The Future of Austrian Economics | Murray N. Rothbard

This is the famous speech by Murray N. Rothbard given in the days following the collapse of the Soviet empire. His exuberance is palpable has he explains the meaning of it all for the place of liberty in the history of civilization.

Source: The Future of Austrian Economics | Murray N. Rothbard – YouTube

http://www.readrothbard.com/the-future-of-austrian-economics-murray-n-rothbard

TRANSCRIPT
00:14
aggressive era with approximately 1998
00:20
Austrian economics said forbes magazine
00:23
is getting more and more attention in a
00:25
world grown weary of socialism and other
00:27
government failures and murray and
00:29
Rothbard added Forbes is the happy
00:31
warrior of the Austrian school the
00:34
greatest living champion of economic
00:36
freedom he’s written 17 books and
00:38
literally thousands of articles
00:40
professor rothbard is academic vice
00:42
president of the liberty von Mises
00:44
Institute and he teaches at the
00:46
University of Nevada Las Vegas dr.
00:50
rothbard who National Review says makes
00:52
the dismal science sing speaks here at
00:55
the Mises Institute summer school on the
00:57
future of Austrian economics in order to
01:04
but since the last the first meeses
01:06
university was last summer about this
01:08
time and since the since that since that
01:12
event we’ve had we want to a cataclysmic
01:15
changes in the world and the what we’ve
01:20
seen I think this last part of last year
01:22
and on continuing this year is the most
01:25
exciting event of the 20th century
01:27
certainly in my lifetime I think in the
01:28
20th century namely the total
01:30
revolutionary collapse of socialism
01:32
communism and it was just fantastic and
01:37
that’s part of the part of the cases of
01:40
her optimism about the future didn’t
01:43
this is the fact that something happened
01:47
which nobody nobody had predicted would
01:49
happen in any sort at least at that time
01:50
and that’s or a way is that we had a
01:55
totalitarian monolith one friend of mine
01:59
claimed about 23 years ago that
02:01
communism has succeeded in rain washing
02:04
all the people their subject so they
02:06
created a new socialist man the man that
02:08
they were trying to achieve and
02:10
therefore everything was hopeless and
02:13
typical of this person is he’s not
02:15
exactly a very good profit and shortly
02:18
after lately his article was written you
02:21
know came like beginnings a whole
02:23
collapse of communism and
02:26
one of the great things about it and in
02:28
addition the fact that shows the spirit
02:29
of freedom cannot be wiped out and
02:31
mankind as it shows the power of ideas
02:35
you know that it’s very difficult me
02:37
tend to get pessimistic sometimes some
02:38
people do some laggards some of the
02:43
faint of heart because here we’re
02:45
pouring forth ideas and beezus for
02:47
example I’ll get to that in a minute all
02:48
those life is fighting for freedom and
02:50
opposed to tyranny and socialism and you
02:54
think I’m hopin ideas affect history and
02:57
we’re locked in you know the pressures
03:00
we all know about the public choice trap
03:03
the public choices who tend to be free
03:05
market people are trapped in this
03:07
extremely gloomy pessimistic out world
03:10
outlook mainly that special privileges
03:13
of course we all know special privileges
03:15
out shaft us 24 hours a day their
03:19
custody working for lobbying and special
03:21
privileges and monopoly contracts and
03:24
all that when the rest of us the
03:25
consumers the average person is not
03:27
interested in any one particular focus
03:29
like the sugar market of it grain market
03:31
or whatever 24 hours a day and therefore
03:34
the consumers quote rationally ignorant
03:37
ignorant unquote and uncaring about
03:39
these particular particular fields and
03:42
areas and therefore it’s inevitable
03:45
special privileges always went out and
03:47
tyranny and statism went out and that’s
03:48
it there’s no hope and every every
03:51
person since every person is only
03:52
interested in the narrow short-run
03:54
economic interest there’s no way of
03:55
getting out of this trap George Stigler
03:58
for example the distinguished Dean of
04:00
chicago school began on a mix of one of
04:02
the two Dean’s at least view is the
04:05
ideas of militants on history whatsoever
04:07
it’s as if everybody is writing in a
04:09
sort of a vacuum or running for each
04:10
other other professors and and as
04:14
there’s no point any of us as far as
04:16
affecting history goes coming from the
04:20
story of economic thought it’s kind of a
04:21
you know kind of a depressing picture
04:23
why are you doing all is if none of this
04:26
has an impact so but we find out here
04:30
dramatic examples of the exact opposite
04:32
in other words here is here the
04:35
communist he was the communist system
04:36
totally locked in
04:38
alleged monolith special privileges with
04:41
Norman clip Torah totally dominant
04:44
everybody had to had to work for the
04:46
state everybody that lies were organized
04:48
by the state and commanded by the state
04:49
and therefore it seemed to be no hope
04:51
and obviously something and here’s a
04:55
situation of people like Ludwig von
04:56
Mises for example 1800 ability David
04:59
human Luke von Mises always kept
05:01
insisting that in the long run ideas of
05:04
the things that count is that’s it’s not
05:06
short run economic interest is the ideas
05:08
of a home other public the determined
05:11
historical events that no no no
05:15
government as much I’m however much
05:17
force they command however much
05:19
instruments of terror they use on the
05:20
population no government can last any
05:22
length of time unless the public
05:24
supports it the majority of a public
05:26
endorse it one way or the other for
05:27
whatever reason and this seemed to be
05:29
outmoded in the days of totalitarianism
05:31
the days when the government has always
05:33
read instruments of torture and
05:35
Technical High technology at their
05:36
command how can the average person
05:39
resist this and you know we will read
05:42
Orwell’s 1984 force is a very gloomy
05:44
picture everything is shot everything is
05:46
finished the totalitarian elite will
05:49
went out and then at the beginning of
05:51
all this process Liberty von Mises in
05:53
1920 wrote his famous article an
05:58
economic calculation of socialist
05:59
Commonwealth beginning of this whole
06:02
monstrous proc collectivist process of
06:04
20th century and he said it’s not going
06:06
to work it was addition to the moral
06:08
ideas the moral failures of socialism in
06:11
the ND and all the other and the
06:12
political philosophic failures and
06:14
sociological figures it’s ain’t going to
06:16
work social impossibility put it and
06:19
cannot plan a modern industrial system
06:22
going to fall apart can’t calculate and
06:26
this was a allegedly we butter the
06:30
Socialists by the way those they took
06:32
this very seriously this is the first
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time they come to their attention is
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there’s a problem other than incentive
06:37
problem you know about the incentive
06:38
prob everybody acknowledged that our
06:40
very beginning of socialism even before
06:42
socialist and the great social socialist
06:45
experiment of the soviet union was
06:46
established incentive problem is if
06:49
everybody is equal and everybody takes
06:51
it
06:51
he was knees and gives the cornu
06:52
visibility who’s gonna take out the
06:53
garbage who’s gonna do that who’s gonna
06:56
do the dirty work what’s who’s going to
06:57
what’s going to happen and the answer
06:59
basically feeling of the socialist was
07:01
we will create of socialism will create
07:04
a new socialist man which will be
07:06
cheerful and robotic and dedicating his
07:09
whole life of the service of the state
07:10
apparatus and essentially means and said
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look even setting on decide whether or
07:16
not you can do that evening even having
07:18
a bunch of robots or cheerfully are
07:20
rushing to the obey the commands of the
07:23
state what does this take what will stay
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be able to tell them mobile to say tell
07:26
them to do how they may have a plan and
07:28
calculate and we’re somewhere some
07:30
production should be established and
07:31
what tech processes should be used and
07:34
what what combinations and so funny so
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they can’t do it because there’s no
07:37
there’s no free market in the means of
07:39
production there’s no genuine market
07:41
which establishes a genuine price system
07:43
and therefore they won’t know that
07:44
course that won’t know if they’re doing
07:45
well or badly and whole thing will fall
07:47
apart social it’s taking it very
07:49
seriously it’s quite a refute it we had
07:52
about 20 years or 15 years of debate
07:55
back and forth especially in Europe or
07:57
maize ofcourse published the conclusion
08:00
which was accepted library right thing
08:01
thinking economist but ladies was that’s
08:04
okay we can have a market socialism acum
08:06
total managers to play play market so 4
08:09
and so on this was generally accepted by
08:11
the establishment and everybody SAT back
08:16
well that poop that problem is disposed
08:18
of they have to worry anymore socialism
08:20
is okay we just have this artificial
08:21
market so-called market and Mises kept
08:24
refuted that a human action and the but
08:27
but the the economic establishment so to
08:30
speak the terminus of the whole problem
08:32
was over don’t worry about it socialism
08:33
can do it well here you are and then but
08:35
at the end of the last one of his last
08:37
articles in his life it’s going longer a
08:40
monstrous little article called the
08:42
computer on the market really refuted
08:44
his whole approach he had said on as
08:46
economic theory of socialism enough to
08:48
worry so she’ll ism doesn’t have to
08:50
worry about calculation we just have a
08:51
phony market at trial and error and that
08:54
we can do it very easily and then he’s
08:56
in 1963 just for 65 I guess before
09:01
yesterday just before he died he said
09:04
don’t have to worry now if I if I was
09:06
writing my answer to hunt Mises and
09:08
Hayek today I simply say look we have a
09:09
computer a great new institution new
09:12
mechanism which would plant everything
09:13
in two seconds the effect is better than
09:15
the market have to worry about it and
09:17
then he passed on any rate we now find
09:21
it and me sir in europe and soviet union
09:23
a fantastic demonstration of vindication
09:26
visas whole approach the whole thing
09:28
collapsed it turns out socialism is
09:30
indeed impossible and popping up from
09:33
this from this rubble we found a whole
09:35
enormous I mean unbelievable
09:38
unbelievable all of us enormous
09:41
outcropping an outpouring of Muse
09:43
Essien’s high Achaeans all over eastern
09:45
europe and soviet union and and one of
09:48
the physical embodiments of that of
09:50
course was here this week and wonderful
09:51
Yuri myself I’m sure she will met and
09:54
and hearing is he’s now he’s not
09:58
honoring the Soviet Union as a profit
10:00
than they want to back come back and
10:03
help us plan itself were put here he’s
10:04
too shrewd for that he to meanwhile most
10:13
moving and this is by the way example of
10:15
how Mises Institute works and one of the
10:19
most moving examples of both of Mises
10:23
Institute analyst the social
10:24
unbelievable d socialization occurred
10:26
the spring April or May when Jesus to
10:31
put on a d socialization conference in
10:32
Washington and was like a people’s
10:34
international we had we had a discussion
10:37
of a planet and socialist planning in
10:40
Eastern Europe jewelry talked about the
10:43
Soviet Union and Hans hobby talked about
10:45
Germany and made a great guy was a
10:49
polish-american emigrated from Poland
10:51
then the early eighties talking about
10:53
the Polish polish planning and we also
10:56
had a top economist Lithuania this is
11:02
very moving one of most moving
11:03
experiences I’ve ever had because
11:05
everybody is what the Russian tax would
11:07
be moving in and about you know I need
11:09
any day and we had listen Elaine Ian
11:11
economic delegation not talk not worried
11:13
that’s seemingly not worry about the
11:14
tanks it over they want to do how do you
11:16
privatize and he get
11:17
total privatization total free market
11:19
how do you do it interesting question
11:20
this is it’s a question of course the
11:22
Orthodox economist and never thought
11:23
about because they’d never thought it
11:25
would happen never never and all these
11:28
millions of dollars that have been
11:29
poured into anti-communists think tanks
11:32
over the last 40 years 40 45 years or so
11:38
figuring out the but this’ll weights and
11:40
throw aways and who should push it bum
11:42
who’s missled first and where and so
11:44
forth the whole thing now seems to be a
11:46
mite now you’re looking back yet I seem
11:47
to be all I got like a like a 16 looking
11:50
at the sick back of the 16th century the
11:51
whole world has changed in one year and
11:53
the whole three-way thing looks like a
11:55
fantastic waste of resources poured into
11:58
this stuff and in the midst of all
12:00
listen to Aunt I come in his research
12:02
nobody far as I know no none of these
12:04
think tanks none of these anti-communist
12:08
foundations of our note nobody ever sat
12:10
down and thought well what would happen
12:11
if the Russians suddenly human action or
12:14
red Milton Friedman or something and
12:15
came to Western economist said okay
12:18
here’s the key do something about we
12:19
surrendered all right communism is
12:23
finished what we do next none of these
12:25
guys ever thought of matter because for
12:27
one thing they thought they’d never
12:29
absorbed a meeting lesson will be
12:30
mommy’s is they never absorbed the fact
12:32
that socially we can work I’m actually
12:33
it is going to collapse eventually they
12:35
are going to surrender one way or the
12:36
other I gotta ask for what are we going
12:38
to do they had no answer for if they’re
12:40
45 years of anti-communist scholarship
12:42
and well what happened to the little a
12:47
knee economists a whole delegation I
12:49
think headed by Vice Premier they’re
12:51
going around the United States the East
12:54
Coast trying to find out how do we what
12:55
do we do and other think tanks I’m i
12:59
might add what they did was they they
13:01
they show them the great offices
13:04
walkie-talkies and the plush carpets
13:06
they were of course we’re very impressed
13:08
with eleni buddy registered where’s the
13:09
knowledge they didn’t weren’t really if
13:11
they knew the West was a great
13:12
technological shape which isn’t how
13:14
didn’t we apply that here and only the
13:16
Mises Institute in this point ideal a
13:18
great ideological entrepreneurship of
13:20
jeff tucker immediately whipped together
13:23
a pump to one day conference of a whole
13:25
bunch of economist and lecturing to
13:27
these lithuanian son and their different
13:29
economic topic
13:30
and they loved it they this is yeah this
13:32
is knowledge this is what we came for we
13:34
didn’t come to admire and plush offices
13:36
this is knew all about that when I was
13:39
at this business into a conference a
13:41
little askew weeks later the first
13:43
delegation I say was one of the most
13:46
moving experience in my life because the
13:47
only people talked about the different
13:48
aspects of Eastern Europe and the
13:51
Cellini and gentlemen who thought he
13:53
couldn’t speak English well enough
13:54
obviously he did this hesitant about
13:56
speaking English to the group he spoke
13:59
in Russian and your age the next time
14:01
translating into English marvelous
14:04
here’s the miscellany and Russian
14:05
people’s free market solidarity Wow Wow
14:13
Soviet tanks were threatening to march
14:15
in and one thing Alyssa lenient
14:19
economist said he said well the grace
14:22
was wonderful to hear today because
14:24
professor Samuelson an MIT told us we
14:26
should have a central bank first things
14:28
you do example two separate bank
14:29
lithuania and and we did that now i find
14:33
out we find out today we should repeal
14:34
the central bank we’re gonna do it not
14:36
gonna have any central back so he’s an
14:43
exact you know a beautiful example of
14:44
influence of ideas on history and the
14:49
and and he said that but and he said one
14:56
thing i should say that is that the was
14:58
going to remark before the whole whole
15:01
implosion I’ll revolutionary implosion
15:02
in the Eastern Europe shows the powerful
15:06
influence of ideas because they simply
15:07
said we very much do you were not going
15:08
to bay orders anymore Slocum that was
15:10
like nonviolent mass civil disobedience
15:13
and fantastic scale and and so here we
15:18
have a as I say nobody could predict the
15:21
exact form of this but here it’s like a
15:23
domino effect one country Tom polls
15:25
communism toppled and the rest of them
15:26
topple the and the form it took was one
15:32
sits well for example in Romania was a
15:35
dramatic example because the troops were
15:37
shooting at the rescue troops are
15:39
shooting into the square and these
15:41
people didn’t flee it just
15:43
you know the heck we’ve all a dive and
15:45
live under communism anymore and that
15:47
was it and that point the soldiers turn
15:49
their guns on the officers and whole
15:50
thing and we had a point with chashu
15:53
issue issue the orders and nobody
15:54
listened to them this is the great
15:56
libertarians dream you know that the
16:01
guys on the topical ordering and
16:03
butchering millions of people of a
16:04
sudden they issue orders and nobody
16:05
everybody says nuts to you that’s the
16:08
listener no more so we have it’s
16:11
impossible I think not to be optimistic
16:13
when we see this when we were we have a
16:16
lot of things to gripe about here we
16:17
have a lot of monstrous trends at work
16:19
and in the United States when we’ve seen
16:22
what happened with under totalitarianism
16:24
when people just said how will that we
16:26
quit and they’re looking for free market
16:29
solutions and amuse Essien’s hiking it’s
16:32
popping abbott’s it’s a magnificent
16:33
experience in something we should ever
16:35
forget if we tend to pretend to be
16:36
pessimistic about trends the United
16:38
States which you realize what they what
16:39
happened in Eastern Europe in 1989 1990
16:43
so in looking at this and looking at the
16:46
the victory of freedom and Eastern
16:47
Europe I’m not saying all probably not
16:49
all problems were solved this is
16:50
unbelievable and fantastic thing we
16:52
should always remember the ideas can
16:53
always oh I be is in the long run
16:55
can trump interests and Trump economic
16:57
interests the looking back at this said
17:02
mrs. Bingley the originator of this the
17:05
art of three knowledge socialism
17:08
possible and can’t work I think we
17:11
should look back at meeses his life and
17:13
what happened events in the Austrian
17:15
economics to see to gauge the future we
17:17
have to look at what’s been happening in
17:18
the recent immediate past as I said
17:23
after my collectivism was being
17:25
established socialism’s be established
17:26
and in the world in Europe am eases
17:29
wrote this article in addition of that
17:31
he was discriminated against he was
17:33
couldn’t get a university post in
17:36
Austria pay university post he kind of
17:37
unpaid post prestigious but unpaid which
17:40
metaphorically had to find work
17:42
elsewhere largely because he was opposed
17:44
to socialism and collectivism and there
17:47
were only two kinds of economists or
17:49
social scientists received pay
17:51
university post in Austria at the time
17:52
either marks Marxist or fascists or
17:55
corporatists that’s
17:56
they were the only respectable those
17:59
that was the wave of the future and the
18:03
leis a fair was was reactionary
18:05
Neanderthal and part of the 19th century
18:08
which were being displaced by the great
18:10
progressive new century of 20th century
18:12
so in addition of that the second thing
18:14
which disqualify meeses from university
18:16
a university poster he was
18:18
uncompromising it was a great guy I mean
18:20
it was he sometimes been accused of
18:22
being personally abrasive I never saw
18:24
those of us who study under him and the
18:26
United States is unbelievably sweet he
18:30
was he was constantly urging people
18:32
finding research project for people to
18:34
do and which usually didn’t do of course
18:36
but always coming up with ideas and
18:39
always being unfailingly courteous and
18:41
unfailingly and non bitter about what
18:43
happened to him and so he wasn’t but he
18:47
was fused to compromise one iota in
18:49
other words he didn’t he didn’t bend
18:51
with the wind with intellectual winds
18:53
which all too often happens and the
18:55
words we won’t know I didn’t say well
18:58
let’s try to work within the system and
19:00
say statism is ok but you should have a
19:02
little bit of tinkering here and there
19:04
like a little currency reform a little
19:05
ways reform something or something like
19:08
that it was absolutely uncompromising
19:10
and kept developing his ideas and his
19:13
great works and in the meantime not
19:16
having a paid university post he had a
19:17
full-time poses economists chief
19:20
economist for the Chamber of Commerce
19:21
which in Austria was a quays like a
19:25
government agency which were businessmen
19:26
elected representatives chamber and they
19:30
would have a staff they would advise the
19:32
government result leases came of the
19:36
major economic advisor all those advice
19:38
wasn’t listening to very much you
19:39
tremendously respected so he almost
19:43
single-handed he and a couple of friends
19:45
of his roots essentially single-handedly
19:46
stopped the Austrian inflation which is
19:48
rampant as well as the German after
19:51
World War one stopped up from a runaway
19:52
inflation he stopped at about twelve
19:54
hundred percent or whatever instead of
19:56
instead of you becoming one as in
19:58
Germany one quadrillion marks to the
20:00
dollar there was only twelve hundred
20:02
Austrian shillings whatever pfennigs
20:04
over the currency unit was to the dollar
20:06
later in his memoirs which is written in
20:08
the midst of his flight
20:10
from Europe 1940 he he said he now he’s
20:15
looking back on he wished he hadn’t
20:16
thought it because we’d better because
20:17
it was hopeless in the long run anyway
20:19
because the just just lengthen the time
20:22
of the inflation just sewed it down and
20:24
the result was the part of him banking
20:26
crash and collapse in 1931 but as a
20:30
matter of fact one of the very sweetest
20:31
things among the most charming moving
20:33
passages in his book he said he’s always
20:35
been accused of being too uncompromising
20:36
if I only had I’ve only had waffled he
20:39
might have been more influential I’m
20:40
looking back on he said no no I wasn’t
20:41
hard I was in a hardcore enough I was
20:43
not covered by amazing enough looking
20:45
back on it I should have been tougher
20:47
the council United States as a refugee
20:50
again gets know of no paid academic post
20:52
in the United States despite his
20:55
tremendous creativity and not an
20:56
unbelievable unbelievable area addition
20:58
at a time when every Marxist semi
21:00
Marxist Social Democrat menshevik
21:03
Trotskyite whatever will call a night
21:07
refugee a top academic post was feted
21:10
welcome the top universities fortunately
21:15
that time we had but we he got a small
21:18
of small Foundation grant in New York
21:21
penniless soul foundation had work on
21:23
two great books which came out a couple
21:25
of years Mises by the way sort of person
21:27
I’ve got a grant and the two years it
21:29
was a book and something many of us try
21:33
to emulate and two great books
21:36
bureaucracy I’m stole a magnificent book
21:39
explaining the difference between
21:40
probably working as a profit operation
21:44
private profit and loss operation and
21:46
government operation which has to be
21:48
bureaucratic and he said a nonprofit
21:50
organization I’ll get back to that in a
21:51
minute because there’s a whole uncharted
21:54
area which Austrian economist haven’t
21:56
dealt with nobody else has dealt with
21:57
really is of the economics of nonprofit
22:00
organizations how do they work is it
22:01
possible for them to be efficient and
22:04
these is pioneer than that and also is
22:07
booked on the phone government which is
22:09
a time was extremely important
22:11
influential because he was the first one
22:13
to show those days the ruling doctrine
22:15
here promulgated by Marxist refugee from
22:18
Europe Germany was that Nazism was the
22:21
simply the last final stage of evil
22:24
capitalism know the capitalist turned to
22:26
the Nazis crushed the rising Paulo tarea
22:29
and that’s the breezy explanation of
22:30
Nazism and what pieces pointed out was
22:33
this is ridiculous web Nazis really is
22:35
national socialism as a form of
22:36
socialism a collective as a member i
22:38
know that in the German nation after
22:41
that it was really a drift and what
22:45
happened was there was a small group of
22:47
as a foundation small group of
22:49
conservative libertarian businessmen who
22:51
banded together and and actually the
22:55
winning voger fund which the head of
22:57
this lien voca fun is an unsung
22:59
forgotten institution which really was
23:01
like the candle in the catacombs
23:03
whatever it preserved maintain it
23:07
fostered all very 1950s and early 60s
23:10
late 40s and early 60s a libertarian
23:13
conservative scholars I was a period
23:14
after realizing I’m socially it’s free
23:16
market economists or or so social signs
23:20
or anything everybody was either and the
23:22
ruling fashional you either a communist
23:24
for coming install of travel or your
23:25
social democrat that’s it was the only
23:26
that was the range of debate are you a
23:29
social democrat or you or you are your
23:31
company being a free-market person was
23:33
being some sort of nineteenth-century
23:34
reactionary fascist neanderthal so how
23:39
aluno had a vulgar fun but searching
23:43
around for his first task he felt with a
23:45
fine of take university post in the
23:47
United States for Mises and Hayek kayak
23:49
was in England I have post in England
23:52
nieces had no position at all the result
23:55
of which this detailed search was he
23:59
couldn’t find a pay university post or
24:00
either of them interestingly enough and
24:03
in other words this replicates meeses
24:05
experience in Austrians and Mises the
24:09
best thing to do for Hayek was too was a
24:11
University of Chicago Economics
24:12
Department rejected Hayek is being
24:14
reactionary Neanderthal and whatever but
24:15
they found it found an unpaid post forum
24:17
in the committee of social thought in
24:19
Chicago which is a highly prestigious
24:21
graduate apartment but the problem with
24:24
that is if you graduate with a PhD in
24:26
social thought we need teach there’s no
24:29
there’s no there are no department of
24:30
social thought any place so it’s very
24:32
difficult to get a teacher
24:36
position do anything with this usually
24:37
they have been history departments
24:38
because it’s kind of difficult you’re
24:40
not a certified a star in as we all know
24:42
is very difficult and then your field
24:44
break through the crust so but hayek us
24:48
an unpaid post in other words the
24:49
Volcker fund pay for a salary hi
24:51
exhaling meeses the bokra fund pay for
24:53
salary visiting professor at NYU and the
24:56
Graduate School Business Administration
24:58
but then his mate the major influence of
25:00
me since I was a private seminar which
25:02
he gave in as every week in the in the
25:05
Department of Commerce offices chamber
25:07
commerce offices and was a magnet for
25:10
all four top students in your all the
25:11
time young social scientists and
25:13
economists and philosophers in Europe
25:14
and in the United States and England I
25:17
came to this but this was the great
25:18
center of research for fur from night
25:21
early 1920s until 1934 and he tried to
25:25
replicate this with us in the United
25:27
States and unfortunately I was I felt
25:29
very sorry about it because a koala
25:31
caliber students they were not exactly
25:33
up to and I was being on par put a very
25:36
kindly he didn’t totally uncomplaining
25:38
that Newell pressed on and was the very
25:41
best to stimulate that said research and
25:43
students and and this was a period from
25:49
19 runs here from mid 40s until nineteen
25:52
until he died in 1973 it was sort of
25:54
like this that candle in the darkness
25:56
over a few Austrians very few free
25:58
market people even with a free market
25:59
became more respectable almost no
26:01
Austrians and that’s but hehe as a
26:05
pressed on time extraordinary productive
26:07
and extraordinary cheerful in this whole
26:09
this whole process but he died in 1973
26:14
the the just coincidentally in like he’s
26:19
the next year that was the year 73 74 of
26:22
a great collapse of Keynesian is because
26:25
that was the first year when the process
26:28
of so-called stagflation Flay sharing
26:32
recession became evident there one
26:33
before a little bit but it wasn’t
26:35
evident all of a sudden 73 74 is an
26:39
inflation thirteen fourteen percent
26:40
inflation so-called double-digit
26:42
inflation and the same time as a big
26:44
recession unemployment and bankruptcies
26:45
no esta what do you do we supposed to do
26:47
about
26:48
Keynesian doctrine of course is very
26:50
simple either the equations are
26:53
complicated leave the practical
26:55
conclusion is very simple the government
26:58
is a great macro steering wheel or
27:00
whatever the economic system is
27:02
wonderful in the micro sets on the macro
27:03
sense is totally without an anchor
27:05
without a rudder it means a great
27:07
helmsman namely of course the government
27:09
but right of the government’s steered by
27:10
my Keynesian economists that’s of course
27:12
a key and looking at the controls and
27:16
the indicators and statistics of if a
27:18
Keynesian economist finds it it’s a
27:20
recession and prices are falling or like
27:22
your pump in spending usually of course
27:24
many government increasing government
27:25
budgets if you find as they there’s a
27:30
boom and those prices going up and so
27:32
for an inflation then you take out
27:33
spending mainly you almost always work
27:35
like increasing taxes number by cutting
27:37
the government budget otherwise is this
27:39
is a this is partly or willing a memory
27:41
hole okay original Keynesian is so you
27:44
increase tax like something up quote
27:46
excess purchasing power in other words
27:47
we have the excess purchasing power
27:48
after the government’s already inflated
27:50
the money supplying we’ve all gotten it
27:52
then we become excessive they have to
27:53
something up stop it away again it’s a
27:56
sort of a one-two punch to the economy
27:58
to the people so here we have a
28:01
situation however Willie had two things
28:04
happening at once if inflation prices
28:06
are going up and yet there’s also
28:07
recession what are you supposed to do
28:08
the pump been spending and take it out
28:10
you can’t do both at the same time it’s
28:12
by all the equations and computer or
28:13
whatever you can’t pump in spending and
28:15
take it out of the same time so they
28:17
were finished I’m especially Keynesian
28:19
has been dead from the neck up since
28:20
nineteen seventy-four it doesn’t mean
28:23
they quit nobody ever request is one
28:25
rough laws laws of sociological laws I
28:27
have whole bunch of them job you’ve
28:29
evolved over the years a lot of them
28:30
nobody quits that’s it’s not it’s not a
28:34
nap addicted were like proxy ology once
28:35
in a while somebody does quit but it’s a
28:37
tremendously imperfect good good
28:39
empirical generalization of high
28:41
predictive value okay so let’s coherent
28:46
and it has great predictive value any
28:48
rate so they hang in there I find the
28:49
best they can a pump in a little bit
28:51
months pending take out all of the
28:52
Spanish hope that something works in
28:54
this situation and this in this real
28:57
collapse of Keynesian I mean Keynesian
28:59
theory how a lot of weaknesses
29:00
or ever since Modigliani’s for the
29:03
equations it became evident that it
29:05
assumes the wage rates are fixed
29:07
downward which nobody really realized
29:09
before but a practical a practical
29:12
political collapse is much more
29:13
important and unfortunately real life
29:15
and theoretical collapse so with this
29:18
political collapse Keynesian let’s say
29:20
was really bankrupt and this this begins
29:22
to dissolve a ruling hegemonic paradigm
29:25
and people looking around for other
29:27
answers next year hi i guess the nobel
29:31
prize and the one of the interesting and
29:33
tan them of course with left-wing
29:35
socialists done or a mere doll it’s not
29:37
to make it to know too terrible
29:40
reactionary now the interesting thing
29:42
this is a big shocker root in economics
29:43
profession and one thing i want to
29:45
stress here i don’t disillusion any
29:47
young students here but economists are
29:49
almost full of obsessed with a Nobel
29:51
Prize men think there’s betting pools
29:53
every every in the early fall who’s
29:56
going to get it this year and there’s
29:59
and there’s all sorts of stuff going
30:00
everybody’s very interested in Nobel
30:01
Prize I’m getting it before Hayek as I
30:04
remember all the recipients almost
30:06
without exception where mathematical
30:07
Keynesian scania con metric types and
30:11
all of a sudden hyatt gets it who the
30:13
hell is Hayek nobody had ever heard of
30:15
me see one of the things about the
30:17
universe repression then I’ll exactly
30:19
steep in their own history I mean if
30:21
something written ten years ago nobody
30:23
nobody knows about it because it becomes
30:25
it’s part of the model of physics if the
30:28
economics is a hard science like physics
30:30
which were all these people hope it open
30:32
think it is then you know physicist
30:34
don’t read 1930s physics in less time at
30:36
acquiring as which is what Einstein did
30:38
or something basically you leave the
30:40
latest journal article the latest
30:41
textbooks and that’s it you don’t worry
30:42
about what some bozo for 20 years ago
30:45
and so trying to make this the paradigm
30:48
of an economics result is tremendous
30:50
loss of knowledge in the part of the
30:52
most economists so who’s Hayek I didn’t
30:54
have to this guy got a Nobel Prize who
30:55
is he and that becomes a resurgent
30:57
because people look back they want we
30:58
have to find out what did he say to earn
31:00
him the Nobel Prize and by oh wow this
31:02
is interesting I never heard of this so
31:05
so with this we certain fortunate some
31:08
of us miss Burgess conspiracy theorists
31:10
this is wasn’t totally unproven
31:12
hypothesis but cherish my many I don’t
31:14
sarily hold it but some of my friends do
31:16
is that the they want to the point of
31:19
the hyatt got his Nobel Prize not for
31:21
this later stuff not for evolution and
31:23
rule of law a sort of thing they got it
31:25
for his B’s sen business cycle theory
31:27
which he expounded an elaborated in my
31:29
in late 1920s and early 1930s that’s
31:31
what he got it for explicitly so the
31:34
conspiracy hypothesis is that they
31:37
waited for me is to die before they gave
31:39
high ACT a Nobel Prize because hi Jesus
31:42
died in 73 hyatt gets it in 74 and they
31:45
would never give a mobile price on
31:47
monster like neat meeses so they so they
31:50
waited till huh means that i forgiven to
31:52
Hayek was much much more of a
31:54
compromiser if you read his
31:56
constitutional Liberty for examples
31:57
there’s probe planning stuff pro status
32:00
level over it so the at that point this
32:06
sort of sparked a regeneration revival
32:08
blustering economic since I it might not
32:10
be a total causal connection but
32:12
certainly is impressive coincidence that
32:14
the first Austrian seminar since old
32:17
Austria occurred conference a week-long
32:19
conference occurred in royalton brahmana
32:21
19 summer of 74 but all the younger and
32:24
whatever Austrians I wore were gathered
32:26
together was a wonderful thing was it
32:27
because we all met each other for the
32:29
first time mostly what you’re an
32:31
Austrian fantastic mrs. like saying the
32:33
catacombs and an Austrian isn’t
32:37
flourished as a shame the Mises didn’t
32:40
live the seamless and after fighting one
32:42
was life for these ideas and then we had
32:47
annual conferences for several years
32:48
after that was a big flourishing
32:50
movement and Austrian ISM was around
32:53
there was becoming known and widely my
32:58
the interest the people run interested
32:59
in England and the United States and
33:01
then something happens light suddenly
33:03
goes out see the history of fort and
33:05
history in general is not an onboard
33:07
operand the lightest a series of
33:08
glitches up it’s sort of like them I
33:10
wouldn’t say business cycle ups and
33:12
downs IG’s a gaff echt so suddenly there
33:15
was a big zag after this compressive the
33:16
zig of the late 70s something happened
33:21
and the Austrian Austrian young girl
33:23
stirrings of the time started saying
33:24
well trouble of meeza says he too
33:27
dogmatic
33:27
to uncompromising to to extreme we can
33:31
tackle how do you get respectable in the
33:33
mainstream of economics keep pushing
33:35
these ideas that nobody really likes in
33:37
there we should really we should I
33:39
become respectable we should drop all
33:40
the stuff of that proxy ology and lays a
33:43
fair and talk about toga market market
33:46
process whatever and and and the dread
33:51
name Jesus begins to slip out of out of
33:53
sight and the and this is this is really
34:00
replicating in Bethlem eases had
34:01
suffered in his life except this time it
34:03
was it was essentially a stabbed on the
34:05
back by people who call themselves me
34:06
Jesse and so understood the situation
34:08
and then basically so laughs you look at
34:11
it right monthly so laughs or potential
34:14
respectability funds mainstream
34:18
publications ten-year-old rest of it
34:21
well in this rather dire situation and
34:25
it’s not an accident by the light of the
34:27
funding sources of almost a single
34:30
funding source for this whole revived
34:32
Austrian movement in late 70s which was
34:34
flourishing fairly weak very nicely was
34:37
one person one billionaire and the
34:40
billionaire had a paradigm shift in his
34:42
head and all the other all the other
34:44
acolytes of the speaker fundies of Benny
34:47
air suddenly I coincidentally shifted
34:49
with it into this idea of and we began
34:53
to hear as I save not only the visas to
34:55
extreme into the automatic you know talk
34:56
about them began to talk about synthesis
34:59
with Marxist this has been the latest
35:01
developments is like nineteen eighty or
35:03
so it’s important for Australians to
35:05
really have to understand the great
35:06
contributions of Marx and Lenin and so
35:08
forth we should have continuing dialogue
35:10
I’m sure you Ray would appreciate this
35:12
and flight for the Soviet Union here
35:15
come the United States or Austrian to
35:16
find out hey we should have accepted to
35:17
the Marxist right let’s join in or
35:21
citizens with nihilism and there’s no
35:23
truths how do we know anything is true
35:25
all sort of fashionable philosophic guff
35:28
mark so Freudian nihilist guff from the
35:31
continent and this this was became that
35:35
was probably the ruling paradigm because
35:36
the the billionaire funder was a favor
35:38
of it basically many guys
35:40
and I won’t have a simplistic mono
35:41
causal analysis here but that’s the way
35:44
it looks to me in this situations in
35:46
this rug pretty women depressing
35:48
situation or Austrian is Amit really
35:50
collapsed The Wall Street isn’t as a
35:52
sudden the first last week what is
35:54
really meas SE anism in this situation
35:57
one person decided to do something about
36:00
it this person is Lew Rockwell it was
36:02
responsible for everything we have today
36:17
well little had been see blue all these
36:19
other people lately ostrow marxist
36:22
Olivia mohr-coulomb we’re moving to
36:23
Washington I like washing it was this is
36:25
where the power is if we can get goodies
36:27
and respectability Lilith spent a lot of
36:29
time in Washington hated it want to get
36:30
out both spiritually and physically okay
36:33
and and he decided that he wanted to
36:37
found the Mises Institute was the dream
36:39
of his life and he said this is the time
36:40
to do it and he wanted to revive the
36:43
Austrians Sen paradigm a name of meeza
36:45
sand I rest of it and he went to the
36:49
aforesaid billionaire we thought was he
36:52
means SE and he said well I want to find
36:53
him he desisted too and he ordered not
36:55
to do it kind of interesting point how
36:58
could he be ordered since he was an
36:59
employee of this person he’s ordered not
37:03
to do it you can’t do it of course the
37:05
blue if you ever if you know Lou at all
37:07
doesn’t accept these kind of orders
37:08
great race not very neatly so Luanne
37:13
ahead with no donations no one down
37:15
meant no pledges no not know but no big
37:17
daddy billionaire I mean nothing just an
37:20
idea and and tremendous energy and
37:22
organizational genius entrepreneurial
37:25
genius or the highest order and as a
37:27
result we have we have all of us today
37:29
we have a fantastic meeses Institute and
37:32
and we have I just to run down some of
37:36
the things in business is doing which i
37:37
think is important that’s its it
37:40
publishes a quarterly oh by the way in
37:42
addition to the publishers our sect
37:45
publishes a quarter animal journal
37:46
review watering economics which is now
37:48
going semiannual by the way I’m happy to
37:51
report its and violated the Osprey
37:56
Austrian journal was boycotted by these
37:58
are for said X Austrians organized the
38:01
boycott which happily was not successful
38:03
and the it has it publishes a quarterly
38:09
Austrian economics newsletter which is
38:10
sort of like a quarterly discussion
38:13
magazine and Austrian economics that
38:15
publishes a monthly free market is
38:17
marvelous of a plenty for application of
38:19
Wall Street nezam in general and
38:20
extremely successful and it publishes
38:25
books which you’re getting even more we
38:27
can be even more books in the future
38:28
talking about the future Wall Street
38:29
kluwer publishers which have taken over
38:32
Leo’s rewari economics extremely excited
38:35
about the about the future washing
38:37
economic but Jesus Institute and the
38:39
future of what’s your economics not
38:40
because they’re audiological buddies I
38:42
don’t know what they are or not but I
38:43
see it as a great marketing great
38:45
prospect to the future and publishers
38:47
are various student this and they
38:49
particularly quite astute I mean if they
38:52
found for example Hans Hoppy’s theory
38:55
capitalism socialism which they
38:56
published their amazed to see which
38:58
under reasons to auspices the races he
39:00
was a best-seller and I can i make
39:02
bestseller being translated in many
39:03
languages so this is deeply move the
39:05
kluwer of people so the so we and we
39:12
have we have we gonna have three bucks
39:13
it books a year I think rich who or
39:15
wants to publish or exactly in tight
39:17
books reasons to two books we have all
39:20
sorts of folks we publish our own
39:22
pamphlets monographs and and conferences
39:27
we’ve been putting together for a long
39:28
time and building up to the present one
39:31
also special conferences like the d
39:34
socialization conference i mentioned
39:35
last year conferences on canes on marks
39:38
on on federal reserve system and all
39:40
these cop all these conference going
39:42
into books in other words we believe in
39:43
contrast of many other institutions
39:46
there’s another institution which i
39:47
won’t mention which is believes every
39:49
conference is an end in itself you got a
39:50
conference everyone should go home and
39:52
never nothing should be published out of
39:53
it sort of and we believe quite the
39:56
opposite every conference you build on
39:58
previous conferences you have a
39:59
conference everybody loves that they go
40:01
home they publish books out of it it
40:03
keeps keeps the whole movement going the
40:05
ideas going and in addition that we have
40:10
these annual conference and summer
40:11
conferences and the interesting thing
40:13
about that is that there’s a certain
40:16
Orthodox mold you know things that
40:18
telephone traditional customary moves
40:20
the customary molds from about started
40:22
with starting in nineteen seventy sevens
40:24
you have a summer conference for one
40:25
week okay you have four professors of
40:27
something like that around four and each
40:30
professor teaches to the whole plenary
40:32
group and each one teaches three times
40:36
or four times or whatever well it seemed
40:38
to work pretty well says everybody sort
40:39
of fell into this mold and
40:42
and what lil realized a couple of years
40:44
ago little rock while realizable years
40:46
ago this this is limited okay in other
40:48
words you’ve got you only have four
40:50
professors you only have a certain
40:51
amount of students everybody gets the
40:53
same thing why not have a university
40:54
concept why not have why don’t have it
40:57
so you can have a lot more professors
40:59
and we had a lot more of the thing is
41:00
more professors are coming into the
41:01
movement so you have a lot more people
41:03
growing up into its first four sorriest
41:05
students and then ending up as
41:06
professors like mark thornton so that’s
41:10
why should we have these people also
41:11
give and be here also give their own
41:13
particular expertise in other words have
41:15
courses like a real University okay and
41:18
and then yeah and then we always had a
41:20
problem the old days an Austrian courses
41:22
in the summer somebody would teach also
41:24
economics and the level is always bad in
41:28
other words the be all sorts of people
41:29
there from firms high school students
41:31
the businessman the graduate student the
41:32
young professors and everybody’s always
41:34
griping about the level because the some
41:36
people thought is too tough other people
41:37
saw it was too easy how do you get the
41:39
love was okay when they were teaching
41:40
political philosophy or history because
41:42
everybody it was more or less the same
41:43
level what do you do about economics and
41:46
so blue got the ID is separated you have
41:48
elementary courses you have an immediate
41:51
courses of advanced wars when you tailor
41:52
each course of the needs of a particular
41:54
student and we wound up with a Mesa
41:56
University concept which is a
41:58
blockbusters unbelievable example of
42:01
creative and ideological
42:02
entrepreneurship and innovation in this
42:05
field to feel which is not really
42:06
recognized as a feel but should be so so
42:11
we had and last year was a fantastic
42:12
success everybody loved it and this year
42:15
even even more so each year’s better
42:16
than preceding one in this case the week
42:19
theory of history seems to work so and
42:22
one of the only thing I quite I don’t
42:24
like about it assesses it’s like a real
42:26
University you don’t see them you want
42:28
to talk to people you want to talk to my
42:29
friends or whatever sorry you have to go
42:30
off to the next class that’s the yes
42:33
inevitable as University takes over so
42:35
to speak so and we have more faculty
42:41
more students and different segregation
42:43
so to speak by quality and depth of
42:45
courses as a result people can come back
42:48
year after year because they take more
42:49
advanced courses or different
42:50
specialties and whatever the addition of
42:55
that we have
42:57
we have by the way I should say that the
43:00
is an unexplored feel i think i
43:02
mentioned meetings bureaucracy onyx for
43:04
field of economics of nonprofit
43:06
organizations it’s almost not not been
43:08
working on people interested in what can
43:09
they work on I’ll show economics here’s
43:11
an area how do you calculate it’s easy
43:13
to see what you how you calculate a
43:14
profit-making institution profit and
43:16
loss how do you calculate the efficiency
43:18
I didn’t make sure that you don’t have a
43:20
bloated organization it’s very difficult
43:22
and unfortunately many ideological
43:26
organizations whether libertarian or
43:28
other tend to become bureaucratic they
43:31
tend to be over waited with Deadwood
43:34
overstaffed under under produced under
43:36
productive the qualities has to go down
43:40
the emphasis sentence beyond on show
43:42
rather than content and what Lou has
43:45
done as part of the proneural
43:47
magnificence I think what he’s done is
43:49
is to have an organization here which is
43:51
the highest has the highest marginal
43:53
productivity of any organization of the
43:54
country unborn none non-profit relation
43:56
of the country in other words fantastic
43:59
output every person here is very tight
44:01
ship amelie the staff is about a
44:04
one-third of any comfortable
44:05
organization each person has dedicated
44:08
extremely competent works very hard and
44:10
as you can probably all know this week
44:12
so and the result of this is the growth
44:16
of business into booking and content and
44:18
quality and quantity and an influence
44:21
essentially we’ve we’ve beaten the
44:24
nightly of the Austral nihilus and the
44:26
Austral Marxist I’m either out of the
44:28
picture they’ve had it and and then
44:31
we’re going to get tremendous odds in a
44:32
sense against the odds of a billionaire
44:34
opposition’s and the sense is very much
44:36
like meeses conquering in the long run
44:38
over the odds that he faced and one one
44:43
interesting thing about also about
44:44
meeses strategy and general strategy and
44:46
outlook we one of the former and also a
44:50
graduate school in economics as I forget
44:51
now is the 1950s or 60s somewhere around
44:53
this Dark Ages and Mises was going to be
44:57
the president of this graduate school is
44:58
gonna be called American School of
44:59
Economics and any insistently we were on
45:04
our people around the board of trustees
45:06
because they want a younger young blood
45:07
I mean
45:09
was a long time ago I was young blood
45:10
right so and these are kept saying well
45:16
don’t forget me as you’re doing this
45:17
hype I theory and scholarship don’t
45:19
forget to have continuing lectures the
45:21
businessmen on the general public at the
45:23
time I didn’t really understand that but
45:25
why is he keep making this point but I
45:27
understand it very well now especially
45:28
since Joe Salerno was pioneered and
45:30
looking back over the Mises Hayek
45:33
differences between Mises and Hayek on
45:35
the economics of social socialism and
45:37
also on the economic a general on the
45:39
root and the rash rational versus the
45:41
irrational review of exchange and
45:42
specialization the point the Mises was
45:45
really making was that since he believed
45:47
that people who change history ideas do
45:49
change history of people conscious
45:51
actors and the decisions really
45:54
determine events it’s very important for
45:58
everyone not just scholars not just
45:59
philosophers and an economist important
46:02
for everyone all the general public
46:03
businessmen on the public understand the
46:05
importance of the free market to
46:06
understand the crippling the free market
46:07
is death I mean literal sense it leads
46:10
to directly to the to the trouble
46:12
situation Eastern Europe from which they
46:14
finally got rid of getting it up so that
46:18
it’s very important not just to get the
46:20
high-flown journal articles is also an
46:22
equally important to spread the basic
46:25
truths of free market and laissez-faire
46:27
and the evils of collectivism and
46:29
interventionism spread that to the
46:31
general public of the business and that
46:32
was the point it wasn’t just sort of a
46:34
sort of her peculiar women the part of
46:38
me says it was rooted in his general
46:40
strategic theories theory of wife and or
46:42
importance of reason and ideas on on
46:45
historical events the interesting thing
46:48
about me the more I me more I read them
46:49
and go back and we just of them with
46:51
greater look Smith’s it’s fascinating
46:52
more insights come men’s it as I reread
46:55
a human action or socialism was great
46:58
works so so looking to the future and
47:03
looking into the weather what is the one
47:05
of the prospects for Austrian economics
47:07
I think its inherent on the current
47:09
situation obviously obviously it’s not
47:10
determined by but certainly we give good
47:13
great leads to what we can expect in the
47:16
future namely I mean just look at the
47:19
fact an Eastern Europe the economy
47:21
soviet russia in Eastern Europe Mises
47:23
and Hayek are revered figures nobody
47:25
reviews canes and Galbraith out there
47:27
had it with socialism and statism
47:30
they’re just trying to figure out how to
47:32
get to what we’ve been advocating all
47:34
this time and if that’s true in a system
47:37
where human nature supposedly
47:38
transformed obviously wasn’t it should
47:40
be also true of course in weston in the
47:43
united states we haven’t got another
47:44
social of stage yet and with the growth
47:49
of the power of ideas i really think in
47:51
the long run truth wins out of course
47:53
this is could be a very long too long
47:54
around for us to worry about its but i
47:56
think it’s it’s winning out right now in
47:59
the short run and that’s that’s a medium
48:00
run I want to put it that way and and we
48:04
have we have a with the growth of the
48:07
influence of Austrian is amis it men
48:09
Mises Institute and the prospects look
48:12
terrific mera Gris continuing growth of
48:14
the Senate quantity and quality and I
48:17
think one of the lessons looking back on
48:18
the Mises himself and lisas Institute
48:20
itself is not that it’s not the cave
48:23
n-nothing saying you’re gonna be gonna
48:25
you’re gonna don’t don’t sell your soul
48:27
for a mess of pottage so to speak
48:29
because you’re just switching again mess
48:30
of pottage if that what happens is that
48:33
the long run it which is not very long
48:36
these these compromises and and and
48:39
caving instantly don’t work you know
48:41
what don’t work pragmatically in
48:43
addition the moral aspect I really just
48:44
simply don’t work they finally really
48:46
repudiated and and rest of you if you
48:49
follow what you believe not only it’s a
48:51
very joyful thing to do it you also went
48:53
out which I think we’re going to win
48:55
that’s our rainbows

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