions like that MRS argued came out of Western Europe earlier than other places, and that's why they do not took over the world basically like that that was the Red and Sudan scientifically empirically what why lighted? Why was that idea? So potent or powerful is because what you're saying that MRS thought, it just so happens to be the case that human life, when you work collaboratively, gets magnified many full that if we special it instead of everyone grow their own food making their own clothes and everything being there okay. So there is an attractive, there's an attractive cause. I religious notion is well ok, so here's what we do I'll tell you a little story about this. I went and stated in European, be out on the coast of British Columbia one year, and it was this nice little cabin perched on this

on the shore of this delicate island. It was a kind of a log, cabin, quite primitive, but very very beautiful and abuse the local and the people who owned the place where from Europe and they were back to the land types. So in all night, the nineteen nineteen equivalent of hippies and I believe that everyone would be better off if they were self sufficient and and that they would be more psychologically healthy if they returned to the land, and so they bought this place. Well, they were trying to be self sufficient and grow their own chickens and raise their own chickens. You really grow them but to raise their own chickens and plant their own vegetables and and so forth, and what they soon discovered was that that was unbelievably difficult life that they were struggling, ray second to stay, afloat, financially and being selfish.

Patient, especially on an island which is a place that pose own complications, especially in a harsh climate. They were completely trapped and they couldn't sell them property for anything near the market, value the value that they had purchased at foreign. So air move back to the land was a complete bloody catastrophe and so well. I want to tell them story, because doing have these romantic notions. You know that we should all be self sufficient and and and that everyone would be better off individually in our family in their town in their states. If we were self sufficient but there's a differ. Idea which is that we're better off trading with someone, generally speaking, even if we're better at every, we do than they are at anything. They do and so that's really crucial point. And so maybe I could get you to elaborate on that, like we're rational people, we dont band

there, too, tyrannise each other we ban together to maximize our productivity, and we do that to stave off the catastrophes of nature, let's say so that we have enough enough to drink and we don't die from some bloody miss a disease that where the tyranny is in our subjection to our vulnerability we ban together to maximize our productivity. Why does that work? Why is that justifiable and in terms of assessing the nature of our social institutions? Ok sure and end again, just drive home for MRS, how critical this was before him. That was the basis of civilization. That's why we need to have property rights. We need to have rules of social or you can't Laura killing people. You know they say, because we civilization in our standard of living rests on the fact that, all specialise in what we do best produce way more of our thing than weeny personally and traded with others, and so, if everybody notices

and people specialise in our farmers and they growing more food than they need and sell the rest to others and some people to make a bunch of sweaters way more our family needs to wherein they sell it. Some people make a bunch of cars we more than they're gonna drive in they sell it. We all end up with more swear, let's hope, because once you build one car building, the second one is a lot easier what is your right so to the others, a few reasons, a trial understand. Why is it that specialization magnifies productivity well that's what you're that ok, there's a proposition specialization, maximizes productivity and then trade is of benefit to all. Ok. So let's justify that preserves occasionally, but I gave you some obvious reasons. So one is people have different abilities and socio. Some people are just A big burly, guys gonna be better as a coal minor. Then some dainty woman right ends, and so did things like their obvious. Ok, certain regions around the world are more hospitable, right, you're, gonna, grow

or oranges and Flora than Yarn Alaska. Doesn't that's so clearly the people in Florida should specialise in growing orange people have weakened capitalize on the unequal distribution of productive resources. Ride trading right readiness, of trying to eradicate the inequality we can capitalize on. The fact that it exists, which is in a sense, is something that eradicated, and we know what would you say practically speaking and that's important to note tube as you know, we have this idea and I think it's deeply rooted in our moral intuitions that everybody should be equal cycle wait. A second trade honour inequality. So that's an interesting you're better at something, then I am at something. Let's say that's an inequality in, and you might even say what you became unjustly better at that than I did. You know for historical reasons, but the fact the matter is that inequality exists. So, let's try to address it. Will one way of dress.

It would be for me to get as good as you are out that thing, but the other way would be for me to do what I'm good at for you to do it you're going out and for us to trade, If we have money, while we can transform the veil, you have our labour into something, that's universal, and that is an equal icing force in and of itself right that that's all, certainly true. Just another quick one, though, is Even if people had similar aptitudes up front like to two people were identical in all respects, if one of them went into studying brain surgery and one of them into studying chemistry. Thirty years later, when you check in on the one person's gummy way better do in brain surgery, the prison can be way better. It yeah! I done a fine new chemical compounds right so because we have finite resources. Each of us, because we have finite time, it means that we can't be as good as everyone can be at everything ever and so we

and up specializing in something so that we have a comparative advantage. But that's it's not see the light. which here and you said Missus, is very careful with his language. So let's be very careful with our language, if I study for thirty years it isn't exactly that. I have a comparative advantage over you. It's that I compare if we have something to offer, you. Right cause advantage implies that I've taken from you in some sense or now I can hold something over. You know. You know, because you, taken advantage of someone, but it isn't that now that I'm bringing something to the table that you actually desire, and so that's not an advance judge. I have it's something that I have to offer that and if I have any sense. I've picked something that I have to offer that I know other people want, and so there's a kind of altruism, that's build into that specialization. Now, ok, so I'm gonna take One step sideways here too, from a marxist perspective, no marks also said that we alienated

specialization alienates us from our labour, and you know that some truth in that because well here's another example when I was a kid sixteen seventeen I worked at this lumber male plywood mill and it was probably built in the fall he's. So it was kind of a dark, satanic mail. You know to use the poetic phrase and it had a pretty hierarchical structure. The foreman. exerted power over the workers, and you know we have fifteen minute breaks, but it took ten minutes to get to the brain room back and so was pretty regimented. It was classic labour versus manager situation for what it's worth definitely noisy in this place, so you had to wear headphones all the time and my job to stand at the end of this platform facing a machine that was about two blocks. Long was basically a natural gas furnace and I flip these pieces of plywood cheating onto a conveyor belt and filled a conveyor belt, and it would mean

into the furnace and go down. Two block journey through the first. and be dry. And then my friend who worked on the other end would take these off, and so it was really it was alienating labor right, because I would do that eight to sixteen hours a day, depending on whether I was working overtime at all, I was really doing was grabbing a piece of wood and flipping it pushing it forward right, and so it was hot and dusty and and all of those things and. now and then machine would jam and burst The flames and the whole plant would fill up with smoke and steam, and then we could climb on top of the plywood, would stacks and have a nap, and so that was sort of like the holiday. But in any case, Give me some sense of what it meant to be alienated from my labour. There had been guys their guys there, who had been there like twenty years doing this job, and I thought well that would just drive me stark raving mad and so that alienation theory I mean. How do we deal with that? Because the problem specialization. Is that while you

to sacrifice all the other things you might be to do this one narrow thing now. I know that opens doors like if you become an expert at something you go through a narrowing process, while you're being an expert and then the world opens back up but mean. Is it how do you deal with the or or does the austrian school of Thought deal the fact that specialization requires particular sacrifices proposition just that it's it's worth it compared the alternatives. Yet before everybody's mentioned, you hit the nail on the head when he leaves a comparative damage a few minutes ago, and you said that even if one person or historically it was done in terms of nations trading, even one country was better producing areas. in its people would still have a higher standard of living of its specialised and what it was really good at and then traded with some other nation, and so David Ricardo Credit with that's. That's so you're right that and why

Is that because that's that's a subtle and yet not easy to understand a way to a more colloquially illustration would be like a doctor who can do a better job, taking people's blood pressure and weighing them and writing down on a piece of paper with their blood pressure and weighing them and ask them. What brings you in today? It would be a waste of the doktor, the doctors do the doctors and higher other people, your nurse is or whenever it said. to do that basic information, so the doktor can just bogus the time eyes what the doctor, or also who constant he should concentrate on whatever it is that he's that other people are least likely to be able to do right right or so that that the general rules, you should concentrate on what's a general value, but what other people are least likely to write or other exam. able to Michael Jordan is very athletic. He could probably cut his long faster than the neighbourhood kid, but Michael Jordan shouldn't be continent

and hire someone also there. He goes practices, basketball, war alone whose really fast hyper typist should still hired a secretary to deal with. You know. The paper works in the latter can focus on talking to decline so that all kinds of examples where just because you can do a task better than someone else. It's still might make sense for you to out source that and higher that person to do it to free your time up, to focus on where you're really good compared to the other person in I guess the guests, the alienation issue is dealt with to some degree. I read young psychological types along. I may go in one of the propositions he put forward was that When slavery was eradicated in in the west, we each became our own slaves. That was the price we paid for it, and so we say moved away for some portion of the day. But the consequence of that was that we had some time where we could be free citizens pursuing our Lee,

you're at will, and I think that's kind of an interesting way of thinking about it too, is that the Vantages of specialization are such that its worth harnessing yourself to the into this. As for a certain amount of time per week, so that can be relatively free and everything else you do and the reason that that's except and beneficial is because there isn't a better alternative right and so I think the way MRS would handle the alienation issue is this is a few things he would say kind of like what you are saying earlier about this ideal notion of and by the way, my wife and I want to get some chickens to answer, this will not get right that we weren't. We want to do that. To biogas we're afraid it was common, but MRS points out a graph of of history, like per capita living standards, is like this like this, like this throughout the censure, then it goes like that, starting in seventeen late, seventeen hours

most important charge in the world right in. And also population explode is not merely that is the same population and just their Livingstone. It's like all of a sudden you don't. The earth's population starts growing very rapidly, and so MRS Point was the Only way that had happened is the city's. Oliver studies are growing in factories, be peasants, left the farms and went to the cities where the jobs were speak colloquially? Ah, yes, and they left the farms and went to the cities despite the existence of the dark, satanic males, because right things considered, it was better in the dark, satanic mills than it was on the bloody farm right now to in fairness, it wasn't just all laissez faire and property. Like there's. People on the left will argue. that there was not much called the inclosure movement and the like some of the land that the peasants usages live on and it was considered. There's these the rich people in Cahoots with the authorities came in and Fenster often kick demise. They had no choice but to

Go to the city because they were dispossessed rights, but that doesn't stop that doesn't mitigate the FAO. that everywhere in the world, people are moving from rural areas to the city, were everywhere, run faster and faster and faster, and so, and so, there is a general trend there despite mean it's very important to separate out the door. general trends from the aberrations right- and you can point to an end like this- is why I want to empty I raised this issue of power because we're talking about first principles here and- and it's really important- to get your first principles the nature of your society correct, and so you know one theory. Is that value produced by labour and then the exporters skim off the excess labour and and other theory is that no we banned together as free individuals. We saw her face ourselves to become specialists, but the net consequence of that is everyone's gain. Including our own

We do that is free agents and, and that's not an fundamentally exploitative system. The fundamental exploitation is: are subjugation to the demands of our biological vulnerability? Not the tyranny of the social institutions that actually ameliorate that now and then you could say. Well, yes, but there are aberrations and sometimes so institutions degenerate in the direction of arbitrary power and and and sometimes they are not merely a consequence of cooperative action But that's not the main trend and that's not the central tendency, but right and also to just go along the lines feeling so you're right it or is it a trade off? I guess that you can once that industrial revolution occurred, and peoples in this is a point, MRS, would stress too that we think about all the factory enhances the fat cats were known. What are they doing at the factories? Receive them

producing that's mass production for the masses. It was in the middle ages, where there were little boutique items made just for the rich, but the rise of modern capitalism, where people are going too fast, reason is crank and stuff out, and all this is so monotonous. That's because its mass production So that's showing that's what the consumers are getting you're, not a factory doesn't have a bunch of workers there sitting Dane and day out doing mindless tasks just for a barren that they be too much out put its for the masses. So there is that trade of that you as the consumer. If you want all of this cornucopia of goods available, that would been available in the year. Fifteen hundred. That's because of this, this new way of a brace show you a price you pay, for. That is that you have to serve to some degree as a key. In the machine, but you get to decide which cog in which machine ideal. Yes, and so

the end? Also to like we take it for granted that all we have a weekend now we only we ultimately work. Five days we and even there people go into the office. Now they don't really work. Eight hours there and twitter they're getting coffee things are even now a work day not nearly as hard as it was fifty years ago? And so these, oh yes, might feel like all this job ambient. Oh, my boss, doesn't appreciate me now, but it's me is it. You know you have we more free time, not because growth productivity is higher. Your wage rate now is way higher than it would have been in the year. Eighteen, fifty that's because of private property rights. Mrs would argue in the incentives that entrepreneurs are face in a market economy so and ultimately get. If you don't like your job, you can quit it and go do somethin else. It's ok has a genuine market economy or rights right right. So so your ear,

Europe has a wage slave who can choose his slave owner, so to speak, and that's, and maybe that is what, constitutes freedom. When you also face biological necessity, that's the best. You can do all right. So here's a proposition property is theft. now that stems from the same kind of idea. Is that the same marxist matrix, let's say the idea there is that, while people gain arbitrary, drawn over a natural resource and fancy from the use of others, and that should be a general resource and the mere fact They have power enables them to maintain. the fences and to benefit preferentially from whatever can be raised there, perhaps as a consequence of use of experts.

station of the labor of people who were then allowed onto the land and again, there's something that sort of folk attractive about that, although I think it also dangerously insights, and justifies envy, but. Maybe we need a better justification for private property what it means is have to say about that. Ok, I dont know if Missis, This point, but I seen others like just prime efface, the statement property is that is almost a contradiction or paradox, because theft means somebody took your property rights of the note of property per SE is built in there's. No such thing as property is a non sensible concept. Then so is theft right, and so that's ok hard though I would make them ok he's, but make that point. So I think, would be one of the things he would say is:

even the socialists who say all rather than the anarchy of production or how much would it be to have all the factories in the farm land in the hands of this narrow group of people that the capitalist, let's call him or the the bourgeoisie or whatever term we want to use? And then the mass of the population is utterly dependent on their decisions and look look at how they live their riotous living in their drunkards in Vienna that these are reputable people anywhere sober minded people. This is a crazy system, let's be more scientific and rational and have sports running it still there just replacing who the Dinero group of people are, who are in charge right, that it is doesn't it it could not be that the people collectively decide which crops are going to get planted, and this acre of farmland because would have people disagree. There has to be some mechanism by which we can agree. Okay, we're going to plant wheat here and we're going to plant tobacco over here or we're going to build a factory here

This is what we're making that people can have disagreements about that, and it's it's silly and naive to assume all are we had reasonable people sit down and think about. What's right, then it would be obvious how to use all societies by means of production no, it's not obvious at all and so under a socialist approach where we get rid of the evil or the theft of private property, at least in the means of production. Your actually not getting rid of the fact that a select few have to decide and everybody else has to go along with it and so to private property per se. So why mean what it's easy to think of private property? Actually as property course. The idea of private property is really the idea that you can own anything. And so then I guess, if we go down to first principles, what is it that you to own in order to make social institutions work. Well, I dont think

is anyone who disputes the idea that you should on the right to dispose of your labour, as you see fit mean even people who are on the radical left. I dont think would allow for that degree the dissolution of ownership to take place. I mean their objection to begin with is that people are sickly, enslaved by exploitative capital, institutions and they should be free to choose and that meets seems to me to mean that they own the right to choose its something like that. So what is it that you need to own? if we're banding together to maximize productivity and we're doing it in a cooperative way rather than splitting one another. Fundamentally Bahrain's be damned for the time being. What

that we need to own what rights do we need to own right? Ok, great, so, you're, right that it's it's interesting that when you talk to in obviously among others, different groups, socialist and marxist and leninist and communist those are not all interchangeable terms and the people who believe in those things would get you not take umbrage at people aged being sloppy with so yeah wanting it's really complicated in the case of places like Norway, in Sweden and while Canada for that matter, because we're more socialist than the? U s- and I mean Canada, Norway in Sweden and finland- and so on, are doing. nicely all things considered. So these can compare two Stalinist Soviet Union, for example, so yeah these distinctions make a tremendous amount of effort? So what whereas goal is to say, though, that when I talk to people like Anti Communist, let's theoretical socialists- that

ask him: will they will say that all young people can own their houses like his lungs? Are modest or workers should only tools rights of it? They have no problem with a carpenter owning hammer ahead we're a nails and saw, and things like that of regional those are means of production, but also, but then, of course, the problem comes up what do you mean by own right, so, if I or my house- but I can't I want a factory, but I can own my house. While that means I can't trade, my house for a factory so I dont know my house in that regard, You know there's something, there's something really fundamental here: that we need to sort out about ownership. What does it mean to own something. Well it it means that you have right to its use right, a young, and yet you you, your will determines how it will be used right and so to say the I own, a factory means market that, yes, not only do I get to determine

What is produced in order for just sits there idle, but also look you say to really own. It means I should be able to sell it, to somebody else for running for any fear or sanctions or anything. While that's that's where things get tricky right, because. If ownership mean something, it ass, to mean something like the right to trade, thing you own for other things you want, because why the hell else would you bother owning it? I mean it'll produce profit, perhaps, but with that profit is still to be able to buy things that you can own. So it's the same problem. So what we need here, at least to somebody The reason I'm driving at all of this is because we are facing the situation in our culture, where there are few the mental revolutionary critiques at the first principle level right right, we're sovereign individuals were members of a group we didn't band together for cooperation. We banded together

to maximize our own selfish me needs our own selfish ambitions- and we do that as a consequence of the expression of arbitrary power that that far The mental relationship between people in a hierarchy is exploitative that that the enlightenment, idea of the sovereign individuals, nothing, but a justification for claims of power. For the privilege group mean these are fundamental. We'll critiques. They go all the way to the bottom, which is why I'm trying to chase things down to the bottom. I'm also- and I want to go to this too- some point it attractive set of ideas. It's an opt in Dick set of ideas, but it instilling the same revolutionary fervour among a minority of of young people let's say in our culture, that these that these more article, that more rapid critical ideas are, and so we also have to address that problem. Is there

This is kind of a nice way of looking at the world. It's it's optimistic, its its positive, but it's not romantically tract of in its being attacked madly, and so we can't and it very well so ok, so so, will will sketch them back to ownership so so yeah. I think it at some point in this discussion a meal with what MRS would stress, disabled, let's not lose sight of the fact that in just so you know armed attributes, the heat, MRS, was not a natural law theorist rights, even though plenty of people like libertarians love, the work of MRS and people were very ideological and have views as though, like that, where property comes from and ethically

MRS was with what was more utilitarian or pragmatic, and I think he would just say: yeah yeah, I'm happy to have these discussions about the philosophy, the underpinnings of justice and so forth. But push comes to shove. The means of privilege, factories in farm land in crude oil deposits and men are other minerals, namely those all need to be own privately to because you need to have market prices for those things, because a given business enterprise needs to be able, at the end of the accounting period, to say where we, profitable, or not, as the only way we can know if it's using scarce resources effectively. Okay, so one reason for ownership is that its very difficult to monitor something without that ownership and if you can't monetize it, you can't calculate its value and if you can't calculate its value, you can't use it. or you you can't know whether you using it efficiently or not,

look out. That would be the same thing essentially because if you don't use it efficiently, you're going to have to stop using it pretty damn quickly and so to some degree pray. thing is the antidote to the tragedy of the commons. That's another way of looking at it. Is that so, for example, the in the oceans. No one owns the oceans, at least not passed, went to get out two hundred miles free for all, essentially, and so the cons all of that is that everyone is incentivize to take every goddamn fish as fast as they possibly can, and that's exactly what's happened and its because the fish are free right, but there not because they are finite resource, and so the problem is, we haven't, monitor or a problem. A potential problem is that we haven't assigned Mama ties value to the fish and so once pulled into an economy. There were something but out their free floating, it's every man for himself, and so that means that without private property you know you can make a case that private property

to the despoiling of the natural environment. Say: okay! Well, what about those situations where there is no private property? Well, then, you get instantaneous despoiling of the natural environment because there's no incentive to maintain it. So we could say you your own things, so that your. Commitment to your specialization is paid for right I want you to become a brain. Surgeon means I have give you something and give you something means you get to own it to dispose. As you see fit, and so we when we want to incentivize everyone to specialise so that we can exploit each other with maxim. Efficient efficiency, Adds to everyone's good, it's something to do it, That's in everyone's best interests it something like that, and so we need private profit. need to manage the incentive. And anyone. You also said to price things properly, because that is also an important consideration. Rights

so historically, even before MRS came along Yeti, the critics of socialism warned about think the incentive issue and like to say that there are some really productive people. If there does getting paid. You know from each according to its ability to each according to his needs, why would a superconductor person you dumb exert himself so much if he just gonna get food based on how many people are in his household or something? You know that kind of thing so that that was a stand thing, but then the socialist countered that and said well know in a socialist society there be a new socialist man who would just you know, give out of altruism years, been to benefit to debate a benefactor of his fellow man. It is only when you grow up in a capitalist system that you're, greedy and self centered you, have to be to survive. So MRS came along- and here in his argument, you heap acknowledged that the truth of the incentive issues

but his was more other of a calculation were urged them. Knowing what to do and singing Even if we stipulate for the sake of argument that all the comrades are willing to do whatever the central plant or stolen, the central planters drew truly want the best for their subjects it just you dont know: where should we locate the factories? How much dumbly car should we make sure we build more food distribution centres? Should we have more farms here there? How many of art in coming years of our apple young scholars should go into these different technical fields, K and the reason. The reason that you don't know. That is because, in order to know that, in order to know the price of one thing, you have to know the price of everything else right right, that's the fundamental point, blood so and then the problem is worse because well how in the world can you calculate the fundamental price of everything, because that's an insuperable computational obstacle.

and the answer is well. You distribute the computational problem to the maximum number of actors and you try to bring everything under the modernization web right and there are places where that where we have real trouble with that, where we can monetize something accurately yes, oh there, no others areas where it doesnt work very well, but in general. Yes, if you just think what does it mean in a decentralized market economy with private property, not just for carpenters, owning hammers, but for the whole factory being owned by a small group of people or one person, you know everything is owned privately and then your people have accountants and at the end, legacy of an accounting period. They look back and say: how did we do and if their profitable distinct from? What does that mean? It means that their cause tomorrow's gave them more dollars. Then they had to spend on the resources to make that stuff the goods or services. While we could use an analogy, somalian, your carpenter and you want to build a house

but you don't have a ruler. You don't have any way to measure length right. Well, so Maybe you eyeball it maybe get pretty good at that, but for maybe he can't you. Do that, so you can't measure length now you have to build a house where you can't, because you have to measure and so then the fundamental point, people here. Is that money is the measure of value and its computed as a consequence of a distributed network and that's the only reason it works, and each person is pursuing some a value in so far as they are the goal of doing that, and they make some pricing decisions on the base. Of their specialised expertise and then we some the consequences of that specialised computation and we have price for everything or virtually everything, and because we have a price for everything we can rough We decide what to do so. Its best

of this really is a computational enterprise. I really like it, and yet MRS used the term calculation yeah that was so your ejaculate either. He argued that that one of the most important distinctions of modern civilization was there you do apply. Arithmetic to human right right right was also the out. This is the measurement issue, and so were were basically making the case that you, you can't You can't get anywhere unless you can measure he is the measure and it's a measure, and so the proposition that central planning will work is the proposition that you can substitute what expert mind for a million distributed expert mines, and that's just not the case. Yes, it's obviously not the case, because each person is going to have knowledge. That pertains their locality, that is

accessible. That's another element of specialization that isn't accessible to everyone, and so it's much better to let everyone make the decisions and some of them, and- and so we have this, this free market society isn't a mechanism to allow, Property holders to exploit others, let's say it's: a mechanism that the entire human race uses to calculate the comparative value of everything right and it makes thought poor. And then means does point that out when he talks about a rhythmic is at its enables us to do a rhythmic tick and we can decide. Is it worth it yet and so Hyatt? Who is the above a follower of MRS and won the Nobel Prize? And seventy four rely to stop. he had but discussion where he was saying, for example, if it in mind, collapses in Africa or something else

what around the world who uses ten needs to use less of it, at least in the near term, until they get that mine up and running again, and so in a market economy. The way that happens is the price of tin goes up, and so are you saying, like some factory owners, a signal in North Dakota doesn't even needs no, why it it's it's a relic you don't need to know the particulars of the Mai. He doesn't know ten is more scarce now than it was yesterday. So too, if you can you something else on the margin in that's exactly what happens when the price goes up, people who can substitute out of ten for something else do so, but for firms that absolutely need tat. is not the way to know it. Is they don't need to know anything about ten? That's! What's so cool about, is that you don't need to know anything about what it is that your purchasing and thank God for that, because we don't know anything about anything you notice of our good. I mean I've tried to buy printers, which is very, very difficult because there's like three.

Hundred printers. You know it's like how the hell do you possibly know which printer is the right, printer and answer bay Italy is well roughly Can you can use price? You can assume the printer is worth whatever its whatever the prices? It's it's. good an indication of the quality as you're going to manage, and thank God because otherwise you wouldn't be able to make a decision. I mean I ran into this sort of problem trying to price some things that I produced. I produce these software programs myself and my collaborators. one of them. The self authoring suite is designed to help people write about their past and present and to make a plan for the future, and we are trying to price that It was unbelievably difficult decision and it started me thinking about pricing. You know if you make it really expensive, well, that's some indication that its of high value, but it limits the number of people who can use it. If you make it, we thought well, maybe we should make it free would

more people use it because we were base. We wanted people to use it. You know I mean we have their motives. I suppose. But fundamentally the motive was labile. We have some psychological knowledge, let's see if we can share this with people as broadly as possible, but our conclusion in events was that free was the wrong price. We couldn't generate enough profit to continually improve it. We couldn't justified effort that we put into it and so were likely to start looking at other things, because we weren't incentivize promptly and people might respond that something worth zero, isn't worth anything right, and that was just one pricing decision- and so you know, we set it at a moderate, too low price and that seems to have worked, but it really did introduce me to the complexities of price

people were willing to pay what we charge for it, and so maybe we should charge more, who the hell knows are perhaps less but ok. So so, let's go back to first principles a little bit, so people need to own things, because if they don't they don't we can't incentivize them to specialise in production, and then we do have anything, and so Their ship allows for incentives, Zation essentially other that's one component, but I'm seeing an independent issue is even if it, Now we must assume we have all the stuff. That's near. The resources are available and people have studied to be brain surgeons and carpenters, and whatever Even so, we don't know devalue do with all these resources. Without her, I really. I gotta get that in my head. That does that's, ok is there another? Is there something is there another attribute we got to their ownership allows for

burn centralisation, and it also allows for pricing and that's necessary to provide comparative information about comparative value. Absolutely crucial, their anything else. That ownership is key to the probably is, but or anything else we're missing? Well, I mean not in terms of like the narrow Egon, mix of it, but I think the broader so MRS would call himself a classical liver or he would say liberal, but for art terms we mean classical liberal, like of individual rights and so on, and I think he would you say in that paradigm: private property was the ultimate bulwark against oppression by the local authorities, that ok, ok, that's a good one. Do so you might say: well we need it. Maybe it's better to a thousand rich people than one tyrant cause you ve just repeated the tyranny of least right now, there's ten, between the tyrants, and maybe it's even better, if there's a hundred thousand tyrants, because their computer,

amongst themselves- and I mean I think you could make the case because one of the factors that delimited the our of the absolute monarch say as England developed was the fact that there were nobles who also had independent basis of power, so ownership also give individuals, authority and power right. Another way, Look in your heart of incendiaries zation about it, but it's also stabilizes society right. So it's so! If you think about it, it's true on the marxist. You haven't a grain of truth that the average worker, especially with no savings, is sorted at the mercy of all the big firms. Oh gee? I need a job in right now, there's really just a hundred companies. There are viable that might hire me and if you know, if I don't get along then we're finally kowtow and do what they want be a yes man than you know, a mile and a half inches do wherever

but how in the world, are you in that situation, improve as let's get rid of the hundred owners and just have the state, be the sole employer and tell her one hears what you're gonna work? The dairy replaced like you say the hundred petty tyrants, where it, ultimately, you can just quit and go somewhere else. Now you have to leave the country if you don't get along with your boss. Who is this? well, you can see to yeah well and then and imagine also the disproportion in power. Okay. So let's go to that. There's a centralized authority. This making all the decisions and then there's all these citizens and they're all equal. Yeah, but they're, not equal in relationship to the centralized authority there radically unequal, they have no power whatsoever, and so now, if you look at a place Communist China, at least this, Central tyrannical tendency of this aid is counter balanced by the authority and power of the tycoons and you gotta think about that is something that's better. At least theirs

competition between tyranny and at that point, even if Europe, very, very cynical about the whole situation. It it's a good thing that there are locales of power that are independent of the state of the state. Central authority Right and that merely because the state, even if it was benevolent, might be wrong just in terms of diversity of opinion, we want to have multiple power sources now you know I've also talk to my brother in law, help me sort. puzzle this through. Do you know there's I'm utility and having some people who specialise in the ownership of money, and so they have a tremendous amount of money, partly because some things are really expensive to do. So, if you want to build a factory to build microchips, for example, that's a couple of billion dollars in investment minimum, and so, unless we have these huge pools of freely available capital that then that requires a certain amount of dis.

proportion in distribution rights so that there are some people who are extremely rich. We couldn't do any of the things that really his require, if we didn't have people who were rich, and so so let tell me what you think about this. So is it the case that distribution of economic resources to the poorest, is dependent on their availability to the rich first, so think about cellphones. When they first come out there like twenty five thousand dollars, and so there's some people. Who can afford it. Twenty five thousand dollars cell phone and they buy them, and then now they're worth twenty thousand dollars, and then more people can buy them, because it's, the twenty thousand dollar price range mean We didn't have radical inequalities in income distribution. Would we or be able to introduce new, expensive products into the market? Will lobbies answered this way and if you, if you want a press me, I can try to elaborate more, but

I think for sure. What MRS would say- and I would agree with this- is for the introduction of new products you do want to have private property and the ability of certain people to have accumulated best. Fortunes because if you think about how did some person get to be a billionaire, it was only because of their person support. Your foresight in anticipating what consumers want it and that's how you got to their position and then that person then to decide whom there's a new technology call a cell phone or cellular phone, yeah. I think it's worth sink and millions of dollars and had seen at this will pan out it's the who's in making that this as the person who's got the proven track record so far, whereas if you headed front system. Where or no we don't individuals to accumulate s fortunes. The state owns everything. Then it's gonna be a committee that always gonna gas and sell able to bring in the new proposals. Let's vote on it, you know like so it's there's nothin

skin in the game to use data that their popular phrase. Now that it's not that into jewels own money, and so did the like You could just see how given human nature and the limits on but people's expertise is that deed district, hitting decentralizing, allowing for the possibility of massive fortunes to accumulate is the better engine for innovation that now people can shall I knew a certain billionaire who does knowing about phones like he made his money with cars, I'd say. I'm gonna pass an otter know anything about that, whereas somebody else who is more technically savvy might invest in it, but there needs to be some way. You can just invest in every problem order who says he I got this new product is gonna revolutionise the world because, Most of us are your argument. Basically is whether people out there who specialised and develop expertise within a certain domain and as a consequence, they have accumulated a fortune and that marks

Excepting aberrations that marks the development of that expertise, it's a pragmatic or for the development of that expertise. You want those people making visions in their area and they make decisions in another area and it's a bad decision there, just gonna lose their money right and so itself, young erect and, like you, so maybe that's what you're she's a brother in law. It was getting it, but there are people. in a market economy whose specialise in investments like they're, good it just picking companies lately Warren Buffett or whatever, to use a popular example. So it's not that Warren Buffett nurseries is good, it running a car factory, but he knows what team is gonna, be good at doing that, legged his interview, people and get a sense of. I think this is this firms. Do well over the next ten years, and so you know there is that so someone who's just good at investing and picking winners in the stock market. If you're really are good at that overtime, you accumulate.

money and then you have more decision as to which firms get funded. So again, it's a meritocracy in all the stuff presupposes: there's property rights and fewer people are, stealing it for years and three action and viability, zooming, rational to say the rules, then yeah overtime Who is it that made a boat load of money in the stock market? The people who has successfully predicted better than everybody else which stocks are likely to go? or they sold the ones that were before they went down and that's exactly the kind of person you want, deploying the scarce amount of capital funds, UNICEF, guiding the trajectory of r and d drill base or about the person you would turn to. If you are looking for advice It seems like that's the sort of person that you'd want now. That means that the thing that again- and this is a moral issues that means those of us

don't have billions of dollars, have to put up with the fact that there are people who do right in and I suppose it's it's tempting to assume that they ve gathered their fortune. The consequence of you know some misbegotten adventure that involves oppression and and unfair. Traction and of course it is always some truth in that, because all systems are susceptible to corruption to some degree see coming. Thinking about this idea of systemic racism a lot lately and it's very very treacherous term and and purposefully. So I believe, or maybe it's evolved that way in some sense, because terms that are particularly treacherous are difficult to dispense with It isn't the racism part of that that's the problem, although it's that it sort of its heavy weight of the the two you say, racism and everyone responds well, that's a terrible thing and then too

jack to anything that has racism appended to. It is very treacherous enterprise because it looks like you're objecting something that obviously terrible. I mean even if you're, a filthy, greedy capitalist. You want to explore, everybody from each race the maximum degree possible until even for you, racism is going to be a terrible thing, but then the systemic issue, Z and that's what sort of snuck in their systemic? Well, systemic implies central tendency. right, because otherwise you wouldn't use the word systemic and so the Opposition is essentially that the central tendency of the social institutions and institutions is racism rather than an aberration in their behaviour or a deviation from the central tendency and what trying to sort out right here is what the central tendency is

and so we're saying, while people band together for productive purposes they specialised, because that is advantageous with regards to maximizing productivity and distribution because of the pressing issue it's not a matter of exploitation. You have specialized to do this and there is a price to be paid for that, but the but the price to be paid is offset by the price that you are paid for specializing. that's a completely different view of, and so a system like that, isn't going to be systemically prejudice because it works at counter purposes. to its central tendency if productivity is the aim and the goal. Then you want to x avoid everyone equally, and just on a narrow pointed you may as well to amplify that. Yes, in a market economy, there is an inbuilt penalty for irrational

it is so you don't you even ok. So now we can define irrational prejudice to in this gets to the issue of merit right, so imagine you're, making widgets. Well, then, the ring criteria is going to be facility and making widgets and anything that isn't relevant to facility in making widgets. Is prejudicial If you allow those prejudices too in since your hiring decisions you're going to be less competitive than someone who doesn't, and so this Central tendency is against prejudice, not for it. It has to be if, if you define prejudice. As deviation from the proclivity to select for the desired output right and so, for example, you know that this, the male female alleged wage gap- and I know I saw your wonderful interview on that issue- but on its own terms, just think it's odd than if it really were true that in the United States,

men and women or men or women, are going to get paid whatever the numbers, eighty eight cents for a man for the same work. It's a mystery What will happen all the firms are run by greedy capless, aren't hiring just women because they re getting just ain't market twenty? They make a twelve percent profit instant run by doing so right, and so it their greedy and exploitive. Why aren't they jumping over that new counter argument has to be whether so prejudiced against women that bill that prejudice to override the greed bright and what's it to you, it's not merely that look like some have to insist that every single employer thinks like that, just all it would take, is five to ten percent which resemble why dont the female owned bid. this is at least just higher all women to take advantage of the fact that women will do this more autonomy, so it's the others. see that has to maintain that. No it's this blind irrational. You know sexism that overrides the greed,

too often I have to explain worldwide the hell's, the motivation exactly is that so what is this that there's a widely distributed belle of owners who are so prejudice. Against women in the main that merely to sustain their prejudiced against women, their willing to take a twelve percent profit hit year after year, and none of them are deviating from that to gain a competitive advantage bright and that's the thing right, and why can't women who see this itself? Obviously, when they start opening businesses to at least high pay their female the sisters. Ninety five cents to them. I it's up it s, really nine cent for that matter right. So it's weird them system so and then, of course,. They would then respond and say well it's because of the data and they pushed the sex, come back, like you say, into the system, and I thank you It's an insidious term for they use racism or sexism. Is that the bad thing to tainted? But then

its unbelievably and city right in that? That's partly, why wanted to have this discussion? It's like it. Its systemic. That The issue, nor is it raises. Yeah, gathers races of no kidding, there's all sorts of arbitrary stupidity, no one debates that, but The stomach means central tendency and so what words. To clear up here today, at least in part is water that what is the central tendencies of our psychological motivation as individuals and central tendency with regard to how we organise our societies and we need make a counter argument to the proposition that its blind, it's the blind application of power, which I think is it not. We are weak argument. I think it's it's. It flies in the face of the truth, it's it's an anti truth, because but don't organise their social institutions on the basis of exploitative power its naughty. very efficient to do that right is because people are incentive. Eyes when their tyrannised and so

So that's another area where I think what you I've heard. Your lectures coincides very nicely with MRS Work when you, say: yes, there are hierarchies, but they're, not based merely on your power. I of there's there's some merit involved, or sometimes there's mare, and that's what MRS says that he like he would talk about. You know that they refer to like the cotton king or that the barons of industry and he said in a market economy, the the people who are at the top, the John Dene Wives, Dundee Rockefeller. You know why were you on top because he delivered kerosene, much lower prices, then his competitors did that the same thing can be said for Walmart ran for bill gates. For that matter, who made who made irony but what happened when Microsoft started to develop gates bundles? four together and sold it for, like one tenth, the price of his competitors. It was any just wiped them out, and so, it have very very rapidly, and so ok, so here's another,

issue with ownership, Robert Breed love brought this up today on Twitter. It's not his idea, but other people have made this ain't case, but he did it quite nicely. He said the private property should the right to private property should also be considered the responsibility of private property, and possibility property had like ok? Now you here's a car and you own it. So what you gonna do with that car. Well, are they take care of it. Are you gonna racket? Well, what is what, if doesn't have you own it. So do you take better care of rental car, your own car and so The question is well. If you want something to you, take better care of it, then if you don't own it, and I think everybody can answer that question for themselves. It's it's it's in your best interests to take care of something that you own, a maybe Don't do a very good job of it, but all that implies is that you do even worse job if you didn't own it right in

just to extend it against the necessity and framework. That's what he would say again that the critical function of having prices and it just simple accounting, like MRS quoting Gerda, who said one them modern miracles, are the best invention of the human mind was doubling We bookkeeping suddenly I've ever had these act where it seems like an odd thing for you know the loud and it's worth its worth. Yes, it is an old saying it's which will first of all, you should define double entry bookkeeping, so everyone knows what that is. Ok, so that you don't want your for in terms of accounting that there's like the liabilities and then on the opposite side of the balance. You know you had the or is there? You have the the assets in the liberties and they and the up the capital and in a company so that every transaction user see the mirror image and you can just keep track of what's happening. And MRS Point was that sort of trivial thing that the Socialists to sell that just an appendage of the market economy, to put some numbers on and wet, but

Is critical because it allows the owner to know? If we are, we have we squandered our funds like our capital at the end of the is it higher or lower in a sort of like a scorecard, and so that's what you just said reminded me. I don't like to say without prices, it's not merely that you would have the incentive, you wouldn't even know, did I add to the stockpile of what I've been in stood with two- should be a steward for iranian society. Of the like, these portions of resources is mine. I own into deco up or down without market prices. You literally don't even know whether it went up or down so it it would be. if you had a car and not just knowing, do you take care of it up and not be able to see it or not even to be opened. The hood and tell there was an engine inside, like you, wouldn't know at my door, having to heart. If you couldn't check up on it. In some way, so that's what market prices do if you earned a profit, that's a signal or feedback from the entire society.

Eighty, the in a sense the consumer say you ve done a good job, using scarce resources, you transfer resources, resource gaily, so ok, so ownership buys us incentive. It binds us lordship advisers measurement and those aren't replace Especially measurement that might be the most crew of all of them because the others fall without measurement. You can't even keep track. Of what you're doing this point, you're just making now yeah that so we can have yet meet me sources, has a phrase where he said the central planners without market prices would be groping in the dark. Well, that's that's the that's it that's a huge issue. I read in Seoul nets and I believe that the central planners under in the cell in Soviet Union had to make something like fifty thousand pricing decisions a day and while you can't even make fifth

thousand decisions today, that's impossible, but I dont know are they managed it, but without right, there's always an assumption. There's always in an employee. That is something on the basis of people who are pushing central planning that the data will somehow be there for the planet to take right. Ok, so others there's a couple more things I want to cover here and so the business cycle, let talk about that because that's if we talked about general economics and the philosophy of Economics- and one of the things we tried to understand- was how we should guard the Organization of Social institutions and the motivation of individuals. The motivation of the visuals isn't to Ix Lloyd, other people, it's to stave off catastrophe using so, she'll cooperation has the means to do so it something like that and the.

willingness to accept the sacrifice of specialization to participate in that process with the in a fit of ownership and all the things that we discuss. That emerge as a consequence of that that isn't something that anyone decided that the other thing we should point out as these systems have evolved across time mean right, just been rational inputs and all of that and and rash, oh formalization of the system, but this isn't evolved system and its consequences distributed computation running across hundreds and thousands of years right. I should mention work within the austrian school there's different emphases, so MRS was was very rationalistic, so he would say all the reason people engaged in social cooperation is as they use a reason and they understand the higher productivity, the division of labour, whereas hijack, who is also a big figure in the austrian school, He was more evolutionary in the sense of different cultures.

For whatever reason you know like these people just didn't like cannibalism for some reason, and then they would tend to multiply more than cultures. That thought cannibalism was ok, you don't be so for him. It wasn't so much that they had to understand why it was just those that happen to think along. The private property is a good thing. Are you Billy or if some society thought merchants were noble profession that they would explode and take off, and then they would conquer everyone else who thought that no working for the government was the only thing that mothers right it's the right. Well, There might be an evolutionary process at work here, so to speak and is, as far as that works in the social world, random. innovation followed by selection. There certainly some of that, but it's all

so necessary for us to understand rationally what the consequence of that right is at least so we little disturbed unduly when we're attempted to write and that something that high brought up a lot. I think it is noble, except in speech We say that the problem with the socialist or, more generally like people coming along looking at social institutions, that we ve inherited over thousands of years. Think that doesn't make sense to me. I think we can do better and to throw that out and that led to all the horrors of the twentieth century, like the smartest guys in the room, not understanding the social utility of some of these traditions and saw a high would argue that, actually not being so. to begin rational liked, let's think through. There must be some reason. They does yeah well debate the big issue there for me, as you know, as look for anyone else, one whose intelligent it's a very complicated, because we do use planning in our day to day lives. One and I mean that's it-

option of the austrian school? And so then you might say: well, isn't there a rule for planning at the highest levels of social organization and the ants that has to be something like the more complex the problem? the less likely that individual rationality is going to be able to solve it. You have to start work moving towards distributed computational systems to solve incredibly complex problems, the exactly right and that that they talk about that. A lot in the austrian tradition to to say we should even concede to the Socialists this term planner, because in the market economy, like you, said, attributes of theirs Lots of plainly, the ceo is in that might be piece of finance and marketing, they sit down in their planning. the time machine we introduce this new product lunch. We built a factory here it, but it's decentralized, whereas The socialists mean by planning, is no a select group of people with political power are going to do that. in writing. So else it's like system,

races centralized play, replanting sounds good, its decentralized. That's the problem, the more centralized the planning the more four catastrophic error right right, the council, had set them or put a political oppression. To like, we said that it's bizarre narrowly economic issue, but but yes, since looking at history, we know it is possible that sometimes people do really awful things. That's another independent reason you would want to limit how much power of a few people have and to give them the power over the whole economy. That's a very risky thing to do is merely to they might not make enough eggs. They might send people to work in death camps. Okay, so are there more criticisms of socialism lurking inside the austrian school? At the level of first principles, we discussed most of them. I think hitting the calculation issue is the critical contribution that MRS made me a here. Right. He goes away all like in Kansas.

and sees the marxist worldview, and they like that Polly Low, Jasmines amuses, says, they say: there's Polly lodges them, but they ve never taken an austere from economic. and shown all this is according to bourgeois logic, but proletarian logic has a different acts even therefore step for the proof. Is he just as they just say that only so he's MRS does really get in to roll up our sleeves and critiques Marxism, but in terms of free or audience. I think that the main thing was why calculation is such a flaw for socialism, but the market economy, also with private property and money prices. Ok, ok! Let's talk about the business cycle now get. If you don't mind too, I'm gonna give you free rein to do that. All interrupt, of course, ok sure so in this again like us in the beginning, is, I think, one of the key contributions, the austrian school, that even other free market oriented economists at the Chicago School,

have shown the Austrian traditionally we said, prices are serve a very important social function, its legislative a decentralized people all around the world with local information, and the price system is the nexus by which deck its communicate around, like hike, even likened to a nervous system and so that's a sense in which the whole system stays rational. If you want to use that phrase or how do we husband resources economically. You need market prices. They have that so ok, but now, specifically, what is it that interest rates do in the austrian school? They say that has to do with, Inter temporal planning like long term decisions. That's where interest rates really play a decisive role, so give a silly example. You know you're an entrepreneur trying decide whether to build an apartment building you'll see can now how much the steel cost the concrete the lumber, the glass you know how much it costs to build. You can even

forecast in all in this neighborhood Abiola, rented for such and such an on bringing this revenue so over. ex twenty years every year, I'll bring in this much net income. Here's the up front cost. Should I build it or not? A critical input to that decision. That calculation is what's that first rate as these rights really high, then you won't builded if it's really love than you might so, let me harass you both the interest rates, you're, so why do we have an interest rate? What Is it exactly ok so that, in the austrian framework, loosely speaking, it has to do with them? Let me say like that, the amount of impatience, the amount by which people are willing to defer consumption as long as they get more down the road. So the higher the interest rate it's like the bigger the penalty is on waiting so alone. So if a societies is very future oriented and very long long term thing,

we are willing to save a lot of other things. Equal that tends to push down interest rates of firms, can borrow a cheap rates and invest in long term. Projects so people are willing to do so. Why do you think our interest rates are so low right? Now? Ok, so right now, I think it's because of the intervention of central banks, and so this ties in with the austrian concern with as is the low interest rates are giving the signal the entrepreneurs go ahead and invest in really long term projects, but The railways are okay, so your money in condensed, of low interest, you have money, face in a bank account, so it can be translated into spendable currency instantly ITALY and its type of its performing a function that reflected in the interest rate and so, if it's just sitting there are collecting point one percent and the inflation rate is. Three percent. Your money is losing value across time,

She can be incentivize to go, find something more useful to do with the money. Hypothetically rights was a two pronged thing that low interest rates, other things equal make people not save as much right, because a. Why would I seem homeowner and link is eight point, one percent, whereas if you were around ten percent and your savings account, you might say more, but then the flip side to businesses who want to borrow funds to go start. A project rate can get it in a much better than the idea of saving is complicated too, because you know the typical folk of a billionaire is something like Scrooge. Mc Dunk remember screw idiotic dark. He had this money been full of money and, of course, as long as all, the money is in Scrooge MC ducks money been No one else has access to it. It's like he's he's, stuffed us five hundred foot, mattress full of caution and he's just sitting on it occupying hoarding it when we save money anymore economy that isn't what

at all, we put money unless we put it in the proverbial mattress, we put it in the bank and that enables other people to use it. And they can use a substantial fraction of it to go and pursue pursuits. That, in principle, have to be more. active in the interest rate that were being awarded so not hoarding the money. The rice, whenever you just said is true, but what's ironic is, if you think about it, even if people do do that it would actually be socially advantageous racist someone goes and produces a bunch of goods and services and people give em cash, and then he got new stores and in his basement. If you think about that, persons gone around, doing work for people and giving them benefits, and then he does yet with the elder, went out consuming any right so right exactly except future consideration, and so I ve never again what what's the worst case? Your only never spends it. That's actually

that would surely, if you ve, never spends its deflation rightly so we drive down the cost of good rice right, so it just ironic that buddy right right and the other thing to rise for most of these energy is not even that they have money and checking account the bank had lent them is that they own stock in companies. They created so easy Bill gates, whatever right, so what they have is the its view, interesting, because in some sense they have power. and in some sense they have authority and in some sense they can exercise compulsion, but they also a tremendous amount of responsibility, because we really have to ask- and I asked myself this many times, especially in recent years-. do you want that responsibility like having billion dollars, is no joke. I mean yes, you, I think TED Turner famously calculated that if you spent as much as you could every possible day just on on what are those goods, disappear. Consumable goods, you know me you use them and then they're gone.

spend four hundred million dollars in your lifetime and in that be flat out nothing but hedonistic spending, so maybe of twenty billion dollars and well that's like your basically running, We need good sized country at that point right and it's not. I read a biography of Howard Hughes, hard use out obsessive, compulsive disorder and he got very ill in these later years, and his money, just evaporated around as soon as he was unable to stay on top of it. It just disappeared like mad, and that makes perfect sense because money, is obviously valuable, and if you don't keep an eye on it, it has attend. See, do distributed self elsewhere. Extortion, early rapidly, and so this end of people who are extraordinarily well off in all its it based on a misapprehension about the nature of their existence, at least to some. I'm not making a case further, wonderfulness of abject poverty. Believe me, I mean.

I'm not doing that at all is just that. The picture is not so simple. You do have a tremendous amount of responsibility along with all that money and if you would exercise the responsibility properly. All that happens is the money disappears extremely rapidly right, which is again another reason distant terms of pragmatic considerations at your mentioning a while ago about would you redistribute oil is there? Some utility are like allowing for the existence of billionaire speculators are stock investors and things, and then I would say yes that it's not it's not correct. I think that all the reason they achieved, that is because they siphoned off from every else did no large wont. Let me ok, let's go after that. They inherited it. Let's start without to justify that. Ok! Well there, I would say the person who, if I go out and create a fortune,

Most people are okay with me being able to go and spend it at the casino or you know, smoke it away or by yachts or whatever, but I'm not allowed to give it. To my kid, that seems weird So it's me, I will, I guess neither did the rejoinder would be well. Why should your child have a special advantage, but my object to that objection is ok, are you trying to give your children all the special advantages that you can and isn't that what you're supposed to do? No special necessarily mean at the expense of someone else see. This is the critical issue here. Is that what we are facing Our culture war is the proposition that those who have have as a consequence of exploitation and that no such thing as merit, there's just different, there's just exploitations justification for itself. Now we already narrowly defined merit right. So when we say our societies meritocratic what we would

is no more than this, and maybe merit is the wrong word and that's a big problem. If I'm, hiring dishwasher merit for me- is that sensibility to wash dishes and nothing else, so the Merit is very, and so we need a better word than merit. It's like function utility or something like that, because a company even by law. You have to do this. You know if you're going to hire someone in the United States. The labour laws are very clear about this point. You have to do it job analysis which breaks down the job into its functional units, let's say, and then you have to look through candidate pool and you have to find the person whose most qualified to perform those asks using, best measurement techniques that are currently available. If you don't do You're in violation of the law, and so that's another rejoinder to the notion of systemic racism and, though bloody laws have teeth. They're they're, not trivial, so and their heavily enforced but merit defined in terms of ethical utility, precisely it

fine very narrowly in terms of pragmatic function, set your meritorious to the degree, meritorious in this particular situation, to the degree that you can perform that particular function and can't say that societies greedy and exploitative answer at the same time that it isn't predicated on merit, use that narrow definition of merit, because you're not gonna, be very effective at being greedy unexploited. If you're, not selecting for productive report. did he lets say it, I think, is more generally only those points in your raising, like, I don't think most people wouldn't would say yeah it's a tragic. Some kids are born without legs. Like that happens, it would be crazy for us to chop everyone's legs off disable. This is the only way to make it fairer right that the EU would realize now that doesn't help anybody, including the people who

naturally would have been born without legs, like they benefit from being in a society. So likewise the I understand, hey, it's not fair if some guys rich and gives his fortune to his kid when night, I didn't get that, but Byles Genome unfortunate, that my parents. married and that do not valued wildly about that's like right. That's exactly the issue right is that this week then I saw this watch- this happened so to speak from a historical perspective, Looking what happened in places like the Soviet Union and in communist China still happening in places like North Korea, where every single person has enough of a comparative advantage? so that there is some dimension along which they can be rightfully regarded as no pressure, because they have We all differ in our advantages and disadvantages. All I have to do is point two year comparative advantages. Despite your disadvantages and say well, you're a man

of the press oppressor class because well you're physically healthy here, you know you're you're, not yours, near six feet tall instead, for foot eight here you know you have use of all your limbs. You have parents who stayed married you're of above average. Intelligence, etc, etc. I can make that lit so What we would say instead is that for maximum fairness, you allow people their comparative advantages, but you encourage industry lies in trade right right and it you're not again. You're you're, not you're, actually not helping the the disadvantage and whatever that narrow criterion. Is that you're? Looking at that moment of analysis by hamstringing everybody else at one dimension? Subsidy,

Zack, they write that we are rather than looking around it it lighten, rather than looking with envy and other people or sing, that's unfair to say, oh no. This person has this ability that I lack, and so let that person developed and run with it in produce in abundance trade with me and ass. Well, that's it! That's the well! Then that's the issue with rigour. Let's, let's talk about the unfairness issue, it's like well, there's! There's. There doesn't look to me like there's any systematic, centralized way of eradicating the essential unfairness, because the unfairness and the here's a perverse little issue is well. You know amongst those who are tempted to engage in critiques of our social institutions say, on the basis of their hypothetical grounding in power. There is this: answer of diversity. Okay, so let's thing that four minute. While diversity has to mean something like difference, mobility because otherwise, why would it be a good and so

We could say, while you are, you want to have a diverse workforce because well things considered, you need people who are cape, Full of doing a variety of different things in case the environment shifts on your case of diversity is a good but D. There is no good at all unless there's comparative advantage, and so and I don't see how to get over the equity hurdle. With regards to comparative advantage, you know we want equality of outcome. Well, do we want equality of outcome on all measures, all conceivable measures? Well, there's milk! the advantage that anymore there's no diversity so which is which is we're going to have organ, have diversity or equity? Could we can't have both yeah yeah? right. It is a weird paradox: similar to how men and women are exactly equal, but women are actually butter and everything like there's three so that they are those those two undercurrents in the standard. You know rhetoric coming out nowadays in these got in this culture war, so so yeah. I am agreeing with you.

It's the right. Yes, the ostensible reason for why you would want to promote diversity in the workplace. Is that could cause they? They will. argue with. If you say, oh no, I should feel the higher the most qualified people, India to make the most if it does not fit bill, argue in his own. All you you're, not gonna, sacrifice profit you'll make more money. If you do what were telling you do, because, for the reasons you know, you're saying that you'll you'll have have new perspectives when you're making decisions and you'll know about you know these people will know how this customer base will react to your marketing and so they're telling you that this is actually the price but will decision. If you were like one, you know they're well, the thing is: is there's probably some merit to that argument, which is that, in our view, want to serve up a population probably want representatives of the population within your decision making purview, but I would say the market already rewards that

intense right that in just use it? A different attitude is like within the climate change debate. I don't know how much you follow them but is a similar thing where they want to pass on. These regulations like to give businesslike to mandate. Businesses have energy efficient installation and do all these things, and so the right being says: no, that's going to impose costs and then their third, the left will say. Oh no they'll save money, and so I would always point Well, then, you don't need a mandate. It just facts. Your data to this. see I followed the corporation and they'll. Do it on the wrong? It's a likewise that yours here. If it really is true that this will promote you no profit it. This is as this is a good move for the company. It's weird that we need to be. beaten course. Everyone into doing it when, by assumption these are greedy capitalists who do anything for a buck except again, apparently, the one thing they won't do is higher different. While, especially given that you can, you could attain

comparative advantage. By doing so right- and I would say, that's actually what's happened, I mean look if you think about historically look at our quick women moved into the workplace. It's been, let's say hundred years, not that they weren't working like mad before thou, because they certainly were, but as soon as became possible for women to enter the workplace on the same terms as men. The workplace opened itself up to them. It was incredible rapidity and it certainly consequence of taking advantage of the available brain power. So system does work, and I so I should also mention too, with a bunch of this if it sounds like we're being real out of touch in like it's easy for you guys to say that, given our D ethic characters. There are a lot of things like injustices and, but I would just say, I would attribute a lot of that. The bad government schools in

wage laws and think things along those lines. May government measures make it hard for someone to start a business and compete with the established firms, so there's a lot of things that explain why, in practice, I think certain, relatively politically powerless groups, don't get a fair shape. But my point is it's: not the world market, a cook in also look. We can also be perfectly blunt in pointing out that. Aberrations in the system might allow for the maintenance of prejudice that the issue, the issue- whether or not the bloody prejudice is the central tendency, because that's systemic racism claim mean the fact that systems or error prone, as I have no problem with that. Obviously that's the case locally and sometimes more widely, but that doesn't mean. It's the central tendency of the systems, the central tendencies. Tendency of the system works against slavery, for example, not for it

no they're aberrations and end the issue is what central? What's an aberration, that the claim that its power, that central is, total lies in play and its will- and I would just add that the two it's my feminism is a complimentary point is under saying, like Jim Crow Laws,. did the other southern states that had a budget there? Is the government forcing companies to do that because they would say all some of these private lives. This is just going to serve to blacks and whites equally, because they know they don't understand the way, our soul system weren't. You don't be so it's it's funny that, like a gym, Olaf is cited as an example of the failures of laissez faire capitalism or not. On its own terms. It was the government overriding the prerogatives of business owners to force them. Yet because the money of any races of equal value right and all it would take- is a few dinars and bus companies where its had believed that, and then you know that this does segregated system would would have

a problem would tend to break one. That did happen to some degree, because black businesses emerged to address exactly that lack didn't remove the prejudicial laws, but it did allows the provision of goods to the black community and those particular sit circumstances, so the market to found a way around the laws, at least with regard to the Tradition of resources right, so that's no justification for the laws, it's quite the contrary, so locate, we need to talk about the business cycle so so, and start by what it is wise imports of what the business cycle. But people meat is the fact that market economies tend to grow over time. You know that the amount of goods per hour per person goes up. But it's not a smooth periodic increase, there's wild ups and downs and in particular those periods where there's high unemployment and then other times when the labour market seems very tight and people can get jobs will easily, and so what why, where

that come from. Why is that the case, and so the austrian explanation is what happens? Is the banking system, and in modern times, under the aegis of central banks, pushes down interest rates below where they should be so interest rates could push to artificially low levels. That gives the wrong signal to the entrepreneurs. They start long term projects, even though the public hasn't saved enough to actually justify those investments. So it gives this false boom period, where everything seemed prosperous businesses are hiring what there's not enough actual saving to bring it to the finish line and at some point, the bank's chicken out the central bank raises rates, cause inflation, kicking up and then the others a crash, and so, in the austrian view,

who did that the depression or the recession, the crisis is caused by the preceding boom, and the only way to get rid of that boom bust cycle is to stop with this alleged medicine of cutting interest rates, to stimulate spending that no that's a sowing the seeds for the next crash, so the price paid four central planning, that's not guided by market signals, is deviation from the average. Essentially volatility. Yes, there's that, but then also in the long run, I think the Austrians would argue because of the mail and it's not just That always the same average over the hundred years, it just more volatile but that the average is lower than otherwise would be because raw, yes right, so the prince

activity suffers as well as in volatility increasing right. So well, it's okay. I can also see an analogy there with the theories that I be laying out, because you know my sense is that failure to react to market signal, so to speak in the psychological world, just stores up catastrophe for later so. Yes in the austrian deregulating the interest rate served has a role to play. It serves a function in mind, times when they say thing all the time because of the slow consumer spending, the FED cut interest rates to try to sitting or are now you know, because the corona layers interest rates are very low. The mutton most economic frameworks- that's like a good thing in all the questions, just as that met us gonna be enough to help in the austrian view. Now that's poison that you're not doing us any favours by making interest rates lower than they should be, because that's the wrong signal

Just like you know. If you put a thermometer on us on a feverish patients head in Israel, high put some ice on it to bring it down to ninety eight point: six Fahrenheit, that's you're not actually doing any favours. bye bye, masking the signal. Now. That's that signal tells you something, and so if interest rates are supposed to be six percent even and how would interest rates be calculated properly in the absence of of termination by a central source just de central and just like you know, how is the price of oil the asset? We don't a group of she just allow private lenders desire private interest rate, private lenders and borrowers working and it can work to commercial banks and light, but as decentralized, we if you think that it's weird. in the ostensibly free market capitalism, you ass, there is a group of people who tell us what interest rates are. In a periodically of legal case, why is that? While the

visual. I know that's a terrible, complicated crazy, but I'd still, I dont know the answer to it. It is odd, so it's The price of money is a centrally planned, Right and actually because interest is the price of money essential or the price of borrowing it yet the m. Yes, it's fine, I think, was a thing. It was John Stewart. You know the daily show guy he had Alan Greenspan on. I hope I'm not mix up that. This is the spirit of the script and he asked him at once. He said a free market economy right. Why do we have a group of censure planted in a green Spank Adams gave some occupation answer, but so the dignity official reason people would give as they say, oh before central banks in the EU, there were these panics. You know while deflationary over there is ups and downs and in the FED was supposed to be form to be a lender of last resort to provide stability. So If that were true on its own terms will know the great depression happened on the feds watched. The great recession happen on the feds watch,

other empirical measures there was more volatility post fed than Pre FED so even its own terms that, during the more cynical, people would say. Well, you know it's a group of bank yours and they were instant. Mental in out of the Federal Reserve ACT and getting that thing established in its an instant institution. That provides liquidity and bells out bankers when they get into trouble and sell you what's the mystery there that that's why it happened. So that's the cynical interpretation which in turn, station. Do do you a favor, I mean we don't want to be cynical about it right and it's always be. I'm always leary of conversations that point too they you know because these huge problems there. All our problems right. There are problems man, so we have central banks, authority- and we decided at some point that that was a good idea and I sent it

theories tend to be incomplete at best, in my view, mean: what's the costs in Europe, you or the view of the austrian school of having the central interest rate and in this manner it's the business cycle. That's that's the that's the issue. Is that

not informed properly the decisions right that by periodically pushing interest rates below what they should be. You know, what's the just in pure cause and effect. What's that was the problem with that is within it when it comes it trades in particular causes this artificial boom period. The necessarily must end in a bust and then, as you say, over the course of the cycle, resources are used inefficiently so that, when holding sudden done with people are poorer than they otherwise would have been had interest rates in setting a true market all so that's you look at the cost of doing it. Besides that, there's redistributive things as well that if you had this engine of inflation, where in a sense in modern times the central bank and literally just create money electronically,.

That's an avenue to corruption and right now the Federal Reserve is buying private sector bonds. They started doing that in the wake of the corona virus. Panic, so you know, are they doing a purely on the merits or is there some you know things going on beside behind the scenes to which companies bonds get purchasing dealt? So it's with all this stuff? Yes, four motivations, but I Yeah well sometimes it's not merely is their corruption, but you know: is there sufficient transparency so that conspiracy, theories of corruption stay, what less popular that's a problem when these decisions are being made, even if they're not actually corrupt, they destroy trust in public institutions because they're not transparent, and there is room for corruption right cells. so what the Austrian gets is regardless

where the motivations areaway, but the fact is that, yes, centrally planning prices, India, we know outright central planning of all prices doesn't work. That's you know the collapse of socialism. We can see apparently that doesnt work and then the off, regions, I think, are being consistent and sang and also why are we centrally planning money in banking? It away central case, there's nothing else. Where very close. This, then, what do you think this is a bit of a left field question? But I've talked to some people recent about bitcoins, I'm gonna. Ask you about it, this sort of the ultimate, decentralized economics, anything any opinions about Bitcoin what think about this idea of taking the monetary system out of the even the high, control of centralized institutions and- and regardless in some sense of this specific merits of Bitcoin it it's a revolutionary idea in some sense. What what do you think about it?

right. So I think it's a fascinating case study and I think it took a lot of US economist by surprise. I think, if you had asked me before it was beyond two thousand and seven could something like Bitcoin exist. I think I would have predicted will know, because how would it get off the ground like? Why would people accept it it just? It seems like it's a circular problem like how would anyone know what it was worth then how it did get off the ground? Is it first? It was almost free like a zero sum game, a bunch for up to pieces or something, and then it is kind of bootstraps. So that's how they got around that problem. I would say what she'd I didn't think of her. I wouldn't have thought of you asked me at a time so right, although it's a classic free market, Why not invest in it if its pennies to the dollar so to speak, because there's some potential upside right and so the market too? care in some say. Yes, I so what do you know that the intellectual a problem. They suckers because hike had a famous essay where he was arguing for

so we when he set his young friend free market types, have tended to focus on commodity money like gold and silver coins and contrasted with fear money like government paper, because historically the government paper up with crashing in other than the marred money, the gold and silver was sound, stable currency but high, except maybe that's wrong, maybe just because it shortly fit paper, Money has been issued by governments. What, if you had private firms, they could issue, namely and currency. That would just paper, but you know, is a private companies. He had named brain recognition and they would not compete with each other, so in other words to privatized central banking. Let's It is all he had a whole essay on that, but even there the problem was you had to trust that you know the reputation or the the honesty integrity of the issuer, of whatever those paper notes were. So I think that the virtue of Bitcoin is They also she figured out a way to make it so that there is

Sense in which the system keeps track of it- often there there's no one in charge of no it's completely redistributed right now. But how do you safely spend money in and solve that problem too, to accurately transfer funds if nobody is in charge of this of the whole ledger, so that was like the intellectual masterpiece in terms of what he did and that now we said so that's what's knew about it in and yes, it's now that it's off the ground yet dance. Your question, the others. A growing number of people who are austrian enthusiasts, forcing Bitcoin or crypto currency in general is great. I'll say for sure I like it, because it shows the public that you could have privately created money just like with it with goober in law. Left the to me. That's the easiest way to get the public to see you don't need to have government medallions for taxicabs, because before overrun left people might have done,

Oh no! It's for safety UK does have a free market in in rides, because the cabin might shoot. You already know, rob you at gunpoint or something or eat don't be driving around in that didn't have any well known on. Ebay is interesting that way too. You know because Ebay to me as an absolute miracle, I mean I know it's it's a less robust platform that it once was but mean it was free enterprise out it's. Why most wildly. unregulated and produce this incredible explosion of value, because people could trade frozen capital there. You know your junk in your basement was now worth something to someone in the Syndic. Said. Well, you know I'll, send you broken junk and you'll pay me with a check that about not didn't happen. You know they they put in place brokers. I s girl wages, to begin with not Ebay itself, but they were available for so that you

ensure your transaction and what happened was the bulk of the transactions were so honest, like ninety nine percent of them are ninety. Ninety eight point, five percent of them that the escrow agents were necessary so which was extremely interesting in, in my estimation, and a newborn laughter are very? examples about as well, because they were, they seem to be. at least as safe as taxis. In my experience that goober lived cars are usually in better shape than taxicabs in much and generally it's a more pleasant experience here and it's cheaper and it provides instant or did provide instant employment and people, which was a real miracle. In my estimation, it's like you are unemployed, but yet access to a cards like you had a job right then, and there remarkable remarked so just so, I think the average person

could understand the possibility of oh yeah. Maybe we don't need the government to have heaven but cartel operation with taxicabs in the name of protecting the public from unscrupulous drivers like Why do I think with crypto currency people seeing that and see how it works and young realizing? Oh yeah, maybe it's not a shouldn't. We should just take it for granted that all clearly the government provides courts and police and money. Obviously, the government has to be in charge of issuing money. Could otherwise that to me that's what one of the virtues of crypto currency is that people can only seen example of something that was obviously had nothing to do with the political scene, yeah. Well, it does definitely seem to be a currency whose fundamental underlying philosophy is in line with the fundamental underlying philosophy of the austrian School of Economics, certain the galleries This step is just do what I acknowledge the sum

Austrians are divided on. This is some real, ok, love commodity money and they think not gold and silver, and they think Bitcoin like not at. That makes no sense. That's crazy! That's just like a big bubble. So I don't. I endorse that right, but I do want to say that they are. Dreams are divided yeah I guess the I guess the affinity is that it's a distributed. Currency it that hypothetically Capitalizing on distributed computation, it's not under the control of any centralized bureaucracy, whether not it's the proper solution to that problem So there is room for and tell me if the boy felt Fanny Austrian would eat, nor is gonna, say God do what you want. It now shut it down. I say that God do. If you want to understand, I personally would invest, namely that would be their view right in your right right that the entire enthusiasm, though they would say, there's a sense in which its even harder than gold, because you know has a twin

million that's it, whereas in principle we could go getting an asteroid that has a bunch of gold, so maybe gold actually wouldn't be the best money for the next two hundred years because of some discovery or some eco innovation in time. three where they can make all pretty cheaply out of Sea water Authority apple, whereas whom Bitcoin just its very nature, mathematically, it's got a fixed limit, and so there is a sense in which that's really hard, if it as if it were become money all right. Well, I think that's, probably a good place to stop I've been speaking with Doktor Robert Murphy. This is This book choice, cooperation, enterprise and human action, and today we talked about the austrian School of economics and many other things, and thank you very much, it was very educational. As far as I was concerned, I am much more solid in my understanding of,

perhaps economics in General- not that I know anything about it yet, but that was very helpful and appreciate you taking the time to speak with me and wish you luck with your Balkan anything else you'd like tat before we close up I would just thank you for this opportunity to talk with you, and I was very excited to do so. I want to mention I've been watching of your lectures- and I am a big fan of your workin pritchett- what you ve been doing. No thank you. Thank you very much