Where Did The Free Markets Go? | Murray N. Rothbard

Murray Rothbard: a Tribute to Ludwig von Mises. 1984

Source: Murray Rothbard Where Did The Free Markets Go? – YouTube

http://www.readrothbard.com/where-did-the-free-markets-go-murray-n-rothbard

TRANSCRIPT
00:09
Mises Mises I have the great privilege
00:11
of studying under him he was a
00:13
magnificent person both in his mental
00:16
achievements and in his personality and
00:19
I want to talk about both today the Mesa
00:24
started off on a great grand old days of
00:27
world pre-world War One Vienna the last
00:29
great civilized whatever that’s been
00:32
seen I think and one of the great things
00:34
about him by the way first name was he
00:36
was full of anecdotes of the old days
00:37
and what happened and who said what to
00:39
whom just charming the
00:44
he had a he grew up and he started and
00:47
university vienna and they seminar the
00:49
greek one ba there one of the Masters of
00:52
the Austrian School of Economics and he
00:57
was one of the shining stars in the
00:59
seminar and became quite radical in it
01:03
because he came to the conclusion that
01:05
you could apply subject a value theory
01:07
margin utility theory not justice so
01:10
called microsphere terrible were so
01:13
stuck with it not just the micro sphere
01:15
of individual actions in the market
01:16
prices and production which of course is
01:19
very important but all son of the sphere
01:21
of money which is well had for a long
01:22
time but it’s totally separated there
01:25
was really a 19th century English
01:26
economics of British economics that we
01:28
started this big separation between the
01:31
microsphere over they are the macro over
01:33
there the macro you deal with money in
01:35
ghost natural product and all that stuff
01:37
and of course it’s standard economics
01:40
there’s no connection with me micro and
01:41
macro you take a micro course and you
01:44
learn about how more or less how good
01:46
the market is with a lot of exceptions
01:48
and supply the man clears the price
01:52
system and so forth so on it works
01:54
pretty well
01:54
it generally conceded it works pretty
01:56
the market works pretty well and in the
01:59
micro area and you get a point where
02:02
example within the Communist Party not
02:05
in the United States the places where
02:06
they’re really doing things like hungry
02:07
yourself as The Economist in the
02:10
Communist Party were much better much
02:11
more free market oriented everybody else
02:13
that sort of shift any rate but the
02:17
micro spheres for speech is talked about
02:20
totally separately we get to the macro
02:22
sphere they talk about the velocity of
02:23
circulation and things like that gross
02:25
national product growth rates seemingly
02:27
with no connection with what was going
02:29
on and they know and the micro course
02:30
for the individual
02:33
in relations between individuals were
02:34
dealt with so means this is the first
02:37
one at least since early 18th century
02:39
Catalan and France to do integrated real
02:44
to believe that they can be integrated
02:45
and started doing it so his first great
02:48
work theory of money and credit came out
02:50
1912 takes the subject of value theory
02:53
the MARTA utility theory applies as the
02:55
fear of money and general price level
02:57
with general prices it was not accepted
03:01
by even by his fellow Australians they
03:03
thought is going too far you can’t do it
03:04
too radical Center etc the and so which
03:17
he started doing just by the example and
03:19
first by example and secondly by his own
03:22
private seminar interestingly enough
03:23
I’ll get back to this later too Mises
03:26
never in his whole life had a paid
03:28
University position
03:29
he certainly qualified for it say the
03:33
least
03:34
I’ll get back it was his American
03:36
experience looking later on but even in
03:38
Vienna he lost that there’s only one
03:40
professor I think again one paid
03:43
professor he lost out on this to
03:45
somebody who was a more orthodox type
03:47
would have not integrated with the money
03:49
supply the theory of money and so he had
03:54
his private seminar he worked for the
03:55
Chamber of Commerce which in Vienna and
03:59
did a lot of a lot of work which has
04:02
been lost of policy studies and things
04:04
like man advice to the Austrian
04:06
government he was the one by the way I
04:07
finally stopped the Austrian inflation
04:09
from becoming really runaways he’s in
04:11
the early 1920s it was a very severe
04:13
inflation something like Argentina
04:15
haven’t ever got to the hyper runaway
04:17
stage Mises almost single-handed prevail
04:20
on the government to stop it so he was
04:22
always an activist as well as they as a
04:24
theoretician and he but he had his
04:30
private seminar and and Europe in those
04:33
days maybe still you can be at a
04:36
university unpaid I have a private
04:38
seminar
04:39
and let’s consider pride quite
04:41
prestigious who’s not like not like he
04:44
sort of you have an alternative
04:46
University or something you rent a room
04:48
in the university that was a prestigious
04:49
post except it was unpaid so of course
04:52
which is important and and it was then
04:57
that private seminar people flocked also
04:59
from from all over Europe
05:01
Coney England to study under the
05:03
reputation became a norm his reputation
05:05
became enormous so first thing either
05:08
was a great subject of value theory and
05:10
Austrian economics in general into the
05:12
money sphere and then by the end of his
05:15
book he really starts applying into
05:16
business cycles he was the first great
05:18
business cycle theorist because the
05:22
phenomenon of business cycles had been
05:23
discovered for a long time and analyzed
05:26
and so forth nobody could nobody could
05:27
quite figure it out because if a market
05:29
tends toward equilibrium tends to our
05:31
situation of full employment and
05:34
everything clears and so forth so on how
05:35
come there’s always business cycle there
05:37
comes booms several years of booms
05:39
always succeed if I said we used a bust
05:40
and so there all sorts of wild theories
05:43
for example Stanley Jevons was quite
05:46
good economist in his own right had a
05:48
sunspot theory he believed that the Sun
05:51
you know changes or whatever else causes
05:53
the problems in the wheat crop this is
05:55
somehow cause of the business cycle a
05:57
lot of nutty theories camera came up
05:59
because they couldn’t figure out
06:00
anything else so so Mises first of all
06:04
realize that it can’t be a market
06:06
phenomenon because the market everything
06:08
is tending to work toward the clarity
06:10
and people learn from their experiences
06:12
somewhat so on he began to realize it’s
06:15
really the intervention by the central
06:16
bank and the money sphere that causes
06:18
generates business cycles and he works
06:20
out the outlines of it does theory money
06:22
and credit from then on he starts
06:24
developing that during the nineteen
06:26
twenties he develops a whole elaborate
06:29
more elaborate theory about how business
06:32
cycles are caused by government
06:34
intervention of the banking system
06:35
generating inflation through the central
06:38
bank and thereby causing malinvestment
06:40
cause the unsound investments which
06:42
would be session as to liquidate the
06:44
result is that the recession even though
06:48
of course pain in the neck
06:50
inevitable and necessary conclusion to a
06:52
boom nose once you start the boom
06:54
process the inflationary boom which
06:55
causes unsound investments they have to
06:57
be liquidated
06:58
so the recession process becomes the
07:00
adjustment process it’s the method by
07:01
which the market reassert itself the
07:03
free market research itself so that you
07:06
wind up after the recovery with an
07:07
efficient system benefiting the consumer
07:11
is the best possible way
07:13
as a result the way to stop a business
07:16
cycle both the recession and the booms
07:17
this is to stop the several bank from
07:19
generating inflation from expanding
07:21
credit and way to do that of course
07:22
it’ll polish the central bank I’m it’s
07:24
the easiest way to do it
07:25
simplest way is a politically easy short
07:30
of abolishing central bank you put you
07:32
chain it down for better than doing
07:34
anything so early in the game then Mises
07:40
really be reconstituted Lee approaching
07:43
the money supply becomes a key factor
07:45
both of inflation and business cycles
07:47
almost single-handed the unfortunately
07:52
the in the scholarly world and this is
07:56
still true by the way nobody reads a
07:57
foreign language the old paths together
08:00
this PhD even now you have to pass the
08:02
language test I think two languages at
08:05
least one that’s truly all passing it
08:07
and it’s all fake thing sort of thing
08:12
where first of all they allow you to
08:12
have a dictionary okay and so if you if
08:15
you study German let’s say for a couple
08:17
of months again you can sort of parcel
08:18
on half and you can flunk it I know
08:21
somebody who flunked this French test
08:22
about three times before they finally
08:24
passed it and obviously you forget it
08:26
the next day and what you pass is that
08:34
the United States were all English
08:36
chauvinists nobody reads a foreign
08:39
language this meant that Mises book not
08:42
having been translated so until the
08:44
mid-30s in other words it took almost 25
08:47
years somebody to translate this theory
08:49
money crowd in English nobody nobody
08:51
read Mises and nobody then has never got
08:53
absorbent in the english-speaking world
08:55
the guy absorbing on the continent and
08:57
the Austrian particularly and
09:01
actually so and was translated really
09:04
too late by the time I was translated
09:06
Kings comes along holding it swept the
09:07
saw but uh so this is this problem of
09:11
translation becomes key point in me
09:13
transmission of ideas as a matter of
09:18
fact one interesting thing was side
09:19
about the great Kings Kings reviewed the
09:21
book for the economic journal which was
09:24
the great prestigious journal in England
09:25
I make journal in England still is o
09:27
Kings review the theory money credit
09:29
says well it’s an interesting book but
09:30
hasn’t has got anything new to say so an
09:32
interesting text book on money it turns
09:35
out later on Keynes admitted that Kansas
09:37
Barbara for admitted that the Kings
09:39
didn’t know German this book was
09:41
reviewed of a German book put it this
09:45
way he knew enough German to understand
09:47
something which you already knew but he
09:49
couldn’t just didn’t know what enough to
09:51
understand a new idea okay so here this
09:55
nothing new in this so anyway this as a
10:00
result I see an ism so to speak didn’t
10:02
get didn’t penetrate to the
10:03
english-speaking world so it was really
10:05
too late
10:07
finally what happened was that well
10:12
first of all Mises one of the few people
10:13
in the 1920s to forecast the Great
10:15
Depression so this is not the Orthodox
10:17
position then was well it’s a new era as
10:20
the Republican administration called it
10:21
here in the 20s we have a new era
10:23
because we have a Fed now this was the
10:26
Orthodox line mainstream line they have
10:28
a Federal Reserve System and they could
10:30
they can correct everything they can
10:32
pump money in if they see prices are
10:33
falling they pump money in the system if
10:35
they see prices going up they take money
10:36
out they can fine tune the economy so
10:38
they can iron out the business cycle and
10:40
it was the pre Friedman eyes by the way
10:42
he was saying that’s Irving Fisher sort
10:45
of the pre Friedman night it was the big
10:48
Guru economist in 1920s he sort of cook
10:51
on the Samuelson of Galbraith now I
10:53
guess and and his position was this is
10:56
greatly now firing out the whole
10:57
business cycle because we have a Fed
11:00
and so when the stock market crash came
11:04
with a 1929 depression came these first
11:06
of all the Fisher wrote a book in 1930
11:08
saying everything is great everything’s
11:11
in great shape
11:12
there is no depression is no crash is
11:13
just a slight blip in the in the new era
11:16
and because the theory was of price if
11:20
you look at the wholesale price level
11:21
and it’s not going up and means there’s
11:23
no inflation of course Mises had said
11:25
just the opposite don’t look at the
11:26
wholesale price level you look at money
11:28
supply and credit because prices should
11:30
be falling in a free market capitalism
11:32
prices tend to fall as example computers
11:36
in penicillin or TV sets of fallen
11:39
dramatically so it usually happens under
11:41
free-market capitalism as prices tend to
11:43
fall and if prices are not flowing
11:45
there’s something wrong other was the
11:46
the Fed or the central bank is pumping
11:48
in too much money this will create a
11:50
business cycle and of course he turned
11:52
out to be right so he was predicting
11:53
this sort of phenomenon as a result his
11:57
views became very popular in Europe
12:00
after the Great Depression after 2029 it
12:04
then happened that has major student
12:05
Hayek went went to London School of
12:10
Economics Lionel Robbins was a big shot
12:13
along the school it studied under Mises
12:15
Indiana that absorbed a lot of these
12:17
essence of thought and thought Hayek /
12:19
Hayek then brings the message of
12:21
Austrian business cycle clear he says he
12:23
was a secretary in England at one point
12:25
he had converted all the top young
12:27
economist in England more guys were now
12:28
later became bigshot Keynesian and
12:32
so look very much as if ms Essien theory
12:36
would then penetrate to the United
12:37
States if they go to English profession
12:39
what then happened was the Keynesian
12:41
revolution which comes out and swept the
12:43
board like 2007 revelation Popeye
13:01
refuted the previous people you know
13:04
reading the textbook about how science
13:05
develops you read that well everybody
13:08
patiently test our hypotheses they then
13:10
they confirm them refute them and new
13:12
hypotheses come in this is all baloney
13:14
almost never happened especially in
13:16
social sciences and it’s like a fashion
13:19
comes a wave a new wave of the future
13:21
comes in and suddenly everybody dropped
13:25
Austrian theory and shifted occasions
13:27
and their various explanations for this
13:30
one as intellectuals we’re looking for a
13:33
big state big growth and statism and
13:35
this is a way to do it and to of course
13:37
the government’s love the idea that
13:38
deficits are great governments always
13:40
love it right now whichever parties and
13:42
power loves deficits the only people
13:44
against those were out of power so so
13:48
the government the government took the
13:49
Keynesian isn’t like a duck takes the
13:51
war this is great we finally have an
13:52
economist as a favor that are big big
13:54
spending public works and deficit
13:56
spending because before Keynes most
13:58
economists regardless of whether they
13:59
were right wing left wing whatever
14:01
against the deficits and so some things
14:03
guy comes along as a very distinguished
14:05
economist I dunno the wave of the future
14:07
deficits are great so any rate so this
14:12
this killed me that’s the in theory in
14:13
England so by the late 30s it’s all
14:16
forgotten just swept on the rug and of
14:20
course with the rise of Nazism the war
14:23
it’s going at least temporarily in
14:26
Europe anyway while this was going on
14:29
while Mises was developing a integrating
14:32
microeconomics with money it evolved a
14:34
business cycle theory he was also doing
14:38
something else I mean doing many other
14:39
things at the same time socialism is
14:41
coming in after World War one as a
14:43
result of World War one socialism
14:45
pianist wheat Europe
14:46
and leases came out with a famous
14:48
article 1920 sharing the real problem
14:51
socialism is not the usual problem who
14:53
will sweep the streets and who could
14:54
take the garbage out which is yeah which
14:56
is a problem the real problem socialism
14:58
can’t calculate they wouldn’t know what
14:59
the hell to do central planning board
15:02
wouldn’t know what to produce where and
15:03
where we set up a steel plant should be
15:06
in there Louis CBO score and all score
15:08
whatever there’s no rational guideline
15:10
to plan therefore the whole thing no
15:12
just will just be a total failure and
15:14
these to start a great debate and
15:16
socialist socialists thought about
15:19
whether or not governments or socialism
15:21
can calculate the they sort of accept it
15:26
now I mean after many years of manatos
15:28
is going to the College of Graduate
15:29
School
15:30
the theory was amis has been refuted
15:31
because Oscar long another great polish
15:34
Marxist have shown that what if you had
15:37
perfect conditions of whatever the
15:39
government could act as if they were the
15:40
market and sort of you tell your
15:42
managers be the market be market and
15:44
then they go out and and these this was
15:48
show that that wouldn’t work either a
15:49
practice of course it hasn’t worked and
15:51
it was one interesting phenomenon where
15:53
one thing that Mises said is that the
15:56
only reason why socialism works at all
15:57
right now is because there’s a world
15:59
market out there where they can refer to
16:01
the prices doesn’t work very works very
16:03
badly but at least as a world market I
16:05
can say okay the price of steel is
16:06
such-and-such or cement or whatever and
16:09
know that English economists visited
16:12
poems in the 50s
16:13
he asked the Polish economists that’s at
16:15
the time with several planning was had a
16:17
destroyed and the Polish communists the
16:20
economists admitted that they refer to
16:22
the world market that’s how they can do
16:23
anything and so he’s so this economist
16:26
said well look if socialism takes over
16:28
the whole world which you’re presumably
16:29
a favor of what we what would you do
16:31
then there is no market left they said
16:33
well off the cross that bridge when we
16:34
come to it anyway so so Mises showed in
16:41
the early 1920s that socialism socialism
16:43
can’t calculate and that’s what
16:44
converted Hayek by the way I had been a
16:46
socialist before that read the book and
16:48
that was he was converted of free market
16:51
and and then he showed the
16:55
interventionism doesn’t work either
16:56
because intervention ISM for example has
16:57
a cumulative effect
16:59
controls don’t work taxes cripple
17:01
savings investment at separate each each
17:03
intervention causes cystic conditions up
17:06
for another intervention of trying to
17:07
cure that and that doesn’t cure that
17:09
Makris conditions for more intervention
17:10
a separate set and tell you why not with
17:12
socialism which doesn’t work either so
17:14
what we had them was a as a result of
17:18
all as a carefully built constructed
17:20
case for why the market works and why
17:23
government doesn’t work the meantime he
17:27
also had methodological fight Mises was
17:29
essentially the one who invented the
17:32
concept of proxy ology actually the
17:34
Austrians have been doing that before
17:35
but he pointed out what the deductions
17:40
from self-evident axioms or accident
17:42
which people would read too soon as they
17:43
understand it and he had a big
17:45
methodological battle with other people
17:47
and with positivism and separate sector
17:48
and finally he developed after setting
17:51
the agenda for methodology for how
17:53
economics should be constructed he
17:54
finally did it with human action okay
17:57
first he says here’s how you can do it
18:00
and then he finally does it well human
18:02
actually presents the whole doctrine
18:04
whole thing how how the market works in
18:06
intricate detail and why government
18:08
screws things up so this is a fantastic
18:10
achievement just unbelievable
18:12
achievement I think I think I don’t
18:14
sling around words like the greatest
18:15
like some people do I think Mises is
18:17
certainly one of the greatest of always
18:19
a 20th century and I think no question
18:20
about it
18:22
the okay while he was doing all this
18:25
while I was doing this fantastic
18:26
scholarly a theoretical achievement he’s
18:28
also battling in the activist front and
18:30
political activist I already mentioned
18:32
how he was a sending advice to the
18:35
Austrian government it helped stop the
18:37
inflation and he also constantly battled
18:42
Falaise a fair purely a fair system of
18:45
course during 30s in particular is
18:47
getting more and more out of fashion say
18:49
the least but nothing ever stopped them
18:52
just amazing I mean fiery and transited
18:55
uncompromising and the more the climate
18:57
became socialistic and status the more
18:59
he battled openly and frankly filiz a
19:01
fear I remember when I was getting
19:04
interested in economics and making 40s
19:07
and friends of mine later the same thing
19:09
anything happen to them we try to find
19:11
some money
19:12
as have openings in favor of
19:14
laissez-faire and we couldn’t find it
19:15
there were almost a conservative
19:16
economist then they would say yes yes
19:18
the government shouldn’t do this to do
19:20
that is always a chapter either the last
19:21
of the first chapter where he says of
19:23
course I’m not in favor lays a fierce
19:24
reactionary garbage we say on nuts can
19:32
we find one economist says of course
19:36
Mises was almost it the only one that
19:41
says frankly he’s a favorite lays a fear
19:43
all the way no compromise and just that
19:46
spells it out and that was for it
19:48
mrs. Mises a remarkable woman woman in
19:51
her own right and we just had a dinner a
19:53
tribute dinner for her and she she gave
19:57
a speech you know she’s frail a little
19:59
house here rousing talk and she said
20:02
Mises was it was act was an activist of
20:04
a mind and she stressed the fact that
20:05
she attacked she attacked the Austrians
20:08
who want to divorce themselves in the
20:10
real world and to only talk about pure
20:12
theory never talk about political
20:13
questions
20:14
she said that’s not my husband’s views
20:16
our husbands it was an activist and this
20:20
show that his especially in his earlier
20:23
work when he dealt with questions of
20:24
imperialism for example Mises was a
20:27
flaming anti imperialist and I recommend
20:32
his writings liberalism and nation
20:35
stayed in market on that he that’s at
20:39
one point we said each individual has a
20:41
salary every group has a right to see
20:43
seed from a state apparatus they don’t
20:45
like they want to get out of this you
20:46
have the right to get out in Europe
20:48
before says it was a big question should
20:50
the Serbs rule the crow outs for them
20:52
the other hundreds of nationalities
20:55
ethnic groups each everyone hate each
20:56
other’s guts and usually a good reason
21:02
country it’s currently he said yes it
21:04
should be allowed to do it and one
21:06
discussion he said well each every
21:08
talent you have a right every village
21:10
have the right to see seed if they want
21:11
to they almost have to the point of
21:13
anarchism when he said each individuals
21:15
have the right to CC then he stops of
21:17
course not be unpractical and I was the
21:19
end of the discussion pose it was a
21:21
fascinating discussion of that he was a
21:23
very attacked imperialism I’ll read this
21:25
to you one quote
21:26
from them because it was modern
21:31
followers Jesus no chapter in history is
21:36
steep further and blood on the history
21:38
of colonialism flourishing lands were
21:40
laid waste whole peoples destroyed and
21:42
exterminated all this can only be
21:44
extenuated or justified the Dominion of
21:47
Europe of Europeans in Africa and
21:49
important parts of Asia is absolutely it
21:52
stands in the sharpest contrast of all
21:53
the principles of liberalism and
21:55
democracy that can be no dad we must
21:57
strive for his abolition
21:59
this is written about 1919 many 20s
22:11
essays intransigent uncompromising etc
22:14
you it was sweet and charming and person
22:17
was very interesting because well those
22:20
of us who we’re gonna meet Mises either
22:21
studying in a seminar or any other
22:23
circumstance we usually quit you know
22:25
our boots
22:25
here’s guys lashing out all the enemies
22:27
all the bad guys and we figure this
22:30
guy’s a fiery monster great great you’ve
22:32
got the great side but you know lashing
22:35
out constantly he was a sweetie pie he
22:38
he was always trying to encourage
22:40
charming and courteous always trying to
22:42
encourage students to do research
22:44
throwing out research projects even
22:47
students are obviously clunks will never
22:48
do any research he was always fun
22:50
encourage them in doing this but one
22:51
great statement which I’ve written about
22:53
I think deserves mentioning here and in
22:55
order to put people their ease in the
22:56
seminar we I mean these people didn’t
22:58
know anything most of us had no anything
22:59
and here’s this great man from innocent
23:03
of knowledge and every addition he said
23:04
look he wanted stimulate questions or
23:06
commas he said look don’t be afraid to
23:08
say anything because whatever you say
23:10
almost of how idiotic it is some eminent
23:12
economist has already set up
23:23
and always trying to encourage us to you
23:28
know to speak up and say where we our
23:30
position was on things etc those are
23:34
full of I say great anecdotes there’s
23:37
one charming one I remember this
23:39
philosophical Ian climb being
23:41
particularly appreciate he was walking
23:43
along the streets of Vienna cousin via
23:45
everybody walks all the time great city
23:46
to walk it even I walk in don’t walk
23:49
usually take a cab two blocks was a
23:58
distinguished philosopher from Germany
24:00
and he said they were taking logical
24:01
positivism which is coming in there’s
24:03
the big new thing and the which then of
24:07
course took over the philosophic
24:08
profession rule that an iron half about
24:10
thirty years it’s only the its iron grip
24:12
is only now beginning to fade and Sheila
24:16
from Berlin’s
24:17
family said well what is there on the
24:20
climate of in this place the Clarence
24:22
place it breeds all these damn logical
24:24
positivists Mises gave it I think
24:26
typical reply from me he says shows his
24:27
shoulders oh look what max and the
24:30
another are now two million people let’s
24:31
say and of the two main about twelve
24:33
logical processes so can’t be the
24:35
climate another great story I’ll tell
24:46
you he’s another great anecdote he was
24:49
after World War one there’s a communist
24:52
regime in Hungary for about six months
24:55
it’s very bloody months the béla kun
24:56
regime and he was amis this was
24:59
representing Austrian a trade treaty
25:01
with communist Hungary and Karl Polanyi
25:05
the famous left-wing sociologist that
25:08
you call and was the was the represented
25:11
from Hungary and so Mises said he and I
25:13
used to walk around walk along Vienna
25:15
and talk about trade is something both
25:16
of them realize across the Bulacan
25:18
regime of a fool a few months and the
25:20
whole idea Palani was to prolong the
25:23
negotiation so we could stay in Vienna
25:24
and you know to get the hell out
25:26
so I had a fine time just so you know
25:29
just BSA
25:30
until they put regime dissolve and on
25:34
you safe so such as the history of
25:38
diplomacy driven out of Austria he was
25:47
his library’s Burma on Aussies he and
25:51
when we gonna take over Western Europe
25:53
he fled through through the Spanish
25:55
route to the United States he came here
25:59
without a penny and at that time during
26:04
and after World War two every every
26:07
communist marxist Samia Marxist Leninist
26:09
and whatever refugee was really a ward
26:12
of a great academic posts full professor
26:15
at Harvard we have stuff in someone’s
26:17
own because and Mises can find any
26:20
academic post he never found a paid
26:23
academic post in his life in the United
26:24
States in particular and finally he had
26:28
us they had a subtle for a consortium of
26:31
businessmen and well started with letter
26:33
read a foundation for economic education
26:34
and a consortium of businessmen paying
26:37
for salary than why you so he was always
26:39
a visiting professor he visited there
26:40
for about twenty years and never got
26:44
paid by NYU and not only that been why
26:46
he was very nasty about about him
26:48
because the beam kept outside you don’t
26:49
take this guy’s courses these they’re
26:51
reactionary crazy or whatever and so
26:54
here it was totally scorned by the
26:56
establishment say the least and those
27:00
they realized the intellectual climate
27:02
in the United States this is during
27:04
after World War Two I was a Columbia
27:07
Graduate School when there was a
27:09
graduate school enormous everybody’s on
27:12
the GI Bill and there was a fire of the
27:15
new world are coming some and the big
27:17
argument on campus was she could be a
27:18
communist party member or not that was
27:20
the big moral problem saying and those
27:24
were not coming as party members were
27:25
left-wing socialists so those are the
27:27
bait on campus and then that climate
27:32
Mises was totally ignored
27:34
almost obliterated and his name never
27:37
came up except to say and
27:39
graduate school for example what Mises
27:41
thoughts of socialism can’t calculate
27:42
we’ve now proven and can that’s it it’s
27:45
only dead takes care of that
27:47
fortunately met Mises through fee and
27:49
and they totally a feat when Mises is
27:52
starting a seminar and my you and his
27:57
book why so what’s in the book I said
28:00
everything is human human action per se
28:02
right and and then he started the thing
28:07
is even though he here he was he was
28:08
totally there obviously depressed about
28:09
the world situation and scorned by
28:13
everybody ignore this upper scepter only
28:15
very cheerful never bitter just amazing
28:18
somebody just magnificent
28:19
and and so I took a bow thing been in
28:23
good spirits autobiography which notes
28:29
and recollections written in 1940 in
28:32
despair while I was fleeing Europe you
28:35
only said he he never thought he thought
28:38
he’d be on advocating reforms or
28:42
whatever he didn’t he didn’t realize
28:43
he’s gonna be in a story I’m the client
28:44
of civilization so as I say always write
28:48
cheery and and never upset I’m just
28:52
there just the magnificent just
28:54
magnificent he’s a great role model as
28:55
well as everything else push the little
28:57
role model for everybody when he died
29:02
Ralph rake I was former student
29:05
mentioned in me that great the great
29:07
quote from Shelley’s from Shelley’s and
29:11
theyes the algae of death of Keats and I
29:14
just wanted we just we do this one
29:16
stands up and I think applies to Mises
29:19
beautifully and he’s gathered to the
29:21
kings of thought who each contention
29:23
with their times the K and of the pastor
29:26
all it cannot pass away so I think I
29:29
think wonderful tribute I think I said
29:32
twice and Mises just one more thing one
29:34
more statement about me he says he’s
29:35
universally beloved in the in the free
29:39
market movement loosely and his very
29:42
name resonates with affection
29:45
one interesting interesting example of
29:47
houses some years ago I was at a dinner
29:50
party friends about eight or ten people
29:53
as a whole spectrum of what could be
29:54
called a right-wing I guess in those
29:56
days
29:57
libertarians rationalist right-wing
30:00
Catholics separate cetera and the one
30:03
guy the side of the other host I guess
30:04
decide what we have to somebody before
30:05
we started dinner and somebody suggested
30:09
book and rational or irrational said
30:11
nuts to that somebody said pain and the
30:13
traditionalist said fully on pain we
30:15
couldn’t think of anybody to toast
30:22
probably guess I’m pretty serious about
30:24
the food question so finally somebody
30:28
said to me well Mises they said course
30:31
enthusiasm and we toasted Mises I’ll
30:34
give you that toast right now
30:50
questions comments we have a few minutes
30:53
for that company
30:58
no man time he’s Sen Z yeah there was
31:12
it’s kind of intricate they knew each
31:16
other and of course ran recommended
31:18
reasons books and although she always
31:22
said you and I don’t read the first half
31:24
human action goes off the way on sand so
31:30
they didn’t get along too well as you
31:32
might expect to strong minded
31:34
personalities at work but I have some
31:37
distant relationship way to describe it
31:39
and there was I think they respected
31:43
each other and their various spheres he
31:45
liked that like shrug was a novel so
31:47
it’s a good way to spread the message so
31:50
I think that’s I think that’s about it
31:52
yeah great story the family of the Mont
32:07
Pelerin Society which was the it’s now a
32:11
huge swollen society but everybody to
32:13
the right of Galbraith free market
32:20
economist basically scholars and these
32:25
isn’t Freeman or at the founding and
32:26
Hayek and rub the NP like that with the
32:28
founding convention of conferences of
32:30
society
32:31
it was Coalmont power society was held
32:33
up at the mountaintop in Mont Pelerin in
32:35
Switzerland in any way Charlie’s one
32:38
great story for a different about four
32:39
or five different versions of what
32:40
actually happened there some but Jesus
32:44
was aghast of the social philosophy
32:46
being spread there because I mean
32:48
Friedman for example in favor of a
32:50
negative income tax and those days of
32:53
progressive income tax to boot and many
32:56
of the other people there were also
32:58
and finally one point I think was on a
33:00
tax question I think is the idea of
33:01
personal income tax because that’s sword
33:04
flung as pencil down a table say you’re
33:06
all a bunch of socialist and walked out
33:07
and Freeman thought it likes to tell his
33:10
stories an attack on Mises and showing
33:12
what an extreme doctrinaire government
33:14
is he was like I bought him my own copy
33:16
book with Friedman many years ago and he
33:18
told this story and Wall Street makes
33:21
conference by the way he was invited to
33:22
be the keynote speaker for some reason I
33:24
could never fathom Friedman and he
33:27
strongly opposed to it anyway told the
33:30
story about arable dogmatic Jesus was
33:33
and when he said you’re almost a social
33:35
I applaud it of course
33:36
Freeman rented house today from the Pope
34:25
Samuelson text book is not no more the
34:28
best-selling it’s still probably the
34:29
most famous one mentions Hayek I think
34:32
you might mention Mises he personally
34:34
mentions mentions on the socialist
34:35
calculation debate because maybe socials
34:40
really can’t calculate a flip flops for
34:41
perusal Eastern Europe etc and also I
34:45
think high of Samuelsson much as Hayek
34:47
and capital theory since it’s not quite
34:49
that bleak he’s a little bit popping up
34:51
here and there’s my affecting current
34:53
textbooks now mention libertarianism ROI
34:55
there’s now it’s great because there’s
34:57
usually a section called radical
34:59
economics and most of those of course on
35:06
Marxism and left-wing Marxism right-wing
35:08
Marxism as always usually a paragraph or
35:10
two on libertarians mean
35:11
Yama’s a pool and Ruffin Brenner my
35:14
lady’s latest in the textbook who was
35:15
very smart and he’s not a no sense of
35:18
free market person but he has a pretty
35:19
good chap section on libertarianism and
35:22
distinguishes between that objectivism
35:24
and software it’s pretty good for
35:25
something from from an outlander be damn
35:28
good so I mean it’s beginning to pop in
35:29
now it’s not not in great shape and some
35:33
of the textbooks they aired and and
35:36
leahey have in immediate price theorem
35:38
or macro and micro textbooks they’re now
35:41
sort of semi Austrians they slip a
35:42
little bit so you can’t have an Austrian
35:44
textbook because I would no college
35:46
would use it so they did was they slip
35:49
it in I slipped that in like at the end
35:50
of the usual Bologna they say the other
35:52
hand Hayek’s points out this really
35:54
doesn’t work at some somebody said once
36:02
once an idea guessing textbook is there
36:05
forever you can never blast it out so
36:07
it’s not yeah you’re mostly right but
36:11
like this hope I think I mean the last
36:12
few years I think is about slight shift
36:14
the beginning I think now whether we’re
36:16
respectable where another group will see
36:18
they use us as a token against the mark
36:20
so that every right now you get the
36:22
point where the apartment really is a
36:23
favor I get academic freedom which is
36:25
quite rare by the way despite all the
36:26
noise we’ll have one Marxist than one
36:30
Austrian or one between market person so
36:33
show they’re really you know sort of
36:34
balanced the only they only had one
36:37
Marxist that was the balance so now
36:38
things are things are improving academic
36:42
front yeah
36:57
go to the college where they teach
36:58
Austrian economics so you can learn
37:00
what’s right or maybe would it be
37:03
preferable to go to a standard school so
37:05
in effect you’re learning what everybody
37:06
else thinks
37:07
yeah tough question it really is because
37:10
it’s music questions do you want the
37:12
prestige it goes along with a harvard or
37:13
yale whatever degree here do you want to
37:15
get the true stuff from non prestigious
37:17
school and their arguments either way
37:20
you know it really depends on one’s
37:21
temperament I think I mean I I think
37:24
it’s my faculty think it’s better to go
37:26
to prestigious school and suffer through
37:28
all this stuff and know what the other
37:30
guys are saying then go to schools has
37:32
no no no reputation
37:35
I mean if it’s done both way one of the
37:38
problems with weather is going to
37:39
Harvard or Yale etc as they the kids
37:41
beginning at brainwashing the wrong
37:43
direction you mean to lose fartlek on
37:45
rice is fake but that’s I I know I would
37:49
I would pick the prestigious school
37:50
myself because one of the main reasons
37:53
you go to college is get the prestige
37:55
learning is only a minor element
38:05
actually the college situation is not
38:07
that bad we now have a lot of colleges
38:09
which have at least one Austrian side
38:11
the problem is really graduate school
38:13
when the establishment really locks in
38:15
because that’s where you train future
38:16
becomes and that’s much more difficult
38:19
to crack a graduate school question we
38:21
didn’t beginning to crack that now –
38:23
there are now places in the graduate
38:25
school you learn Austrian economics but
38:26
that’s a tough row to hoe yeah yeah
38:35
intervention is responsible for all
38:38
business cycles or might write a totally
38:40
free market also have cycles well I
38:43
think that be fluctuation and with many
38:45
cycles and was it wouldn’t be the the
38:46
traditional boom-bust malinvestment
38:49
unemployment also stuff cycle I think
38:52
that’s the government they’d be
38:53
fluctuation man for example there’d be a
38:55
seven-year look let’s say let’s say I
38:56
have a country which is plays every
38:58
seven years my locusts and every seven
39:01
years everybody gears up because they
39:02
know but you know locust is coming to
39:04
1988 and so you have fluctuation other
39:07
words the lupus fighting industry who
39:08
start gearing up a year or two before
39:09
that come they sort of disappear that’s
39:12
a cycle and there’s no problem with it
39:15
because everybody just ahead of time so
39:17
they’ll be fluctuation there’d be
39:19
fluctuation individual industries
39:20
obviously I mean the firm’s which there
39:23
was all the time funds which still make
39:24
adding machines when I was going to
39:26
graduate school for example they used
39:27
calculating most capital and machines
39:30
big clunky 500-pound things which bang
39:33
away you’ve got a multiplication about
39:34
three minutes calculators computers
39:42
business there’s it be fluctuations
39:44
within the market obviously as new
39:47
things come up old things become officer
39:49
lesson so there would be a real cycle
39:50
wouldn’t be massive unemployment
39:52
I mean large-scale things like that or
39:54
massive bankruptcies spreading
39:56
throughout the system much different
40:08
won’t work and that’s it’s easier
40:11
explain how and why it’s Rex ISM was a
40:13
system I mean I think that’s that
40:16
difficult you point out the Federal
40:18
Reserve prints money legalized money
40:21
counterfeiters they’re legalized
40:23
counterfeiters
40:23
if I print money I go to jail for a long
40:26
time nobody worries about my that my
40:29
upbringing the private playgrounds as a
40:31
youth that came from broken homes and
40:32
all that stuff like the counter
40:39
thirty years with confidence do
40:42
something serious anyway they’re
40:43
interfering government’s monopoly of
40:44
counterfeiting easy to point out his
40:51
typical explain exactly how the Fed does
40:53
it that’s a very technical thing but
40:54
it’s just to say well they kind of fit
40:56
and that’s what they do you know and
40:57
that causes inflation and distortions in
41:00
production and the reason why I think
41:07
that’s so that’s a very complex question
42:17
the Fed before the Fed we had a quasi
42:20
centralized system and the national
42:21
banking system so the only really
42:24
approximation of freedom of man he was
42:25
before the civil war between 1833 or
42:29
whatever was one of the exact date when
42:30
the back united states was finally
42:31
smashed until the Civil War and there
42:34
were problems with that wasn’t really
42:35
really free a lot of regulations and
42:38
stuff the first one I think banks can
42:43
easily survive on our percent reserve
42:45
now they have a money market funds and
42:46
things like
42:47
I mean these are great new instruments
42:49
certificate of deposit CDs and money
42:51
market funds where banks can you know it
42:53
was you when you lend the bank money for
42:55
some specific length of time say six
42:57
months or whatever and you know it and
42:59
they know it there’s no fraudulent
43:00
aspect involved that’s great yeah yeah
43:03
oh yeah that was in six months you’ve
43:05
got the money ready you know and the
43:07
thing fools do and infraction was I
43:11
first name a price I could serve this is
43:12
a big argument with in the Austrian camp
43:15
still raging my first day say fractions
43:18
are banking is fraud okay I’m all those
43:20
my colleagues think it isn’t by I think
43:21
in the free market would really would
43:23
really neither disappear be a minor
43:25
importance because the hard money banks
43:27
could always go up on the other coming
43:30
back for redemption
43:31
okay here’s we we collecting your bills
43:33
pay up let’s put them out of business
43:35
pretty fast and the pre-civil war fair
43:39
that we’re such there were people called
43:40
many brokers go collect the notes save
43:43
the bank of Oshkosh or printing money
43:45
like mad promising a pay in gold or
43:47
silver of course they didn’t have
43:48
anything and the Moneybookers a
43:50
collectible stuff in the east let’s say
43:52
shop over Oshkosh and present the five
43:56
fifty thousand dollar bills if they
43:59
weren’t shot by the local jean-marie
44:00
which is what happened in the pay of the
44:04
banks the banks go under and then ass
44:07
course it’s much easy to do that him
44:08
electronic transfers in a horse-riding
44:12
three days together the bank so nowadays
44:15
be much easier to bust them and my own
44:18
solution the problem is a hundred
44:19
percent reserved person as well if you
44:21
don’t have you just have feedback here
44:23
they’d be anti Bank vigilante leaves
44:24
please would you make sure your
44:26
propagandize on the TV these that
44:27
bankers Bank Club go get your money out
44:29
fast be enough to kill it

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